Rio Tinto RIO Rio Tinto Investor Seminar

  Rio Tinto (RIO) - Rio Tinto Investor Seminar

RNS Number : 2715S
Rio Tinto PLC
28 November 2012

Rio Tinto Investor Seminar

29 November 2012

Rio Tinto is holding an investor seminar in Sydney today that includes an
in-depth look at its Iron Ore and Diamonds & Minerals product groups.

Rio Tinto chief executive Tom Albanese said "Rio Tinto is very well positioned
despite the challenging global economic environment. Today we are highlighting
the strong future earnings potential from iron ore volume increases and
higher-priced new titanium dioxide contracts. And we are showcasing the
excellence of our West Australian iron ore business, which is delivering
productivity improvements and holding down the costs of expansion despite the
current headwinds.

"We are taking further tough action to roll back the unsustainable cost
increases of the past few years and are maintaining a relentless focus on
improving productivity. We are investing in the highest returning
opportunities, delivering major projects on time and are taking advantage of
the inbuilt flexibility in our phased investment programmes. We have the
ability to respond to changing market conditions and I am confident we have
the right strategy to maximise shareholder value in the long term."

Highlights from the presentations:

· The short-term macroeconomic outlook remains volatile, with major
uncertainties around future US and European economic growth. However, Rio
Tinto is guardedly optimistic on China's prospects. A number of recent macro
leading indicators have beaten market expectations, suggesting early signs of
economic pickup. Rio Tinto expects this to continue in 2013, leading to a
slight rise in Chinese GDP growth to above eight per cent next year.

· Rio Tinto's strategy of maximising shareholder value by investing in
and operating large, long-term, cost-competitive mines and assets is
unchanged. Rio Tinto is committed to a strong balance sheet and aims to
maintain a single A credit rating.

· Rio Tinto's strong track record in productivity improvement and
management of major capital projects continues to deliver increased value:

o current nameplate capacity in the Pilbara has risen from 230 million tonnes
per annum (mt/a) to 237 mt/a through de-bottlenecking and productivity
improvement, with minimal capital spend; this increases the capacity of the
expansion programme from 353 mt/a to 360 mt/a

o the capital intensity of the Pilbara expansion programme from 220 mt/a to
360 mt/a remains at the mid-US$150s per tonne level despite a strong
Australian dollar; this has been made possible through capital efficiency and
productivity improvements including a US$1 billion saving from reconfiguring
the mine plan.

· Rio Tinto is continuing its drive for further cost reductions:

o Rio Tinto is targeting cumulative savings of more than US$5 billion of
operating and support costs by the end of 2014 compared with expected costs in
2012, based on current market conditions and stable operating conditions

o Rio Tinto's planned spending on exploration and evaluation projects will be
reduced by US$1 billion over the remainder of 2012 and 2013

o capital expenditure on approved and sustaining projects will taper off from
current levels in 2013

o sustaining capital expenditure will reduce by more than US$1 billion next

· Rio Tinto will benefit from three major sources of production growth in

o expansion of 53 mt/a of iron ore production capacity as the Pilbara
operations reach capacity of 290 Mt/a in the fourth quarter

o first commercial production from the Oyu Tolgoi copper-gold mine in the
first half, following the successful conclusion of a power supply agreement
earlier this month

o the ongoing ramp up of the Yarwun 2 alumina refinery, which started
production in the second half of 2012, and is already producing at around 90
per cent of nameplate capacity.

· As China and other emerging economies become more consumption-led, Rio
Tinto is set to benefit from mid- to late-cycle commodities such as titanium
dioxide. The business will become a more significant contributor to Rio Tinto
earnings from 2013 as long-term contracts expire, increasing exposure to
current market prices, which are up to 300 per cent higher than existing
contract averages.

· 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.

Other key topics that will be covered at the seminar include:

Iron Ore

· Rio Tinto expects Chinese steel demand growth to peak at around one
billion tonnes towards 2030

· Rio Tinto Iron Ore (RTIO) continues to be the Pilbara's lowest cost,
most productive operator

· The cash cost of production in the Pilbara was US$24.50 per tonne in
the first half of 2012; the cost per tonne to deliver to China is US$47 per
tonne, including royalties, shipping and sustaining capital costs; this is
expected to reduce when infrastructure expansions are in place

· Expansion of capacity in the Pilbara to 290 mt/a is on track for the
fourth quarter of 2013 and on budget

· RTIO is reaping competitive advantage from innovation in technology and
automation through Rio Tinto's Mine of the Future™ programme

· Investment in Simandou, the largest undeveloped iron ore deposit in the
world, will be phased as the Government of Guinea progresses its financing
strategy and grants approvals for the next steps in developing rail and port

· First shipment of ore is scheduled by mid-2015

· The partnership with the Government of Guinea, the Chinalco consortium
and the International Finance Corporation underpins the development strategy
and risk management approach of the project

Diamonds & Minerals

· Global underlying macro-trends are driving mid-late cycle demand growth
for minerals

· Rio Tinto is the largest producer of high grade titanium dioxide
feedstocks with global feedstock capacity of around 2.2 million tonnes per

· The doubling of Rio Tinto's stake in the Richards Bay Minerals TiO2
business is value-accretive and is expected to have a positive cash pay back
within five years

· Co-products, including zircon, rutile, iron and steel, are recovered to
generate substantial additional value

· A leading resource and technology position provides options to further
expand mining and refining capacity by up to 50 per cent, subject to market

· Rio Tinto has a strong underlying position in borates, with significant
optionality to grow through projects like the development of the kernite
processing plant at Boron in California

· Options are being created to expand into complementary sectors. The
Jadar Lithium-borate project in Serbia has the potential to supply 20 per cent
of the lithium market. The potash development joint venture in Canada is
targeting a tier one resource suitable for solution mining with promising
initial results

· In Diamonds, the Argyle underground development is progressing and the
first crusher will be commissioned in the first quarter of 2013

Notes to editors

1. The seminar will be webcast at 2.30pm AEDT and can be accessed on Replays will be available from 9pm AEDT on Thursday.

2. Presentations will be made by Tom Albanese, chief executive, Guy Elliott,
chief financial officer, Sam Walsh, chief executive, Iron Ore and Alan Davies,
chief executive, Diamonds & Minerals.

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

Christina Mills                   

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

Bruce Tobin

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

Twitter: Follow @riotinto on Twitter

High resolution photographs and media pack available at:

                     This information is provided by RNS
           The company news service from the London Stock Exchange


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