Rio Tinto Plc · LSE:RIO
Rio Tinto — Investor Day (November 2007)
34 slides from Rio Tinto's investor day presentation, Nov 26, 2007
Slide 1: ASX cover letter for investor seminar presentations
Communications & External Relations Telephone: +61 3 9283 3360 Facsimile: +61 3 9283 3216 For personal use only 26 November 2007 Company Announcements Office Australian Stock Exchange Limited SYDNEY NSW 2000 Dear Sir, Attached are presentations from Rio Tinto's annual investor seminar conducted in L
Slide 2: Delivering exceptional growth: Cautionary statement
For personal use only Delivering exceptional growth 26 November 2007 Cautionary statement • Disclaimer: This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and comprises the written materials/slides for a presentation concerning Rio Tinto. By reviewing/attending
Slide 3: Seminar outline
HANDOUT Seminar outline For personal use only Paul Skinner Introduction Tom Albanese Highlights 10 mins Sam Walsh Iron ore 15 mins Dick Evans Aluminium 15 mins Bret Clayton Copper 10 mins Tom Albanese Other product groups and exploration 5 mins Guy Elliott Capital structure 5 mins Tom Albanese Round
Slide 4: Rio Tinto strategy and future direction
For personal use only Tom Albanese Chief Executive Officer Rio Tinto Investor Seminar 26 November 2007 5 Rio Tinto strategy and future direction • Continuing focus on the creation of shareholder value • Clear strategic direction and management focus • Pursuit of the highest quality assets wherever t
Slide 5: Key Rio Tinto highlights
Key Rio Tinto highlights For personal use only Iron ore – Global production growth pathway to over 600 million tonnes per annum – Impressive Pilbara and Guinea mineralisation – Potentially capturing more upside through pricing strategy Aluminium – Post tax synergies revised up to $940 million – Busi
Slide 6: Economic and demographic development will favour Rio Tinto
Economic and demographic development will favour Rio Tinto For personal use only Consumption of metals increases in line with increasing income 2007 Population Expenditure per capita Distribution US$ (2007 terms) 30% 60 World average income per capita 2007 2022 25% 50 Aluminium 20% 40 15% 30 Copper
Slide 7: Iron ore demand – strong and getting stronger
For personal use only Sam Walsh Chief Executive Rio Tinto Iron Ore Rio Tinto Investor Seminar 26 November 2007 11 Iron ore demand – strong and getting stronger Chinese iron ore imports (mt) 600 2007 forecasts 500 400 2005 forecasts 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 8: Highly competitive position in the iron ore industry
Rio Tinto has a highly competitive position in the iron ore industry For personal use only 2007 iron ore cost curve, delivered to China at spot freight rates 200 USD/tonne USD/tonne CFRCFR 180 160 140 120 100 80 Mine-to-mouth Chinese 60 producers 40 Rio Tinto BHPB Pilbara Pilbara 20 - 0 50 100 150 2
Slide 9: Excellent reserve, resource and mineralisation position
Rio Tinto has an excellent reserve, resource and mineralisation position For personal use only Pilbara reserves and resources Rio Tinto Pilbara Rio Tinto and BHP Billiton Rio Tinto Pilbara Rio Tinto BHP Billiton Rio Tinto reserves & resources Targeted additional 8.0 billion tonnes 14.2 billion tonne
Slide 10: Rail and port infrastructure positions Rio Tinto as premier supplier
Rail and port infrastructure positions Rio Tinto as premier supplier For personal use only Mine, rail and port Dampier incorporating: infrastructure • Parker Point Red – Rio Tinto • East Intercourse Island Blue – BHP Billiton Green – FMG Cloud Break Christmas Creek Source: Geological Survey of Weste
Slide 11: Conceptual pathway to over 600 million tonnes per annum
Conceptual pathway to over 600 million tonnes per annum For personal use only Rio Tinto global iron ore production 630 600 Phase 1: Pilbara 320, Simandou 70, IOC/Corumbá 40 – pre-feasibility 530 Phase 2: Pilbara 370, Simandou 120 – conceptual Simandou Phase 3: Pilbara 420, Simandou 170 – conceptual
