Annual Report 2021
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Rio Tinto acknowledges the First Nations custodians
of land where we work and live around the world.
We respect their unique connection to land,
waters and the environment.
Cover | Operations Centre, Perth. Western Australia.
Inside front cover | QIT Madagascar Minerals (QMM).
The photography in this report may not reflect the COVID-19 regulations in place on site at the time of publication.
Rio Tinto acknowledges the First Nations custodians
of land where we work and live around the world.
We respect their unique connection to land,
waters and the environment.
Cover | Operations Centre, Perth. Western Australia.
Inside front cover | QIT Madagascar Minerals (QMM).
The photography in this report may not reflect the COVID-19 regulations in place on site at the time of publication.
Contents
Strategic report
2021 highlights
2021 at a glance
Chairman’s statement
Chief Executive’s statement
Strategic context
Our values
Our stakeholders – our section 172(1) statement
Our business model
Key performance indicators
Chief Financial Officer’s statement
Financial review
Portfolio management
Business reviews
Iron Ore
Aluminium
Copper
Minerals
Commercial
Innovation
Sustainability
Risk report
Risk management
Principal risks and uncertainties
Five-year review
Directors’ report
Governance
Chairman’s introduction
Board of Directors
Executive Committee
Board insights
Our stakeholders – our section 172(1) statement
Matters discussed in 2021
Governance framework
Evaluating our performance
Nominations Committee report
Audit Committee report
Sustainability Committee report
Remuneration report
Annual statement by the Remuneration Committee Chair
Response to 2021 AGM voting outcomes
Remuneration at a glance
Implementation report
Additional statutory disclosure
Compliance with governance codes
and standards
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Financial statements
Group income statement
Group statement of comprehensive income
Group cash flow statement
Group balance sheet
Group statement of changes in equity
Reconciliation with Australian accounting standards
Outline of dual listed companies structure and
basis of financial statements
Notes to the 2021 financial statements
Rio Tinto plc company balance sheet
Rio Tinto plc company statement of changes in equity
Rio Tinto financial information by business unit
Australian Corporations Act – Summary of ASIC relief
Directors’ declaration
Independent auditors’ reports
Auditors’ independence declaration
Alternative Performance Measures
Financial summary 2012-2021
Summary financial data in Australian Dollars,
Sterling and US Dollars
Production, Ore Reserves, Mineral
Resources and Operations
Metals and Minerals Production
Mineral Resources and Ore Reserves
Competent Persons
Mines and production facilities
Additional information
Independent limited assurance report
Shareholder information
Contact details
Cautionary statement about forward-looking statements
Visit riotinto.com to find out more
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Annual Report 2021 | riotinto.com
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Amrun operations, Chith Export Facility. Weipa operations, Australia.
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Annual Report 2021 | riotinto.com
Strategic report
All-injury frequency rate
Consolidated sales revenues
0.40
(2020: 0.37)
Fatalities
Zero
(2020: zero)
$63.5bn
(2020: $44.6bn)
Net cash generated from
operating activities
$25.3bn
(2020: $15.9bn)
Scope 1 and 2 greenhouse
gas emissions (equity Mt CO2e)
31.1Mt
(2020: 31.5Mt)
Underlying EBITDA2
$37.7bn
(2020: $23.9bn)
People who undertook cultural
awareness training1
Profit after tax attributable to owners of
Rio Tinto (net earnings)
22,400
(2020 comparative dataset is not available due to
programme changes)
$21.1bn
(2020: $9.8bn)
Women in our workforce
21.6%
(2020: 20.1%)
Total dividend per share
1,040 cents
(2020: 557 cents)
Amrun operations, Chith Export Facility. Weipa operations, Australia.
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Annual Report 2021 | riotinto.com
1. People who undertook cultural awareness training included employees and contractors. Course content and length varied depending on cultural and operational context.
2. A reconciliation of underlying EBITDA to its closest IFRS measure is presented on page 343.
Annual Report 2021 | riotinto.com
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2021 at a glance
Our business comprises a portfolio of
world-class assets that help meet
society’s current and future needs and
generate strong cash flows through
the cycle.
Product groups
Iron Ore
Aluminium
Iron ore is the primary raw material used to make steel. Steel is
strong, long-lasting and cost-efficient, making it perfect for
everything from wind turbines to skyscrapers and ships.
Aluminium is one of the world’s fastest-growing major metals.
Lightweight and recyclable, it is found in everything from solar panels
to electric vehicles and smartphones.
In the Pilbara region of Western Australia, we produce five iron ore
products, including the Pilbara Blend™, the world’s most traded
brand of iron ore.
Our vertically integrated aluminium portfolio spans high-quality bauxite
mines, alumina refineries and smelters which, in Canada, are powered
entirely by clean, renewable energy.
Our Dampier Salt operations in Western Australia are the
world’s largest exporter of seaborne salt, produced from
evaporating seawater.
This quality product suite is well positioned to benefit from
continued demand across China, Japan and other markets.
Our unique assets allow us to provide responsible aluminium with a
low-carbon footprint, traceable from mine to metal.
Our low-cost, hydro-based aluminium smelters will continue to
grow their distinct structural advantages as we move towards a
net zero world.
Gross product sales
$39.6bn
Underlying EBITDA
$27.6bn
Gross product sales
$12.7bn
Underlying EBITDA
$4.4bn
(2020: $27.5bn)
(2020: $18.8bn)
(2020: $9.3bn)
(2020: $2.2bn)
Production (100% basis)
319.7Mt
iron ore
(2020: 333.4Mt)
Production (our share)
54.3Mt
bauxite
(2020: 56.1Mt)
CO2e emissions
(our share)
3.0Mt
(2020: 3.0Mt)
All-injury
frequency rate
0.67
(2020: 0.53)
CO2e emissions
(our share)
21.9Mt
(2020: 21.8Mt)
3,151kt
aluminium
(2020: 3,180kt)
All-injury
frequency rate
0.33
(2020: 0.34)1
4
Annual Report 2021 | riotinto.com
1. Our Gove operations' closure unit was transferred from Aluminium to Closure, causing
change in historical AIFR, previously noted as 0.36 in our 2020 Annual Report.
2021 at a glance
Our business comprises a portfolio of
world-class assets that help meet
society’s current and future needs and
generate strong cash flows through
the cycle.
Iron Ore Company of Canada (IOC), operations.
Product groups
Iron Ore
Iron ore is the primary raw material used to make steel. Steel is
Aluminium is one of the world’s fastest-growing major metals.
strong, long-lasting and cost-efficient, making it perfect for
Lightweight and recyclable, it is found in everything from solar panels
everything from wind turbines to skyscrapers and ships.
to electric vehicles and smartphones.
Copper is essential to the transition to a low-carbon future as it
plays a key role in electrification and power generation, including
in renewable energy and electric vehicles.
Our Minerals product group provides materials essential to a wide
variety of industries, ranging from agriculture to renewable energy
and electric vehicles.
Aluminium
Copper
Minerals
In the Pilbara region of Western Australia, we produce five iron ore
Our vertically integrated aluminium portfolio spans high-quality bauxite
products, including the Pilbara Blend™, the world’s most traded
mines, alumina refineries and smelters which, in Canada, are powered
Our operations span the globe, from Mongolia to Chile to the US,
and occupy various stages of the mining lifecycle.
With global decarbonisation goals set to drive growing demand for
copper and other key commodities, our pipeline of growth projects
strongly positions us as a partner in sustainable growth.
We produce high-grade, low-impurity iron ore pellets and concentrate,
titanium dioxide, diamonds and borates from our operations in Canada,
Madagascar, South Africa and the US.
We contribute to Rio Tinto’s sustainable growth by unlocking value
from our high-grade orebodies and developing new materials.
In addition to copper, our product group also includes the Simandou
iron ore project in Guinea, the largest known undeveloped
high-grade iron ore deposit in the world2.
By reprocessing mining waste to extract valuable by-products, we are
expanding our frontiers and meeting the increasing demand for critical
minerals, such as lithium and scandium.
brand of iron ore.
entirely by clean, renewable energy.
Our Dampier Salt operations in Western Australia are the
world’s largest exporter of seaborne salt, produced from
Our unique assets allow us to provide responsible aluminium with a
low-carbon footprint, traceable from mine to metal.
evaporating seawater.
This quality product suite is well positioned to benefit from
continued demand across China, Japan and other markets.
net zero world.
Our low-cost, hydro-based aluminium smelters will continue to
grow their distinct structural advantages as we move towards a
Gross product sales
Underlying EBITDA
Gross product sales
Underlying EBITDA
$39.6bn
(2020: $27.5bn)
$27.6bn
(2020: $18.8bn)
$12.7bn
(2020: $9.3bn)
$4.4bn
(2020: $2.2bn)
Gross product sales
$7.8bn
Underlying EBITDA
$4.0bn
Gross product sales
$6.5bn
Underlying EBITDA
$2.6bn
(2020: $5.0bn)
(2020: $2.1bn)
(2020: $5.2bn)
(2020: $1.7bn)
Production (100% basis)
Production (our share)
319.7Mt
iron ore
(2020: 333.4Mt)
CO2e emissions
(our share)
3.0Mt
(2020: 3.0Mt)
All-injury
frequency rate
0.67
(2020: 0.53)
54.3Mt
bauxite
(2020: 56.1Mt)
CO2e emissions
(our share)
21.9Mt
(2020: 21.8Mt)
3,151kt
aluminium
(2020: 3,180kt)
All-injury
frequency rate
0.33
(2020: 0.34)1
Production (our share)
494kt
mined copper
(2020: 528kt)
Production (our share)
1,014kt
titanium dioxide
slag
9.7Mt
iron ore pellets and
concentrates
(2020: 1,120kt)
(2020: 10.4Mt)
CO2e emissions
(our share)
2.2Mt
(2020: 2.6Mt)
All-injury
frequency rate
0.21
(2020: 0.25)
CO2e emissions
(our share)
3.4Mt
(2020: 3.6Mt)
All-injury
frequency rate
0.38
(2020: 0.43)
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Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
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1. Our Gove operations' closure unit was transferred from Aluminium to Closure, causing
change in historical AIFR, previously noted as 0.36 in our 2020 Annual Report.
2. Simandou is an iron ore project but is reported under Copper due to the management structure.
Chairman’s statement
In 2021, Rio Tinto focused on rebuilding
relationships and strengthening our
social licence, while producing record
financial results as the developed world
and China recovered strongly from the
economic dislocation caused by the
COVID-19 pandemic.
During the first half of 2021, the Board appointed Jakob Stausholm as
Chief Executive and Peter Cunningham as Chief Financial Officer, and
nine members of the Executive Committee also took up new roles.
After this unprecedented period of management change, consolidation
and planning for the future were the major focus during the remainder
of the year.
Following extensive engagement with management and the Board,
the new team led by Jakob established four objectives – to become
the best operator; achieve impeccable environmental, social and
governance (ESG) credentials; excel in development; and secure a
strong licence to operate. In addition, we introduced three new values
– care, courage and curiosity – and a new strategy, including
significantly more ambitious targets to address climate change.
With the new leadership team and a clearly articulated strategy in
place, in 2022 we will focus on delivering the strategy, in collaboration
with our partners and other stakeholders.
Safety and wellbeing
Rio Tinto achieved zero fatalities for a third consecutive year in 2021.
This reflects the hard work and dedication of our employees and
contractors worldwide. Sadly, however, people are still getting injured
at work, so we must remain vigilant and focused.
While some countries are gradually adapting to life with COVID-19,
the pandemic continues to exact a heavy toll, particularly in developing
countries, including Mongolia, South Africa and India, and at our
non-managed operations in South America. I am very proud of the care
shown by our employees and contractors, for each other and for their
local communities, by prioritising safety controls, supporting
vaccination programmes and setting up vaccination clinics near many
of our operations.
Recognising that our responsibility for ensuring the wellbeing of our
employees and contractors extends beyond the traditional areas of
health and safety, Rio Tinto launched the Everyday Respect initiative in
2021. The objective is to create a safer, more respectful and inclusive
environment by preventing, and improving how we respond to,
unacceptable behaviour in the workplace.
I am grateful to Elizabeth Broderick, formerly the Australian sex
discrimination commissioner, for advising the Everyday Respect task
force that we set up to drive this initiative, and to the more than 10,000
employees and contractors worldwide who participated in listening
6
Annual Report 2021 | riotinto.com
sessions and surveys as part of the discovery phase. The findings of
the Everyday Respect task force were published in February 2022 and
made confronting reading. Having established and acknowledged the
extent of the problem, we are urgently implementing the
recommendations set out in the report.
Financial performance, economic contribution
and dividend
Our operating and project development performance in 2021 was
adversely impacted by COVID-19-related travel restrictions and labour
shortages, and the transition to improved communities and heritage
management processes in the Pilbara and elsewhere.
Nevertheless, the Group achieved record financial results, with underlying
earnings of $21.4 billion (2020: $12.4 billion) and net cash generated from
operating activities of $25.3 billion (2020: $15.9 billion). Profit after tax
attributable to owners of Rio Tinto was $21.1 billion (2020: $9.8 billion)
and our balance sheet remains exceptionally strong with net cash of
$1.6 billion (2020: net debt of $0.7 billion). These results reflect the quality
of Rio Tinto’s assets and strong commodity prices, particularly during the
first half of 2021.
The Group’s direct economic contribution to the countries where we
operate, including payments to employees, suppliers, governments and
shareholders, amounted to $66.6 billion (2020: $47 billion). Corporate tax
paid in 2021 was $8.5 billion (2020: $5.3 billion), which when combined
with royalties and other taxes, and with our share of taxes and royalties
paid by equity accounted units, resulted in payments to governments of
over $13 billion (2020: $8.4 billion), including over $11 billion
(2020: $6.8 billion) paid in Australia.
In recognition of this strong performance, the Board is recommending a
final dividend of 417 US cents (2020: 309 US cents) and a special
dividend of 62 US cents per share (2020: 93 US cents), taking total
dividends declared to shareholders this year to a new record of $16.8 billion.
Environmental, social and governance
(ESG) credentials
Climate change is the defining issue of our time. In October 2021, Jakob
and I travelled to Glasgow for COP26, the UN Climate Change Conference,
to meet governments, civil society organisations, financiers and business
leaders seeking solutions to the common goal of tackling climate change.
Chairman’s statement
In 2021, Rio Tinto focused on rebuilding
relationships and strengthening our
social licence, while producing record
financial results as the developed world
and China recovered strongly from the
economic dislocation caused by the
COVID-19 pandemic.
During the first half of 2021, the Board appointed Jakob Stausholm as
sessions and surveys as part of the discovery phase. The findings of
Chief Executive and Peter Cunningham as Chief Financial Officer, and
the Everyday Respect task force were published in February 2022 and
nine members of the Executive Committee also took up new roles.
made confronting reading. Having established and acknowledged the
After this unprecedented period of management change, consolidation
extent of the problem, we are urgently implementing the
and planning for the future were the major focus during the remainder
recommendations set out in the report.
of the year.
Following extensive engagement with management and the Board,
the new team led by Jakob established four objectives – to become
the best operator; achieve impeccable environmental, social and
governance (ESG) credentials; excel in development; and secure a
strong licence to operate. In addition, we introduced three new values
– care, courage and curiosity – and a new strategy, including
significantly more ambitious targets to address climate change.
With the new leadership team and a clearly articulated strategy in
place, in 2022 we will focus on delivering the strategy, in collaboration
with our partners and other stakeholders.
Safety and wellbeing
Rio Tinto achieved zero fatalities for a third consecutive year in 2021.
This reflects the hard work and dedication of our employees and
contractors worldwide. Sadly, however, people are still getting injured
at work, so we must remain vigilant and focused.
While some countries are gradually adapting to life with COVID-19,
the pandemic continues to exact a heavy toll, particularly in developing
countries, including Mongolia, South Africa and India, and at our
non-managed operations in South America. I am very proud of the care
shown by our employees and contractors, for each other and for their
local communities, by prioritising safety controls, supporting
vaccination programmes and setting up vaccination clinics near many
of our operations.
