Rio Tinto Plc · LSE:RIO
Rio Tinto — H1 2010 Earnings Presentation
16 slides from Rio Tinto's earnings presentation, Aug 5, 2010
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 5 August 2010 Dear Sir, Attached is the Rio Tinto 2010 in
Slide 2: 2010 interim results
2010 interim results For personal use only 5 August 2010 Shiploader, Cape Lambert 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 presentati
Slide 3: Jan du Plessis, Chairman; Tom Albanese, CEO
Jan du Plessis For personal use only Chairman Chute du Diable dam, Saguenay Tom Albanese Chief executive officer Bingham Canyon
Slide 4: First half 2010 highlights
Continued improvement in safety For personal use only 5 August 2010 Rio Tinto 2010 interim results 5 First half 2010 highlights • Record underlying earnings from higher prices and volumes • Strong cash flows reduced net debt to $12 billion • Operations producing close to capacity • Capital expenditu
Slide 5: EBITDA growth in a volatile period; iron ore earnings
EBITDA growth in a volatile period For personal use only Note: Change in price relative to 31 December 2007 Lighter shading denotes profit on disposal of undeveloped exploration properties 5 August 2010 Rio Tinto 2010 interim results 7 Prices and volumes drive iron ore earnings 2010 first half highl
Slide 6: Exceptional growth path in iron ore; aluminium transformation
Exceptional growth path in iron ore • Long term outlook remains strong • Focus on regulatory approvals for WA production joint venture For personal use only • Incremental capacity increases on track in the Pilbara • $1 billion approved for Pilbara 330mtpa expansion early works • Expansion of IOC und
Slide 7: New growth projects for Copper; Energy impacted by lower prices
New growth projects announced for Copper 2010 first half highlights • Prices slip back from prior half but provide major boost from 2009 first For personal use only half • Mined copper production impacted by lower grades at Kennecott Utah Copper and Grasberg • Earnings boosted by higher moly prices
Slide 8: Diamonds & Minerals markets continue to recover
Diamonds & Minerals markets continue to recover 2010 first half highlights • Recovery in prices and volumes • Late cycle commodity strength in For personal use only first half • Strong growth in Chinese demand for diamonds • Continued progress in Madagascar • Diavik underground commenced production
Slide 9: Price and volume drive earnings; cash flow generation
Price and volume drive earnings, offsetting cost pressure For personal use only Note: Exploration and evaluation variance includes $568 million net decrease in gain on undeveloped property sales (+$229 million gain in H1 2010 from sale of undeveloped coal properties compared with $797 million gain i
Slide 10: Further repayment of debt; uses of cash flow
Further repayment of debt in first half For personal use only Gearing defined as ratio of net debt to net debt plus total equity 5 August 2010 Rio Tinto 2010 interim results 17 A consistent approach to uses of cash flow • Investment in value adding growth is top priority • Stable investment conditio
Slide 11: Prioritising investment in value adding growth
Prioritising investment in value adding growth • Many options available • Capex expected to rebound in second half For personal use only • $3 billion of project investment approved in first half • 2010 capex of up to $6 billion • 2011 capex of approximately $9 billion subject to stable investment co
Slide 12: Persistent economic imbalances may lead to medium term volatility
Persistent economic imbalances may lead to medium term volatility GDP growth forecasts For personal use only 2009 2010 2011 US -2.4 3.3 2.9 Eurozone -4.1 1.0 1.3 Japan -5.2 2.4 1.8 China 9.1 10.5 9.6 India 5.7 9.4 8.4 Other Asia 1.7 6.4 5.5 Brazil -0.2 7.1 4.2 Middle East 2.4 4.5 4.9 World (PPP -0.6
Slide 13: Global project pipeline provides options to invest
Rio Tinto’s global project pipeline provides options to invest For personal use only Key Mines and mining projects Smelters, refineries, power facilities and processing plants remote from mine Countries where Rio Tinto operates Aluminium Copper / nickel Diamonds Energy Iron ore Minerals 5 August 201
Slide 14: Focused on value adding growth
Focused on value adding growth • Outstanding first half earnings, EBITDA and operating cash flow • Net debt reduced to $12 billion For personal use only • Operating at close to capacity • Key projects completed on time and on budget • Second wave of transformation at Aluminium underway • Strong bala
Slide 15: Breakdown of price and volume variance
Breakdown of price variance For personal use only 5 August 2010 Rio Tinto 2010 interim results 27 Breakdown of volume variance 5 August 2010 Rio Tinto 2010 interim results 28
Slide 16: Modelling earnings
Modelling earnings 2010 H1 average Impact on full year Earnings sensitivity price/rate underlying earnings ($m) For personal use only Copper 324c/lb +/-32c/lb 329 Aluminium $2,129/t +/-$213/t 622 Gold $1,149/oz +/-$115/oz 61 Molybdenum $16/lb +/-$1.6/lb 31 Iron ore +/-10% 1,287 A$ 89 USc +/-US8.9c 5