Sandeep biswas luxor - presentation final

Aluminium industry global
trends and growth in the Middle
East
Sandeep Biswas
Senior Vice-President, Business Development & Growth
Rio Tinto Alcan
ARABAL 2010
2 November 2010
Luxor, Egypt

October 2010 Aluminium industry global trends and growth in the Middle East ٢
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.

October 2010 Aluminium industry global trends and growth in the Middle East ٣
Market update and outlook
Industry growth – drivers and challenges
Aluminium growth in the Middle East
Rio Tinto Alcan in the Middle East
Conclusion

October 2010 Aluminium industry global trends and growth in the Middle East ٤
Strong recovery but cautious about short
term volatility
Industrial Production Index (2007 = 100) Positive pressures
• China growth
• Government tightening to
prevent bubbles
• Improving OECD demand
Negative pressures
• Sovereign risk and debt
concerns
• Risk of over aggressive
measures to cool the Chinese
property market
• Diminishing effect of stimulus
measures80
85
90
95
100
105
110
Jan-07 Jan-08 Jan-09 Jan-10
OECD Global

October 2010 Aluminium industry global trends and growth in the Middle East ٥
Aluminium price has recovered, inventory
levels remain high
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
janv
89
janv
92
janv
95
janv
98
janv
01
janv
04
janv
07
janv
10
0
5
10
15
20
Aluminium price vs. inventory • LME aluminium price remains
in contango
• Strong demand recovery in
2010 versus 2009
– 18-20% China, about 15%
globally
• Physical inventory balances
stabilized and dropping in
weeks of consumption
• Inventory tied up in financial
deals
• Increasing marginal cost of
production providing higher
price floor
2009$ / tonne
weeks
Price
Inventory

October 2010 Aluminium industry global trends and growth in the Middle East ٦
Global alumina market situation
Source: CRU, Global Insight
Medium-Term AluminaBalanceBenchmark
(250)
0
250
500
750
1000
1250
1500
1750
2000
2010
2011
2012
2013
2014
ktpa
BHJune2010 CRUQ2 2010
CRU Average Spot Price
0
100
200
300
400
500
600
700
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
US$/tAlumina

October 2010 Aluminium industry global trends and growth in the Middle East ٧
Conclusion

October 2010 Aluminium industry global trends and growth in the Middle East ٨
• Our base case is for ~4%-5%
growth in aluminium demand over
the next two decades
• Current energy surplus in China
expected to be temporary
• Increasing competition for energy
in China from residential and
transportation sectors
Long-run story continues to be attractive
Global Aluminium Consumption (million tonnes)
0
20
40
60
80
100
120
140
160
2000 2010 2020 2030 2040 2050
One Saguenay system required every nine months

October 2010 Aluminium industry global trends and growth in the Middle East ٩
Continued cost pressure on marginal cost
producers will provide upward price lift
2010 world BOC curve (2010$/t)
Source: CRU (LME assumption = $2,044/t)
1,000
1,250
1,500
1,750
2,000
2,250
2,500
2,750
3,000
0% 25% 50% 75% 100%
• Electricity cost (particularly in China)
• Raw material prices including alumina
• Renminbi appreciation
• CO2 costs
• Capital charges of new capacity

October 2010 Aluminium industry global trends and growth in the Middle East ١٠
Aluminium is well positioned for the future
Increased focus on carbon emissions reduction will favour the use of
aluminium in transportation, building and thermal transfer
• Aluminium has an excellent strength to weight ratio; aluminium is 2.7 times lighter
than steel; although steel is generally stronger some Aluminium alloys have similar or
greater strength than the common A36 steel
• Aluminium contributes to global CO2 emissions reductions though recycling and the
light-weighting of vehicles
• Aluminium has outstanding thermal and electrical conductivity properties – it is
therefore widely used in applications such as heat exchangers, air conditioning
systems, electrical cables
• Technological developments in production lowering carbon associated with primary
production, for example Rio Tinto Alcan’s proprietary AP50 technology

