Slide 1: Notice to ASX: 2021 Full year results presentation
Notice to ASX 23 February 2022 For personal use only 2021 Full year results presentation Attached is the Rio Tinto 2021 full year results presentation to be given at 8.30am (GMT) / 7.30pm (AEDT) today by Rio Tinto Chief Executive Jakob Stausholm, and Chief Financial Officer Peter Cunningham. The pre
Slide 2: Please direct all enquiries to
Please direct all enquiries to Contacts media.enquiries@riotinto.com For personal use only Media Relations, UK Media Relations, Australia Illtud Harri Jonathan Rose M +44 7920 503 600 M +61 447 028 913 David Outhwaite Matt Chambers M +44 7787 597 493 M +61 433 525 739 Jesse Riseborough Media Relatio
Slide 3: 2021 Full Year results
For personal use only 2021 Full Year results Grow, decarbonise and deliver attractive shareholder returns 23 February 2022 Operations Centre, Perth. Western Australia
Slide 4: Cautionary and supporting statements
Cautionary and supporting statements For personal use only This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (together with their subsidiaries, “Rio the SEC. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance Tinto”).
Slide 5: Jakob Stausholm, Chief Executive
For personal use only Jakob Stausholm Chief Executive Melbourne, Australia
Slide 6: Delivering on our objectives to grow, decarbonise and deliver attractive shareholder returns
Delivering on our objectives in order to grow, decarbonise and deliver attractive shareholder returns For personal use only Best operator Impeccable Excel in ESG credentials development Transform our safe Accelerate our own Grow in commodities operating performance decarbonisation enabling the globa
Slide 7: Record full year results and new direction
Record full year results and new direction For personal use only 0.40 $38bn All injury frequency rate (AIFR) Underlying EBITDA Zero fatalities 44% Third consecutive year Underlying ROCE Evolving our culture FCF of $18bn Partnering with experts, living our values Net cash of $1.6bn New strategy in 20
Slide 8: Evolving our culture
Evolving our culture For personal use only Living our values: Care, Courage, Curiosity Creating a safe, respectful and inclusive work environment Implementing all 26 recommendations from the Everyday Respect report; visible shift in attitudes and behaviours over the last 12 months Empowering the fro
Slide 9: Peter Cunningham, Chief Financial Officer
For personal use only Peter Cunningham Chief Financial Officer New Zealand Aluminium Smelter (NZAS)
Slide 10: Record financial results
Record financial results For personal use only ($bn, except for per share data) 2021 2020 Comparison Consolidated sales revenue 63.5 44.6 +42% Underlying EBITDA 37.7 23.9 +58% Underlying earnings 21.4 12.4 +72% Net earnings 21.1 9.8 +116% Underlying ROCE 44% 27% n/a Cash flow from operations 25.3 15
Slide 11: Robust demand drives commodity prices
Robust demand drives commodity prices For personal use only Iron Ore1 (+48% YoY) Aluminium2 (+46% YoY) Copper3 (+50% YoY) 250 3,700 900 500 800 200 3,200 450 700 600 400 150 2,700 500 350 400 100 2,200 300 300 1,700 200 50 250 100 1,200 0 200 0 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-18 Jan-19 Jan-20
Slide 12: Strong conversion of price into earnings
Strong conversion of price into earnings… For personal use only Underlying EBITDA $bn Iron Ore +11.6 Copper +1.9 Aluminium +3.0 Other +1.0 ©2022, Rio Tinto, All Rights Reserved 10
Slide 13: Strong conversion of earnings into cash flows
…and strong conversion of earnings into cash flows For personal use only Cash flow $bn 25.3 20.0 17.7 15.1 15.9 14.3 14.9 13.9 11.8 9.4 9.4 9.5 9.2 9.4 7.7 8.5 6.9 7.0 5.8 4.8 2.1 (8.1) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operating cash flow Free cash flow Free cash flow is define
Slide 14: Iron Ore
