Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Presentation (March 2008)
46 slides from Rio Tinto's investor presentation, Mar 14, 2008
Slide 1: ASX cover letter for Rio Tinto Alcan 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 14 March 2008 Dear Sir, Attached are presentations from R
Slide 2: Rio Tinto Alcan Financial community site visit
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 3: Cautionary statement
Cautionary statement For personal use only 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 to be bound by the following conditions. Forward lo
Slide 4: Jacynthe Cote, President Primary Metal
For personal use only Jacynthe Cote President Primary Metal – Rio Tinto Alcan 3
Slide 5: Primary metal strategy and assets
For personal use only Primary metal strategy and assets Power Technology and operational excellence Highly attractive growth 4
Slide 6: Clear and compelling strategy
Clear and compelling strategy For personal use only Build on unique competitive strengths Focused on the development of low cost, long life, large scale aluminium assets Leveraging competitive advantages Self owned electricity Cutting edge technology Operating know-how Sustainability app
Slide 7: A global presence
A global presence For personal use only RTA Primary Metal at a glance: • Global presence in 21 countries and regions; 45 production facilities; 19,400 employees • Largest aluminium producer with highest share of low cost, world class assets • World’s largest self-generated power producer (capacity o
Slide 8: A leading cost position
A leading cost position Rio Tinto Alcan capacity weighted average For personal use only Cash cost, 2007 USD Rio Tinto Alcan smelters Chinese weighted average 2800 Chinese smelters x% Share of Rio Tinto Alcan’s total capacity in quartile 2600 2400 56% 30% 8% 6% 2200 85% of capacity in the 4th quartil
Slide 9: Primary metal strategy and assets
For personal use only Primary metal strategy and assets Power Technology and operational excellence Highly attractive growth 8
Slide 10: Scale of self-owned power
Scale of self-owned power For personal use only RTA self-generated power sufficient to supply nearly all of Denmark RTA power generation in 2007 : Denmark power usage in 2007 : 34 TWh - consolidated 36 TWh – all usages Québec UK Australia * British Columbia Others ** * RTA’s share in Gladstone Power
Slide 11: Clean, secure power base not easily replicable
Clean, secure power base not easily replicable For personal use only Combination of water rights, physical assets and expertise is unique British Columbia (896MW*) Quebec Hydro Network (2,687MW*) 1941 PASSES DANGEREUSES RESERVOIR STORAGE CAPACITY 5 200 HM3 LAC MANOUANE 1941 RESERVOIR STORAGE CAPACIT
Slide 12: Limited power cost exposure
Limited power cost exposure For personal use only Rio Tinto Alcan 2007 smelter energy sources Short/medium-term power contracts (6%) Long-term power contracts Self-generated (46%) power (48%) • Self-generated power cost escalation limited by strong hydro footprint • Minimal exposure to wholesale ele
Slide 13: Primary metal strategy and assets
For personal use only Primary metal strategy and assets Power Technology and operational excellence Highly attractive growth 12
Slide 14: Technology strategy
Technology strategy For personal use only A key driver of growth and operational excellence A three-pronged technology strategy: Leading through operational excellence Maintain and enhance AP technology leadership Develop new breakthrough technologies with step changes in energy consumption an
Slide 15: Technology integral in delivering capacity creep
Technology integral in delivering capacity creep For personal use only Production capacity creep Rio Tinto Alcan smelter capacity creep (kt) RTA Primary Metal has added 387 on average 1.1% capacity per year since 2001 compared to 150 0.5% to 1% for the industry Every 5-8 years, RTA generates the
Slide 16: Operational excellence across the board
Operational excellence across the board For personal use only Labour productivity Improved labour productivity of 3% per year over the last 4 years and continued improvement planned for the next 3 years Safety Improved safety results by 70% over the last 4 years Environment Reduction of GHG in
Slide 17: High value generated by unparalleled smelter technology
High value generated by unparalleled smelter technology and support For personal use only “The AP Technology edge” Demonstrated economic cost advantage with superior levels of predictability Value for Rio Tinto Alcan Installed capacity = 6.0 Mt Under construction = 0.9 Mt Multiple sources of t
Slide 18: Primary metal strategy and assets
For personal use only Primary metal strategy and assets Power Technology and operational excellence Highly attractive growth 17
Slide 19: Sohar - the world's most modern smelter
Sohar- the world’s most modern smelter For personal use only Sohar will operate in the first decile of the industry cash cost curve Project structure RTA led project development team RTA is managing partner Secure, long term, low cost electricity Option to take increased stake in subsequent
Slide 20: Kitimat smelter project
Kitimat smelter project For personal use only Production capacity: 400 kt pa Leveraging the Kemano self owned hydro power facility Latest AP35+ pre-bake pot cell technology First metal expected in 2011 Reducing environmental footprint of existing plant by over 40% Advanced feasibility st
Slide 21: The AP-50 project
The AP-50 project For personal use only 44-cell pilot plant Expansion to First metal: 2010 180+ pots Production capacity: 60 kt pa Substantial Quebec government assistance Leveraging self-owned hydro power Increased capital and operating cost efficiencies Designed to serve as platform for
Slide 22: Visit: The Saguenay hub
Visit: The Saguenay hub For personal use only 21
Slide 23: Executive summary
Executive summary For personal use only RTA holds a competitive advantage in the industry to deliver value through: Low cost, long life, world class assets Secure, clean self-generated power Unsurpassed technology offering Robust sustainability approach RTA’s attractive growth pipeline d
