Slide 1: 2009 full year results
2009 full year results 11 February 2010
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: Jan du Plessis, Chairman
Jan du Plessis Chairman
Slide 4: 2009 highlights
2009 highlights • Commendable results in a rapidly changing macro environment • Recapitalised balance sheet; $20 billion reduction in net debt • Significant progress with divestment programme • Second half momentum from higher prices and actions taken • Continuing strong operational performance; $2.
Slide 5: Substantial recovery but volatility likely to persist
Substantial recovery but volatility likely to persist • Price resurgence across most of our key commodities driven by government stimulus measures • Factors that drove upturn will continue through 2010 — China expected to grow at over 9 per cent — OECD coming out of recession • Risks remain in the s
Slide 6: Tom Albanese, Chief executive officer
Tom Albanese Chief executive officer
Slide 7: Continuing improvements in safety performance
Continuing improvements in sfaety performance Decline in injury frequency rates 2002-2009 Per 200,000 hours worked All injury frequency rate Lost time injury frequency rate 0.0 0.5 1.0 1.5 2.0 2.5 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 11 February 2010 Rio Tinto 2009 full year results 7
Slide 8: Momentum returned in the second half
Momentum returned in the second half Underlying EBITDA (US$ bn) 0 2 4 6 8 10 12 H1 06 H2 06 H1 07 H2 07 H1 08 H2 08* H1 09* H2 09 Highlights • Strong volume growth delivered in iron ore, copper and gold • Achieved year on year operating cost savings of $2.6 billion • Aluminium business turnaround •
Slide 9: Iron ore volume growth drove strong earnings
Iron ore volume growth drove strong earnings Underlying results (US$ bn) 2009 highlights • Strong demand growth driven by China • 2010 iron ore demand growth to outstrip supply • Record annual sales and production from the Pilbara • Pilbara production run-rate in excess of 220mtpa nameplate capacity
Slide 10: Positioned to benefit from long term outlook for iron ore demand growth
Positioned to benefit from long term outlook for iron ore demand growth • Long term outlook remains strong • First production from Mesa A, Brockman 4 to follow shortly • Incremental capacity increases to add considerable value • Expansions to 225mtpa and studies to 230mtpa by 2012 underway • Evaluat
Slide 11: Western Australian iron ore production joint venture
Western Australian iron ore production joint venture • Good progress towards formation of production joint venture • Regulatory process underway • More tonnes faster, at lower cost • Estimated synergies totalling in excess of US$10 billion NPV • Both companies will independently market iron ore glob
Slide 12: Aluminium earnings recovered in the second half
Aluminium earnings recovered in the second half Underlying result (US$ bn) (1.0) (0.5) 0.0 0.5 1.0 1.5 2.0 2.5 H1 08 H2 08 H1 09 H2 09 Underlying EBITDA Underlying earnings 2009 highlights • Resurgence in prices in the second half • $1.0 billion EBITDA and $0.8 billion earnings improvement in 2H vs
Slide 13: Successful delivery on initiatives drove improvements in Aluminium earnings
Successful delivery on initiatives drove improvements in Aluminium earnings Four major initiatives are driving improvements 1. Delivered on synergies and integration targets • $441 million synergies in H2 2009 bringing total to $924 million for 2009 • $1.1 billion run rate achieved at the end of 200
Slide 14: Strong volume gains in Copper
Strong volume gains in Copper Underlying result (US$ bn) 0 1 2 3 H1 08 H2 08 H1 09 H2 09 Underlying EBITDA Underlying earnings 2009 highlights • Rebound in prices in 2009 following surge in Chinese imports • >$550 million year on year volume benefit following improved operating performance and highe
Slide 15: Energy earnings remained robust
Energy earnings remained robust Underlying result (US$ bn) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 H1 08 H2 08* H1 09 H2 09 Underlying EBITDA Underlying earnings 2009 highlights Robust seaborne market for Australian coal, as China became a significant importer Improvements to infrastructure constraints unde
Slide 16: Some recovery in Q4 for Diamonds & Minerals
Some recovery in Q4 for Diamonds & Minerals Underlying result (US$ bn) 0.0 0.2 0.4 0.6 0.8 1.0 1.2 H1 08 H2 08 H1 09* H2 09 Underlying EBITDA Underlying earnings 2009 highlights • Demand recovery lags other product groups due to OECD focus — Shutdowns in 2009 to balance production with market demand
Slide 17: Guy Elliott, Chief financial officer
Guy Elliott Chief financial officer
Slide 18: Major progress on divestments
