Aluminium: A bright future for the metal of tomorrow. Jacynthe Côté Metal Bulletin International Aluminium Summit Paris, 8 September 2011

Transcription

1 Aluminium: A bright future for the metal of tomorrow Jacynthe Côté Metal Bulletin International Aluminium Summit Paris, 8 September 2011

2 Global economic situation 2008 = 100 Dow Jones ASX FTSE 2

3 Market is gradually recovering but prices have recently been in decline Unwrought week of shipment (LME & IAI) LME 3-month 3

4 Strong demand driven by emerging economies 60 Global China Rest Rest of of World world CAGR % million tonnes (aluminium) % 9.4% Source: Rio Tinto Alcan Industry Analysis 4

5 Still a lot to come for aluminium Percentage of saturation level* Titanium dioxide Crude steel Nickel Aluminium Titanium Dioxide Copper Borates Diamonds 2,000 10,000 18,000 26,000 34,000 42,000 50, ,000 World GDP/capita 2000 US$ PPP *Saturation level point at which consumption per capita does not increase with income levels Source: Rio Tinto 5

6 Supply has mainly tracked demand with growth in China China Middle East India ROW 40% million tonnes (aluminium) 5% 9% 46% 6

7 European situation Western European smelters tend to be higher on the global cost curve Between 2000 and 2010, primary aluminium production in Europe increased at a much slower rate than the global average Creates a challenging environment in which to operate A secure, long-life and competitively priced supply of electricity is imperative to operating a viable aluminium smelters 7

8 Regional balance: importers and exporters Global North America 0.7 Europe China (1.0) (1.6) (1.4) (0.1) (0.1) (0.1) Japan (2.2) (2.4) (2.4) (0.0) Latin America 0.3 (0.4) (1.0) Primary aluminium production (by millions of tonnes) Source: Rio Tinto Alcan Industry Analysis Middle East Africa (0.8) India Oceania 8

9 Continued pressure on marginal cost producers Business operating costs Capital charge new capacity 2. Input costs (alumina & coke) 3. Carbon tax 4. Energy (China) 5. Appreciating RMB $1,000 /t Source: Rio Tinto Alcan analysis 9

10 Continuing the transformation journey to a very low cost producer Strong performance in health, safety and the environment Building solid relationships with key stakeholders Meeting the needs of our customers Robust financial results Further improvement from our current portfolio of assets Deliver priority growth projects 10

11 Rio Tinto Alcan has high-quality assets, advantages from mine to metal Fully integrated producer Low operating cost, solid return potential Bauxite 33.4Mt Alumina 9Mt Aluminium 3.8Mt External sales Majority of assets are large-scale, modern Strategy to be long in bauxite and alumina (opportunities as pricing evolves) Growth options in bauxite, alumina, aluminium and electricity Reliable, global commercial network to serve key markets and customers Hydropower and technology advantages in a carbon-constrained market All volumes shown reflect Rio Tinto Alcan 2010 total production 11

12 Unrivalled position in clean, renewable, self-generated power Clean, low-cost energy supply Gas/coal thermal Secured energy sources Short and medium-term contracts (3%) (29%) Nuclear (8%) Hydro (63%) Long-term contracts (46%) Self-generated (51%) 3,815MW owned hydroelectric generating installed capacity in Canada Compares favourably to global aluminium industry total of about 35 percent hydro based power for smelting Long-standing water rights in Canada Compares favourably to global aluminium industry average of about 35 percent self-generated power for smelting As aluminium markets continue to recover, Rio Tinto Alcan is expected to benefit from stable energy sources; has low cost escalation, is well positioned to continue capturing LME uplift 12

13 Technology gives us a competitive advantage The AP Technology TM edge Demonstrated cost advantage with superior levels of predictability Installed capacity: 6.6 million tonnes Under construction: 0.9 million tonnes Under discussion: ~ 4.3 million tonnes AP60 to operate at an unprecedented 600kA Driven by step change Broader scope than the reduction cell AP-Xe suite designed to retrofit previous AP series Expected to reduce energy consumption by up to 15 per cent Multiple sources of technology revenue: License fees Technical and management assistance Specialised equipment and carbon materials First user advantage ensuring cost, efficiency leadership of asset base Partner of choice with superior access to low-cost power blocks 13

14 Global options in our project pipeline: all top-tier assets ISAL, Iceland (100%) AP60 smelter, Canada (100%) (replacing current Arvida smelter) Kitimat, Canada (100%) Alma, Canada (100%) Sohar, Oman (20%) Shipshaw, Canada (100%) Algeria Under construction Under consideration Bauxite brownfield Bauxite greenfield Alumina brownfield Alumina greenfield Aluminium brownfield Aluminium greenfield Kabata, Guinea Paraguay Amargosa (100%) Edea, Cameroon In addition to those listed above, we have further opportunities in early stages of evaluation Malaysia (60%) Weipa, Australia (100%) Yarwun II, Australia (100%) 14

15 Priority projects for Rio Tinto Alcan AP60 plant (phase I) ISAL modernisation Kitimat modernisation Yarwun II expansion 15

16 Sustainable development Rio Tinto Alcan supports projects that facilitate social, environmental and economic development in host communities Dialogue with the community Work with the right projects Make a positive impact 16

17 Summary We remain cautious about the short-term outlook but global aluminium markets are improving Strong profits available to well-positioned, low-cost producers Rio Tinto Alcan is focused on disciplined cost and portfolio management leveraging our quality bauxite, unrivalled electricity position, benchmark technology developing our exceptional growth pipeline exceptional customer service The world needs more aluminium, for all the right reasons Our potential is limited only by the breadth of our vision 17