Rio Tinto Plc · LSE:RIO
Rio Tinto — SEG 2006 Conference
18 slides from Rio Tinto's conference presentation, Mar 14, 2006
Slide 1: Rio Tinto – taking the long term view for value creation
Tom Albanese Executive Director, Exploration & Group Resources “Rio Tinto – taking the long term view for value creation ” SEG 2006 Conference Keystone, Colorado March 14, 2006
Slide 2: Rio Tinto overview
Rio Tinto overview BHP Billiton 134.2 Rio Tinto 78.9 Anglo American 66.8 CVRD 56.1 Shenhua 32.5 Alcoa 30.5 • Second largest global mining company Barrick Gold 24.8 Norilsk 24.5 • Largest supplier of industrial minerals Newmont Mining 24.4 Xstrata 23.5 • Second in uranium and traded coal Anglo Platin
Slide 3: A broad geographic spread of operations
A broad geographic spread of operations Diamonds Aluminium Zinc, silver Talc Coal TiO2 / Iron and gold Iron Ore Talc Talc Talc Gold Coal Nickel Borates Copper Aluminium TiO2 Copper / Gold / Silver / Copper / Gold Molybdenum Iron ore Copper Uranium Diamonds Bauxite Iron ore Diamonds Salt Coal Copper
Slide 4: Rio Tinto North American Assets
Rio Tinto North American Assets Eight North American Businesses • Quebec Iron & Titanium Diamonds • Iron Ore Company of Canada (59%) • Diavik (60%) Zinc, silver Talc Coal TiO2 / Iron and gold • US Borax Iron Ore Gold Talc Coal • Luzenac America Borates Gold • Kennecott Energy Corporation Copper / Go
Slide 5: Rio Tinto Exploration (RTE) has a clear objective
Rio Tinto Exploration (RTE) has a clear objective - “To create value by providing ore resources to Rio Tinto” Diavik Diamonds Indian Kimberlite being drilled “RTE has entered a period of near unprecedented exploration success since reorganisation in 1997” 5 SEG Keystone, Colorado March 14, 2006
Slide 6: A predominantly geographic organisational structure
A predominantly geographic organisational structure Bristol Salt Lake City Reno Exploration Regions North America South America Africa/Europe Perth Melbourne Australasia Santiago Asia Global Project Generation Region HQ This slide is designed as a simplified District Offices Project Generation repre
Slide 7: Countries RTE Active - 2006
Countries RTE Active - 2006 Core countries Emerging programmes Under review No present interest 7 SEG Keystone, Colorado March 14, 2006
Slide 8: Exploration strategy – the key to success
Exploration strategy – the key to success • Establish a clear objective • Prioritise, Prioritise, Prioritise • Focus on results, not process Pic de Fon, Simandou, Guinea • Collaboration with partners • Appropriate use of technology • Selection of the best team • Target quality Chapudi Coal 8 SEG Key
Slide 9: Supply side response on the way
Supply side response on the way 6 2006? 5 4 3 $ billions 2 1 0 t 89 90 00 91 92 93 94 95 96 97 98 99 01 02 03 20 004 es 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 05 2 Source: Metals Economics Group Estimated total industry global exploration spending 9 SEG Keystone, Colorado March 14, 2006
Slide 10: The China effect
The China effect • Now fourth largest global economy • Has had a major impact on global demand since 2000 • Demand growth exceeding domestic supply • China is a significant player in world consumption, but lacks natural resources. • Probably a long term deficit based on geology 10 SEG Keystone, Colo
Slide 11: Metal prices and capital expenditure by the mining and metals industries
Metal prices and capital expenditure by the mining and metals industries Capex, Non Ferrous Real Non Ferrous Metals, 2005 US$ billion Metal Prices 1995=100 40 180 Capex 160 35 140 30 120 100 25 80 20 60 NFM Prices 40 15 20 10 0 Source: CRU (MICA), 78 81 84 87 90 93 96 99 02 05 The Economist 11 SEG K
Slide 12: Rio Tinto is a leader in technology development
Rio Tinto is a leader in technology development Sensor housing VK1 gravity gradiometer in development Isolation platform with the University of Western Australia. 12 SEG Keystone, Colorado March 14, 2006
Slide 13: Major Discoveries Attributable to Rio Tinto
Major Discoveries Attributable to Rio Tinto 3 Simandou Barneys Number Discoveries Lihir Pilbara deposit PRC Kaltim Prima Las Cruces 2 Resolution Tom Price Panguna Century Murowa Rossing Tarong Argyle Diavik Kelian Weipa 1 0 1955 1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2
Slide 14: Incremental growth projects
Incremental growth projects Pilbara mine capacity HIsmelt Recent Exploration Hamersley port & rail generated projects Kennecott Land Escondida SL Committed Grasberg DOZ Cortez Hills Hail Creek to 8mt $3.5 billion West Antelope UGS to 375 kt Madagascar Ti 02 Advanced study Hope Downs Eagle Grasberg u
Slide 15: Copper stocks and prices
000 tonnes Copper stocks and prices cents/lb 2400 250 2000 200 Price 1600 150 1200 100 800 Exchange stocks 50 400 Other stocks 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: LME / WBMS 15 SEG Keystone, Colorado March 14, 2006
Slide 16: Advancing the Resolution Deposit
Advancing the Resolution Deposit Drilling situation Additionally building new No. 10 shaft as of end 2004 N De-watering and deepening No. 9 shaft to ~2,000m 500 M 16 SEG Keystone, Colorado March 14, 2006
Slide 17: La Granja – a significant copper deposit in Peru
La Granja – a significant copper deposit in Peru • Rio Tinto successful in December 2005 tender • $60m investment planned in exploration & feasibility work • Increasing confidence in heap leach technology for mixed sulphide ores • La Granja orebody could support a large, long life copper mining oper
Slide 18: Commitment to Sustainable Development differentiates Rio Tinto
Commitment to Sustainable Development differentiates Rio Tinto Achieved through: • Corporate philosophy • Corporate policies & ethics • Stakeholder relationships • Environmental performance • Commercial transparency • Community relations • Employee welfare • Shareholder return • Economic contributio