chris welton director – rio tinto kazakhstan amm – astana july 2012 exploration technology and...

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Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

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Page 1: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

• Chris Welton• Director – Rio Tinto Kazakhstan

AMM – Astana July 2012

Exploration technology and partnerships in Central Asia

Page 2: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Cautionary statement

This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and consisting of the slides for a

presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions.

Forward-looking statements

This presentation includes forward-looking statements. All statements other than statements of historical facts included in this

presentation, including, without limitation, those regarding Rio Tinto’s financial position, business strategy, plans and objectives of

management for future operations (including development plans and objectives relating to Rio Tinto’s products, production forecasts

and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown

risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rio Tinto, or industry

results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking

statements.

Such forward-looking statements are based on numerous assumptions regarding Rio Tinto’s present and future business strategies

and the environment in which Rio Tinto will operate in the future. Among the important factors that could cause Rio Tinto’s actual

results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels

of actual production during any period, levels of demand and market prices, the ability to produce and transport products profitably,

the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and

economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as

changes in taxation or regulation and such other risk factors identified in Rio Tinto's most recent Annual Report on Form 20-F filed

with the United States Securities and Exchange Commission (the "SEC") or Form 6-Ks furnished to the SEC. Forward-looking

statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking

statements. These forward-looking statements speak only as of the date of this presentation.

Nothing in this presentation should be interpreted to mean that future earnings per share of Rio Tinto plc or Rio Tinto Limited will

necessarily match or exceed its historical published earnings per share.

©2012 Rio Tinto, All Rights Reserved

Page 3: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Market capitalisation of major listed mining companies

At 29 February 2012(US$bn)

Anglo PlatinumFresnillo

Teck ResourcesMosaic

Grupo MexicoSouthern Copper

NewcrestNewmont

NorilskGoldcorp

Potash CorpFreeportGlencore

BarrickAnglo American

XstrataShenhuaRio Tinto

ValeBHP Billiton

0 50 100 150

21

22

23

25

25

27

28

29

38

39

40

40

48

48

56

57

88

112

135

193

Chart Title

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Page 4: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Rio Tinto – a world leader in mining

Aluminium

#1 in bauxite#2 in aluminium#3 in alumina

Diamonds & Minerals

#1 in titanium dioxide and seaborne salt

#2 in borates#5 in diamonds

Copper

#5 in copper#7 in molybdenum

Energy

#4 in uranium#6 in export coking coal #9 in export thermal coal

Iron Ore

#2 in seaborne iron ore

2010 data

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Page 5: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Implementation of innovative technologiesis a key differentiatorOur Mine of the FutureTM is shaped by four significant value levers

Find Develop Mine Recover

• Find future tier oneore bodies

• VK1 in initial flight trials• Complex testing

programme in 2012

• Develop future blockcave mines safer,faster, better

• Tunnel boring system trials to commence at Northparkes in 2012

• Optimise resource productivity

• Expansion of driverless truck fleet

• Operations Centre• Smart drilling and

blasting• Autonomous trains

(AutoHaul™)

• Recover more from mineral deposits

• IronX™ iron ore recovery pilot plant to be scaled up in 2012

• NuWave™ copper sorting pilot plant being commissioned at KUC

Innovation networks created through long term strategic alliancesProtection of Intellectual Property is key to sustaining competitive advantage

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Page 6: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

The target – A Tier 1 deposit

Tier 1 deposits – the largest and highest quality in the world – are geologically rare

They are profitable at all parts of the natural price cycle and confer sustainable competitive advantage

They grow with exploration and commonly have other Tier 1 deposits nearby

Their capacity to support production expansions delivers optionality and value growth

Output from these deposits dominates global minerals production

They have mine lives in excess of 50 years and often in excess of 100 years

View of the open pit

Production by year 1906 - 2010

Bingham Canyon, USA

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Page 7: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Copper discoveries showing depth of deposits with >4Mt contained copper

-200

0

200

400

600

800

1000

1200

1400

1850 1870 1890 1910 1930 1950 1970 1990 2010

Approximate year of discovery

Ap

pro

xim

ate

de

pth

to

to

p o

f d

ep

os

it

Resolution

Hugo Dummett

Pebble East

Heruga

Kalamazoo

Escondida

Grasberg

Chuquicamata

El Teniente Andina

Olympic Dam

Los Sulfatos

Source: MEG

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Page 8: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Technology: Driving our competitive advantage in exploration

Rapid laser guided analysis of mineral grains allows the development of vectors to mineralisation from distal rocks or transported grains in regional exploration. This can reduce the time to discovery and make exploration more efficient.

