Slide 1: Half Year Results
2021 Half Year Results 28 July 2021 Karratha’s Red Earth Arts Precinct, the Pilbara. Rio Tinto is a funding partner
Slide 2: Cautionary and supporting statements
Cautionary and supporting statements This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (together with their subsidiaries, “Rio Tinto”). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward-looking stateme
Slide 3: Jakob Stausholm, Chief Executive
Jakob Stausholm Chief Executive Iron Ore Company of Canada (IOC)
Slide 4: Four areas of focus for an even stronger Rio Tinto
Four areas of focus for an even stronger Rio Tinto H1 2021 Financials Best Impeccable ESG Excel in operator credentials development Room to improve Partnerships Jadar $21.0bn ELYSISTM, InoBat, ARENA, New commodity entry; EBITDA Rio Tinto Safe Charge On Challenge large, low cost 50% Production System
Slide 5: Peter Cunningham, Chief Financial Officer
Peter Cunningham Chief Financial Officer Perth operations centre, Western Australia
Slide 6: Continued supportive global conditions in iron ore
Continued supportive global conditions in iron ore China’s crude steel production (Mt annualised) Iron Ore 1 (+101% YoY) $/dmt 250 1,250 1,200 200 1,150 1,100 150 1,050 1,000 950 100 900 850 50 800 5-year Range 5-year avg 2020 2021 750 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 18 Jul 18
Slide 7: Robust demand supports aluminium, copper and TiO2
Robust demand supports aluminium, copper and TiO2 Aluminium1 (+41% YoY) Copper (+66% YoY) TiO2 (chloride slag) (-1% YoY) $/t $c/lb $/t 2,800 700 500 850 2,600 600 450 800 2,400 500 400 2,200 400 750 2,000 350 300 1,800 700 300 200 1,600 650 100 250 1,400 1,200 0 200 600 Jan-18 Jan-19 Jan-20 Jan-21 J
Slide 8: Outstanding financial results
Outstanding financial results ($bn, except for per share data) H1 2021 H1 2020 Comparison Consolidated sales revenue 33.1 19.4 +71% Underlying EBITDA 21.0 9.6 +118% Underlying ROCE 50% 21% n/a Cash flow from operations 13.7 5.6 +143% Free cash flow 10.2 2.8 +262% Underlying earnings 12.2 4.8 +156% U
Slide 9: Significant support from higher prices
Significant support from higher prices Underlying EBITDA $bn 12.8 0.0 21.7 21.0 0.6 0.1 0.4 0.3 0.0 Iron Ore +9.9 Copper +1.2 Aluminium +1.1 Other +0.7 9.6 H1 2020 Prices Exchange Energy Inflation Flexed H1 Volumes Unit cash Noncash costs H1 2021 Underlying 2020 & Mix costs /other Underlying EBITDA
Slide 10: Iron Ore
Iron Ore Strong financial result despite operational challenges H1 2021 H1 2020 2021 Production impacted by weather, tie-in of Operating metrics c comparison guidance replacement mines, plant availability and cultural heritage management Average realised price1, 3 $168.4/t + 97% Shipments3 (100% bas
Slide 11: Pilbara iron ore a stronger business beyond 2021
Pilbara iron ore a stronger business beyond 2021 Average Pilbara shipments has been 331mt a year (100% basis) over the last 5 years The completion of 90mt of replacement mine capacity and the commissioning of Gudai-Darri (43mt), our first new mining hub in nearly a decade1, will significantly streng
Slide 12: Aluminium
Aluminium Solid operating performance in recovering markets Operating metrics H1 2021 H1 2020 2021 FCF of $0.9bn matches full year 2020. C comparison Guidance All PacAl smelters FCF positive Average aluminium price1 $2,626/t + 42% Average alumina price2 $ 288/t + 9% EBITDA doubles on higher sales pr
Slide 13: Copper
Copper Strong financial results despite COVID-19 and other challenges Operating metrics H1 2021 H1 2020 2021 Strong recovery in prices of copper, gold, c comparison Guidance silver and molybdenum Copper realised price1 415c/lb + 66% OT underground – achieved key technical 500-550kt Production – mine
Slide 14: Minerals
Minerals Strong demand across all products especially high grade iron ore Operating metrics H1 2021 H1 2020 2021 $2.4bn commitment to fund Jadar. Low c comparison guidance cost, long life asset, entry into battery IOC pellets price1 $218/t + 86% materials at scale TiO2 slag price2 $782/t - 1% Produc
Slide 15: Disciplined allocation of capital
Disciplined allocation of capital 1 Essential sustaining capex Further cash Compelling returns to growth shareholders 2 Ordinary dividends 3 Iterative cycle of Debt management ©2021, Rio Tinto, All Rights Reserved 15
Slide 16: Discipline maintained under strong price conditions
Discipline maintained under strong price conditions Underlying earnings, $bn Total capital expenditure, $bn Growth is about value not volume Platts Price - 62% Fe, $/dmt 16 200 171 173 180 Investing to sustain our assets 14 160 12 134 Developing projects that deliver 129 additional supply of the com
Slide 17: Measured ramp-up continues
Measured ramp-up continues Capital expenditure profile Capex of $3.3bn comprised $1.4bn $bn sustaining and $1.9bn replacement ~7.5 ~7.5 ~7.5 and growth 24% higher YoY as we ramp up our 6.2 projects 5.4 5.5 Guidance for 2021 - 2023 unchanged ~$7.5bn Jadar funding commitment of $2.4bn to commence in 2
Slide 18: Balance sheet strength adds to our resilience
Balance sheet strength adds to our resilience Net debt (cash) $bn Balance sheet strength is an asset. 14.1 Offers resilience and creates optionality Gearing -6% 12.9 11.3 10.0 9.3 9.3 Operating cash flow of $13.7bn 8.0 9.6 5.2 5.6 Invested $3.3bn and distributed $6.4bn to 7.6 4.8 6.0 shareholders 4.
