Rio Tinto Plc · LSE:RIO
Rio Tinto — Rio Tinto Iron & Titanium — Rio Tinto 2008 Canadian site visit
26 slides from Rio Tinto's conference presentation, Mar 13, 2008
Slide 1: ASX cover letter for site visit presentation
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 13 March 2008 Dear Sir, The attached presentation was giv
Slide 2: Rio Tinto Iron & Titanium Analyst presentation
For personal use only Rio Tinto Iron & Titanium Analyst presentation Harry Kenyon-Slaney Managing Director, RTIT Montréal, 12th March 2008
Slide 3: Cautionary statement
Cautionary statement 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 For personal use only Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following c
Slide 4: Summary
Summary For personal use only • Leading position in the TiO2 feedstock industry • Products • Unrivalled suite of products • Strong co-product earnings stream • Large and high quality ilmenite reserves • Growth • New capacity under construction in Madagascar • Further opportunities as market expands
Slide 5: Majority of TiO2 feedstock is used to produce white pigment
The majority of TiO2 feedstock is used to produce white pigment for which there is no commercial substitute For personal use only TiO2 Mining Upgrading Paint Pigment 12 March 2008 Rio Tinto Iron and Titanium investor presentation 4
Slide 6: The pigment industry consumes 93% of TiO2 feedstocks
The pigment industry consumes 93% of TiO2 feedstocks Consumption of pigment by end-use industries For personal use only Major drivers: ink, fibre, sunscreen 11% Paint & Coatings Plastics Major drivers: printed media 9% Paper and packaging Other 56% Major drivers: housing, 24% appliance and Major dri
Slide 7: Rio Tinto Iron & Titanium is a global business
Rio Tinto Iron & Titanium is a global business For personal use only London Quebec Fer et Titane - QIT (100%) Corporate Office 2007 Production: 1.8Mt QIT Suzhou powder plant Operating Asset Development Asset Exploration Asset Richards Bay Minerals - RBM (50%) Corporate/Marketing 2007 Production: 1.7
Slide 8: QIT extracts maximum value from ilmenite through beneficiation steps
QIT extracts maximum value from ilmenite through a series of beneficiation steps For personal use only 12 March 2008 Rio Tinto Iron and Titanium investor presentation 7
Slide 9: QMM construction is progressing well
QMM construction is progressing well Aerial View Port Ehoala For personal use only Wet Plant Dry Mill Structure 12 March 2008 Rio Tinto Iron and Titanium investor presentation 8
Slide 10: QMM construction is progressing well
QMM construction is progressing well Dredge Components Dry Mill Drainage For personal use only Mineral Separations Plant Make Up Water Area 12 March 2008 Rio Tinto Iron and Titanium investor presentation 9
Slide 11: Mandena development followed by two further expansions
The current development of the Mandena deposit can be followed by two further expansions For personal use only Ilmenite Timing Phase 1 750 ktpa 2008 Phase 2 750 ktpa >2012 Potential Phase 3 750 ktpa TOTAL 2.25 Mtpa 12 March 2008 Rio Tinto Iron and Titanium investor presentation 10
Slide 12: QMM output targeting growth in chloride pigment demand
QMM output targeting the growth in pigment demand produced by the chloride route. Sulphate process growth For personal use only slowing due to higher production & environmental costs. 7000 Forecast Chloride 6000 Pigment ('000 tonnes) Sulphate 5000 4000 3000 2000 1000 0 1970 1980 1990 2000 2010 Sourc
Slide 13: China's pigment industry is sulphate based and fragmented
China’s pigment industry is sulphate process based and is fragmented. The industry is expected to evolve rapidly. For personal use only Tier 3 Tier 2 Tier 1 Business Capabilities Technical & Quality Capabilities Bubble size represents estimated relative company capacity for year end 2007 Source: RTI
Slide 14: China and developing economies at early stage of TiO2 use
China and other developing economies are still at an early stage of growth in TiO2 use For personal use only GDP per capita versus pigment consumption per capita, 1990-2006 4.5 4.0 Pigment consumption per North America 3.5 capita, kg/person 3.0 Western Europe 2.5 Japan 2.0 1.5 China 1.0 0.5 Latin Am
Slide 15: Chinese per capita pigment consumption lower than other metals
