TIDMRIO
RNS Number : 2388O
Rio Tinto PLC
09 October 2012
Rio Tinto Investor Seminar
9 October 2012
Rio Tinto is holding an investor seminar in London and New York
today that includes an in-depth look at its Copper product group
and its Technology & Innovation group.
Highlights from the presentations:
-- Rio Tinto's strategy of maximising shareholder value by
investing in and operating large, long-term, cost-competitive mines
and assets is unchanged.
-- The short-term macroeconomic outlook remains volatile.
Economic growth in China is robust but moderating, and is slow and
uneven in developed economies. Rio Tinto expects China's stimulus
packages to take effect progressively after the Chinese leadership
change and has therefore lowered its estimates for Chinese GDP
growth this year to just below eight per cent. There are some
positive signs on the European debt crisis and US quantitative
easing although risks remain in both economies.
-- Iron ore prices have partially recovered after a period of
rapid decline but Rio Tinto expects them to remain volatile in the
near future. Rio Tinto analysis suggests that around 100 million
tonnes of primarily Chinese iron ore production had become
unprofitable, and sees evidence on the ground that a large
proportion of this has already been curtailed.
-- With a continuing volatile short-term environment, Rio Tinto
plans further cost reductions, primarily in operating, evaluation
and sustaining capital costs across the business. Its drive to
reduce service and support costs has so far produced savings of
$500 million a year. Total annual capital expenditure on projects
already approved is expected to peak in 2012.
-- The longer term picture remains positive, with increasing
urbanisation in emerging markets driving strong demand growth
across a range of commodities, and a slower supply response from
the industry.
Rio Tinto chief executive Tom Albanese said "Significant
stimulus efforts have been announced in China, the US and Europe,
but it's uncertain exactly when we will see the impact of these on
our markets. Given this, and the considerable price fluctuations in
recent times, we are somewhat more cautious on the outlook over the
next few quarters.
"Our business remains resilient in this environment and our
operations are performing better than our peers, reflecting our
consistent strategy of running long-term, cost-competitive
operations. We aim to maintain our single A credit rating and are
driving our cost reduction efforts harder and faster.
"Rio Tinto has the right strategy to maximise shareholder value
in the long term. We are positioned to reap the benefits of
long-term demand growth while withstanding short-term volatility.
We have the flexibility to phase our investment projects and a
disciplined and rigorous approach to capital allocation that
ensures we only invest in the highest returning opportunities in
the most attractive sectors and divest assets that no longer fit
with our strategy."
Other key topics that will be covered at the seminar
include:
Copper
-- Rio Tinto's copper production is expected to increase from
2013 as a result of improving grades and investments at Kennecott
and Escondida and by the start of production from the Oyu Tolgoi
mine in Mongolia. From 2011 to 2015, Rio Tinto expects to achieve a
cumulative annual growth rate of 13 per cent for copper.
-- The Oyu Tolgoi project is 97 per cent complete. Negotiations
with Chinese authorities on a power purchase agreement (PPA) for
the Oyu Tolgoi Project are actively progressing. Rio Tinto remains
optimistic that negotiations will result in a final PPA. Once a
final power agreement has been concluded, first ore is expected to
be processed through the concentrator within six weeks. First
concentrate production will follow within one month and the start
of commercial production is expected three to five months
thereafter.
-- The short-term outlook for copper remains volatile but Rio
Tinto continues to believe that the market's long-term fundamentals
remain robust given urbanisation in emerging markets. On the supply
side, annual production across the industry continues to fall short
of expectations, a trend Rio Tinto expects to continue.
-- Rio Tinto's Copper product group is focused on operational
excellence, cost management and using technological innovations to
reduce the cost of developing new mines and improve the
productivity of existing operations. Future expansions are focused
on the highest value-creating projects, which are being phased to
retain flexibility.
Technology & Innovation
-- Rio Tinto's Technology and Innovation group (T&I) has
sector-leading capability to analyse and identify how resources can
be developed with the minimum capital spend and generate the most
value. This helps Rio Tinto to make better informed investment
decisions that ensure that the maximum value can be generated from
an ore deposit.
-- The T&I group has created significant value by driving
improvement in operating excellence and developing sector-leading
new technologies as part of Rio Tinto's Mine of the Future(TM)
programme.
-- The T&I function aims to create distinctive competitive
advantage through operational excellence, managing, measuring and
benchmarking consistent performance across the business. This
approach is leading to improvements in equipment reliability and
availability and in turn lower capital cost requirements.
Notes to editors
1. The seminar will be webcast at 2.30pm BST/09.30am EST and can
be accessed on www.riotinto.com. Replays will be available after
the close of the seminar.
2. Presentations will be made by Tom Albanese, chief executive,
Guy Elliott, chief financial officer, Andrew Harding, chief
executive, Copper and Preston Chiaro, group executive, Technology
& Innovation.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered
in the UK, combining Rio Tinto plc, a London and New York Stock
Exchange listed company, and Rio Tinto Limited, which is listed on
the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral
resources. Major products are aluminium, copper, diamonds, thermal
and metallurgical coal, uranium, gold, industrial minerals (borax,
titanium dioxide and salt) and iron ore. Activities span the world
and are strongly represented in Australia and North America with
significant businesses in Asia, Europe, Africa and South
America.
For further information, please contact:
Media Relations, EMEA / Americas Investor Relations, London
Illtud Harri Mark Shannon
Office: +44 (0) 20 7781 1152 Office: +44 (0) 20 7781
Mobile: +44 (0)7920 503 600 1178
David Outhwaite Mobile: +44 (0) 7917
Office: +44 (0) 20 7781 1623 576597
Mobile: +44 (0) 7787 597493 David Ovington
Christina Mills Office: +44 (0) 20 7781
Office: +44 (0) 20 7781 1154 2051
Mobile: +44 (0) 7825 275 605 Mobile: +44 (0) 7920
010 978
Media Relations, Australia / Investor Relations, Australia
Asia Christopher Maitland
David Luff Office: +61 (0) 3 9283
Office: +61 (0) 3 9283 3620 3063
Mobile: +61 (0) 0419 850 205 Mobile: +61 (0) 459 800
Karen Halbert 131
Office: +61 (0) 3 9283 3627
Mobile: +61 (0) 412 119 389
Bruce Tobin
Office: +61 (0) 3 9283 3612
Mobile: +61 (0) 419 103 454
Media Relations, Canada Investor Relations, North
Bryan Tucker America
Office: +1 (0) 514 848 8151 Jason Combes
Mobile: +1 (0) 514 825 8319 Office: +1 (0) 801 204
2919
Mobile: +1 (0) 801 558
2645
Website: www.riotinto.com
Email: media.enquiries@riotinto.com enquiries.mediaaustralia@riotinto.com
Twitter: Follow @riotinto on Twitter
High resolution photographs and media pack available at:
www.riotinto.com/media
This information is provided by RNS
The company news service from the London Stock Exchange
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