Recognising that our responsibility for ensuring the wellbeing of our
employees and contractors extends beyond the traditional areas of
health and safety, Rio Tinto launched the Everyday Respect initiative in
2021. The objective is to create a safer, more respectful and inclusive
environment by preventing, and improving how we respond to,
unacceptable behaviour in the workplace.
I am grateful to Elizabeth Broderick, formerly the Australian sex
discrimination commissioner, for advising the Everyday Respect task
force that we set up to drive this initiative, and to the more than 10,000
employees and contractors worldwide who participated in listening
6
Annual Report 2021 | riotinto.com
Financial performance, economic contribution
and dividend
Our operating and project development performance in 2021 was
adversely impacted by COVID-19-related travel restrictions and labour
shortages, and the transition to improved communities and heritage
management processes in the Pilbara and elsewhere.
Nevertheless, the Group achieved record financial results, with underlying
earnings of $21.4 billion (2020: $12.4 billion) and net cash generated from
operating activities of $25.3 billion (2020: $15.9 billion). Profit after tax
attributable to owners of Rio Tinto was $21.1 billion (2020: $9.8 billion)
and our balance sheet remains exceptionally strong with net cash of
$1.6 billion (2020: net debt of $0.7 billion). These results reflect the quality
of Rio Tinto’s assets and strong commodity prices, particularly during the
first half of 2021.
The Group’s direct economic contribution to the countries where we
operate, including payments to employees, suppliers, governments and
shareholders, amounted to $66.6 billion (2020: $47 billion). Corporate tax
paid in 2021 was $8.5 billion (2020: $5.3 billion), which when combined
with royalties and other taxes, and with our share of taxes and royalties
paid by equity accounted units, resulted in payments to governments of
over $13 billion (2020: $8.4 billion), including over $11 billion
(2020: $6.8 billion) paid in Australia.
In recognition of this strong performance, the Board is recommending a
final dividend of 417 US cents (2020: 309 US cents) and a special
dividend of 62 US cents per share (2020: 93 US cents), taking total
dividends declared to shareholders this year to a new record of $16.8 billion.
Environmental, social and governance
(ESG) credentials
Climate change is the defining issue of our time. In October 2021, Jakob
and I travelled to Glasgow for COP26, the UN Climate Change Conference,
to meet governments, civil society organisations, financiers and business
leaders seeking solutions to the common goal of tackling climate change.
While the UN conference achieved some important breakthroughs, it
also underlined the urgent need for greater action if the world is to meet
its commitments under the Paris Agreement and achieve a just transition
to a low-carbon economy.
Just two weeks before COP26, we announced our new strategy, setting
out our plans for growth in materials, such as copper and lithium, that are
essential for the energy transition, as well as significantly more ambitious
carbon reduction targets in our operations. We have accelerated our
target of a 15% reduction in absolute Scope 1 and 2 emissions from
2030 to 2025, and established a challenging new target to achieve a
50% reduction by 2030.
To thrive in the long-term, we need to be part of net zero value chains,
particularly for steel and aluminium production, so we also have ambitious
plans to work in collaboration with our customers and suppliers to reduce our
indirect Scope 3 emissions. In 2019, we established our flagship partnership
with China Baowu and Tsinghua University, followed by our partnership
with Nippon Steel Corporation in 2020. In 2021 we added two new steel
decarbonisation partnerships with POSCO in South Korea and BlueScope in
Australia. Our efforts to decarbonise aluminium smelting include scaling-up
the breakthrough ELYSISTM technology, for commercialisation by 2024.
We also have the ambition to reduce our shipping emissions intensity by
40% by 2025 and to reach net zero by 2050.
One of the themes at COP26, and the earlier G7 meeting, was an increasing
awareness that constraints in the supply of critical raw materials, such as
copper, lithium and certain rare earth elements, potentially threaten to delay
the transition to a low-carbon economy. We were disappointed to hear
recent announcements by the Government of Serbia in relation to the Jadar
lithium project. While the benefits of projects like Jadar are significant
and global in enabling the energy transition, we acknowledge the
concerns of the local community and have worked hard to mitigate local
impacts while maximising the potential social and economic benefits to
Serbia. Taken together with the responsible development of the
Resolution Copper project in the US, our growing lithium portfolio has
the potential to strengthen the resilience of supply chains serving the
renewable energy sector and electric vehicle manufacturers.
We are also evaluating the use of our landholdings to develop verifiable,
nature-based carbon offsets for those parts of our business where
abatement is technologically challenging or prohibitively expensive.
These carbon offset projects also have the potential to deliver significant
biodiversity, community and water management benefits. In addition,
we are participating in two early-stage carbon mineralisation research
projects, in Iceland and the US.
In September 2021, we published an interim report on our communities
and social performance commitments, as we continue to implement
the recommendations arising from the Juukan Gorge tragedy. We have
initiated numerous other workstreams to strengthen our relations and
build mutually beneficial partnerships with Traditional Owners and
other Indigenous peoples around the world. Further details are set out
on pages 94-95 of this report.
Leadership, culture and values
Following his appointment as Chief Executive on 1 January 2021, Jakob
moved rapidly to appoint his new leadership team and to roll out a new
development programme for our top managers, designed to achieve a
more collaborative, inclusive and effective senior leadership team.
Over the coming months, over 400 General Managers will join a similar
programme. Their leadership will be crucial as we seek to embed the
desired values and behaviours.
Stakeholder and workforce engagement
Despite the travel restrictions imposed by the pandemic, Board
members engaged extensively with stakeholders throughout the year,
including having regular updates with shareholders, governments, local
communities, and Traditional Owners, and hosting three civil society
roundtables, in Australia, Europe and North America.
The Board expanded its engagement with the workforce, through site
visits, in-person and virtual town halls, podcasts, videos, and listening
sessions. Feedback from these events suggests that our employees
are generally optimistic about the future and the changes taking place
across the Group. There is good support for the new leadership team,
our new strategy and values, and the Everyday Respect initiative,
coupled with a realistic acknowledgement that cultural change takes
time and the leadership team will be judged by their actions, not
their words.
Sadly, we are seeing increasing staff turnover, and usage of our
Employee Assistance Programme remains high, reflecting the
pressures, both at home and at work, that many of our employees are
experiencing, in part because of the pandemic.
Annual Report 2021 | riotinto.com
7
Chairman’s statement continued
Board and Executive Committee
It is a testament to the strength of Rio Tinto’s talent pool and
succession planning that all but two of the positions created by the
significant management changes that were necessary at the start of
2021, were filled with internal candidates. The new team, under Jakob’s
leadership, has worked tirelessly to ensure a smooth transition and to
co-create our new strategy and values. I am very grateful to them and
to all our employees and contractors for their hard work and
commitment during another challenging, but successful, year.
We were delighted to welcome Ben Wyatt to the Board in September.
Ben’s knowledge of finance, public policy, trade and Indigenous affairs
has already proved to be invaluable. As previously announced, I will
step down as Chairman following the Australian annual general
meeting in May 2022. I am delighted that the Board has announced the
appointment of Dominic Barton as Chair-designate. Dominic has
extensive business and international relations knowledge as well as
deep understanding of the linkages between business, governments
and society. I wish him every success.
Reflections and outlook
As I reach the end of my eight years on the Board, it has been a privilege
to be part of the leadership team of this great company and I am proud of
the direction that Rio Tinto is taking and of the talent, resilience and
enthusiasm of our employees and contractors around the world.
Our third successive fatality-free year underlines our commitment to
safety and strengthens a mindset where zero fatalities has become the
expectation, not the exception. The Group’s response to COVID-19 has
also been exemplary. We have kept all our managed operations
worldwide running safely and smoothly, protecting thousands of jobs at
our suppliers and customers, while safeguarding our employees,
contractors and local communities. In many ways, the pandemic brought
out the best of Rio Tinto. It was inspiring to see how the organisation
pulled together to support each other and their communities.
We have emerged from the challenges of the last few years with a firm
commitment to become a more inclusive, respectful and caring
company that values genuine partnerships with all our stakeholders.
Our purpose remains to produce minerals and metals essential to
human progress, and we have set out a new strategy that seeks to
re-establish Rio Tinto as a leader in an industry that has a uniquely
important and challenging role to play in creating a sustainable
and prosperous future for people and the planet. The strategy is
designed to achieve a 50% reduction in our greenhouse gas
emissions by 2030 and net zero by 2050, including breakthrough
technology to decarbonise the production of aluminium, one of the
most energy-intensive industrial processes in the world.
We have also increased the diversity of our workforce, our
management team and the Board, and have taken important steps to
ensure that all our operations provide a safe, inclusive workspace,
where everyone can achieve their full potential. And last, but not least,
we have produced record financial results.
Let me finish by thanking my colleagues on the Board, and especially
Jakob, for their hard work, commitment and dedication to Rio Tinto
over the past year and for their insights, advice and support during my
time as Chairman.
Simon Thompson
Chairman
23 February 2022
8
Annual Report 2021 | riotinto.com
Statement from Dominic Barton,
Chair-designate
It is a great honour to succeed Simon Thompson as Chair
of Rio Tinto, starting on 5 May 2022.
I am delighted to be joining the Board of this great,
long-standing company of almost 150 years. Rio Tinto
truly is a global business, with a dedicated and talented
workforce, world-class assets, safe and well-run
operations, and a strong balance sheet.
Importantly, Rio Tinto has the opportunity to make a
significant contribution to society at a pivotal moment in
history – by effectively facilitating the transition to a
lower-carbon economy. Through our products, people,
partnerships and technologies, we aim to help enable a
decarbonising world, while maintaining our focus on
capital discipline, pursuing growth, and delivering
attractive returns to shareholders.
Building even stronger relationships with our customers,
partners and local communities will be an important part of
this journey, and something that I am particularly passionate
about. I am also keen to ensure that we create a safe,
respectful and inclusive work environment. I welcome the
proactive commissioning and subsequent publication
of the recent review into workplace culture at Rio Tinto,
and I fully support Jakob and the management team in
implementing the recommendations.
There is much work ahead as we navigate a shifting
competitive landscape, grapple with the ongoing pandemic
and other societal challenges, reset and strengthen
relationships, progress our growth projects, and embed a
change in mindset and behaviours throughout the
organisation in line with Rio Tinto’s new values.
I am encouraged by the company’s resolve as it seeks to
realise these opportunities, and I look forward to working
closely with Jakob Stausholm, Peter Cunningham and my
Board colleagues as we implement our strategy. With the
new strategic direction that we have set in 2021, I am really
excited about the opportunities that lie ahead to deliver
sustainable growth for Rio Tinto, our shareholders and our
wider stakeholders.
Dominic Barton
Chair-designate
23 February 2022
Chairman’s statement continued
Board and Executive Committee
It is a testament to the strength of Rio Tinto’s talent pool and
succession planning that all but two of the positions created by the
significant management changes that were necessary at the start of
2021, were filled with internal candidates. The new team, under Jakob’s
leadership, has worked tirelessly to ensure a smooth transition and to
co-create our new strategy and values. I am very grateful to them and
to all our employees and contractors for their hard work and
commitment during another challenging, but successful, year.
We were delighted to welcome Ben Wyatt to the Board in September.
Ben’s knowledge of finance, public policy, trade and Indigenous affairs
has already proved to be invaluable. As previously announced, I will
step down as Chairman following the Australian annual general
meeting in May 2022. I am delighted that the Board has announced the
appointment of Dominic Barton as Chair-designate. Dominic has
extensive business and international relations knowledge as well as
deep understanding of the linkages between business, governments
and society. I wish him every success.
Reflections and outlook
As I reach the end of my eight years on the Board, it has been a privilege
to be part of the leadership team of this great company and I am proud of
the direction that Rio Tinto is taking and of the talent, resilience and
enthusiasm of our employees and contractors around the world.
Our third successive fatality-free year underlines our commitment to
safety and strengthens a mindset where zero fatalities has become the
expectation, not the exception. The Group’s response to COVID-19 has
also been exemplary. We have kept all our managed operations
worldwide running safely and smoothly, protecting thousands of jobs at
our suppliers and customers, while safeguarding our employees,
contractors and local communities. In many ways, the pandemic brought
out the best of Rio Tinto. It was inspiring to see how the organisation
pulled together to support each other and their communities.
We have emerged from the challenges of the last few years with a firm
commitment to become a more inclusive, respectful and caring
company that values genuine partnerships with all our stakeholders.
Our purpose remains to produce minerals and metals essential to
human progress, and we have set out a new strategy that seeks to
re-establish Rio Tinto as a leader in an industry that has a uniquely
important and challenging role to play in creating a sustainable
and prosperous future for people and the planet. The strategy is
designed to achieve a 50% reduction in our greenhouse gas
emissions by 2030 and net zero by 2050, including breakthrough
technology to decarbonise the production of aluminium, one of the
most energy-intensive industrial processes in the world.
We have also increased the diversity of our workforce, our
management team and the Board, and have taken important steps to
ensure that all our operations provide a safe, inclusive workspace,
where everyone can achieve their full potential. And last, but not least,
we have produced record financial results.
Let me finish by thanking my colleagues on the Board, and especially
Jakob, for their hard work, commitment and dedication to Rio Tinto
over the past year and for their insights, advice and support during my
time as Chairman.
Simon Thompson
Chairman
23 February 2022
8
Annual Report 2021 | riotinto.com
Statement from Dominic Barton,
Chair-designate
It is a great honour to succeed Simon Thompson as Chair
of Rio Tinto, starting on 5 May 2022.
I am delighted to be joining the Board of this great,
long-standing company of almost 150 years. Rio Tinto
truly is a global business, with a dedicated and talented
workforce, world-class assets, safe and well-run
operations, and a strong balance sheet.
Importantly, Rio Tinto has the opportunity to make a
significant contribution to society at a pivotal moment in
history – by effectively facilitating the transition to a
lower-carbon economy. Through our products, people,
partnerships and technologies, we aim to help enable a
decarbonising world, while maintaining our focus on
capital discipline, pursuing growth, and delivering
attractive returns to shareholders.
Building even stronger relationships with our customers,
partners and local communities will be an important part of
this journey, and something that I am particularly passionate
about. I am also keen to ensure that we create a safe,
respectful and inclusive work environment. I welcome the
proactive commissioning and subsequent publication
of the recent review into workplace culture at Rio Tinto,
and I fully support Jakob and the management team in
implementing the recommendations.
There is much work ahead as we navigate a shifting
competitive landscape, grapple with the ongoing pandemic
and other societal challenges, reset and strengthen
relationships, progress our growth projects, and embed a
change in mindset and behaviours throughout the
organisation in line with Rio Tinto’s new values.
I am encouraged by the company’s resolve as it seeks to
realise these opportunities, and I look forward to working
closely with Jakob Stausholm, Peter Cunningham and my
Board colleagues as we implement our strategy. With the
new strategic direction that we have set in 2021, I am really
excited about the opportunities that lie ahead to deliver
sustainable growth for Rio Tinto, our shareholders and our
wider stakeholders.
Dominic Barton
Chair-designate
23 February 2022
We have set out a new
strategy that seeks to
re-establish Rio Tinto
as a leader in an industry
that has a uniquely
important and challenging
role to play in creating
a sustainable and
prosperous future for
people and the planet.
Simon Thompson
Chairman
Annual Report 2021 | riotinto.com
9
Chief Executive’s statement
2021 was a defining year as we set a
new direction to take Rio Tinto forward.
When I began leading this company as Chief Executive, it quickly
became clear that we needed to reset the dial with a clearer sense of
purpose – putting respect for people, communities and land at the
heart of our contribution. Building on our strengths and learning from
our past, we are determined to shift the way we see ourselves and the
world and ensure that Rio Tinto thrives in the decades to come.
Some of my first actions were to stabilise our company, start to rebuild
damaged relationships, and set the overall direction to make Rio Tinto
stronger. We implemented the biggest management change in our
corporate history and rallied our efforts around four objectives: being
the best operator, achieving impeccable environmental, social and
governance (ESG) credentials, excelling in development, and
strengthening our social licence.
The four objectives are underpinned by the launch of our Rio Tinto Safe
Production System (RTSPS), our new strategy, and a set of simple
values that connect us all as human beings – care, courage and
curiosity. I am proud of the depths of talent, energy and commitment in
our organisation as well as the progress we made in 2021. I know there
is still much to do, and we are all committed to making Rio Tinto an
even better company.
