Rio Tinto Plc · LSE:RIO
Rio Tinto — FY2010 Earnings Presentation
27 slides from Rio Tinto's earnings presentation, Feb 10, 2011
Slide 1: ASX cover letter for 2010 full year results 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 10 February 2011 Dear Sir/Madam, Attached is the Rio Tint
Slide 2: 2010 full year results
For personal use only 2010 full year results 10 February 2011 Cape Lambert port
Slide 3: Cautionary statement
For personal use only 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. Forwar
Slide 4: Jan du Plessis, Chairman
For personal use only Jan du Plessis Chairman Diavik Diamond Mine
Slide 5: Tom Albanese, Chief executive
For personal use only Tom Albanese Chief executive ISAL smelter, Iceland
Slide 6: Continued improvement in safety
For personal use only Continued improvement in safety Decline in injury frequency rates 2002–2010 Per 200,000 hours worked 10 February 2011 Rio Tinto 2010 full year results 5
Slide 7: 2010 highlights
For personal use only 2010 highlights • Record underlying earnings and cash flows • Increased volumes, including record iron ore production • Ordinary dividend increased 20 per cent compared with previous commitment • Capital management programme announced comprising $5 billion share buyback • $12 b
Slide 8: Increased risk of volatility in commodity prices
For personal use only Increased risk of volatility in commodity prices Commodity market prices • Demand from developing (Daily spot price index (1 January 2009=100)) countries exceed expectations • Weather disruptions have caused some supply shortages • Global growth expected to average 4% in 2011 a
Slide 9: Building on our strengths in Iron Ore
For personal use only Building on our strengths in Iron Ore Iron ore underlying results Highlights (US$bn) • Strong price environment • Record Pilbara production • Successful ramp up of new mines • Operations Centre drives productivity gains • Channar JV extended • Approval in 2011 to extend Marando
Slide 10: Iron ore capacity expansion in the Pilbara
50 per cent increase in Iron Ore capacity over For personal use only next five years • Approvals of $5.6 billion to expand Car Dumpers (x2) Pilbara operations to 283mtpa by end of 2013 1.8 km • New production capacity 100% Existing Cape 2.5km Lambert Port owned • Proven track record to deliver on Tu
Slide 11: Renewed investment in Aluminium
For personal use only Renewed investment in Aluminium Aluminium underlying results Highlights (US$bn) • Recovery in pricing and premiums • EBITDA breakeven of $1,570/t • Input cost pressures to return • Transformation programme continues • Yarwun expansion three months ahead of schedule • Modernisat
Slide 12: We are advancing our Copper growth projects
For personal use only We are advancing our Copper growth projects Copper underlying results Highlights (US$bn) • Record copper prices driven by supply disruptions • Earnings boosted by higher prices but lower grades impacted volumes • Cornerstone expected to extend KUC to 2028 • Increased evaluation
Slide 13: Energy boosted by higher coking coal volumes
For personal use only Energy boosted by higher coking coal volumes Energy underlying results Highlights (US$bn) • Strong seaborne coal prices partly offset currency impact • Significant rise in coking coal production following increased investment • Clermont ramping up • Force majeure at Queensland
Slide 14: Recovery in Diamonds & Minerals markets
For personal use only Recovery in Diamonds & Minerals markets Diamonds & Minerals underlying results Highlights (US$bn) • Robust recovery in prices driven by global economic conditions • Diamond demand from China and India accelerates • First production from Diavik underground • Argyle underground p
Slide 15: Guy Elliott, Chief financial officer
For personal use only Guy Elliott Chief financial officer Hunter Valley Operations
Slide 16: Record earnings driven by strong markets
For personal use only Record earnings driven by strong markets Underlying earnings 2009 vs 2010 ($m) Note: Exploration and evaluation variance includes $568 million net decrease in gain on undeveloped property sales: +$229 million gain in 2010 from sale of undeveloped coal properties compared with $
Slide 17: Controllable costs flat despite input price pressures
For personal use only Controllable costs flat despite input price pressures Total cash cost variance • Most cost increases were $bn uncontrollable from weaker US$, higher royalties and LME linked input prices • Continued savings from Aluminium • Limited upward pressure elsewhere • Increasing investm
Slide 18: Record cash flow generation
For personal use only Record cash flow generation 2010 cash flows Cash flows from operations ($bn) ($bn) Dividends from EAUs Cash flows from consolidated operations Reduction in net debt: ($14.6bn) Cash flows from operations: $23.5bn Other: ($1.4bn) Acquisitions: ($0.9bn) Tax: ($4.1bn) Interest: ($0
Slide 19: 2007 divestment programme complete – portfolio review continues
2007 divestment programme complete – For personal use only portfolio review continues • Packaging sales completed in 2010 Price (US$bn) for $3 billion 2008 3.1 • Remaining 48 per cent in Cloud Peak divested in 2010 2009 3.7 • Sale of 61 per cent of Alcan 2010 4.2 Engineered Products completed in 201
Slide 20: Balancing growth with capital returns
For personal use only Balancing growth with capital returns • Record cashflows have reduced net debt to $4 billion Cash from operations • Oyu Tolgoi fully consolidated – accounting change means 2011 capex now expected to be ~$13 billion • Small to medium-sized M&A – Investment Prudent Riversdale in
Slide 21: Tom Albanese, Chief executive
For personal use only Tom Albanese Chief executive Oyu Tolgoi construction site
Slide 22: Poised to capture growth associated with higher standards of living
We are poised to capture growth associated with For personal use only higher standards of living The inflection point is yet to be reached for many of our products Percentage of saturation level* Nickel Titanium Dioxide Crude steel Aluminium Copper Diamonds Borates 2,000 10,000 18,000 26,000 34,000
Slide 23: A strong pipeline of organic growth projects
For personal use only A strong pipeline of organic growth projects Key Mines and mining projects Smelters, refineries, power facilities and processing plants remote from mine Countries where Rio Tinto operates Aluminium Copper / nickel Diamonds Energy Iron ore Minerals 10 February 2011 Rio Tinto 201
Slide 24: Rio Tinto's offer for Riversdale will expand coking coal exposure
If successful, Rio Tinto’s offer for Riversdale For personal use only will expand our coking coal exposure Riversdale tenements in Moatize Basin ROM Riversdale Date of 1st production ownership production Status Benga Stage 1 5.3 Mtpa 65% 2H 2011 Construction Benga Stage 2 & 3 14.7 Mtpa 65% Pre-feasi
Slide 25: Investment in technology and exploration gives competitive edge
Our investment in technology and exploration For personal use only gives us competitive edge Exploration in Africa Iron Ore Operations Centre, Perth New tunnelling partnership with Aker Wirth Surface mine automation 10 February 2011 Rio Tinto 2010 full year results 24
Slide 26: Record year and strong growth prospects
For personal use only Record year and strong growth prospects • Record earnings, EBITDA and operating cash flow • $12 billion of capital approvals in value adding growth • 20 per cent increase in ordinary dividend and $5 billion capital management programme • Strong balance sheet • Excellent growth
Slide 27: 2010 full year results
For personal use only 2010 full year results 10 February 2011 Bingham Canyon