aluminium industry update and key challenges - … · aluminium industry update and key challenges...
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Aluminium industry update and key challenges Alf Barrios, chief executive, Aluminium
20th CRU World Aluminium Conference 12 May 2015
©2014, Rio Tinto, All Rights Reserved
2
Aluminium contributes to a better life – driving long-term demand
Lower GHG emissions through lighter vehicles and buildings and through its recyclability
Bringing energy efficiency for cities and buildings in an energy constrained world
Preserving food and medicines through its unique barrier properties
©2015, Rio Tinto, All Rights Reserved
Source: CRU and Rio Tinto Source: Rio Tinto
3
Robust demand outlook
Primary Aluminium Demand (million tonnes)
Demand Growth (index)
14 17 19 21 24 27
51 20 24
26 26 26
27
47
34 41
45 47 50
54
98
0
20
40
60
80
100
120
2009
2010
2011
2012
2013
2014
2030
Rest of WorldChina
©2015, Rio Tinto, All Rights Reserved
Source: CRU and Rio Tinto
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Fundamentals improving
Primary Aluminium Balance (million tonnes)
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Global Balance - actual
Global Balance - forecast
Global Balance - forecast range
China
RoW
©2015, Rio Tinto, All Rights Reserved
Source: LME, Platts and Metal Bulletin
Source: Platts and Metal Bulletin
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Continued volatility near-term
0
50
100
150
200
250
300
350
400
450
500
550
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Europe (cash DPP)MidwestJapan
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
3,250
3,500
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
'All-In' average
LME Cash
Price ($US per tonne)
Market Premiums ($US per tonne)
©2015, Rio Tinto, All Rights Reserved
Source: China customs and Rio Tinto
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Strong bauxite fundamentals
China Imports (million tonnes)
14 23
36 28
49
9
5
7
8 9
14
16
2
6
8
3
4
130
20
30
45 40
72
37
2009
2010
2011
2012
2013
2014
2025
Other
India & Malaysia
Australia
Indonesia
©2015, Rio Tinto, All Rights Reserved
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Rio Tinto aluminium: clear focused strategy
First quartile smelters Tier one bauxite
Cash generation Market-paced growth Strategic focus
Low-cost, renewable energy portfolio Industry-leading bauxite position Competitive
advantage
Key enablers
Industry-leading performance through the cycle Strategic goal
Alumina supply and security
Commercial excellence
©2015, Rio Tinto, All Rights Reserved
Leading bauxite position Global bauxite resources / reserves (Billion tonnes)1
1 Rio Tinto group Bauxite Reserves and Resources are aggregated form the managed operations as listed in Rio Tinto’s 2014 Annual Report dated 6 March 2015 and released to ASX on 6 March 2015. The Competent Persons responsible for that previous reporting were L McAndrew (AusIMM Reserves), J Bower (AusIMM Resources), D Butty (EuroGeol Resources/Reserves), R Aglinskas (AusIMM Resources) and JPC de Mel Franco (AusIMM Reserves). Rio Tinto is not aware of any new information or data that materially affects these Reserve or Resource estimates, and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Mineral Resources are reported exclusive of Ore Reserves.
2 Competitor data taken from published company data. For BHP the Resources are reported inclusive of Ore Reserves.
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RTA leading bauxite position driving value-accretive growth
1.5 billion tonnes Ore Reserves1
1.9 billion tonnes Mineral Resources1
North of Wenlock
Andoom East Weipa
South of Embley
Cape York Bauxite
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
RTA Rusal EGA BHP Alcoa Harita Chalco
Resources Reserves
Alcoa/AWAC
©2015, Rio Tinto, All Rights Reserved
Aluminium cost curves Operating cost (US$ per tonne)
Source: CRU
1 Including the Kitimat modernisation project
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RTA first quartile smelting business
Arvida Aluminium Smelter AP60 Technology Centre – Saguenay, Canada
1000
1500
2000
2500
3000
0% 25% 50% 75% 100%
2010
2015
©2015, Rio Tinto, All Rights Reserved
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Rio Tinto: valued partner for the MENA aluminium industry • Offering support from mine to refining and smelting
− Technology − Secure, high-quality bauxite supply for increasing needs − Marketing and operational excellence
• Strong track record and commitment to regional social- economic development
Sohar, Oman