Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Day (May 2012)
21 slides from Rio Tinto's investor day presentation, May 2012
Slide 1: Diamonds & Minerals update
1 Diamonds & Minerals update Harry Kenyon-Slaney Chief executive, Diamonds & Minerals May 2012 ©2012 Rio Tinto, All Rights Reserved
Slide 2: Cautionary statement
2 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
Slide 3: Product groups restructured in 2009
3 Product groups restructured in 2009 Diamonds & Minerals formed to maximise the value of a world class portfolio and pursue growth opportunities Iron ore Energy Diamonds & Aluminium Copper Minerals Diamonds Borates TiO2 Zircon Lithium Potash ©2012 Rio Tinto, All Rights Reserved
Slide 4: Strategy to deliver profitability and growth
4 Strategy to deliver profitability and growth Improve Build Grow Extract additional value from Generate value by developing Seek opportunities to grow in businesses through projects and people within existing and complementary improvement and collaboration existing businesses: sectors • Prices and
Slide 5: Strong reputation underpins strategy
5 Strong reputation underpins strategy • Responsible approach is key to securing and maintaining license to operate • Strong reputation improves access to mineral resources, people and capital we need • Source of competitive advantage Safety performance Injuries per 200,000 hours 2.5 All injury freq
Slide 6: Portfolio includes industry leading businesses
6 Portfolio includes industry leading businesses Titanium dioxide Minerals Diamonds Development • 60 years in business • 140 years in • #1 producer of • Potash JV business (borates) coloured diamonds exploration project • #1 producer of high in Saskatchewan grade feedstocks • #2 producer of • Mines
Slide 7: Steady improvement in EBITDA
7 Steady improvement in EBITDA Underlying EBITDA • Strong earnings growth in titanium dioxide will US$ billions continue as supply tightens and long term contracts unwind 0.8 • Sustained price growth for borates with 0.7 increasing supply tightness 0.6 • Strong long term fundamentals for diamonds –
Slide 8: Poised to capture demand growth
8 Poised to capture demand growth Inflection point not yet reached for many of our products Percentage of saturation level* Titanium dioxide 100 90 Nickel Titanium Dioxide 80 Crude steel 70 Aluminium Copper 60 50 40 Diamonds 30 Borates 20 10 0 2,000 10,000 18,000 26,000 34,000 42,000 50,000 58,000 W
Slide 9: Borates performing steadily
9 Borates performing steadily Global share of sales by volume 2010 • Rio Tinto supplies 40% of refined borates SA 6% Other 1% Bor 5% • Demand for higher quality products increasing SVM 6% Rio Tinto 40% • Growth driven by consumer demand for next generation electronics, more energy efficient building
Slide 10: TiO2 positioned to capture profitable growth
10 TiO2 positioned to capture profitable growth Global share of sales by value 2010 • Market concentrated, especially for high grades Rio Tinto 24% Other 27% • Demand driven by infrastructure growth in developing countries Kenmare 2% BHP 5% • Trend towards higher grade feedstock as Vietnam 4% BEE 4%
Slide 11: Building on exceptional performance
11 Building on exceptional performance RBM QMM RTFT Mozambique • Doubling stake to • 60% increase in • Record production • Progressing order 74% production in 2011 in 2011 of magnitude studies • New tailings • Dry mining plant • C$800m treatment plant and dredge investment over 5 improvements years
Slide 12: Diamonds fundamentals remain strong
12 Diamonds fundamentals remain strong Global share of sales by value 2010 • Strong fundamentals, but scale may suit a different ownership structure Others (13%) Anglo/ De Beers Harry Winston (2%) 36% • India and China growing to represent 20% of Petra (3%) global consumption by 2012 and 40% by DRC
Slide 13: Outlook is bright
13 Outlook is bright • Proven strategy and world class assets • Managing portfolio to maximise value • Advancing growth options to capture demand growth • Strong development position in promising new sectors ©2012 Rio Tinto, All Rights Reserved
Slide 14: Appendix
14 Appendix ©2012 Rio Tinto, All Rights Reserved
Slide 15: RTIT – high quality asset base and technology
15 RTIT – high quality asset base and technology ©2012 Rio Tinto, All Rights Reserved
Slide 16: Beneficiation process maximises value (RTFT)
16 Beneficiation process maximises value (RTFT) ©2012 Rio Tinto, All Rights Reserved
Slide 17: Beneficiation process maximises value (RBM)
17 Beneficiation process maximises value (RBM) • Dredge mining extracts and separates ilmenite, rutile and zircon (~5% in volume) from sand • Heavy mineral concentrate is transported to the mineral separation plant (MSP); ilmenite removed through magnetic separation and sent to smelter • Non-magneti
Slide 18: TiO2 uses linked to higher standards of living
18 TiO2 uses linked to higher standards of living TiO2 Feedstock Paints and Coatings 93% 52% 8% Plastics Other Paper • Inks • Fabrics • Cosmetics ©2012 Rio Tinto, All Rights Reserved
Slide 19: Borates – integrated and flexible global footprint
19 Borates – integrated and flexible global footprint • Mines in California and Argentina • Processing plants and shipping facilities in California, China, France, Spain, the Netherlands, Argentina • Global network of warehouses, stock points • Sales offices in Denver, UK, Singapore Slide ©2012 10 A
Slide 20: Mine one of two world-class borate deposits
20 Mine one of two world-class borate deposits • Underground operations began in 1927; open pit operations began in 1957 • Pit measures 2,800 meters wide, 3,200 meters long and 230 meters deep • 2.5 million tonnes of ore mined annually to produce 1 million tonnes of products • Life of mine is ~40 ye
Slide 21: Borate chemistry determines value, functionality
21 Borate chemistry determines value, functionality B2O3 tonnes vs. product tonnes • Measures concentration of boric oxide; chemically active ingredient Refined products vs minerals • Refined borates offer better purity, consistency, handling, storage and shipping Sodium borates vs. non-sodium borat