Iron Ore Strong financial result despite challenging conditions For personal use only 2021 2020 2022 Production impacted by above average Operating metrics comparison guidance rainfall in H1, cultural heritage management Average realised price1, 3 $143.8/t + 45% and tie-in of growth and replacement
Slide 15: Setting up Pilbara iron ore for stronger performance
Setting up Pilbara iron ore for stronger performance For personal use only First train loaded from mobile crushing and screening at Gudai-Darri with first production from main plant expected for Q2 2022, subject to COVID-19 constraints Commissioning and ramp up of brownfield mines ongoing, impacted
Slide 16: Aluminium
Aluminium Outstanding financials with free cash flow more than doubling For personal use only 2021 2020 2022 Substantial increase in FCF to $2.3bn, Operating metrics comparison guidance and more than double EBITDA on stable Aluminium realised price1 $2,899/t + 49% metal operations, higher sales pric
Slide 17: Copper
Copper Strong financial results despite COVID-19 and other challenges For personal use only 2021 2020 2022 Strong market conditions due to declining Operating metrics comparison guidance stocks, renewed speculative interest and Copper realised price1 424c/lb + 50% COVID-related supply constraints Pr
Slide 18: Minerals
Minerals Robust financials in operationally challenging year For personal use only Operating metrics 2021 2020 2022 Entered into a binding agreement to comparison guidance acquire the Rincon lithium project in IOC pellets price1 $214/t + 68% Argentina TiO2 slag price2 $785/t - 2% Production – IOC 9.
Slide 19: Disciplined allocation of capital remains at our core
Disciplined allocation of capital remains at our core For personal use only 1 Essential capex Integrity, Replacement, Decarbonisation Further cash Compelling returns to growth shareholders 2 Ordinary dividends Debt management 3 Iterative cycle of... ©2022, Rio Tinto, All Rights Reserved 17
Slide 20: Disciplined reinvesting for growth and decarbonisation
Disciplined reinvesting for growth and decarbonisation For personal use only Capital expenditure profile $bn Ambition to grow and decarbonise ~9.0-10.0 ~9.0-10.0 reflected in 2023-24 capex of up to ~$9-10bn including up to $3bn in growth investment, depending on ~8.0 opportunities 7.4 Total decarbon
Slide 21: Value accretive decarbonisation investment
Value accretive decarbonisation investment For personal use only $7.5bn of estimated investments5 between 2022 and 2030 – value accretive in aggregate at a modest carbon price Mt CO2e In the Pilbara we consume $150m pa of gas for electricity generation. Our first GW of renewable capacity can replace
Slide 22: Balance sheet is strong; we will maintain our discipline
Balance sheet is strong; we will maintain our discipline For personal use only Net (cash) debt $bn Balance sheet strength is an asset. 14.1 Offers resilience and creates optionality Gearing -3% and net (cash)/debt to 12.9 11.3 LTM^ EBITDA of -0.04x 10.0 9.6 9.3 9.3 Operating cash flow of $25.3bn 8.0
Slide 23: Attractive dividends remain paramount
Attractive dividends remain paramount For personal use only Shareholder returns of 40-60% of underlying earnings on average through the cycle Pay-out ratio (%) Consistent six-year track record of shareholder returns 100 2021 pay-out of 79% reflects exceptional financial results, strong 80 balance sh
Slide 24: Jakob Stausholm, Chief Executive
For personal use only Jakob Stausholm Chief Executive Gobi Desert, Mongolia
Slide 25: Delivering a stronger Rio Tinto
Delivering a stronger Rio Tinto For personal use only Best operator Impeccable ESG credentials Excel in development RTSPS*: 5 pilot sites initiated, ELYSIS™ successfully produced Oyu Tolgoi underground project: already seeing returns. Significant aluminium without any direct GHG reset relationship w
