Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Day (October 2023)
81 slides from Rio Tinto's investor day presentation, Oct 9, 2023
Slide 1: Presentation for Financial community visit to Pilbara
Notice to ASX Presentation for Financial community visit to Pilbara 9 October 2023 Attached are the presentation slides for the presentation by management at the site visit for the financial community to its Pilbara operations in Western Australia. The presentation will be webcast at 13:45 AWST / 06
Slide 2: Contacts
Notice to ASX/LSE 2/2 Contacts Please direct all enquiries to media.enquiries@riotinto.com Media Relations, Media Relations, Media Relations, United Kingdom Australia Americas Matthew Klar Matt Chambers Simon Letendre M +44 7796 630 637 M +61 433 525 739 M +1 514 796 4973 David Outhwaite Jesse Riseb
Slide 3: Pilbara Site Visit October 2023
For personal use only Pilbara Site Visit October 2023
Slide 4: Important information
Important information This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward-looking statements This document contains certain forward-lookin
Slide 5: Agenda
Agenda Time Topic Presenter For personal use only Session 1 13:45 – 13:55 Safety and Cultural Share Cecile Thaxter 13:55 – 14:25 Iron Ore Simon Trott 14:25 – 14:45 Pilbara Mines Matthew Holcz 14:45 – 15:00 Rail, Port & Core Services Richard Cohen 15:00 – 15:10 Operational & Technical Support Stephen
Slide 6: Cecile Thaxter, Health, Safety, Environment & Communities
Cecile Thaxter Vice President, Health, Safety, Environment & Communities For personal use only 4
Slide 7: Fatality prevention
Fatality prevention For personal use only The leading causes of fatalities across the mining industry in 20221 are risks that our people face today… Mobile Falling Working at equipment objects heights 1 Based on International Council on Mining and Metals (ICMM) 5 member organisations
Slide 8: Integrated approach to preventing fatalities
Integrated approach to preventing fatalities For personal use only Safety Maturity Model pillars Managing fatality risks Ensuring critical controls are well designed, understood, in place, and working at the frontline Shifting mindsets & behaviours Learning & Risk Through leadership & engagement and
Slide 9: Nammuldi cultural heritage incident
Nammuldi cultural heritage incident Before Original position Existing natural Original position of dislodged treeof tree rockfall Original position Existing natural of dislodged rock For personal use only rockfall August 2023 Identified dislodgement of Pilbara scrub tree and ~1m3 rock Original posit
Slide 10: Simon Trott, Chief Executive, Iron Ore
Simon Trott Chief Executive, Iron Ore For personal use only 8
Slide 11: Acknowledgement of country
Acknowledgement of country For personal use only We acknowledge the Yaburara and Ngarluma People on whose Traditional Lands Dampier is located and pay our respects to Elders past and present. We extend that respect to all Aboriginal and Torres Strait Islander peoples on the lands where we operate. 9
Slide 12: Presenters
Presenters For personal use only Simon Trott Cecile Thaxter Matthew Holcz Richard Cohen Chief Executive, Vice President, Managing Director, Managing Director, Iron Ore Health, Safety, Environment & Pilbara Mines Rail, Port & Core Services Communities Stephen Jones Will Millsteed Simon Farry Rowena A
Slide 13: This week's programme
This week’s programme Dampier Our world class port Ports capable >360 Mtpa For personal use only and autonomous rail Gudai-Darri We continue to excel Applying co-management in development Rhodes Ridge The best undeveloped Large, grade-advantaged project in the Pilbara & close to infrastructure 11
Slide 14: Nothing is more important than the safety and wellbeing of our people
Nothing is more important than the safety and wellbeing of our people For personal use only Fatality prevention Everyday respect Life Saving Commitments Embedding respectful behaviours Critical Risk Management Inclusion and respect Safety Maturity Model Supportive leadership programmes to help suppo
Slide 15: We have a compelling global iron ore portfolio
We have a compelling global iron ore portfolio Our portfolio includes the world’s two best undeveloped projects For personal use only Access to global markets Iron ore projects on three continents 175 Japan / Korea Rhodes Ridge & Simandou 1,193 Greater China Iron Ore 23 100 The best undeveloped proj
