Rio Tinto Iron & Titanium in this presentation should be interpreted to mean that future earnings...
Transcript of Rio Tinto Iron & Titanium in this presentation should be interpreted to mean that future earnings...
Rio Tinto Iron & Titanium Long-lasting commitment
April 2013
Cautionary statement
This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and consisting of the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions.
Forward-looking statements This presentation includes forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding Rio Tinto’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Rio Tinto’s products, production forecasts and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rio Tinto, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Rio Tinto’s present and future business strategies and the environment in which Rio Tinto will operate in the future. Among the important factors that could cause Rio Tinto’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation and such other risk factors identified in Rio Tinto's most recent Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the "SEC") or Form 6-Ks furnished to the SEC. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation.
Nothing in this presentation should be interpreted to mean that future earnings per share of Rio Tinto plc or Rio Tinto Limited will necessarily match or exceed its historical published earnings per share.
Slide 2 ©2013 Rio Tinto, All Rights Reserved
• Safety
• Long-life assets
• Productivity & products
• Facing the changing markets
• Our agility
Slide 3
Overview
©2013 Rio Tinto, All Rights Reserved
Safety is our most important priority
RTIT Injury frequency rates – January 2001 to March 2013
Slide 4 ©2013 Rio Tinto, All Rights Reserved
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Rio Tinto 12 month rolling AIFR RTIT 12 month rolling AIFR
Committed to serving the TiO2 industry
Slide 5 ©2013 Rio Tinto, All Rights Reserved
1950 - RTFT Canada
1976 - RBM South Africa
2009 - QMM Madagascar
Technology Centre
Maximizing the long-life potential of our mines
©2013 Rio Tinto, All Rights Reserved Slide 6
Decades of mining under our belt with sufficient reserves to sustain production for decades to come RTFT (+35 year LOM) • C$800m planned investment over 5 years to extend mine
life and improve efficiency. Two major projects are on-going: • Lowering sulphur dioxide (SO2) emissions and
improving dust collection
RBM (20 year LOM) • The PFS to develop Zulti South to sustain production is
expected to continue QMM (+20 year LOM) • Dry mining plant and dredge improvements • Resource development work on the Sainte-Luce ore body
to continue
©2013 Rio Tinto, All Rights Reserved Slide 7
Improving productivity at our smelting operations
Realizing the full potential of our assets in producing a variety of consistent quality high grade feedstocks • Proprietary smelting technology
1. Long furnace life 2. Large scale furnaces 3. Continuous charging
• Maximize the combination of our expertise and technology to suit customer needs by: 1. producing a wide range of products 2. adapting to market conditions
• Leverage 60 years of experience to deliver
strong operational performance with significant cost reductions to reinforce our resilience
Slide 8
Product development Delivering value from higher grades Decades of knowledge & product development
Historical Sorelslag®
Sorelslag®
RBM chloride slag RTCSTM
UGS®
70% TiO2
72% TiO2
78% TiO2
80% TiO2
85% TiO2
90% TiO2
95% TiO2
©2013 Rio Tinto, All Rights Reserved
Slide 9
Life cycle analysis of TiO2 value chain
Built cradle-to-gate life cycle analysis (LCA) models
Environmental impacts include: 1. Global warming potential 2. Primary energy demand 3. Solid waste generation
Work audited and approved by PE International
Lowest incidence position: High grade feedstocks
©2013 Rio Tinto, All Rights Reserved
Source: RTIT
Overall environmental impact of pigment production
Co-products provide a significant value proposition
Source: Rio Tinto
Co-products • Leveraging technology to
create valuable products instead of waste
• Provides greater flexibility to respond to changing market environment
• Diverse knowledge under the umbrella of common values
Slide 10
Iron & Titanium revenue by product line US$ billions, 100% basis
Co-product revenue TiO2 feedstock revenue
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©2013 Rio Tinto, All Rights Reserved
Long run demand fundamentals are strong for TiO2
• Global demand underpinned by growth of intensity of use in large developing markets
• Chinese middle class growing to 70%
by 2020 • Strong consumption growth trends
evident in other emerging economies • Demand growth strongest in building
and construction, consumer durables and packaging
• Some positive short term signals • Housing sales in the US • Chinese TiO2 pigment production
increased by 7.7% in 2012 y-o-y
Slide 11
Pigment consumption per capita 1995-2011 Pigment production accounts for 90% of TiO2 use
©2013 Rio Tinto, All Rights Reserved
Source: Rio Tinto, TZ Minerals International; Note: 1Average is over 2001-2011 period
Approximate population in 2020 shown
Evolution of Chinese TiO2 sector remains pivotal
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LG Sulphate HG Sulphate HG Chloride
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Sulphate Chloride
Source: Rio Tinto, TZ Minerals International
• Large growth in sulphate pigment production and feedstock imports
• Chloride pigment capacity under construction
• Chinese pigment playing a greater role in export markets
• Today’s crossroads:
• Chinese pigment industry growth and technology selection
• Feedstock selection
• Rio Tinto well positioned to supply both sulphate and chloride segments
Slide 12
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China: TiO2 feedstock imports (2002 to 2012), kt
China: TiO2 pigment production (2002 to 2012), kt
China: TiO2 pigment net exports (2002 to 2012), kt
©2013 Rio Tinto, All Rights Reserved
Agility demonstrated through recent actions
On-going actions
Ability to rebalance our portfolio according to demand trends in different market segments
Slide 13
Short-term actions Well-positioned to rapidly adapt:
• 2 furnace rebuilds • UGS • TIO4
©2013 Rio Tinto, All Rights Reserved
Partner of choice
Security of supply • Mining industry leader • Combining large resources and
operations with back-up options • Master TiO2 smelting technology
Reliability, consistent product quality Wide product range Technical support at customer sites Sustainable development policy
©2013 Rio Tinto, All Rights Reserved Slide 14
In brief
• Safety must remain our top priority
• Maximizing our long-life assets
• Belief in medium and long term demand dynamics
• Improving productivity, reducing costs and strengthening resilience
• Delivering value from high grades
• Third party positioning: strong advantage in the value chain
©2013 Rio Tinto, All Rights Reserved Slide 15
©2013 Rio Tinto, All Rights Reserved Slide 16
Thank you!