Safety above all
Safety is at the core of how we operate each and every day. Nothing
matters more than the safety and wellbeing of our employees and
contractors, and I am pleased that we have experienced our third
consecutive year with no fatalities at our managed operations. While
this is good news, being able to go home to one’s family at the end of a
shift should be a given, not an achievement.
I was extremely saddened when a colleague from Richards Bay
Minerals (RBM) was tragically killed this year in a violent incident
off-site. To ensure the safety of our team in South Africa, we made the
decision to curtail operations at the site for a number of months.
Our all-injury frequency rate (AIFR) increased slightly in 2021, and we
are still seeing situations where colleagues could have died, most often
from falling objects or falling from heights. While we have made some
safety improvements and are on the right path, every injury is one too
many. We fundamentally believe that all incidents and injuries
are preventable.
The ongoing pandemic has touched all of us in some way, affecting
both our physical and our mental wellbeing. Sadly, we have lost
colleagues around the world to this virus. Many of us also lost family
and friends, saw people close to us battling COVID-19, or experienced
it ourselves. Our thoughts and condolences go out to the families,
co-workers and friends of all those who left us in 2021.
Over the last two years, we have continued to prioritise the safety,
health and wellbeing of our people, their families and the communities
where we operate. I am grateful for the incredible teamwork, resilience
and care across Rio Tinto – prioritising controls, supporting
government vaccination campaigns, setting up vaccination clinics near
our operations, and working tirelessly to help our colleagues and
communities with vital supplies and safety protection, such as in India
and South Africa. I am also thankful for all those who sacrificed time
away from family for extended periods as a result of COVID-19
restrictions, to help us keep the business running and deliver the
products our customers need.
10
Annual Report 2021 | riotinto.com
Chief Executive’s statement
2021 was a defining year as we set a
new direction to take Rio Tinto forward.
When I began leading this company as Chief Executive, it quickly
became clear that we needed to reset the dial with a clearer sense of
purpose – putting respect for people, communities and land at the
heart of our contribution. Building on our strengths and learning from
our past, we are determined to shift the way we see ourselves and the
world and ensure that Rio Tinto thrives in the decades to come.
Some of my first actions were to stabilise our company, start to rebuild
damaged relationships, and set the overall direction to make Rio Tinto
stronger. We implemented the biggest management change in our
corporate history and rallied our efforts around four objectives: being
the best operator, achieving impeccable environmental, social and
governance (ESG) credentials, excelling in development, and
strengthening our social licence.
The four objectives are underpinned by the launch of our Rio Tinto Safe
Production System (RTSPS), our new strategy, and a set of simple
values that connect us all as human beings – care, courage and
curiosity. I am proud of the depths of talent, energy and commitment in
our organisation as well as the progress we made in 2021. I know there
is still much to do, and we are all committed to making Rio Tinto an
even better company.
Safety is at the core of how we operate each and every day. Nothing
matters more than the safety and wellbeing of our employees and
contractors, and I am pleased that we have experienced our third
consecutive year with no fatalities at our managed operations. While
this is good news, being able to go home to one’s family at the end of a
shift should be a given, not an achievement.
I was extremely saddened when a colleague from Richards Bay
Minerals (RBM) was tragically killed this year in a violent incident
off-site. To ensure the safety of our team in South Africa, we made the
decision to curtail operations at the site for a number of months.
Our all-injury frequency rate (AIFR) increased slightly in 2021, and we
are still seeing situations where colleagues could have died, most often
from falling objects or falling from heights. While we have made some
safety improvements and are on the right path, every injury is one too
many. We fundamentally believe that all incidents and injuries
are preventable.
The ongoing pandemic has touched all of us in some way, affecting
both our physical and our mental wellbeing. Sadly, we have lost
colleagues around the world to this virus. Many of us also lost family
and friends, saw people close to us battling COVID-19, or experienced
it ourselves. Our thoughts and condolences go out to the families,
co-workers and friends of all those who left us in 2021.
Over the last two years, we have continued to prioritise the safety,
health and wellbeing of our people, their families and the communities
where we operate. I am grateful for the incredible teamwork, resilience
and care across Rio Tinto – prioritising controls, supporting
government vaccination campaigns, setting up vaccination clinics near
our operations, and working tirelessly to help our colleagues and
communities with vital supplies and safety protection, such as in India
and South Africa. I am also thankful for all those who sacrificed time
away from family for extended periods as a result of COVID-19
restrictions, to help us keep the business running and deliver the
products our customers need.
Safety above all
A strong financial performance
Best operator
Despite challenging operating conditions from prolonged COVID-19
disruptions, we achieved record financial results in 2021, with net cash
generated from operating activities of $25.3 billion (2020: $15.9 billion),
which flowed through to free cash flow of $17.7 billion (2020: $9.4 billion).
Profit after tax attributable to owners of Rio Tinto was $21.1 billion
(2020: $9.8 billion) and our balance sheet remains exceptionally strong
with net cash of $1.6 billion (2020: net debt of $0.7 billion).
As a result, the Board has recommended a final ordinary dividend of
417 US cents per share and a special dividend of 62 US cents per
share, resulting in total shareholder returns declared this year of
$16.8 billion. This is our highest total dividend ever. We recognise that
these strong results were supported by the recovery of the global
economy and driven by industrial production, which resulted in
significant price strength for our major commodities.
One of our key objectives is restoring Rio Tinto’s reputation as the best
operator in the business. We are one of the safest mining companies to
work for, with pockets of operational excellence across the business,
but we know that we can do better. Through RTSPS, we want to further
sharpen the consistency of our performance and unlock real and
sustainable improvements at each of our assets.
This is not a one-off improvement programme, but rather a journey.
It is being led by our Chief Operating Officer, Arnaud Soirat, whose
extensive experience is invaluable. We have begun developing and
implementing RTSPS, which leverages all of our people, empowering
them to develop and share sustainable, best practice solutions to
define the way we work safely and optimally at Rio Tinto.
In 2021, we launched RTSPS at five different sites – our copper
concentrator at Kennecott; Yandicoogina Fixed Plant and drill
and blast at West Angelas, both in the Pilbara; the casthouse
system at Grande-Baie in the Saguenay; and the concentrator
at Iron Ore Company of Canada (IOC). We supplemented these
deployments with a series of rapid improvement projects targeting
short-term bottlenecks.
We are very excited about where RTSPS will take us, and we will
be launching it at many more of our sites over the coming months.
It has a long-term focus as we want to build momentum and ensure
we facilitate deployment, maximise value and properly embed the
gains for the future.
10
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
11
Chief Executive’s statement continued
Impeccable ESG credentials
If anything became clear in the past year, it is that we must align our
business priorities with society’s expectations and ensure all of our
stakeholders benefit from our success.
Society is demanding a greater commitment on climate change.
I was fortunate to attend COP26, the UN Climate Change Conference,
in Glasgow, where engaging conversations with civil society organisations,
governments and other companies convinced me more than ever that
Rio Tinto is an integral part of the solution. We produce materials that
are necessary to the world today – and even more so for the transition
to a lower-carbon planet. We recognise that we have a major carbon
footprint, with significant Scope 1 and 2 emissions and very material
indirect Scope 3 emissions. This is a major challenge but also a major
opportunity to urgently decarbonise our business and be part of the
solution the world is looking for.
In 2021, we launched our new business strategy, with the low-carbon
transition at its heart. This prioritises the opportunity for growth in the
materials that will enable the energy transition and accelerates the
decarbonisation of our assets. We brought forward our 15% reduction
target for our own Scope 1 and 2 emissions from 2030 to 2025, and we
more than tripled the target for 2030, seeking to reduce our carbon
footprint by 50%.
To achieve these targets, we will need to switch to renewable power,
electrify processing and run electric mobile fleets, and we intend to
invest about $7.5 billion in climate-related projects from now to 2030.
These projects deliver a range of returns but overall are positive at a
modest carbon price. Most importantly, they safeguard the integrity of
our assets over the longer term and reduce the risk profile of our cash
flows. Our long-term ambition remains to reach net zero by 2050.
We recognise that processing our products also generates very
material indirect Scope 3 emissions. Over 90% of these Scope 3
emissions are generated in countries that have carbon neutrality
pledges and 28% of our iron ore sales are directly to steel producers
who have set public targets for their Scope 1 and 2 (our Scope 3)
emissions, and have ambitions to reach net zero by around
mid-century. In 2022, we commit to engage with all our direct
iron ore customers to share information on our respective climate
change goals and roadmaps, and actively seek areas of mutual
collaboration on pathways to net zero.
Decarbonisation partnerships will be key – and we have seen some
great examples in 2021, including with BlueScope and POSCO, to explore
low-carbon steelmaking pathways. In addition, we have committed to
increasing our research and development spend to speed up the
development of technologies to enable our customers to decarbonise.
Culture is key to delivering on our strategy. In 2020, reflecting on how
we want to think and act, we began to evolve our culture, striving to
become a more outward-looking, humble and humane company.
In 2021, we launched new values that we can all stand by as individuals
and as a company – showing care for people, communities and the
planet, having the courage to stand up for what we believe in, and
being curious and open to diverse ideas and learning continuously.
“Our society and our company are both at a
pivotal moment in history, with challenges
and lots of hard work still ahead. But we are
excited about the future.”
As a company, we have made mistakes and are continuing to learn
from these. We believe we can and will do better. That starts with
making sure that everyone at Rio Tinto can count on a safe, respectful
and inclusive workplace. In 2021, we asked experts Elizabeth Broderick
& Co. to conduct an independent study to understand the experiences
of our workforce and make recommendations on how we can
prevent and respond to harmful behaviours such as bullying,
sexual harassment, racism and other forms of discrimination in our
business. At the beginning of 2022, we published the findings in a
comprehensive report – these findings are deeply disturbing and I
offer my heartfelt apology to every team member, past and present,
who has suffered as a result of these behaviours. This is not the kind of
company we want to be. The report also contained 26 detailed
recommendations, all of which we will implement. I am determined that
by implementing appropriate actions to address the recommendations,
and with the management team’s commitment to a safe, respectful and
inclusive Rio Tinto in all areas, we will make positive and lasting change
and strengthen our workplace culture for the long term.
We also launched an innovative, company-wide leadership
programme focused on developing our most senior leaders to be the
best versions of themselves. And in 2022, we have started to extend
this programme to the next level of leaders throughout the company.
Unlocking their full potential will help foster a high-achieving and
caring culture and will be critical in achieving the business objectives
and strategy we have set.
Excel in development
Our strategy also focuses on growing in materials required to support
the energy transition, such as copper, lithium, aluminium and high-quality
iron ore. This will ensure our portfolio remains relevant and is well-placed
to meet the commodity needs of future generations.
Our ambition is to increase our investment in growth capital expenditure
to up to $3 billion annually by 2023 to 2024, and to prioritise our
investments in commodities that are essential for the drive to net zero.
We will look for new options and innovative ways of bringing projects
on stream faster, but we will only do this in line with our ESG standards
and while maintaining our absolute commitment to capital discipline.
Included in the growth capital expenditure is the $2.4 billion committed
to funding the Jadar lithium-borates project in Serbia. This project
remains subject to receiving all relevant approvals, permits and licences.
In January 2022, the Government of Serbia cancelled the Spatial Plan
for the Jadar Project and required all related permits to be revoked. We
acknowledge concerns from the local communities and are committed
to exploring all options. We are reviewing the legal basis of the decision
and the implications for our activities and people in Serbia.
12
Annual Report 2021 | riotinto.com
Chief Executive’s statement continued
Strategic report
Impeccable ESG credentials
If anything became clear in the past year, it is that we must align our
business priorities with society’s expectations and ensure all of our
stakeholders benefit from our success.
Society is demanding a greater commitment on climate change.
I was fortunate to attend COP26, the UN Climate Change Conference,
in Glasgow, where engaging conversations with civil society organisations,
governments and other companies convinced me more than ever that
Rio Tinto is an integral part of the solution. We produce materials that
are necessary to the world today – and even more so for the transition
to a lower-carbon planet. We recognise that we have a major carbon
footprint, with significant Scope 1 and 2 emissions and very material
indirect Scope 3 emissions. This is a major challenge but also a major
opportunity to urgently decarbonise our business and be part of the
solution the world is looking for.
In 2021, we launched our new business strategy, with the low-carbon
transition at its heart. This prioritises the opportunity for growth in the
materials that will enable the energy transition and accelerates the
decarbonisation of our assets. We brought forward our 15% reduction
target for our own Scope 1 and 2 emissions from 2030 to 2025, and we
more than tripled the target for 2030, seeking to reduce our carbon
footprint by 50%.
To achieve these targets, we will need to switch to renewable power,
electrify processing and run electric mobile fleets, and we intend to
invest about $7.5 billion in climate-related projects from now to 2030.
These projects deliver a range of returns but overall are positive at a
modest carbon price. Most importantly, they safeguard the integrity of
our assets over the longer term and reduce the risk profile of our cash
flows. Our long-term ambition remains to reach net zero by 2050.
We recognise that processing our products also generates very
material indirect Scope 3 emissions. Over 90% of these Scope 3
emissions are generated in countries that have carbon neutrality
pledges and 28% of our iron ore sales are directly to steel producers
who have set public targets for their Scope 1 and 2 (our Scope 3)
emissions, and have ambitions to reach net zero by around
mid-century. In 2022, we commit to engage with all our direct
iron ore customers to share information on our respective climate
“Our society and our company are both at a
pivotal moment in history, with challenges
and lots of hard work still ahead. But we are
excited about the future.”
As a company, we have made mistakes and are continuing to learn
from these. We believe we can and will do better. That starts with
making sure that everyone at Rio Tinto can count on a safe, respectful
and inclusive workplace. In 2021, we asked experts Elizabeth Broderick
& Co. to conduct an independent study to understand the experiences
of our workforce and make recommendations on how we can
prevent and respond to harmful behaviours such as bullying,
sexual harassment, racism and other forms of discrimination in our
business. At the beginning of 2022, we published the findings in a
comprehensive report – these findings are deeply disturbing and I
offer my heartfelt apology to every team member, past and present,
who has suffered as a result of these behaviours. This is not the kind of
company we want to be. The report also contained 26 detailed
recommendations, all of which we will implement. I am determined that
by implementing appropriate actions to address the recommendations,
and with the management team’s commitment to a safe, respectful and
inclusive Rio Tinto in all areas, we will make positive and lasting change
and strengthen our workplace culture for the long term.
We also launched an innovative, company-wide leadership
programme focused on developing our most senior leaders to be the
best versions of themselves. And in 2022, we have started to extend
this programme to the next level of leaders throughout the company.
Unlocking their full potential will help foster a high-achieving and
caring culture and will be critical in achieving the business objectives
and strategy we have set.
Excel in development
Our strategy also focuses on growing in materials required to support
the energy transition, such as copper, lithium, aluminium and high-quality
iron ore. This will ensure our portfolio remains relevant and is well-placed
to meet the commodity needs of future generations.
change goals and roadmaps, and actively seek areas of mutual
Our ambition is to increase our investment in growth capital expenditure
collaboration on pathways to net zero.
Decarbonisation partnerships will be key – and we have seen some
great examples in 2021, including with BlueScope and POSCO, to explore
low-carbon steelmaking pathways. In addition, we have committed to
increasing our research and development spend to speed up the
to up to $3 billion annually by 2023 to 2024, and to prioritise our
investments in commodities that are essential for the drive to net zero.
We will look for new options and innovative ways of bringing projects
on stream faster, but we will only do this in line with our ESG standards
and while maintaining our absolute commitment to capital discipline.
development of technologies to enable our customers to decarbonise.
Included in the growth capital expenditure is the $2.4 billion committed
Culture is key to delivering on our strategy. In 2020, reflecting on how
we want to think and act, we began to evolve our culture, striving to
become a more outward-looking, humble and humane company.
In 2021, we launched new values that we can all stand by as individuals
and as a company – showing care for people, communities and the
planet, having the courage to stand up for what we believe in, and
being curious and open to diverse ideas and learning continuously.
to funding the Jadar lithium-borates project in Serbia. This project
remains subject to receiving all relevant approvals, permits and licences.
