Rio Tinto Group Q4 FY2024 earnings call

• Four objectives: 1. Best operator: Focus on safe production, learning from past tragic events to improve processes. 2. Impeccable ESG: Action plan for decarbonization, value accretive. 3. Excel in development: Progress at Simandou, Oyu Tolgoi, Rincon showcases project building expertise. 4. Social license: Importance of earning and maintaining social license. - Financial performance: Underlying EBITDA down 2% to $23.3 billion despite an 11% lower iron ore price, with rising contribution from aluminum and copper. Operating cash flow rose 3% with a 67% EBITDA cash conversion rate. Net debt $5.5 billion, ordinary dividend paid at 60% of the range for the 9th year. - Project progress: Simandou progressing on schedule and budget, Oyu Tolgoi ramp-up milestones achieved, Rincon scaling up, Kennecott working on unlocking value from its asset, IOC working on operational stability. - Decarbonization: Signed renewable power contracts for around half of Boeing's needs, secured more flexible energy supply for ANZS, and increased stake to 100%.

Iron ore: Delivered over $16 billion of EBITDA in 2024. Realized pricing was strong at 99% of the index, with good productivity improvement and met shipment guidance. Unit costs came in at $23 a tonne, guiding to around 3% higher in 2025. Western Range is on plan to commence production in the first half. Aluminum: Performance was impressive, particularly for smelting and bauxite, with a 61% increase in product group EBITDA. Copper: Strong due to higher prices and rising volumes across operations. Minerals: TiO2 volumes reflected weak Western market conditions for pigment; IOC still not achieving operational stability, but Rincon achieved first lithium and Salta plant approval for full-scale operations.

• Production: Copper equivalent production up just over 1% in 2024, with mid-range guidance 4% growth in 2025 led by Oyu Tolgoi ramp-up. - Dividend: 60% payout for ordinary dividend, maintaining a 9-year track record of paying at the top end of the range. - CapEx: Guidance unchanged, with major commitments in 2025 including completion of OT underground, ongoing delivery of Simandou, and start of construction at Rincon.

• Operational risks: Impact of tropical cyclones affecting Pilbara production, challenges with IOC operational stability, geotechnical risks at Kennecott. - Regulatory risks: Uncertainty around tariffs on aluminum, potential impacts of new government policies on critical mineral tax credits. - Approval risks: Uncertainty around heritage and environmental approvals for Pilbara mine replacement projects.

Q: Rahul Anand asked about dividend policy and if they're comfortable adding debt to maintain EPS payout level.

A: Peter Cunningham said they're investing in attractive growth like OT underground and Simandou, which will add incremental cash flows, so they're comfortable.

Q: Rahul Anand asked about aluminum business coping with tariffs.

A: Jakob Stausholm said tariffs' impact is unclear, but could redirect aluminum to other markets.

Q: Jason Fairclough asked about investments in Canada and US despite tariffs.

A: Jakob Stausholm said keen to invest in US and Canada, seeing opportunities arise from seismic changes.

Q: Jason Fairclough asked about unproductive PP&E becoming productive.

A: Peter Cunningham said Simandou spent $2.4B of CapEx (40% through), OT 95% of CapEx but just starting ramp-up.

Q: Paul Young asked about Pilbara guidance and Rhodes Ridge.

A: Jakob Stausholm said guidance unchanged, Western Range on schedule, progress on mine replacement projects.

Q: Lyndon Fagan asked about Pilbara replacement mines and Simandou impact.

A: Peter Cunningham said replacement mines progressing as expected, Simandou high-grade iron ore fits market balance.

Q: Ephrem Ravi asked about Rincon spending and Arcadium transaction.

A: Jakob Stausholm said Arcadium deal near closing, plan to spend on Rincon but details pending closure.

Q: Richard Hatch asked about iron ore costs.

A: Peter Cunningham said $23 cost is good, guidance 3% higher in 2025, targeting $20/tonne mid-term.

Q: Christopher LaFemina asked about Kennecott and aluminum tariffs.

A: Jakob Stausholm said too early to conclude on Kennecott tax credit, aluminum tariff impact uncertain.

Q: Liam Fitzpatrick asked about Chinalco stake and Pilbara monetization.

A: Jakob Stausholm said working on Chinalco stake, not keen on Pilbara minority sell-down.

Q: Lachlan Shaw asked about cost curve trend and inorganic growth.

A: Peter Cunningham said cost curve trend not changing much, organic growth underway, inorganic depends on deals.

Q: Alain Gabriel asked about Resolution project and Entrée Resources JV.

A: Jakob Stausholm said Resolution project waiting on Supreme Court, working on Mongolian tax dispute and Entrée Resources JV.

Q: Kaan Peker asked about TiO2 in Canada and East Intercourse Island remediation.

A: Jakob Stausholm said TiO2 impact depends on tariffs, East Intercourse Island remediation still on initial 3-4 week timeline.

Q: Amos Fletcher asked about Glencore approach and DLC structure.

A: Jakob Stausholm said no comment on Glencore rumor, not thinking more positively about DLC dissolution.

Q: Myles Allsop asked about Simandou ramp-up shape and DLC cost.

A: Jakob Stausholm said Simandou ramp-up shape unclear, not going into DLC cost details for shareholders.