Rio Tinto Plc · LSE:RIO
Rio Tinto — BoAML Global Metals, Mining & Steel Conference 2015
16 slides from Rio Tinto's conference presentation, May 12, 2015
Slide 1: Generating value through the cycle
12 May 2015 BoAML Global Metals, Mining & Steel Conference 2015 Generating value through the cycle Sam Walsh, Chief executive
Slide 2: Cautionary statement
2 Cautionary statement This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. In this presentation all figures are US dollars unless stated otherwise
Slide 3: Early and decisive actions
3 Early and decisive actions Improve Strengthen Deliver Reduced costs Decreased capex Reduced net debt $4.8bn by by $9.4bn $9.6bn Operating, exploration and evaluation cost reductions achieved Since net debt peaked by 31 December 2014 vs 2012 Full year 2014 spend vs 2012 at 30 June 2013 Recycl
Slide 4: The 'New Normal'
4 The ‘New Normal’ Global growth continues • Period of economic adjustment Real GDP (US$ trillion) Real GDP growth (%) • Developed markets recovering 100 10% • China transitioning to major developed economy 80 8% Other developing − Lower growth on a higher base economies 60 6% China • Rising demand
Slide 5: Iron ore demand growth continues
5 Iron ore demand growth continues Crude steel production • Chinese steel mix evolving: Million tonnes per annum 3000 − New infrastructure slowing 2500 Other developing economies − Increased replacement 2000 1500 − Rise in scrap 1000 China − Manufactured goods increasing 500 Developed economies − Gr
Slide 6: Marginal iron ore supply is exiting
6 Marginal iron ore supply is exiting Majors accounted for ~47% of 2014 supply Percentage of contestable iron ore market • ~775 Mt of 2014 supply from China, non-traditionals and rest of world 20% 17% Rio Tinto = 47% • ~125 Mt of high cost supply exited BHP Vale ~1.7 7% billion 14% FMG the market in
Slide 7: Success in the 'New Normal'
7 Success in the ‘New Normal’ World-class portfolio Free Quality cash flow growth generation Sustainable shareholder returns Operating Capital and allocation commercial discipline excellence Balance sheet strength ©2015, Rio Tinto, All Rights Reserved
Slide 8: Safety and responsibility are fundamental
8 Safety and responsibility are fundamental Injury frequency rates Per 200,000 hours worked Accountability • Relentless pursuit of shareholder value 2.0 • Disciplined decision-making 1.5 Respect • For the environment and communities • For health, safety and wellbeing 1.0 Integrity 0.5 • Transparency
Slide 9: Leading the market in the current environment
9 Leading the market in the current environment Capex discipline... …and efficient working capital... (54%) (36%) 0% (28%) (23%) 6 16 14 5 12 4 US$ billion US$ billion 10 8 3 6 2 4 1 2 0 0 Rio Rio Tinto Tinto Peer 1 Peer 2 Peer 3 Peer 4 Rio Rio Tinto Tinto Peer 1 Peer 2 Peer 3 Peer 4 2014 capex spen
Slide 10: Highest dividend growth and strongest balance sheet
10 Highest dividend growth and strongest balance sheet 15% Shrinking Growing returns, strong returns, strong balance sheet balance sheet 20% Rio Tinto Peer 1 25% Gearing Peer 2 30% Peer 4 35% Shrinking Growing returns, weaker Peer 3 returns, weaker balance sheet balance sheet 40% (60)% (40)% (20)% 0
Slide 11: Tier 1 iron ore assets and operational excellence deliver through the cycle
11 Tier 1 iron ore assets… 140 2014 Fourth quarter delivered iron ore cost curve (WoodMac) $/dmt CFR China 62% Equivalent 120 Rio Tinto Pilbara Q3 Producer 100 80 60 40 20 0 0 200 400 600 800 1000 1200 1400 1600 1800 Mtpa …and operational excellence deliver through the cycle 80% Average annual margi
Slide 12: Commercial excellence captures full value
12 Commercial excellence captures full value 2014 like-for-like iron ore sales price performance: vs BHP vs FMG vs Vale (US $/wmt FOB) (US$/dmt, including freight revenue) (US $/wmt including freight revenue) 5.0 5.0 5.0 +3.5 +1.0 62%Fe index +1.7 +0.3 - - - -5.0 -5.0 -5.0 -10.0 -10.0 -10.0 -13.0 -1
Slide 13: Delivering value through iron ore growth
13 Delivering value through iron ore growth Consistently improving capital efficiency • 360 infrastructure in final stage (US$/t) Capital intensity of 220-360Mt/a Pilbara expansion1 175 − Minimal capital investment − Maximise infrastructure capacity 19% 150 through productivity − Maintain focus on e
Slide 14: Aluminium business delivering quality growth
14 Aluminium business delivering quality growth Kitimat South of Embley First hot metal expected mid-2015: South of Embley feasibility study and • First decile cost position investment decision expected towards the end of 2015 • 50% increase in capacity and halves emissions compared to old plant Alu
Slide 15: Significant growth in Copper ahead
15 Significant growth in Copper ahead KUC volumes to Oyu Tolgoi recover in 2016 underground will following significantly de-weighting/ de- increase value watering east wall (80% of total value) New 152 ktpd Rio Tinto expects concentrator significant metal expected to share from complete in H1’15 Gra
Slide 16: Building the world's best mining company
16 Building the world’s best mining company World-class portfolio Free Quality cash flow growth generation Sustainable shareholder returns Operating Capital and allocation commercial discipline excellence Balance sheet strength ©2015, Rio Tinto, All Rights Reserved
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