In January 2022, the Government of Serbia cancelled the Spatial Plan
for the Jadar Project and required all related permits to be revoked. We
acknowledge concerns from the local communities and are committed
to exploring all options. We are reviewing the legal basis of the decision
and the implications for our activities and people in Serbia.
In support of our commitment to the battery materials sector, in
December 2021, we entered into a binding agreement to acquire the
Rincon lithium project in Argentina from Rincon Mining, for $825 million.
This acquisition is strongly aligned with our strategy to prioritise growth
capital in commodities that support decarbonisation and to continue to
deliver attractive returns to shareholders. This project holds the
potential to deliver a significant new supply of battery-grade lithium
carbonate, to capture the opportunity offered by the rising demand
driven by the global energy transition.
We also began to broaden our approach to developing our pipeline of
growth options, organic and inorganic. To support our focus on
excelling in development, we will further strengthen the capabilities in
project development, evaluation and execution required to create the
portfolio for the next decade and beyond.
Social licence
None of our other objectives described above would be possible
without trust, meaningful relationships and mutually beneficial
partnerships. This is our social licence to operate. It is judged by others
and is essential for our long-term future.
The 24th of May 2021 marked one year since the destruction of the rock
shelters at Juukan Gorge in Western Australia. Earlier in the year, I was
very grateful to meet with the Puutu Kunti Kurrama and Pinikura (PKKP)
people on their land and personally express my sincere regret for the
damage. Being there with them had a profound impact on me. At the
end of 2021, the relationship between the PKKP leadership and
Rio Tinto Iron Ore is constructive and considered. Together, we are
charting new territory. This takes time, but we are moving forward on a
model which is respectful and looks to provide certainty of protection
for cultural heritage and mining.
Throughout the year, my colleagues and I reflected on how we interact
with others, and we invested significant time and effort in resetting
relationships and developing stronger connections. In my first year as
Chief Executive, despite COVID-19 restrictions, I met many external
stakeholders, including in Australia, Canada, the US, Serbia, Mongolia,
New Zealand and Guinea – I have a deep appreciation for the
importance of relationships and genuinely finding out what is on the
minds of various stakeholders.
We continued to work hard to elevate our approach to social
performance to the same level as we do with health, safety and
environment. And we remained focused on shaping a shared future
and ensuring that Indigenous communities and cultural heritage sites,
wherever we operate, are treated with the care they deserve.
These efforts include growing Indigenous leadership, building cultural
awareness capability and competency across the Group as well as a
number of other actions to strengthen our cultural heritage approach,
processes and performance more broadly and increase transparency.
In 2021, we released our Communities and Social Performance
Commitments Disclosure Interim Report, Rio Tinto’s first report
dedicated to sharing the progress on these actions.
We appreciate there is still more work to do. We know this is a long
journey, and we are dedicated to working with and earning the trust of
our hosts in every region where we operate worldwide.
Looking ahead
It has been an intense and extraordinary time on many levels. Our society
and our company are both at a pivotal moment in history, with challenges
and lots of hard work still ahead. But we are excited about the future.
We have a clear direction and strategy centred on the transition to a
low-carbon economy. We are rebuilding relationships and evolving our
culture, supported by simple, human values. We have world-class
assets, high-quality products and a strong balance sheet. And in my
travels in 2021 to our operations such as in Australia, the US and
Canada, I was tremendously impressed by our talented and dedicated
people, all of whom want to make a difference.
As we look ahead to our 150th anniversary in 2023, I want to thank our
thousands of employees and contractors as well as host governments
and communities, our customers, our shareholders and our partners.
You make our success possible, and we are determined to do the right
things to succeed together well into the next 150 years.
Jakob Stausholm
Chief Executive
23 February 2022
12
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
13
Strategic context
Our strategy is informed by a deep analysis and understanding of global
megatrends across key dimensions related to geopolitics, society and technology.
These trends set the context for our industry and influence commodity choices for
the future of our business as well as expectations about how we produce them.
Geopolitical tensions
Sustainable value chains
Economic responses to COVID-19 have differed widely and the past
year has been marked by supply chain disruptions as returning demand
in some jurisdictions occurred concurrently with pandemic-related
production losses and logistical issues. This has resulted in uncertainty
in the supply of goods and services and considerable price inflation
and volatility.
While a lot of focus has been on reducing carbon emissions, there has
been a more holistic shift towards increasingly transparent, sustainable
and circular value chains. This is encouraging companies to improve
their performance across a broad range of sustainability metrics and
map their contributions towards the UN Sustainable Development
Goals (UN SDGs).
In recent years, we have witnessed an evolution in the global geopolitical
context, marked by an erosion of global trust in elites and institutions
and a backlash in some quarters against globalisation. Despite this,
we saw some renewed momentum on global collaboration to tackle
climate change around the UN Climate Change Conference (COP26)
in 2021.
An emerging theme in the development of more sustainable value
chains is the circular economy, which is built around the principles of
designing out waste and pollution, keeping products and materials in
use, and regenerating natural systems. The concept offers a transition
away from linear “take-make-use-dispose” value chains to building
more sustainable and resilient supply ecosystems.
Tensions between the US and China continue to evolve, but their
economies remain closely intertwined, resulting in a mix of competition
and cooperation dependent on the issues at hand, from technology
leadership to climate change. Balancing our relationships with our host
country governments and other stakeholders, alongside those with
China as a key customer, partner and shareholder, is a strategic priority.
Climate action
Many countries and companies have announced long-term pledges to
achieve net zero emissions. However, these commitments fall short of
what is required to limit the global temperature rise to 1.5°C above
pre-industrial levels. In recognition of this, and faced with increasing
societal demands, governments are setting more ambitious targets and
creating policies to support the development of low-carbon economies.
Efforts to contain a global temperature rise will create challenges and
opportunities for the mining sector, and companies will need to set
aside capital to tackle their carbon footprints. This is also important for
our customers attempting to reduce their carbon emissions. Failure to
achieve targets on time and within budget, coupled with increasing
carbon prices and environmental regulations, could result in an erosion
of profit, licence to operate and investor confidence.
Increasing electrification and the construction of renewable energy
infrastructure will drive demand for several commodities critical for the
energy transition, including lithium, copper, aluminium, green steel and
related high-grade iron ore. Meanwhile, demand for fossil fuels is
expected to decline as governments and companies strive to meet
their carbon emissions reduction targets.
The circular economy presents a risk to primary metal demand growth
in some markets, but it also offers unique growth opportunities, from
scrap recycling to the monetisation of waste streams. It could also
provide a pathway to greatly reduce the environmental and social
impacts of metal value chains, while increasing supply security for
customers. An increasing number of downstream participants are
actively participating in responsible sourcing initiatives (such as the
Aluminium Stewardship Initiative and the European Battery Alliance)
to help create more ethical and sustainable metal supply chains.
Convergence of technologies
The continued development and cost reduction of low-carbon
technologies is an ongoing trend that is accelerating many global
movements, including the global energy transition and potentially
future climate outcomes.
2021 saw unprecedented investment in emerging technologies that
could significantly improve the sustainability of the mining sector.
These include innovative carbon capture technologies, novel
metal-extraction processes (for full-value mining and tailings reuse),
innovative electrolyser technologies (for green hydrogen production),
biofuels and environmental monitoring solutions.
The pandemic has also accelerated the use of digital solutions, such as
offering customers the opportunity to buy products and conduct
end-to-end digital transactions using blockchain technology. This is
continuing to improve the efficiency and transparency of global
value chains.
In the mining sector, technology is playing an important role in
addressing productivity, growth and sustainability challenges.
To find solutions, companies will increase investment in research
and development in partnerships with suppliers, technology providers,
start ups and other stakeholders across the value chain and
other sectors.
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Strategic context
Our strategy
Strategic report
In 2021, we announced a new integrated strategy bringing together a set of new
commitments across three pillars of activity with four objectives guiding how we seek to
improve our business. We have positioned climate change and the low-carbon transition at
the heart of our strategy to strengthen our resilience and pursue new growth opportunities
and partnerships. Our culture, underpinned by our new values of care, courage and
curiosity, will be a key enabler in the successful execution of our new strategy and the
delivery of superior returns to our shareholders and contributions to society.
The energy transition will create additional demand for our commodities
– such as copper, lithium and aluminium. Iron ore will also continue to
be an essential raw material for the production of steel, not only for
ongoing urbanisation, but also in the development of the infrastructure
needed for the low-carbon transition. We expect steel, particularly
green steel, to have a bright future as the steel industry decarbonises,
supporting stronger demand for high-quality iron ore. Crucially, there
are often no alternatives to the commodities we produce.
Our new strategy has three key elements:
At the same time, we are also part of the climate challenge. We have
a major carbon footprint with significant Scope 1 and 2 emissions
and very material indirect Scope 3 emissions. This needs to change
and we are addressing this with urgency, deploying large-scale
renewable energy and working in partnerships to develop new
low-carbon technologies for both our operations and those of our
customers, across our value chains.
Accelerate the
decarbonisation
of our assets
Develop products and
technologies that help our
customers decarbonise
Grow in materials
enabling the
energy transition
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To strengthen our alignment with the
Paris Agreement and our long-term
ambition of achieving net zero emissions
by 2050:
– We are bringing forward to 2025
our previous 2030 target of a
15% reduction in Scope 1 and 2
carbon emissions.
– We are more than tripling our previous
2030 target from a 15% reduction to a
50% reduction in our Scope 1 and 2
emissions against our 2018
equity baseline.
To achieve our raised decarbonisation
ambition and targets, we will switch to
renewables at scale, with a priority focus
in the Pilbara. We will accelerate the
electrification of our mobile equipment
and processes, and empower our people
to think differently about energy solutions.
We expect to invest an estimated
$7.5 billion in decarbonisation projects
this decade, including around
$500 million in each of the next
three years.
In parallel, we will continue to review and
enhance the resilience of our assets to
physical climate risk.
Our products are essential today as
enablers of the energy transition and
in a net zero world, but we recognise that
the processing of our products is
resulting in very material indirect
Scope 3 emissions.
We have a role to play in the
decarbonisation of the supply chains we
are part of, particularly the steel value
chain. We will step up our customer
engagements to help them meet their
Scope 1 and 2 emissions goals and will
continue to work towards our 2050
ambition of net zero emissions from the
shipping of our products.
We will increase our investment in
research and development to speed
up the development of products and
technologies that will enable our
customers to decarbonise. This includes
the continued development of ELYSISTM
for aluminium, finding future pathways for
Pilbara ores as the industry transitions to
green steel, and studying a hydrogen-
based hot briquetted iron (HBI) plant
in Canada.
Our effort will require deep collaboration
across our industry and beyond,
including partnerships with customers,
technology providers, research institutes,
governments and other stakeholders.
The pursuit of the Paris Agreement
goals will create additional demand
for materials such as copper, lithium,
aluminium and high-quality iron ore.
These are essential enablers of the
energy transition and the development of
infrastructure for a low-carbon world.
Our ambition is to increase our growth
capital to $3.0 billion annually in 2023 to
2024, depending on opportunities, while
continuing to provide attractive returns to
our shareholders.
We will seek to grow further in copper
and battery materials, and to bring
additional tonnes of high-grade iron ore
to market from the Iron Ore Company of
Canada (IOC) and the Simandou project
in Guinea.
We will continue to align our exploration
spend to supplement our existing
growth pipeline.
Our strategy is informed by a deep analysis and understanding of global
megatrends across key dimensions related to geopolitics, society and technology.
These trends set the context for our industry and influence commodity choices for
the future of our business as well as expectations about how we produce them.
Geopolitical tensions
Sustainable value chains
Economic responses to COVID-19 have differed widely and the past
While a lot of focus has been on reducing carbon emissions, there has
year has been marked by supply chain disruptions as returning demand
been a more holistic shift towards increasingly transparent, sustainable
in some jurisdictions occurred concurrently with pandemic-related
and circular value chains. This is encouraging companies to improve
production losses and logistical issues. This has resulted in uncertainty
their performance across a broad range of sustainability metrics and
in the supply of goods and services and considerable price inflation
map their contributions towards the UN Sustainable Development
and volatility.
Goals (UN SDGs).
In recent years, we have witnessed an evolution in the global geopolitical
An emerging theme in the development of more sustainable value
context, marked by an erosion of global trust in elites and institutions
chains is the circular economy, which is built around the principles of
and a backlash in some quarters against globalisation. Despite this,
designing out waste and pollution, keeping products and materials in
we saw some renewed momentum on global collaboration to tackle
use, and regenerating natural systems. The concept offers a transition
climate change around the UN Climate Change Conference (COP26)
away from linear “take-make-use-dispose” value chains to building
in 2021.
more sustainable and resilient supply ecosystems.
Tensions between the US and China continue to evolve, but their
The circular economy presents a risk to primary metal demand growth
economies remain closely intertwined, resulting in a mix of competition
in some markets, but it also offers unique growth opportunities, from
and cooperation dependent on the issues at hand, from technology
scrap recycling to the monetisation of waste streams. It could also
leadership to climate change. Balancing our relationships with our host
provide a pathway to greatly reduce the environmental and social
country governments and other stakeholders, alongside those with
impacts of metal value chains, while increasing supply security for
China as a key customer, partner and shareholder, is a strategic priority.
customers. An increasing number of downstream participants are
Climate action
actively participating in responsible sourcing initiatives (such as the
Aluminium Stewardship Initiative and the European Battery Alliance)
to help create more ethical and sustainable metal supply chains.
Many countries and companies have announced long-term pledges to
achieve net zero emissions. However, these commitments fall short of
what is required to limit the global temperature rise to 1.5°C above
Convergence of technologies
pre-industrial levels. In recognition of this, and faced with increasing
The continued development and cost reduction of low-carbon
societal demands, governments are setting more ambitious targets and
technologies is an ongoing trend that is accelerating many global
creating policies to support the development of low-carbon economies.
movements, including the global energy transition and potentially
Efforts to contain a global temperature rise will create challenges and
future climate outcomes.
opportunities for the mining sector, and companies will need to set
2021 saw unprecedented investment in emerging technologies that
aside capital to tackle their carbon footprints. This is also important for
could significantly improve the sustainability of the mining sector.
our customers attempting to reduce their carbon emissions. Failure to
These include innovative carbon capture technologies, novel
achieve targets on time and within budget, coupled with increasing
metal-extraction processes (for full-value mining and tailings reuse),
carbon prices and environmental regulations, could result in an erosion
innovative electrolyser technologies (for green hydrogen production),
of profit, licence to operate and investor confidence.
biofuels and environmental monitoring solutions.
Increasing electrification and the construction of renewable energy
The pandemic has also accelerated the use of digital solutions, such as
infrastructure will drive demand for several commodities critical for the
offering customers the opportunity to buy products and conduct
energy transition, including lithium, copper, aluminium, green steel and
end-to-end digital transactions using blockchain technology. This is
related high-grade iron ore. Meanwhile, demand for fossil fuels is
continuing to improve the efficiency and transparency of global
expected to decline as governments and companies strive to meet
value chains.
their carbon emissions reduction targets.
In the mining sector, technology is playing an important role in
addressing productivity, growth and sustainability challenges.
To find solutions, companies will increase investment in research
and development in partnerships with suppliers, technology providers,
start ups and other stakeholders across the value chain and
other sectors.
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15
Our strategy continued
Our four objectives
We recognise that our success is based on our ability to build and
strengthen our resilience and form partnerships that enable us to adapt
rapidly to future realities and opportunities. Delivering on our strategy
depends on four objectives set out at the start of 2021: to be the
best operator, to achieve impeccable environmental, social and
governance (ESG) credentials, to excel in development, and to protect
our social licence. These essential components will help improve
productivity and reduce capital intensity, and assist us in becoming a
partner of choice globally.
Best
operator
Expand capability
and leadership
Impeccable
ESG credentials
Strengthen track record
and transparency
Excel in
development
Deliver organic and
inorganic growth, on
time, on budget
Social licence
Earn trust by building meaningful relationships and partnerships
Best operator
Impeccable ESG credentials
Improving the consistency of the safety and operational
performance across our assets is the foundation of our business.
We will become the best operator by replicating capabilities from
existing pockets of excellence and empowering our people.
