Rio Tinto Plc · LSE:RIO
Rio Tinto — ESG Presentation (April 2020)
44 slides from Rio Tinto's sustainability presentation, Apr 21, 2020
Slide 1: Our approach to climate and water
Our approach to climate and water 21 April 2020
Slide 2: Cautionary and supporting statements
Cautionary and supporting statements 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. Forward-looking statements Disclaimer This document, in
Slide 3: Our strategic approach
Our strategic approach J-S Jacques Chief Executive
Slide 4: Agenda
Agenda Time Segment Speaker Covid-19 response J-S Jacques, 10 mins Our strategic approach Chief Executive Peter Toth, 15 mins Our climate strategy and plans Head of Corporate Development Nigel Steward, 10 mins Technology to tackle the industry’s challenges Head of Group Technical - Processing Theres
Slide 5: As pioneers in mining and metals we produce materials essential to human progress
As pioneers in mining and metals we produce materials essential to human progress Fe Cu Al Ni Li Perform & Transform Perform today Transform for tomorrow Portfolio Performance People Partners 5 ©2020, Rio Tinto, All Rights Reserved
Slide 6: Navigating the impact of Covid-19
Navigating the impact of Covid-19 Our priorities are clear, we continue to: 1. Keep our employees and communities healthy and safe 2. Serve our customers and protect our assets 3. Keep the company and balance sheet strong 4. Maintain strong partnerships – with governments, customers, suppliers and s
Slide 7: Pressures are growing in a 'New Era' of complexity
Pressures are growing in a ‘New Era’ of complexity Framed by three interconnected global forces Geopolitics Technology Geopolitics Society Technology – Political, economic – Strong domestic, – Fast-paced and technological regional technology fragmentation and global development, – Changing nature co
Slide 8: Our assets mirror global demand themes
Our assets mirror global demand themes Transition to the Urbanisation Electrification low-carbon economy Iron Ore Copper Aluminium Minerals & Exploration World leader Well-timed World leader Ventures World leading growth Products for the future We do not mine coal 43% EBITDA margin Our assets are at
Slide 9: We need an honest debate amongst stakeholders
We need an honest debate amongst stakeholders Consumers Climate Shareholders change & partnership Business Government 9 ©2020, Rio Tinto, All Rights Reserved
Slide 10: An integrated approach to sustainability
An integrated approach to sustainability Running a safe, responsible Collaborating to enable Pioneering materials and profitable business long-term economic benefits for human progress Health, safety & wellbeing Communities Climate change People Social & economic development Materials of the future
Slide 11: Board endorses Group's climate ambition and emissions targets
Board endorses Group’s climate ambition and emissions targets Board Committees Third line At Rio Tinto climate strategy sits within our business Group Internal Audit strategy – alongside our strategic portfolio decisions Provides independent assurance to the Board and its sub-committees The Sustaina
Slide 12: Strong track record on sustainability performance and climate
Strong track record on sustainability performance and climate No fatalities in 2019 46% reduction1 in emissions since 2008 $100 million new Employee engagement investment in solar in 2020 12 point increase in net promoter score (eNPS) ASI 2 34% $36 million Invested in community 76% of power certifie
Slide 13: Our climate strategy and plans
Our climate strategy and plans Peter Toth Head of Corporate Development
Slide 14: Our climate change strategy is in four areas
Our climate change strategy is in four areas Producing materials essential 1 for low-carbon future Reducing the carbon 2 footprint of our operations Partnering to reduce the carbon 3 footprint across our value chain Enhancing our resilience 4 to physical climate risk 14 ©2020, Rio Tinto, All Rights
Slide 15: Our commodity portfolio is positioned for a low-carbon future
1 Our commodity portfolio is positioned for a low-carbon future Iron Ore Copper Used in steel as fundamental Essential to electrification building block of energy- of low-carbon economy efficient urban centres and transport due to and infrastructure superior conductivity We do not We do not extract
Slide 16: Carbon intensity
2 70% of scope 1 & 2 emissions are from our aluminium business low 0.2 31.8* (Mt CO2e) 2.6 3.3 Uranium Diamonds Copper Pilbara Borates 3.7 IOC Carbon intensity (tCO2e / tCu-eq) Atlantic Al Bauxite & 5.1 Alumina TiO2 6.6 10.3 Pacific Al high low EBITDA margin (%) high Aluminium (Pacific) Bauxite & Al
