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
2028-20361, becoming a first-quartile copper producer and the
world’s fourth-largest copper mine by 20302
- 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 Simandou3
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 scenario4, 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 CO2e 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 ore5 (shipments, 100%
basis) (Mt)
320 – 3356
323 – 338
Copper
Mined copper7 (consolidated basis)
(kt)
Refined copper (kt)
590 – 640
160 – 190
660 – 720
230 – 260
Aluminium
Bauxite (Mt)
Alumina (Mt)
Aluminium (Mt)
54 – 578
7.4 – 7.7
3.1 – 3.3
53 – 56
7.6 – 7.9
3.2 – 3.4
Minerals
Titanium dioxide slag (Mt)
IOC pellets and concentrate9 (Mt)
Boric acid equivalent (Mt)
1.1 – 1.48
9.3 – 9.8
~0.5
0.9 – 1.1
9.8 – 11.5
~0.5
Capex guidance
2023
2024-2026
(per year)
Total Group10
~$7.0bn
~$10.0bn
Growth capital
~$1.0bn11
Up to $3bn
Sustaining capital
~$4.0bn
~$4.0bn
Including Pilbara
Sustaining12
~$2.0bn
~$1.8bn
Replacement capital
~$1.7bn
~$2 to $3bn
Decarbonisation capital
~$0.15bn
~$1.5bn cumulative13
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.
This announcement is authorised for release to the market by
Andy Hodges, Rio Tinto’s Group Company Secretary.
1 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 Source: Wood Mackenzie. Dataset Dec 2022,
based on production from committed projects. 3 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 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 Pilbara shipments guidance remains subject
to weather, market conditions and management of cultural heritage.
6 In the upper half of the range. 7 Includes Oyu Tolgoi on a 100%
consolidated basis and continues to reflect our 30% share of
Escondida. 8 In the lower end of the range. 9 Iron Ore Company of
Canada. 10 Including Simandou. 11 We expect our share of investment
in Simandou to be around $0.2 billion in H2 2023. 12 Subject to
ongoing inflationary pressure. 13 Weighted towards the latter part
of the period.
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version on businesswire.com: https://www.businesswire.com/news/home/20231205267112/en/
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