We must ensure all our stakeholders benefit from the success
of Rio Tinto. We will achieve impeccable ESG performance
by aligning our business priorities with society’s expectations.
This is essential to the future of our business.
Excel in development
Social licence
Our portfolio is well-placed to meet the commodity needs of
future generations, but we also need to build a pipeline of organic
and inorganic growth opportunities and establish a strong track
record of capital-efficient delivery.
Our social licence to operate is essential and will be judged by all
our stakeholders. We know we need to be more responsive and
humble, building meaningful relationships with our stakeholders
by listening, learning and respecting diverse perspectives.
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Our strategy continued
Our four objectives
We recognise that our success is based on our ability to build and
strengthen our resilience and form partnerships that enable us to adapt
rapidly to future realities and opportunities. Delivering on our strategy
depends on four objectives set out at the start of 2021: to be the
best operator, to achieve impeccable environmental, social and
governance (ESG) credentials, to excel in development, and to protect
our social licence. These essential components will help improve
productivity and reduce capital intensity, and assist us in becoming a
partner of choice globally.
Best
operator
Expand capability
and leadership
Impeccable
ESG credentials
Strengthen track record
and transparency
Excel in
development
Deliver organic and
inorganic growth, on
time, on budget
Social licence
Earn trust by building meaningful relationships and partnerships
Best operator
Impeccable ESG credentials
Improving the consistency of the safety and operational
We must ensure all our stakeholders benefit from the success
performance across our assets is the foundation of our business.
of Rio Tinto. We will achieve impeccable ESG performance
We will become the best operator by replicating capabilities from
by aligning our business priorities with society’s expectations.
existing pockets of excellence and empowering our people.
This is essential to the future of our business.
Excel in development
Social licence
Our portfolio is well-placed to meet the commodity needs of
Our social licence to operate is essential and will be judged by all
future generations, but we also need to build a pipeline of organic
our stakeholders. We know we need to be more responsive and
and inorganic growth opportunities and establish a strong track
humble, building meaningful relationships with our stakeholders
record of capital-efficient delivery.
by listening, learning and respecting diverse perspectives.
Strategic report
Best operator
Impeccable ESG
credentials
Excel in
development
Social licence
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Strong safety performance
remains our first priority – we
will never be complacent.
We are developing and
implementing the Rio Tinto
Safe Production System
(RTSPS) as a new, people-
centric approach to engage
our workforce to develop
and share best practice
solutions across our assets
in a sustainable way.
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We created a new Chief
Operating Officer role.
We completed extensive
performance benchmarking
of our assets.
We deployed RTSPS at five
sites, supplemented by a
series of rapid improvement
projects (kaizens) targeting
short-term bottlenecks.
We are integrating
sustainability at the core of
our business strategy, from
our community work to
addressing climate change.
We are striving to be a
responsible and trusted
steward of resources and
are committed to making
meaningful contributions
towards addressing some of
the world’s most urgent
challenges, as captured in
the United Nations
Sustainable Development
Goals (UN SDGs).
We launched new Scope 1
and 2 carbon reduction
targets for 2025 and 2030.
We established a
Communities and Social
Performance (CSP) Area of
Expertise and created an
end-to-end CSP leadership
team from all parts of our
business to drive best
practice, standards
and assurance.
We set a new standard in
transparency and
traceability for the aluminium
industry with the launch of
STARTTM, a “nutrition label”
for responsible aluminium.
We are broadening our
approach to developing our
pipeline of growth options
and are testing innovative
ways of bringing projects
online faster. Through it all,
we will maintain our absolute
commitment to capital
discipline and only pursue
opportunities that
create value.
We are also focused
on further building our
capabilities in business
development and
project execution.
We announced the aim to
increase our growth capital,
while maintaining our
well-established capital
allocation policy and
discipline.
We entered into a binding
agreement to acquire the
Rincon lithium brine project
in Argentina.
We announced an
investment to increase
low-carbon aluminium
production with 16 new
smelting pots at our AP60
smelter in Quebec, Canada.
We are stepping up our
external engagements to
develop deeper connections
with all stakeholders and
build mutually beneficial
partnerships.
We are building cultural
capability and competency
across the Group to ensure
that we fully understand,
value and partner with our
host communities.
We continued on our journey
to improve our engagement
with Traditional Owners to
better understand their
priorities and concerns,
minimise our impacts, and
responsibly manage
Indigenous cultural heritage
within our operations –
moving to a co-management
of Country model.
We continued to deliver
a dedicated programme
to increase Indigenous
leadership and employment
in our business.
Building on the learnings
from the Australian
programmes, we established
a steering group in North
America to develop a plan to
lead, coordinate and boost
Indigenous recruitment,
inclusion and retention.
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17
Our values
Reflecting on the past, how we want to evolve and how we
want to think and act, we introduced a new set of values
expressed in three simple words: care, courage, curiosity.
Our values connect us as human beings and guide how we work and treat each
other. They are essential to build meaningful relationships and deliver on our
purpose and strategy.
Care
Courage
Curiosity
We act with care by prioritising
the physical and emotional
safety and wellbeing of those
around us.
We respect others, build
trusting relationships and
consider the impact of
our actions.
We look for ways to contribute
to a better future for our
people, communities and
the planet.
We act with courage by
showing integrity, speaking up
when something is not right
and taking decisive action
when needed.
We are not afraid to try
new things.
We respond positively in
difficult situations and
demonstrate commitment to
achieving shared goals.
We act with curiosity by inviting
diverse ideas and collaborating
to achieve more together than
can be done alone.
We are continuously learning
and developing ourselves, and
looking for better and safer
ways of doing things.
We draw inspiration from
others and the world around us.
As a company, we know we may not always get it right, but we are
committed to learning and improving. And through it all,
safety – the essence of caring – remains our number one priority.
18
Annual Report 2021 | riotinto.com
Our values
Reflecting on the past, how we want to evolve and how we
want to think and act, we introduced a new set of values
expressed in three simple words: care, courage, curiosity.
Our values connect us as human beings and guide how we work and treat each
other. They are essential to build meaningful relationships and deliver on our
purpose and strategy.
We act with care by prioritising
We act with courage by
We act with curiosity by inviting
the physical and emotional
showing integrity, speaking up
diverse ideas and collaborating
safety and wellbeing of those
when something is not right
to achieve more together than
around us.
and taking decisive action
can be done alone.
We respect others, build
trusting relationships and
consider the impact of
our actions.
to a better future for our
people, communities and
the planet.
when needed.
We are not afraid to try
new things.
We respond positively in
We are continuously learning
and developing ourselves, and
looking for better and safer
ways of doing things.
demonstrate commitment to
others and the world around us.
achieving shared goals.
We look for ways to contribute
difficult situations and
We draw inspiration from
As a company, we know we may not always get it right, but we are
committed to learning and improving. And through it all,
safety – the essence of caring – remains our number one priority.
Care
Courage
Curiosity
Our culture
A change in mindset and behaviours is being embedded
throughout the organisation. We are changing the way
that we lead by investing in developing our senior
leaders to be their best. Similarly, through the Rio Tinto
Safe Production System (RTSPS), we are empowering
and upskilling our frontline people to be more effective
leaders, bringing out the best in their teams to become
the safest and best operator in the industry.
We also continue to elevate our approach to social
performance, including respect for cultural heritage,
to the same level as we do with health, safety
and environment. And we remain committed
to engaging respectfully and meaningfully with
Indigenous communities in every region where we
operate worldwide.
A cultural shift takes time. Together, we will ensure that
our values of care, courage and curiosity are reflected in
all that we do – so that we can become the company we
want to be and contribute to a better future for society.
Our culture is a product of Rio Tinto people’s collective
mindsets and beliefs, and the processes and decision-
making architecture that sit across all levels of
the organisation.
This culture helped us achieve zero fatalities for the third
year in a row. It also underpins the resilience, commitment
and teamwork of our people during the global pandemic,
in supporting colleagues and host communities while
delivering high-quality products to our customers.
At the same time, we know that we did not always meet
expectations and aspects of our culture do not fully
reflect who we aspire to be. We need to continuously
evolve our culture, guided by our new values and strategy.
In particular, everyone deserves to be in a workplace
free of bullying, sexual harassment, racism and other
forms of discrimination – without exception. In 2021, we
initiated a comprehensive, independent review of our
workplace culture to better understand, prevent and
respond to harmful behaviours in the workplace.
The Board and Executive Committee fully endorse the
recommendations set out in the report and we are
grateful to everyone who came forward to share their
experiences to help inform this work.
Karratha Rail, the Pilbara. Western Australia.
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19
Our stakeholders
Our business touches the lives of many people around the world.
Partnerships and collaboration are essential to the long-term success of
our business; they give us a competitive edge and allow us to work more
thoughtfully and responsibly. We work with technology experts, universities,
suppliers, governments, community groups, industry leaders and civil
society organisations at all stages of the mining lifecycle, from exploration
to rehabilitation and closure. By continuously engaging with our stakeholders
and listening to their views, we can make a more meaningful contribution to
society while becoming a more valuable company for our shareholders.
Workforce
In 2021, we focused on providing support and care to our people as we
continued to face challenges and fatigue due to the ongoing
COVID-19 pandemic and associated disruptions.
We also made progress in our efforts to create a more respectful
workplace by changing the way we engage, interact and operate.
Our people are driving the operational and cultural change that we
need to become the best operator.
In 2021, we launched our new values and strategy, with our people at
the centre. We believe that our values of care, courage and curiosity
will drive superior performance by enabling our people and guiding our
decisions and behaviours. We recognise that embedding our values
will not happen overnight, and that it is part of a cultural shift that will
take time. This will be a main focus for 2022.
Empowered and engaged people are key to our success. In 2021,
we spent a lot of time listening and reflecting on how we can do better.
To understand people’s experiences of sexual harassment, bullying
and racism in the workplace, we launched the Everyday Respect task
force and initiated a comprehensive, independent review of our
workplace culture. Following the feedback from more than 10,000 of
our people, we have set out an action plan to address these issues.
This will, over time, contribute to a safer, more respectful and inclusive
work environment.
In our most recent employee survey, conducted in October and
November, we saw that many employees like our new strategy.
Our new values of care, courage and curiosity also resonated for many,
who felt they have more human connection and show the type of
company we want to be. However, our employee satisfaction (eSAT)
score has gone down from 73 to 71. This is the first decline since 2017,
and it happened across most levels, geographies and parts of the
business. This is consistent with what Glint, our survey provider and
expert in engagement, is seeing across organisations. After a broad
increase in eSAT during the first year of the pandemic, there is a
general decline across many organisations as fatigue and workload
have increased. We are using these insights to guide our actions to
support our colleagues and restore employee satisfaction.
Our priorities for our people focus on improving overall safety
performance and health; transforming our culture to make it more
inclusive and welcoming; finding ways to simplify work and make it
more efficient; developing our leaders; offering competitive pay and
benefits; and ensuring work-life balance, including a focus on
strengthening mental health.
Communities
Communities are the places where we operate, live, work and call
home – from the Pilbara, Western Australia, to KwaZulu-Natal,
South Africa, to Saguenay–Lac-Saint-Jean, Quebec, Canada.
Our communities are made up of people – employees, Indigenous
peoples, suppliers and neighbours – with whom we strive to build
long-term, positive partnerships. Our strength is built upon their
strength and we want everyone to have a stake in our success.
We recognise that, in parts of our business, we have work to do to meet
our own standards on open, transparent engagement. We continue to
strive to engage consistently and honestly with communities on issues
such as jobs and local procurement as well as the impact of our
operations on the local environment.
Our Communities and Social Performance (CSP) Area of Expertise has
been set up and follows the same model as our well-established
Health, Safety, Environment and Security (HSES) function. The CSP
Area of Expertise supports and complements our asset-based teams
by monitoring external societal trends, developing standards, systems
and risk and assurance processes, building capability, and providing
strategic and technical subject matter advice. Operational leaders
within the product groups now have direct responsibility for building
and maintaining relationships with their host communities, including
Indigenous peoples, ensuring that they have a voice in our mine
planning and decision making.
In 2021, we continued our work to rebuild trust and strengthen the
relationships that were damaged by the destruction of the rock shelters
at Juukan Gorge in May 2020. We are engaging with Traditional
Owners in the Pilbara to modernise and improve agreements. We are
also moving to an informed, consultative approach to mine development,
together with a broader partnership which will enhance the protection
of heritage and provide better outcomes for both Indigenous peoples
and our business. More information can be found on pages 94-95.
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Annual Report 2021 | riotinto.com
Our stakeholders
Our business touches the lives of many people around the world.
Partnerships and collaboration are essential to the long-term success of
our business; they give us a competitive edge and allow us to work more
thoughtfully and responsibly. We work with technology experts, universities,
suppliers, governments, community groups, industry leaders and civil
society organisations at all stages of the mining lifecycle, from exploration
to rehabilitation and closure. By continuously engaging with our stakeholders
and listening to their views, we can make a more meaningful contribution to
society while becoming a more valuable company for our shareholders.
Workforce
In 2021, we focused on providing support and care to our people as we
continued to face challenges and fatigue due to the ongoing
COVID-19 pandemic and associated disruptions.
We also made progress in our efforts to create a more respectful
workplace by changing the way we engage, interact and operate.
Our people are driving the operational and cultural change that we
need to become the best operator.
In 2021, we launched our new values and strategy, with our people at
the centre. We believe that our values of care, courage and curiosity
will drive superior performance by enabling our people and guiding our
decisions and behaviours. We recognise that embedding our values
will not happen overnight, and that it is part of a cultural shift that will
take time. This will be a main focus for 2022.
Empowered and engaged people are key to our success. In 2021,
Our priorities for our people focus on improving overall safety
performance and health; transforming our culture to make it more
inclusive and welcoming; finding ways to simplify work and make it
more efficient; developing our leaders; offering competitive pay and
benefits; and ensuring work-life balance, including a focus on
strengthening mental health.
Communities
Communities are the places where we operate, live, work and call
home – from the Pilbara, Western Australia, to KwaZulu-Natal,
South Africa, to Saguenay–Lac-Saint-Jean, Quebec, Canada.
Our communities are made up of people – employees, Indigenous
peoples, suppliers and neighbours – with whom we strive to build
long-term, positive partnerships. Our strength is built upon their
strength and we want everyone to have a stake in our success.
We recognise that, in parts of our business, we have work to do to meet
our own standards on open, transparent engagement. We continue to
we spent a lot of time listening and reflecting on how we can do better.
strive to engage consistently and honestly with communities on issues
To understand people’s experiences of sexual harassment, bullying
such as jobs and local procurement as well as the impact of our
and racism in the workplace, we launched the Everyday Respect task
operations on the local environment.
force and initiated a comprehensive, independent review of our
workplace culture. Following the feedback from more than 10,000 of
our people, we have set out an action plan to address these issues.
This will, over time, contribute to a safer, more respectful and inclusive
work environment.
In our most recent employee survey, conducted in October and
November, we saw that many employees like our new strategy.
Our Communities and Social Performance (CSP) Area of Expertise has
been set up and follows the same model as our well-established
Health, Safety, Environment and Security (HSES) function. The CSP
Area of Expertise supports and complements our asset-based teams
by monitoring external societal trends, developing standards, systems
and risk and assurance processes, building capability, and providing
strategic and technical subject matter advice. Operational leaders
Our new values of care, courage and curiosity also resonated for many,
within the product groups now have direct responsibility for building
who felt they have more human connection and show the type of
and maintaining relationships with their host communities, including
company we want to be. However, our employee satisfaction (eSAT)
Indigenous peoples, ensuring that they have a voice in our mine
score has gone down from 73 to 71. This is the first decline since 2017,
planning and decision making.
and it happened across most levels, geographies and parts of the
business. This is consistent with what Glint, our survey provider and
expert in engagement, is seeing across organisations. After a broad
increase in eSAT during the first year of the pandemic, there is a
general decline across many organisations as fatigue and workload
have increased. We are using these insights to guide our actions to
support our colleagues and restore employee satisfaction.
In 2021, we continued our work to rebuild trust and strengthen the
relationships that were damaged by the destruction of the rock shelters
at Juukan Gorge in May 2020. We are engaging with Traditional
Owners in the Pilbara to modernise and improve agreements. We are
also moving to an informed, consultative approach to mine development,
together with a broader partnership which will enhance the protection
of heritage and provide better outcomes for both Indigenous peoples
and our business. More information can be found on pages 94-95.
