Rio Tinto Plc · LSE:RIO
Rio Tinto — Conference Presentation (March 2015)
12 slides from Rio Tinto's conference presentation, Mar 10, 2015
Slide 1: Optimising business value through the cycle
Optimising business value through the cycle Andrew Harding Chief executive officer – Iron Ore, China, Korea and Japan
Slide 2: Cautionary statement
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 T
Slide 3: Pilbara - decade of growth; continued strong returns
Pilbara- decade of growth; continued strong returns Pilbara infrastructure capacity vs production 2005 – 2014 (Mt/a) • Decade of growth in installed capacity 400 from 171 Mt/a to 360 Mt/a due in 1H 2015 300 • Expansions achieved safely, on budget 200 and ahead of schedule 100 0 • Moving from expansi
Slide 4: Maintaining consistent share of sales and value to shareholders
Maintaining consistent share of sales and value to shareholders Rio Tinto iron ore seaborne supply - share of sales • Rio Tinto’s share of seaborne sales over (Pilbara 2005-2014) the past decade consistently around 50% 20% 40% 30% • Our growth plans and performance have 20% 10% been well- documented
Slide 5: Global iron ore demand improves to 2030
Global iron ore demand improves to 2030 Finished steel demand (Mt/a) • China’s GDP growth around 7%, with the 2,500 transition away from investment driven 2,000 growth underway 1,500 Other developing • Chinese steel demand growth will be driven 1,000 China by manufacturing and replacement demand 500
Slide 6: Marginal iron ore production continues to exit
Marginal iron ore production continues to exit • ~125 Mt of supply exits in 2014 ~85 Mt of Chinese exits, predominately North-East China • China’s largest iron high-cost private mines located in north- ore supply region eastern China • Large proportion of high cost private ~40 Mt of seaborne exits,
Slide 7: Capturing full value from our product suite and marketing expertise
Capturing full value from our product suite and marketing expertise 2014 Pilbara products by market % • Supplier of choice to Asian steel industry - 100% consistent demand for Rio Tinto products across 80% varied market conditions 60% 40% • Pilbara Blend products facilitate operational 20% efficienc
Slide 8: Matching volume to capacity via low-cost brownfields
Matching volume to capacity via low-cost brownfields • 360 Mt/a infrastructure ~80% complete and on schedule for H1 2015 • On track for delivering 330 Mt in 2015 and 350 Mt by 2017 • ~40 Mt/a of brownfields growth approved Cape Lambert and being implemented at capital intensity Brownfield mines of ~
Slide 9: Consistently retaining the best margins
Consistently retaining the best margins • Our low-cost advantage has been sustained over Pilbara cash unit cost / EBITDA margin US$ per tonne Percentage many years: 30 80% − 2014 cash unit cost of $19.5/t 70% − H2 2014 cash unit cost of $18.7/t (8% lower than 25 $20.4/t in H1 2014) 23.9 60% 20 21.8
Slide 10: Leveraging innovation and technology to drive productivity and cost reductions
Leveraging innovation and technology to drive productivity and cost reductions Improved Cape Lambert lump outloading: CL average shiploading rate (tph) & cumulative Bottleneck shift improved average production capacity improvement average by ~10% 15 8000 Average rate (tph) Annual increase in outload
Slide 11: Concluding comments
Concluding comments • Our strategy has remained constant and clear • Iron ore demand and supply fundamentally rebalancing • High quality product, integrated logistics and marketing drives sustainable long-term value • Low first quartile cost position necessary in globally competitive sector • Commit
Slide 12: Questions
OJULL ON] Questions Cape Lambert