LONDON, U.K, Nov. 26 /CNW Telbec/ - Rio Tinto today presents its annual
investor seminar setting out in detail its strategy and growth plans.
Chief executive Tom Albanese and some of his senior management team will
provide additional information to investors on the significant value within
Rio Tinto and how the Group's portfolio of assets and growth options are
exceptionally well placed to benefit from the global rise in demand for metals
Five key value drivers will be outlined:
- An exceptional growth strategy in iron ore and a strong pricing
outlook, with a conceptual pathway to treble production to over
600 million tonnes per annum.
- Positioned as the world's leading aluminium and bauxite producer with
an excellent portfolio of growth projects and a strong market outlook.
Anticipated post tax synergies resulting from the Alcan integration
have been increased by more than 50 per cent from US$600 million to
US$940 million per annum.
- As one of the world's leading copper businesses Rio Tinto has an
impressive pipeline of exciting projects with interests in many of the
world's largest undeveloped mineralisation opportunities. Recent
exploration at the La Granja project in Peru has highlighted the
potential for doubling forecast production to in excess of
500,000 tonnes per annum.
- An increase in the divestment target from at least US$10 billion to at
least US$15 billion following a strategic review.
- A capital management strategy focused on enhancing shareholder returns
from cash flow while providing flexibility for ongoing growth. The
total 2007 dividend will be increased by 30 per cent with a further
annual total increase of no less than 20 per cent in each of the
following two years. This reflects the Board's confidence in
Tom Albanese said: "The rise in global mineral demand is a trend that we
expect to continue for decades because of fundamental demographic and economic
shifts, especially in developing economies like China and India. We believe
that the value in Rio Tinto is yet to be fully reflected by the market.
"We believe we have a better growth pipeline than our competitors, which
puts Rio Tinto in a strong position to supply the metal-hungry world. We have
the people, execution capability and resources to work smarter, faster and
better than our competitors. We also believe our track record of delivery is
unrivalled and we look forward with confidence to a hugely exciting future."
The seminar will be webcast live at 09.00 GMT/20.00 Australian Eastern
Daylight Saving Time on the Rio Tinto website, www.riotinto.com, on Monday, 26
November and available online afterwards. A copy of the presentation as well
as a transcript of the presentation will also be available on the Rio Tinto
Five key value drivers in detail:
1. Exceptional growth prospects in iron ore and strong pricing outlook
- Conceptual pathway to production of over 600 million tonnes per
annum, including 420 million tonnes per annum from the Pilbara.
- US$2.4 billion has been committed to develop the Mesa A and
Brockman 4 iron ore deposits in the Pilbara in Western Australia.
- Targeted additional mineralisation in the Pilbara region of 20 to
30 billion tonnes and 8 to 11 billion tonnes at Simandou in Guinea
(non-JORC compliant Rio Tinto estimates).
- Pilbara rail and port infrastructure secures Rio Tinto's position as
the premier supplier, positioning Rio Tinto to reap maximum benefit
from strong pricing outlook.
- Simandou is a major new, high quality haematite deposit (with a
targeted grade of 65 per cent iron) in proximity to the Atlantic
Basin and the Middle East. Simandou has a potential production
capacity of 70 million tonnes per annum with options to expand to
120 million tonnes per annum and 170 million tonnes per annum in the
future. Feasibility studies are likely to be completed by 2010 with
first production in 2013.
- Demonstrated capability to deliver growth with a compound annual
growth rate in iron ore production of 14.8 per cent over the period
from 1999 to 2007.
2. Number one position in global aluminium with excellent growth and
market outlook following integration of Alcan
- Strong outlook for pricing and demand.
- Post tax synergy target from Alcan integration increased to
US$940 million per annum (up from US$600 million), deliverable by the
end of 2009.
- Enhanced growth options to achieve number one global position in
alumina and retain number one position in bauxite and aluminium.
- Strong fit with strategic focus on the best assets in the aluminium
industry - competitively positioned operations with improving cost
position backed by hydro power.
- Cutting edge technology, global reach and operational expertise to
capitalise on the demand outlook.
- Renewed focus on upstream assets with decision to explore divestment
of the Engineered Products division.
- Attractive growth opportunities in alumina refining with expansions
at Yarwun and Gove and primary aluminium smelting with expansion at
Kitimat in British Columbia, a new smelter in Oman and other projects
in Abu Dhabi, Malaysia and South Africa
3. One of the world's leading copper businesses with an impressive
pipeline of projects
- Low position on cash cost curve.
- Excellent long term growth prospects with interests in many of the
world's largest undeveloped copper targets.