October 2010 Aluminium industry global trends and growth in the Middle East ١١
Conclusion

October 2010 Aluminium industry global trends and growth in the Middle East ١٢
The region is already a major primary aluminium producer
with more growth to come in the near future.
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2008 2010 2015F
KSA
Qatar
Oman
UAE
Iran
Bahrain
Egypt
Note: 2015 forecast is with the confirmed/under serious consideration projects
Global CAGR of 5.4% per year versus
Middle East CAGR of 9% per year in same period

October 2010 Aluminium industry global trends and growth in the Middle East ١٣
Middle East aluminium industry growth drivers
Energy
advantage
Availability -
Carbon -
footprint -
Proximity to emerging
markets and Europe
Capital
availability
Cost-effective logistics
and infrastructure
Growth in
downstream
transformation
Economic
diversification
Job creation

October 2010 Aluminium industry global trends and growth in the Middle East ١٤
18
15
14
13
11
9
66
3
ChinaUSAMiddle
East
OceaniaSouth
Africa
EuropeLatin
America
Canada India
Aluminium smelter carbon emission intensity, including power source
emissions
Tons CO2e per ton of aluminium produced
SOURCE: Rio Tinto Alcan
Middle East has a carbon emission intensity
advantage
Hydro/nuclear power
and/or lower energy
consumption technology
Coal power and/or
higher energy consumption
technology
Aluminium production mostly natural gas powered
Natural gas power

October 2010 Aluminium industry global trends and growth in the Middle East ١٥
• Competitively priced natural gas
• Competition and demand for power
• Attracting qualified talent and training and educating local and
regional workforce
• Sourcing of key raw materials of acceptable quality and at a
competitive price
– Procuring alumina is a significant challenge
• Increasing alumina pricing and delinking the price from the LME
• Achieving a sustainable business model
Middle East: Industry Challenges

October 2010 Aluminium industry global trends and growth in the Middle East ١٦
Rio Tinto Alcan: A partner of choice in the Middle East
Conclusion

October 2010 Aluminium industry global trends and growth in the Middle East ١٧
Bauxite
30.7Mt
Alumina
8.8Mt
Aluminium
3.9Mt
Solid operating growth strategy: long-life,
large-scale, low-cost assets, leveraging
competitive advantages
• Global presence & scale
– Best bauxite reserves and resources
– No. 2 for aluminium production
– No. 3 for Alumina production
– B&A ‘hub’ in North East Australia to add value over
long term
• Fully integrated, long in bauxite and alumina,
providing growth opportunities and robust supply
chain
• Very strong electricity position – low-cost with low-
carbon footprint
• Modern large-scale smelters and refineries
– Smelter assets average in Q2 cost curve and
modernization programs will continue enhancing
position
– With Yarwun II, alumina production moving down cost
curve
– Transformation to continue lowering costs
• Leadership position in R&D and technology
• Strong reputation on sustainable development
External
Sales
All volumes shown reflect Rio Tinto Alcan share of production for 2009, including joint ventures.
External
Sales

October 2010 Aluminium industry global trends and growth in the Middle East ١٨
Clean, low-cost energy supply Secured energy sources
Short & medium-
term contracts
(5%)
Self-generated
(48%)
Long-term
contracts
(47%)
• 3,815MW owned hydro electric generating
installed capacity in Canada
• Compares favourably to global aluminium
industry total of about 35% hydro based
power for smelting
• Long-standing water rights in Canada
• Compares favourably to global aluminium
industry average of about 35% self-
generated power for smelting
Hydro
(67%)
Nuclear
(11%)
Gas/coal
thermal
(24%)
Unrivalled position in clean, renewable,
self-generated power
Only 16% of power contracts linked to LME