Major progress on divestments Asset Price (US$m) Completed Greens Creek, Cortez, Kintyre, other 3,074 2008 Ningxia, sundry exploration properties 193 Corumbá and potash assets 1,664 Jacobs Ranch 764 2009 Cloud Peak Energy (52%) 741 Alcan Engineered Products Composites 349 Alcan Packaging global phar
Slide 19: Strong cash flow funded increased investment in value adding growth
Strong cash flow funded increased investment in value adding growth 2009 full year cash flows ($bn) 0 5 10 15 20 25 30 35 Inflow Outflow Rights issue proceeds — $14.8bn Reduction in net debt — $19.8bn Disposal proceeds and other inflows — $2.4bn Cash flow from operations — $13.8bn Other — $0.7bn Int
Slide 20: Significant price effect in first half 2009, with some recovery towards the end of the year
Significant price effect in first half 2009, with some recovery towards the end of the year Underlying earnings 2008 vs 2009 ($m) 0 2000 4000 6000 8000 10000 12000 10,303 2008 (6,879) Price 484 Exchange Rates Non traded prices — $3.8 bn Traded prices — $3.1 bn 40 60 80 100 120 140 Dec ‘07 Jun ‘08 De
Slide 21: Volume growth and cost improvements to earnings
Volume growth and cost improvements to earnings Underlying earnings 2008 vs 2009 ($m) 0 2000 4000 6000 8000 10000 12000 10,303 2008 (6,879) Price 484 Exchange Rates 652 Volume (172) Inflation 318 Energy 742 Cash costs 890 Explor’n & Eval’n (40) Interest, Tax & Other 6,298 2009 Note: Exploration and
Slide 22: Recapitalised balance sheet allows disciplined investment in value adding growth
Recapitalised balance sheet allows disciplined investment in value adding growth... Cash from operations Investment in value adding growth Prudent balance sheet management Return cash to shareholders • Rigorous process to prioritise capital expenditure • Growth has been underpinned by continued inve
Slide 23: Resumption of dividends to shareholders
.... and the resumption of dividends to shareholders 2008 2009 20101 Interim USc/share 68 — 45 Total payout ($m) 850 — 882 Payment date Sep 2008 n/a Sep 2010 Final USc/share 68 45 45 Total payout ($m) 876 882 882 Payment date Apr 2009 Apr 2010 Apr 2011 • Final dividend of 45 US cents per share • Exp
Slide 24: Tom Albanese, Chief executive officer
Tom Albanese Chief executive officer
Slide 25: We have preserved our growth options
We have preserved our growth options Key Mines and mining projects Smelters, refineries and processing plants remote from mine Aluminium Copper Diamonds Energy Iron ore Minerals 11 February 2010 Rio Tinto 2009 full year results 27
Slide 26: Increasing urbanisation rates support positive longer term view
Increasing urbanisation rates support positive longer term view • Growth in non-OECD markets will support higher prices over the longer term • China is key • But India is set to follow — 15 years behind China — Less commodity intensive 11 February 2010 Rio Tinto 2009 full year results 28
Slide 27: 2009 — delivering against our commitments
2009 — delivering against our commitments Target Achieved Reduce controllable operating costs Controllable operating costs reduced by at least $2.5 billion per annum in by $2.6 billion in 2009 2010 Reduction in global headcount of Global headcount reduced by around 14,000 roles 16,000 in first half
Slide 28: A stronger business, well-positioned for growth
A stronger business, well-positioned for growth Strong demand to continue through 2010 but with some risks and volatility Priorities for 2010 Focus on operational delivery Transformation of our aluminium business to continue Pursue growth path through disciplined capital expenditure Complete the Wes
Slide 29: 2009 full year results
2009 fulll year results 11 February 2010
Slide 30: Breakdown of price variance
Breakdown of price variance Earnings impact from price $(6,879) million ($m) (3500) (3000) (2500) (2000) (1500) (1000) (500) 0 500 1000 Copper Aluminium Moly Other Iron ore Thermal coal Coking coal Uranium Industrial minerals Diamonds Other (435) (2,614) (343) 285 Traded Non-traded (2,884) (128) (56
Slide 31: Breakdown of volume variance
Breakdown of volume variance Earnings impact from volumes $652 million ($m) (300) (200) (100) 0 100 200 300 400 500 600 700 800 175 (41) 357 13 (704) (75) (106) 8 (49) (240) (4) Copper Aluminium Gold Moly Iron ore Coal Uranium Industrial minerals Diamonds Other EP 11 February 2010 Rio Tinto 2009 ful
Slide 32: Modelling earnings
Modelling earnigs 2009 average Impact on full year Earnings sensitivity price/rate underlying earnings ($m) Copper 232c/lb +/-23c/lb 268 Aluminium $1,665/t +/-$167/t 465 Gold $970/oz +/-$97/oz 63 Molybdenum $11/lb +/-$1.1/lb 20 Iron ore +/-10% 638 A$79 USc +/-US7.9c 444 C$88 USc +/-US8.8c 171 11 Feb