Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Presentation (September 2003)
62 slides from Rio Tinto's investor presentation, Sep 10, 2003
Slide 1: ASX cover letter to Company Announcements Office
RIO TINTO External Affairs Yelephone: +61 3 9283 3360 Facsimile: +61 3 9283 3216 10 September 2003 Company Announcements Office Australian Stock Exchange Limited SYDNEY NSW 2000 Dear Sir, The attached was presented by Rio Tinto Iron Ore to the financial community on adviser ~ Media & Publications At
Slide 2: Rio Tinto Iron Ore Financial Community Visit
RIO TINTO IRON ORE Financial Community Visit September 2003 Part 1 of 2
Slide 3: Ian Bauert introduction and venue safety
Rio Tinto Iron Ore RLO TINTEO lan Bauert Managing Director — New Business Rio Tinto lron Ore Financial Community Visit Wednesday 10: September: 2003 Venue safety 1. Fire alarms 2. Exits 3. Assembly point Financial Community Visit, September 2003
Slide 4: Iron Ore - Strong contribution to Rio Tinto performance
Rio Tinto Iron Ore Rio Tinto fron Ore - Strong contribution to Rio Tinto performance ‘Gross Tumover. Net earnings 4H 2003 = US$5.561m 4H 2008: = US$041m Mined: (Mt): Reserves {Mt} Resources (Mt): 2001: 2002 2004 2002 2004 2002 899° °904 2.617. 2)528 95957. 43;785: Rio Tinto fron Ore — Global positio
Slide 5: Range of products and markets
Rio Tinto Iron Ore Rio Tinto Iron Ore — Range of products and markets Rio Tinto iron Ore1H 2003 Sales = 63:4Mt Ma China 28% s % I, Other: Pellets’ G9), a S Korea ae 44% Rio Tinto Iron Ore — RIO Diverse assets delivering value TINTO Strength Marketieaderin China: High margin, Hanersley lon high volum
Slide 6: Development projects
Rio Tinto Iron Ore Rio Tinto Iron Ore — Development projects « Corumba, Brazil * Creeping capacity to 2Mtpa + by end 2004 * Sales to Europe have begun; after successful trials * Investigating expansion options to. 10Mtpa + « Simandou, Guinea »-Mining Convention signed giving 50 year tenure * Resourc
Slide 7: Global context and first half 2003 highlights
Rio Tinto Iron Ore Global context - 1H 2003 business conditions * Prices up - fines by.9% Million g and lump by 8.9% from April 03 aoe rE ae |. 7 tron ore exports up yoy mainly == driven by China ig. of Soaborces 480 if 150 » Australia 1p 16% » Brazilup 10% als, © China now world’s largest iron : or
Slide 8: Iron Ore - 1H 2003 Meeting unprecedented demand
Rio Tinto Iron Ore Rio Tinto lron Ore — 1H 2003 RIG Meeting unprecedented demand TINTO Performance Quarter Measure 2. O41 ee oF _ ooo 2008 2008 “Production | 27545 30733 43282| 56.402 640151 8% 21% Shipments | 28.267 29977 38,359] 53336) 11% 18% 22% Strong acceptance of West Angelas Marra Mamba ore:
Slide 9: Market strength - Driven by China
Rio Tinto Iron Ore Market strength — : RIC 1 Driven by China IINTO Seaborne traded iron ore by market 500: A5O AQ0: 250 China 309 @ Other Asia = 250 ( : wt Other 200 a 2 : : & Japan 450 : W Europe 400. 50 0 1985°:1987-4989"-4904:4993":4906: 1997: 4999-°2004 Seaborne Traded Ore 2002 = 474 Mt ni 4g So
Slide 10: Strong outlook for Chinese demand
Rio Tinto Iron Ore RLO Strong outlook for Chinese demand TINTO Chinese steel demand in the range of Domestic demand 275-300Mt by end of decade Key risks: / Domestic \ * Banking system steel demand * SOE reforms » Consumer confidence Steel intensity: Domestic production * Government spending The tisk
Slide 11: China steel industry development
Rio Tinto Iron Ore China steel industry development T a O Chinese stee! capacity forecast orld Steel Dynamics China iron ore imports @ Other Supply REO: Supply. 2002 By end of decade: (estimate) Chinese:domestic iron ore production constrained Assuming similar market share to 2062, expected growth i
Slide 12: Expansion plans and purchasing practices changing
Rio Tinto Iron Ore Brockman (+3Mipa -> 8Mipa) Eastern Range (+10Mipa > 10Mipa). Yandi= Stage:1-(+4Mipa->-24Mipa) Yandi-= Stage 2. (+10Mina:-> 34Mtpa): West Angglas (+5Mtna:—> 25Mipa) Rail Ports Dampier (+40Mipa -> 114Mipa). Cape - Stage: t:(:-> 55Mtpa): Cape - Stage 2 (+14Mipa -> 69Miipa) : : : RIO
