Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Presentation (March 2008)
90 slides from Rio Tinto's investor presentation, Mar 13, 2008
Slide 1: ASX cover letter: Rio Tinto Alcan presentations
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 13 March 2008 Dear Sir, Attached are presentations from R
Slide 2: Rio Tinto Alcan Financial community site visit
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 3: Cautionary statement
Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward lo
Slide 4: Dick Evans, Chief Executive
For personal use only Dick Evans Chief Executive Rio Tinto Alcan 12 March 2008 Financial community site visit (12 - 14 March 2008) 3
Slide 5: The leading aluminium business
For personal use only The leading aluminium business The positive shift in the aluminium industry Competitively advantaged assets A growth profile unparalleled in the industry Track record 12 March 2008 Financial community site visit (12 - 14 March 2008) 4
Slide 6: The leading aluminium business
The leading aluminium business For personal use only • Scale and strength across the upstream aluminium value chain – The combination of Alcan and Rio Tinto aluminium assets create a leading position in each of bauxite, alumina and aluminium – Increasingly long positions in bauxite and alumina • Mod
Slide 7: Short term and strategic focus
Rio Tinto Alcan focus For personal use only Short term focus • Deliver on integration and synergies Strategic focus • Achieve excellence in health, safety and environmental performance • Leverage competitive advantages of bauxite reserves, self owned electricity and leading technology • Growth in lo
Slide 8: The premier integrated producer in the industry
The premier integrated producer in the industry For personal use only Production Mt Bauxite (2007)1 Alumina (2007)1 Aluminium (2007)2 0 10 20 30 0 10 20 0 5 Rio Tinto Alcan3 UC Rusal3 Pathway to UC Rusal3 No. 1 with Alcoa Chalco Gove and Rio Tinto Alcan3 Yarwun UC Rusal3 Alcoa3 expansions Alcoa3 BHP
Slide 9: Global reach with a stable OECD base
Rio Tinto Alcan has a global reach with a stable OECD base For personal use only Rio Tinto Alcan 2007 pro forma revenue – upstream only, by region North America Europe 34% 30% 3% Asia 1% S America 1% Africa Australia 31% Data under IFRS Pro forma 2007 upstream revenues = $15.1bn 12 March 2008 Financ
Slide 10: The leading aluminium business
For personal use only The leading aluminium business The positive shift in the aluminium industry Competitively advantaged assets A growth profile unparalleled in the industry Track record 12 March 2008 Financial community site visit (12 - 14 March 2008) 9
Slide 11: Forward markets indicate significant structural re-pricing
Forward markets indicate a significant structural re-pricing in the last 12 months For personal use only Aluminium 5-year forward curve USD/tonne 3,300 March 5, 2008 3,000 2,700 Dec. 31 2007 1,100 2,400 Dec 29, 2006 Feb 2008 analyst consensus 2,100 Dec 30, 2005 1,800 Dec 31, 2004 1,500 2005 2008 201
Slide 12: Aluminium consumption growing driven largely by China
Aluminium consumption is growing driven largely by China For personal use only Primary aluminium consumption kt 70,000 7.0% 60,000 50,000 3.1% 40,000 14.7% 30,000 8.9% 20,000 World 10,000 China1 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 1 China’s expected compound annua
Slide 13: Developing economies climbing the aluminium intensity curve
Developing economies have just begun to climb the aluminium intensity curve For personal use only Aluminium Consumption and GDP per Capita in 2006 30 Per capita consumption (kg) 25 China impact China will consume an 20 additional 12-13 Mtpa Japan USA when it reaches Developed Asia’s level 15 China o
Slide 14: Aluminium cost curve has risen and steepened