Strategic report
Civil society organisations
Investors
Our investors include pension funds, global fund managers,
bondholders, and tens of thousands of individuals around the world,
including approximately 25,000 Rio Tinto employees who own shares
in the company primarily through myShare, our global employee share
plan. They have trusted us with their investment, and in return, they
expect their investment to grow. They are also increasingly focused
on how that return is made, with a shift toward supporting companies
that consider long-term sustainability as part of their operations,
and behave responsibly across environmental, social and governance
(ESG) measures.
We engaged with current and potential investors through virtual forums
for the majority of 2021, providing an opportunity for meetings with our
Executive Committee, the Chairman and Non-Executive Directors.
Additionally, our two annual general meetings (AGMs) in the UK and
Australia provided an opportunity for all investors to question and
engage with the Board. Given the growing importance of issues such
as climate change, governance, social performance and environment,
we present and engage regularly on these topics.
In March, we held an investor sustainability seminar focused on our
approach to cultural heritage. The Chair of the Sustainability
Committee, members of the Executive Committee and subject matter
experts provided an update on the actions we are taking to improve
the Traditional Owner partnerships and cultural heritage aspects of our
business, including in the Northern Territory, Western Australia and
Canada. In October, we hosted our Capital Markets Day, with the
Executive Committee setting out our long-term vision, including how
we will deliver value-adding growth, accelerate the decarbonisation of
our portfolio, and continue to pay attractive dividends to our
shareholders. In 2022, we will hold further environmental, social and
governance forums in response to growing investor interest in the
company’s progress in a number of areas, including climate change,
heritage and communities, closure and environment.
This stakeholder section, together with
our stakeholder pages in the governance
section, explains how the Board takes
account of stakeholder interests,
our ”section 172(1) Statement”.
Civil society organisations play an important role in society. They raise
awareness of key issues, advocate for social change, provide input to
policy development, and help to hold businesses and governments
accountable for their actions. We believe that preventing and
addressing the world’s many complex and multifaceted environmental,
social and governance challenges, such as climate change, human
rights violations and bribery and corruption, can only be achieved
through genuine dialogue with civil society organisations and other
stakeholders. As a result, we regularly engage with civil society
organisations and, although our opinions may differ from time to time,
we respect their views and value the challenges they set for us to be
better across different areas of our business.
Since 2018, we have held annual roundtables with civil society
organisations to listen, learn and understand how we can improve.
The roundtables provide an opportunity for us to explore and discuss
key social, environmental and economic issues facing society and our
business. They also provide an important touch point to sense check
the issues that matter most to society and help us to better understand
evolving expectations. The roundtables are attended by senior
Rio Tinto leadership, including members of the Board and Executive
Committee. In late 2021, we held three roundtables across Australia,
Europe and the UK, and North America. A wide range of topics was
discussed, including climate change, biodiversity and water
management, human rights, Indigenous engagement and cultural
heritage and transparency. A number of agreements were made
regarding information-sharing and follow-up meetings, including
smaller sessions where more issue and thematic focused dialogues
could take place to advance progress on specific shared challenges.
More information can be found on page 141.
Governments
Governments – federal, state and provincial, and local – are important
stakeholders for our business. We regularly engage with officials at all
levels on matters including how we explore, mine and process ore;
conditions of land tenure; health, safety and environmental issues,
including climate change; securities; taxation; intellectual property;
competition and foreign investment; data privacy, conditions of trade
and export; and infrastructure access.
We are proud of the economic contribution our business makes to
governments around the world. We were the first company in our
industry to disclose our payments to governments in detail, and we
have been reporting on our taxes and royalties paid, and our economic
contribution, in increasing detail, for more than a decade. Over the past
ten years, we have paid $74 billion in taxes and royalties globally, of
which 78%, or $58 billion, was paid in Australia. Corporate tax paid in
2021 was $8.5 billion (2020: $5.3 billion), which when combined with
royalties and other taxes, and with our share of taxes and royalties paid
by equity accounted units, resulted in payments to governments of
over $13 billion (2020: $8.4 billion), including over $11 billion (2020:
$6.8 billion) paid in Australia. This is important because our businesses’
economic contribution to governments and communities supports the
basic infrastructure of society – bridges and roads, schools and
hospitals – as well as other local development priorities, like job
creation and skills training.
At the global level, we engage with multilateral organisations such as
the World Bank, the International Finance Corporation, the United
Nations, and the Organisation for Economic Co-operation and
Development (OECD). We also engage with multi-stakeholder
initiatives in which governments participate, such as the Extractive
Industries Transparency Initiative (EITI) and the Voluntary Principles on
Security and Human Rights. These bodies help to define the industry’s
operating environment and contribute to joint problem solving.
20
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
21
Our stakeholders continued
Customers
The world’s journey towards achieving the goals of the
Paris Agreement will require nothing less than a green-energy
revolution. The minerals and metals we produce and sell to our
customers are vital ingredients in meeting this challenge.
The needs of our customers are central to our operational decision
making. Using the insights generated from everything we buy, sell and
move around the world, our Commercial team works closely with
customers to ensure that we deliver industry-leading products that
meet their specific requirements. Our new offering, START Responsible
Aluminium, which is the first sustainability label for aluminium using
blockchain technology, is just one example of our responsiveness to
customer requirements.
Building trust with our customers is critical, and it requires us to deliver
on our promises consistently, and to act with care, courage and
curiosity. For the third year, we asked our customers for their feedback
via a survey. The insights from this survey are helping us deliver new
and better products and initiatives.
We increased our spend with Indigenous suppliers in Australia
by 40% from 2020 to 2021 to A$400 million. In Mongolia,
between 2010 and the end of 2021, Oyu Tolgoi spent $4.1 billion
on national procurement*.
Quality relationships with our suppliers are vital to ensure that we
remain at the forefront of technological and market developments,
and we continually strive to improve our supplier experiences. As with
our customers, we ask our suppliers to participate in a yearly survey to
ensure we capture their feedback for improvement. To further support
our suppliers, in 2021, we introduced new faster payment terms in
Australia to ensure Indigenous, small and regional suppliers are paid
more quickly.
We also continue to engage with both customers and suppliers on
innovative climate change partnerships, including with BlueScope in
Australia, China Baowu in China, Nippon Steel Corporation in Japan
and POSCO in South Korea, to tackle emissions across the steel value
chain. On the supplier side we are partnering with Komatsu and
Caterpillar on zero-emissions haul trucks. More information on some of
these partnerships can be found in the Innovation pages 70-71.
Suppliers
Engaging with suppliers is an important way in which we can have
a positive impact on communities. In the areas where we operate,
we work hard to partner with and develop local businesses so
they can share in our success. In 2021, we spent $19.4 billion with
suppliers globally, including almost A$8 billion in Western Australia.
*Oyu Tolgoi’s (OT) national procurement figure represents spend with suppliers registered in
Mongolia and more than 50% owned by Mongolian citizens. It relates to the OT operations
only, and does not include the underground project.
Time off in Broome. Fly-in, fly-out (FIFO)
programme. Western Australia.
22
Annual Report 2021 | riotinto.com
Our stakeholders continued
Strategic report
Customers
The world’s journey towards achieving the goals of the
Paris Agreement will require nothing less than a green-energy
revolution. The minerals and metals we produce and sell to our
customers are vital ingredients in meeting this challenge.
The needs of our customers are central to our operational decision
making. Using the insights generated from everything we buy, sell and
move around the world, our Commercial team works closely with
customers to ensure that we deliver industry-leading products that
meet their specific requirements. Our new offering, START Responsible
Aluminium, which is the first sustainability label for aluminium using
blockchain technology, is just one example of our responsiveness to
customer requirements.
Building trust with our customers is critical, and it requires us to deliver
on our promises consistently, and to act with care, courage and
curiosity. For the third year, we asked our customers for their feedback
via a survey. The insights from this survey are helping us deliver new
and better products and initiatives.
We increased our spend with Indigenous suppliers in Australia
by 40% from 2020 to 2021 to A$400 million. In Mongolia,
between 2010 and the end of 2021, Oyu Tolgoi spent $4.1 billion
on national procurement*.
Quality relationships with our suppliers are vital to ensure that we
remain at the forefront of technological and market developments,
and we continually strive to improve our supplier experiences. As with
our customers, we ask our suppliers to participate in a yearly survey to
ensure we capture their feedback for improvement. To further support
our suppliers, in 2021, we introduced new faster payment terms in
Australia to ensure Indigenous, small and regional suppliers are paid
more quickly.
We also continue to engage with both customers and suppliers on
innovative climate change partnerships, including with BlueScope in
Australia, China Baowu in China, Nippon Steel Corporation in Japan
and POSCO in South Korea, to tackle emissions across the steel value
chain. On the supplier side we are partnering with Komatsu and
Caterpillar on zero-emissions haul trucks. More information on some of
these partnerships can be found in the Innovation pages 70-71.
Suppliers
Engaging with suppliers is an important way in which we can have
a positive impact on communities. In the areas where we operate,
we work hard to partner with and develop local businesses so
they can share in our success. In 2021, we spent $19.4 billion with
suppliers globally, including almost A$8 billion in Western Australia.
*Oyu Tolgoi’s (OT) national procurement figure represents spend with suppliers registered in
Mongolia and more than 50% owned by Mongolian citizens. It relates to the OT operations
only, and does not include the underground project.
Time off in Broome. Fly-in, fly-out (FIFO)
programme. Western Australia.
22
Annual Report 2021 | riotinto.com
Our business model
Our ability to create value is underpinned by the quality of our assets,
the capabilities of our people, our operational and sustainability performance,
innovative partnerships, and disciplined capital allocation.
1. Explore
and evaluate
We use some of the most advanced exploration technologies in the world to find potential sources of
minerals and metals. We consider new commodities and products with an understanding of customers’ and
communities’ needs. We are also mindful of our potential future social and environmental impact as well as
the diversity and balance of our portfolio.
With the low-carbon transition at the heart of our business, we will continue to focus our exploration efforts on
commodities essential for the energy transition. We are also evaluating emerging opportunities in the circular
economy and green energy production.
2. Develop
and innovate
We assess each potential opportunity with a focus on risk, potential returns, and long-term value and sustainability.
Once we have approved an investment, we design and build each operation, informed by input from our partners
and those stakeholders most affected. We aim to develop every potential site with safety as our first priority and to
achieve optimal, long-term productivity while minimising risks and our environmental footprint. We also consider
closure from the start, in the way we design, build and run every site.
We work in partnership with a growing network of stakeholders – governments, communities, customers and
suppliers – who help expand our understanding, capabilities and, ultimately, our ability to be the best operator and a
responsible steward of resources.
3. Mine
and process
We share best practices across our assets to support safe, productive and environmentally responsible operational
performances. Our operations benefit local economies by contributing training and skills development, jobs, taxes
and royalties, contracts with local businesses, and social and community investment. We also support the economic
diversification of regions where we are based, in alignment with national and regional development plans, ensuring
host communities can thrive long after our operations close. Our ambition is for our operations to reach net zero
carbon emissions by 2050.
By understanding and respecting our business partners, employees, communities and the environment, we can
create sustainable value for all our stakeholders.
4. Market
and deliver
We align our products with market and customer needs. Our minerals and metals are essential as enablers of the
energy transition and are used in a vast array of everyday products – from electric vehicles to smartphones to
skyscrapers. The transition to net zero will create additional demand for materials such as copper, lithium, aluminium
and high-quality iron ore. We will support growth in these commodities while developing new technologies and
products that help our customers decarbonise.
Our network of rail, ports and ships enables us to control end-to-end logistics to deliver our products safely,
efficiently and reliably.
5. Repurpose
and renew
We aim to design and run our assets to create a positive legacy once our mining or processing activity concludes.
We engage stakeholders of our sites nearing closure – including Indigenous peoples, government, employees and
host communities – and actively involve them in the planning.
Each of our sites has rehabilitation plans that we review every year. Planning and operating with the future in mind is
integral to running a safe, responsible and profitable business.
Underpinned by disciplined capital allocation
Our business is underpinned by a disciplined approach to capital allocation; we strive to use every dollar prudently. Today, our balance sheet is a
key strength, providing a resilient platform for strong and consistent shareholder returns, as well as enabling us to invest throughout the
commodity cycle.
Annual Report 2021 | riotinto.com
23
Key performance indicators
We use a range of financial and non-financial metrics to measure Group performance
against our four objectives: best operator, impeccable environmental, social and
governance (ESG) credentials, excel in development, and social licence.
Alignment to our four objectives
Best
operator
Expand capability
and leadership
Impeccable
ESG credentials
Strengthen track record
and transparency
Excel in
development
Deliver organic and
inorganic growth, on
time, on budget
Social licence
Earn trust by building meaningful relationships and partnerships
Link to executive remuneration
Included as a performance metric in the safety component of the
short-term incentive plan (see pages 175-176).
Our performance in 2021
We achieved a third year in a row of zero fatalities and we had zero
permanent damage injuries. Our all-injury frequency rate (AIFR) slightly
increased to 0.40 from 0.37 in 2020. Fatigue, labour shortages and
other pressures from COVID-19 have presented new challenges
in our day-to-day operations and remind us that there is no room
for complacency.
Forward plan
– Continue our critical risk management programme
– Implement enhancements to the safety maturity model programme
– Continue to implement our major hazard standards, including
process safety, underground safety and tailings, and apply strong
assurance processes
– Innovate to reduce exposure to safety and health risks
All-injury frequency rate (AIFR)
per 200,000 hours worked
2017
2018
2019
2020
2021
Definition
0.420.42
0.440.44
0.420.42
0.370.37
0.400.40
The number of injuries per 200,000 hours worked by employees and
contractors at the operations that we manage. AIFR includes: medical
treatment cases, restricted workday and lost-day injuries.
Alignment to our four objectives
– Best operator
Associated risks
– Operational
– Impeccable ESG credentials
– ESG
(see page 117)
Relevance to strategy and executive remuneration
Our global workforce is the foundation of our business. Supporting our
people and their safety is our number one priority; and essential to
everything we do. We are committed to having a safe work environment
for all our people. We focus on maintaining zero fatalities, preventing
catastrophic events and reducing safety risk everywhere we work. We
are a learning organisation enabling a safe, responsible and productive
business that protects and cares for people. We continue to implement
our safety maturity model which brings together the key elements to
building a strong safety culture and leadership maturity. Our facilities
developed improvement plans and continued to enhance their safety
maturity throughout the pandemic-related challenges faced during
2021. We are focused and committed to strengthening our partnerships
with industry and associated committees (eg ICMM), contracting
partners and local communities with the priority of learning and sharing
to protect everyone’s health, safety and wellbeing.
24
Annual Report 2021 | riotinto.com
Key performance indicators
We use a range of financial and non-financial metrics to measure Group performance
against our four objectives: best operator, impeccable environmental, social and
governance (ESG) credentials, excel in development, and social licence.
Alignment to our four objectives
Best
operator
Expand capability
and leadership
Impeccable
ESG credentials
Strengthen track record
and transparency
Excel in
development
Deliver organic and
inorganic growth, on
time, on budget
Social licence
Earn trust by building meaningful relationships and partnerships
Link to executive remuneration
Included as a performance metric in the safety component of the
short-term incentive plan (see pages 175-176).
Our performance in 2021
We achieved a third year in a row of zero fatalities and we had zero
permanent damage injuries. Our all-injury frequency rate (AIFR) slightly
increased to 0.40 from 0.37 in 2020. Fatigue, labour shortages and
other pressures from COVID-19 have presented new challenges
in our day-to-day operations and remind us that there is no room
for complacency.
Forward plan
– Continue our critical risk management programme
– Implement enhancements to the safety maturity model programme
– Continue to implement our major hazard standards, including
process safety, underground safety and tailings, and apply strong
assurance processes
– Innovate to reduce exposure to safety and health risks
All-injury frequency rate (AIFR)
per 200,000 hours worked
2017
2018
2019
2020
2021
Definition
0.420.42
0.440.44
0.420.42
0.370.37
0.400.40
The number of injuries per 200,000 hours worked by employees and
contractors at the operations that we manage. AIFR includes: medical
treatment cases, restricted workday and lost-day injuries.