Slide 16: Proven record of outstanding Pilbara financials and a strategy for the future
Proven record of outstanding Pilbara financials We aim to be the ‘Most Valued’ resource business and a strategy that will deliver into the future For personal use only 68% $82bn Average Pilbara EBITDA Free cash flow, margin, 2013-2022 2013-2022 $39bn 53% Corporate Tax, Return on Capital Employed, 20
Slide 17: Our strategy is realising tangible results across the value chain
Our strategy is realising tangible results across the value chain 2023 Focus areas 2023YTD Outcomes For personal use only 5 Mt uplift from Safe Production System (SPS) 2023 forecast to be upper half of guidance with SPS 5 Mt uplift on track Best operator 320 to 335 Mt 2023 original shipments guidanc
Slide 18: Three global forces define our strategic context
Three global forces define our strategic context 1 2 3 For personal use only Global steel demand Decarbonisation ESG Stewardship ~24% growth by 2050 ~50% with net zero targets +12-18 months since 2018 Driven by emerging markets with Based on 2022 iron ore Increase in Western Australian mining maturi
Slide 19: The next years will be defined by access to infrastructure, markets and resources
The next 10 years will be defined by access to infrastructure, markets and resources For personal use only Competitive advantage Port capability >360 Mtpa Access to Rail delivering Infrastructure Access Access to to Markets Resources Strategic JV relationships Co-designing mines Pilbara Blend base l
Slide 20: Generating robust returns from disciplined capital investment
Generating robust returns from disciplined capital investment Mine capital intensity outlook Rhodes Ridge: the best undeveloped project in the Pilbara For personal use only ($/t installed capacity) 100 Large Grade-advantaged Infrastructure Range: 30% – 80% IRR1 >100 Mtpa capacity >62% for Pilbara Bl
Slide 21: We have production momentum, targeting a higher range in 2024
We have production momentum, targeting a higher range in 2024 Shipping guidance For personal use only (Mt, 100% basis) Guidance On track for upper half of guidance in 2023 360 323 – 338 Mt in 2024 Replacement projects Equity 338 Equity tonnes 84%1 in 2022 335 345 Effective equity share of free cashf
Slide 22: Volume and productivity to enable cost improvement
Volume and productivity to enable cost improvement Unit costs For personal use only $/t shipped 2023 ~$20/t mid-term unit cost target1 Guidance $21-22.5 Volumes increasing 21.2 ~20 Productivity improvements Work index rising 2011-2015 2016-2020 2021 2022 H1 2023 Mid-term Reduces unit costs from curr
Slide 23: Building valued partnerships across our business
Building valued partnerships across our business State-wide benefits Working to build healthy, resilient communities and For personal use only strong local economies Largest residential and regional FIFO presence Derby Community health Pilbara-based businesses Inclusive education Broome Wickham Damp
Slide 24: Positioning for a green future
Positioning Scope 1 & 2 Scope 3 for a green future Reducing operational emissions Pathways to producing low CO2 steel For personal use only Existing pathways Progressing a renewable- Lower the carbon impact of Ongoing powered business with existing Blast Furnace steel options for expansion making te
Slide 25: A proven record and a strategy for the future
A proven record and a strategy for the future For personal use only Best operator 2023 volumes at the upper half of guidance Maximising productivity with our Safe Production System Impeccable ESG Safety and wellbeing of our people Partnering on low CO2 technologies for Pilbara ores Excel in developm
Slide 26: Matthew Holcz, Managing Director, Pilbara Mines
Matthew Holcz Managing Director, For personal use only Pilbara Mines 24 Marandoo Mine Site
Slide 27: A globally significant bulk commodities business
A globally significant bulk commodities business Mine For personal use only Cape Lambert 17 Mines Port Dampier 430 Haul trucks (361 automated) Operations Centre 60 Production drills (34 automated) Rail 17 Processing plants (7 wet plants) P I L B A R A 1,900 Rail network distance (km) Robe Valley 220
Slide 28: Building resilient and reliable performance