Aluminium cost curve has risen and steepened since 2003, RMB appreciation would impact further For personal use only 2007 with 15% RMB appreciation Cash cost (RMB:USD = 6.54) USD / t 2,800 Potential GHG 2,600 impact 2,400 2,200 2,000 2007 base case Rio Tinto Alcan RMB:USD = 7.69 1,800 1,600 1,400 20
Slide 15: Cost curve shift driven by energy and electricity prices
Upward shift of aluminium cost curve driven by global increase in energy and electricity prices… For personal use only Energy prices Electricity prices * 2003 - 2008 2003 - 2008 400 120 Oil - WTI 550.5 February 2008: Gas - NYMEX 1mo in Feb. MID-C = $69.68/MWh 350 Coal - globalCoal NEWC index 100 NOR
Slide 16: Bauxite and alumina prices
… as well as bauxite and alumina prices For personal use only Increase in China’s bauxite imports Both spot and contract alumina prices driving prices up above their historical trend Bauxite USD/tonne ($/tonne) 700 Alumina Spot 600 Alumina - Australian Export 500 400 300 200 100 0 1992 1994 1996 199
Slide 17: Depreciation of US dollar
Depreciation of US dollar For personal use only Trade-Weighted Value of US$ 105 Jan. 2003 = 100 100 95 90 85 80 75 2003 2004 2005 2006 2007 2008 Source: Global Insight Database 12 March 2008 Financial community site visit (12 - 14 March 2008) 16
Slide 18: Chinese smelters dominate upper end of cost curve
Chinese smelters dominate the upper end of the global cost curve Rio Tinto Alcan capacity weighted For personal use only Cash cost, 2007 average USD/tonne Chinese weighted average 3000 Chinese smelters 2800 2007 with RMB:USD rate = 6.54:1 (15% appreciation) 2600 2400 2007 with RMB:USD rate = 7.69 22
Slide 19: The leading aluminium business
For personal use only The leading aluminium business The positive shift in the aluminium industry Competitively advantaged assets A growth profile unparalleled in the industry Track record 12 March 2008 Financial community site visit (12 - 14 March 2008) 18
Slide 20: A unique portfolio of assets
A unique portfolio of assets For personal use only Key value driver • Quantity and quality of • Largest owned bauxite reserves in the reserves industry Bauxite • Scale of production • 100% owned Weipa – 2nd largest • Sovereign risk producing bauxite mine • 25 Mt of production in Australia • Bauxite
Slide 21: Bauxite: the world's largest reserves and resources
Bauxite: the world’s largest reserves and resources For personal use only Resources Bauxite Billion tonnes Reserves 4 3 2.507 1.349 0.103 2 2.200 1.060 1 1.813 1.387 1.950 0.525 0.835 0 Rio Tinto Alcan1 UC Rusal Vale Chalco Alcoa2 1 Rio Tinto Alcan reserves and resources have been determined in acco
Slide 22: Alumina: 8.4 Mt capacity in lower half of cost curve
Alumina: 8.4 Mt of capacity in the lower half of the cost curve…all with expansion options For personal use only Cash cost, 2007 USD/tonne Rio Tinto Alcan 2007 capacity weighted average 400 Rio Tinto Alcan refineries 350 Gardanne1 300 Arvida1 * Expansion options 250 Yarwun* QAL* Alumar* Gove* 200 15
Slide 23: Aluminium: 3.5 Mt in lower half of cost curve
Aluminium: 3.5 Mt in the lower half of the metal cost curve For personal use only Rio Tinto Alcan capacity weighted Cash cost, 2007 average USD Chinese weighted average 2800 Rio Tinto Alcan smelters 2600 2007 with RMB:USD rate = 6.54:1 (15% appreciation) 2400 2200 2007 with RMB:USD rate = 7.69 2000
Slide 24: Aluminium: the largest modern smelter fleet
Aluminium: the largest modern smelter fleet For personal use only Plant capacity1 by time elapsed since commissioning or last modernization Mt, 2007 Older pre-bake/Soderburg (30+ years old) 5 Soderburg to be replaced with modern pre-bake 4.2 4.2 Modern pre-bake (less than 30 years old) 4 3.9 3 2.8 2
Slide 25: 94% of power secured on long-term basis
Aluminium: 94% of power secured on long- term basis including 64% hydro For personal use only Sustainable, low cost energy supply Secured energy sources Rio Tinto Alcan 2007 smelter energy sources Short & medium- term contracts (6%) Gas/coal thermal (25%) Self Long-term generated Contracts (48%) Hyd
Slide 26: Aluminium: the AP technology edge
