african iron ore

African Iron OreMetal Bulletin, Johannesburg, 6-8 NovemberAlan Davies, Chief executive Diamonds and Minerals, Rio Tinto

©2012, Rio Tinto, All Rights Reserved

Cautionary statement

Metal Bulletin African Iron Ore Conference6-8 November 2012 2

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 statementsThis presentation includes forward-looking statements. All statements other than statements of historical facts included in thispresentation, 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. 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 mostrecent 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.

©2012, Rio Tinto, All Rights Reserved6-8 November 2012 Metal Bulletin African Iron Ore Conference 3

Our presence in Africa is growing

Mutamba Project (Mozambique)

Simandou (Guinea) Murowa Diamonds (Zimbabwe) Rio Tinto Coal MozambiquePalabora Mining Company (Sth Africa)

CBG Sangaredi Mine (Guinea)

Rössing Uranium Mine (Namibia)

QIT Madagascar Minerals (QMM)Rio Tinto Alcan –Alucam (Cameroon)

3

Key

Mines and mining projects

Smelters, refineries, power facilities and processing plants remote from mine

Aluminium

Copper

Diamonds

Energy

Iron ore

Minerals

Richard Bay Minerals (RBM) (Sth Africa)


Near term uncertainty is likely to persist

Platts IODEX62% Fe, $/dmt, CFR North China

Synchronised slowdown underwayPurchasing Managers Index – Manufacturing

Source: Platts

Monthly new home sales growth in China% change year on year

Source: CEIC / NBS


However, the long term demand outlook remains attractive

Global commodity demand trajectoriesIndex 2012 = 100

• ~2 billion additional people to urbanise by 2030

• Global steel consumption expected to grow by 2 per cent per annum

• China to remain key driver until mid-2020s

Source: Rio Tinto analysis

2020s

• China GDP per capita currently19% of USA levels

• India and South East Asian economies more than offset flat and then falling consumption in China

• Consumption-led growth will benefit TiO2 and Aluminium


Chinese steel production is expected to grow to around 1 billion tonnes per year towards 2030

Chinese crude steel productionMillion tonnes

Chinese steel demand by sectorMillion tonnes

4

1-1

-1

18

xx Decade average compound annual growth rate (%)

Source: Rio Tinto analysis Source: Rio Tinto analysis


Steel growth still has a long way to run

Steel intensity and GDP 1900 – 2011Kg/capital crude steel production

1,000

1,200

1,400

China on track to exceed 500 kg/capita level of crude steel productionfor first timein 2011

Korea

Japan

Total steel demand over respective 20-year period tonnes per capita

0

200

400

600

800

0 10,000 20,000 30,000 40,000

China(actual)1950–2010

USA

China (forecast) 2011–2040

India

Germany

GDP per capita (PPP basis, $2005)

Note: Stylistic representationSource: Correlates of War, Maddison, Global Insight, Rio Tinto

Note: Steel stock refers to the level of cumulative steel consumed within an economy over a 20-year periodSource: Rio Tinto analysis


The industry supply response is increasingly challenged

• Over the 7 years to 2018, it is expected that 700Mt of global supply additions will be required:

o 500 Mt to satisfy expected demand growth

o 200 Mt to replace expected high cost

Announced and completed iron ore capacity million tonnes

o 200 Mt to replace expected high cost supply exits

• We expect to add ~ 25% of required supply

• Cost escalation and rising capital intensity will increase pressure on marginal project returns

• Scarcity of highly skilled labour, access to financing

• Recent high profile project deferrals

Source: UNCTAD, Rio Tinto analysis


Simandou, a world class project in a world class province

• One of the largest known undeveloped iron ore deposits in a resource-rich province

• ~100Mtpa progressive mine development, 650km trans-Guinean railway and deep water port near

Progressive delivery of the Simandou project

FaranahMamou

Conakry

Ile Coastal Plain Mamou Range Eastern Plateau Region MineKabak

railway and deep water port near Conakry

• Project is advancing against clear segmented milestones agreed with the Government of Guinea

• Further investment will be made as the Government of Guinea progresses its financing strategy and grants approvals for the next steps in developing rail and port infrastructure

Sierra Leone

Liberia

Beyla

ForécariahGuinea

New airstrips

Pre-stripping (Oueleba main)

Camps & logistic centres

Infrastructure corridor

Marine Offload Facility

Stockyard earthworks

Potential phased ore delivery Proposed rail line

West rail (multiple fronts)

East rail (multiple fronts)

Access Road and Causeway

20

30

40

200%

250%

Metal Bulletin African Iron Ore Conference

WA construction projects performanceCost (% of budget)

10

We are the right partner to move this project forward

RTIO projects Non RTIO projectsOver budgetbehind schedule

Mo

nth

s o

ver

bu

dg

et

6-8 November 2012

30

20

10

10

0%

50%

100%

150%

Budget Additional months

Source: Pit Crew Management Consulting Services

Under budgetahead ofschedule

Mo

nth

s o

ver

bu

dg

et


A unique development partnership

• A project of this magnitude requires a unique approach to development

• Partnership with Government of Guinea, Chinalco and IFC underpins strategy

• Project financing will provide additional opportunities for risk management and opportunities for risk management and governance for all partners

• Working alongside our partners towards the common goal of responsible and sustainable development

Tree-planting in Simandou to symbolise the partnership between Rio Tinto, China and Guinea


Phased development and ramp up of Simandou

• Simandou infrastructure declared a Project of National Interest for Guinea by presidential decree

• Construction of the pioneering marine offload facility underway

• Proceeding with preparatory works such • Proceeding with preparatory works such as roads, logistics centres and construction camps

• Engineering progressing towards a Bankable Feasibility Study

• Completion of Social Impact Environment Assessment

• Capital efficient deployment strategy in line with approvals and financing for construction works


Building mutually beneficial relationships will be key

• Implementing best practice sustainable stewardship and engagement

• Cross-sector partnerships to encourage economic diversification

• Capacity development and training to build skills and institutionsbuild skills and institutions

• Mentoring in procurement process

• Aim to create an opportunity for social and economic development


Leveraging our competitive advantages

• Pioneer in developing and operating mining and infrastructure assets globally

• Access to world class engineering and construction expertise for delivery of mega-mining projects

• Commitment to sustainable stewardship • Commitment to sustainable stewardship are core competitive advantage

• Recognised industry leader in technology and innovation

African Iron OreMetal Bulletin, Johannesburg, 6-8 NovemberAlan Davies, Chief executive Diamonds and Minerals, Rio Tinto

african iron ore

Documents