Andrew Harding, Rio Tinto - Rio Tinto

Generating significant business value

Andrew Harding

Chief executive officer – Iron Ore, China, Japan, Korea

AJM Global Iron Ore & Steel Forecast Conference, Perth 2014

©2014, Rio Tinto, All Rights Reserved

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 statements

This presentation includes forward-looking statements. All statements other than statements of historical facts included in this

presentation, 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 most recent 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


3

Bringing capacity on-line to meet growth in traditional and developing regions

Source: China National Bureau of Statistics, CISA, Rio Tinto

Source: United Nations, Global Insight, Rio Tinto

Chinese steel demand Million tonnes per annum

Growth fundamentals 2010-30 CAGR %

6.1

2.0

0.3

0 5 10

GDP per capita

Urbanpopulation

Population

6.1

2.3

1.0

0 5 10

3.7

2.2

1.0

0 5 10

GDP per capita

Urbanpopulation

Population

2.4

1.9

1.6

0 5 10

China

ASEAN Middle East

India

0

100

200

300

400

500

600

700

800

2011 2012 2013 2014

≈4 %

(e)

7.5% 2.2%


Monthly Q Lagged

Q Actual

Spot

• Pilbara Blends continue to be base load products for Asian steel industry

• Unprecedented demand for 2014 off-take opportunities due to our reputation of providing stable quality and reliable supply

• Of our 2014 volume:

• ~85% will be sold under term contracts

• ~15% uncontracted for sale into the spot market, in support of robust and transparent indices

• Pilbara Blend sustainable for decades to come

2014 Pilbara off-take agreements

by pricing mechanism

4

Rapid uptake of 2014 off-take opportunities with unfulfilled demand for Rio Tinto iron ores


• Mine, rail and port network wholly-

owned by IOC ( Rio Tinto 58.7%)

• Consistently high quality products

with the lowest phosphorous in the

industry

• 2013 saleable production of 15.4Mt,

9% higher than 2012

• CEP project adds mining fleet, ore

delivery, grinding and spiral capacity

and power infrastructure

• Concentrate expansion project to

23.3 Mt/a expected in H1 2014.

Iron Ore Company of Canada operations

5

Iron Ore Company of Canada - fully integrated mine to port system


6

The Pilbara – high quality assets, fully owned and operated, with great optionality

• System fully

integrated via

Operations Centre

• All product blending

undertaken at port

• Strong Resources &

Reserves position

provides optionality

Rio Tinto Pilbara operations

Assets • 15 mines

• 1,600kms of rail

• 4 independent

port terminals,

with 11 berths,

• 3 power stations


0

10

20

30

40

50

60

70

80

Q1 Q2 Q3 Q4

• Severe weather impacts in 1Q, 2Q

and 4Q 2013.

• Increasing capacity and system

alignments enabled improving

performances beyond 237Mt/a

rating

• 2013 mine production of 251Mt

(YoY +5%)

• 66.5Mt mine production and

68.8Mt shipping in Q4 2013

• Strong contribution to EBITDA and

underlying earnings

7

Pilbara performance key to delivering strong 2013 financial results

Pilbara mine production Million tonnes per quarter

2010

2011

2012

2013

290

237

Source: Rio Tinto

2013 2012 Change

Production

(Million tonnes100%)

266.0 253.5 +5%

Underlying EBITDA

($ millions)

17,442 15,679 +11%

Underlying earnings

($ millions)

9,858 9,247 +7%

Iron Ore results Global 2013 vs 2012


8

Continuous improvement outcomes realise significant value

Mine

• “Right- sizing” the fleet initiative optimising cycle

times and payload management

• 6 out of 55 West Angelas haul trucks

redeployed to other mines

• Reductions to occur at other mines

Rail

• Continued train cycle improvements with

electronic controlled pneumatic brakes and

additional consists

• Payload increases through new train specs and

mass and volumetric loading controls

• 2013 new consist payload record of 27kt

Port

• Parker Point outload capacity increased 12Mt/a

• Changes to reclamation control program

and stockpile profiling

• Dual reclaiming to maximise ship loading

Pooled fleet railings and payload

26.3

26.4

26.5

26.6

26.7

26.8

26.9

27.0

27.1

1,500

1,600

1,700

1,800

1,900

2,000

2,100

2,200

2,300

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Railings

Payload

Railin

gs (

no

. o

f tr

ain

s)

Paylo

ad

(k

t)

Reclaimer


• Improved crane scheduling and

alignment of maintenance shuts

• $1.4M saved at Brockman 4

alone

• Rationalised training and streamlined

delivery

• Cost savings ~$20M/ yr

• Over 200,000 person hours*

returned to the business

• Hire car expenditure savings ~ $4

• Centralised administration function

savings over $5 million per annum

9

Relentless focus on cost- outs to also continue

2013 productivity improvements Hours returned to the business via training transformation

