Rio Tinto Iron Ore

3 September 2015
Economics & Markets
Iron Ore
Iron Ore Seminar
Sales & Marketing
Technology & Innovation
Cautionary statement
This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (Rio Tinto). By accessing/attending this presentation you
acknowledge that you have read and understood the following statement.
Forward-looking statements
This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Rio
Tinto Group. These statements are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, and Section
21E of the US Securities Exchange Act of 1934. The words intend, aim, project, anticipate, estimate, plan, believes, expects, may,
should, will, target, set to or similar expressions, commonly identify such forward-looking statements.
Examples of forward-looking statements include those regarding estimated ore reserves, anticipated production or construction dates, costs,
outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors set forth in this presentation.
For example, future ore reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect
the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our
products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency
exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and
political uncertainty.
In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied
by these forward-looking statements which speak only as to the date of this presentation. Except as required by applicable regulations or by law,
the Rio Tinto Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new
information or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results. In this
presentation all figures are US dollars unless stated otherwise.
Disclaimer
Neither this presentation, nor the question and answer session, nor any part thereof, may be recorded, transcribed, distributed, published or
reproduced in any form, except as permitted by Rio Tinto. By accessing/ attending this presentation, you agree with the foregoing and, upon
request, you will promptly return any records or transcripts at the presentation without retaining any copies.
This presentation contains a number of non-IFRS financial measures. Rio Tinto management considers these to be key financial performance
indicators of the business and they are defined and/or reconciled in Rio Tintos annual results press release and/or Annual report.
2015, Rio Tinto, All Rights Reserved
JORC Code references are to the Australasian Code for Reporting of Exploration Results, Minerals
Resources and Ore Reserves, 2012 Edition.
Mineral Resources and Ore Reserves

Details of the Pilbara Mineral Resource and Ore Reserve estimates from 2006 to 2014 which appear on slide
66 of this presentation are set out in the Rio Tinto Annual Reports for those years. The references in the chart
on that slide to the 2014 estimate of Rio Tintos Mineral Resources and Ore Reserves base in the Pilbara are
an aggregation of estimates as at 31 December 2014 that were previously reported in accordance with the
JORC Code on pages 199 and 204 of the Rio Tinto 2014 Annual Report dated 4 March 2015 and released to
ASX on 6 March 2015, and in respect of those Mineral Resources or Ore Reserves for which the information in
relation to the relevant criteria in Table 1 of the JORC Code is required, this information is found at
www.riotinto.com/JORC.
Rio Tinto confirms that it is not aware of any new information or data that materially affects the Mineral
Resource and Ore Reserve information on slide 66, that all material assumptions and technical parameters
underpinning those estimates continue to apply and have not materially changed, and that the form and
context of the Mineral Resources and Ore Reserves has not been materially modified. Details of the
Competent Persons responsible for that previous reporting are set out below.
Competent Persons
To the extent that information on slide 66 of this presentation relates to the Pilbara Mineral Resources, it was
prepared by Mr Bruce Sommerville, a Competent Person who is a Fellow of the Australasian Institute of Mining
and Metallurgy. To the extent that information on slide 66 of this presentation relates to the Pilbara Ore
Reserves, it was prepared by Mr An Do, a Competent Person who is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Sommerville and Mr Do have overseen the aggregation of the Mineral Resources
and Ore Reserves data for inclusion in this presentation.
Messrs Sommerville and Do are full-time employees of Rio Tinto Iron Ore and have sufficient experience that
is relevant to the style of mineralisation and type of deposits under consideration and to the activity which each
has undertaken to qualify as a Competent Person as defined in the JORC Code. Messrs Sommerville and Do
consent to the inclusion in the report of the matters based on their information in the form and context in which
it appears.
Production Targets
Production targets for 2017 for our Pilbara operations and Iron Ore Company of Canada
appear in this presentation.
For our Pilbara operations, slide 25 states Pilbara integrated production system is
expected to deliver 350 Mt in 2017. This production target is underpinned as to 71% by
proved ore reserves, and as to 25% by probable ore reserves, and as such 96% of the
production target is based on ore reserves. The remaining 4% of the production target is
sourced from identified inferred mineral resources within the detailed pit designs. There is
a low level of geological confidence associated with inferred mineral resources and there
is no certainty that further exploration work will result in the determination of indicated
mineral resources or that the production target itself will be realised.
For our Iron Ore Company of Canada operations, slide 35 states Nameplate Capacity of
23 Mtpa concentrate to be achieved in 2017. This production target is underpinned as to
61% by proved ore reserves, and 39% by probable ore reserves.
The above 2017 production targets are based on internal modelling of integrated supply
plans derived from the relevant estimates of mineral resources and ore reserves, which
have been prepared by Competent Persons in accordance with the requirements of the
JORC Code, scheduled from within the current pit designs. Pit design, ore scheduling and
economic assessments, which form the basis of the production target are based on
detailed studies using the actual operating performance of our existing mines, processing
plants and infrastructure as the basis of the assumptions. These studies include
assessment of mining, metallurgical, ore processing, marketing, government, legal,
environmental, economic and social factors.
3 September 2015
Economics & Markets
Introduction
Andrew Harding, chief executive, Iron Ore
Iron Ore
Sales & Marketing
3 September 2015
Economics & Markets
Iron Ore
Iron ore demand

fundamentals
Vivek Tulpule, head of Economics & Markets
Sales & Marketing
Rio Tinto Economics & Markets
Independent advice
Extensive data collection
Report to CFO
Primary research
Independent from Product Groups
Internal and external resources
Risk and scenario analysis
Fundamental demand and supply

analysis
Rigorous testing of results
Understand and quantify uncertainty
Proprietary cost curves