Building resilient and reliable performance For personal use only 2018 2021 20231 Today Volume Shipments 338 Mt 320 Mt 328‒335 Mt2 Volume recovering Mine spatial conformance3 <1.00 1.25 1.33 Mine Health Blasted stocks 103 Mt 110 Mt 142 Mt Mine health restored Run of mine stocks 12 Mt 15 Mt 30 Mt Ass
Slide 29: Blast Management Plans are designed to protect heritage sites
Blast Management Plans are designed to protect heritage sites For personal use only Design Heritage site A 70 metre exclusion zone Detailed understanding of the heritage site and surrounding areas B 200 metre blast management zone Technical analysis defining exclusion zones and operating parameters
Slide 30: Embedding co-management across our business
Embedding co-management across our business Gudai-Darri case study For personal use only Whistler Warlu Employee cultural awareness Changes to mine plan Gudai-Darri Warlu hole identified by operator 10% reduction in ore reserve from Kara deposit Gorge following cultural awareness 12% of production t
Slide 31: Mining work index continues to increase but at a slower rate
Mining work index continues to increase but at a slower rate Total material moved (Bt) Effective flat haul (km) Mining work index (Bt.km) For personal use only CAGR = 4% CAGR = 2% CAGR = 6% CAGR = 3% CAGR = 11% CAGR = 5% 1.3 1.3 1.4 15.7 15.3 18.2 25.4 1.0 11.6 20.0 19.9 12.0 2018 2023F 2024F Mid-te
Slide 32: Pathway to Best Operator
Pathway to Best Operator Safe Production System deployment Mine Safe Production System For personal use only Dampier Rail Cape Lambert Leading Problem Digital Port practice solving applications Remote Pilot Key enablers Sustaining Robe Valley Organisation Operational Capability Implementation design
Slide 33: Safe Production System is delivering
Safe Production System is delivering: 5 Mt uplift in 2023 on track Development Drill & Blast Load & Haul Processing Rail Ports Deployment For personal use only A West Angelas E 14% C 27% E 11% D 10% F 5% G 11% B Yandicoogina Spatial conformance1 Metres drilled per hour1 Truck work rate1 Fixed plant
Slide 34: Gudai-Darri: Pathway to Best Operator
Gudai-Darri: Pathway to Best Operator Phase 1: Ramp-up achieved within 12 months Phase 2: Creep capacity towards 50 Mtpa For personal use only Pathway Chute and conveyor belt upgrades to main plant Additional mining fleet and rail stockyard expansion Leverage incremental crushing and screening facil
Slide 35: Disciplined approach to deliver resilient and reliable performance
Disciplined approach to deliver resilient and reliable performance For personal use only Volume recovering Mine health, product quality and heritage management Continue the momentum Drive productivity and overcome work index challenges Safe Production System Productivity pathway embedded and deliver
Slide 36: Richard Cohen, Managing Director, Rail, Port & Core Services
Richard Cohen Managing Director, Rail, Port & Core Services For personal use only 34
Slide 37: World class infrastructure
World class infrastructure Our mines are serviced by a fully integrated supply chain, supported by our Operations Centre in Perth Extensive rail network For personal use only ~1,900km of privately owned rail AutoHaul® delivering safety and efficiency Port competitive advantage Unencumbered, low risk
Slide 38: Reliable rail and port infrastructure already supports 330 Mtpa
Reliable rail and port infrastructure already supports 360 Mtpa For personal use only Existing capacity 350 – 360 Mtpa1 Existing capacity >360 Mtpa1 ~330 Mtpa average weekly performance2 ~330 Mtpa average weekly performance2 Rail performance Port performance Weekly annualised actual performance from
Slide 39: We have unrivalled port capacity
We have unrivalled port capacity For personal use only Our ports offer a competitive advantage Existing capacity >360 Mtpa Demonstrated port capability above 360 Mtpa Two berths per shiploader Maximising utilisation of our shiploaders Weekly outload capacity1 2018-2023, Mtpa annualised Dedicated shi
Slide 40: Increasing rail capacity towards 360 Mtpa
Increasing rail capacity towards 360 Mtpa Improved AutoHaul® performance Rail track renewal progress For personal use only Percentage of time a train driver responds to a train in the field Improving asset health Safety improvement Dampier Cape Lambert Increasing efficiency of execution Reduced vari
Slide 41: Our Safe Production System will build on our downstream advantage
