Rio Tinto Plc · LSE:RIO

Rio Tinto — Debt Investor Presentation (March 2010)

26 slides from Rio Tinto's debt investor presentation, Mar 29, 2010

  1. Slide 1: ike)

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  2. Slide 2: Disclaimer and forward-looking statements

    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-looking statements This presentation incl

  3. Slide 3: Section 1: Company Overview; Sections 2-5

    Section 1: Company Overview Section 2: 2009 Highlights Section 3: Economic Outlook Section 4: 2010 Priorities Section 5: Financial Management 3

  4. Slide 4: Company Overview

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  5. Slide 5: One of the world's leading mining and exploration companies

    ! " Rio Tinto is one of the world' s leading mining and exploration companies Iron Ore Aluminium Copper Coal Uranium Diamonds & Industrial Minerals #2 market share #2 in Global #5 Market Share #6 Market Share in #2 Supplier of #3 Market Share in globally in Aluminium in Mined Copper7 Export Coking C

  6. Slide 6: 2009 Highlights

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  7. Slide 7: Momentum returned in the second half of 2009

    # $ Momentum returned in the second half of 2009 Highlights • Strong volume growth delivered in iron ore, copper and gold • Achieved year on year operating cost savings of $2.6 Bn • Aluminium business turnaround • Significant price recovery in second half • Key divestments completed *H208 and H109 u

  8. Slide 8: Delivering against our commitments

    Delivering against our commitments Target Achieved Reduce controllable operating costs by at least Controllable operating costs reduced $2.5 Bn per annum in 2010 by $2.6 Bn in 2009 Reduction in global headcount of 14,000 roles Global headcount reduced by around 16,000 in first half 2009 Reduce net d

  9. Slide 9: Balance sheet recapitalised and refinancing risk mitigated

    % %& The balance sheet has been recapitalised and refinancing risk has been mitigated Net debt at end of period Gross debt maturity profile ($ Bn) ($ Bn) 10 9 8 $4bn repaid in Jan & 7 Feb 2010 6 5 4 3 2 1 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ A cquisitio n facility Repaid acqn fa

  10. Slide 10: $20 Bn used to strengthen the balance sheet

    –' () * $20 Bn used to strengthen the balance sheet of which a net $14.8 Bn was raised from rights issues 2009 full year cash flows ($ Bn) Rights issue proceeds – $14.8 Bn Reduction in net debt – $19.8 Bn Disposal proceeds and other inflows – $2.4 Bn Other – $0.7 Bn Cash flow from Tax – $3.1 Bn oper

  11. Slide 11: Significant cash generation from divestment of non-core assets

    + Significant cash generation from divestment of non-core assets Asset Price ($ Bn) Completed Greens Creek, Cortez, Kintyre, other 3.1 2008 Ningxia, sundry exploration properties 0.2 Corumbá and potash assets 1.7 Jacobs Ranch 0.8 2009 Cloud Peak Energy (52%) 0.7 Alcan Engineered Products Composites

  12. Slide 12: Credit ratings

    , - Standard & Poor’s2 Moody’s3 Fitch4 DBRS5 Long-term BBB+ Baa1 A- A Low Short-term A-2 P-2 F2 R1 Low Outlook Stable Stable Stable Stable 1. A rating is not a recommendation to buy, sell or hold securities, and may be subject to revision, suspension or withdrawal at any time by the assigning rating

  13. Slide 13: Economic Outlook

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  14. Slide 14: Metals demand expected to double over the next 15-20 years

    % - . ! $/ Metals demand expected to double over the next 15 – 20 yrs requiring a significant supply response Global consumption of leading Rio Tinto commodities Indexed, 2000=100 • Increasing urbanisation rates support positive longer term view 450 • Growth in non-OECD markets will 400 support high

  15. Slide 15: Strong demand to continue through 2010 but with some risks and volatility

    . ! $/ Strong demand to continue through 2010 but with some risks and volatility • Most prices rose substantially over the second half of 2009 due to macroeconomic stimulus measures, pushing current prices above average levels from the previous cycle (2005-mid 2008) • More volatility can be expected

  16. Slide 16: 2010 Priorities

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  17. Slide 17: A stronger business, well-positioned for growth

    * A stronger business, well-positioned for growth • Focus on operational delivery • Transformation of our aluminium business to continue • Pursue growth path through disciplined capital expenditure • Complete the Western Australian iron ore production joint venture • Prudent balance sheet management

  18. Slide 18: Strategy to maximize long term return to shareholders

    % - ' Rio Tinto’s strategy is to maximize long term return to shareholders • Invest in large, long life, low cost assets • Driven not by choice of commodity but by the quality of each opportunity • Long term sustainable development at the heart of everything the Group does 18

  19. Slide 19: We have preserved our growth options

    0 " We have preserved our growth options Key Mines and mining projects Smelters, refineries and processing plants remote from mine Aluminium Copper Diamonds Energy Iron ore Minerals 19

  20. Slide 20: Positioned to benefit from long term iron ore demand growth

    ! Positioned to benefit from long term outlook for iron ore demand growth • Long term outlook remains strong • First production from Mesa A, Brockman 4 to follow shortly • Incremental capacity increases to add considerable value • Expansions to 225mtpa and studies to 230mtpa by 2012 underway • Evalu

  21. Slide 21: Western Australian production joint venture

    ! 1 23" 4# 4$ $ Western Australian production joint venture • Good progress towards formation of production joint venture • Estimated synergies totaling in excess of $10 Bn NPV • The Production JV is geographically limited to the parties’ WA Iron Ore operations • Both companies will independently ma

  22. Slide 22: MoU to form Joint Venture with Chinalco (Simandou)

    ! 1' Memorandum of understanding to form Joint Venture signed with Chinalco • Simandou is an undeveloped iron ore deposit located in Guinea, West Africa • Rio Tinto currently owns 95% of the Simandou project, with International Finance Corporation (IFC) owning the remaining 5% • A non-binding MoU ha

  23. Slide 23: Oyu Tolgoi could support a 50 year plus mine life

    Oyu Tolgoi could support a 50 yr plus mine life • Conditions precedent (CP) progressing, 7 of • Current activity focused on planning capex 10 completed1 activities • Capital expenditure of $758 MM approved by • Developing training plan technical committee • Options exist to increase stake in Ivanhoe

  24. Slide 24: Financial Management

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  25. Slide 25: Significant improvement in debt levels and maturity profile

    +5 *$ Significant improvement in debt levels and maturity profile • Reduction in gross debt by 10 $4.3 Bn since y/e 2009 • 2012 debt maturity reduced from 8 $9 Bn to $5 Bn • Liquidity strong at $11 Bn 6 4 Debt Proforma US$bn 31-Dec repay Disposals 1-Mar 2 Cash 4.3 (4.3) 3.5 3.5 Fac B 2.1 – (2.1) – F

  26. Slide 26: Recapitalized balance sheet allows disciplined investment in growth

    ) * $" Recapitalized balance sheet allows disciplined investment in value adding growth • Rigorous process to prioritise capital expenditure • Growth underpinned by continued investment in key projects (or M&A) • Capex adjusted to reflect current conditions For 2010 • Capex expected to be at least $

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