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Tom Albanese 10 May 2011 Bank of America Merrill Lynch 2011 global metals and mining
Tom Albanese 10 May 2011 Bank of America Merrill Lynch 2011 global metals and mining
Tom Albanese
10 May 2011
Bank of America Merrill Lynch 2011
global metals and mining conference
Cape Lambert port

Cautionary statement

This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and consisting of the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions.

Forward-looking statements This presentation includes forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding Rio Tinto’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Rio Tinto’s products, production forecasts and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rio Tinto, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding Rio Tinto’s present and future business strategies and the environment in which Rio Tinto will operate in the future. Among the important factors that could cause Rio Tinto’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation and such other risk factors identified in Rio Tinto's most recent Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the "SEC") or Form 6-Ks furnished to the SEC. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation.

Nothing in this presentation should be interpreted to mean that future earnings per share of Rio Tinto plc or Rio Tinto Limited will necessarily match or exceed its historical published earnings per share.

2011 year to date highlights

• Australian coal, iron ore, uranium and alumina operations impacted by extreme weather in the first quarter

• Production recovering

• Major project approvals continue

– Marandoo extension – $933 million

– IOCC phase 2 expansion - $277 million

– KUC extension feasibility funding – $238 million

• New agreement on Simandou

• Assumed control of Riversdale

• Regained single A credit rating

• Completed $1.4 billion of $5 billion buyback programme

• $13 billion capex in 2011 – comparable levels in medium term

Increased risk of volatility in commodity prices

Commodity prices remain volatile

Prices at 380 Spot iron ore (62% Fe WA FOB) Aluminium 31 March2011 $37.87/oz 340
Prices at
380
Spot iron ore (62% Fe WA FOB)
Aluminium
31 March2011
$37.87/oz
340
Copper
Gold
USc425/lb
300
Oil -WTI
Thermalcoal(NEWCFOB)
260
Silver
$164/t
$106/bbl
220
$2,600/t
180
$1432/oz
$122/t
140
100
60
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11

Prudent actions have been taken by China, but risks remain

Prudent actions have been taken by China, but risks remain
Prudent actions have been taken by China, but risks remain

Many large Chinese provinces are just beginning to climb the steel intensity curve

Chinese regional steel intensity

Steel use per capita 2009 (kg)

Beijing 18m Shanghai Shandong 19m 95m Henan 100m Guangdong 96m Sichuan 89m Guizhou
Beijing
18m
Shanghai
Shandong
19m
95m
Henan
100m
Guangdong
96m
Sichuan
89m
Guizhou

41m

95m Henan 100m Guangdong 96m Sichuan 89m Guizhou 41m Bubble size reflects population of each of

Bubble size reflects population of each of the 31 Chinese provinces

Source: Global Insight China Regional Service

Our portfolio is across a range of products at different stages of demand growth

The inflection point is yet to be reached for many of our products

Percentage of saturation level*

Titanium dioxide Nickel Titanium Dioxide Crude steel Aluminium Copper Diamonds Borates 2,000 10,000 18,000
Titanium dioxide
Nickel
Titanium Dioxide
Crude steel
Aluminium
Copper
Diamonds
Borates
2,000
10,000
18,000
26,000
34,000
42,000
50,000
58,000

Timeframe

2010

2020

2035

2045

2050

*Saturation level – point at which consumption per capita does not increase with income levels Source: Rio Tinto

Our strategy is consistent and unchanged

Our strategy is consistent and unchanged • Our core objective is to maximise total shareholder return
Our strategy is consistent and unchanged • Our core objective is to maximise total shareholder return
Our strategy is consistent and unchanged • Our core objective is to maximise total shareholder return
Our strategy is consistent and unchanged • Our core objective is to maximise total shareholder return

• Our core objective is to maximise total shareholder return by sustainably finding, developing, mining and processing natural resources

• Invest in and operate large, long term, cost competitive mines and assets

– Focused on developing high quality organic growth options

– 2011 capex expected to be ~$13 billion

– Capex 2012-15 expected to remain at comparable levels

– Riversdale, Ivanhoe

• Driven not by choice of commodity but by the quality of each opportunity

Investing in long life, low cost projects across a range of products

Project timeline (1) 2011 2012 2013 2014
Project timeline (1)
2011
2012
2013
2014

% Complete

$ Capex (2)

Production

$91m +5mtpa

$91m

+5mtpa

$230m +5mtpa

$230m

+5mtpa

$678m +5.3mtpa

$678m

+5.3mtpa

$1.6bn 15mtpa ( 4 )

$1.6bn

15mtpa (4)

$7.6bn +53mtpa

$7.6bn

+53mtpa

$933m 15mtpa ( 4 )

$933m

15mtpa (4)

$166m ( 5 ) Access high grade ore

$166m (5)