Aluminium: the AP technology edge 71% market share in electrolysis technology over 2000-2005 (excluding China) For personal use only Full economic cost leadership with emphasis on energy conservation and environmental Full economic impact cost leadership with emphasis on energy conservation and envi
Slide 27: The leading aluminium business
For personal use only The leading aluminium business The positive shift in the aluminium industry Competitively advantaged assets A growth profile unparalleled in the industry Track record 12 March 2008 Financial community site visit (12 - 14 March 2008) 26
Slide 28: An enviable project pipeline
An enviable project pipeline For personal use only Bauxite Alumina Aluminium Mt Mt kt Less North Weipa 4.0 – 10.0 Gove 1.8 Sohar I 74 than Gove 2.0 Alumar 0.2 Kitimat 400 3 years away1 Yarwun II 2.0 Quebec 450 2 Sohar II 215 2 South Weipa 15.0 - 22.0 QAL 1.0 Ma’aden 350-530 2 Ma’aden 1.7 Ma’aden 0.8
Slide 29: The leading aluminium business
For personal use only The leading aluminium business The positive shift in the aluminium industry Competitively advantaged assets A growth profile unparalleled in the industry Track record 12 March 2008 Financial community site visit (12 - 14 March 2008) 28
Slide 30: Consistently exceeded industry through capacity creep
Rio Tinto Alcan has consistently exceeded the industry in adding value through For personal use only capacity creep Rio Tinto Alcan smelter capacity creep kt – Rio Tinto Alcan has 237 added on average 240 1.1% capacity per 30 year since 2001 200 25 compared to 0.5% to 31 1% for the industry 160 120
Slide 31: Track record of delivering on synergies
Track record of delivering on synergies For personal use only Confidence in revised Rio Tinto target based on prior experience USD Millions 1,100 940 252 280 162 187 Target Achieved Target Achieved Target Internal stretch target Alcan-Alusuisse1 Alcan-Pechiney1 Rio Tinto Alcan1 1 After tax run rate
Slide 32: A strong management team with deep experience
A strong management team with a deep pool of experience For personal use only CEO Dick Evans Finance Human General Business Communica- Bauxite & Primary Phillip Resources Counsel Development tions and Alumina Metal Strachan Jean- Pierre Sandeep External Steve Jacynthe Christophe Chenard Biswas Relat
Slide 33: Financial community site visit – March 2008
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 34: Cautionary statement
Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward lo
Slide 35: Carmine Nappi, Vice President – Industry Analysis
For personal use only Carmine Nappi Vice President – Industry Analysis Rio Tinto Alcan 12 March 2008 Financial community site visit (12 - 14 March 2008) 3
Slide 36: The role of China
For personal use only The role of China Demand drivers Supply drivers Impact on trade flows 12 March 2008 Financial community site visit (12 - 14 March 2008) 4
Slide 37: Major player in global production
Major player in global production… For personal use only Global production growth Global primary production by region by region in 2007 40,000 Over the past six years, China has ktpa W. Europe represented ~2/3 of the net increase in E 35,000 11% primary production a s Other t 24% United States 30,00
Slide 38: …and consumption
…and consumption For personal use only Chinese apparent primary Global primary consumption consumption growth by region in 2007 Annualised Consumption (Mtpa, Not Seasonally Adjusted 14 325% East/Central 13 300% CIS Over the past six years, China has Europe 12 represented ~3/5 of the increase in glob
Slide 39: Chinese demand matched by Chinese supply
Enormous Chinese primary aluminium demand has so far been matched by Chinese supply For personal use only Primary aluminium apparent Primary aluminium production consumption growth rate (y/y %) growth rate (y/y %) 60% 60% Apparent Consumption IAI Production 50% 50% 6-Mos Moving Average 6-Mos Moving
