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Rio Tinto CopperJean-Sebastien Jacques, CEO
Copper Group
CESCO Conference, April 2013
Cautionary statement
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.
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.
2©2013, Rio Tinto, All Rights Reserved
Contents
� Mega trends
� Copper industry – Opportunities & Challenges
� Rio Tinto Copper strategic approach
3©2013, Rio Tinto, All Rights Reserved
Mega trends shaping the Copper industry
Rise of China & emerging
markets
Environmental awareness &
need for energy
efficiency
Structurally higher costs in a resource constrained
world
Social-political risks
4©2013, Rio Tinto, All Rights Reserved
Source: Wood Mackenzie
2000 2012 2024
Mature markets
Other Emerging Markets
China
Drivers of growth
1
2
3
4
5
Continued rise of China
Development of other large
Emerging markets (India, SEA)
Changing fuel mix towards non-
traditional energy sources
Increased energy efficiency and
safety requirements
Substitution, mainly
Aluminium (negative)
77% of demand will be in Emerging Markets
+44% (11Mt)
Copper semis demand (Mt)
+28% (6Mt)
35% of demand in Emerging Markets
Emerging market growth will create an additional 11Mtpa of demand by 2024
5©2013, Rio Tinto, All Rights Reserved
2000 2012 2024
Riskier regions
Location of copper supply
Higher risk
Medium risk
Lower risk
Declining grades
0.8%
1.0%
1.2%
1.4%
2000 2012 2024
Head grade treated (% Cu)Forecast
High disruptions
Annual disruption (% of planned production)
-4%
0%
4%
8%
12%
2000 2002 2004 2006 2008 2010 2012
Greater depth
1980s 1990s 2000s
Indicative depth of major discoveries
Exposed
Covered
Blind
Source: Wood Mackenzie, RT Copper analysis
Meanwhile supply will become more challenging
6©2013, Rio Tinto, All Rights Reserved
0
2
4
6
8
10
12
14
16
18
2000 2012 2024
Forecast production of mines operating in 2012 excluding brownfield expansions (Mt)
Forecast production at currently operating mines
~4Mt of new annual capacity is required to stand still
Source: Wood Mackenzie
Structural and input cost drivers
1
2
3
4
Declining ore grades
Greater depth
Increasing ore hardness
Rising labour cost
5 Increasing energy cost
Significant investment required and structurally higher costs
7©2013, Rio Tinto, All Rights Reserved
Copper industry opportunities & challenges
Opportunities Challenges
Safety risks, associated with increased depth
Costs performance & project delivery
Social-political risks, incl. licence to operate
1
2
3
Investment environment
4
Resources & talent development
5
(Short term)
8©2013, Rio Tinto, All Rights Reserved
World class safety culture
Critical control monitoring plans – strong focus on fatality prevention programs
Material process safety risks – risk elimination through safe design & strong risk management framework
World class underground safety standards
Block Caving Knowledge Centre – Simulation technology to develop stronger underground expertise in a risk free environment
Developing a world class safety culture1
9©2013, Rio Tinto, All Rights Reserved
Copper NuWave™ (ore sorting technology)
Rio Tinto Block Cave Knowledge Centre Heap Leaching technology
Tunnel Boring Machine
• Plant constructed and pilot underway
• Upgrade marginal ore
and waste• More efficiently uses
concentrator capacity
• Commissioning at Northparkes Mine
• Potential to reduce Underground construction times by
~40% due to being more effective than drill and blast methods
• Northparkes Minecentre opened August 2012
• Partnership with University of NSW
• State of the art learning technology
• Safe learning environment that reduce safety risks & improve productivity
• Linking ore body knowledge with selective leaching
• Maximise mineral recovery
• Technology being developed for La Granja project (test facility at KUC)
Technology & innovation drives productivity gains and reduces capital requirements
2
10©2013, Rio Tinto, All Rights Reserved
Becoming a partner of choice to drive licence to operate
• Climate change and energy
• Land
• Biodiversity
• Water
• Safety
• Health
• Our people
• Communities and regional development
Social
wellbeing
• Financial performance
• Suppliers
• Product stewardship
• Non-managed operations and projects
Economic
prosperity
• Business integrity
• Human rights
• Business resilience & recovery
• Stakeholder engagement
• Closure and legacy
Strong
governance
Environmental
stewardship
3
11©2013, Rio Tinto, All Rights Reserved
• Collaborate with
communities on issues of
mutual interest: health,
education, economic
opportunities, security,
water
• Leverage existing funding
and services for local
benefit
• 80% of the workforce in
project field services is
from local communities
• Working with 65 local
suppliers
• Focus on "employability”
using broad-based skills
training
Employment & Economic
Development
Partnerships for Regional
Development
• Dialogue process
underway with
communities to develop
framework and criteria for
permanent land access
• Transparent, equitable and
built for successful
livelihood transitions
Land Access
La Granja project example - Peru3
12©2013, Rio Tinto, All Rights Reserved
Grasberg – Block cave & DMLZ
(240ktpd of mill throughput)(1st quartile)
Source: Wood Mackenzie (2013 C1 cost curve position; projects average cost at full capacity)
Resolution600ktpa Cu(1st quartile)
Oyu Tolgoi425ktpa Cu; 460kozpa Au
(1st quartile)
La Granja500ktpa Cu
(2nd quartile)
Kennecott Utah CopperSouth wall pushback & underground options
beyond 2050 (1stquartile)
Brownfield
Greenfield
Escondida1.3mtpa Cu (3rd quartile)
Long term investment strategy is focused on tier 1 assets – large, long life, low cost assets
4
13©2013, Rio Tinto, All Rights Reserved
Example of the development strategy for a tier 1 asset – Oyu Tolgoi
4
2016
14©2013, Rio Tinto, All Rights Reserved
• World class safety standards & culture• Technology drive
Safety
• Operational excellence• Technology drive
Costs performance & project delivery
• Be a Partner of Choice with local communities & Governments
Social-political risks
• Capital prioritisation – Tier 1 assets• Phased & structured developments
Investment environment
• Global talent pool• Investment in workforce of developing
countriesResourcing
Rio Tinto Copper Strategic Approach
15©2013, Rio Tinto, All Rights Reserved
THANK YOU
16
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