Rio Tinto Group Q2 FY2023 earnings call

• Safety: Investigated incidents at Sorel and Kennecott, emphasizing the need for continuous risk management improvement. - Investments: Highlights include Oyu Tolgoi underground production, Kennecott expansion, joint venture with First Quantum for La Granja, AP60 smelter expansion, Matalco joint venture, Simandou progress, Western Range iron ore project, and Sorel BlueSmelting demonstration plant. - Pilbara Business: Sustained strong momentum with 7% production uplift, unit cost decline to $21 per tonne. - Oyu Tolgoi: Achieved first sustainable production from underground, with plans to become the world's fourth largest copper mine by 2030. - Decarbonization: Efforts include BlueSmelting, renewable diesel in boron operation, and MOU with China Baowu, though challenges exist in meeting emissions targets.

Iron Ore: Performed well, Gudai-Darri reached nameplate capacity, full-year shipments expected in the upper half of the 320-335 million tonne guidance range. Aluminum: Volumes of metal up 9% due to Kitimat recovery, but EBITDA margins halved due to 24% drop in LME prices. Invested in AP60 smelter expansion, recycling capacity, and joint venture with Matalco. Copper: Highlighted first sustainable production from Oyu Tolgoi underground; Kennecott and Escondida had operational challenges. Minerals: IOC saw improved performance but lost almost a month of production in June due to forest fires; iron, titanium, and boron suffered market weakness. Lithium: Rincon lithium capital increased to $335 million for the 3,000 tonne per annum starter plant with extended schedule and added scope.

• Returned $2.9 billion to shareholders with a 50% payout. - Capital allocation focus on sustaining capital, high-returning replacement projects, and decarbonization. - Simandou project with ongoing negotiations, expected Rio Tinto share of CapEx. - Aluminum business plans for growth in North America with investments in smelting, recycling, etc.

• Safety incidents at Sorel and Kennecott. - Operational challenges at Kennecott, IOC, Escondida. - Uncertainties in Simandou negotiations. - Impact of commodity price volatility, inflation, and decarbonization challenges.

Q: On Simandou, outline outstanding issues and CapEx guidance A: Peter and Jakob discuss ongoing negotiations, Rio Tinto's share of CapEx with negotiations still ongoing and focus on getting the right agreements with partners Q: On Matalco JV, profitability and recycling strategy A: Jakob talks about joint venture details, focus on recyclability in aluminum but limited details due to deal not closed and competition authority clearance Q: On Kennecott costs and improvement A: Jakob and Peter discuss operational challenges at Kennecott, including smelter rebuild and plans to improve performance Q: On IOC operations A: Peter discusses IOC's performance, recovery from forest fires, and progress in improving operations Q: On aluminum investment and decarbonization A: Jakob and Peter talk about AP60 smelter investment, decarbonization efforts, and challenges in achieving emissions targets Q: On emissions flight path A: Jakob discusses challenges in achieving emissions targets, including factors like company growth and Western world's slow progress on renewable energy