Rio Tinto commits greater value for shareholders at its investor seminar in Sydney

Rio Tinto will demonstrate strong progress and performance against its commitment of delivering greater value for shareholders at its investor seminar in Sydney today. In addition to presenting results achieved year-to-date, the company will outline what it is doing to capitalise on long-term attractive industry fundamentals. There will be an in-depth look at its Aluminium, Copper and Iron Ore product groups.

Some of the key points from the seminar include:

• The delivery of a US$1.8 billion improvement in operating cash costs in the ten months to October, and on track to deliver the US$2 billion target for 2013.

• US$3.3 billion of divestments of non-core assets announced or completed in 2013. To date, proceeds of US$2.3 billion have been received in divestments of non-core businesses, including the recent sale of a stake in Constellium for US$315 million. Sale of Northparkes closed on 1 December for final cash proceeds of US$820 million. Clermont is making good progress and on track to close in early 2014.

• Headcount reduction of 3,800 across the Group since June 2012, after taking into account 1,800 new roles to support the iron ore expansions. Another 3,000 roles have left the business with divested assets.

• Pursuing a consistent and clear strategy with a company-wide transformation programme to improve execution and deliver industry-leading performance and superior returns on investment.

• Aluminium continuing its transformation by reducing operating costs by more than $450m to the end of October 2013, compared to 2012, and optimising its portfolio through the sale, suspension or curtailment of non-core assets.

• Focusing on a bauxite operation in Gove as part of a comprehensive engagement plan with the Northern Territory and Australian Governments and regional community following last month’s decision to suspend operations at the alumina refinery.

“I have set a clear direction for the business to reignite our passion for delivering greater value for shareholders. Our results so far show we are taking decisive action, making tough decisions and advancing at pace.” Rio Tinto chief executive Sam Walsh said.

“We have cut costs and are set to exceed our commitments made in February. Operating costs are down $1.8 billion year to date compared to the same period last year and exploration and evaluation costs are more than $800 million lower.

“From where I stand, we continue to see market fragility and volatility. The impacts of decisions like quantitative easing and austerity programmes are still washing through markets around the world. But it is a mixed story because, despite this uncertainty, we are also seeing modest economic recovery.

“Over the longer term, I remain optimistic about demand for our products. China’s urbanisation will continue and the development of other economies as they continue to grow at pace, such as India, Vietnam, Indonesia, the Philippines, the Middle East, the former Soviet Union, South America and Africa, will also contribute to ongoing demand for our products.

“Therefore, the outlook for our business is robust and we are strengthening our ability to capitalise on opportunities available to us in the future.”