Slide 19: Stable five-year record of shareholder returns
Stable five-year record of shareholder returns Shareholder returns of 40-60% of underlying earnings on average through the cycle $6.1bn ordinary interim dividend, Pay out ratio (%) $3.76 per share, 50% pay-out ratio 100 $3.0bn special dividend, $1.85 per share 80 75% total pay-out ratio 60 40 20 0 2
Slide 20: Jakob Stausholm, Chief Executive
Jakob Stausholm Chief Executive Gobi desert, Mongolia
Slide 21: We produce materials essential for a low-carbon future
We produce materials essential for a low-carbon future Cu Cu Cu Ti Copper Copper Copper Titanium 29 29 29 22 Al Al Al Li Aluminum Aluminum Aluminum Lithium 13 13 13 3 Fe Fe Fe B Iron Iron Iron Boron 26 26 26 5 Al Cu Fe Aluminum Copper Iron 13 29 26 Fe Li Cu Iron Lithium Copper 26 3 29 Ti Titanium 22
Slide 22: Four areas of focus for an even stronger Rio Tinto
Four areas of focus for an even stronger Rio Tinto Best Impeccable ESG Excel in operator credentials development Expand capability Strengthen track Deliver organic & and leadership record and inorganic growth transparency Social Licence Earn trust by building meaningful relationships and partnership
Slide 23: Becoming more outward looking
Best operator Impeccable Excel in ESG Development Becoming more credentials Social Licence outward looking New Executive Committee effective 1 March. Embed for the long term. CEO Australia on Executive Committee A period of deep engagement. Over 130 meetings1 by the CEO across governments, civil soc
Slide 24: Working towards impeccable ESG credentials
Best operator Impeccable Excel in ESG Development Working towards impeccable credentials License Social Licence ESG credentials Everyday Respect Initiative Embedding communities & heritage Decarbonising our business - Building a safer, more respectful in daily operations and value chain and inclusiv
Slide 25: Building on our strengths
Best Impeccable Excel in operator ESG Development Building on our credentials Social Licence strengths Safety always our priority Rio Tinto Safe Production System a bottom-up, people centric approach COO organisation established including governance, scope and people at the assets Focus on long term
Slide 26: Controlled risk taking; disciplined progress
Best Impeccable Excel in operator ESG Development Controlled risk taking; disciplined progress credentials Social Licence 2021 2022 Jadar funding committed Activity Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 8% equity stake in Western Copper Pilbara projects (Iron ore, Australia) and Gold Gudai-Darri ramp-up Continue
Slide 27: Oyu Tolgoi Underground
Best Impeccable Excel in operator ESG Development Oyu Tolgoi credentials Social Licence Underground Technical progress despite COVID-19 restrictions Material Handling System 1 is 90% complete; technical criteria achieved to support undercut commencement despite site operating as low as 25% manning l
Slide 28: Strengthening our portfolio with commitment to fund Jadar
Strengthening our portfolio with Best Impeccable Excel in operator ESG Development credentials Social Licence commitment to fund Jadar Continue to work closely with stakeholders in Serbia. Subject to award of final permits and approvals, construction will commence in 2022, with first saleable produc
Slide 29: Unleashing our potential
Unleashing our potential Our priorities Best operator | Impeccable ESG credentials | Excel in development with controlled risk taking | Be more outward looking to strengthen social licence Attractive assets A focused team Clear ambition - Strong safety record - New Exco started 1 March - Invest in s
Slide 30: Appendices
Appendices Jadar project, Loznica, Serbia
Slide 31: Our portfolio is well positioned for the low-carbon transition
