Rio Tinto progresses strategy to strengthen, decarbonise and grow

Rhea-AI Summary

Rio Tinto has updated investors on its long-term strategy during an Investor Seminar in London. The company anticipates a 25% increase in demand for its products, driven by the energy transition by 2035, and plans to invest up to $3 billion annually in growth projects. Rio Tinto is also targeting a 50% reduction in Scope 1 and 2 emissions by 2030, with investments of around $7.5 billion expected from 2022 to 2030. The production guidance for 2023 remains stable for several key commodities, including Pilbara iron ore.

Positive

• Projected 25% increase in demand for key products by 2035 due to energy transition.
• Investment target of up to $3 billion annually to support growth projects.
• Commitment to reduce Scope 1 and 2 emissions by 50% by 2030, supporting long-term sustainability.

Negative

• Production guidance for refined copper slightly lower, ranging from 180 to 210 kt in 2023.
• Risks around commissioning and ramp-up of new mines could affect Pilbara iron ore shipments.

LONDON--(BUSINESS WIRE)-- Rio Tinto is today providing an update at its Investor Seminar on progress against its long-term strategy to strengthen the business, grow in a decarbonising world and continue to deliver attractive shareholder returns.

Updates will include Rio Tinto’s market outlook, with the energy transition expected to add as much as 25% in new demand above traditional sources on a copper equivalent basis across the Group's key products by 2035. Rio Tinto is targeting investment of up to $3 billion per year in growth to meet this demand, including the Oyu Tolgoi copper, Rincon lithium and Simandou iron ore projects.

There are now 30 deployments of the Rio Tinto Safe Production System (SPS) across 16 sites. Roll-outs are ongoing to continuously improve safety, drive employee satisfaction and lift operational performance across Rio Tinto’s global portfolio, delivering benefits such as up to 5 million tonnes of production uplift expected at the Group’s Pilbara iron ore assets in 2023.

Executives will outline projects underway to meet challenging decarbonisation targets to halve Scope 1 & 2 emissions by 2030, on the road to net zero by 2050. Six large emissions abatement programmes are focused on renewable power, process heat, diesel and the ELYSIS^TM zero carbon aluminium smelting technology to drive the transition to net zero by 2050, supported by high-quality nature based solutions. Investments of around $7.5 billion are expected between 2022 and 2030, including around $1.5 billion over the next three years which will be back-end dated. Investments are being prioritised and phased in the most logical way, with consideration for near-term work around energy inputs and attractive economics. New long-term power contracts will also be required for the aluminium business to meet targets. Incremental operating expenditure on building new teams and energy efficiency initiatives remains around $200 million per year, in addition to research and development investment.

Rio Tinto Chief Executive Jakob Stausholm said: “We are now creating real momentum, to build a stronger Rio Tinto that is a platform for delivering long-term value. From evolving our culture, to operational improvements, a different approach on cultural heritage, and technology breakthroughs to address climate change and a changing customer environment, we are seeing early results that give us conviction we have the right objectives, the right team, and the right strategy. This is all captured in our newly defined purpose: finding better ways to provide the materials the world needs.

“Meeting the incremental demand of the energy transition and ensuring local supplies of critical minerals globally deepens our relevance in the world and provides new opportunities. We are working hard to decarbonise our assets and products, as we invest to grow in materials needed for the energy transition.

“The quality of our assets, resilience of cashflows and strength of our balance sheet ensure we are well positioned to continue to invest with discipline for the long term and deliver attractive returns to our shareholders throughout the cycle.”

Production guidance is being released for 2023. Pilbara iron ore shipments (100% basis) of 320 to 335Mt are expected in 2023, with mid-term capacity remaining at 345 to 360Mt.

Production guidance - Rio Tinto share, unless otherwise stated	2022		2023
Pilbara iron ore (shipments, 100% basis) (Mt)	320 to 3351		320 to 3352 ​
Bauxite (Mt)	54 to 57		54 to 57
Alumina (Mt)	7.6 to 7.8		7.7 to 8.0
Aluminium (Mt)	3.0 to 3.1		3.1 to 3.3
Mined copper (kt)	500 to 575		​550 to 600​
Refined copper (kt)	190 to 220		​180 to 210
Diamonds (M carats)	4.5 to 5.0		3.0 to 3.8
Titanium dioxide slag (Mt)	1.1 to 1.4		1.1 to 1.4
IOC3 iron ore pellets and concentrate (Mt)	10.0 to 11.0		10.5 to 11.5
Boric oxide equivalent (Mt)	~0.5		~0.5
1 At the low end of the range. 2 Pilbara shipments guidance remains subject to risks around commissioning and ramp-up of new mines and management of cultural heritage. 3Iron Ore Company of Canada.
Unit cost guidance			20231
Pilbara iron ore (US$/tonne)​			$21.0 - $22.5​
Copper C1 (US cents/lb)​			160 - 180
1 FY23 guidance is based on A$:US$ exchange rate of 0.70 and excludes COVID-19 response costs.​

The presentation slides and the live webcast can be accessed at https://www.riotinto.com/en/invest/presentations/2022/investor-seminar-london.

This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221129006177/en/

Please direct all enquiries to media.enquiries@riotinto.com

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Investor Relations, UK

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Amar Jambaa

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Rio Tinto plc

6 St James’s Square

London SW1Y 4AD

United Kingdom

T +44 20 7781 2000

Registered in England

No. 719885

Rio Tinto Limited

Level 43, 120 Collins Street

Melbourne 3000

Australia

T +61 3 9283 3333

Registered in Australia

ABN 96 004 458 404

Category: General

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Source: Rio Tinto

FAQ

What is Rio Tinto's production guidance for Pilbara iron ore in 2023?

Rio Tinto expects Pilbara iron ore shipments to be between 320 to 335 Mt in 2023.

How much does Rio Tinto plan to invest annually to meet growing demand?

Rio Tinto plans to invest up to $3 billion per year to support growth projects.

What emissions reduction target has Rio Tinto set for 2030?

Rio Tinto aims to halve Scope 1 and 2 emissions by 2030 as part of its decarbonisation efforts.

What is the expected demand increase for Rio Tinto's products by 2035?

The energy transition is expected to increase demand for Rio Tinto’s key products by up to 25% by 2035.

What investments is Rio Tinto making to achieve its decarbonisation goals?

Rio Tinto expects to invest around $7.5 billion between 2022 and 2030 to meet its decarbonisation targets.