Detailed sectoral country modelling
Chinas transition toward high-income status

involves a structural transition to slower growth
Chinas New Normal
Demographic
Transition
Slowing
Urbanisation
Growth
Greater
emphasis on
services and
consumption
Tapering of
Capital
Intensive
Investment
Higher Value
Added
Production
Relationship
between
China and
other
Emerging
Markets
Continued global iron ore demand

Moderate growth in iron ore demand
Global steel demand grows by 2.5% pa,

versus GDP growth of 3.0%
Total iron ore demand (million tonnes)

3,000
2.0%
CAGR
Chinese steel demand is evolving with an

increasing focus on exports
2,500
Increasing importance of emerging

3.4%
markets beyond China, especially in Asia
Other Emerging
Markets
2,000
The world will need 3 billion tonnes of iron

ore by 2030, that is a growth rate
of 2%
0.6%
1,500
New supply will0.1%

be required
China
1,000
Over 50% of the additional supply will be

delivered through the seaborne market
12.2%
500
Developed Economies
0
2010
2015
2020
2025
2030
Source: Rio Tinto

10
Robust growth in rest of world demand

Rest of World (ex-China) steel demand
Crude steel production (million tonnes)
1,500
1,250
Sectors
Regions
Other manufacturing
Other transport
Shipbuilding
Machinery
Automotive
Construction
Emerging Asian
Economies
1,750
Other
Emerging
Markets
1,000
750
OECD
Economies
500
250
2010
2015
2020
2025
2030
Process of industrialisation and

urbanisation in the rest of world will be
highly steel intensive
Rest of world steel demand to increase

by 65% by 2030
Indias share of rest of world demand will

double from 10% by 2030
In 2030, China remains the largest

demand region, followed by India and
then ASEAN
Construction of commercial and

residential buildings and infrastructure
supports Chinese exports of finished
steel and machinery
2030
Note: Crude steel production basis and does includes steel trade
11
China steel growth will continue

Maturing domestic steel demand
Crude steel production expected to

reach around 1 billion tonnes by 2030
1,000
Growth in capital stock is slowing

leading to a declining demand for steel
to support growth
Replacement of capital stock will

maintain current levels of Chinese
domestic consumption
Growing global markets generate

demand for manufactured exports
containing steel (e.g. machinery, cars)
Steel exports to be maintained at current

levels though with a declining global
share (e.g. flat and long products)
Crude steel production (million tonnes)
800
600
400
200
2000
2005
2010
2015
Net Steel Exports

Replacement of Capital Stock
2020
2025
2030
Exports of Finished Goods

Additional Capital Stock
Source: Rio Tinto

Chinese steel demand based on detailed

analysis
Building
12
Infrastructure
Highways
Urban Residential
Rural Residential
Rail
Subway
Non-Residential
Machinery
Petrochemical
Agricultural
Public Facilities
Transport & Other

Autos
Construction
Mining Equipment
Shipping
Consumer Durables
Power Generation
Other
Finished Steel Consumption
13
Case study I: Residential steel demand

GDP per capita
Population
Typical ~30 storey high rise
Superstructure
Basement
Foundation
Source: Rio Tinto
Steel
Intensity
Floor Space
Steel
50 kg/sqm
120,000 sqm
6,000 t
175kg/sqm
50,000 sqm
8,750 t
Regulation
Building height
Seismic rating
High strength rebar substitution
Car penetration
Prefabricated concrete
Case study II: Residential replacement demand
New-build urban residential intensity
By 2030, nearly 25% of the current

urban residential building stock will be
demolished and rebuilt
The average life of an urban residential

building in 1980 was 37 years
In 1980, 65% of urban residential

buildings completed were 1 storey and
around 5% above 7 storeys
By 2030, a third of the buildings

completed will be above 7 storeys
Newly built residential will be more steel

intensive than those they replace
Kg / square metre
100
14
50
Tier I
Tier III
2000
2015
2030
Source: Rio Tinto

15
Case study III: Automobile steel demand

China automobile saturation
500
400
300
Italy
Passenger cars per thousand people
600
Canada
Spain
Japan
Australia
Germany
France
UK
USA
China Forecast
South Korea
China passenger vehicles rise by 280

million from 2015 - 2030, a nearly threefold increase
The typical steel in a passenger vehicle

is currently ~900kg
Passenger vehicles are replaced on

average every 15 years, buses every 12
years and trucks every 8 years
By 2030 over 20 million cars a year will

need to be replaced
200
100
China 2015
GDP per capita at peak passenger vehicles
10,000
20,000
30,000
40,000
Source: World Bank, OICA, Rio Tinto calculations
50,000
Obsolete Chinese scrap triples in fifteen years

and will displace some iron ore requirements
16
Chinese scrap supply

Million tonnes
250
Scrap produced
at mills
Home
Prompt
200
Offcuts from
manufacturing
Obsolete
150
100
Other
Autos
Power Generation
Urban
Residential
50
2015
2020
2030
Source: Rio Tinto

