TIDMRIO
RNS Number : 7571R
Rio Tinto PLC
31 October 2019
Rio Tinto well positioned to sustain strong returns
31 October 2019
Rio Tinto is well positioned to continue generating strong
returns, building on a track record of $32 billion returned to
shareholders since 2016, and the significant progress achieved in
strengthening the resilience and sustainability of the
business.
At its investor seminar in London, Rio Tinto chief executive J-S
Jacques and members of his executive team will outline how the
quality of Rio Tinto's portfolio, strong customer relationships and
capital discipline positions the company for continued strong
financial performance, as demonstrated by free cash flow of $10
billion in 2019 calculated at current spot prices*.
J-S said "Rio Tinto has a world-class portfolio, delivering
superior margins and free cash flows, with an established track
record of generating resilient returns. This includes $32 billion
returned to shareholders since 2016, in a volatile macro
environment.
"We are not complacent, and will step up our operational
performance to fully optimise our assets and maintain strong cash
delivery. We will continue to create value by strengthening
relationships with our customers and with other partners, both of
which are crucial for our future success."
Rio Tinto will also underline its environmental and
sustainability credentials and demonstrate what it is doing to
position the business for a carbon constrained world and reinforce
its value proposition to investors as the only major diversified
miner who does not extract fossil fuels. Rio Tinto has reduced its
emissions-intensity footprint by almost 30 per cent since 2008 and
today, over 70 per cent of its electricity comes from renewable
sources. Current emissions targets, which have already been
achieved, expire at the end of 2019 and new targets will be
disclosed in early 2020. The new targets will move Rio Tinto closer
to its long-term commitment of substantially decarbonising its
business by 2050.
Key points from the presentation include:
Financial
-- $10 billion of free cash flow in 2019* at spot prices,
demonstrating the ongoing cash generation resilience of our
world-class assets in a volatile macro environment.
-- Rio Tinto remains committed to maintaining an appropriate
balance between investment in the business and cash returns to
shareholders. Over the last three years, our pay-out ratio,
excluding returns from divestments, has averaged more than 70 per
cent, above our returns policy range of 40-60 per cent in
recognition of the strong free cash flow generation of the
business.
-- Total capital expenditure in 2019 is expected to be $0.5
billion lower than previous guidance at around $5.5 billion, with
$0.5 billion deferred into 2020. As a result, guidance for 2020 is
around $7 billion. Guidance for 2021 remains unchanged at around
$6.5 billion. Guidance for 2022 was included for the first time at
around $6.5 billion.
Iron Ore
-- Pilbara shipment and cash unit cost guidance for 2019 remain
unchanged at 320-330 million tonnes and $14-15 per tonne.
-- Sustaining capital expenditure is now expected to be $1
billion to $1.5 billion per year from 2020, versus earlier guidance
of around $1 billion.
-- Pilbara system has, at times, operated at 360 Mtpa run rates, but not on an annual basis.
-- Annualised system capacity of 360 Mtpa expected once
Koodaideri phase 1 is fully commissioned, with first ore still
expected late 2021.
-- Pilbara Blend continues to command a premium and remains the
flagship product from our Pilbara system.
-- SP10 supports high consistency of the Pilbara Blend, whilst
increasing resource recovery and improving mine productivity. It is
also of lower cost than Pilbara Blend on average.
-- 2020 shipment guidance is an increase of up to 5% on 2019
guidance subject to market conditions. Specific guidance for 2020
will be provided with the fourth quarter operations review, in
January 2020.
Oyu Tolgoi
-- Rio Tinto provided an update on progress at Oyu Tolgoi,
underlining that the world-class ore-body will become one of the
world's largest copper and gold mines.
-- Construction of Shaft 2 is now complete and commissioning is
in progress, which will facilitate a step-change in lateral
development productivity, providing the ability to move more
material, equipment and people between the surface and
underground.
-- The underground development is large and complex, with over 200km of underground roads and infrastructure.
-- Work evaluating design options continues, including reviewing
the location of access drives, the ore handling system and options
for panel sequencing. Mine design will be completed in H1 2020.
-- The Definitive Estimate, which will include the final
estimate of cost and schedule for the remaining underground
project, is still expected to be delivered in the second half of
2020.
Growth & Innovation
-- Rio Tinto spends $200m each year on early stage R&D.
-- In studies and construction, innovation and digital design is
helping Rio Tinto to achieve improvements in safety and cost as
seen most recently at Amrun and at Koodaideri.
-- Partnering to develop innovative technology to tackle
critical industry challenges is leading to advances in tailings
management and handling, emissions reductions as well as improved
water usage and recycling.
-- Investment in exploration continues in 18 countries and seven
commodities. By taking a sophisticated approach to data and
technology to improve targeting, Rio Tinto has uncovered
opportunities in areas that have been well explored in the
past.
Notes to editors
1. Rio Tinto is holding an investor seminar in London today that
includes a review of the Group strategy.
2. The presentation material and webcast will be available at
www.riotinto.com/presentations at 8.00am GMT and the slides will
also be released to the ASX at this time.
3. Presentations will be made by J-S Jacques, chief executive;
Jakob Stausholm, chief financial officer; Simon Trott, chief
commercial officer; Chris Salisbury, chief executive, Iron Ore;
Arnaud Soirat, chief executive, Copper & Diamonds; Steve
McIntosh, Group executive, Growth & Innovation and Vivek
Tulpule, head of economics and markets. Members of the management
team will also be present.
*2019 forecast assumes June year-to-date actual realised
pricing, July to September monthly average index prices with the
remainder of 2019 based on October spot prices. Production and
shipments for 2019 is based on consensus. Free cash flow is defined
as net cash generated from operating activities less purchases and
sales of Property, Plant & Equipment.
Forward-looking statements
This announcement may include forward looking statements. Such
forward looking statements involve known and unknown risk,
uncertainties and other factors which may cause actual production,
performance or results of Rio Tinto to be materially different from
any future production, performance or results expressed or implied
by such forward-looking statements.
Contacts
media.enquiries@riotinto.com
riotinto.com
Follow @RioTinto on Twitter
Media Relations, United Kingdom Media Relations, Australia
Illtud Harri Jonathan Rose
M +44 7920 503 600 T +61 3 9283 3088
M +61 447 028 913
David Outhwaite
T +44 20 7781 1623 Matt Chambers
M +44 7787 597 493 T +61 (0) 3 9283 3087
M +61 433 525 739
Media Relations, Americas
Matthew Klar Jesse Riseborough
T +1 514 608 4429 T +61 8 6211 6013
M +61 436 653 412
Media Relations, Asia
Grant Donald
T +65 6679 9290
M +65 9722 6028
===================================== ================================
Investor Relations, United Kingdom Investor Relations, Australia
Menno Sanderse Natalie Worley
T +44 20 7781 1517 T +61 3 9283 3063
M +44 782 519 5178 M +61 409 210 462
David Ovington Amar Jambaa
T +44 20 7781 2051 T +61 3 9283 3627
M +44 7920 010 978 M +61 4 7286 5948
===================================== ================================
Rio Tinto plc Rio Tinto Limited
6 St James's Square Level 7, 360 Collins Street
London SW1Y 4AD Melbourne 3000
United Kingdom Australia
T +44 20 7781 2000 T +61 3 9283 3333
Registered in England Registered in Australia
No. 719885 ABN 96 004 458 404
--------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCQFLBXKBFXFBZ
(END) Dow Jones Newswires
October 31, 2019 03:00 ET (07:00 GMT)
Rio Tinto (LSE:RIO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Rio Tinto (LSE:RIO)
Historical Stock Chart
From Apr 2023 to Apr 2024