Slide 24: Rio Tinto Alcan Financial community site visit
For personal use only Rio Tinto Alcan Financial community site visit 12 – 14 March 2008
Slide 25: Cautionary statement
Cautionary statement For personal use only 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 to be bound by the following conditions. Forward lo
Slide 26: Don Macmillan, VP Technology and Operational Excellence
For personal use only Don Macmillan Vice President, Technology and Operational Excellence Rio Tinto Alcan Primary Metal 3
Slide 27: Industry growth drivers; technology agenda
For personal use only Industry growth drivers RTA technological leadership Technology strategy and key priorities Conclusions 4
Slide 28: Industry growth drivers
Industry growth drivers For personal use only Access to competitive Sustainable Access to and long-term growth capital energy supply drivers Critical success factors • Proven technology & large project execution capabilities • Operating know-how • Global reputation for performance & sustainable deve
Slide 29: RTA technological leadership agenda
For personal use only Industry growth drivers RTA technological leadership Technology strategy and key priorities Conclusions 6
Slide 30: AP technology leadership
AP technology leadership For personal use only Organization-wide commitment to sustainable development. Anode & cathode Equipment ALESA Supply, Engineering & management and operating support technical solutions 7
Slide 31: AP technology leadership
AP technology leadership For personal use only Installed capacity = 6.0 Mt Under construction = 0.9 Mt Under discussion ≈ 5.7 Mt UK: Lochaber France: Slovenia: Dunkerque Talum St-Jean Norway: Karmoy India: Canada: Iceland Nalco Alma Fjardaal (in (L4 under Lauralco start-up) Bahrain: construction) Al
Slide 32: Technology and R&D organisation
Technology and R&D organisation For personal use only One globally deployed technology and R&D organisation « Rhône-Alpes » R&D, plant support and deployment (180) « Québec » R&D, plant support and deployment (190) « Australia » plant support and deployment (45) 9
Slide 33: AP30-3X key facts
AP technology leadership For personal use only AP30-3X Key Facts The most comprehensive, low-risk and bankable technology Proven technology transfer process Leadership in capital effectiveness solutions and lowest full economic cost Leadership in sustainability 10
Slide 34: AP a leader in sustainability
AP technology leadership AP 30 a leader in sustainability with all plants using this technology in For personal use only the first quartile of the industry energy curve 20.00 Ist Quartile 2nd Quartile 3rd Quartile 4th Quartile 19.00 18.00 17.00 DC MWh/t.Al 16.00 15.00 14.00 Coega 13.00 12.00 ALL AP3
Slide 35: Technology strategy and key priorities
For personal use only Industry growth drivers RTA technological leadership Technology strategy and key priorities Conclusions 12
Slide 36: Technology and R&D strategy and key priorities
Technology and R&D strategy and key priorities For personal use only Extending technological leadership Key priorities: Leading through operational excellence Maintaining and enhancing AP technology leadership Developing new breakthrough technologies – step changes in energy consumption and en
Slide 37: Operational excellence
Operational excellence For personal use only The “hidden factory” Operational excellence achieving ~300kt additional capacity Additional 400kt delivered during last 7 Goal of years. Goal Benchmark ~ 400kWh/t reduction in Performance energy consumption *Growth of 1% per annum of benchmark com
Slide 38: Full economic cost initiative (FECRI)
Full economic cost initiative (FECRI) at ECL…… For personal use only DESIGN TO COST PROJECT Performance achieved: Previous New Design Savings Cost 100 70 -30% Weight 150 t FECRI: 122 t -19% Market analysis Height 11600 Structured 11100 -500 mm Anode changing process of FEC Functional analysis cycle
Slide 39: AP technology lowest full economic cost leadership
RTA’s AP 36 technology has achieved lowest full economic cost leadership going head-to-head with Chinese 350 technology in Asia For personal use only AP36 Technology Chinese 350kA Technology AP36, though having somewhat higher CAPEX, wins out on a full economic cost basis due to faster and more pred
Slide 40: AP50 next generation AP technology
AP50… next generation AP technology For personal use only Cell daily production (t) AP50 AP30/3X AP18/22 1.4-1.6 2.3-2.9 3.8-4.2 t/d t/d t/d 17
Slide 41: AP50 pilot plant
AP50 pilot plant For personal use only 44-cell Pilot Plant Expansion to 180+ pots 44-cell First pilot Metal: plant 2010 Expansion to 180+ cells first metal: 2010 18
Slide 42: What next?
What next ? For personal use only AP 50 cells …..welcome to breakthrough technologies 19
Slide 43: Breakthrough technologies
Breakthrough technologies For personal use only An innovative portfolio of breakthrough technologies is being pursued with the overall goal of lowering unit energy consumption by up to 20% while reducing and eventually eliminating GHG and other emissions. H2 Energy and CO2 Capture Hydrogen Energy -
Slide 44: AP-Xe
AP-Xe : - A whole new idea of the reduction cell For personal use only - A whole new idea of the aluminum smelter AP-Xe and Breakthroughs: ─ Integrate the portfolio elements into a whole new generation of smelting technology: the AP-Xe. AP-Xe technology: ─ Basis is the AP50 platform step changes
Slide 45: Conclusions agenda
For personal use only Industry growth drivers RTA technological leadership Technology strategy and key priorities Conclusions 22
Slide 46: Conclusions
Conclusions For personal use only The AP Technology is the industry benchmark, being the most comprehensive, low-risk and bankable technology available, with a proven technology transfer process. Rio Tinto Alcan’s industry-leading technology position represents a distinct competitive advantage, crea