Our Safe Production System will build on our downstream advantage The voice of our For personal use only Ports Rail people Dampier Cape Lambert 23% 11% 5% 60 We are clear on our Unscheduled loss Cape Lambert A plant Cape Lambert Less wagons called for purpose and our compared to 2022 effective utili
Slide 42: Safe, respectful and inclusive communities at our villages & towns
Safe, respectful and inclusive communities at our villages & towns For personal use only Safety and security Infrastructure modernisation Thriving communities Improvements in lighting, Room and housing Partnerships to deliver CCTV and village security refurbishments, enhanced infrastructure projects
Slide 43: Decarbonising our Pilbara supply chain
Decarbonising our Pilbara supply chain ~600MW of renewable generation will For personal use only A strategic Integrated System Model optimises our displace the majority of gas use renewables pathway as options and technology develop 34MW of solar farm built at Gudai-Darri 45MW Battery Energy Storage
Slide 44: Advancing our rail and port advantage
Advancing our rail and port advantage For personal use only Unrivalled port capacity Port infrastructure above 360 Mtpa Safe Production System Building on our network efficiency Safety & wellbeing Improving safety and amenity at villages and camps Scope 1 & 2 Decarbonising our Pilbara supply chain 4
Slide 45: Stephen Jones, Operational & Technical Support
Stephen Jones Managing Director, Operational & Technical Support For personal use only 43
Slide 46: An extensive geoscience, planning and research capability
An extensive geoscience, planning Resource development and research capability Acquire and interpret geological information to define our extensive resource portfolio For personal use only Mine planning Design and optimisation of our new and existing portfolio of mines Integrated planning Connect ou
Slide 47: Designing a mining portfolio compatible with environmental and heritage values
Designing a mining portfolio that is compatible with the environmental and heritage values of the region For personal use only Co-design of mines Access to Investing in genuine engagement with Traditional Owners Infrastructure Protecting culturally significant areas Water stewardship Preservation of
Slide 48: Our next replacement projects are in progress
Our next replacement projects are in progress For personal use only West Angelas Co-design with Traditional Owners Pre-Feasibility Study Developments compatible with regional First ore 2027 heritage values Hope Downs 1 Feasibility Study Replacing Sustaining Production First ore 2027 Mine extensions
Slide 49: Rhodes Ridge is a world class mining hub in the making
Rhodes Ridge is a world class mining hub Large in the making >100 Mtpa capacity, scalable Grade Advantaged For personal use only ‘Big Rock’ Choices Re-orientate mix to Pilbara Blend Scale Resources Processing Product Well suited to a green iron future 1 Hub Brockman Dry Crush & Screen Pilbara Blend
Slide 50: Advancing a more sustainable and lower cost business
Advancing a more sustainable and lower cost business For personal use only Reshaping our Remote operations & Lower cost & lower impact Processing options orebody knowledge automation mining methods Using technology to shape timely Digital programmes to support and Progressive rehabilitation New proc
Slide 51: Designing the future mining portfolio
Designing the future mining portfolio For personal use only Driving a sustainable and respectful future in mining Co-designing mines An extensive development pipeline Replacement projects commencing construction in 2024 Rhodes Ridge A world class mining hub in the making 49
Slide 52: Will Millsteed, Head of Market Analysis
Will Millsteed Head of Market Analysis For personal use only 50
Slide 53: China steel demand resilient as growth drivers shift from property
China steel demand resilient as growth drivers shift from property to other sectors For personal use only China finished steel Weak property market … resilient infrastructure and … and robust increase demand*, Mt more than offset by … manufacturing investment … in manufactured goods YTD Aug 2023 gro
Slide 54: Incremental iron ore demand met mainly by higher cost seaborne supply growth