Slide 40: The role of China
For personal use only The role of China Demand drivers Supply drivers Impact on trade flows 12 March 2008 Financial community site visit (12 - 14 March 2008) 8
Slide 41: Consumption fuelled by urbanisation and infrastructure
China’s aluminium consumption is fuelled by urbanisation and infrastructure development For personal use only Consumer segments are not yet fully China is urbanising rapidly tapped in China Percentage of Chinese population living in Total aluminium consumption breakdown urban area 2007 % % 60 10 Chi
Slide 42: China's initial consumption growth faster than other Asian economies
China’s initial growth in consumption is faster than other Asian economies For personal use only Primary aluminium consumption kg per capita – 3-year rolling average 24 20 16 Japan 12 Taiwan 8 Korea 4 China* 0 1957 1967 1977 1987 1997 2007 * If China follows the same growth pattern as Taiwan or Kore
Slide 43: The role of China
For personal use only The role of China Demand drivers Supply drivers Impact on trade flows 12 March 2008 Financial community site visit (12 - 14 March 2008) 11
Slide 44: Alumina and energy in China's high operating costs
Role of alumina and energy in China’s high operating costs: 2007 For personal use only 2500 Alumina Energy Labour Carbon Business Operating Costs ($ / Tonne) Average Other Cost BOC = 2007 $/T 2000 Average 15% 300 BOC = 1753 $/T Average Average BOC = 1637 $/T BOC = 1586 $/T 7% 146 221 13% 87 11% 186
Slide 45: Sustainability of China's production growth and exports
The sustainability of China’s primary aluminium production growth and exports is questionable For personal use only 15% export tax on primary metal Chinese power constraints RMB appreciation Central Govt policies restricting energy intensive industries Higher environmental standards Market interest
Slide 46: The role of China
For personal use only The role of China Demand drivers Supply drivers Impact on trade flows 12 March 2008 Financial community site visit (12 - 14 March 2008) 14
Slide 47: Impact of supply and demand drivers
Impact of supply and demand drivers For personal use only Increased net imports of aluminium units Net exports of unwrought metal Net imports of “scrap” -50 (kt Monthly) 200 150 0 Jan- kt +180.9 +9 6YT NET UNWROUGHT EXPORTS (kt) 100 50 NET SCRAP FLOWS . 100 50 150 -0 200 -50 250 -100 1999 2000 2001
Slide 48: China rationally moving up the value chain
China is rationally moving up the value chain For personal use only Net exports of semis 200 150 NET SEMIS EXPORTS . (kt monthly) 100 50 -180kt -0 +64kt +554kt +1,164kt Jan-08 -104.0 kt +57.5%YTD -50 2004 2005 2006 2007 2008 Source: China National Bureau of Statistics, Antaike 12 March 2008 Financia
Slide 49: Decreasing excess smelting capacity, lower net exports
Decreasing excess smelting capacity, lower net exports and soon a net importer of unwrought aluminium For personal use only Idle capacity and net export/import balance Mt 3.0 Idle capacity 2.5 2.0 1.5 Export 1.0 0.5 0.0 -0.5 Net balance (exports minus imports) Import -1.0 -1.5 2005 2006 2007 2008 20
Slide 50: Conclusions
Conclusions For personal use only The drivers for China’s aluminium consumption (increasing income per capita, urbanisation trends, infrastructure investments) are MORE SUSTAINABLE in the long-term than the variables driving production (low investment costs, the need to stimulate local employment, p
Slide 51: Financial community site visit – March 2008
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 52: Cautionary statement
Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward lo
Slide 53: Phillip Strachan, Chief Financial Officer
For personal use only Phillip Strachan Chief Financial Officer – Rio Tinto Alcan Financial community site visit (12 - 14 March 2008) 3
Slide 54: Additional value since the deal was done