Slide 13: Improving efficiencies in the value chain
Rio Tinto Iron Ore RIO Improving efficiencies in the value chain TINTO infand Chinese mill example FOB prite® Steaming Port: Port to plant: Plant, Screening! : Totat value unloading anloading =. handing chain Rio Tinto Iron Ore — Integration synergies Achieved + Formation of Pilbara Rail Company. =
Slide 14: Operational safety and summary
Rio Tinto Iron Ore Rio Tinto Iron Ore — RIO Operational safety TINTO RIO safety performance mate (CC s=— RTO combined Hi Robe SL semenes Higmelt 4999 = 2000) 2004 2002. 2003 Lost Time: trjury Frequency. Rate (UTIER) represents the number of lost-time Rio Tinto Iron Ore — Summary Expectations of sust
Slide 15: Hamersley Iron - 100%
Rio Tinto Iron Ore Hamersley Iron — 100% Dave Smith Managing Director Hamersley lron HI overview Resource/product capacity Expansion concept Operational review = Cost = Industial relations. on Safety. = Productivity Demurrage Financial Community Visit, September 2003 13
Slide 16: Steady growth in Hamersley sales
Rio Tinto Iron Ore Steady growth in Hamersley sales t oni Lominissexie Market strength - Growing sales to China 444-2003 sales:=-35:7Mt $: Korea 15%: Mi Europe: Taiwan 1% 6% includes 100% of all sales through joint ventures Financial Community Visit, September 2003 * Hamersley Iron has the capacity
Slide 17: Sales volumes underpinned by joint ventures
Rio Tinto Iron Ore Market Strength — Sales volumes underpinned by joint ventures Existing JVs provide Hi with a HI sales volume under long strategic advantage by. term contract (Mt) + Strenathening relationships with key customers: * Securing future market presence + Providing more efficient and clo
Slide 18: Expansion program - Dampier Port operations
Rio Tinto Iron Ore Expansion program — Dampier Port operations * Capacity. approx 74Mipa « Hamersley lron study into increasing capacity to 114Mipa in line with demand * Significant work at Dampier Port — second circuit at Parker Point * Concept for 74 to: 414Mipa well progressed; involving a duplic
Slide 19: Rail expansion program
Rio Tinto Iron Ore Rail expansion program Rail + Selective dual tracking of 125km required Dusl wecking tecured —« Tunkawanna to Cockatoo memmem Duplication nol required tunkawanna Expansion program - Yandicoogina (Yandi) Yandi start-up in 1999 at 15Mipa capacity e Expanded to 20Mipa in 2000 Increas
Slide 20: Expansion program - Eastern Range under construction
Rio Tinto Iron Ore Expansion program — Eastern Range under construction 54/46 JV with Baosteel agreed in 2002 Mine will average 10Mipa for 20 years JV. will take full range of Hamersley lron’s product Construction more than 50% complete Commissioning Q2 2004 Expansion program — Brockman * Brockman c
Slide 21: Costs and productivity
Rio Tinto Iron Ore Costs and productivity. Cost reduction program ees 49714=100 5 Target A$100m : Achieved A$80m in 3 years Tonnes produced per ~300.initatives across the : employee business + PRC + Procurement * Paraburdoo + Maintenance i Exceeded inflation JQ 72 74 76 78 80 82 84 Bb BB OO 92 94 96
Slide 22: Significant improvement in safety performance
Rio Tinto Iron Ore Significant improvement in safety performance 2000 2001 2002 2003 YTD. Hamersiey iron LTIFR Lost Time: trip cy-Rate (ETIER) represents the number of lost time: Environment and community AML- Environmental performance scores 4 Enviconresnital responsibility: ef 2000. 2: Conpnaunily
Slide 23: Industrial relations
Rio Tinto Iron Ore industrial relations No lost production due to industrial stoppages since 1993 Continue to employ on individual contracts: 90% on Australian Workplace Agreements 10% an Common Law contracts Recently negotiated a consensus federal award with Austratian Workers’ Union Award is a mod
Slide 24: Hismelt - 100%
Rio Tinto Iron Ore Hismelt — 100% Duncan Price Managing Director Hismelt Hismelt scale up strategy Full unit cost of iron Time u86-of considerable change in the risic profile representad'by.6 metre diameter plant, Jando be a isk free investment: Financial Community Visit, September 2003 22
Slide 25: Why Hismelt?