17
China steel demand growth consistent with

international experience
Substantial steel potential for developing Asia
Global steel stock per capita (tonne/capita)
South Korea
Japan
Russia
Taiwan
Germany
G7 Average
China 2030
United States
Canada
Italy
United Kingdom
Australia
Netherlands
France
Poland
Spain
China
Brazil
Malaysia
Mexico
Thailand
India
Vietnam
Indonesia
Philippines
China steel intensity to increase at slowing rate

Global crude steel intensity per capita (Kg/capita)
1,200
South Korea
Forecast
1,000
Japan
Taiwan
800
China
Germany
600
United States
2030
400
India
200
2014
10
France
Historical Peak
15
20
Source: World Steel, Maddison, Correlates of War, E&M forecasts and calculations
Vietnam
0
5,000
GDP per capita
10,000 15,000 20,000 25,000 30,000
Source: World Steel, Maddison, Correlates of War, Global Insight, E&M China
Forecasts
Note: Stylised intensity curves
18
Summary
The world will need increasing volumes of iron ore: 2.0% CAGR 2015-2030
Emerging markets, other than China, will play an increasingly significant role
in the iron ore market with demand expected to increase by 65%
Continued modest Chinese steel production growth to 2030
Growing role for replacement of capital stock and exports to other emerging
markets
3 September 2015
Economics & Markets
Iron Ore
Sales & Marketing
Delivering value through the cycle

20
The worlds best iron ore business

Underpinned by a comprehensive strategy that drives compelling value:
Production at the right cost
Value-driven growth
Maximising portfolio value
Safest and lowest cost production

through unrivalled technology
and high performing teams
Disciplined phasing and low

cost quality growth options
Leveraging our portfolio of

growth options, product strategy
and sales and supply chain
capabilities
Examples:
Operating excellence
Increasing automation
Examples:
Benchmark product quality
System capacity creep
Examples:
Sales & marketing expertise
Product and development
synergies
Personal safety, health and well-being is a

fundamental business priority
21
Iron Ore all injury frequency rate

Per 200,000 hours worked
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
'05
Note:
'06
'07
'08
'09
'10
'11
'12
'13
'14 YTD'15
Year to date 2015 is January to end of July.

22
Consistently delivering value

Operating costs
have been reduced
by almost $1 billion
compared to 2012
Staged Pilbara
infrastructure
expansion
completed at
capital intensity
of ~$105/t
Iron ore
workforce
+15,000 people
delivering 1
million tonnes of
ore per day
More than 400

million tonnes of
material moved by
autonomous
trucks in the
Pilbara
Maintaining the
lowest first quartile
cost position in the
industry at
US$16.20/t
IOC concentrator
expansion project
complete record
concentrate run
rate of 21.5 Mt/a in
July 2015
23
The Pilbara - a fully integrated system

Leading edge technology
~30TB analysed by the OC per month
~5TB added by Library of Congress per month
1
Drill & Blast
> 12,000 kilometres

drilled each year
Load & Haul
~1 billion tonnes
rock moved per year
Process
> 400 kilometres of

conveyors
across the Pilbara
Rail
> 15,000 kilometres

rail travel per day
Ship
> 300 million tonnes

ore shipped annually
RUSSIA
Equivalent to the
diameter of the earth
Enough to fill the MCG

every two days
8 times the length of Almost a return trip on the Cargo shipped through
the Channel Tunnel
Trans-Siberian railway
the Panama Canal
Note: approximate comparative estimates based on publically available information

24
producing a suite of world-class iron ore

products, including our flagship Pilbara Blend
Ore group
Mines
Ore-types
Banded Iron Formation derived Iron Deposits

Paraburdoo
(inc. Channar
Eastern
Range)
B
Brockman 2
Brockman 4
Hope Downs 4
Products
Lump (L) & Fines (F)
Ore-types
B = Brockman Iron Formation
MM = Marra Mamba Iron Formation
PIS = Yandicoogina pisolite
PIS = Robe Valley pisolite
Mt Tom
Price (Inc.
WTS)
B
Channel Iron Deposits
Marandoo
Nammuldi
MM
MM
West
Angelas
Hope
Downs 1
Yandicoogina
Mesa
A&J
MM
MM
PIS
PIS
HIY
F
Robe Valley
Pilbara Blend (PB)

L&F
Product
Fe (dry basis)
Moisture
Pilbara Blend Lump
62.5%
4.0%
Pilbara Blend Fines
61.5%
9.0%
Robe Valley Lump
57.5%
6.5%
Robe Valley Fines
57.0%
7.5%
Yandicoogina Fines (HIY)
58.5%
9.0%
L&F
25
Growth infrastructure complete, with brownfields

continuing to supply near-term volume
40 Mt of brownfields completed at
average capital intensity of $9/t
Debottlenecking and productivity
improvements continue
Pilbara integrated production system

expected to deliver
Nammuldi feed bins
335 Mt in 2016
350 Mt in 20171
Nammuldi incremental investment
5 Mt/a, commencing 2015/16
5 Mt/a, commencing in 20172
Nammuldi concentrator
Access low phosphorous ore for