For personal use only Additional value since the deal was done • Target synergies have increased by ~85% • External factors have moved in our favour Synergies ahead of expectation Selected proforma data and sensitivities Financial community site visit (12 - 14 March 2008) 4
Slide 55: The market is repricing aluminium
The market is repricing aluminium for the new reality For personal use only Aluminium price per tonne $/t 3,500 March 2008 Underlying 3,000 July 2007 +44% for 2012 fundamentals (935$/t) 2,500 • Energy availability and price causing 2,000 supply side issues • RMB strengthening 1,500 Spot placing pres
Slide 56: Additional value since the deal was done
For personal use only Additional value since the deal was done Synergies ahead of expectation • Internal target increased to $1.1billion • Internal rigorous well developed processes • Experience and track record • Robust projects Selected proforma data and sensitivities Financial community site visi
Slide 57: Alcan synergy internal target increased to $1,100 million
Alcan synergy internal target increased to $1,100 million post tax For personal use only Operating synergies Financial integration benefits Pre-tax synergies Post-tax synergies USD Millions USD Millions July announcement 314 380 220 600 November update 800 380 560 940 Internal target 1,000 400 700 1
Slide 58: Integration process is rigorous and well developed
Integration process is rigorous and well developed For personal use only Completed Oct 2007 Dec 2007 Feb 2008 Initial bottom-up Syndication and Top-down target Implementation assessment vetting Key activities • Launch taskforces • Perform • Get regional • Finalize valuation and • Allocate targets to
Slide 59: Value initiatives grouped into clusters
Value initiatives are grouped into 7 clusters Post-tax synergies For personal use only USD Millions Operational synergies • Designed around 280 Operations centres of excellence $700 M 123 Procurement • Leveraged IPT work 32 Marine 200 SGA • Leveraged experience Other of Alcan’s prior 65 integrations
Slide 60: Operations: $280 million synergies
Operations $280 million synergies in operations For personal use only Post-tax run rate Bauxite and alumina USD Millions Precipitation yield increased at Yarwun Crushed bauxite 280 • Alcan technology and best Digestion practice exchange to increased Calcination yield and improve alumina Bauxite and
Slide 61: Procurement: $123 million synergies
$123 million synergies by leveraging spend Procurement For personal use only Leveraged spend Emerging market sourcing USD Billions pa Eliminate duplication and leverage spend 1.9 Current suppliers in China and India Alcan 0.7 Procurement synergy levers • Emerging markets sourcing • Vendor consolidat
Slide 62: Marine: $32 million synergies
$32 million synergies by optimising routes Marine For personal use only Caustic soda backhaul in combined Panamax vessel triangulation liquid/dry bulk carriers IOC iron ore Caustic soda to Europe Sept-Îles for Gove refinery Port Alfred Bauxite to China Bauxite from Salt to Asian Guinea to Quebec Chl
Slide 63: SGA: $200 million of synergies
SGA $200 million of SGA synergies For personal use only Opportunity to remove duplication Consolidate R&D and corporate offices in Queensland • Public Company functions • Lawyers • Consultants • Auditors • Training Consolidated • Services hub in • Buildings Brisbane Opportunity to rationalize corpor
Slide 64: Additional value since the deal was done
For personal use only Additional value since the deal was done Synergies ahead of expectation Selected proforma data • 2007 proforma production and earnings • Synergy run rates • Earnings sensitivities Financial community site visit (12 - 14 March 2008) 14
Slide 65: 2007 pro forma – a window on the future
Rio Tinto Alcan 2007 pro forma – a window on the future For personal use only USD millions (unaudited) Gross sales Aluminium EBITDA Net earnings revenue Primary Metals 11,756 3,711 1,597 Bauxite & Alumina 3,272 1,102 495 Product group operations 15,028 4,813 2,092 Other product group items * 66 (19)