Slide 26: Respect for people, communities and environment at our heart
Respect for people, communities Impeccable Best Excel in ESG operator development credentials and environment at our heart Social licence For personal use only – Launched the Everyday Respect initiative and engaged an external expert review on workplace culture. We are working to create safe, inclus
Slide 27: Building sustained operating improvement
Building sustained Impeccable Best Excel in ESG operator development credentials operating improvement Social licence For personal use only Safety always our priority Rio Tinto Safe Production System initiated at five pilot sites focusing on sustainably unlocking capacity across the system and impro
Slide 28: Decarbonising our business and value chain
Decarbonising our Impeccable Best Excel in ESG operator development credentials business and value chain* Social licence For personal use only Net zero by 2050 across our operations Scope 1 and 2: 15% reduction by 2025, 50% by 2030 Scope 3: Engaging with iron ore and bauxite customers Energy Develop
Slide 29: Reframing our approach to growth
Reframing our approach to growth Impeccable Best Excel in ESG operator development credentials Social licence For personal use only - 18 countries across seven commodities Fe Pilbara: Gudai-Darri, Western - Unlocking opportunities Turner Syncline, Robe Valley, through technology Western Range - Acce
Slide 30: Oyu Tolgoi Underground
Oyu Tolgoi Underground Impeccable Best Excel in ESG operator development credentials Social licence For personal use only Resetting the relationship between partners and increasing the value the project delivers for Mongolia – Underground mining commenced on 25 Jan 2022 following comprehensive agree
Slide 31: Strong foundation for growth, decarbonisation and shareholder returns
Strong foundation for growth, decarbonisation and shareholder returns For personal use only Clear strategy Significant achievements in 2021 Continued progress in 2022 - Accelerate our own decarbonisation - New strategy - Further evolving our culture - Grow in materials enabling the global energy - A
Slide 32: Appendices
For personal use only Appendices Winu, Western Australia
Slide 33: Strong iron ore demand and tight supply despite H2 slowdown in China
Strong iron ore demand and tight supply despite H2 slowdown in China For personal use only China’s crude steel production (Mt annualised) Iron Ore1 (+48% YoY) $/dmt 1,200 250 1,150 200 1,100 1,050 150 1,000 950 100 900 50 850 800 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-18 Jan-19 Jan-20
Slide 34: Robust demand supports aluminium, copper and TiO2
Robust demand supports aluminium, copper and TiO2 For personal use only Aluminium1 (+46% YoY) Copper2 (+50% YoY) TiO2 (chloride slag) (-2% YoY) 3,700 900 500 850 800 3,200 450 700 800 600 400 2,700 750 500 350 400 2,200 700 300 300 1,700 200 650 250 100 1,200 0 200 600 Jan-18 Jan-19 Jan-20 Jan-21 Ja
Slide 35: Already seeing returns from 2021 deployments
Already seeing returns from 2021 deployments; focus on highest-value in 2022 For personal use only Kennecott Concentrator West Angelas Drill and Blast Flow Shutdown management Pulse Survey | Feedback Addressing bottlenecks Efficiently executing longer Increase in team member sentiment 20+ people ups
Slide 36: Kaizens delivering immediate value
Kaizens delivering immediate value Pilbara iron ore 2021 complete For personal use only Cape Lambert - Brockman 4 – West Angelas Yandi - Conveyors Conveyors Wait for Trucks (WFT) - ‘Super Kaizen’ with 30 - To improve ‘clean up’ delays - Cleaning of excessive material - Demonstrated a reduction in pa
Slide 37: Sustainability highlights
Sustainability highlights For personal use only 2021 performance Goals People - Zero fatalities at managed operations - To maintain zero fatalities, and to eliminate workplace injuries and catastrophic events - All injury frequency rate (AIFR) at 0.40 (target: 0.33) Safety - To improve diversity in