Slide 17: We are already a very large user of renewable energy
2 We are already a very large user of renewable energy Electricity generation Electricity consumption and share from renewables World energy system* Rio Tinto** Diversified mining majors*** 26,600 56 15 TWh TWh TWh Renewables Fossil fuels Renewables Fossil fuels Renewables Fossil fuels *Source: IEA
Slide 18: Our businesses are already low on respective intensity curves
2 Our businesses are already low on respective intensity curves Aluminium Iron Ore Alumina Copper1 18 Source: CRU, Wood Mackenzie, Rio Tinto analysis ©2020, Rio Tinto, All Rights Reserved Notes: 1. excluding emissions from smelting and refining. KUC RECs refer to Renewable Energy Certificates at Ken
Slide 19: Rigorous analysis of mitigation options informed our targets
2 Rigorous analysis of mitigation options informed our targets Pilbara business-as-usual emissions Pilbara marginal abatement cost curve Renewable power (Mt CO2,100% basis) (100% basis) most viable pre-2030 Battery technology improvements could see low-carbon mine vehicles post 2030 R&D required to
Slide 20: Committed to being part of the solution to climate change
Committed to being part of 3 the solution to climate change Our climate Essential Net zero change ambition for our materials operations by 2050 commitments for low-carbon future 30% 15% Carbon-neutral reduction in Scope 1 reduction in absolute growth overall and 2 emissions Scope 1 and 2 intensity b
Slide 21: CO2 emissions across the aluminium and steel value chains
3 CO2 emissions across the aluminium and steel value chains Bauxite Alumina Aluminium Consumer mining refining Shipping smelting1 products Recycling 3% of global CO2 <5Mt ~175Mt ~5Mt CO2e ~780Mt Life cycle ~15Mt CO2e CO2e CO2e CO2e emissions2 Iron ore Primary iron Recycling mining Shipping and steel
Slide 22: Scope 3 reduction pathways are commodity specific
3 Scope 3 reduction pathways are commodity specific Carbon in product sold Carbon in product sold No carbon in product sold No carbon in product sold Substitutes available today Harder to substitute High carbon energy needs Low-carbon energy needs today for processing for processing Scope 3 reductio
Slide 23: Our partnership with Baowu / Tsinghua University
3 Our partnership with Baowu / Tsinghua University 2020 work programme 1 Carbon inventory and reporting Steel value chain carbon model Expand Tsinghua University carbon modelling with industry insights 2 Carbon reduction and R&D Optimise ore consumption R&D programmes on ore characteristics and blen
Slide 24: The world's first carbon-free aluminium smelting process
The world’s first carbon-free 3 aluminium smelting process In 2018, in partnership with Alcoa In Canada alone, the use of and with support from Apple and ELYSIS™ technology has the the governments of Canada and potential to reduce GHG Quebec, we announced ELYSIS™ emissions by 7 million tonnes – the
Slide 25: Physical risks
4 Physical risks Analysis across the portfolio Analysis undertaken to identify physical risk: Temperature Rainfall Sea-level rise Extreme climatic events: cyclones (intensity and frequency); flood frequency Physical risks built into all projects and closure processes* 2020 – work continues to refine
Slide 26: Technology to tackle the industry's challenges
Technology to tackle the industry’s challenges Nigel Steward Head of Group Technical - Processing
Slide 27: New Energy and Climate Change Centre of Excellence
New Energy and Climate Change Centre of Excellence key enabler of successful execution of our climate change strategy Accountable for GHG emissions & own energy and climate change projects Product Groups GHG emissions monitoring & Technical experts reporting Co-ordinate across group Energy & HSE Rel
Slide 28: Technology key to achieving net zero by 2050
Technology key to achieving net zero by 2050 Rio Tinto scope 1& 2 GHG emissions (2018 = 100) 2050 decarbonisation levers 100 90 -15% Carbon neutral growth 80 Mine closure Energy efficiency 70 -30% Renewables - Aluminium 60 50 Renewables - Other Further repowering with renewables 40 Inert anode ELYSI
Slide 29: We have a pathway to decarbonising our electricity network in the Pilbara
We have a pathway to decarbonising our electricity network in the Pilbara Our competitive advantage Open cycle gas turbines provide firming of intermittent renewable energy Existing network provides pathways for expansion for future potential fleet electrification Stage One – Approved with estimated