Slide 66: In period synergies of $591M in 2008
In period synergies of $591M in 2008 For personal use only In period synergy benefits Financial integration benefits USD millions EBITDA synergies 2008 2008 2009 2009 2010 2010 1,400* 400 592 503 1,000 359 232 H1 H2 H1 H2 Annual Note: Values presented based on the $1.1 billion after tax internal syn
Slide 67: Sensitivity to market forces
Sensitivity to market forces For personal use only 2007 average Effect on Rio Tinto Alcan full price/exchange Sensitivity year underlying earnings ($m) rate Aluminium 120c/lb +/-10c/lb 620 Canadian dollar 93USc +/-10c 150 Australian dollar 84USc +/-10c 165 Euro 137USc +/-10c 50 Financial community s
Slide 68: Financial community site visit – March 2008
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 69: Cautionary statement
Cautionary statement For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward lo
Slide 70: Steve Hodgson, President Bauxite & Alumina
For personal use only Steve Hodgson President Bauxite & Alumina - Rio Tinto Alcan Financial community site visit (12 - 14 March 2008) 3
Slide 71: Bauxite & alumina strategy and balance across value chain
For personal use only Bauxite & alumina strategy and the importance of balance across the value chain Bauxite & alumina assets Growth options Qualifications and capabilities to deliver 4
Slide 72: Bauxite & alumina strategy
Bauxite & alumina strategy For personal use only Strategic priorities: • Establish and maintain a long position in both bauxite and alumina production to support existing operations and to underpin aluminium smelting expansion options • Expand bauxite and alumina sales capability to support profitab
Slide 73: Bauxite & alumina value chain
Bauxite & alumina value chain For personal use only Balance in the bauxite and alumina value chain Alumina prices: spot and Australian export 1992 - 2008 • Bauxite security of supply underpins alumina 700 ($/tonne) expansion Alumina Spot 600 Alumina - Australian Export 500 • Alumina security of supp
Slide 74: Bauxite & alumina strategy and balance across value chain
For personal use only Bauxite & alumina strategy and the importance of balance across the value chain Bauxite & alumina assets Growth options Qualifications and capabilities to deliver 7
Slide 75: Large producing mines in key bauxite countries
Large producing mines in the key bauxite countries For personal use only Top 10 bauxite mines Top 10 bauxite reserve countries Production (2007) Reserves (2006)* Mt ownership % Mt presence Huntly 20.7 – Guinea 5,224 Weipa1 18.2 100 Australia 3,387 Trombetas1 18.1 12.0 Brazil 1,972 Boké1 13.7 22.9 Ja
Slide 76: Large-scale bauxite and alumina hub in Australia
Large-scale bauxite and alumina hub in Australia For personal use only Alumina exports & Bauxite exports transfers 2007 production Bauxite 22.9 Mt Alumina 6.3 Mt Alumina exports & transfers Gove – 1.9 Mt Weipa – 18.2 Mt Gove – 4.7 Mt Mitchell Plateau2 – 0 Mt QAL1 – 3.1 Mt Boyne – 330 kt Yarwun – 1.3
Slide 77: Weipa bauxite mine
Weipa bauxite mine For personal use only Bauxite production (million tonnes per annum) 22 21.3 20 18.2 18 16.3 16 14 12 10 2006 2007 2008F Commenced operations 1961 Country Australia Location Weipa, Queensland Rio Tinto Alcan ownership 100 per cent Annual production 18.2 million tonnes (2007) Reserv
Slide 78: Gove bauxite mine & alumina refinery
Gove bauxite mine & alumina refinery For personal use only Alumina production (million tonnes per annum) 3.0 3 1.9 2 1.6 1 0 2006 2007 2008F Bauxite production Commenced operations 1972 Country Australia (million tonnes per annum) Location Gove, Northern Territory 8 7.6 Rio Tinto Alcan ownership 100
Slide 79: Yarwun alumina refinery
Yarwun alumina refinery For personal use only Alumina production (million tonnes per annum) 1.5 1.4 1.3 1.2 1 0.5 0 2006 2007 2008F Commenced operations 2005 Country Australia Location Gladstone, Queensland Rio Tinto Alcan ownership 100 per cent Annual production 1.3 million tonnes (2007) Key advant
