Rio Tinto Plc · LSE:RIO
Rio Tinto — AJM Global Iron Ore & Steel Forecast Conference, Perth 2014
16 slides from Rio Tinto's conference presentation, March 2014
Slide 1: Generating significant business value
Generating significant business value Andrew Harding Chief executive – Iron Ore, China, Japan, Korea AJM Global Iron Ore & Steel Forecast Conference, Perth 2014
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: Bringing capacity on-line to meet growth in traditional and developing regions
3 Bringing capacity on-line to meet growth in traditional and developing regions Chinese steel demand Growth fundamentals Million tonnes per annum 2010-30 CAGR % 800 ≈4 % China India 7.5% 700 2.2% Population 0.3 1.0 Urban 600 2.0 2.3 population 500 GDP per capita 6.1 6.1 400 0 5 10 0 5 10 300 ASEAN
Slide 4: Rapid uptake of 2014 off-take opportunities with unfulfilled demand for Rio Tinto iron ores
4 Rapid uptake of 2014 off-take opportunities with unfulfilled demand for Rio Tinto iron ores 2014 Pilbara off-take agreements • Pilbara Blends continue to be base by pricing mechanism load products for Asian steel industry Spot • Unprecedented demand for 2014 off-take opportunities due to our reput
Slide 5: Iron Ore Company of Canada - fully integrated mine to port system
5 Iron Ore Company of Canada - fully integrated mine to port system • Mine, rail and port network wholly- owned by IOC ( Rio Tinto 58.7%) • Consistently high quality products with the lowest phosphorous in the industry • 2013 saleable production of 15.4Mt, 9% higher than 2012 • CEP project adds mini
Slide 6: The Pilbara – high quality assets, fully owned and operated, with great optionality
6 The Pilbara – high quality assets, fully owned and operated, with great optionality Assets • 15 mines • 1,600kms of rail • 4 independent port terminals, with 11 berths, • 3 power stations • System fully integrated via Operations Centre • All product blending undertaken at port • Strong Resources &
Slide 7: Pilbara performance key to delivering strong 2013 financial results
7 Pilbara performance key to delivering strong 2013 financial results Pilbara mine production • Severe weather impacts in 1Q, 2Q Million tonnes per quarter and 4Q 2013. 80 70 290 • Increasing capacity and system 60 50 237 alignments enabled improving 40 30 2013 performances beyond 237Mt/a 2012 20 10
Slide 8: Continuous improvement outcomes realise significant value
8 Continuous improvement outcomes realise significant value Pooled fleet railings and payload Mine • “Right- sizing” the fleet initiative optimising cycle 2,300 Payload 27.1 times and payload management Railings (no. of trains) 2,200 27.0 • 6 out of 55 West Angelas haul trucks Railings 2,100 26.9 re
Slide 9: Relentless focus on cost-outs to also continue
9 Relentless focus on cost- outs to also continue 2013 productivity improvements • Improved crane scheduling and Hours returned to the business via training transformation alignment of maintenance shuts 21,000 150,000 • $1.4M saved at Brockman 4 18,000 15,000 120,000 alone 12,000 90,000 9,000 60,000
Slide 10: Improvements are maintaining the business as the Pilbara's lowest cost producer
10 Improvements are maintaining the business as the Pilbara’s lowest cost producer Full year cash unit cost WA IO – EBITDA per tonne ($/t) (US$/t and %) 140 80% 25 120 70% 20 60% 100 50% 15 80 EBITDA % US$/t 40% 60 10 30% 40 20% 5 20 10% 0 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 H110 H210 H111
Slide 11: 290Mt/a infrastructure complete and now quickly ramping to fill capacity
11 290Mt/a infrastructure complete and now quickly ramping to fill capacity • 290 Mt/a first ore on ship 24 August • 4 months ahead of schedule • $US400M under budget • 220 – 290Mt/a being delivered at a capital intensity <US$140/t (100%) • Extra 53Mt/a Pilbara system 290Mt/a complete, 360Mt/a wharf
Slide 12: Infrastructure development to 360 Mt/a progressing on target
12 Infrastructure development to 360 Mt/a progressing on target • Infrastructure expansion to 360Mt/a fully approved and underway • Expected completion during H1 2015 • Cape Lambert • All major work packages have been awarded Cape Lambert Screenhouse 6 • Earthworks complete, civil works near complet
Slide 13: Low-cost, brownfields Pilbara growth pathway extracts significant value
13 Low- cost, brownfields Pilbara growth pathway extracts significant value Mine capacity potential (average annualised) • A rapid, low- cost pathway to Million tonnes per annum increase mine production capacity 375 by more than 60Mt/a by 2017 350 325 • Utilises brownfield mine options 300 opportuni
Slide 14: Further value opportunities being realised in sustaining tonnage projects
14 Further value opportunities being realised in sustaining tonnage projects • Western Turner Syncline phase 2 approved in February 2014 • Additional 7Mt/a to replace Tom Price ore to commence in mid 2015 • A new WTS phase 1 mine plan allows extension of trucking model • At least 3 year deferral of
Slide 15: Mine of the Future programme continues to turn competitive advantage into real business value
15 Mine of the Future™ programme continues to turn competitive advantage into real business value • Autonomous Haulage System update • >130Mt autonomously moved between 2008-2013. • Improved safety and control • Reduced truck numbers • Expect 10-15% increase in effective utillisation in mature opera
Slide 16: Proven sector leadership continues to return significant value
16 Proven sector leadership continues to return significant value • Relentless focus on safety • Continual liaison with full range of key stakeholders • Drawing greater value through: • operational performance across integrated system • cash costs/ margin management • on time/ budget growth projects
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