Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Presentation (September 2009)
23 slides from Rio Tinto's investor presentation, Sep 23, 2009
Slide 1: ASX cover letter for Diavik site visit presentation
120 Collins Street Melbourne 3000 Australia Postal Address: GPO Box 384D Melbourne 3001 Australia T +61 (0) 3 9283 3333 F +61 (0) 3 9283 3707 For personal use only Company Announcements Office Australian Stock Exchange Limited SYDNEY NSW 2000 23 September 2009 Dear Sir/Madam Please find attached the
Slide 2: Diavik Diamond Mine Analysts Presentation - Cautionary statement
Diavik Diamond Mine For personal use only Analysts Presentation September 2009 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
Slide 3: Diavik Mine – a joint venture
For personal use only Introduction Project to Date and Current Operations Market Context Underground Project Growth Options Summary September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 3 Diavik Mine – a joint venture Harry Winston Diamond Corporation Harry Winston Diamond Limited Diavik Diam
Slide 4: Location of 154 & 418 Pits
For personal use only Introduction Project to Date and Current Operations Market Context Underground Project Growth Options Summary September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 5 Location of 154 & 418 Pits A418 Pit A154 Pit September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY
Slide 5: Island based Diavik; the compact plant site
Island based Diavik For personal use only Diavik Plant Site NEW A418 Dike & Pit Airstrip Till placed for future fish habitat A154 Dike & Pit September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 7 The compact Diavik plant site Administration / Maintenance Process Plant Complex Fresh Water Int
Slide 6: Pit Operations and Ore Processing
Pit Operations For personal use only • Conventional truck and shovel operation – 60,000 tpd ore and waste varying seasonally • Challenges – Water/ice management – Cold weather operations – Aging fleet • A154N, open pit mining complete • A154S, one bench remaining • A418, open pit mining until early
Slide 7: Product Splitting Facility
Product Splitting Facility CHEMICAL For personal use only CLEANING VALUATION SPLIT AND PACKAGING SORTING SIZING September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 11 Product September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 12 6
Slide 8: Diavik's deposits are high quality; ore production exceeded expectations
Diavik’s deposits are high quality For personal use only World Diamond Deposits Estimated Value (US$) per Tonne 0 Value (US$) per Tonne 0 0 0 0 0 0 Voor- Nama- Cullinan Argyle Bunder Orapa Murowa Letlha- Catoca Victor Venetia Snap Ekati Jwaneng DIAVIK spoed qualand kane Lake (average) (average) Sour
Slide 9: Carat production has exceeded expectations
Carat production has exceeded expectations For personal use only Diavik Diamond Mine (100%) Carats Produced Actual Forecast 1999 Feasibility 14 Carats Produced, Millions 12 10 8 6 4 June YTD 2 0 2003 2004 2005 2006 2007 2008 2009 Market Response September 09 Diavik Diamond Mines Inc. – A RIO TINTO C
Slide 10: The diamond industry has faced an unprecedented crisis after Oct 08
The diamond industry has faced an unprecedented crisis after Oct 08 • Excess rough stock inventories Liquidity constraints For personal use only Speculation De-stocking of whole pipeline US market demand collapse Total Sales Value DTC, Alrosa, RTD, BHP, Endiama 1200 1000 Sales Value, US$M 80
Slide 11: Where are we now?
Where are we now? Several lead indicators are now moving in the right direction For personal use only Index (Jan '07 = 100) Consumer Confidence Indices PolishedPrices - 'Overall' index 120 110 Index (100 = Jan '07) 100 105 80 100 60 95 90 40 85 20 80 - 75 J a 07 70 J a 08 N 07 N 08 M -07 M 08 M -09
Slide 12: New diamond discoveries are increasingly rare; reserves declining
On the supply side, new diamond discoveries are SUPPLY becoming increasingly rare… For personal use only Annual kimberlite discoveries 5-year moving average 200 180 • 1 in 10 are 160 diamondiferous • 1 in 100 are 140 economic 120 100 80 60 40 20 0 1930 1940 1950 1960 1970 1980 1990 2000 2010 Source:
Slide 13: Future diamond demand to exceed supply in the long-term
RTD expects future diamond demand to exceed supply in the long-term For personal use only Indexed US$ CAGR (Real) 170 Rough diamond +4.0% 160 demand 150 140 130 Destocking 120 110 100 Supply -1.6% 90 Production -0.4% 80 2006 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Rio Tinto Diamonds demand
Slide 14: Diavik's future is underground mining
Diavik’s future is underground mining For personal use only • Aerial photograph (Aug 2008) overlaid on top of UG design • Note 2 open pits and 3 kimberlite pipes • In red is the ore mined by the open pit as of late 2008 • The purple is the remaining ore to be mined • Mining in A154 due to finish in
Slide 15: Different and safe mining methods
Different and safe mining methods For personal use only •Applies to about 40% of production •Expensive method •Requires cemented paste backfill September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 27 Different and safe mining methods •Applies to about 60% of production •Cheaper method •Used
Slide 16: Transition to Underground
Transition to Underground For personal use only September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 29 More power needed, and more fuel New Original powerhouse powerhouse 6th fuel tank September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 30 15
Slide 17: We need to heat air for underground; new crusher and paste plant
We need to heat air for underground For personal use only • New heaters to heat the air sent underground • More power required, and therefore more fuel September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 31 New crusher and paste plant Construction well underway Schematic layouts September 0
Slide 18: Treat and protect more water; when it will happen
Treat and protect more water For personal use only • Double the treatment capacity • More piping & pumps • Increased water management across the site September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 33 When it will happen •Graph below shows timelines •Shading shows where we are mining an
Slide 19: Keeping everyone safe; protecting the environment
We’re keeping everyone safe For personal use only • 2008 All injury frequency and lost time injury rates: 0.98 and 0.49 • 2009 ytd All injury frequency and lost time injury rates: 0.78 and 0.22 • Three time winner of John T. Ryan Regional Safety Trophy • 2009 mine rescue team wins North’s mine rescu
Slide 20: Contributing to communities
Contributing to communities For personal use only • Employment • Training • Business capacity building • Community investment September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 37 Communities highlights • Established new levels of community transparency – Agreements and implementation plan
Slide 21: Mineral Reserves and Remaining Resources
For personal use only Introduction Market Context Project to Date and Current Operations Underground Project Growth Options Summary September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 39 Mineral Reserves and Remaining Resources (100%) PROVEN AND PROBABLE RESERVES 31 December 2008 Pipe Minin
Slide 22: Exploration status; A21 ongoing investigations
Exploration status For personal use only • Diavik exploration block includes 626,485 acres of Leases and Claims – 70 kimberlites discovered – Approx half are diamondiferous; a small number have economic potential • Grassroots exploration – No drilling or geophysics at this time – Some sampling and g
Slide 23: Summary – Diavik has sound fundamentals
For personal use only Introduction Market Context Project to Date and Current Operations Underground Project Growth Options Summary September 09 Diavik Diamond Mines Inc. – A RIO TINTO COMPANY 43 Summary – Diavik has sound fundamentals • Strong market fundamentals • High quality ore body • Substanti