Rio Tinto Plc · LSE:RIO
Rio Tinto — Corporate Update (January 2008)
19 slides from Rio Tinto's corporate update, Jan 15, 2008
Slide 1: ASX cover letter: Pilbara media visit presentations
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 15 January 2008 Dear Sir, Attached are presentations from
Slide 2: Iron ore Pilbara media visit - Cautionary statement
For personal use only Iron ore Pilbara media visit 15 - 18 January 2008 Cautionary statement This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree t
Slide 3: Overview of today's presentations
For personal use only Sam Walsh Chief executive - Iron ore 15 January 2008 Rio Tinto Pilbara media visit - January 2008 3 Overview of today’s presentations • Safety • Global economy • Iron ore market • Growth plans • Financial overview • Global business • Resource position • Pilbara expansion projec
Slide 4: Safety is core to our business; Welcome to the Pilbara
Safety is core to our business For personal use only Rio Tinto iron ore AIFR* per 200,000 hours worked 3 2 1 0 2003 2004 2005 2006 2007 * AIFR (all injury frequency rate) includes Lost Day Injuries, Restricted Work Day Injuries and Medical Treatment Cases per 200,000 hours worked which consists of e
Slide 5: Developing world will take a bigger share of growing global economy
Developing world will take a bigger share of growing global economy For personal use only 350 World GDP 300 Trillion $ (2000 terms, PPP basis) Developing world 250 Rest of world India 200 China South America 150 Asia Pacific developed Eastern Europe Developed world 100 Western Europe North America 5
Slide 6: Chinese steel consumption is underpinned by domestic demand
Chinese steel consumption is underpinned by domestic demand For personal use only Urbanisation level Chinese steel consumption 60% 50% 40% Construction 30% 20% Others 10% Machinery 0% Automobile 1990 1995 2000 2005 2010 2015 Source: China National Bureau of Statistics, Analytic Outcomes, Rio Tinto a
Slide 7: Spot iron ore prices into China indicate significant upside
Spot iron ore prices into China indicate significant upside For personal use only CFR iron ore prices into China (US$/t, dmt) Spot 200 180 160 Indian exports 140 120 US$/t 100 80 Australia CFR China 60 40 20 0 Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Source
Slide 8: Rail and port infrastructure positions Rio Tinto as premier supplier
Rail and port infrastructure positions Rio Tinto as premier supplier For personal use only Dampier incorporating: • Parker Point • East Intercourse Island Distance from Liverpool to London 205 Miles = 328kms Rio Tinto Pilbara media visit - January 2008 13 Demonstrated capability to deliver superior
Slide 9: Rio Tinto Pilbara's growth path to >300mtpa is earlier and cheaper
Rio Tinto Pilbara’s growth path to >300mtpa is earlier and cheaper than BHP Billiton… For personal use only Path to 300 mtpa ~100 to 200 mtpa ~200 to 300 mtpa Completed by: Rio Tinto 2009 Rio Tinto 2013 BHPB 2011 BHPB 2015 168 Capital (US$/ tonne) 100 88 55 Rio Tinto BHPB Rio Tinto BHPB Source: Rio
Slide 10: With an outstanding resource position to match
With an outstanding resource position to match For personal use only Iron ore reserves, resources and announced targeted mineralisation Billion tonnes – (100% basis) 60 Pilbara Global 50 40 30 Announced 20 targeted mineralisation* 10 Reserves & 0 resources Rio BHPB Rio BHPB Tinto Tinto Note: Please
Slide 11: Excellent market outlook; roadmap to treble production
“Rio Tinto's iron ore business is the best business in all of mining due to its low-cost operations and close proximity to the key Asian end markets.” Lehman Brothers, November 2007 For personal use only • Excellent market outlook • Rio Tinto’s resources and infrastructure in the Pilbara provide the
Slide 12: Superior business underpinned by strong financials
Superior business underpinned by strong financials For personal use only Pilbara iron ore Pilbara iron ore gross sales revenue (US$m) EBITDA (US$m) 30 June year-end 30 June year-end Rio Tinto 8,000 4,000 53% Rio Tinto 42% GR 6,000 R 3,000 CA BHPB CAG BHPB 38% 29% 4,000 2,000 2,000 1,000 0 0 2005 200
Slide 13: EBITDA margin outperformance and cost curve position
On an EBITDA margin basis, Rio Tinto’s Pilbara operations have outperformed For personal use only Pilbara iron ore operations EBITDA margin (%) 30 June year-end 60% 60% 58% 56% 54% 51% 50% 47% 40% 30% 20% 10% 0% 2005 2006 2007 BHP Billiton Rio Tinto Source: BHP Billiton earnings releases, Rio Tinto
Slide 14: The only iron ore producer with a truly global supply strategy
The only iron ore producer with a truly global supply strategy For personal use only IOCC (59%) Orissa Mining (51%) Simandou (95%) Corumba (100%) Pilbara Operating asset Hamersley Iron Development asset (100%*) Robe (53%) Markets supplied Perth HIsmelt (60%) * Hamersley Iron participates in the foll
Slide 15: Rio Tinto has the best mineralisation and land position in the Pilbara
For personal use only Warwick Smith Managing Director expansion projects – Iron ore 15 January 2008 Rio Tinto Pilbara media visit - January 2008 27 Rio Tinto has the best mineralisation and land position in the Pilbara Tenements Red – Rio Tinto Blue – BHP Billiton Source: Western Australian Departme
Slide 16: Leading iron ore resource position and drilling programme
Leading iron ore resource position in the Pilbara, supported by one of Australia’s largest drilling For personal use only programmes • 500km of drilling planned per annum from 2008 until 2012 • Approved resources are being converted into recoverable and viable reserves • Supports the expansion work
Slide 17: Further $2.4 billion committed to mine developments
Further $2.4 billion recently committed to mine developments For personal use only Brockman 4 • 22mtpa operation approved, with expansion potential to 36mtpa • Capital investment of $1.5 billion, which includes a rail link to the mainline track • Production will commence in Q1 2010, with full produc
Slide 18: Port expansion to enable 420mtpa in the Pilbara
Port expansion to enable 420mtpa in the Pilbara For personal use only New stock yards • Pre-feasibility study into the expansion of the Pilbara to 320mtpa is progressing well • Expect to announce a decision in 2009 • Targeting 320mtpa operating rate by 2012 • Significant opportunity to expand Cape L
Slide 19: On track to automate the Pilbara
On track to automate the Pilbara For personal use only Automation • Automated train operations • Automated trucks • Automated drilling • Continuous miners Remote Operations Centre (ROC) • Successful prototype of pit and plant control from ROC in Perth • Trials at West Angelas and Yandicoogina • Exte