Slide 38: Accelerating current abatement projects
Accelerating current abatement projects For personal use only Our Marginal Abatement Cost Curve for Scope 1 & 2 emissions (excl. Pilbara and Pacific Operations repowering, ELYSISTM, energy efficiency and carbon offsets) USD$/t CO2e 300 250 Renewables 200 Mobile diesel 150 Process heat Anodes & reduc
Slide 39: MACC project: Queensland Alumina Limited boiler feed water heating
MACC project*: Queensland Alumina Limited (QAL) boiler feed water heating For personal use only Project summary: Details: Boiler feed water heating project seeks to install heat QAL operates three parallel high recovery equipment to reduce waste energy by 50% temperature digestion units, using displ
Slide 40: MACC project: Rio Tinto Fer et Titane energy efficiency
MACC project*: Rio Tinto Fer et Titane energy efficiency For personal use only Project summary: Details: Decrease natural gas and reductant consumption by • Optimising operation parameters with lean indicators and new various energy efficiency initiatives instrumentation to improve the process for r
Slide 41: QMM construction on solar and wind power plant commenced
QMM construction on solar and wind power For personal use only plant commenced QMM has signed a 20-year power purchase agreement using renewable energy with CrossBoundary Energy to supply their mine operations in southern Madagascar ~18,000 solar panels and four wind turbines will enable QMM to meet
Slide 42: We operate in three out of the eleven advantageous regions for renewable energy
We operate in three out of the eleven advantageous regions for renewable energy For personal use only Advantaged positions Large power producer and consumer. Uniquely positioned in advantaged green energy Ideal for wind Ideal for solar Ideal for solar and wind Existing major hydropower RES* endowed
Slide 43: Our products enable the energy transition
Our products enable the energy transition and we need to be part of net zero value chains For personal use only Customer partnerships Technology partnerships and investments 2022 customer engagements Iron ore 365Mt - Baowu / Tsinghua (2019) Blast furnace Pilbara Low-carbon 28% of our customers have
Slide 44: Partnering to reduce the carbon footprint of our value chains
Partnering to reduce the carbon footprint of our value chains For personal use only 95% of Scope 3 emissions is from the processing of iron ore, bauxite and other products by our customers 94% of these processing emissions take place at our customer facilities in China, South Korea, Japan and other
Slide 45: Climate and value chain: H1 2021 highlights
Climate and value chain: H1 2021 highlights For personal use only - Signed a charter agreement with Singapore’s ship management company Eastern Pacific Shipping for three liquefied natural gas dual-fuel Newcastlemax bulk carriers, to further reduce our scope 3 shipping emissions. - Charge On Innovat
Slide 46: Climate and value chain: H2 2021 highlights
Climate and value chain: H2 2021 highlights For personal use only - Carbfix partnership: to implement a technology - Purchased four battery-electric trains for use for capturing carbon and permanently storing it in the Pilbara, WA. Production is due to commence in underground at our ISAL aluminium s
Slide 47: Our focus areas for iron and steel decarbonisation
Our focus areas for iron and steel decarbonisation For personal use only Future pathways for Pilbara iron ore 1 2 3 4 5 6 Blast furnace Pilbara Low-carbon H2 DRI H2 DRI Simandou optimisation beneficiation research project and melter Canada Multiple Universities Pilbara Pilbara Project – High-quality
Slide 48: ELYSIS zero carbon metal meets new market demand