Slide 80: Queensland Alumina Limited (QAL)
Queensland Alumina Limited (QAL) For personal use only Pro forma alumina production (RTA share, million tonnes per annum) 4 3.1 3.1 3.2 3 2 1 0 2006 2007 2008F Commenced operations 1967 Country Australia Location Gladstone, Queensland Rio Tinto Alcan ownership 80 per cent Annual production (80%) 3.1
Slide 81: Strong Atlantic regional presence
Strong Atlantic regional presence provides alumina and bauxite options For personal use only RTA’s Atlantic bauxite and alumina production capacity* • Strong historical presence in Guinea through CBG; largest known resources in Guinea and high quality bauxite • High-performance JVs in Brazil; Alumar
Slide 82: Bauxite & alumina strategy and balance across value chain
For personal use only Bauxite & alumina strategy and the importance of balance across the value chain Bauxite & alumina assets Growth options Rio Tinto Alcan bauxite & alumina compared to BHP Qualifications and capabilities to deliver Billiton bauxite & alumina 15
Slide 83: Strong record of production growth
Strong record of production growth with an increase in momentum For personal use only Production (1) Bauxite (RTA attributable share, millions of tonnes per annum) • Weipa expansion to 50 +7.9% support Yarwun 1 and 2, 40 CAGR2 QAL capacity creep and 30 third party sales 20 • Gove 3 expansion 10 • At
Slide 84: Third-party bauxite sales a growing opportunity
Third-party bauxite sales represent a growing opportunity For personal use only 84% of bauxite supply is captive... ... and China’s growing dependence on imported bauxite has driven third-party sales and export prices up Bauxite Bauxite supply USD/ton Mt %, 2007 50 10 100% = 216 Mt Supply to other i
Slide 85: Massive Weipa resource provides pathway for growth
Massive Weipa resource provides pathway for immediate bauxite and alumina growth For personal use only Weipa expansion options Andoom Plant • Production expandable from 22 Mt Current 10 Mt Expanded 13 Mt to 35 Mt in 5 years • Expansion options Lorim Pt Plant – North: 4-10 Mt requires Embley Current
Slide 86: Mine locations provide multiple bauxite supply options
Mine locations provide multiple bauxite supply options Existing bauxite export or For personal use only transfer options Potential bauxite export or transfer options China Bauxite to China Bauxite to Japan and US Bauxite to Gove Rio Tinto Bauxite to Alcan Europe Weipa refineries Gladstone 1 Based on
Slide 87: Yarwun alumina refinery expansion to 3.4 Mtpa
Yarwun alumina refinery expansion to 3.4 Mtpa For personal use only • Yarwun stage 2 expansion will add 2.0 Mtpa of capacity to the existing refinery, taking total capacity to 3.4 Mtpa • Expansion will benefit from substantial scale efficiencies gained from the construction of Yarwun stage 1 • Once
Slide 88: Refining technologies support growth options
Refining technologies support growth options For personal use only High temperature refineries – hydrate thermal energy consumption GJ/tonne • Wide range of proprietary Plant with RTA technologies enabling Rio Tinto technology Alcan to design highly efficient 50 refineries for a variety of bauxites
Slide 89: Industry technology leadership in alumina
Industry technology leadership in alumina Own refinery For personal use only Third party refineries Refinery Projects Rio Tinto Alcan Refining technology global presence Persian Gulf Ma’aden , Project Europe Gardanne’ France <1950 ADG, Greece, 1966 China Nikolayev, 1980 Pinguo, 1995 North America Au
Slide 90: Summary
Summary For personal use only • Strong operational focus and first class assets • Long alumina and bauxite positions secure growth and provide platform for profitable third party business • Global presence in key operating regions centred around high quality bauxite resources • Significant growth pi