Slide 12: Simandou (Guinea) – a new high grade iron ore province
Simandou (Guinea) – a new high grade iron ore province For personal use only • Major new iron ore province Ivory Coast • Large, high quality haematite deposit with similar characteristics to Carajas SSF ore Guinea • Targeted mineralisation of between 8 and 11 Capt Hook billion tonnes within Simandou
Slide 13: Delivering on time and on budget
Delivering on time and on budget For personal use only Iron ore expansion projects (>$300m) Budget Time Over budget 120% Behind schedule 100% Under budget 80% Ahead of schedule 60% 40% 20% 0% Dam pier Port to Yandi to 52m tpa Dam pier Port to Hope Dow ns Cape Lam bert to 116m tpa 140m tpa 80m tpa (f
Slide 14: Rio Tinto Alcan is the global leader in aluminium
For personal use only Dick Evans Chief Executive Rio Tinto Alcan Rio Tinto Investor Seminar 26 November 2007 25 Rio Tinto Alcan is the global leader in aluminium • Leader in bauxite production, high quality reserves and options for refinery expansions – e.g. Weipa, Guinea, Brazil • Leader in high qu
Slide 15: A global leadership position
A global leadership position For personal use only Aluminium Alumina Bauxite (production 2006) (production 2006) (production 2006) Pathway to (a) Rio Tinto Alcan UC Rus al #1 with Rio Tinto Alcan Gove and (a) Yarwun UC Rus al Alcoa expansions Alcoa (a) Alcoa Chalco UC Rusal Rio Tinto Hydro Al BHP Bi
Slide 16: Unique Rio Tinto Alcan opportunity in north east Australia
Unique Rio Tinto Alcan opportunity in north east Australia For personal use only • Three of the world’s leading refineries backed by world-class bauxite reserves • Enables unique capture of logistics, SG&A and operating synergies WEIPA QUEENSLAND BAUXITE DEPOSITS GOVE BAUXITE MINE Current capacity:
Slide 17: Alcan's structural cost advantage is improving
Surge in China’s alumina output is largely dependent on imported bauxite For personal use only ktonnes $/t bauxite 8000 Indonesian sourced bauxite price 40 6000 30 4000 20 2000 10 Bauxite imports 0 0 Q1 03 Q3 03 Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Source: China Customs Statistics Rio Tin
Slide 18: Alcan brings a unique self-generated hydro power advantage
Alcan brings a unique self-generated hydro power advantage For personal use only Rio Tinto Alcan 2006 smelter energy sources • Self-generation and long-term contracts provide 95% of 2006 energy requirements Long Term contracts: Hydro • Significant access to owned and Self generated: contracted hydro
Slide 19: Growth opportunities in alumina refining and aluminium smelting
Attractive growth opportunities in alumina refining For personal use only Alumina refinery pipeline – Rio Tinto Alcan attributable production Alumina refinery production - Rio Tinto Alcan share 20 15 Mt per annum 10 Alcan acquisition 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 QAL Yarwun G
Slide 20: Well positioned to capture earnings growth in aluminium
Rio Tinto well positioned to capture earnings growth in aluminium For personal use only Positive market • Aluminium price outlook is structurally favourable – LME forward curve – Demand growth is strong – Structural shift in cost curve Global leadership • Weipa, Brazil and Guinea reserves offer exce
Slide 21: Assets well positioned on the cost curve
Rio Tinto assets are well positioned on the cost curve For personal use only 2006 copper cost curve, net of by-product credits 2006 Copper Mine C1 normal unit cash cost Cum ulative Production ( kt ) 300 Rio Tinto Rio Tinto Rio Tinto Weighted BHP Billiton BHP Billiton Weighted 250 BHP Billiton Averag
Slide 22: Interest in the world's largest undeveloped copper projects
Rio Tinto has an interest in the world’s largest undeveloped projects For personal use only Largest undeveloped copper projects by contained copper equivalent 100 Competitors 1 Copper equivalent grade - % Cu (log scale) Rio Tinto interests 10 Resolution3 Oyu Tolgoi 2 1 Pebble2 3 La Granja Note: bubb