Access high grade ore

$6bn +100ktpd ore

$6bn

+100ktpd ore

$340m 30mlb Ph1, 60mlb Ph2 (capacity)

$340m

30mlb Ph1, 60mlb Ph2 (capacity)

$469m +17kt Ni, 13kt Cu per annum

$469m

+17kt Ni, 13kt Cu per annum

$1.9bn +2mtpa

$1.9bn

+2mtpa

$1.1bn +60ktpa

$1.1bn

+60ktpa

$487m +41ktpa

$487m

+41ktpa

NA

$270m (3)

+5.3mtpa ROM (3)

 

$184m  +2.1mtpa

+2.1mtpa

 

$260m  +6mtpa

+6mtpa

 

$1.1bn  +1.3mtpa

+1.3mtpa

 

$1.6bn  28mcpa capacity

28mcpa capacity

(1) Represents timing of project completion and initial production (4) Sustaining production at Pilbara total capacity

(2) 100% unless otherwise stated (5) RT share of capex

(3) Source: Riversdale

High quality tier one projects currently in advanced study

     

Indicative

 

Indicative

first

Indicative production (1)

Project

Product

capex (1)

production

Pilbara 333

Iron ore

$$$

2015

+50mtpa

IOCC Phase 3

Iron ore

$

2013

+2.7mtpa

Simandou

Iron ore

$$$$

2015

+95mtpa

Oyu Tolgoi Phase 2

Copper, Gold

$$$

2015

+60ktpd ore

KUC extension

Copper, gold, moly

$$

2015

Extend LOM to 2028

Kitimat

Aluminium

$$

2014

430ktpa capacity

Weipa South of Embley

Bauxite

$

2015

+22.5mtpa

Mt. Pleasant

Thermal Coal

$

2014

+8.5mtpa

$ <$2 billion

$$ $2–$5 billion

(1) 100% basis unless otherwise stated

$$$ $5–$10 billion

$$$$ >$10 billion

A deep portfolio of strong earlier stage projects provide options for further quality growth

• Pilbara 433mtpa Iron Ore • Orissa • IOCC expansions • Resolution • KUC North
• Pilbara 433mtpa
Iron Ore
• Orissa
• IOCC expansions
• Resolution
• KUC North Rim Skarn
Copper
• La Granja
• Northparkes expansion
• Escondida options
• AP60 Phase 2
• Armargosa (bauxite)
Aluminium
• Sarawak
• Paraguay smelter
• Cameroon brownfield and greenfield
• Benga phase 2 and Zambeze
• Winchester South
• Hail Creek
• Rossing heap leach
Energy
• Hunter Valley options
• Valeria
• Bunder (diamonds)
• TiO2 mine expansions
Diamonds &
Minerals
• Diavik A21 (diamonds)
• TiO2 smelter expansions
• Jadar (borates, lithium)

Our investment in technology and exploration gives us competitive edge

in technology and exploration gives us competitive edge Exploration in Africa New tunnelling partnership with Aker

Exploration in Africa

exploration gives us competitive edge Exploration in Africa New tunnelling partnership with Aker Wirth Iron Ore

New tunnelling partnership with Aker Wirth

in Africa New tunnelling partnership with Aker Wirth Iron Ore operations centre, Perth Surface mine automation

Iron Ore operations centre, Perth

with Aker Wirth Iron Ore operations centre, Perth Surface mine automation 10 May 2011 Bank of

Surface mine automation

Balancing growth with capital returns

Cash from operations Investment Prudent in value balance Capital adding sheet management growth management
Cash from operations
Investment
Prudent
in value
balance
Capital
adding
sheet
management
growth
management

$13 billion

of capital

expenditures

in 2011

Single

A credit

rating

Dividend +20% $5 billion share buyback – $1.4 billion completed

• Record cashflows have reduced net debt to $4 billion at end of 2010

• Investing in high quality growth opportunities – organic and M&A

• Regained single A credit rating from all major international credit agencies

• Ordinary dividend increased by 20%

• $5 billion capital management programme – $1.4 billion completed

• 2011 interim dividend expected to be 54 US cents per share

Conclusion

• Production recovering from weather impacted first quarter

• Delivering on growth

• A deep portfolio of projects across all product groups and at various stages from execution to early evaluation

• Assumed control of Riversdale, currently hold more than 73%

• Fully leveraging tier one assets providing further options to grow

• Regained single A credit rating

• Returning cash to shareholders

– Ordinary dividend increased by 20%

– $5 billion buyback programme – $1.4 billion completed to date

• Well placed to enhance shareholder value

Tom Albanese 10 May 2011 Bank of America Merrill Lynch 2011 global metals and mining
Tom Albanese 10 May 2011 Bank of America Merrill Lynch 2011 global metals and mining
Tom Albanese
10 May 2011
Bank of America Merrill Lynch 2011
global metals and mining conference
Cape Lambert port