0

30,000

60,000

90,000

120,000

150,000

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

Jan

Fe

b

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Monthly Cumulative

*December 2013 annualised Stockpile


WA IO – EBITDA per tonne (US$/t and %)

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

20

40

60

80

100

120

140

H110 H210 H111 H211 H112 H212 H113 H213

EB

ITD

A %

US

$/t

RTIO ($US/t) BHP ($US/t) FMG ($US/t)

RTIO % BHP % FMG %

10

Improvements are maintaining the business as the Pilbara’s lowest cost producer

Source: Rio Tinto ; BHPB; and FMG lodged financial statements Note: RTIO results exclude Dampier Salt and RT Marine

Tonnage based on attributed shipments (adjusted for Robe River at 65% as per financial results). Results as reported. All

publically available information

Full year cash unit cost ($/t)

0

5

10

15

20

25

2006 2007 2008 2009 2010 2011 2012 2013

AUD cost USD cost

• 2013 full year cash unit cost was

US$20.80/t, 11% lower than 2012

• Retaining best margin of Pilbara producers

Source: Rio Tinto


• 290 Mt/a first ore on ship 24 August

• 4 months ahead of schedule

• $US400M under budget

• 220 – 290Mt/a being delivered at a

capital intensity <US$140/t (100%)

• Extra 53Mt/a Pilbara system

nameplate capacity by end 1H

2014

• Nammuldi below water table mine

completion on target for Q4 2014

• Deliberate mine bulk stocks

strategy, with ~5Mt draw- down in

2014

Nammuldi mine development

11

290Mt/a infrastructure complete and now quickly ramping to fill capacity

290Mt/a complete, 360Mt/a wharf in progress


• Infrastructure expansion to 360Mt/a

fully approved and underway

• Expected completion during H1 2015

• Cape Lambert

• All major work packages have

been awarded

• Earthworks complete, civil works

near complete, SMP commenced

• Rail

• All rolling stock contracts awarded

• Duplication earthworks and track

construction complete

• Full commissioning by late 2Q ‘14

12

Infrastructure development to 360 Mt/a progressing on target

Cape Lambert Screenhouse 6

Car dumpers 6 & 7 First train at 37.5kp duplication


• A rapid, low- cost pathway to

increase mine production capacity

by more than 60Mt/a by 2017

• Utilises brownfield mine options

opportunities at existing operations

• Silvergrass decision has been

deferred and Koodaideri mine

decision not required in the medium

term

• US$3 billion saving in growth capital

over the next 3 years

• Capital intensity to reduce from mid

$150s/t to $120-130/t (100% basis)

13

Low- cost, brownfields Pilbara growth pathway extracts significant value

Mine capacity potential (average annualised) Million tonnes per annum

225

250

275

300

325

350

375

2013 2014 2015 2016 2017 2018

Example brownfield expansions Indicative Mt/a

West Angelas (approved 13/02/2014) ~6

Yandicoogina ~8

Brockman ~8

Paraburdoo ~7

Nammuldi ~9

Other ~6 – 10

Source: Rio Tinto


Western Turner Syncline - 1

14

Further value opportunities being realised in sustaining tonnage projects

• Western Turner Syncline phase 2

approved in February 2014

• Additional 7Mt/a to replace Tom

Price ore to commence in mid 2015

• A new WTS phase 1 mine plan

allows extension of trucking model

• At least 3 year deferral of primary

crusher construction and linking to

Phase 1 conveyor

• ~$500M in deferred capital

expenditure

• NPV unchanged


• Autonomous Haulage System update

• >130Mt autonomously moved between 2008-2013.

• Improved safety and control

• Reduced truck numbers

• Expect 10-15% increase in effective utillisation in mature operation

• AutoHaul™

• first heavy haul network in the world to be fully automated

• scheduled to be operational in 2015

• Safety, cycle time and capacity improvements

• Eliminating driver changeovers

• High performing teams

• Cohesive culture is fundamental

• United focus, creative solutions and excellent performance

15

Mine of the Future™ programme continues to turn competitive advantage into real business value

Autonomous haul trucks

AutoHaul™


• Relentless focus on safety

• Continual liaison with full range of

key stakeholders

• Drawing greater value through:

• operational performance across

integrated system

• cash costs/ margin management

• on time/ budget growth projects

• sales and marketing strategies

• utilisation of new technology

• Remaining flexible to changing

internal and external environments

16

Proven sector leadership continues to return significant value

Haul truck

News & Politics

Andrew Harding, Rio Tinto - Rio Tinto