Incremental iron ore demand met mainly by higher cost seaborne supply growth China’s steel demand and trade Impact of Chinese steel exports on Global iron ore market balance For personal use only iron ore demand Jan-Aug’23 Mt YoY Jan-Aug’23 Mt YoY Jan-Aug’23 Mt YoY Finished steel demand 604 +8Mt 1.3
Slide 55: Global steel demand growth is driven by emerging markets
Global steel demand growth is driven by emerging markets Steel intensity curves by region Finished steel demand by region For personal use only Finished steel consumption per person (kg) (Bt) 2.1 1200 South Korea 2.0 1.9 1.7 1000 800 Japan 600 China 400 Germany USA 200 France India GDP per person ($
Slide 56: Decarbonisation drives potential for segmented steel value chains
Decarbonisation drives potential for segmented steel value chains Western hemisphere Eastern hemisphere For personal use only ~25% of 2040 iron ore demand ~75% of 2040 iron ore demand Robust future demand Robust future demand for high grade iron ores for all iron ore grades (DRI EAF pathway) + scr
Slide 57: Simon Farry, Head of Steel Decarbonisation
Simon Farry Head of Steel Decarbonisation For personal use only 55 Kennecott, US
Slide 58: Our approach spans time horizons and the full steel value chain
Our approach spans 3 time horizons and the full steel value chain We are working with ~40 partners, across ~50 projects in 10 countries For personal use only Existing pathways Emerging pathways Future pathways Ongoing ~1-10 years to commercial scale >10 years to commercial scale Working with our Uti
Slide 59: Majority of steel is produced via the Blast Furnace route, reliant on coal
Majority of steel is produced today via the Blast Furnace – Basic Oxygen Furnace (BF-BOF) route, reliant on coal Today’s steelmaking production routes Carbon intensity and energy source of each production route For personal use only 25% Steel recycling (Scrap-EAF) Scrap-EAF Uses Electricity 0.1 – 0.
Slide 60: A range of new technological pathways are emerging to produce low CO2 steel
A range of new technological pathways are emerging to produce low CO2 steel, transitioning away from fossil fuels For personal use only Global steel produced by technological pathway (in tonnes) (representative only) Existing pathway (BF-BOF) Carbon-intensive energy / 01 Blast Furnace is being optim
Slide 61: Ironmaking will likely dislocate from steelmaking
Ironmaking will likely dislocate from steelmaking, moving to advantaged energy locations, with near zero hubs emerging * Illustrative only Today’s supply chain For personal use only Energy & reductant (Coal) Iron ore Iron & steelmaking End user Future supply chain Near zero ironmaking hubs Ironmakin
Slide 62: Work is underway across a suite of technologies
Work is underway Ore & ore processing Ironmaking Steelmaking across a suite of BOF Highly Current technologies Furnace Blast All Fines Sinter suitable for new low CO2 Blast Furnace Pilbara ores For personal use only All Lump / Pellet technologies Shaft Furnace EAF suitable for High-Grade Fines Pelle
Slide 63: Melter programme - unlocking new low CO2 technologies for Pilbara iron ores
Melter programme - unlocking new low CO2 technologies for Pilbara iron ores Progress and Partners Developing a process step to remove impurities from Direct Reduced Iron (DRI) For personal use only made with Pilbara ores • MoU signed in 2021 Simplified illustration Removing impurities found in Pilba
Slide 64: BioIron - unlocking new low CO2 technologies for Pilbara iron ores
BioIronTM - unlocking new low CO2 technologies for Pilbara iron ores BioIronTM is Rio Tinto proprietary technology which uses sustainable Progress and partners For personal use only biomass and microwave energy as alternatives to coal in steelmaking We have successfully produced Simplified illustra
Slide 65: Our approach spans time horizons and the full steel value chain
Our approach spans 3 time horizons and the full steel value chain We are working with ~40 partners, across ~50 projects in 10 countries Existing pathways Emerging pathways Future pathways For personal use only Ongoing ~1-10 years to commercial scale >10 years to commercial scale Objectives Utilise o
Slide 66: Rowena Albones, Chief Financial Officer, Iron Ore
Rowena Albones Chief Financial Officer Iron Ore For personal use only 64
Slide 67: We have great assets that generate superior returns through the cycle