ELYSIS™ zero carbon metal meets new market demand For personal use only 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. - Q4 2020: Rio Tinto supplied ELYSIS metal to AB InBev a
Slide 49: Mine project pipeline
Mine project pipeline For personal use only Capital Intensity Completed projects High volume of environmental approvals ($/t Real 2021) Projects in development for new mines Projects in study stage $150 $130 $110 $90 Western GD1 Range $70 BS1 $50 Robe Valley Sustaining BHT/HD2 $30 West Angelas WTS2
Slide 50: Ongoing focus on quality and product mix
Ongoing focus on quality and product mix For personal use only Shipments by product (%) Consistent quality remains key for our Pilbara Blend. 46% 45% 43% 45% Demand remains strong, and will continue to underpin our product strategy 20% 26% 24% 27% Pilbara Blend quality maintained by: 18% - Blending
Slide 51: Shareholder structure
Shareholder structure For personal use only 23% Rio Tinto Limited Shares outstanding: 0.371bn 77% Rio Tinto plc Shares outstanding: 1.247bn 100% Rio Tinto DLC Shares outstanding: 1.619bn 1.1 0.3 0.4 0.5 5.7 14.8 13.9 17.5 18.8 35.9 7.1 59.2 29.5 28.9 31.9 8.2 14.1 12.5 Australia UK Europe (ex UK) No
Slide 52: Strong commodity pricing driving EBITDA
Strong commodity pricing driving EBITDA For personal use only Underlying EBITDA 2021 vs 2020 $ million 45,000 17,464 40,000 11,589 35,000 30,000 23,902 25,000 20,000 3,027 15,000 1,896 674 161 117 10,000 5,000 Iron ore Iron & Titanium Diamonds Copper Aluminium* Other, net 0 2020 Price underlying EBI
Slide 53: Lower volume in iron ore driven by weather, heritage management and delays
Lower volume in iron ore driven by weather, heritage management and delays in mine tie-in projects For personal use only Underlying EBITDA 2021 vs 2020 $ million 445 45,000 17,464 258 39,672 40,000 26 (606) (398) (690) (583) 35,000 (19) (169) (230) 30,000 23,902 25,000 20,000 (894) 15,000 Diamonds G
Slide 54: Iron Ore: Strong pricing supports EBITDA
Iron Ore Strong pricing supports EBITDA For personal use only Underlying EBITDA 2021 vs 2020 $ million 10,346 28,794 252 30,000 27,592 18,837 (88) (114) (187) (863) (591) 20,000 10,000 0 2020 Price Exchange rates Energy Inflation Flexed 2020 Volumes and Mix Cash costs Other 2021 underlying EBITDA un
Slide 55: Aluminium: Higher prices, recovery of VAP demand and volumes
Aluminium Higher prices, recovery of VAP demand and volumes For personal use only Underlying EBITDA 2021 vs 2020 $ million 5,500 2,977 4,564 258 4,382 (270) (34) (261) (269) 4,000 (50) (121) 2,152 2,500 1,000 2020 Price Exchange rates Energy Inflation Flexed 2020 Volumes Cash costs One-offs Other 20
Slide 56: Aluminium Value Chain
Aluminium Value Chain 2021 Actuals For personal use only Mining Refining Aluminium Casting Bauxite 30% Alumina 54.3dmt 7.9mt 80% Aluminium Casthouse 100% RTA 70% 3.2mt Prodn 20% Intersegment 50% 50% 3rd Party Bauxite Alumina VAP Non-VAP Sales 37.6dmt 1.6mt ©2022, Rio Tinto, All Rights Reserved 54
Slide 57: Copper: Higher prices, volume impacted by COVID-19
Copper Higher prices, volume impacted by COVID-19 For personal use only Underlying EBITDA 2021 vs 2020 $ million 4,500 2,190 4,089 3,969 (1) (101) (83) (1) (68) (22) (29) 3,000 2,084 1,500 2020 Price Exchange rates Energy Inflation Flexed 2020 Volumes Cash costs One-offs Other 2021 underlying underl
Slide 58: Minerals: Strong pricing across portfolio supports EBITDA
Minerals Strong pricing across portfolio supports EBITDA For personal use only Underlying EBITDA 2021 vs 2020 $ million 4,000 1,432 3,000 2,817 19 2,603 1,710 (136) (60) (129) 2,000 (105) (69) (59) 1,000 0 2020 underlying Price Exchange rates Energy Inflation Flexed 2020 Volumes and Mix Cash costs O
Slide 59: Other movements in underlying EBITDA