Alignment to our four objectives
Associated risks
– Best operator
– Operational
– Impeccable ESG credentials
– ESG
(see page 117)
Relevance to strategy and executive remuneration
Our global workforce is the foundation of our business. Supporting our
people and their safety is our number one priority; and essential to
everything we do. We are committed to having a safe work environment
for all our people. We focus on maintaining zero fatalities, preventing
catastrophic events and reducing safety risk everywhere we work. We
are a learning organisation enabling a safe, responsible and productive
business that protects and cares for people. We continue to implement
our safety maturity model which brings together the key elements to
building a strong safety culture and leadership maturity. Our facilities
developed improvement plans and continued to enhance their safety
maturity throughout the pandemic-related challenges faced during
2021. We are focused and committed to strengthening our partnerships
with industry and associated committees (eg ICMM), contracting
partners and local communities with the priority of learning and sharing
to protect everyone’s health, safety and wellbeing.
24
Annual Report 2021 | riotinto.com
Strategic report
Total shareholder return (TSR)1
Underlying earnings and underlying EBITDA
measured over the preceding five years (using annual average
share price)
$ millions
2017
5.8%5.8%
2018
33.4%33.4%
2019
49.6%49.6%
2020
2021
Definition
110.1%110.1%
263.3%
263.3%
Combination of share price appreciation (using annual average share
price) and dividends paid and reinvested to show the total return to the
shareholder over the preceding five years.
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
– Impeccable ESG credentials
– Economic
– Excel in development
– Social licence
– ESG
(see page 117)
2017
Underlying earnings
8,627
8,627
Underlying EBITDA
18,580
18,580
2018
Underlying earnings
8,808
8,808
Underlying EBITDA
18,136
18,136
2019
Underlying earnings
10,373
10,373
Underlying EBITDA
21,197
21,197
2020
Underlying earnings
12,448
12,448
Underlying EBITDA
23,902
23,902
2021
Underlying earnings
Underlying EBITDA
Definition
21,380
21,380
37,720
37,720
Relevance to strategy and executive remuneration
Our strategy aims to maximise shareholder returns through the
commodity cycle, and TSR is a direct measure of that.
Underlying earnings represent net earnings attributable to the owners
of Rio Tinto, adjusted to exclude items which do not reflect the
underlying performance of the Group’s operations. These items are
explained in note 2 of the financial statements.
Link to executive remuneration
Reflected in the long-term incentive plan, measured equally against the
EMIX Global Mining Index and the MSCI World Index (see pages
181-182).
Our performance in 2021
TSR performance over the five-year period was driven principally by
movements in commodity prices and changes in the global macro
environment. Rio Tinto significantly outperformed both the EMIX Global
Mining Index and the MSCI World Index over the five-year period.
Forward plan
We will continue to focus on generating the free cash flow from our
operations. This allows us to return cash to shareholders (short-term
returns) while investing in the business (long-term returns).
Underlying EBITDA represents profit before tax, net finance items,
depreciation and amortisation. It excludes the EBITDA impact of the
items mentioned above.
For more information please refer to Alternative Performance Measures
on pages 343-347.
Alignment to our four objectives
– Best operator
Associated risks
– Economic
– Operational
– ESG
(see page 117)
Relevance to strategy and executive remuneration
These financial KPIs measure how well we are managing costs, increasing
productivity and generating the most revenue from each of our assets.
Link to executive remuneration
Underlying earnings are reflected in the short-term incentive plan; in
the longer term, both measures influence TSR, which is the primary
measure for the long-term incentive plan (see pages 180-182).
Our performance in 2021
Underlying earnings of $21.4 billion were $8.9 billion higher than in 2020.
Underlying EBITDA of $37.7 billion was $13.8 billion higher than in
2020. The 58% increase in underlying EBITDA resulted from higher
iron ore, aluminium and copper prices, partly offset by lower sales
volumes and higher energy costs.
1. The TSR calculation for each period is based on the change in the calendar-year
average share prices for Rio Tinto plc and Rio Tinto Limited over the preceding five years.
This is consistent with the methodology used for calculating the vesting outcomes for
Performance Share Awards (PSA). The data presented in this chart accounts for the dual
corporate structure of Rio Tinto.
Forward plan
We will continue to drive superior margins and returns through our
focus on becoming the best operator and unlocking full potential
across our value chains.
Annual Report 2021 | riotinto.com
25
Key performance indicators continued
Underlying return on capital employed (ROCE)
Net cash generated from operating activities
%
2017
2018
2019
2020
2021
Definition
18%18%
19%19%
24%24%
27%27%
44%44%
$ millions
2017
2018
2019
2020
2021
Definition
13,884
13,884
11,821
11,821
14,912
14,912
15,875
15,875
25,345
25,345
Underlying return on capital employed (“ROCE”) is defined as
underlying earnings excluding net interest divided by average capital
employed (operating assets). For more information please refer to
Alternative Performance Measures on pages 343-347.
Cash generated by our operations after tax and interest, including
dividends received from equity accounted units and dividends paid to
non-controlling interests in subsidiaries.
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
Alignment to our four objectives
– Best operator
Associated risks
– Economic
– Excel in development
– Economic
– Operational
– ESG
(see page 117)
– Operational
– ESG
(see page 117)
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
Our portfolio of low-cost, long-life assets delivers attractive returns
throughout the cycle and has been reshaped significantly in recent
years. Underlying ROCE measures how efficiently we generate profits
from investment in our portfolio of assets.
Link to executive remuneration
Underlying earnings, as a component of underlying ROCE, is included
in the short-term incentive plan. In the longer term, underlying ROCE
also influences TSR, which is included in the long-term incentive plan
(see pages 180-182).
Our performance in 2021
Underlying ROCE increased 17 percentage points to 44% in 2021,
reflecting the increase in underlying earnings driven by higher
commodity prices, partially offset by an increase in capital employed
due to capital expenditure.
Forward plan
We will continue to focus on maximising returns from our assets over
the short, medium and long-term. We will also maintain our disciplined
and rigorous approach and invest capital only in projects that we
believe will deliver returns that are well above our cost of capital.
This KPI measures our ability to convert underlying earnings into cash.
Link to executive remuneration
Included in the short-term incentive plan; in the longer term,
the measure influences TSR, which is included in the long-term
incentive plan (see pages 180-182).
Our performance in 2021
Net cash generated from operating activities of $25.3 billion was 60%
higher than 2020. This was primarily due to higher commodity prices,
partially offset by higher taxes paid, higher dividends paid and an
increase in working capital.
Forward plan
We will focus on effectively converting earnings into cash, underpinned
by operational and commercial excellence, including our careful
management of working capital.
26
Annual Report 2021 | riotinto.com
Key performance indicators continued
Strategic report
Underlying return on capital employed (ROCE)
Net cash generated from operating activities
%
2017
2018
2019
2020
2021
Definition
18%18%
19%19%
24%24%
27%27%
$ millions
2017
2018
2019
2020
2021
Definition
13,884
13,884
11,821
11,821
14,912
14,912
15,875
15,875
44%44%
25,345
25,345
Underlying return on capital employed (“ROCE”) is defined as
Cash generated by our operations after tax and interest, including
underlying earnings excluding net interest divided by average capital
dividends received from equity accounted units and dividends paid to
employed (operating assets). For more information please refer to
non-controlling interests in subsidiaries.
Alternative Performance Measures on pages 343-347.
Alignment to our four objectives
Associated risks
Alignment to our four objectives
Associated risks
– Best operator
– Excel in development
– Best operator
– Economic
– Operational
– ESG
(see page 117)
– Strategic
– Economic
– Operational
– ESG
(see page 117)
Our portfolio of low-cost, long-life assets delivers attractive returns
This KPI measures our ability to convert underlying earnings into cash.
throughout the cycle and has been reshaped significantly in recent
years. Underlying ROCE measures how efficiently we generate profits
from investment in our portfolio of assets.
Link to executive remuneration
Link to executive remuneration
Included in the short-term incentive plan; in the longer term,
the measure influences TSR, which is included in the long-term
incentive plan (see pages 180-182).
Underlying earnings, as a component of underlying ROCE, is included
in the short-term incentive plan. In the longer term, underlying ROCE
also influences TSR, which is included in the long-term incentive plan
Our performance in 2021
Net cash generated from operating activities of $25.3 billion was 60%
higher than 2020. This was primarily due to higher commodity prices,
partially offset by higher taxes paid, higher dividends paid and an
Underlying ROCE increased 17 percentage points to 44% in 2021,
reflecting the increase in underlying earnings driven by higher
commodity prices, partially offset by an increase in capital employed
increase in working capital.
Forward plan
(see pages 180-182).
Our performance in 2021
due to capital expenditure.
Forward plan
We will focus on effectively converting earnings into cash, underpinned
by operational and commercial excellence, including our careful
management of working capital.
We will continue to focus on maximising returns from our assets over
the short, medium and long-term. We will also maintain our disciplined
and rigorous approach and invest capital only in projects that we
believe will deliver returns that are well above our cost of capital.
Free cash flow
$ millions
6,977
6,977
9,540
9,540
9,1589,158
9,407
9,407
2017
2018
2019
2020
2021
Definition
Net cash/(debt)
$ millions
2017
(3,845)
(3,845)
2018
2019
(3,651)
(3,651)
2020
2021
Definition
17,664
17,664
255255
(664)
(664)
1,576
1,576
Free cash flow is defined as net cash generated from operating
activities minus purchases of property, plant and equipment and
intangibles and payments of lease principal, plus proceeds from the
sale of property, plant and equipment and intangible assets. For more
information please refer to Alternative Performance Measures on
pages 343-347.
Total borrowings plus lease liabilities less cash and cash equivalents and
other liquid investments, adjusted for derivatives related to net cash/(debt)
(see note 23 of the financial statements). For more information please
refer to Alternative Performance Measures on pages 343-347.
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
– Excel in development
– Excel in development
– Economic
– Operational
– ESG
(see page 117)
– Economic
– Operational
– ESG
(see page 117)
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
This KPI measures the net cash returned by the business after the
expenditure of sustaining and growth capital. This cash can be used for
shareholder returns, reducing debt and other investment.
This measures how we are managing our balance sheet and capital
structure. A strong balance sheet is essential for giving us flexibility to
take advantage of opportunities as they arise, and for returning cash
to shareholders.
Link to executive remuneration
Included in the short-term incentive plan; in the longer term, the
measure influences TSR, which is included in the long-term incentive
plan (see pages 180-182).
Our performance in 2021
Free cash flow increased by $8.3 billion to $17.7 billion in 2021,
primarily due to the increase in net cash generated from operating
activities. This was partially offset by an increase in replacement and
development capital expenditure as we ramp up our projects.
Forward plan
We will focus on effectively converting earnings into cash, underpinned
by operational and commercial excellence, including our careful
management of working capital.
Link to executive remuneration
Net cash/(debt) is, in part, an outcome of free cash flow, which itself is
reflected in the short-term incentive plan. In the longer term, net cash/
(debt) influences TSR, which is reflected in the long-term incentive plan
(see pages 180-182).
Our performance in 2021
Net debt decreased by $2.2 billion to a net cash position of $1.6 billion.
This reflects $17.7 billion of free cash flow in 2021, partially offset by
$15.4 billion of cash returns to shareholders through dividends.
Forward plan
We will focus on effectively converting earnings into cash, underpinned
by operational and commercial excellence, including our careful
management of working capital.
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27
Key performance indicators continued
Scope 1 and 2 greenhouse gas emissions
Gender diversity
(equity Mt CO2e)
Representation of women within our workforce
20181
2019
2020
2021
32.532.5
31.531.5
31.531.5
31.131.1
Prior to 2018 we reported our greenhouse gas emissions on a 100% managed basis.
1. The 2018 figure is the baseline for our 2025 and 2030 emissions targets and has been
adjusted for acquisitions and divestments.
2017
2018
2019
20202
20202
2021
18.0%18.0%
17.7%17.7%
18.4%18.4%
19.0%19.0%
20.1%20.1%
21.6%21.6%
2. Baseline reset with definition for 2020 to 2021 gender diversity.
Definition
Definition
Equity greenhouse gas emissions: equity share of Scope 1 and 2
emissions from managed and non-managed operations expressed in
million metric tonnes of carbon dioxide equivalent.
Includes our total workforce based on managed operations (excludes
the Group's share of non-managed operations and joint ventures)3.
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
Alignment to our four objectives
– Best operator
Associated risks
– Strategic
– Impeccable ESG credentials
– ESG
– Impeccable ESG credentials
– Excel in development
(see page 117)
– Social licence
– ESG
(see page 117)
– Social licence
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
Climate risks and opportunities have formed part of our strategic
thinking and investment decisions for over two decades. We have put
the net zero transition at the heart of our business strategy; combining
actions to reduce greenhouse gas emissions from our assets with
investments in commodities that enable the energy transition, so that
we can provide products that will help our customers to decarbonise.
Link to executive remuneration
Climate change is included in our ESG metrics for executive
remuneration with a weighting of 5% of the short-term incentive plan.
In 2021, the business achieved the approval of 0.26Mt CO2e of
abatement projects and exceeded the total 0.5Mt CO2e targeted for
2020 and 2021. For more information, see page 177.
Our performance in 2021
Our absolute emissions in 2021 were 31.1Mt CO2e, 4% below our 2018
equity emissions baseline. The reductions achieved since 2018 are
primarily the result of switching to renewable electricity contracts at
Kennecott in the US and the Escondida mine in Chile (managed by
BHP; Rio Tinto owns 30%), and also relate to unplanned operational
disruptions in 2021 at Richards Bay Minerals in South Africa and the
Kitimat aluminium smelter in Canada.
Forward plan
As part of our new Group strategy, we announced new targets in 2021
and aim to reduce absolute emissions by 15% by 2025 and by 50%
by 2030. We are committed to reaching net zero emissions by 2050.
Our decarbonisation roadmap to meet these targets is detailed in
the Climate Action Plan section of our 2021 Climate Change Report,
which can be found at riotinto.com/climatereport.
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Annual Report 2021 | riotinto.com
Inclusion and diversity are imperative for the sustainable success of the
business. Our sustained performance and growth rely on having
workforce diversity that is representative of the communities in which
we operate and having a workplace where people are valued for who
they are and encouraged to contribute to their full potential.
Link to executive remuneration
In 2021, our target was to increase the proportion of women in our
workforce by 2%. This target is included in our ESG metrics for
executive remuneration, with a weighting of 5% of the short-term
incentive plan. For more information, please see page 177.
Our performance in 2021
In 2021, we increased our representation of women by 1.5%, from
20.1% to 21.6%. This falls short of our 2% target. However, it is the
largest increase in gender diversity in the past five years. The increases
were distributed across all levels of the organisation, with senior
leaders increasing from 26.1% to 27.4% and managers increasing by
1.7% to 31.9%.
Forward plan
Our target to increase the proportion of women in our workforce by 2%
year on year will continue in 2022. We will keep promoting initiatives to
support this target, including the Everyday Respect task force
recommendations. For more information, please see page 101.
3. In 2020, we updated our definition of our total workforce to include those employees
who were unavailable for work (eg on parental leave) and temporary contractors.
Note: less than 1% of the workforce gender is undeclared.
Key performance indicators continued
Scope 1 and 2 greenhouse gas emissions
Gender diversity
(equity Mt CO2e)
Representation of women within our workforce
20181
2019
2020
2021
32.532.5
31.531.5
31.531.5
31.131.1
2017
2018
2019
20202
20202
2021
18.0%18.0%
17.7%17.7%
18.4%18.4%
19.0%19.0%
20.1%20.1%
21.6%21.6%
Prior to 2018 we reported our greenhouse gas emissions on a 100% managed basis.
1. The 2018 figure is the baseline for our 2025 and 2030 emissions targets and has been
adjusted for acquisitions and divestments.
2. Baseline reset with definition for 2020 to 2021 gender diversity.
Definition
Definition
Equity greenhouse gas emissions: equity share of Scope 1 and 2
Includes our total workforce based on managed operations (excludes
emissions from managed and non-managed operations expressed in
the Group's share of non-managed operations and joint ventures)3.
million metric tonnes of carbon dioxide equivalent.