Our portfolio is well positioned for the low-carbon transition Our portfolio No carbon in product No carbon in product No carbon in product Over 95% of our 2020 revenues are from Carbon in product sold and widely Carbon in product sold but CO2 intensive processing sold and best-in- class process CO2
Slide 32: Our portfolio to perform strongly in scenarios with proactive climate action
Our portfolio to perform strongly in scenarios with proactive climate action Our Scope 3 goals to guide our partnerships 2020 Highlights - Technology for reductions in steelmaking carbon intensity of at - Reduced emissions by 1.1Mt CO2e or 3% least 30% from 2030 vs 2018 baseline, though flat in 2020
Slide 33: ELYSIS zero carbon metal meets new market demand
ELYSIS zero carbon metal meets new market demand Strong market demand emerging - Q3 2020: Apple’s 16” MacBook Pro is world’s first device manufactured using ELYSIS metal, delivered through Rio Tinto’s commercial network. Scaling up ELYSISTM technology - Q4 2020: Rio Tinto supplied ELYSIS metal to AB
Slide 34: Oyu Tolgoi delivers substantial economic value to Mongolia
Oyu Tolgoi delivers substantial Total in-country spend (2010 – Q2 2021) economic value to Mongolia FDI: OT accounts for one-third of Mongolia’s GDP; 70% of Foreign Direct Investment Jobs: Country’s largest private-sector employer, workforce of 12,000 is 96% Mongolian Taxes: Since 2010, OT has spent
Slide 35: Resolution Copper: potential to produce up to 25% of US copper demand
Resolution Copper: potential to produce up to 25% of US copper demand; critical to a low carbon future We are continuing to work with the US Forest Service to review the Final Environmental Impact Statement (EIS) and draft Record of Decision. Mine studies continue to progress in parallel. More than
Slide 36: Significant Paterson footprint with potential beyond Winu
Significant Paterson footprint with potential beyond Winu RT Paterson JV’s RT Status SIPA Extensive portfolio of 100% owned tenure, majority owned joint Citadel JV (Antipa) 51% Secured 0 100 km venture (JV) tenure, and active earn-in opportunities SIPA, Carrawine, Alloy Earning In Continue to active
Slide 37: We are committed to the Simandou project and Guinea
We are committed to the Simandou project and Guinea One of the world’s largest untapped and richest high-grade iron ore deposits, located in Guinea High-grade ores can support the transition to lower-carbon steel Strengthens Rio Tinto’s iron ore portfolio as well as our product offering Complements
Slide 38: Strong commodity pricing driving EBITDA
Strong commodity pricing driving EBITDA Underlying EBITDA H1 2021 vs H1 2020 $ million 24,000 22,000 Iron ore Iron & Titanium Diamonds Copper Aluminium* Other, net 20,000 11,000 9,874 18,000 9,000 16,000 12,833 7,000 14,000 12,000 5,000 9,640 10,000 3,000 1,193 1,090 8,000 591 1,000 44 41 6,000 -1,0
Slide 39: Lower volume in iron ore driven by weather, mine tie-in work, plant availability
Lower volume in iron ore driven by weather, mine tie- in work, plant availability and heritage management Underlying EBITDA H1 2021 vs H1 2020 $ million 24,000 43 21,752 22,000 210 (627) (137) 20,000 (381) 66 47 18,000 4 16,000 12,833 (30) (66) 14,000 12,000 9,640 10,000 8,000 (612) 6,000 Diamonds G
Slide 40: Iron Ore
Iron Ore Strong pricing supports EBITDA Underlying EBITDA H1 2021 vs H1 2020 $ million 18,000 213 16,000 (244) (5) (40) (559) 14,000 (212) 12,000 9,209 10,000 8,000 16,618 16,060 6,000 4,000 7,698 2,000 0 H1 2020 Price Exchange rates Energy Inflation Flexed H1 2020 Volumes and Mix Cash costs Other H
Slide 41: Aluminium
Aluminium Higher prices, recovery of VAP demand and volumes Underlying EBITDA H1 2021 vs H1 2020 $ million 2,500 83 66 2,000 (265) (41) (75) 79 (77) 1,500 1,229 1,000 1,931 1,924 500 925 0 H1 2020 underlying Price Exchange rates Energy Inflation Flexed H1 2020 Volumes Cash costs One-offs Other H1 20
Slide 42: Copper