Pilbara Blend at ~US$19/t capital
intensity
This production target must be read in conjunction with the supporting information and cautionary statement that there is a low level of geological confidence
associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that
the production target itself will be realised set out on slide 4. 2 These 5 Mt are included in the 2017 production target of 350 Mt for the Pilbara referred to above.
1
Further high value tonnes from Silvergrass
26
Nammuldi incremental investment

also allows for:
Silvergrass dewatering
infrastructure
Nammuldi below water table
plant expansion from 21- 42 Mt/a
Full Silvergrass mine development:
Remains subject to approval in
2016
Additional mining capacity
Crusher and overland conveyor
Associated support infrastructure
Operating costs significantly
reduced
27
Unlocking value
Releasing
working capital
Reducing
costs
Improving
productivity
>20% reduction in
mine stocks
Renegotiation with
key suppliers
12% increase in
labour productivity
Inventories at mines reduced by

4.5 Mt to 14.5 Mt, improving working
capital
Contract renegotiations delivering

savings and improved payment terms
Lower head count and increased

volumes improved productivity
24% reduction in
warehouse
inventory
5% reduction in
contractor and
consultant spend
Improved
maintenance
tactics
Warehouse spares reduced by

managing lead times and reducing
bulk stocks
Reduction saved A$32m
Resulted in higher asset availability

delivering productivity improvements
28
Sustaining a competitive advantage

Pilbara cash unit cost
US$ per tonne
-32%
23.9
20.2
19.5
16.2
H1 2015 cash unit cost of US$16.2/t

(13% lower than $18.7/t in H2 2014)
Attractive FOB EBITDA margin at
61% in H1 2015
Iron ore has delivered almost
$1 billion in cost savings since 2012
Pilbara results
H1 2015 vs H1 2014
H1 2015 H1 2014 Change
FY2012
FY2013
FY2014
Shipments
(Million tonnes, 100%)
146.5
136.1
8%
FOB EBITDA margin

(%)
61%
70%
-9%
Underlying earnings
(US$ million)
2,158
4,570
-53%
H1 2015
29
Pilbara H1 2015 financial summary

Pilbara net earnings reconciliation
US$ million
7,004
(353)
(620)
4,059
(1,972)
(846)
(1,055)
Revenue 1
Freight expense
Royalties
Pilbara unit cash costs
Operating costs (US$ million)

Tonnes shipped
(million tonnes)
Pilbara unit cash costs

(US$/t)
1,972
122.0
16.2
Operating costs
EBITDA
Depreciation
& amortisation
Tax & other
2,158
Net earnings
Other
11%
Employee
costs 36%
Fuel & energy

13%
Materials 19%
Contractor &
external
services 21%
Sales revenue of $7,004 million includes freight revenue of $372 million.
Pilbara unit cash costs $/tonne calculation is based on the equity share of tonnages of 122 Mt. Please
see appendix for reconciliation to 100% production data.
1
2
Reducing contractor and employee costs has

delivered significant benefits in unit costs
30
Pilbara cash unit cost

US$ per tonne
20.4
17.5
(2.9)
H1 2014
FX Impact
Restated H1 2014
(1.2)
(0.6)
Employee Costs
Contractor Costs
0.5
16.2
Other Costs
H1 2015
Pilbara unit cost of $16.2/tonne shipped benefitted from:

Favourable exchange movement
Improved labour productivity by 12% in H1 2015 (shipped tonnes/FTE)
5% reduction in contractor and consultant spend
Our Operations Centre enables us to optimise

for tonnes, quality and value
31
Capability enables real-time visibility of entire value chain and powerful forward planning
Real time analytics

reducing system
variability
Ensuring a consistently
high-quality product
Debottlenecking and
rapid response to events
and disruptions
Maximising the value of our assets

Operational and commercial excellence is

embedded across the business
Iron ore material
Rehandle reduced
by 16 Mt in 2014
Heavy Equipment
Life Extension
$200 million in capital

deferrals
HME contracts
consolidation
FasTrack 35
35 hrs cycle time target

Cycle time improvement
to date ~11.0% & aiming
for ~20%
Tyre management
- $16 million tyre
inventory reduction
- $10 million supply
volume reduction
32
$55 million in rebates
Brockman train
loading
100 minute reduction

in train loading time
at Brockman 2
Autonomous fleet continues to expand bringing

significant productivity improvements
33
Autonomous Haul Trucks Performance

Effective utilisation indexed to all manned sites
120%
110%
100%
90%
80%
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Yandicoogina primary haul

fleet now entirely autonomous
(22 trucks across 2 pits)
Autonomous Drills Performance

Use of availability versus manned fleet
1.0
0.8
0.6
West Angelas first fully

autonomous drilling site
0.4
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
34
Nearly 400 improvement initiatives underway

Mindful spending and improvement culture
Production at the right cost Improving the work place
Operations centre upskilled themselves to enable in-housing
support of two radio platforms, avoiding a contractor cost of
$365,000
Paraburdoo employees challenged vendor tool allowance, realising
a credit of $25,000 for Paraburdoo and $145,000 across the Pilbara
Work simplification
Making it count Ensuring all work adds value through waste
elimination
Tom Price haul truck service kaizen reduced the 5.5 hour truck
service time by 2 hours
Rail track portable web grinders 75% task time reduction

reducing re-handling risk
Iron Ore Company of Canada continues to

improve performance
Iron Ore Company of Canada production
Million tonnes
8.9
35
Monthly production record in July 2015,

with 21.5 Mt/a concentrate run-rate
Nameplate capacity of 23 Mt/a
concentrate to be achieved in 20171
4.6
Concentrate unit cash cost:

