Tom Albanese - 10 May 11
Transcript of Tom Albanese - 10 May 11
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Tom Albanese10 May 2011Bank of America Merrill Lynch 2011
global metals and mining conference
Cape Lambert port
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2011 year to date highlights
Australian coal, iron ore, uranium and alumina operations impacted by
extreme weather in the first quarter
Production recovering
Major project approvals continue
Marandoo extension $933 million
IOCC phase 2 expansion - $277 million
KUC extension feasibility funding $238 million
New agreement on Simandou
Assumed control of Riversdale
Regained single A credit rating Completed $1.4 billion of $5 billion buyback programme
$13 billion capex in 2011 comparable levels in medium term
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Increased risk of volatility in commodity prices
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Commodity prices remain volatilePrudent actions have been taken byChina, but risks remain
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Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
Spot iron ore (62% Fe WA FOB)
Aluminium
Copper
Gold
Oil -WTI
Thermal coal (NEWC FOB)
Silver
$1432/oz
$2,600/t
USc425/lb
$164/t
Prices at31 March2011
$106/bbl
$122/t
$37.87/oz
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Many large Chinese provinces are just beginning
to climb the steel intensity curve
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Source: Global Insight China Regional Service
Chinese regional steel intensitySteel use per capita 2009 (kg)
Bubble size reflects population of each of the 31 Chinese provinces
Shanghai19m
Beijing18m
Shandong95m
Guangdong96m
Sichuan
89m
Henan100m
Guizhou41m
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2,000 10,000 18,000 26,000 34,000 42,000 50,000
Diamonds
Crude steel
Titanium Dioxide
Borates
Copper
58,000
Nickel
Titanium dioxide
Aluminium
Our portfolio is across a range of products
at different stages of demand growth
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The inflection point is yet to be reached for many of our productsPercentage of saturation level*
*Saturation level point at which consumption per capita does not increase with income levels
Source: Rio Tinto
2020Timeframe 2010 2035 2045 2050
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Our strategy is consistent and unchanged Our core objective is to maximise
total shareholder return bysustainably finding, developing,
mining and processing naturalresources
Invest in and operate large, longterm, cost competitive mines andassets
Focused on developing highquality organic growth options
2011 capex expected to be~$13 billion
Capex 2012-15 expected to
remain at comparable levels Riversdale, Ivanhoe
Driven not by choice of commoditybut by the quality of each opportunity
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Investing in long life, low cost
projects across a range of products
810 May 2011 Bank of America Merrill Lynch global metals and mining conference
Project timeline(1) % Complete $ Capex(2) Production
$91m +5mtpa
$230m +5mtpa
$678m +5.3mtpa
$1.6bn 15mtpa(4)
$7.6bn +53mtpa
$933m 15mtpa(4)
$166m(5) Access high grade ore
$6bn +100ktpd ore
$340m 30mlb Ph1, 60mlb Ph2 (capacity)$469m +17kt Ni, 13kt Cu per annum
$1.9bn +2mtpa
$1.1bn +60ktpa
$487m +41ktpa
NA $270m(3) +5.3mtpa ROM(3)
$184m +2.1mtpa
$260m +6mtpa
$1.1bn +1.3mtpa
$1.6bn 28mcpa capacity
(1) Represents timing of project completion and initial production (2) 100% unless otherwise stated (3) Source: Riversdale
(4) Sustaining production at Pilbara total capacity (5) RT share of capex
2011 2012 2013 2014
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High quality tier one projects
currently in advanced study
Project ProductIndicativecapex(1)
Indicativefirstproduction
Indicativeproduction(1)
Pilbara 333 Iron ore $$$ 2015 +50mtpa
IOCC Phase 3 Iron ore $ 2013 +2.7mtpa
Simandou Iron ore $$$$ 2015 +95mtpa
Oyu Tolgoi Phase 2 Copper, Gold $$$ 2015 +60ktpd ore
KUC extension Copper, gold, moly $$ 2015 Extend LOM to 2028
Kitimat Aluminium $$ 2014 430ktpa capacity
Weipa South of Embley Bauxite $ 2015 +22.5mtpa
Mt. Pleasant Thermal Coal $ 2014 +8.5mtpa
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$ $10 billion
(1) 100% basis unless otherwise stated
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A deep portfolio of strong earlier stage projects
provide options for further quality growth
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Pilbara 433mtpa Orissa
IOCC expansions
Resolution La Granja Escondida options
Copper
AP60 Phase 2 Sarawak Cameroon brownfield and greenfield
Aluminium
Benga phase 2 and Zambeze Hail Creek
Hunter Valley options Valeria
Energy
Bunder (diamonds) Diavik A21 (diamonds) Jadar (borates, lithium)
Diamonds &Minerals
Iron Ore
KUC North Rim Skarn Northparkes expansion
Armargosa (bauxite) Paraguay smelter
Winchester South Rossing heap leach
TiO2 mine expansions TiO2 smelter expansions
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Our investment in technology and exploration
gives us competitive edge
1110 May 2011 Bank of America Merrill Lynch global metals and mining conference
Iron Ore operations centre, Perth
New tunnelling partnership with Aker Wirth Surface mine automation
Exploration in Africa
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Balancing growth with capital returns
Record cashflows have reducednet debt to $4 billion at end of 2010
Investing in high quality growthopportunities organic and M&A
Regained single A credit ratingfrom all major international creditagencies
Ordinary dividend increasedby 20%
$5 billion capital managementprogramme $1.4 billion
completed 2011 interim dividend expected
to be 54 US cents per share
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Prudentbalancesheet
management
SingleA creditrating
Capitalmanagement
Dividend +20%$5 billion
share buyback $1.4 billion
completed
Investmentin valueaddinggrowth
$13 billionof capital
expendituresin 2011
Cash from operations
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Conclusion
Production recovering from weather impacted first quarter
Delivering on growth
A deep portfolio of projects across all product groups and at various stagesfrom execution to early evaluation
Assumed control of Riversdale, currently hold more than 73%
Fully leveraging tier one assets providing further options to grow
Regained single A credit rating Returning cash to shareholders
Ordinary dividend increased by 20%
$5 billion buyback programme $1.4 billion completed to date
Well placed to enhance shareholder value
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Tom Albanese10 May 2011Bank of America Merrill Lynch 2011
global metals and mining conference
Cape Lambert port