Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Presentation (April 2012)
16 slides from Rio Tinto's investor presentation, Apr 26, 2012
Slide 1: Andrew Harding, Chief Executive, Copper
1 Oyu Tolgoi, Mongolia Andrew Harding Chief executive, Copper April 2012 ©2012, Rio Tinto, All rights reserved
Slide 2: Cautionary statement
26 April 2012 | 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-lo
Slide 3: Demand: China will continue to drive long term demand growth
26 April 2012 | 3 Demand: China will continue to drive long term demand growth China has plenty of growth potential China’s GDP growth remains strong Per capita refined copper consumption (kg) China’s GDP levels and growth forecast (US$bn 2005) 18 12000 15 16 10000 14 12 8000 10 10 6000 8 6 4000 5 4
Slide 4: Supply: growth will continue to be challenged
26 April 2012 | 4 Supply: growth will continue to be challenged Supply is evolving from traditional sources • An increasing proportion of potential new Copper supply location (%) supply is located in riskier countries 36% 9% • More challenging environments subject to 41% 47% a lack of infrastructure
Slide 5: Our continued focus on production at low cost
26 April 2012 | 5 Our continued focus on production at low cost Production profile Continued focus at low cost 2012–2015 production forecast C1 costs 2010 (c/lb)** Kt Cu/ Koz Au Mlbs Mo 1,350 70 1,200 60 1,050 50 900 750 40 600 100 30 95 450 20 66 300 10 150 37 30 0 0 2010 2011 2012 2013 2014 2015 A
Slide 6: Kennecott: studies to increase Bingham Canyon life of mine are advancing
26 April 2012 | 6 Kennecott: studies to increase Bingham Canyon life of mine are advancing • Push back south wall by 7%, deepen pit 8% • NRS exploration decline underway • Tunnel boring system trial • Upgrades to flotation circuit • Copper NuWave™ technology trial • 275 MW gas fired power generation
Slide 7: Kennecott: going underground
26 April 2012 | 7 Kennecott: going underground • Long term future is underground Bingham Canyon, US • First step is near term development of North Rim Skarn (NRS) − 20 million tonne mineral resource at 3.6% Cu ~900m − 1.0 million ounces of contained gold − $165 million approved for pre- North Rim Cu
Slide 8: Northparkes: step change
26 April 2012 | 8 Northparkes: step change • Potential to increase annual Cu production to 150ktpa with a 20+ year life • $114 million pre-feasibility study approved: − Exploration decline, additional drilling and studies to expand concentrator • Will move unit costs to 2nd quartile • Potential firs
Slide 9: Grasberg and Escondida: continued investment in our assets
26 April 2012 | 9 Grasberg and Escondida: continued investment in our assets Escondida Grasberg • Organic Growth 1 Project • Grasberg Block Cave • Oxide Leach Area Project • Deep Mill Level Zone (DMLZ) • Ore access, bioleach and • 40% of total production 2021 de-bottlenecking projects ©2012, Rio Tin
Slide 10: Ivanhoe Mines: majority, 51% ownership of Ivanhoe secured
26 April 2012 | 10 Ivanhoe Mines: majority, 51% ownership of Ivanhoe secured Equity financing • Subscription price of US$8.34 US$1.8 Billion • Rio Tinto standby commitment for the rights offering Bridge loan • Ensuring Oyu Tolgoi development remains on track US$1.5 Billion • In addition to US $1.8 b
Slide 11: Oyu Tolgoi: a world class asset
26 April 2012 | 11 Oyu Tolgoi: a world class asset • A top five copper producer and major gold producer1 Large • Average annual production of 450kt of copper and 330koz of gold • 3.1bt resource and 1.4bt reserve • Potential for a > 50 year mine life Long life • Highly prospective region with further
Slide 12: Oyu Tolgoi: 77% complete for first commercial production by 2013
26 April 2012 | 12 Oyu Tolgoi: 77% complete for first commercial production by 2013 Phase 1 • Open pit mine • 100,000 tonne per day concentrator • Preliminary development of UG mine Phase 2 • Complete development of UG mine • Mill expansion • Power station ©2012, Rio Tinto, All rights reserved
Slide 13: La Granja: phased development with potential 500ktpa Cu for 40+ years
26 April 2012 | 13 La Granja: phased development with potential 500ktpa Cu for 40+ years • 100% RT owned Staged development plan Conceptual representation of development plan • Substantial additional mineral inventory identified Copper Processing capacity − Major new porphyry system has been (Ktpa)
Slide 14: Resolution: first production ~2021, potential 600ktpa
26 April 2012 | 14 Resolution: first production ~2021, potential 600ktpa • High quality resource – 1.47% copper with significant molybdenum Shaft 9 • Top of resource about 1.5km deep, with production level 2km deep Shaft 10 • Land exchange bill approved in US House of Representatives • Sinking shaft
Slide 15: Technology: driving our competitive advantage
26 April 2012 | 15 Technology: driving our competitive advantage Tunnel boring system Copper NuWave™ recovery innovation • Commissioning at NPM in progress • Pilot plant in construction at Kennecott • Trials to commence in H2 2012 • Commissioning Q2 2012 • Potential to significantly reduce • Upgrade
Slide 16: World class assets and industry leading cost base
26 April 2012 | 16 World class assets and industry leading cost base • Constrained supply • Copper has strong, long term industry fundamentals • Substantial brownfield investment to optimise our current assets • A strong pipeline of value-generating greenfield projects • Oyu Tolgoi on track to deliv