+18%
7.6
+13%
4.0
$39.2/t in H1 2015
Down by 26% (H1 2015 vs. H1 2014)
2016 target is $30/t
Forecast to be cash positive in 2015
IOC price premiums remained robust

despite the decline in the fines price
H1 2014 H1 2015
Concentrate (Mt)
1
H1 2014 H1 2015
Pellets (Mt)
This production target must be read in conjunction with the supporting information set out on slide 4.
Making a positive and lasting difference in our

local communities
36
An unfaltering commitment to the

local communities that host our
operations
Key initiatives in education, health,

environment, culture and regional
sustainability
Partnering with State and local/
provincial government to enhance
community infrastructure and
services
Direct employment of over 1,000
Indigenous Australians
Sourcing a 1,000 strong regional

workforce through fly-in/fly-out
37
Summary
The safety and wellbeing and development of our people is paramount
Operational excellence continuing to drive productivity improvements
Maintaining a low cost industry position is embedded at all levels
Technology and automation continue to increase value
Sales and marketing excellence captures full value from our product suite
Word-class integrated system of mining, logistics and marketing
3 September 2015
Economics & Markets
Iron Ore
Sales & Marketing
Maximising value
Bold Baatar, managing director, Iron Ore Sales & Marketing and Marine
Our sales and marketing capabilities maximise

the value of our products
Industry
knowledge
A deep understanding of markets and

the steel industry
Product
alignment
Aligning our resource base with customer needs

over the long term to maximise product value
Strategic agility
Continuous development of marketing strategy,

competencies and excellence in tactical execution
Supply chain
optimisation
Maximising supply chain capacity utilisation

and value
39
Steel production has been resilient in 2015

Majors accounted for ~47% of 2014 supply
40
Global steel production is broadly flat

Million tonnes annualised
Percentage of contestable iron ore market
1,700
17%
20%
7%
17%
~1.7
14%
billion
tonnes
9%
Rio Tinto
BHP
Vale
16%
FMG
China
Non-traditionals 1
Rest of world 2
= 47%
= 53%
Domestic ore consumption*

Imported ore consumption
Domestic share (3MMA, RH axis)
800
400
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
1H14 H2-14
2H14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
H1-14
Chinas steel exports offsets domestic consumption

100%
1,200
Mar-14
1,620
1,600
0
0
Dec-13
1,660
1,640
Chinas imported ore has remained steady

1,600
1,680
1,000
80%
800
60%
600
40%
400
20%
200
0%
* Total Iron ore requirements imported ore consumption

Source: Company reports, GTA, WSA, Mysteel and Rio Tinto analysis.
1 Non-traditionals include Russia, Malaysia, Iran, Mexico and Indonesia.
2 RoW includes Africa, South America, Europe, Canada and India.
China steel consumption
China steel net exports
1H14 H2-14
2H14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15
H1-14
41
We expect ~120 Mt/a of marginal iron ore supply to

exit the market in 2015
China domestic supply down ~45 Mt/a YoY
Average annualised run rates (Mt/a)
National Total
350
100
Shanxi
50
100
50
Inner
Mongolia
100
Exits annualised by region
Liaoning
100
50
High-cost seaborne supply down ~75 Mt/a YoY
300
100
50
250
RoW
Hebei
CIS
75
0
100
50
100
Europe
Anhui
Canada
50
Southwest
50
0
100
2014 run rate (Mt/a)
India
50
0
100
Iran
Shandong
West Africa
25
Brazil
Other
Provinces
50
0
H1 2015 run rate (Mt/a)

Source: RTIO S&M Analysis, SMM, Mysteel, Company Reports
Australia
2014
2015*
*2015 reflects seasonally adjusted H1-2015 delivered supply (annualised)
~110 Mt of low-cost supply expected to enter in 2015, offset by stock movements and exits:
~45 Mt/a of exits from China: H1 2015 iron ore production ~280 Mt/a (325 Mt in 2014)
~75 Mt/a of exits from high-cost seaborne supply
~45 Mt/a of additional seaborne supply at risk

42
Customers value products differently

Technical
Type of steel product produced
Size of blast furnace or sinter plant
Quality of metallurgical coal
Stockpile and blending capacity
Mill flexibility to vary sinter, pellet

and lump charge
Geographical
Delivered costs and availability of

fuels and fluxes
Seasonal factors
Availability, cost and quality of

alternatives ores
Commercial
Regulatory
Purchasing strategies including:
Environmental exposure
Security of supply (contract

duration, spot purchases)
Energy caps/limitations
By-products value or disposal costs
Flexibility within quality, credit or

logistics constraints
Own iron ore investments

43
Our Pilbara products are aligned to our

resource base and customer needs
Product
Strengths
Pilbara Blend The most traded iron ore product globally

Fines
Base load sinter blend in Asian markets
Pilbara Blend Avoids the costs of sintering which will
Lump
increase with increasing emissions legislation
HIY Fines
Ideal chemical composition for the Asian sinter

blends, with low alumina and phosphorus
Coarse sizing aids sinter granulation
Robe Valley
Fines
Coarse sizing aids sinter granulation

Low phosphorus
Robe Valley
Lump
Low phosphorus
Avoids the costs of sintering which will
increase with increasing emissions legislation
H1 2015 shipments by product

