Rio Tinto. Markets of the Future: Preparing. for Perpetual Change. Xiaoling Liu. President and Chief Executive Officer Rio Tinto Minerals

Transcription

1 Markets of the Future: Preparing Xiaoling Liu for Perpetual Change President and Chief Executive Officer Rio Tinto Minerals

2 2 nd Wave of Industrialization Global Trends European Challenges and Opportunities RTM Position and Response

3 The 1 st and 2 nd wave of industrialization experience same macroeconomic fundamentals Metals & Chemical Feedstocks(base 100) Industrial Minerals (base 100) Zinc Lead Tin Copper Nickel Turkish Feldspar Cal Borates PCC Ballclays /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/2010 Source: Industrial Minerals International Congress 2010, Gerard Buffiere, Imerys

4 2 nd wave of industrialization now underway Multiple factors impacting Global Trends Regulatory Environment Monetary and Fiscal Policy Infrastructure and Resources Industrial Minerals 1st Wave of Industrialization Metals Enablers Headwinds 2 nd Wave of Industrializa- tion- Minerals

5 Slower pace of population growth Developing countries grow 7 times faster than developed countries Source: World Population Prospects The 2010 Revision, United Nations Department of Economic and Social Affairs (DESA) Population Division

6 Urban share of the population will continue to increase by over 8% By 2030, over 5 billion people will live in cities or mega-cities

7 Urbanization and increased levels of disposable income spread technology Use of technology correlated to reduction of poverty and growth of GDP. 5 billion internet users by Technology devices will be wide-spread Innovation cycles will shorten Fundamental changes in consumption patterns Source: United Nations

8 Population growth, urbanization, the rise of the middle class drive the Need to Feed. Population increases and urbanization drive the uptake in food consumption To feed growing population, modern agricultural practices are needed Fertilizers improve cropyield and output. To satisfy the world s food nutritional needs, must also address water Source: Food Price Index

9 Growth in agriculture will require increased access to water. Water stress exacerbated by climate change. World Water Stress Water demand to increase by 55% by 2050, mostly in the BRIIC nations People living under water stress to more than double between Population growth and urbanization to cause a large part of the population to lack access to clean water By mid-century, water to decrease percent Source: OECD: Water: The Environmental Outlook to 2050 / The Environmental Outlook Baseline projections

10 Resource scarcity will create both opportunity and stress Physical Not Accessible Depletion of reserves Economic Price volatility Market developments Geopolitical Export controls / barriers Conflict regions Pressures / opportunities will impact Europe first. Source: Minerals and metals scarcity in manufacturing: the ticking time bomb ; 2011

11 Europe Challenges and Opportunities Global Trends Headwinds Enablers Infrastructure and Resources Regulatory Population and Aging Multispeed economies Southern Europe Multispeed economies Northern, Central Europe Limited access to and productivity gaps on primary resources Considered the world leader in sustainability Urbanization Aging population - pressure on GDP Liberalization of services due to single market Lack of port growth, trucking shortages, restrictive vessel rates Restrictive product market regulations that may spread globally Resource Scarcity Lower labor utilization than most OECD economies Strong ties to emerging Europe and BRIC nations Fragmented road freight industry Threat of nationalization, trade barriers More. Competitiveness at risk? High quality of life Lack of feedstocks of industrial minerals License to operate How will mineral companies doing business in Europe create a sustainable competitive advantage?

12 Industrial minerals will need to adapt to compete Be flexible to shift focus between mine-to-market and market-to-mine. Improve productivity and labor utilization Improve port access Push for a trade route north Improved access to capital

13 Europe RTM s Position Locations European HQ in London Sales and Customer Service Office in Frankfurt Manufacturing in Coudekerque and Nules Port in Rotterdam Stockpointsin Nuremberg, Mannheim Borate/ lithium project in Serbia

14 RTM is positioning for the markets of the future and the 2 nd wave of industrialization. New Asia Technology Center in Suzhou, China Development of borate/lithium project in Serbia Presence in South American agriculture The movement from markets where the first wave is mature and the second wave is growing New emerging demand and profit in a mature or emerging market, post 1st phase of industrialization

15 Markets of the Future: Preparing for Perpetual Change Questions?