Rio Tinto Plc · LSE:RIO
Rio Tinto — BMO Nesbitt Burns 2003 Global Resources Conference
25 slides from Rio Tinto's conference presentation, Feb 24, 2003
Slide 1: BMO Nesbitt Burns - 2003 Global Resources Conference
Guy Elliott BMO Nesbitt Burns - 2003 Global Resources Conference February 24 2003
Slide 2: Cautionary Statement
Cautionary Statement For the purposes of the Forward-Looking Statements Safe Harbor provisions of the US securities laws This presentation contains statements which constitute forward-looking statements within the meaning of the US securities laws. Such statements include, but are not limited to, st
Slide 3: A consistent and successful strategy
A consistent and successful strategy Maximisation of shareholder value Emphasis on Large scale, Excellence in quality of long life, low mining the cost opportunity Rigorous capital appraisal process Existing and future asset base 3
Slide 4: Strong earnings trend
Strong earnings trend Second half earnings Adjusted Earnings US$ millions First half earnings 2000 1,662 1,507 1,530 1600 1,220 1,282 1,070 1,103 821 1200 830 828 625 773 800 518 552 400 841 677 702 552 595 551 509 0 96 97 98 99 00 01 02
Slide 5: Margins strong across all the product groups
Margins strong across all the product groups EBIT Margin % 50 40 Industrial minerals Iron ore Diamonds and gold 30 Energy 20 Aluminium 10 Copper 0 EBIT $m 0 200 400 600 800 1000 Bubble size represents turnover. All data is for year ended 31 December 2002
Slide 6: A balanced product portfolio
A balanced product portfolio Diamonds & Gold 8% Copper 16% Industrial Minerals 16% Aluminium 14% Energy 20% Iron Ore 26% Earnings by product group $1,788 million (2002)
Slide 7: 84% of assets in Australia and North America
84% of assets in Australia and North America Rio Tinto 2002 assets - by region Canada 15% United Europe 3% States 20% 5% Indonesia Africa 3% S America 5% Australia 49% Operating Assets = $13bn
Slide 8: A naturally hedged portfolio
A naturally hedged portfolio US$ TWI, 90=100 The Economist NFM index, 95=100 130 120 110 120 US$ TWI 100 110 90 80 100 70 60 90 Metals prices 50 80 40 90 91 92 93 94 95 96 97 98 99 00 01 02 03
Slide 9: Consistent and increasing operating cashflow
Consistent and increasing operating cashflow US$m Cash flow from Dividends from operations associates & JVs 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 95 96 97 98 99 00 01 02 Cash from operations excludes cash flows relating to capital expenditure, exploration, interest, tax, dividends and inve
Slide 10: Strong operating cash flow underpins investment and capital returns
Strong operating cash flow underpins investment and capital returns 2002 Operating cash flow - $3.7 billion Acquisitions 11% Dividends 24% Sustaining capital CAPITAL INVESTMENTS 15% RETURNS 39% CAPITAL New projects 21% Exploration 3% Taxation 18% Financing Note: these cash flows exclude $233 million
Slide 11: Strong historical and near term growth
Strong historical and near term growth Index (1990 = 100)* 260 240 Comalco alumina Diavik 220 Escondida 4 Hail Creek 200 West Angelas 180 160 140 120 100 90 91 92 93 94 95 96 97 98 99 00 01 02 05 proforma Bars represent Rio Tinto’s nine major products valued at constant prices
Slide 12: Diavik
Diavik
Slide 13: Industry Structure (handout only)
Industry Structure (handout only) Retail diamond jewellery sales Pro-forma world production ($) 2001 market share ($) 2001 + Diavik Other 18% Other USA 47% 27% Asia Pacific De Beers 5% 37% Europe 13% BHPB 6% Aber 3% Japan 17% ALROSA Rio Tinto 19% 8%
Slide 14: Hail Creek
Hail Creek
Slide 15: Current projects (handout only)
Current projects (handout only) Est. Mine Expected cap. cost % life annual Location Product US$m owned yrs production Construction projects Complete • Grasberg - DOZ Indonesia Copper / gold 243 46 20 25,000 tpd • West Angelas Australia Iron ore 450 53 20 ramp up to 20mtpa • Escondida phase 4 Chile C
Slide 16: Options and risk management
Options and risk management High OPTIONS PROJECTS Conceptual or order-of- magnitude Ability to add value Pre- feasibility Feasibility Implementation Low Start Completion Time
Slide 17: Development options (handout only)
Development options (handout only) Location Product owned Status Notes Development options • Yandicoogina expansion Australia Iron ore 100 Feasibility Expansion to 30mtpa • Dampier port capacity Australia Iron ore 100 Feasibility Expansion to 85mtpa • Sept Iles pellet plant Canada Iron ore pellets 5
Slide 18: China's market shares
China’s market shares % of total world demand 30 Aluminium Copper Traded Iron Ore 25 20 15 10 5 0 1990 1996 2002 Source: Rio Tinto
Slide 19: Chinese steel production and iron ore imports
Chinese steel production and iron ore imports Million Steel production tonnes 210 Iron ore imports Baosteel JV 180 Channar JV 150 120 90 60 30 0 90 91 92 93 94 95 96 97 98 99 00 01 02 Source: IISI
Slide 20: Iron ore – growth options
Iron ore – growth options • Robe River JV – West Angelas from 7mtpa start up rate to 20mtpa • Hamersley Iron – Rail and port capacity expansion programme • Current capacity of 74mtpa • Low cost expansion to 85mtpa – Yandicoogina expansion – Reserve extension programme
Slide 21: Chinese aluminium production and alumina imports
Chinese aluminium production and alumina imports Alumina imports Aluminium production 000 tonnes 4500 4000 3500 3000 2500 2000 1500 1000 500 0 90 91 92 93 94 95 96 97 98 99 00 01 02 Source: General Administration of Customs Statistics
Slide 22: Comalco alumina refinery
Comalco alumina refinery
Slide 23: Rio Tinto's performance is superior to sector peers
Rio Tinto’s performance is superior to sector peers Ranking of Rio Tinto plc vs 15 other resource Current comparator stocks on a Total Shareholder Return basis over companies 4 year rolling periods Alcan Q1 Alcoa Anglo American Barrick Gold Q2 BHP Billiton Limited Freeport Grupo Mexico Q3 INCO MIM N
Slide 24: Summary
Summary • Portfolio of high quality assets • Strong suite of projects • Track record of delivery • Leverage to Chinese growth
Slide 25: Guy Elliott
Guy Elliott BMO Nesbitt Burns - 2003 Global Resources Conference February 24 2003
Rio Tinto — BMO Nesbitt Burns 2003 Global Resources Conference on 6ix