Percentage
100%
80%
60%
40%
20%
0%
China
PBF
Japan
PBL
Korea,
Taiwan
RVF
RVL
% of volume
HIY
Pilbara Blend is the industry reference iron ore

Major iron ore fines products
44
Major iron ore lump products
H1 2015 (million tonnes)
H1 2015 (million tonnes)

45
80
PBF
70
PBL
40
35
60
30
50
25
40
30
20
HIY
15
20
10
0
10
RVF
RVL
Rio Tinto
Peer 1
Peer 2
Peer 3
Rio Tinto
Peer 1
Peer 4
Source: RTIO S&M Analysis, Company Reports

Lump is an important value driver for Rio Tinto

Lump is a higher value product
US$ per dry metric tonne (CFR)
100
Premium lump products remain in

scarce supply
Rio Tinto is the largest supplier of

lump with 40 Mt of Pilbara Blend lump
and Robe Valley lump shipped in H1
2015
The Platts lump premium averaged

~$13/dmt above the 62% Fe index
over H1 2015
Lump demand in China should

outperform iron ore growth due to:
80
Ave, 73.0
60
Ave, 60.4
40
45
Exit of domestic concentrate
20
Evolving burden practises

0
Increased environmental regulation

Platts 62% Fe fines
Plus platts lump

premium
Source: Platts - H1 2015 averages
46
Blending significantly reduces variability

Mines
Mesa J
Port Terminals Products
Stockpile stacking and reclaiming
RVL
Mesa A
Cape
Lambert A
Yandicoogina
RVF
HIY
HIY
West Angelas
Cape
Lambert B
Hope Downs 1
PBL
PBF
Nammuldi
Marandoo
Parker Point
Brockman 4
PBL
PBF
Alumina
66% improvement
Silica
70% improvement
Phosphorus
80% improvement
Mt Tom Price
Paraburdoo
Hope Downs 4
EII
Brockman 2
PBL
PBF
Pisolite
Marra Mamba
Brockman
Ship
Mine/Rail
Product quality - variance from mean (2014)

Consistent supply and quality supports our

marketing strategy
2015 Pilbara off-take by pricing mechanism
Portfolio focused on long-term contracts

with the worlds top 50 steel companies
Of our 2015 volume:
Percentage of total sales

Spot
15%
~85% sold under term contracts
Q Actual
4%
~15% sold into the spot market, in

support of robust and transparent
indices
Monthly
60%
Q Lagged
21%
47
Steel production - worlds top 50 steel mills

Million tonnes
750
500
250
0
Asia
Europe/CIS
With Rio Tinto supply contracts

Source: World Steel, Rio Tinto
Americas
ROW
Without Rio Tinto supply contracts
Fully automated iron ore port laboratory at Cape Lambert B

ensures world class analysis and sampling
Australias delivered cost advantage to China

H1 2015 freight component of the
Platts 62% Fe price
48
Dry bulk shipments
100%
8%
19%
80%
92%
81%
60%
0%
Brazil
Source: Platts, BCI
FOB
Australia
Freight
A standard vessel round trip of load port, to China, and back to load port is ~3 x longer
for Brazil compared to Australia (~90 days compared ~30 days)
Australias proximity advantage will be more significant as oil prices recover
Capesize bulkers continue to be the preferred vessel size by the industry with 20% of
Pilbara-suited vessels now with a capacity of >200,000 tonnes
Delivering value through management of the

port to customer supply chain
Rio Tinto Pilbara Shipments
Value created through
Million tonnes
300
CFR
250
FOB
200
162
109
82
100
135
127
64
2013
2014
H1 2015
Rio Tinto Pilbara H1 2015 freight procurement

Percentage of total
Price maximisation
Supply chain efficiency
Product placement flexibility
150
50
49
Period
contract
31%
Located in Singapore
Co-located with Rio Tinto marine and
other product groups
Close to proximity to markets
World class logistics
Close communications with:
Spot
46%
Account management
Own
vessels
7%
Term
voyage
charter
16%
Ship scheduling and chartering

Operations
50
Commercial excellence captures full value

H1 2015 absolute price comparison:
vs BHP2
vs FMG3
vs Vale4
(US $/wmt FOB)
(US$/dmt CFR)
(US $/wmt CFR)
5.0
2.1
3.4
62%Fe index1
5.0
5.0
2.0
1.8
-5.0
-5.0
-5.0
-10.0
-10.0
-10.0
-15.0
-15.0
-20.0
-20.0
BHP
RTIO
-12.4
-7.1
-15.0
-20.0
FMG
RTIO
Vale
RTIO
1 Source:
Platts, The Baltic Exchange. For the BHP comparison, the index has been adjusted to FOB basis by assuming BCI C5 (WA-Qingdao) and 8% free moisture.
BHP Billiton Results For the Year ended June 30 2015, page 8.
3 Implied weighted average of FMG half yearly results (Full Year (YEJ): $57/dmt CFR; First Half: $66/dmt CFR). FMG 2015 Annual Report, page 29. FMG Financial Report for half
year ended 31 December 2014, page 5, 6.
4 Weighted average of Vale Quarterly Financial Results. Iron Ore fines CFR/FOB realised price (ex-RoM & Pellets). Vale's Q2 2015 Earnings Release, page 25, 27.
2
51
Summary
Supplier of choice to the Asian steel industry
Full offtake and close management of credit exposures
Value-maximising mix, aligned to customer needs and our resource base
Optimising our market placement through segmentation
Delivering value through alignment between Marine and Iron Ore
Higher average FOB price than other Pilbara producers
3 September 2015
Economics & Markets
Iron Ore
Sales & Marketing
Advancing productivity at
Rio Tinto
Greg Lilleyman, group executive, Technology & Innovation
T&I delivers world-class projects and step

