Business description – setting the scene? 2010 Annual report This report is available online Visit www.riotinto.com/annualreport2010 Rio Tinto 2010 Annual Report Basic Materials United Kingdom/Australia globalsector leadership Striving for Group overview Opportunities for long term growth Major global operations Our assets are ideally positioned to serve our customers worldwide. The majority of our operations are in Australia and North America, but we also have businesses in South America, Europe, southern Africa and Asia. While our operating heartland is in OECD (Organisation for Economic Co-operation and Development) countries, much of our sales are to emerging economies – which are driving the anticipated growth in metals and minerals demand. To meet rising demand, we will continue to pursue value-adding organic growth, plus targeted small to medium sized acquisitions. Our ve product groups (below) are supported by our Exploration and Technology & Innovation groups. of sales by destination to North and South America 21 % of sales by destination to Europe, Middle East and Africa 19% Overview of sales by destination to China 28% 32% of sales by destination to elsewhere in Asia and Australia Performance 18 Countries with operations and/or projects Production, reserves and operations Aluminium We are a global leader in the aluminium industry. Our closely integrated facilities include high quality bauxite mines and alumina re neries, as well as some of the world’s lowest cost primary aluminium smelters. Copper With diverse assets and leading technology, our Copper group is uniquely positioned to supply growing global demand. In 2010, we produced 678 thousand tonnes of copper, making us the world’s fth largest supplier. We also produced 772 thousand ounces of gold and 13 thousand tonnes of molybdenum as by-products of our copper operations. Diamonds & Minerals The Diamonds & Minerals group comprises mining, re ning and marketing operations across three sectors. Rio Tinto Diamonds is one of the world’s leading diamond producers, active in mining and sales and marketing. Rio Tinto Minerals is a world leader in borates and talc, with mines, processing plants, commercial and research facilities. Rio Tinto Iron & Titanium is an industry leader in high grade titanium dioxide. Energy We are a leading supplier of thermal and coking coal to the Asian seaborne market and are one of the world’s largest uranium producers, serving electric power utilities worldwide. Our Energy portfolio includes: Rio Tinto Coal Australia; a coal mine at Colowyo in Colorado, US; Energy Resources of Australia, which produces uranium oxide from its Ranger operation; and Rössing, a Namibian uranium oxide producer. Iron Ore We are the second largest producer supplying the global seaborne iron ore trade. After a decade of dramatic expansion in Australia, and more recent growth in both Australia and Canada, we believe we are well positioned to bene t from the continuing demand surge in China and other Asian markets. We are driving performance through effective project management and enhanced operational ef ciency. Exploration Exploration is one of the Group’s core activities – largely paying for itself through the sale of non core discoveries. Potential Tier 1 discoveries (see page 62) are retained for development and operation. These have included two of the largest copper opportunities in the world at Resolution in Arizona, US and La Granja in Peru. Exploration has also delivered one of the world’s largest known undeveloped high grade iron ore deposits, at Simandou in Guinea, as well as the Caliwingina channel iron deposits in the Pilbara, Australia. Full operating review on page 62 Products • Bauxite, alumina, aluminium Governance Key strengths • Effective portfolio management, improving our already strong position and moving assets further down the cost curve. • Largest bauxite producer in the industry. • Self generated hydroelectricity at many facilities. • Global scale gives the group the ability to seize opportunities and support customers worldwide as markets continue their recovery. • One of the best growth project pipelines in the aluminium industry, supported by our management expertise and proprietary AP Technology™. Contribution to Group underlying earnings (a) (b) Products • Copper, gold, molybdenum, silver, nickel Key strengths • Participation in and ownership of several world class operating assets. Management of the Oyu Tolgoi project, scheduled to be a top ten copper producer and a signi cant gold producer. • Investment in a substantial growth pro le. • Industry leading technology and innovation. Products • Diamonds, borates, titanium dioxide feedstocks, talc, high purity iron, metal powders, zircon, rutile Products • Thermal coal, coking coal, uranium Products • Iron ore, salt Key strengths • Strong customer relationships and high quality assets located in close proximity to growing Asian markets. • Emphasis on operational excellence, thereby reducing waste and greenhouse gas emissions and engaging our people. Key strengths • Proximity of the expanded Pilbara operations to the world’s largest and fastest growing markets. • Success in increasing operational ef ciency and controlling costs. • Vast potential of brown eld developments near existing infrastructure. Contribution to Group underlying earnings (a) (b) Key strengths • Poised to bene t from late-cycle demand growth. • Substantial brown eld and green eld development pipeline. Technology & Innovation Our centralised team of specialists focuses on improving current technologies and operations, with emphasis on project development, execution and evaluation. The Group’s Innovation Centre concentrates on step changes that will give us competitive advantages in developing the orebodies of the future. A special Energy & Climate Strategy Centre is dedicated to improving the Group’s use of energy, reducing greenhouse gas emissions and understanding the effects of climate change on our operations and prospects. Full operating review on page 64 Financial statements Contribution to Group underlying earnings (a) (b) Contribution to Group underlying earnings (a) (b) Contribution to Group underlying earnings (a) (b) 6% 18% 2% 8% 73% Additional information Full operating review on page 42 Full operating review on page 46 Full operating review on page 50 Full operating review on page 54 Full operating review on page 58 (a) Items excluded from net earnings to arrive at underlying earnings are explained in note 2 to the 2010 nancial statements. (b) Aggregate product group underlying earnings contribution of 107 per cent is reduced to 100 per cent by negative amounts for Other items and Net interest. 4 Rio Tinto 2010 Annual report www.riotinto.com 5 pp 4-5 In the Rio Tinto report, business divisions and supporting functions are all clearly outlined showing their contribution to group revenue and key strengths. The global reach, and distribution, of the organisation is explained as well as graphically depicted showing the percentage of the group’s products sold to major geographical regions. 12 Integrated thinking in reporting
