Rio Tinto Plc · LSE:RIO
Rio Tinto — 14th International Iron Ore Symposium 2006
18 slides from Rio Tinto's conference presentation, May 31, 2006
Slide 1: Rio Tinto Iron Ore: Expanding to Meet Global Demand
Rio Tinto Iron Ore Expanding to Meet Global Demand Alan Smith Vice President – Atlantic Marketing 14th International Iron Ore Symposium Athens, 31 May 2006
Slide 2: Rio Tinto Iron Ore
Rio Tinto Iron Ore • Comprising a quarter of seaborne iron ore trade • Operations in Australia, Canada and Brazil with expansion options at each operating site and new projects under study in Guinea and India. • Full product suite • Lump ore (BF & DR Grade) • Fine ore and concentrate • Pellets (BF &
Slide 3: Strong steel production growth is expected to continue
Strong steel production growth is expected to continue • China consumed at least 50m tonnes more steel in 2005 and has achieved CAGR of 23% during the last three years. • Growth is expected to continue strongly for at least the next five years with China dominating increases. • The rest of the world
Slide 4: The seaborne iron ore market also continues to grow strongly
The seaborne iron ore market also continues to grow strongly • Growth has increased more in the past four years than in the preceding two decades. Global Crude Steel Production and 1200 Seaborne Iron Ore Trade Global crude steel production 1000 Million tonnes 800 600 Rest of World iron ore imports 4
Slide 5: Significant ore supply additions are in the pipeline but will take time to catch up
Significant ore supply additions are in the pipeline but will take some time to catch up • In the meantime higher cost production particularly in China and India is filling the gap • To bring on low cost, long term supply requires superior resources and deep pockets. Chinese Iron Ore Spot Prices 140
Slide 6: In the medium term sources of new ore demand are likely to emerge
In the medium term sources of new ore demand are likely to emerge Indian and Chinese Indian and Chinese 6000 300 Per Captia Incomes Steel Consumption 5000 250 China per capita China 10.3% US$000 (PPP in 2000 terms) income growth of 7.6% 4000 200 CAGR 1994-2004 CAGR 1994-2004 Million tonnes 3000 Inco
Slide 7: RTIO current operational performance
RTIO current operational performance Q4 Full Year Million tonnes Q1 2006 2005 2005 Hamersley 23.1 21.2 89.6 • 2005 record performances Robe 13.9 11.3 52.4 IOCC 4.1 3.2 15.6 • Q1 2006 Hamersley and Corumba 0.3 0.4 1.4 Robe production affected HIsmelt 0.009 0.004 - by heavy rains following Total produ
Slide 8: US$3.7 billion RTIO expansion
US$3.7 billion RTIO expansion Recently completed projects ($1.1 bn) • Yandi mine to 36mtpa Mt • West Angelas to 25mtpa RTIO iron ore production* 250 • Port expansion to 116mtpa Hamersley Robe IOC • Other incl. power 200 Ongoing projects ($0.6 bn) 150 • Rail duplication 100 • Locos and rolling stock
Slide 9: RTIO Pilbara operations
RTIO Pilbara operations • Manage the assets of Hamersley Iron and Robe River Iron Associates through Pilbara Iron • Operate nine mines • Utilise three port facilities for shipping • Use and maintain the largest privately owned heavy freight railway in the world • Direct employment, 3850, 90% based i
Slide 10: Iron Ore Company of Canada
Iron Ore Company of Canada • Open pit mine, concentrator and pellet plant at Labrador City, Newfoundland and Labrador • 420km railway to port facilities and partly refurbished pellet plant at Sept Iles, Quebec • Exports concentrates and pellet to North America, Europe and Asia Pacific • Approximatel
Slide 11: Corumbá (Brazil)
Corumbá (Brazil) • High grade resource, primarily lump ore • Mine expansion to 2mtpa and new barge convoy completed 2005 • Staged expansion to 15mtpa under study • Facilitating development of regional steel centre • Approximately 450 employees (2005) 11
Slide 12: HIsmelt iron making process
HIsmelt® iron making process • New technology developed by Rio Tinto for direct smelting of iron ore fines into high quality pig iron without using coke ovens and sinter plants • JV partners for initial plant: – Rio Tinto 60%, Nucor 25%, Mitsubishi Corp 10%, Shougang 5% • Construction of the 800,000
Slide 13: Investing to meet growing demand in a challenging environment
Investing to meet growing demand in a challenging environment • RTIO capital expenditure in 2005 increased 30% to US$1.2bn • Work has started on our next phase to take total Pilbara capacity towards 200 Mt/a • Studies being undertaken for expansions/ Greenfield developments at other properties • Rig
Slide 14: Pilbara port capacity increasing to almost 200Mtpa
Pilbara port capacity increasing to almost 200Mtpa Dampier port expansion to 116mtpa • Project completed on time and on budget • 5.7mt shipped from new shiploader in 2005 Dampier port expansion to 140mtpa • Construction underway • Due for completion at end of 2007 14
Slide 15: English proverb: soft words butter no parsnips
English proverb: “soft words butter no parsnips” • The world’s ore needs will not be met by unrealistic plans and boom-time hype • Some hard realities face producers in today’s environment: • Insufficient labour and skills • Shortages of materials • Rising capital and operating costs • Timetable del
Slide 16: Summary of RTIO Expansion Commitments
Summary of RTIO Expansion Commitments 2003 Expansion Commitments (100%) US$m Completion Date Dampier Port Expansion – phase 1 685 Completed Yandi mine expansion to 36mpta 200 Completed West Angelas mine expansion to 25mtpa 105 Completed Other 35 Completed 2004 expansion commitments Rail capacity exp
Slide 17: Further expansion opportunities in the Pilbara and globally
Further expansion opportunities in the Pilbara and globally IOC Orissa Simandou Corumba Hamersley Robe Markets supplied HIsmelt Operations Projects • Existing Pilbara resource base of >11bt* with unrivalled infrastructure • US$190m drilling programme underway to further extend resource base • Hope D
Slide 18: Summary
Summary • While the market is strong, there are many challenges facing existing and would-be iron ore producers • Only careful planning and rigorous management will deliver required ore projects • RTIO is working hard to meet customers needs, and through comprehensive analysis and close cooperation
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