REG - Rio Tinto - Investor Seminar-Rio Tinto invests with discipline

Rio TintoAnnouncement

06/12/2023 07:00

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RNS Number : 7931V  Rio Tinto PLC  06 December 2023

 

Notice to
ASX/LSE

 

Rio Tinto invests with discipline to strengthen the performance of assets and grow

6 December 2023

 

Rio Tinto will today hold its 2023 Investor Seminar in Sydney, where it will
update on progress in its long-term strategy of investing with discipline to
strengthen operations, deliver growth in a decarbonising world and continue to
generate attractive shareholder returns.

 

Rio Tinto Chief Executive Jakob Stausholm said: "We strongly believe we are
well positioned in an opportunity rich world. There has never been greater
demand for what we do, from mining to processing, and the work we are doing
today is creating a stronger Rio Tinto for years to come.

 

"The performance at our Pilbara iron ore and Oyu Tolgoi copper operations
shows our path towards becoming best operator, and we are focussed on driving
continuous improvement across our global portfolio. Our people are at the
heart of lifting our performance, and we are continuing to invest time and
energy in building a stronger culture with a learning mindset.

 

"We are making real progress in shaping our portfolio for the future, through
entering new markets like recycled aluminium in North America, developments in
technology and one of the most exciting exploration pipelines we've had for
many years.

 

"Our purpose and long-term strategy make more sense than ever, as we ensure
Rio Tinto remains a strong investment proposition. Profitable growth enables
us to invest for the future while also paying attractive returns."

 

Executives will outline progress made in 2023, a pivotal year for Rio Tinto in
which the Group's Copper Equivalent production is expected to grow 4%. This
included a 5 million tonne uplift from implementing the Safe Production System
at the Pilbara iron ore business, where a further 5 million tonne uplift is
targeted for 2024. The Safe Production System continues to be rolled out
across the Group's global operations to deliver further sustainable production
improvement.

 

Progress in shaping Rio Tinto's portfolio for the future includes:

·      A clear pathway to achieve and sustain mid-term system annual
capacity of 345 to 360 million tonnes from its Pilbara iron ore business,
including a pre-feasibility study underway on the Rhodes Ridge project, the
Pilbara's best undeveloped iron ore deposit

·      Production ramping up from Oyu Tolgoi in Mongolia, which is set
to deliver 500 kt of copper per year on average for the period 2028-2036 1 
(#_ftn1) , becoming a first-quartile copper producer and the world's
fourth-largest copper mine by 2030 2  (#_ftn2)

·      Formation of the Matalco joint venture to give the Group a
leading position in the growing North American recycled aluminium market

·      Announcing today ( )Rio Tinto's estimate of its $6.2 billion
share of capital investment to develop Simandou(( 3  (#_ftn3) ))

 

Rio Tinto's market outlook will highlight how the Group is strategically
well-positioned to capitalise on the expected sustained commodity demand
created by decarbonisation, shifting regional industrial policies and
geopolitics, that is favourable to Rio Tinto's globally diversified portfolio.
 Total copper equivalent commodity demand growth of ~4% CAGR is expected
between 2022 and 2035 under a <2°C scenario 4  (#_ftn4) , with attractive
long-term fundamentals across Rio Tinto's product mix.

 

Rio Tinto's share of capital investment is expected to be around $10 billion
per year from 2024 to 2026, including up to $3 billion per year of growth
investment to meet this demand. The largest investment over the next three
years is expected to be Rio Tinto's equity share of the Simandou project once
approved by the Rio Tinto Board, as spend starts to wind down at Oyu Tolgoi
beyond 2024 with completion of the infrastructure. The remainder will be
focussed on other copper and lithium projects, some of which are yet to be
approved.

 

Rio Tinto remains committed to meeting its ambitious decarbonisation target to
halve Scope 1 and 2 emissions by 2030 on the road to net zero by 2050, and a
well-defined pipeline of initiatives is progressing.

The Group has made project commitments in 2023 which will deliver abatement of
around 2Mt of CO(2)e per year. This includes renewable energy contracts in
Australia and Africa and the transition to 100% renewable diesel at Boron in
California in 2023 and at Kennecott in Utah from 2024.

 

95% of Rio Tinto's Scope 3 emissions stem from customers' processing of its
products. Customers and governments have commitments to reduce their
emissions, but as of today, Rio Tinto estimates a trajectory for those
processing emissions that will reach net zero by around 2060. Rio Tinto is
committing to partner with customers and suppliers to find better ways to
reach their targets and bring them forward by a decade, to reach their targets
by 2050. To do this, the Group is making real and measurable commitments in
the short-term focussed around investments in the development of breakthrough
technologies that will help decarbonise value chains and upgrading ores to be
suitable for these. Detail on these commitments is included in the
presentations for today's Investor Seminar.

 

Rio Tinto has updated its total capital guidance on decarbonisation to $5 to 6
billion for the period to 2030 (previously ~$7.5 billion), including around
$1.5 billion from 2024 to 2026 and weighted to the latter part of the period.
This reflects factors including the use of commercial partnerships outside of
capital expenditure, such as renewable power purchase agreements and biofuel
contracts, to accelerate decarbonisation, and aligning the timing of
investment in the second phase of Pilbara renewable infrastructure to beyond
2030 when it will be needed to support fleet electrification.