RIMS

Step-change airborne gravity gradiometer technology multi-commodity application provides highly sensitive gravity readings from an airborne instrument that can be flown over large prospective blocks as a first pass prospecting tool.

VK1 • Our exploration R&D focus is

on step-change technologies

with multi-commodity

applications

• RIMS geochemistry is being

developed for copper and

uranium exploration to assist

in developing vectors to

mineralisation based on distal

samples

• Rio Tinto is at an advanced

stage of development of a

high sensitivity gravity

gradiometer system (VK1™)

for multi-commodity mineral

exploration

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Page 9: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Technology: Driving our competitive advantage in exploration

Deep penetrating geophysical method to model covered and deep mineralised targets. This can reduce drill costs and identify high grade deep targets for future block cave exploitation.

3D MT modelling

30 Eö/√Hz noise 1 Eö/√Hz noise

Deep drilling • Deep covered targets are

expensive and difficult to drill

test.

• Deep penetrating geophysics

can effectively model geology

and mineralisation and not

only provide targets but also

increase confidence on future

resource models.

• Drilling technology has

advanced significantly in

recent years and maximum

data can now be obtained

from a single drill pad.

Deep targets are expensive to drill and require specialist equipment and technology. Rio Tinto is partnering with drill contractors to maximise the speed and efficiency of deep drilling through the drilling of multiple tails from a single drill pad.

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Page 10: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Rio Tinto’s approach to partnership

• Partnerships are a central part of Rio Tinto’s approach in the countries in which we operate, these vary from simple joint ventures, to strategic alliances with the countries government, but also include technology partnerships with suppliers and contractors.

• ICMM members seek to be partners of choice for host countries and communities in developing mineral resources. Helping to ensure that the companies’ investments in these resources enhance social and economic development locally and nationally is an important part of accomplishing this goal.

• A partnership plays on the strengths of both parties and to be a success needs to have clearly defined common goals

“Every time Rio Tinto enters a new region we recognise that we are doing so at that country’s invitation”

Doug Richie, Rio Tinto Executive Committee

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Page 11: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Partnerships in eductaion

Proposal Benefit for Kazakhstan

Benefit for Rio Tinto

Partnerships with local universities to provide internships for students and employment opportunities for graduates 

Skills development for future workforce

Future skilled workforceAccess to research skills

Partnership with the Bolashak scholarship programme to identify opportunities for Kazakh post graduate students to pursue technical research projects 

Increase in technical skills in Kazakhstan

Access to research skills

Partnerships with Kazakh universities such as the Nazarbayev university to identify opportunities for Kazakh post graduate students to pursue technical research projects

Increase in technical skills in Kazakhstan

Future skilled workforce

• Rio Tinto proposes to establish a proactive support network for education institutes to create

future work force in Kazakhstan

• Rio Tinto to aid in skills development of employed staff to better enable to the local work force

to manage and operate mines in Kazakhstan

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Page 12: Chris Welton Director – Rio Tinto Kazakhstan AMM – Astana July 2012 Exploration technology and partnerships in Central Asia

Conclusions• Future copper discoveries will be deep and with complex geology often with either

no surface expression of occurring beneath low grade or barren systems

• Exploration technology is required to discover and evaluate these opportunities

• When Rio Tinto enters a new region we recognise that we are doing so at that country’s invitation

• Rio Tinto is committed to creating partnerships to not only utilise but also effectively transfer technology and experience.

• The foundation being set in Kazakhstan through our proposed partnerships with Tau-Ken Samruk and MINT provide a platform for effective communication and bring benefits to both Rio Tinto and Kazakhstan.

• This model will be mirrored in neighbouring countries.

• Rio Tinto’s goal is to be the partner of choice in central Asia.

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