Rio Tinto Iron Ore Why Hismelt? Potential for reduction of costs through using Hismelt Eurond Brownfield) : USABrowotield) No cake or'sinfer plants of dioxias, furans: tars, phend SOx 90% lowest, NOx 20% lower CO; 20 to:80% fower Consums CAPEX {US $itpa} Is 120: OPEX (USSithin) Net value to the Hism
Slide 26: Kwinana plant
Rio Tinto Iron Ore Kwinana plant Project snapshot as at end July 2003 Safety LTis ie) Hrs worked » 500,000 Workforce. KCJV. 84 Hismelt ) Contractors 422 Progress Deconstruction 400% complete ‘Temp const facilities 160% complete Engineering 71% complete Total project $9% complete (planned 40%) Schedu
Slide 27: The steel industry opportunity
Rio Tinto Iron Ore The steel industry opportunity: Production costs * South Ames a i india tow-cost cLiGers due to access to raw nateriais: and: low: cost:labout: *Westere world ‘characterised by high operating o high V matetials and tabour USA & EU Sth Africa} Sth Am, fOr Fatios id: North Arn ping
Slide 28: The steel industry opportunity: three distinct markets
Rio Tinto Iron Ore The steel industry opportunity: Three distinct markets + China + Economic growth through infrastructure development + Steel sector growing based:on pig iron: and: BOF. «oHismelttor expansion and modern + Developed world + -Rationalisation due to lagging cost: competitiveness * “Re
Slide 29: Key messages
Rio Tinto Iron Ore Key messages . Kwinana Is on track ~ so far, so good. . Further development at Kwinana is only for product development and local optimisation. it will be performed in a modular, minimum risk manner. . The main game has begun. Each 6M Hismelt plant consumes 1.3Mt of iron ore fines
Slide 30: Schedule of events
Rio Tinto Iron Ore Rio Tinto fron Ore — Schedule of events DAY: 2. THURSDAY 11 SEPTEMBER 7:00am 8:00 am 9:15am 41:00am 12:00 pm 42:30: pm 2:45 pm 3:00:pm 416 pm Leave for Cape Lambert Cape Lambert presentation ‘Tour of Cape Lambert operation Leave tor Dampier Lunch Brief and tour of Dampier Port ope
Slide 31: Paraburdoo Operations
Rio Tinto lron Ore Paraburdoo Operations Hamersley Iron Pty Ltd A Meniber-of the Ric Tinto Group. Evacuation procedure Please observe the following rules during your visit + Always follow the advice of your tour guide. + Wear safety glasses and hard helmets when advised by your guide. ¢ Safety belts
Slide 32: Hamersley Iron Rail System and Paraburdoo history
Rio Tinto lron Ore Hamerstey Iron Rail System Dampier Rosati Siding 2 Marandoo : ona igjim | Yandi (HY) Brockman No.2 Cnttnevene dent toan a ane HY) P Htount Tom Prien f° Sesiun to Dampier Po, cs] Paraburdoo 1966 - Tom Price production begins August 1966 - first ship loaded at Dampier, Tachikawa Mar
Slide 33: Greater Paraburdoo
Rio Tinto Iron Ore Greater Paraburdoo >» Paraburdoo, Channar, Eastern Range (2004) « Total material mined 42Mt « High grade production 18Mt « Mobile fleet » 6 Loader Units and 12 Trucks * 350 employees on site « Paraburdoo is a residential site, supported by the township of Paraburdoo Financial Comm
Slide 34: Commissioned in 1994
Rio Tinto Iron Ore Commissioned in 1994 + Hydrocyclone improves quality by removing ultrafines and reducing impurities + up to 85% mass recovery +« Dewatering to reduce moisture acne Seaeoe nett ‘poses Financial Community Visit, September 2003
Slide 35: Unincorporated joint venture with Baosteel
Rio Tinto Iron Ore + Unincorporated joint venture with Baosteel to supply 200 Mt of Hamersley product over 20 years, averaging ~10Mtpa, using existing infrastructure * Hamersley lron will be responsible for the construction and operation of the joint venture * The initial capital investment was A$12
Slide 36: Eastern Range construction scope
Rio Tinto Iron Ore + At Eastern Range: Construction of primary and secondary crushing facility, together with dust suppression and dust collection * Ore Transfer: Construction of overland conveying facilities to enable transfer of ore from Eastern Range to Paraburdoo via the existing Channar conveyo