 

Production guidance across Rio Tinto's portfolio is being released for 2024,
with Pilbara iron ore shipments (100% basis) of 323 to 338 million tonnes, as
announced at the Pilbara Site Visit in October.

 

 Production guidance - Rio Tinto share unless otherwise stated  2023                   2024
 Pilbara iron ore 5  (#_ftn5)  (shipments, 100% basis) (Mt)     320 - 335 6  (#_ftn6)  323 - 338
 Copper                                                         590 - 640              660 - 720

 Mined copper 7  (#_ftn7) (consolidated basis) (kt)             160 - 190              230 - 260

 Refined copper (kt)
 Aluminium                                                      54 - 57 8  (#_ftn8)    53 - 56

 Bauxite (Mt)                                                   7.4 - 7.7              7.6 - 7.9

 Alumina (Mt)                                                   3.1 - 3.3              3.2 - 3.4

 Aluminium (Mt)
 Minerals

 Titanium dioxide slag (Mt)                                     1.1 - 1.4(8)           0.9 - 1.1

 IOC pellets and concentrate 9  (#_ftn9) (Mt)                   9.3 - 9.8              9.8 - 11.5

 Boric acid equivalent (Mt)                                     ~0.5                   ~0.5

 

 Capex guidance                                       2023                        2024-2026

                                                                                  (per year)
 Total Group 10  (#_ftn10)                            ~$7.0bn                     ~$10.0bn
 Growth capital                                       ~$1.0bn(( 11  (#_ftn11) ))  Up to $3bn
 Sustaining capital                                   ~$4.0bn                     ~$4.0bn
      Including Pilbara Sustaining 12  (#_ftn12)           ~$2.0bn                     ~$1.8bn
 Replacement capital                                  ~$1.7bn                     ~$2 to $3bn
 Decarbonisation capital                              ~$0.15bn                    ~$1.5bn cumulative(( 13  (#_ftn13) ))

 

The presentation slides and the live webcast, which begins at 0500 GMT | 1600
AEDT, can be accessed at https://www.riotinto.com/en/invest/investor-seminars
(https://www.riotinto.com/en/invest/investor-seminars) .

 

 

 

Contacts

Please direct all enquiries to media.enquiries@riotinto.com

 

 

 

 Media Relations,        Media Relations,               Media Relations,
 United Kingdom          Australia                      Americas

 
 
 

 Matthew Klar            Matt Chambers                  Simon Letendre

 M +44 7796 630 637      M +61 433 525 739              M +1 514 796 4973

 David Outhwaite         Jesse Riseborough              Malika Cherry

 M +44 7787 597 493      M +61 436 653 412              M +1 418 592 7293

                         Alyesha Anderson               Vanessa Damha

                         M +61 434 868 118              M +1 514 715 2152

                         Michelle Lee

                         M +61 458 609 322

 Investor Relations,     Investor Relations,
 United Kingdom          Australia

 
 

 Menno Sanderse          Tom Gallop

 M +44 7825 195 178      M +61 439 353 948

 David Ovington          Amar Jambaa

 M +44 7920 010 978      M +61 472 865 948

 Laura Brooks

 M +44 7826 942 797

 Rio Tinto plc           Rio Tinto Limited

 
 

 6 St James's Square     Level 43, 120 Collins Street

 London SW1Y 4AD         Melbourne 3000

 United Kingdom          Australia

 T +44 20 7781 2000      T +61 3 9283 3333

 Registered in England   Registered in Australia

 No. 719885              ABN 96 004 458 404

This announcement is authorised for release to the market by Andy Hodges, Rio
Tinto's Group Company Secretary.

 

 

 

 

 

 

riotinto.com

 1  (#_ftnref1) This production target (stated as recoverable metal) for the
Oyu Tolgoi underground and open pit mines for the years 2028 to 2036 was
previously reported in a release to the Australian Securities Exchange dated
11 July 2023 "Investor site visit to Oyu Tolgoi copper mine, Mongolia".
All material assumptions underpinning that production target continue to
apply and have not materially changed.

 2  (#_ftnref2) Source: Wood Mackenzie. Dataset Dec 2022, based on production
from committed projects.

 3  (#_ftnref3) Refer to release dated 6 December 2023 and titled "Simandou
iron ore project update" at www.riotinto.com/news/releases. The final
sanctioning of the project by the Rio Tinto Board is subject to a number of
remaining conditions being met, including joint venture partner and regulatory
approvals from China and Guinea.

 4  (#_ftnref4) Copper equivalent demand uses average annual prices from
2018-22 with finished steel demand in iron ore equivalent units. Energy
Transition demand calculated on a gross basis. Based on Rio Tinto's
Competitive Leadership scenario.

 5  (#_ftnref5) Pilbara shipments guidance remains subject to weather, market
conditions and management of cultural heritage.

 6  (#_ftnref6) In the upper half of the range.

 7  (#_ftnref7) Includes Oyu Tolgoi on a 100% consolidated basis and
continues to reflect our 30% share of Escondida.

 8  (#_ftnref8) In the lower end of the range.

 9  (#_ftnref9) Iron Ore Company of Canada.

 10  (#_ftnref10) Including Simandou.

 11  (#_ftnref11) We expect our share of investment in Simandou to be around
$0.2 billion in H2 2023.

 12  (#_ftnref12) Subject to ongoing inflationary pressure.

 13  (#_ftnref13) Weighted towards the latter part of the period.

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