Slide 23: Mineralisation at La Granja
Mineralisation at La Granja up to 8 billion tonnes at 0.5% Cu equivalent For personal use only • 35km of drilling completed since acquisition in December 2005 Other porphyries Cerro Paja Blanca identified by Rio • La Granja has become the largest – initial porphyry discovery Tinto team undeveloped c
Slide 24: Eagle Nickel and Sulawesi Nickel opportunities
Eagle Nickel – high grade and highly prospective For personal use only EAGLE EXPLORATION & MILL scale McComb 00 miles km 58 NORTH Roland Lake Eagle Deposit Nickel Midway mineralisation Ni-Cu Prospects Boulderdash BIC EagleEagle/ Deposit East Eagle High grade underground deposit High grade Part of un
Slide 25: Strong base, good growth prospects
Strong base, good growth prospects For personal use only Strong base of high quality assets • Optionality at existing operations • Significant contribution from by-products • First quartile producer Foothold in many of the major known undeveloped copper deposits • La Granja, potential for more than
Slide 26: Overview: Energy, Diamonds & Minerals, Exploration, Technology
For personal use only Tom Albanese Chief Executive Officer Rio Tinto Investor Seminar 26 November 2007 49 Overview • Energy • Diamonds & Minerals • Exploration • Technology • Project pipeline Rio Tinto Investor Seminar 26 November 2007 50 25
Slide 27: Growth options in uranium and seaborne traded coal
Growth options in uranium and seaborne traded coal For personal use only • Near term uranium market opportunity • Rössing production rising to 16 m lbs per annum U3O8 in 2012 • Significant expansion potential at ERA, with Ranger optionality • One of the largest thermal coal reserves and resources in
Slide 28: An excellent track record of exploration
An excellent track record of exploration For personal use only Rio Tinto discoveries since 1990 Diavik Eagle nickel Las Cruces Kazan trona Resolution Simandou La Granja porphyries Tier one deposit Sulawesi nickel Tier two deposit Rio Grande borates Murowa Kintyre uranium Caliwingina Iron Ore Chapudi
Slide 29: Leading position in technology
Leading position in technology For personal use only • A focus on mine automation, with dedicated resources in place • Hydrogen Energy • Iron ore – HIsmelt – Remote operations centre established in Perth for the Pilbara – Automated train trials are well advanced – Continuous miners in use • Aluminiu
Slide 30: Strategic review to realise additional value
For personal use only Guy Elliott Chief Financial Officer Rio Tinto Investor Seminar 26 November 2007 57 Strategic review to realise additional value • Rio Tinto’s businesses are profitable with strong cash flows • Group-wide strategic review is under way post Alcan acquisition • Assets with a value
Slide 31: Project pipeline supported by capex commitments
Project pipeline supported by capex commitments For personal use only Capital expenditure $bn • Rio Tinto strong resource position provides 10 options to grow 8 • Record level of organic expenditure currently • Growth trend in investment will continue 6 – High quality brownfield expansions 4 – Large
Slide 32: Group capital structure and dividends
Group capital structure and dividends For personal use only • Strong cash flows and divestment proceeds • Medium term goal of a single A credit rating • Significant multi-year rebasing of progressive dividend At least Dividend history and future intention 200 +20% At least +20% 150 +30% USc per shar
Slide 33: Rio Tinto presents a compelling value proposition
Rio Tinto’s side of the story… the upside is ours For personal use only Source: BHP Billiton presentation to investors 12 November 2007 Rio Tinto Investor Seminar 26 November 2007 63 Rio Tinto presents a compelling value proposition • Excellent long term demand outlook as the developing world urbani
Slide 34: Delivering exceptional growth
For personal use only Delivering exceptional growth 26 November 2007 Rio Tinto Investor Seminar 26 November 2007 65 33