Slide 37: lron Ore
Rio Tinto lron Ore . st _ a oe en ee ’ canine! Seresaens 85 ipoies este 3 Financial Community Visit, September 2003
Slide 38: Iron Ore
Rio Tinto lron Ore Financial Community Visit, September 2003
Slide 39: Robe River - 53% ownership structure
Rio Tinto lron Ore Robe River — 53% Clive Latcham Managing Director Robe River Ownership structure — JV between diverse partners . Mitsul iron Ore Nippon Steel Development PA. Austratia PA. * Unincorporated joint venture = Global mining house = Global tradirig house — Customers Financial Community V
Slide 40: Current operations
Rio Tinto lron Ore Current operations assareone dy Morbie Bar © iia Bogie ‘West Angelas Mine Paraburdes.e Growth in tonnage and product range Robe River sales Financial Community Visit, September 2003
Slide 41: Total sales of iron ore and safety
Rio Tinto lron Ore Total sales of tron ore 1H 2003 Sales = 21. 1Mt China _& Korea 8% : 8% WiEurope: | 23% Safety — adopting best practice Robe River'safety performance: Behavioural based safety systems Safety reports through to the line Employees and contractors improved supervision and mgt ‘MarO4:
Slide 42: Productivity enhancement
Rio Tinto lron Ore Productivity enhancement No-of Employees Productivity: produced per: amploy 80,000: = AG.000. 30,000 OX OY: 10%. JOY: 1O¥: IY: 10%: Ox: $993.52 2003 $9885 49932003. (QBS A9B3: 2003 1O¥clran Ore-Year- which is: 1 Aprile 34 March Leverage operational strengths Low cost producer Repu
Slide 43: Cost programs
Rio Tinto lron Ore Cost programs Ongoing process for cost reduction ~ Internal targets, tight control of cosis ~ Costs at West Angelas higher than for Mesa J Focus on business planning and control = Reducing costs through improved planning ~ Prevention of failure and breakdown + Increased ability to
Slide 44: West Angelas
Rio Tinto lron Ore West Angelas * Open-pit mine, a crushing and screening plant, stockpiling, reclaiming and train load-out facilities + Enriched Marra Mamba iron formation — Reserves estimated at 455Mt in 2002 i ( Dp Meet demand growth — West Angelas Accelerated production ramp-up to meet full mark
Slide 45: Mesa J operations
Rio Tinto lron Ore Mesa J operations Mesa J located near the town of Pannawonica, 200km south-west of Cape Lambert port Mining commenced 1992 Mining below water table — Large percentage of reserves under water table - Blending to manage moisture variability Processing of ore through two process plan
Slide 46: Cape Lambert and expansion program
Rio Tinto lron Ore Cape Lambert Deepwater port facility Nominal capacity of 52Mipa Work commencing to “de-bottleneck’ the port, and thereby achieve nominal Cea rey Crushing and screening plant for Mesa J production Stockyard capacity of 8Mt Power station: Laboratory Port sharing a priority Expansion
Slide 47: Cost performance
Rio Tinto lron Ore Cost performance Unit cost performance Sustaining capital 2001 2002 2003. 2001 2002 2003 June: dune YTD. YTD. lndex:2001: #106: index 2001 =.40. ie Summary slide of key message Low cost operation Strong demand for Pisolite and Marra Mamba products Expansion phase — acceleration of
Slide 48: West Angelas Operations location
Rio Tinto Iron Ore Clive Latcham West Angelas Operations Managing Director : 2 Rohe River Sepiember 2003 Location « West Angelas located inland Pilbara « Open-pit mine, a crushing and screening plant, stockpiles, reclaiming and train joad-out facilities «Enriched Marra Mamba iron formation roducing
Slide 49: Project performance
Rio Tinto Iron Ore Project performance Robe JV participants agreed to develop West Angelas ore deposits in 1998 Agreement in 2001 to share rail infrastructure with Rio Tinto Mine completed in mid-2002 on budget and ahead of schedule + Estimated cost US$450m + Consistent mining from March 2002 Trial
Slide 50: Current resource - major chemistry
Rio Tinto Iron Ore Current resource — major chemistry West Angelas | West Angelas lron fron Ore Fines Ore Lump Element Compound Expect % Expect % fron (Fe) 61.88 62.74 Fe (caicined) 65.83 66.89 Silica (SiO2) 3.05 2.36 Alumina (Al203) 1.96 4.20 Phosphorous (P} 0.065 0.054 Sulphur (8) 0.022 0.015 Loss