Other movements in underlying EBITDA For personal use only Underlying EBITDA impact FX/ Energy Cash $ million 2020 price & Inflation Volumes costs E&E Non-cash Other 2021 Other operations 24 578 -91 37 -56 0 -102 -418 -28 Exploration & Evaluation (net) -250 -10 -5 - - 3 5 - -257 Other -655 -158 -24
Slide 60: Debt maturity profile
Debt maturity profile 31 December 2021 debt maturity profile* For personal use only $ million Average outstanding debt maturity of 2,000 corporate bonds extended to ~16 years following the bond maturity extension 1,800 transaction undertaken in H2 2021 1,600 (~11 years for Group debt) 1,400 1,200 No
Slide 61: Pro-forma net debt reconciliation
Pro-forma net debt reconciliation For personal use only $ billion 2021 2020 Reported net (cash)/debt (1.6) 0.7 Australian tax top-up in June of following year 1.1 0.9 Proforma net (cash) debt (0.5) 1.6 ©2022, Rio Tinto, All Rights Reserved 59
Slide 62: Group level financial guidance
Group level financial guidance For personal use only 2022 2023 2024 CAPEX Total Group ~$8.0bn ~$9.0 – 10.0bn ~$9.0 – 10.0bn Sustaining Capex ~$3.5bn ~$3.5bn ~$3.5bn Group Pilbara Sustaining ~$1.5bn ~$1.5bn ~$1.5bn Capex - $0.5bn* per year to decarbonise our assets - Ambition to grow and decarbonise
Slide 63: Product group level guidance
Product group level guidance For personal use only 2022 2022 Production Guidance Costs $19.5-21.0/wmt (FOB), Iron Ore 320 – 335Mt1 based on an Australian Shipments (100% basis) dollar exchange rate of $0.75 Copper C1 Copper unit costs Mined Copper 500 to 575kt 130-150 US c/lb Refined Copper 230 – 29
Slide 64: Modelling EBITDA
Modelling EBITDA For personal use only Underlying EBITDA sensitivity US$ million impact on full year 2021 underlying Average published price/exchange rate for 2021 EBITDA of a 10% change in prices/exchange rates Copper 422c/lb 543 Aluminium $2,480/t 813 Gold $1,799/oz 120 Iron ore realised price (62
Slide 65: Modelling aluminium costs
Modelling aluminium costs For personal use only Canadian* smelting unit cash** cost sensitivity ($/t) Impact a $100/t change in each of the input costs below will have on our 2021 Canadian smelting unit cash cost of $1,373/t Alumina (FOB) $191 Green petroleum coke (FOB) $25 Calcined petroleum coke (
Slide 66: Application of the returns policy
Application of the returns policy For personal use only Capital return considerations Comments – Operating cash flow of $25.3 billion 1 Results for FY 2021 – FCF of $17.7 billion – Underlying earnings up 72% to $21.4 billion – Focused on Oyu Tolgoi Long-term growth prospects – Investing in replacing
Slide 67: Oyu Tolgoi delivers substantial economic value to Mongolia
Oyu Tolgoi delivers substantial Total in-country spend (2010 – Q4 2021) economic value to Mongolia For personal use only FDI OT accounts for one-third of Mongolia’s GDP; 70% of Foreign Direct Investment Jobs Country’s largest private-sector employer, workforce of 12,000 is >96% Mongolian Taxes Since
Slide 68: Group Income Statement and Cash flow statement
Group Income Statement and Cash flow statement For personal use only Rio Tinto Group Proforma Rio Tinto Group Oyu Tolgoi and Turquoise Hill(1) (excluding OT and TRQ)(2) Dec-21 YTD Dec-20 YTD Dec-21 YTD Dec-20 YTD Dec-21 YTD Dec-20 YTD US$m US$m US$m US$m US$m US$m Consolidated sales revenue 63,495 4
Slide 69: Group Balance Sheet
Group Balance Sheet For personal use only Rio Tinto Group Proforma Rio Tinto Group Oyu Tolgoi and Turquoise Hill(1) (excluding OT and TRQ) Dec-21 YTD Dec-20 YTD Dec-21 YTD Dec-20 YTD Dec-21 YTD Dec-20 YTD US$m US$m US$m US$m US$m US$m Non-current assets 78,464 76,535 12,250 10,930 66,214 65,605 Curr
Slide 70: Common acronyms
Common acronyms For personal use only T Tonne RTSPS Rio Tinto Safe Production Sytem Mt Million tonnes ROCE Return on capital employed Gt Giga tonnes Earnings Before Interest, Taxes, tCO2 Tonne of carbon dioxide EBITDA Depreciation and Amortisation tCO2 e Tonne of carbon dioxide equivalent CAGR Compo