October 2010 Aluminium industry global trends and growth in the Middle East ١٩
Increasing growth opportunities through
technology leadership with AP5X
AP5X industry benchmark for productivity, energy efficiency, and GHG emissions
• Unsurpassed amperage of 545+ kA
• Using the same number of pots, an AP5X potline can produce approximately 50% more
than the latest versions of AP3X technology
• Up to $50-$100 per ton full economic cost (FEC) advantage over AP3X technology
• AP5X Pilot Plant currently under construction will act as the platform for development
of AP6X operating at 600+ kA
AP5X platform for breakthrough technologies APXe well within this decade
• Absolute Specific Energy Efficiency benchmark for Hall-Héroult process
• Enabling containment of direct emissions of GHG form smelting
• Highest health and safety standards
AP technology further reduces capital and operating costs through
– Fewer pot-tending assemblies (PTAs)
– Improved building and equipment design
– Comprehensive engineering packages and training modules
– Experienced support teams at all project stages
– Reduced construction and start-up times

October 2010 Aluminium industry global trends and growth in the Middle East ٢٠
Global options in our project pipeline
Africa
Europe
South
America
North
America
Australasia
Asia
Additional opportunities in early stages of development
AP 50 Pilot Plant
Arvida, Canada (100%)
• Ph 1 under construction: ~60kt
• Potential Ph 2: ~140–340kt
(replacing current Arvida smelter
with capacity of ~165kt)
Alma II, Canada (100%)
• ~180-240kt
Yarwun II, Australia (100%)
• ~2.0Mt
Kitimat, Canada (100%)
• ~400kt (replacing current
plant with capacity of ~275kt)
Malaysia (60%)
• ~460-920kt
Sohar, Oman (20% Ph 1)
• Ph 1 completed: ~360kt
• Potential Ph 2: ~360kt
Guinea (45%)
• 1.6 – 3.2 Mt
ISAL, Iceland (100%)
• ~45kt
Edea, Cameroon
(47%)
• ~600-700kt
Alumina greenfield
Aluminium greenfield
Aluminium brownfield
Alumina brownfield
Under construction
Under
consideration

October 2010 Aluminium industry global trends and growth in the Middle East ٢١
Sohar: the world’s most modern smelter
• Rio Tinto Alcan led project development
team and is managing partner
• Secure, long term, low cost electricity
Project structure
Construction completed on schedule
and budget at $340m (Rio Tinto
Alcan share)
First metal poured in June 2008
• Advanced AP 36 technology,
• Largest single potline in the world
Technology
Sohar will operate in the first quartile of the industry
cash cost curve

October 2010 Aluminium industry global trends and growth in the Middle East ٢٢
Rio Tinto Alcan - The partner of choice in
aluminium for the Middle East
• Strong operating experience – 5 bauxite mines, 10 refineries and 23
smelters on 5 continents
• Backstop alumina supply from world-class refineries in Australia
• State-of-the-art technology, engineering and technical solutions
• Growth-driven mindset and organisation-wide commitment to
sustainable development
• Significant experience working in diverse locations
• Strong corporate governance and recognized for a solid reputation

October 2010 Aluminium industry global trends and growth in the Middle East ٢٣
Rio Tinto Alcan: A partner of choice in the Middle East
Conclusion

October 2010 Aluminium industry global trends and growth in the Middle East ٢٤
Conclusion
• Long-term aluminium industry fundamentals remain strong with short-term
volatility
• Middle East is well positioned to capture more than its share of primary aluminium
production growth
• Industry must focus on meeting the challenges facing aluminium producers in the
Middle East
– Competitively priced natural gas
– Competition and demand for power
– Attracting qualified talent and training and educating local and regional workforce
– Sourcing of key raw materials of acceptable quality and at a competitive price
• Procuring alumina is a significant challenge
– Increasing alumina pricing and delinking the price from the LME
– Achieving a sustainable business model
• Rio Tinto Alcan is a partner of choice for the Middle East

Sandeep biswas luxor - presentation final

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