- La Granja in Peru has targeted mineralisation of 4 to 8 billion
tonnes at a copper equivalent grade of 0.5 per cent (a non-JORC
compliant Rio Tinto estimate). The mine has the potential to produce
in excess of 500,000 tonnes per annum, double what was previously
anticipated. It was acquired in 2005 for US$22 million plus a work
commitment of US$60 million. First production is expected in 2014
- Development work on Oyu Tolgoi is progressing well with significant
further exploration potential in Mongolia. Average production is
projected at 440,000 tonnes per annum of copper and 320,000 ounces
per annum of gold over the projected life of the mine.
- Significant extension options in copper, gold, and molybdenum at
Kennecott Utah Copper operations and upside on the Resolution
- Nickel projects in Indonesia and the US offer a pathway to becoming a
top tier global nickel producer.
4. Raising divestment target from at least US$10 billion to at least
US$15 billion following strategic review
- Asset divestment target following the Alcan acquisition raised from
at least US$10 billion to at least US$15 billion following the
completion of a strategic review, which has highlighted approximately
US$30 billion of potential divestments.
- Rio Tinto will explore options for the sale of a shortlist of assets.
These are all good businesses and any sales will be value driven and
dependent on price. The following businesses are included in the
- Rio Tinto Alcan Packaging (previously announced)
- Rio Tinto Energy America (previously announced)
- Rio Tinto Alcan Engineered Products (global)
- Cortez/Pipeline (gold, 40 per cent stake, US)
- Greens Creek (zinc, lead, silver, 70 per cent stake, US)
- Rio Tinto Minerals Talc (Europe, Australia, North America)
- Northparkes (copper/gold, 80 per cent stake, Australia)
- Sweetwater (uranium project, not operational, US)
- Kintyre (uranium project, not operational, Australia)
5. Capital management strategy focused on enhancing shareholder returns
and providing flexibility for ongoing growth.
- The total 2007 dividend will be increased by 30 per cent with a
further annual total increase of no less than 20 per cent in each of
the following two years, reflecting the Board's belief in the
- Estimated post tax US$1.7 billion per annum cash flow enhancement
expected by 2010.
- Financial strength to pursue capital expenditure programme, forecast
at U$9 billion in 2008 and 2009, while maintaining the goal of a
single A credit rating and a commitment not to raise equity as part
of the refinancing of the debt incurred in the Alcan transaction.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK,
combining Rio Tinto plc, a London 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, energy (coal and uranium),
gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore.
Activities span the world but are strongly represented in Australia and North
America with significant businesses in South America, Asia, Europe and
Dial in numbers for conference call at 9am (GMT)
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High resolution photographs available at: www.newscast.co.uk Photos from
today's presentation will be available from 11.45am (UK time) at:
Forward looking statements
This article includes "forward-looking statements". All statements other
than statements of historical facts included in this article, including,
without limitation, any 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), 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 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 article. Rio Tinto expressly disclaims any obligation or
undertaking (except as required by applicable law, the City Code on Takeovers
and Mergers (the "Takeover Code"), the UK Listing Rules, the Disclosure and
Transparency Rules of the Financial Services Authority and the Listing Rules
of the Australian Securities Exchange) to release publicly any updates or
revisions to any forward-looking statement contained herein to reflect any
change in Rio Tinto's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.
Nothing in this article 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.
Subject to the requirements of the Takeover Code, none of Rio Tinto, any
of its officers or any person named in this article with their consent or any
person involved in the preparation of this article makes any representation or
warranty (either express or implied) or gives any assurance that the implied
values, anticipated results, performance or achievements expressed or implied
in forward-looking statements contained in this article will be achieved.
The Directors of Rio Tinto plc and Rio Tinto Limited accept responsibility
for the information contained in this announcement. To the best of the
knowledge and belief of the Directors of Rio Tinto plc and Rio Tinto Limited
(who have taken all reasonable care to ensure that such is the case), the
information contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such information.
Subject to the above, none of Rio Tinto, any of its officers or any person
named in this announcement with their consent or any person involved in the
preparation of this announcement makes any representation or warranty (either
express or implied) or gives any assurance that the implied values,
anticipated results, performance or achievements expressed or implied in
forward looking statements contained in this presentation will be achieved.
The targeted additional mineralisation figures in this announcement are
based on Rio Tinto's exploration and production experience in the relevant
regions, including an assessment of tenure areas using surface mapping,
drilling results and other information. The potential mineralisation is
conceptual in nature - there has been insufficient exploration to define a
mineral resource and it is uncertain if further exploration will result in the
determination of a mineral resource.
For further information:
For further information: Media Relations, London: Christina Mills,
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Office: +61 (0) 3 9283 3627, Mobile: +61 (0) 419 801 349, Media Relations,
Canada: Bryan Tucker, Office: +1 514 848 8511; Investor Relations, London:
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Relations, Australia: Dave Skinner, Office: +61 (0) 3 9283 3628, Mobile: +61
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