change productivity
World-class projects
World-class productivity
Project Shaping: project shaping

and strategic production planning
Productivity Generation:
productivity, innovation and
analytics
Major Project Delivery: delivery of

world class projects
Capital Effectiveness: optimising
portfolio and delivering
best-in-class capital efficiency
Technical Assurance:
independent technical reviews
53
Technical Discipline Leadership:

global processes and strategic
technical risk management
Flagship Projects: Asset
Management, Energy Productivity,
and Advanced Technology
Deployment
54
Rio Tinto Projects delivers major capital projects
Cape Lambert Port
Wickham Housing Estate
Paraburdoo
Kitimat, March 2015
Rail infrastructure
Nammuldi Below Water Table
Yandicoogina
Fume Treatment Centre
West Angelas Power Station
West Angelas Deposit B
Brockman 4
First hot metal June 2015
Iron ore infrastructure & mines $14.7bn
Kitimat $4.7bn
Delivering value through optimising the Pilbara

expansions
Consistently improving capital efficiency
(US$/t) Capital intensity of 220-360 Mt/a Pilbara expansion1

175
55
Original 360 expansion included

Silvergrass
Koodaideri
Optimised route relies on low-cost
brownfield expansions
19%
150
8%
125
5%
Lower capex pathway for

Silvergrass
100
Investment decision expected in

2016
75
50
- 40 Mt of brownfield mine
expansions at capital intensity of
$9/t completed in 2015
2012
2013
2014
2015
Mid-points of guidance ranges shown in graph. 2012 guidance was mid $150s/t. 2013 guidance reduced to $120-130/t which
was further reduced in 2014 to $110-120/t. The latest guidance is ~$105/t.
1
56
Sustainable growth delivered for less

2015 capital expenditure guidance
US$ billion
<7.0
(0.5)
Original guidance
Cost savings
(0.4)
Deferrals
5.5
(0.3)
FX
Current guidance
Current focus is on three key growth projects

Iron Ore
Aluminium
Copper
Pilbara mines
South of Embley
OT Underground Mine
57
Push mine capacity through

low-cost growth to fill expanded
infrastructure
Feasibility study expected to

complete towards end of 2015
Over 80% of the value lies in

the underground development
Current focus is:
Current focus is:
Current focus is:
Completing the 360 growth

programme
Capital savings opportunities
Finalising the Feasibility Study
Optimising construction
schedule
Re-stablishing Project
Financing
Progressing AutoHaul
Assessing Silvergrass timing
Obtaining final permits
Steady progress on AutoHaul implementation
58
Worlds first fully autonomous long

distance heavy haul railway
Improves productivity & safety
Over 250 journeys completed in
automated mode
Autohaul operation
~90% of locomotive modifications

complete
Wayside works are complete and

being commissioned
86% software complete
Forecast project completion mid2016
Wayside system & communications
59
Delivering productivity improvements across the

Group
Advanced
technology
deployment
- Increased truck
utilisation by 14%
World-class asset
management
- Optimised asset servicing
- ADS availability +10%
- Standardised
maintenance practice
- RTVis reclassified 1 Mt
resources for blending
- Predictive asset health
Energy productivity
- Transparent energy
measurement
- Power optimisation
- Diesel efficiencies
Potential value of opportunity

Reduced capital
Lower operating
expenditures
Improved productivity
and HSE performance
Target $200m per annum

savings in the next 3
years
Targeting 2-3% energy

savings
Advancing productivity through the Mine of the

Future programme
60
Technologies developed include:

Autonomous trucks
AutoHaul
Advanced analytics
Resistate indicator minerals
Haul Truck Wheel Changer
RTVis
Haul Truck Wheel Changer
RTVis / Mine Automation

System
Train load-out control system
Remote draft survey
Haul truck wheel changer
Drone applications
AutoHaul
Autonomous Haulage Truck
Drone operation
Big data analytics manages risk and reduces

costs
900 haul trucks
4.9 Tb data per day
Target run- Actual Runtime (hrs)
time (hrs)
Cloud based
advanced neural
networks
Deferred
spend
Engine 1 RTIO
25,000
27,867
$61,927
Engine 2 RTIO
25,000
30,022
$108,475
Engine 3 RTIO
25,000
28,668
$79,228
Benefits to the
business
61
Lower
costs
Predictive
analytics
Detection of
impending failure
Extends
useful life
Risk-based
maintenance
62
T&I delivers significant value

World-class projects
World-class productivity
Best-in-class
project portfolio
World-Class
Projects
Group-wide deployment of world

World-Class Productivity
class technologies and
productivity platforms
High-quality investment options

Reduced capital intensity
Leading the mining industry in

step-change innovations
Strategic technical risk

management
Moving beyond industry norms
3 September 2015
Economics & Markets
Summary
Iron Ore
Sales & Marketing
Best performing iron ore business
64
Our priority is the safety and wellbeing of our people

