Rio Tinto (RIO) - Rio Tinto Investor Seminar
RNS Number : 2388O
Rio Tinto PLC
09 October 2012
Rio Tinto Investor Seminar
9 October 2012
Rio Tinto is holding an investor seminar in London and New York today that
includes an in-depth look at its Copper product group and its Technology &
Highlights from the presentations:
· Rio Tinto's strategy of maximising shareholder value by investing in
and operating large, long-term, cost-competitive mines and assets is
· The short-term macroeconomic outlook remains volatile. Economic growth
in China is robust but moderating, and is slow and uneven in developed
economies. Rio Tinto expects China's stimulus packages to take effect
progressively after the Chinese leadership change and has therefore lowered
its estimates for Chinese GDP growth this year to just below eight per cent.
There are some positive signs on the European debt crisis and US quantitative
easing although risks remain in both economies.
· Iron ore prices have partially recovered after a period of rapid
decline but Rio Tinto expects them to remain volatile in the near future. Rio
Tinto analysis suggests that around 100 million tonnes of primarily Chinese
iron ore production had become unprofitable, and sees evidence on the ground
that a large proportion of this has already been curtailed.
· With a continuing volatile short-term environment, Rio Tinto plans
further cost reductions, primarily in operating, evaluation and sustaining
capital costs across the business. Its drive to reduce service and support
costs has so far produced savings of $500 million a year. Total annual capital
expenditure on projects already approved is expected to peak in 2012.
· The longer term picture remains positive, with increasing urbanisation
in emerging markets driving strong demand growth across a range of
commodities, and a slower supply response from the industry.
Rio Tinto chief executive Tom Albanese said "Significant stimulus efforts have
been announced in China, the US and Europe, but it's uncertain exactly when we
will see the impact of these on our markets. Given this, and the considerable
price fluctuations in recent times, we are somewhat more cautious on the
outlook over the next few quarters.
"Our business remains resilient in this environment and our operations are
performing better than our peers, reflecting our consistent strategy of
running long-term, cost-competitive operations. We aim to maintain our single
A credit rating and are driving our cost reduction efforts harder and faster.
"Rio Tinto has the right strategy to maximise shareholder value in the long
term. We are positioned to reap the benefits of long-term demand growth while
withstanding short-term volatility. We have the flexibility to phase our
investment projects and a disciplined and rigorous approach to capital
allocation that ensures we only invest in the highest returning opportunities
in the most attractive sectors and divest assets that no longer fit with our
Other key topics that will be covered at the seminar include:
· Rio Tinto's copper production is expected to increase from 2013 as a
result of improving grades and investments at Kennecott and Escondida and by
the start of production from the Oyu Tolgoi mine in Mongolia. From 2011 to
2015, Rio Tinto expects to achieve a cumulative annual growth rate of 13 per
cent for copper.
· The Oyu Tolgoi project is 97 per cent complete. Negotiations with
Chinese authorities on a power purchase agreement (PPA) for the Oyu Tolgoi
Project are actively progressing. Rio Tinto remains optimistic that
negotiations will result in a final PPA. Once a final power agreement has been
concluded, first ore is expected to be processed through the concentrator
within six weeks. First concentrate production will follow within one month
and the start of commercial production is expected three to five months
· The short-term outlook for copper remains volatile but Rio Tinto
continues to believe that the market's long-term fundamentals remain robust
given urbanisation in emerging markets. On the supply side, annual production
across the industry continues to fall short of expectations, a trend Rio Tinto
expects to continue.
· Rio Tinto's Copper product group is focused on operational excellence,
cost management and using technological innovations to reduce the cost of
developing new mines and improve the productivity of existing operations.
Future expansions are focused on the highest value-creating projects, which
are being phased to retain flexibility.
Technology & Innovation
· Rio Tinto's Technology and Innovation group (T&I) has sector-leading
capability to analyse and identify how resources can be developed with the
minimum capital spend and generate the most value. This helps Rio Tinto to
make better informed investment decisions that ensure that the maximum value
can be generated from an ore deposit.
· The T&I group has created significant value by driving improvement in
operating excellence and developing sector-leading new technologies as part
of Rio Tinto's Mine of the Future™ programme.
· The T&I function aims to create distinctive competitive advantage
through operational excellence, managing, measuring and benchmarking
consistent performance across the business. This approach is leading to
improvements in equipment reliability and availability and in turn lower
capital cost requirements.
Notes to editors
1. The seminar will be webcast at 2.30pm BST/09.30am EST and can be accessed
on www.riotinto.com. Replays will be available after the close of the seminar.
2. Presentations will be made by Tom Albanese, chief executive, Guy Elliott,
chief financial officer, Andrew Harding, chief executive, Copper and Preston
Chiaro, group executive, Technology & Innovation.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK,
combining Rio Tinto plc, a London and New York Stock Exchange listed company,
and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources.
Major products are aluminium, copper, diamonds, thermal and metallurgical
coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt)
and iron ore. Activities span the world and are strongly represented in
Australia and North America with significant businesses in Asia, Europe,
Africa and South America.
For further information, please contact:
Media Relations, EMEA / Americas Investor Relations, London
Illtud Harri Mark Shannon
Office: +44 (0) 20 7781 1152 Office: +44 (0) 20 77811178
Mobile: +44 (0)7920 503 600 Mobile: +44 (0) 7917 576597
David Outhwaite David Ovington
Office: +44 (0) 20 7781 1623 Office: +44 (0) 20 77812051
Mobile: +44 (0) 7787 597493 Mobile: +44 (0) 7920 010 978
Office: +44 (0) 20 7781 1154
Mobile: +44 (0) 7825 275 605
Media Relations, Australia / Asia Investor Relations, Australia
David Luff Christopher Maitland
Office: +61 (0) 3 9283 3620
Mobile: +61 (0) 0419 850 205 Office: +61 (0) 3 9283 3063
Karen Halbert Mobile: +61 (0) 459 800 131
Office: +61 (0) 3 9283 3627
Mobile: +61 (0) 412 119 389
Office: +61 (0) 3 9283 3612
Mobile: +61 (0) 419 103 454
Media Relations, Canada Investor Relations, North America
Bryan Tucker Jason Combes
Office: +1 (0) 514 848 8151 Office: +1 (0) 801 204 2919
Mobile: +1 (0) 514 825 8319 Mobile: +1 (0) 801 558 2645
Email: email@example.com firstname.lastname@example.org
Twitter: Follow @riotinto on Twitter
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STREKLBBLBFXFBQ -0- Oct/09/2012 06:00 GMT
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