Rio Tinto Plc · LSE:RIO
Rio Tinto — J.P. Morgan China Conference 2011
13 slides from Rio Tinto's conference presentation, Jun 2, 2011
Slide 1: Cover letter to ASX Company Announcements Office
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 2 June 2011 Dear Sir, Attached is a presentation given on
Slide 2: JP Morgan investor presentation
For personal use only JP Morgan investor presentation Ian Bauert Managing director, China 2 June 2011
Slide 3: China growth slowing but will probably outperform consensus in 2011
China growth slowing but will probably outperform consensus in 2011 For personal use only GDP Growth: Consensus* vs. Actual • Monetary tightening is slowing growth Expected Actual • Stabilizing demand leading to 2009 6.5 9.2 destocking 2010 9.6 10.3 • High-end property sales weakening 2011 9.1 9.5**
Slide 4: The power shortage is real but driven by pricing dynamics rather than capacity shortages
The power shortage is real but driven by pricing For personal use only dynamics rather than capacity shortages 10 800 •Current shortage driven by pricing differentials 9 700 •Shortage is concentrated in 8 coastal provinces, 600 particularly Zhejiang and 7 Guangdong 500 •Excess manufacturing 6 capaci
Slide 5: Medium term: soft landing likely due to high savings
Medium term: soft landing likely due to high For personal use only savings 12th 5-year plan (2011-15) – emphasizes quality of growth: • GDP growth: slowdown to 7% • Services / GDP: increase from 43% to 47% • Urbanization: increase from 47.5% to 51.5% – 2010 Census says already 49.7% • CO2 emissions
Slide 6: China's growth is supported by resource-intensive drivers
China’s growth is supported by resource- For personal use only intensive drivers •Urban population to rise from about 50% to 70% by 2025 Urbanization •Cities vertical to preserve arable land •Still a huge pent up demand for affordable housing Housing •44mn units built over last 10 years vs. a 200 mn
Slide 7: Housing: imbalances but no bubble
Housing: imbalances but no bubble For personal use only • The urban population has grown by about 200 million people over the last ten years but only some 44 mn flats have been built over the same period • Investment efficiency affected by overbuilding of luxury flats and underbuilding of affordable
Slide 8: Housing demand in lower-tier cities and interior provinces remains strong
Housing demand in lower-tier cities and interior For personal use only provinces remains strong
Slide 9: Many large Chinese provinces are just beginning to climb the steel intensity curve
Many large Chinese provinces are just beginning to climb the steel intensity curve For personal use only Chinese regional steel intensity Steel use per capita 2009 (kg) Beijing 18m Shanghai Shandong 19m 95m Henan 100m Guangdong 96m Sichuan 89m Guizhou 41m Bubble size reflects population of each of t
Slide 10: Rio Tinto and China
For personal use only Rio Tinto and China
Slide 11: China's preferred supplier, partner and customer
Aim: China’s preferred supplier, partner and For personal use only customer • 1960s aluminium trade • 1973 iron ore pioneer • 1983 China office • 1987 Channar JV • 2002 BaoHi JV • 2002 Shougang in HIsmelt • 2002 Exploration JV Gansu • 2005 Suzhou Metal Powders Plant • 2008 Chinalco largest sharehold
Slide 12: Rio Tinto provides key materials for China's growth
Rio Tinto provides key materials for China’s For personal use only growth Includes iron ore, aluminium, copper, energy, industrial minerals and diamonds.
Slide 13: Rio Tinto sourcing from China: a growth story
Rio Tinto sourcing from China: a growth story Ore cars For personal use only Caustic soda Anodes • 50 active suppliers Trucks from Hunan from all over China Pilings from • 30 current and Ningbo - over 150 potential projects Ship loaders • Over 50 sourcing professionals Alloys Coke Pipes Mine • $500M