Chinese consumption of pigment on a per capita basis is currently lower than that of other metals when For personal use only compared to usage in the US Chinese per capita consumption as a proportion 100% of US per capita demand 80% 60% 40% 20% 0% Steel Copper Aluminium Nickel Pigment Source: IISI,
Slide 16: Construction, transport and durables drive Chinese TiO2 consumption
In China construction, transport, and consumer durables account for 70% of Chinese TiO2 consumption. Strong growth is being witnessed in these sectors. For personal use only Floor space & Autos Refridgerators 12,000 48,000 Total urban residential floorspace (M sq.m) Total auto production ('000 units
Slide 17: Chinese pigment consumption expected to keep growing
Chinese pigment consumption is expected to continue growing at the pace seen since 1999 For personal use only Chinese TiO2 Pigment Demand 1999 – 2012 CAGR 15.1% 1600 TiO2 Pigment ('000 tonnes) 1400 1200 1000 800 600 400 200 0 1991 1994 1997 2000 2003 2006 2009 2012 Source: Historical RTIT / Forecast
Slide 18: China to account for about 60% of global pigment growth
China to account for approximately 60% of the growth in global pigment consumption until 2012 For personal use only Cumulative pigment consumption growth from 2006 TiO2 Pigment ('000 tonnes) 1000 800 600 China 400 ROW 200 0 2007 2008 2009 2010 2011 2012 Source: Rest of world by RTIT / China forecast
Slide 19: Large high grade ilmenite reserves well located to key markets
Rio Tinto Iron & Titanium manages 3 large high grade ilmenite reserves well located to key markets. For personal use only QIT QMM RBM Size of Bubble represents reserve base Source: RTIT, QIT 100%, QMM 80%, RBM 50% 12 March 2008 Rio Tinto Iron and Titanium investor presentation 18
Slide 20: RTIT has led technical development of TiO2 feedstock industry
RTIT has led the technical development of the TiO2 feedstock industry For personal use only TiO 2 Feedstocks – Product Development D evelopment Dominant New Chloride Dominant Sulfate Process C hloride Market Market 100% Synthetic R utile UG S 94.5% 95% 92% 90% R B Chloride SR EP 94% TiO2 Content Sla
Slide 21: RTIT businesses captured majority of chloride feedstock growth
RTIT managed businesses have historically captured the majority of the growth in the chloride feedstock market For personal use only Cumulative growth in chloride pigment demand 3500 Forecast 3000 2500 since 1977 - kt TiO2 2000 Other 1500 RTIT 1000 500 0 1987 1997 2007 2012 Source: RTIT, Rio Tinto m
Slide 22: Incremental growth projects at RTIT
For personal use only Incremental growth projects at RTIT QIT • Furnace 9 rebuilt and modernised in October 2007 • Expected ramp up of QMM based slag to 475 ktpa by 2011/2012 • UGS capacity increase to 400 ktpa during 2008 RBM • 50 ktpa capacity upgrade of furnace 4 from 2009 • Re-process tailings t
Slide 23: Pigment prices remain volatile and regional
Pigment prices remain volatile and regional For personal use only 3250 3000 WEurope NAmerica Asia 2750 Avg Market Price ($US/Te) 2500 2250 2000 1750 1500 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source – ICIS LOR 12 March 2008 Rio Tinto Iron and Titanium i
Slide 24: High Purity Iron contributes significantly to earnings as niche product
Our High Purity Iron contributes significantly to earnings as a niche product For personal use only High purity iron (HPI) is Iron prices are at all-time used in ductile iron castings, highs 2006 world consumption of iron Basic pig iron prices, US$/tonne products 600 fob NOLA 2% 500 del. Italy 3% 40
Slide 25: RTIT produced about 30% of feedstock at higher revenue to cash cost ratio
In 2006 RTIT managed businesses produced approximately 30% of the industry feedstock at For personal use only 30% higher revenue to cash cost ratio 2 Revenue / cash cost ratio TiO2 units produced 1.5 RTIT Managed 1 Rest of Industry 0.5 0 RTIT Rest of Industry Source: TZMI 12 March 2008 Rio Tinto Iro
Slide 26: Summary
Summary For personal use only • Leading position in the TiO2 feedstock industry • Products • Unrivalled suite of products • Strong co-product earnings stream • Large and high quality ilmenite reserves • Growth • New capacity under construction in Madagascar • Further opportunities as market expands
Rio Tinto Iron & Titanium — Rio Tinto 2008 Canadian site visit on 6ix