Copper Higher prices & volume, albeit impacted by COVID-19 Underlying EBITDA H1 2021 vs H1 2020 $ million 2,500 50 86 16 2,000 (43) (31) (17) 1,500 1,301 1,000 1,896 2,048 500 686 0 H1 2020 Price Exchange rates Energy Inflation Flexed H1 2020 Volumes Cash costs Other H1 2021 underlying underlying EB
Slide 43: Minerals
Minerals Strong pricing across portfolio supports EBITDA Underlying EBITDA H1 2021 vs H1 2020 $ million 2,000 52 (99) (13) (31) (63) (47) (47) 934 1,000 1,503 1,398 712 0 H1 2020 underlying Price Exchange rates Energy Inflation Flexed H1 2020 Volumes and Mix Cash costs One-offs Other H1 2021 underly
Slide 44: Other movements in underlying EBITDA
Other movements in underlying EBITDA Underlying EBITDA impact Energy $ million H1 2020 FX/ price Volumes Cash costs E&E Non-cash Other H1 2021 & Inflation Other operations 1 260 9 17 6 - -54 -243 -4 Exploration & Evaluation (net) -121 - - - 18 -17 - - -120 Other -261 -76 -8 72 -58 - - 62 -269 Total
Slide 45: Group level financial guidance
Group level financial guidance FY2021 FY2022 FY2023 CAPEX Total Group ~$7.5bn ~$7.5bn ~$7.5bn Sustaining Capex Group $3.0 - $3.5bn $3.0 - $3.5bn $3.0 to $3.5bn Pilbara Sustaining Capex $1.2-$1.6bn $1.2-$1.6bn $1.2-$1.6bn Effective tax rate 30% Returns Total returns of 40 – 60% of underlying earnings
Slide 46: Product group level guidance
Product group level guidance 2021 production guidance1 2021 costs Iron Ore $18.0-18.5/wmt (FOB), based on an 325 – 340mt2 (100% basis) Shipments Australian dollar exchange rate of $0.77 C&D Mined Copper 500 – 550kt3 C1 Copper unit costs 60-75 US c/lb Refined Copper 210 – 250kt Diamonds 3.0 – 3.8m ca
Slide 47: Debt maturity profile
Debt maturity profile 30 June 2021 debt maturity profile* $ million Average outstanding debt maturity of 2,000 corporate bonds at ~12 years (~ 9 years for Group debt) 1,800 1,600 No corporate bond maturities until 2024 1,400 1,200 Liquidity remains strong under stress tests 1,000 800 $7.5bn back-sto
Slide 48: Modelling EBITDA
Modelling EBITDA Underlying EBITDA sensitivity Average published price/exchange US$ million impact on full year 2021 underlying rate for 2021 first half EBITDA of a 10% change in prices/exchange rates Copper 413c/lb 478 Aluminium $2,245/t 784 Gold $1,805/oz 77 Iron ore realised price $168.4/dmt 4,18
Slide 49: Modelling aluminium costs
Modelling aluminium costs Canadian* smelting unit cash** cost sensitivity ($/t) Impact a $100/t change in each of the input costs below will have on our H1 2021 Canadian smelting unit cash cost of $1,262/t Alumina (FOB) $191 Green petroleum coke (FOB) $27 Calcined petroleum coke (FOB) $36 Coal tar p
Slide 50: RTA Value Chain – 2020 Actuals
RTA Value Chain – 2020 Actuals Mining Refining Aluminium Casting Bauxite Alumina 56.1 dmt 30% 8.0mt 80% Aluminium Cast Prod RTA 3.2mt 100% Intersegment 70% 20% 43% 57% 3rd Party Sales Bauxite Alumina VAP Non-VAP 39.4 dmt 1.6mt ©2021, Rio Tinto, All Rights Reserved 50
Slide 51: Application of the returns policy
Application of the returns policy Capital return considerations Comments – Operating cash flow of $13.7 billion 1 Results for H1 2021 – FCF of $10.2 billion – Underlying earnings up 156% to $12.2 billion – Focused on Oyu Tolgoi and Jadar Long-term growth prospects – Investing in replacing high quali
Slide 52: Group Income Statement and Cash Flow Statement
Group Income Statement and Cash Flow Statement Rio Tinto Group Proforma Rio Tinto Group Oyu Tolgoi and Turquoise Hill1 (excluding OT and TRQ)2 Jun-21 YTD Jun-20 YTD Jun-21 YTD Jun-20 YTD Jun-21 YTD Jun-20 YTD US$m US$m US$m US$m US$m US$m Consolidated sales revenue 33,083 19,362 844 409 32,239 18,95
Slide 53: Group Balance Sheet
Group Balance Sheet Rio Tinto Group Proforma Rio Tinto Group Oyu Tolgoi and Turquoise Hill(1) (excluding OT and TRQ) Jun-21 YTD Dec-20 YTD Jun-21 YTD Dec-20 YTD Jun-21 YTD Dec-20 YTD US$m US$m US$m US$m US$m US$m Non-current assets 77,676 76,535 11,789 10,930 65,887 65,605 Current assets 25,765 20,8