Rio Tinto

Markets of the Future: Preparing

for Perpetual Change

Rio Tinto

Xiaoling Liu

President and Chief Executive Officer

Rio Tinto Minerals

Rio Tinto

• 2nd Wave of Industrialization

• Global Trends• Global Trends

• European Challenges and Opportunities

• RTM Position and Response

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The 1st and 2nd wave of industrialization experience

same macroeconomic fundamentals

Industrial Minerals (base 100)Metals & Chemical Feedstocks (base 100)

250

300

350

400

450

Zinc

Lead 250

300

350

400

450

Turkish

Feldspar

Cal Borates

0

50

100

150

200

250

05

/01

/20

05

05

/01

/20

06

05

/01

/20

07

05

/01

/20

08

05

/01

/20

09

05

/01

/20

10

Lead

Tin

Copper

Nickel

0

50

100

150

200

250

05

/01

/20

05

05

/01

/20

06

05

/01

/20

07

05

/01

/20

08

05

/01

/20

09

05

/01

/20

10

PCC

Ballclays

Source: Industrial Minerals International Congress 2010, Gerard Buffiere, Imerys

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2nd wave of industrialization now underway

Multiple factors impacting

Global Trends

Monetary and Fiscal

Policy

Regulatory Environment

Industrial Minerals

1st Wave of Industrializa-

tion –

Metals

2nd Wave of Industrializa-

tion -Minerals

Headwinds

Enablers

Infrastructure and

Resources

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Slower pace of population growth

Developing countries grow 7 times faster than developed

countries

Source: World Population Prospects – The 2010 Revision, United Nations Department of

Economic and Social Affairs (DESA) Population Division

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Urban share of the population will continue to increase by over 8%

By 2030, over 5 billion people will live in cities or mega-cities

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Urbanization and increased levels of disposable income

spread technology

Use of technology correlated to reduction of poverty and

growth of GDP.

• 5 billion internet users by 2020.

• Technology devices will be wide-spread• Technology devices will be wide-spread

• Innovation cycles will shorten

Source: United Nations

Fundamental changes in consumption patterns

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Population growth, urbanization, the rise of the middle class

drive the “Need to Feed”.

• Population increases and

urbanization drive the

uptake in food

consumption

• To feed growing

population, modern

Source: www.fao.org/FAO Food Price Index

population, modern

agricultural practices are

needed

• Fertilizers improve crop-

yield and output.

• To satisfy the world’s

food nutritional needs,

must also address water

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Growth in agriculture will require increased access to water.

Water stress exacerbated by climate change.

World Water Stress

• Water demand to increase by 55% by 2050, mostly in the BRIIC nations

• People living under water stress to more than double between 2000-2050

• Population growth and urbanization to cause a large part of the population to lack access to clean water

• By mid-century, water to decrease 10-30 percent

Source: OECD: Water: The Environmental Outlook to 2050 / The Environmental Outlook Baseline projections

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Resource scarcity will create both opportunity and stress

Physical

• Not Accessible

• Depletion of reserves

• Price volatility

Source: www.pwc.com/resourcescarcity; “Minerals and metals scarcity in manufacturing: the ticking time bomb”; 2011

Pressures / opportunities will impact Europe first.

Economic • Market developments

Geopolitical

• Export controls / barriers

• Conflict regions

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Europe – Challenges and Opportunities

Global Trends

Population and Aging

Headwinds

Multispeed economies –Southern Europe

Enablers

Multispeed economies –Northern, Central

Europe

Infrastructure and Resources

Limited access to and productivity gaps on

primary resources

Regulatory

Considered the world leader in sustainability

Urbanization

Resource Scarcity

More….

Aging population -pressure on GDP

Lower labor utilization than most OECD

economies

Competitiveness at risk?

Liberalization of services due to single market

Strong ties to emerging Europe and BRIC nations

High quality of life

Lack of port growth, trucking shortages,

restrictive vessel rates

Fragmented road freight industry

Lack of feedstocks of industrial minerals

Restrictive product market regulations that

may spread globally

Threat of nationalization, trade

barriers

License to operate

How will mineral companies doing business in Europe

create a sustainable competitive advantage?

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Industrial minerals will need to adapt to compete

• Be flexible to shift focus between mine-to-market and

market-to-mine.

• Improve productivity and labor utilization

• Improve port access

• Push for a trade route north

• Improved access to capital

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•European HQ in London

•Sales and Customer Service

Office in Frankfurt

Locations

Europe – RTM’s Position

Office in Frankfurt

•Manufacturing in

Coudekerque and Nules

• Port in Rotterdam

•Stockpoints in Nuremberg,

Mannheim

•Borate / lithium project in

Serbia

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RTM is positioning for the markets of the

future and the 2nd wave of industrialization.

• New Asia Technology Center in Suzhou, China

• Development of borate/lithium project in Serbia

• Presence in South American agriculture• Presence in South American agriculture

• The movement from markets where the first wave is mature and the second wave is growing

• New emerging demand and profit in a mature or emerging market, post 1st phase of industrialization

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Markets of the Future: Preparing

for Perpetual Change

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Questions?