Slide 51: Site layout - Deposit A
Rio Tinto Iron Ore Site layout — Deposit A an Mine blending Ore & Waste options in each pit + 2 Excavators in primary sources 2 Front-end loader for flexibility Single, or dual sourcing to crusher Financial Community Visit, September 2003
Slide 52: produc
Rio Tinto Iron Ore produc i As at 1/06/2002 4x 75,000t fines + 4 x 75,000t jump Stockpile grades modelled by SMS Sequential stacking & reclairning artes Financial Community Visit, September 2003
Slide 53: Future development
Rio Tinto fron Ore Future development * Demand for Marra Mamba is excellent = Ramp-up progressing well = Now considering future development options (where to after Deposit A) # Considering whether market demand justifies further expansion # Working with Pilbara Rail on rail capacity and future expan
Slide 54: Next step - expansion to 25mtpa
Rio Tinto fron Ore Next step - expansion to 25mtpa ® Approval from Rio Investment Committee # Extension to the stockyard # Further minor plant modifications # Further expansion to village and ancillary infrastructure # Currently assessing the rail implications of expanded West Angelas # Target rate
Slide 55: Rio Tinto Iron Ore background and production history
RIO TINTO IRON ORE Background Rio Tinto is a world leader in finding, developing, extracting and processing mineral resources. The Rio Tinto Iron Ore (RTIO) group includes Hamersley Iron which is whoily owned, a 53% interest in Robe River iron Associates and a 59% interest in lron Ore Company of Can
Slide 56: Hamersley Iron
HAMERSLEY IRON Location Hamersley Iron has six mines all located in the Hamersley Ranges of Western Australia. Five mines have train-loading facilities, and the Channar mine has an overland conveyor to the Paraburdoo operation. Ownership Mt Tom Price, Paraburdoo, Marandoo, Brockman (including Nammul
Slide 57: Robe River Iron Associates
ROBE RIVER IRON ASSOCIATES Location Robe River has two mines in the Pilbara region of WA. The Mesa J operations are located near Pannawonica, and West Angelas, which was commissioned in 2002, is 110 km west of Newman. Ownership Robe River is an unincorporated joint venture in which Rio Tinto has a 5
Slide 58: Pilbara Rail Company
PILBARA RAIL COMPANY Location The Pilbara Rail Company (PRC) currently rails iron ore from seven mines in the Pilbara region of Western Australia to four dumpers (two at the Dampier port and two at Cape Lambert port). Ownership PRC is a 50/50 joint venture between Rio Tinto Iron Ore and Robe River e
Slide 59: Track
Track e Total track length including yards is 868km (HI) and 316km (Robe) « Gauge: 1435mm (standard gauge) Haulage lengths - Yandicoogina to Dampier 447km - West Angelas to Lambert 420km - Paraburdoo to Dampier 386km - Marandoo to Dampier 306km - Tom Price to Dampier 291km - Brockman to Dampier 291k
Slide 60: Hismelt Project, Kwinana
HISMELT PROJECT, KWINANA Location Kwinana, south of Perth Western Australia. Ownership Wholly owned by Rio Tinto. Technology method The Hismelt process is a direct iron smelting technology that converts fine ores into high quality pig iron (96% iron ore content) without the use of coke ovens and sin
Slide 61: Iron Ore Company of Canada
IRON ORE COMPANY OF CANADA Location Labrador City, Newfoundland (mine, concentrator and pellet plant) Sept-lles, Quebec (currently idle pellet plant) Ownership Rio Tinto owns 58.7% of IOC. Other shareholders are Mitsubishi (26.2%) and Labrador Iron Ore Royalty Income Fund (15.1%). Reserves Tonnage G
Slide 62: Rio Tinto Iron Ore financials
RIO TINTS IRON ORE FINANCIALS - this information has been provided by Rio Tinto and is in the pubsic domain US dollars (million) Rio Tinto Gross tumover {a) EBITDA {b} Net Earnings fo) Capex (a) Depn & Amortn fe} Operating assets {fh Interest % _1HO3__4HO2_4HO3_1HOZ_1HO3_tHOZ 4HO3_tHOZ_ HOS HOZ HOS