Slide 30: ELYSIS – developing direct GHG-free aluminium smelting
ELYSIS™ – developing direct GHG-free aluminium smelting Inert anode technology proven at research scale to eliminate direct greenhouse gas emissions from traditional smelting process ELYSIS™ working to scale up and commercialise technology C$188 million investment announced with Alcoa, Apple, the go
Slide 31: Surface mining in 2030 – the mine of the future
Surface mining in 2030 – the mine of the future Surface Mining Safe Sustainable Smart Centre of Excellence Zero fatalities Sustainability and Asset and equipment Digitally integrated Trial of dual fuel gas decarbonisation optimisation surface mine and diesel at KUC Ensuring our current diesel fleet
Slide 32: Our approach to water
Our approach to water Theresia Ott Chief Advisor Environment
Slide 33: We operate in areas of water scarcity and surplus
We operate in areas of water scarcity and surplus The water resource Dewatering Availability for our operations, our host Access to ore requires displacement communities, and the environment of water e.g. Desert environment, Oyu Tolgoi e.g. Semi-arid environments, Pilbara Water quantity Long-term wa
Slide 34: Our water targets – focusing our efforts
Our water targets – focusing our efforts Our group target Our site-based targets By 2023, we will disclose for all managed operations: Pilbara Iron Ore Energy Kennecott 1 Permitted surface water allocation volumes managed aquifer Resources of Australia Copper import reinjection inventory reduction r
Slide 35: Case study: Oyu Tolgoi, Mongolia
Case study Oyu Tolgoi, Mongolia Water scarcity Online disclosure Mine located in arid region Local herders’ culture and livelihoods of performance Water source Drawn from a deep saline aquifer No connection to shallow aquifers used by herders Restoration of existing and >80% Minimise water use and e
Slide 36: Case study: Pilbara iron ore
Case study Pilbara iron ore Groundwater impacts Orebody Mining below water table presents potential impact to Pilbara groundwater levels access Managed aquifer recharge requires Is the method under study for mitigation of impacts dewatering Reinstatement Consideration Understanding geology of ground
Slide 37: Our investment approach
Our investment approach Jakob Stausholm Chief Financial Officer
Slide 38: Our commitment: $1 billion climate-related spend over five years
Our commitment: $1 billion climate-related spend over five years Elysis R&D $1 billion climate-related Pilbara solar spend over five years and battery project Combination of opex and capex stage one Capital portion already in guidance $1 billion climate-related Investing in physical assets spend Inv
Slide 39: Rigorous bottom-up approach to our investments
Rigorous bottom-up approach to our investments… Pilbara marginal abatement cost curve A portion of the $1 billion is capital investment (100% basis) Bottom-up selection of NPV positive projects Projects developed by Business Strategy and product groups and form part of our marginal abatement cost cu
Slide 40: Spend on climate integral in our capital allocation
…with spend on climate integral in our capital allocation Climate-related spending is an Essential 1 sustaining capex integral part of our capital allocation Some of it will fall in maintenance capex Further cash Part of it is included in our returns to Compelling Ordinary 2 dividends shareholders g
Slide 41: Sustainability supports our resilience and our competitiveness
Sustainability supports our resilience and our competitiveness Our Assets Our Approach Our Performance in 2019 Long life Sustainability (ESG) $10.4 billion earnings1 Competitive Operational Excellence $17.2 billion supplier payments Expandable + Value over volume = $5.5 billion invested in capital p
Slide 42: Summary
Summary J-S Jacques Chief Executive
Slide 43: Our climate and water targets
Our climate and water targets Group water target Increased disclosure of water allocations $1 billion and usage for all estimated spend on managed operations 30% climate-related projects by 2023 reduction in over five years Scope 1 and 2 emissions intensity by 15% Net zero 2030 reduction in ambition
Slide 44: As pioneers in mining and metals we produce materials essential to human progress
As pioneers in mining and metals we produce materials essential to human progress Fe Cu Al Ni Li Perform & Transform Perform today Transform for tomorrow Portfolio Performance People Partners 44 ©2020, Rio Tinto, All Rights Reserved