Australia s Tier 1 opportunity. Stephen McIntosh Group Executive Growth & Innovation Diggers and Dealers August 2016

Transcription

1 Australia s Tier 1 opportunity Stephen McIntosh Group Executive Growth & Innovation Diggers and Dealers August 2016

2 Cautionary Statement This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited ( Rio Tinto ). By accessing/attending this presentation you acknowledge that you have read and understood the following statement. Forward-looking statements This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Rio Tinto Group. These statements are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, and Section 21E of the US Securities Exchange Act of The words intend, aim, project, anticipate, estimate, plan, believes, expects, may, should, will, target, set to or similar expressions, commonly identify such forward-looking statements. Examples of forward-looking statements include those regarding estimated ore reserves, anticipated production or construction dates, costs, outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this presentation. For example, future ore reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and political uncertainty. In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied by these forward-looking statements which speak only as to the date of this presentation. Except as required by applicable regulations or by law, the Rio Tinto Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results. In this presentation all figures are US dollars unless stated otherwise. Disclaimer Neither this presentation, nor the question and answer session, nor any part thereof, may be recorded, transcribed, distributed, published or reproduced in any form, except as permitted by Rio Tinto. By accessing/ attending this presentation, you agree with the foregoing and, upon request, you will promptly return any records or transcripts at the presentation without retaining any copies. This presentation contains a number of non-ifrs financial measures. Rio Tinto management considers these to be key financial performance indicators of the business and they are defined and/or reconciled in Rio Tinto s annual results press release and/or Annual report.

3 A relentless focus on safety RTX performance - delivering discoveries safely 2.5 All injury frequency rate (AIFR) 12 mth rolling AIFR* YTD LTI & 0 MTCs AIFR *per 200,000 hrs worked 0.0 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 AIFR Updated to end May 2016

4 Indigenous agreements and partnerships Building respect, supporting recognition 4

5 5 Community programmes - Royal Flying Doctor Service

6 Our track record in Australia Approaching 70 years of exploration commitment and success 1962 Tom Price Iron Ore 1970 Tarong (QLD) Coal 1979 Argyle Diamonds 2014 Yandi Braid Iron Ore 2015 MTW / HV* Coal Weipa Bauxite 1990 Century Lead-Zinc 2005 Caliwingina Iron Ore *Mt Thorley Warkworth / Hunter Valley 6

7 Pilbara - 50 years and going strong

8 Weipa and Amrun, Cape York Tier 1 assets measured in the decades

9 Rio Tinto Exploration s regional structure Multi-commodity teams and cross-region portfolio prioritisation Head of Exploration Vancouver Salt Lake City London Africa-Eurasia Moscow Almaty Ulaan Bataar Beijing Americas Bangalore Lima Brasilia Australasia Santiago 9 Johannesburg Project Generation Group (commodity & orebody knowledge specialists, data & information management, targeted research & development) Perth Brisbane Melbourne

10 Rio Tinto significant discoveries since 2000 A truly multi commodity and global exploration effort Saskatchewan 2012, potash Resolution 2002, copper Aluminium Copper & Diamonds Eagle 2004, nickel** Simandou 2004, iron ore Jadar 2009, lithium/borate Bunder, 2008, diamonds Sulawesi 2008, nickel laterite*** Energy & Minerals Iron Ore Greenfield projects Brownfield projects La Granja 2005, copper Amargosa 2011, bauxite Potasio Rio Colorado 2000, potash* 10 Mutamba 2008, mineral sands**** Mt Thorley Warkworth /Hunter Valley 2015, coking coal Yandi Braid 2014, iron ore Caliwingina 2005, iron ore *sold to Vale in 2009 **sold to Lundin in 2013 ***sold in 2014 ****JV with Savana in 2015

11 Rio Tinto Exploration - Jadar discovery Jadar is a world class lithium resource 1998 Exploration starts 2004 Discovery by RTM Exploration 2008 OoM completed 2011 PFS commenced Jadarite recognised as a new mineral

12 Rio Tinto Exploration 2016 operational footprint Exploring for 8 different commodities across 17 countries Expenditure by regions Non- OECD 32% OECD + Peru 68% Expenditure by commodity Aluminium Copper & Diamonds Energy & Minerals Iron Ore R&D 6% Copper 66% Bauxite 9% Energy 9% D&M 2% Iron Ore 8% Greenfield projects Brownfield projects Updated June 2016

13 Tier 1 copper resources Difficult to find, slow to develop Tier 1 copper discoveries Tier 1 copper development timelines Discoveries 1 Cu price US$/lb Greenfield Brownfield Lubin Talnakh Panguna Sar Cheshmeh Ok Tedi Pelambres Olympic Dam Collahuasi Escondida Grasberg 1. Pebble East 2. Rosario West 3. Kamoa 4. Los Sulfatos 5. Escondida Este Resolution Oyu Tolgoi Reko Diq Years to production Lubin Talnakh Panguna Sar Chemesh Ok Tedi Pelambres Olympic Dam Collahuasi Escondida Grasberg Oyu Tolgoi 12 years Sources: SNL, Rio Tinto, public presentations and academic papers 13 Sources: SNL, Rio Tinto, public presentations and academic papers

14 Exploration spend and discovery rate Significant* mineral discoveries & expenditures (excluding bulk commodities) Western world: Estimated spend ( ): $169B Total number of discoveries ( ): Exploration expenditure (real 2015 US$B) Number of discoveries Estimated worldwide exploration expenditure (US$B) Discoveries Expenditures Incomplete discovery data in recent years Number of Discoveries *Significant defined as >100Koz Au, >10Kt Ni, >100Kt Cu equiv, 250Kt Zn+Pb, >5Moz Ag, >5kt U 3 O 8 Source: MinEx Consulting March 2016 ; Expenditures - SNL Metals & Mining December 2015 Note: SNL expenditure data excludes Uranium prior to

15 Exploration access Work with regulators to get more time in the field 15

16 Improving discovery rates Combination of old & new technologies and effective data integration yielding knowledge Traditional Methods New Technologies and Concepts Data Integration Mapping Sampling Geophysics Drilling Analysis Resistate Indicator Minerals & Greenrocks Bundoora Micro-Analytical Facility Greenrocks & RIMS VK1 gravity gradiometer Very large scale compilation of government, open file and Rio Tinto proprietary data Accessible by all geoscientists Advanced visualization software

17 Technologies - KIMs and RIMs A significant technology advance for porphyry identification Stage I Mass Analysis Stage II Automated KIMs Stage III Direct Detection Stage IV Greenrocks & Zircon Fertility PHOTOS SEM-based Low quality, high volume KIMs mineral chemistry MLA-based mineral identification + high quality, high volume KIMs mineral chemistry MLA-based mineral identification in conventional geochemical and interface samples Sophisticated vectoring and fertility assessment based on trace element mineral chemistry ~

18 Data integration - bringing legacy data to life More than half a century of exploration assets in our database 8 million sample of public surface data 2.7 million Rio Tinto samples from our storage warehouse 18

19 Undercover exploration initiative Improve exploration performance under post mineralisation cover New geological and structural models Geochemical Methods Airborne geophysics Pilbara Cover Thickness Robust exploration models looking for the secondary footprints Lower detection limits and micro analytical techniques UAV surveys and airborne gravimetric surveys

20 Australia - A tier 1 opportunity Where is our new discovery 20