Rio Tinto Plc · LSE:RIO
Rio Tinto — BoAML Global Metals, Mining & Steel Conference 2015
17 slides from Rio Tinto's conference presentation, May 12, 2015
Slide 1: Notice to ASX
Notice to ASX Bank of America Merrill Lynch Global Metals, Mining and Steel Conference For personal use only 12 May 2015 Attached is the presentation given by chief executive Sam Walsh at the Bank of America Merrill Lynch Global Metals, Mining and Steel conference held today at 8.30am (BST) / 5.30pm
Slide 2: Generating value through the cycle
12 May 2015 BoAML Global Metals, Mining & Steel Conference 2015 For personal use only Generating value through the cycle Sam Walsh, Chief executive
Slide 3: Cautionary statement
2 Cautionary statement For personal use only 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. In this presentation all figures are US dollars u
Slide 4: Early and decisive actions
3 Early and decisive actions For personal use only Improve Strengthen Deliver Reduced costs Decreased capex Reduced net debt $4.8bn by by $9.4bn $9.6bn Operating, exploration and evaluation cost reductions achieved Since net debt peaked by 31 December 2014 vs 2012 Full year 2014 spend vs 2012
Slide 5: The 'New Normal'
4 The ‘New Normal’ For personal use only Global growth continues • Period of economic adjustment Real GDP (US$ trillion) Real GDP growth (%) • Developed markets recovering 100 10% • China transitioning to major developed economy 80 8% Other developing − Lower growth on a higher base economies 60 6%
Slide 6: Iron ore demand growth continues
5 Iron ore demand growth continues For personal use only Crude steel production • Chinese steel mix evolving: Million tonnes per annum 3000 − New infrastructure slowing 2500 Other developing economies − Increased replacement 2000 1500 − Rise in scrap 1000 China − Manufactured goods increasing 500 De
Slide 7: Marginal iron ore supply is exiting
6 Marginal iron ore supply is exiting For personal use only Majors accounted for ~47% of 2014 supply Percentage of contestable iron ore market • ~775 Mt of 2014 supply from China, non-traditionals and rest of world 20% 17% Rio Tinto = 47% • ~125 Mt of high cost supply exited BHP Vale ~1.7 7% billion
Slide 8: Success in the 'New Normal'
7 Success in the ‘New Normal’ For personal use only World-class portfolio Free Quality cash flow growth generation Sustainable shareholder returns Operating Capital and allocation commercial discipline excellence Balance sheet strength ©2015, Rio Tinto, All Rights Reserved
Slide 9: Safety and responsibility are fundamental
8 Safety and responsibility are fundamental For personal use only Injury frequency rates Per 200,000 hours worked Accountability • Relentless pursuit of shareholder value 2.0 • Disciplined decision-making 1.5 Respect • For the environment and communities • For health, safety and wellbeing 1.0 Integr
Slide 10: Leading the market in the current environment
9 Leading the market in the current environment Capex discipline... …and efficient working capital... For personal use only (54%) (36%) 0% (28%) (23%) 6 16 14 5 12 4 US$ billion US$ billion 10 8 3 6 2 4 1 2 0 0 Rio Rio Tinto Tinto Peer 1 Peer 2 Peer 3 Peer 4 Rio Rio Tinto Tinto Peer 1 Peer 2 Peer 3
Slide 11: Highest dividend growth and strongest balance sheet
10 Highest dividend growth and strongest balance sheet For personal use only 15% Shrinking Growing returns, strong returns, strong balance sheet balance sheet 20% Rio Tinto Peer 1 25% Gearing Peer 2 30% Peer 4 35% Shrinking Growing returns, weaker Peer 3 returns, weaker balance sheet balance sheet 4
Slide 12: Tier 1 iron ore assets and operational excellence
11 Tier 1 iron ore assets… 2014 Fourth quarter delivered iron ore cost curve (WoodMac) For personal use only 140 $/dmt CFR China 62% Equivalent 120 Rio Tinto Pilbara Q3 Producer 100 80 60 40 20 0 0 200 400 600 800 1000 1200 1400 1600 1800 Mtpa …and operational excellence deliver through the cycle 80
Slide 13: Commercial excellence captures full value
12 Commercial excellence captures full value For personal use only 2014 like-for-like iron ore sales price performance: vs BHP vs FMG vs Vale (US $/wmt FOB) (US$/dmt, including freight revenue) (US $/wmt including freight revenue) 5.0 5.0 5.0 +3.5 +1.0 62%Fe index +1.7 +0.3 - - - -5.0 -5.0 -5.0 -10.
Slide 14: Delivering value through iron ore growth
13 Delivering value through iron ore growth For personal use only Consistently improving capital efficiency • 360 infrastructure in final stage (US$/t) Capital intensity of 220-360Mt/a Pilbara expansion1 175 − Minimal capital investment − Maximise infrastructure capacity 19% 150 through productivity
Slide 15: Aluminium business delivering quality growth
14 Aluminium business delivering quality growth For personal use only Kitimat South of Embley First hot metal expected mid-2015: South of Embley feasibility study and • First decile cost position investment decision expected towards the end of 2015 • 50% increase in capacity and halves emissions com
Slide 16: Significant growth in Copper ahead
15 Significant growth in Copper ahead For personal use only KUC volumes to Oyu Tolgoi recover in 2016 underground will following significantly de-weighting/ de- increase value watering east wall (80% of total value) New 152 ktpd Rio Tinto expects concentrator significant metal expected to share from
Slide 17: Building the world's best mining company
16 Building the world’s best mining company For personal use only World-class portfolio Free Quality cash flow growth generation Sustainable shareholder returns Operating Capital and allocation commercial discipline excellence Balance sheet strength ©2015, Rio Tinto, All Rights Reserved
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