Tier one assets and tier one people
Creating value through technology and innovation
Embedding a culture of constant improvement
Clear strategy that will deliver value through the cycle
3 September 2015
Economics & Markets
Appendix
Iron Ore
Sales & Marketing
66
Mineral Resources and Ore Reserves

Pilbara resources, reserves and production
Million tonnes (LHS, dry; RHS, wet)
25,000
Drilling
Metres
700,000
300
600,000
500,000
20,000
225
400,000
300,000
15,000
200,000
150
100,000
10,000
0
75
5,000
2006 2007 2008 2009 2010 2011 2012 2013 2014
Mineral Resources (LHS):

Ore Reserves (LHS):
Production (RHS):
Inferred
Indicated
Probable
Proved
Production
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Actual Drill (m)
Forecast Drill (m)
Mineral Resources position continues to

support production growth
Maintaining evaluation drilling and resource

development programs
Ore Reserves are being maintained in line

with actual mine production
Measured
Mineral Resources and Ore Reserves are reported in dry metric tonnes and are reported on a 100% basis. Ownership percentages for each joint venture are provided in the Mineral
Resource and Ore Reserve statements on pages 199 and 204 of the Rio Tinto 2014 Annual Report.
Mineral Resources are reported exclusive of Ore Reserves. Ore Reserves are reported as product tonnes. Mineral Resources are reported on an in situ basis.
Refer to the statements supporting the above estimates and relevant Competent Person references set out on slide 3 of this presentation.
The Pilbara - a fully integrated system
67
+12,500 workforce
15 mines
1,700kms rail
4 port terminals
3 power stations
360 trucks
39 production drills
190 locomotives
Rio Tinto share of shipments reconciliation

Calculation of Rio Tinto share of Pilbara shipments
Rio Tinto Iron Ore Global Sales
Less: IOC Concentrate
Less: IOC Pellets
Rio Tinto Iron Ore Pilbara Sales
Adjustment to increase Robe River Mines from 53% to 65%
basis
Robe River Sales - Pannawonica (Mesas J & A)
Robe River Production - West Angelas
Sales from Robe River mines (65% basis)
Adjustment to increase Robe River Mines from 53% to 65%
basis
Rio Tinto Share of Pilbara Shipments (65% basis)
68
kt
122,672
(1,530)
(2,806)
118,336
7,943
8,272
16,215
19,886
3,671
122,007
The Group recognises a 65 per cent share of the assets, liabilities, revenues and expenses of Robe River, with a 12 per cent non-controlling interest. The Group therefore has a
53 per cent beneficial interest in Robe River.
Robe River (and therefore West Angelas and Pannawonica) is owned through two holding companies. One holding company is 100% owned, and owns 35% of Robe. The other
is 60% owned and owns 30% of Robe. Rio Tinto's effective ownership is therefore (100%*35%) + (60%*30%) or 53%. Each of the holding companies proportionally consolidates
for the part of Robe that it owns, i.e. holding company one consolidates 35% of Robe's revenue and cost; holding company two consolidates 30% of Robe's revenue and
cost. These holding companies are then fully consolidated in the Rio Tinto Group accounts, resulting in 65% of Robe's revenue, cost and assets being included in Rio Tinto's
revenue, cost, assets, etc. The 12% that is not owned by Rio Tinto is removed in the line attributable to non-controlling interests to get back to Rio's true share of 53%.

Rio Tinto Iron Ore

Uploaded by

Copyright:

Available Formats

Rio Tinto Iron Ore

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Rio Tinto Iron Ore

Uploaded by

Copyright:

Available Formats

What is the purpose of the presentation?

What is the purpose of the presentation?

What is the Pilbara region known for?

What is the Pilbara region known for?

3 September 2015

Economics & Markets

Iron Ore Seminar

Sales & Marketing

Technology & Innovation

Mineral Resources and Ore Reserves

Economics & Markets

Sales & Marketing

Technology & Innovation

Economics & Markets

Iron ore demand

Sales & Marketing

Technology & Innovation

Rio Tinto Economics & Markets

Extensive data collection

Independent from Product Groups

Internal and external resources

Risk and scenario analysis

Fundamental demand and supply

Rigorous testing of results

Understand and quantify uncertainty

Proprietary cost curves

2015, Rio Tinto, All Rights Reserved

Chinas transition toward high-income status

Chinas New Normal

2015, Rio Tinto, All Rights Reserved

Continued global iron ore demand

Global steel demand grows by 2.5% pa,

Total iron ore demand (million tonnes)

Chinese steel demand is evolving with an

Increasing importance of emerging

The world will need 3 billion tonnes of iron

New supply will0.1%

Over 50% of the additional supply will be

Source: Rio Tinto

Robust growth in rest of world demand

Process of industrialisation and

Rest of world steel demand to increase

Indias share of rest of world demand will

In 2030, China remains the largest

Construction of commercial and

China steel growth will continue

Crude steel production expected to

Growth in capital stock is slowing

Replacement of capital stock will

Growing global markets generate

Steel exports to be maintained at current

Crude steel production (million tonnes)

Net Steel Exports

Exports of Finished Goods

Source: Rio Tinto

Chinese steel demand based on detailed

Transport & Other

Finished Steel Consumption

2015, Rio Tinto, All Rights Reserved

Case study I: Residential steel demand