We have great assets that generate superior returns through the cycle For personal use only Asset quality $ Billion Strong resource base 2020 2021 2022 H1 2023 Except where stated Integrated mining and infrastructure system Underlying EBITDA 18.8 27.6 18.6 9.8 Attractive EBITDA and returns EBITDA ma
Slide 68: Our strong resource base provides options in the market
Our strong resource base provides options in the market For personal use only Pilbara sales mix and index price relativity Resilient product mix Average realised Pilbara Blend >85% of volume post Rhodes Ridge2 price vs 62% Fe1 98% 97% 98% Strong SP10 relativities SP10 flex > Competitive cost, provid
Slide 69: We have focused on improving mine and asset health
We have focused on improving mine and asset health For personal use only Pilbara unit costs (2020 v 2022)1 $/t shipped Increase Driver of costs 21.7 ~ $4/t Inflation: ~7% p.a. Western Australia cost escalation2 (market driven) Diesel price: ~150% increase in price, ~1 billion litres 15.4 Infrastruct
Slide 70: This year, improved productivity is offsetting mining headwinds
This year, improved productivity is offsetting mining headwinds Pilbara unit costs (H1 2022 v H1 2023) Productivity and asset health For personal use only $/t shipped Improved system productivity and uplift in volume offset ~6% uplift in mining work index 21.8 Guidance 21.6 Retain focus on maintenan
Slide 71: Volume and productivity to enable cost improvements
Volume and productivity to enable cost improvements Pilbara unit costs For personal use only $/t shipped Productivity Higher sustaining Next tranche of mine Disciplined approach to Reduces unit costs from current Increases unit costs from current capital improving asset replacement supports Volume($
Slide 72: Disciplined capital investment across our Pilbara assets
Disciplined capital investment across our Pilbara assets Capital expenditure For personal use only $ billion, Rio Tinto share Sustaining Decarbonisation ~$0.2bn/year Replacement and Expansion Replacement Decarbonisation ~$1.8bn/year1 Depreciation and Amortisation Sustaining remains at ~$1.8bn/year2
Slide 73: We have clear priorities and are positioning for the future
We have clear priorities and are positioning for the future For personal use only Best Impeccable Excel in Social Volume: 345 – 360 Mtpa mid-term capacity operator ESG development licence Effective equity: remains >85%1 post Rhodes Ridge Focus on safety “Cracking the Advantaged Resource co- and cult
Slide 74: Simon Trott, Chief Executive, Iron Ore
Simon Trott Chief Executive, Iron Ore For personal use only 72
Slide 75: A proven record, and a strategy for the future
A proven record, and a strategy for the future For personal use only We will be the ‘Most Valued’ resource business Defined by the cash flow we generate and as viewed by our people and external stakeholders 73
Slide 76: Q&A
For personal use only Q&A 74
Slide 77: Rio Tinto
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Slide 78: Common acronyms
Common acronyms AHS Automous Haulage System EAF Electric Arc Furnace IRR Internal rate of return RT Rio Tinto Earnings Before Interest, Taxes, AIFR All Injury Frequency Rate EBITDA JV Joint Venture RTE Round trip efficiency Depreciation and Amortisation Association of Southeast Asian Environmental,
Slide 79: Our ability to flex product mix is an important value lever
Our ability to flex product mix is an important value lever For personal use only Pilbara Blend (since 2007) Our flagship, long-term product strategy Reliable | Liquid | Reference product for 62% Fe indices | Baseload in China Yandicoogina Fines (since 1998) Baseload by large, quality sensitive mill
Slide 80: Our world class Pilbara iron ore blending capability
Our world class Pilbara iron Port blending capability reduces product variability ore blending capability Dampier & Cape Lambert Ports For personal use only Mesa A Hub Mesa J Hub Robe Valley Cape Robe Valley Lump Lambert A Robe Valley Fines Yandicoogina Yandicoogina Fines West Angelas Hope Downs 1 C
Slide 81: Accounting treatment for Pilbara mines
Accounting treatment for Pilbara mines For personal use only Asset % Location Accounting treatment Brockman (2 and 4) 100.0 Australia Full consolidation Eastern Range JV1 54.0 Australia Proportional consol Hope Downs JV (1 and 4) 50.0 Australia Proportional consol Marandoo 100.0 Australia Full conso