Alignment to our four objectives
Associated risks
Alignment to our four objectives
Associated risks
– Best operator
– Impeccable ESG credentials
– Excel in development
– Social licence
– Strategic
– ESG
(see page 117)
– Best operator
– Impeccable ESG credentials
– Social licence
– Strategic
– ESG
(see page 117)
Relevance to strategy and executive remuneration
Relevance to strategy and executive remuneration
Climate risks and opportunities have formed part of our strategic
Inclusion and diversity are imperative for the sustainable success of the
thinking and investment decisions for over two decades. We have put
business. Our sustained performance and growth rely on having
the net zero transition at the heart of our business strategy; combining
workforce diversity that is representative of the communities in which
actions to reduce greenhouse gas emissions from our assets with
we operate and having a workplace where people are valued for who
investments in commodities that enable the energy transition, so that
they are and encouraged to contribute to their full potential.
we can provide products that will help our customers to decarbonise.
Link to executive remuneration
Climate change is included in our ESG metrics for executive
remuneration with a weighting of 5% of the short-term incentive plan.
In 2021, the business achieved the approval of 0.26Mt CO2e of
abatement projects and exceeded the total 0.5Mt CO2e targeted for
2020 and 2021. For more information, see page 177.
Our performance in 2021
Link to executive remuneration
In 2021, our target was to increase the proportion of women in our
workforce by 2%. This target is included in our ESG metrics for
executive remuneration, with a weighting of 5% of the short-term
incentive plan. For more information, please see page 177.
Our performance in 2021
In 2021, we increased our representation of women by 1.5%, from
20.1% to 21.6%. This falls short of our 2% target. However, it is the
Our absolute emissions in 2021 were 31.1Mt CO2e, 4% below our 2018
largest increase in gender diversity in the past five years. The increases
equity emissions baseline. The reductions achieved since 2018 are
were distributed across all levels of the organisation, with senior
primarily the result of switching to renewable electricity contracts at
leaders increasing from 26.1% to 27.4% and managers increasing by
Kennecott in the US and the Escondida mine in Chile (managed by
1.7% to 31.9%.
BHP; Rio Tinto owns 30%), and also relate to unplanned operational
disruptions in 2021 at Richards Bay Minerals in South Africa and the
Kitimat aluminium smelter in Canada.
Forward plan
Our target to increase the proportion of women in our workforce by 2%
year on year will continue in 2022. We will keep promoting initiatives to
support this target, including the Everyday Respect task force
As part of our new Group strategy, we announced new targets in 2021
recommendations. For more information, please see page 101.
Forward plan
and aim to reduce absolute emissions by 15% by 2025 and by 50%
by 2030. We are committed to reaching net zero emissions by 2050.
Our decarbonisation roadmap to meet these targets is detailed in
the Climate Action Plan section of our 2021 Climate Change Report,
which can be found at riotinto.com/climatereport.
3. In 2020, we updated our definition of our total workforce to include those employees
who were unavailable for work (eg on parental leave) and temporary contractors.
Note: less than 1% of the workforce gender is undeclared.
Chief Financial Officer’s statement
We have an outstanding foundation of long-life assets, producing vital commodities
for a decarbonising world.
Net cash generated from operating activities
Robust financial results
$25.3bn
(2020: $15.9bn)
Profit after tax attributable to owners of
Rio Tinto (net earnings)
$21.1bn
(2020: $9.8bn)
Underlying earnings
$21.4bn
(2020: $12.4bn)
The recovery of the global economy resulted in significant price
strength for our major commodities. We maintained our financial
discipline throughout 2021 and were able to capture around 80%
of the price uplift, achieving record financial results, with net cash
generated from operating activities of $25.3 billion, underlying
earnings of $21.4 billion and net earnings of $21.1 billion.
Our financial position is strong and stable and we ended the year with a
net cash position of $1.6 billion. However, we are not satisfied with our
operating performance and progress on our capital projects has been
challenging. Our teams continue to adapt to difficult conditions with
COVID-19 still prevalent, creating significant restrictions on the
availability of labour and supply chains. The Rio Tinto Safe Production
System has a long-term focus to ensure we properly embed any gains
for the future, including enhancing operating and leadership
capabilities. However, we are not ignoring the near term and are
already rolling out this significant improvement programme.
Disciplined allocation of capital remains at
our core
There is one thing that will not change at Rio Tinto, and that is our
approach to capital discipline. Our aim is to invest consistently
through the cycle, balancing near-term returns to shareholders with
reinvestment and de-risking future cash flows. It involves carefully
testing all opportunities and taking controlled risks.
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29
Strong foundation for growth, decarbonisation
and shareholder returns
We have an outstanding foundation of long-life assets, producing vital
commodities for a decarbonising world. Our balance sheet is stronger
than ever and we have a world-class pipeline of projects.
This means that we have the financial capacity for our ambition to
double investment in value-adding growth and accelerate the
decarbonisation of our portfolio, while continuing to pay attractive
dividends in line with our policy.
By accelerating our own decarbonisation transition, we will de-risk the
company, generate growth, maintain our financial discipline and
enhance our competitive advantage.
Peter Cunningham
Chief Financial Officer
23 February 2022
Chief Financial Officer’s statement continued
“Over the last six years, we have paid out at
the top end of the range for the ordinary
dividend at 60% of underlying earnings.”
We are focusing on the highest risk areas and ensuring that all capital is
deployed with discipline. Essential capital expenditure to maintain
future cash flows remains our priority for capital allocation. It includes
sustaining capital to ensure the integrity of our assets, high-returning
replacement projects and investment to increase and accelerate
decarbonisation. This latter investment is set to rise in line with our
strategic priorities, with our focus over the next three years on
repowering the Pilbara with renewables.
Our next priority is the ordinary dividend within our well-established
returns policy. We then test investment in compelling growth against
debt management and additional cash returns to shareholders.
In 2021, we increased our capital expenditure overall by 19% to
$7.4 billion, targeting disciplined investment in key projects and
commodities. This was comprised of $0.6 billion of growth capital,
$3.3 billion of replacement and $3.5 billion of sustaining capital. Our
most significant growth project remains the Oyu Tolgoi copper/gold
underground mine in Mongolia where we invested around $0.6 billion,
on a 100% basis as we fully consolidate Oyu Tolgoi. Much of the 2021
increase in capital relates to our Pilbara replacement iron ore mines as
we ramped up the pace of construction.
Attractive dividends remain paramount
Our shareholder returns policy dates back to 2016. We have
committed to returning 40 to 60% of underlying earnings on average
through the cycle, with additional returns in periods of strong earnings
and cash generation. It is tried and tested and has resulted in record
returns. It is a variable policy, in terms of the absolute number,
with the denominator moving up and down, mostly in line with
commodity prices.
We have paid out at the top end of the range for the ordinary dividend
at 60% of underlying earnings. Overall, due to our strong cash flows,
we have consistently exceeded the policy, with a total payout ratio
averaging 74% over the last six years, when you include special
dividends and share buy-backs and exclude divestment proceeds.
For 2021, we are returning 79% of underlying earnings to shareholders.
This is comprised of the full year ordinary dividend of 793 US cents per
share and special dividend of 247 US cents per share, bringing the total
dividend to 1,040 US cents, or $16.8 billion. While encouraged by growth
prospects in the coming year, we remain vigilant in relation to potential
disruption from new COVID-19 variants and geopolitical tensions.
We see the dividend as paramount for maintaining discipline.
Our financial strength means that we can reinvest for growth,
accelerate our decarbonisation and continue to pay attractive
dividends through the cycle.
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Annual Report 2021 | riotinto.com
Chief Financial Officer’s statement continued
“Over the last six years, we have paid out at
the top end of the range for the ordinary
dividend at 60% of underlying earnings.”
We are focusing on the highest risk areas and ensuring that all capital is
deployed with discipline. Essential capital expenditure to maintain
future cash flows remains our priority for capital allocation. It includes
sustaining capital to ensure the integrity of our assets, high-returning
replacement projects and investment to increase and accelerate
decarbonisation. This latter investment is set to rise in line with our
strategic priorities, with our focus over the next three years on
repowering the Pilbara with renewables.
Our next priority is the ordinary dividend within our well-established
returns policy. We then test investment in compelling growth against
debt management and additional cash returns to shareholders.
In 2021, we increased our capital expenditure overall by 19% to
$7.4 billion, targeting disciplined investment in key projects and
commodities. This was comprised of $0.6 billion of growth capital,
$3.3 billion of replacement and $3.5 billion of sustaining capital. Our
most significant growth project remains the Oyu Tolgoi copper/gold
underground mine in Mongolia where we invested around $0.6 billion,
on a 100% basis as we fully consolidate Oyu Tolgoi. Much of the 2021
increase in capital relates to our Pilbara replacement iron ore mines as
we ramped up the pace of construction.
Attractive dividends remain paramount
Our shareholder returns policy dates back to 2016. We have
committed to returning 40 to 60% of underlying earnings on average
through the cycle, with additional returns in periods of strong earnings
and cash generation. It is tried and tested and has resulted in record
returns. It is a variable policy, in terms of the absolute number,
with the denominator moving up and down, mostly in line with
commodity prices.
We have paid out at the top end of the range for the ordinary dividend
at 60% of underlying earnings. Overall, due to our strong cash flows,
we have consistently exceeded the policy, with a total payout ratio
averaging 74% over the last six years, when you include special
dividends and share buy-backs and exclude divestment proceeds.
For 2021, we are returning 79% of underlying earnings to shareholders.
This is comprised of the full year ordinary dividend of 793 US cents per
share and special dividend of 247 US cents per share, bringing the total
dividend to 1,040 US cents, or $16.8 billion. While encouraged by growth
prospects in the coming year, we remain vigilant in relation to potential
disruption from new COVID-19 variants and geopolitical tensions.
We see the dividend as paramount for maintaining discipline.
Our financial strength means that we can reinvest for growth,
accelerate our decarbonisation and continue to pay attractive
dividends through the cycle.
Strong foundation for growth, decarbonisation
and shareholder returns
We have an outstanding foundation of long-life assets, producing vital
commodities for a decarbonising world. Our balance sheet is stronger
than ever and we have a world-class pipeline of projects.
This means that we have the financial capacity for our ambition to
double investment in value-adding growth and accelerate the
decarbonisation of our portfolio, while continuing to pay attractive
dividends in line with our policy.
By accelerating our own decarbonisation transition, we will de-risk the
company, generate growth, maintain our financial discipline and
enhance our competitive advantage.
Peter Cunningham
Chief Financial Officer
23 February 2022
“We have the financial
capacity for our ambition
to double investment
in value-adding growth
and accelerate the
decarbonisation of our
portfolio, while continuing
to pay attractive dividends
in line with our policy.”
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31
Financial review
Non-GAAP measures
In addition to IFRS measures, management uses non-GAAP measures
internally to assess performance. Full reconciliations are provided on
pages 343-347. These measures are highlighted with the symbol: •
At year end
Net cash generated from operating activities (US$ millions)
Purchases of property, plant and equipment and intangible assets (US$ millions)
Free cash flow1 (US$ millions) •
Consolidated sales revenue (US$ millions)
Underlying EBITDA1 (US$ millions) •
Profit after tax attributable to owners of Rio Tinto (net earnings) (US$ millions)
Underlying earnings per share1 (EPS) (US cents) •
Ordinary dividend per share (US cents)
Special dividend per share (US cents)
Total dividend per share (US cents)
Net cash / (debt)1 (US$ millions) •
Underlying return on capital employed (ROCE)1 •
2021
25,345
7,384
17,664
63,495
37,720
21,094
1,321
793.0
247.0
1,040.0
1,576
44%
2020
15,875
6,189
9,407
44,611
23,902
9,769
770
464.0
93.0
557.0
(664)
27%
Change
60%
19%
88%
42%
58%
116%
72%
71%
166%
87%
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). Footnotes are set out on page 35.
Key financial highlights
– $25.3 billion net cash generated from operating activities was
60% higher than 2020 driven by higher prices. This flowed through
to 88% higher free cash flow1 of $17.7 billion, which included a
19% rise in capital expenditure to $7.4 billion.
– $21.1 billion of net earnings, 116% higher than 2020, reflected the
higher prices, the impact of closure provision increases at Energy
Resources of Australia (ERA) and other non-operating sites,
$0.5 billion of exchange and derivative gains and $0.2 billion of
impairments2. Effective tax rate on net earnings of 27.7% compared
with 33.1% in 2020.
– $37.7 billion underlying EBITDA1 was 58% above 2020, with an
underlying EBITDA margin1 of 57%.
– $21.4 billion underlying earnings1 (underlying EPS1 of 1,321.1 US
cents) were 72% above 2020 with a 28.0% effective tax rate on
underlying earnings1, compared with 29.5% in 2020.
– $1.6 billion of net cash1 at year end, compared with net debt1 of
$0.7 billion at the start of the year, reflected the free cash flow1 of
$17.7 billion, partly offset by $15.4 billion of cash returns to shareholders.
– $16.8 billion full-year dividend, equivalent to 1,040 US cents per
share and 79% of underlying earnings, includes $6.7 billion record
final ordinary dividend (417 US cents per share) and $1.0 billion final
special dividend (62 US cents per share) declared today.
$16.8 billion* of dividends declared for 2021: payout ratio averages 74% over past six years
Ordinary dividend
Interim ordinary dividend paid in September 2021
Final ordinary dividend to be paid in April 2022
Full-year ordinary dividend represents 60% payout
Additional returns
Special dividend paid in September 2021
Special dividend to be paid in April 2022
Combined total is 79% of 2021 underlying earnings
US$ billion
US cents
per share
6.1
6.7
12.8
3.0
1.0
16.8
376
417
793
185
62
1,040
* Based on weighted average number of shares and declared dividends per share for the respective periods excluding foreign exchange impacts on payment.
32
Annual Report 2021 | riotinto.com
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS). Footnotes are set out on page 35.
Financial review
Non-GAAP measures
In addition to IFRS measures, management uses non-GAAP measures
internally to assess performance. Full reconciliations are provided on
pages 343-347. These measures are highlighted with the symbol: •
At year end
Net cash generated from operating activities (US$ millions)
Purchases of property, plant and equipment and intangible assets (US$ millions)
Free cash flow1 (US$ millions) •
Consolidated sales revenue (US$ millions)
Underlying EBITDA1 (US$ millions) •
Profit after tax attributable to owners of Rio Tinto (net earnings) (US$ millions)
Underlying earnings per share1 (EPS) (US cents) •
Ordinary dividend per share (US cents)
Special dividend per share (US cents)
Total dividend per share (US cents)
Net cash / (debt)1 (US$ millions) •
Underlying return on capital employed (ROCE)1 •
Key financial highlights
– $25.3 billion net cash generated from operating activities was
60% higher than 2020 driven by higher prices. This flowed through
to 88% higher free cash flow1 of $17.7 billion, which included a
19% rise in capital expenditure to $7.4 billion.
– $21.1 billion of net earnings, 116% higher than 2020, reflected the
higher prices, the impact of closure provision increases at Energy
Resources of Australia (ERA) and other non-operating sites,
$0.5 billion of exchange and derivative gains and $0.2 billion of
impairments2. Effective tax rate on net earnings of 27.7% compared
with 33.1% in 2020.
– $37.7 billion underlying EBITDA1 was 58% above 2020, with an
underlying EBITDA margin1 of 57%.
Ordinary dividend
Interim ordinary dividend paid in September 2021
Final ordinary dividend to be paid in April 2022
Full-year ordinary dividend represents 60% payout
Additional returns
Special dividend paid in September 2021
Special dividend to be paid in April 2022
Combined total is 79% of 2021 underlying earnings
2021
25,345
7,384
17,664
63,495
37,720
21,094
1,321
793.0
247.0
1,040.0
1,576
44%
2020
15,875
6,189
9,407
44,611
23,902
9,769
770
464.0
93.0
557.0
(664)
27%
Change
60%
19%
88%
42%
58%
116%
72%
71%
166%
87%
– $21.4 billion underlying earnings1 (underlying EPS1 of 1,321.1 US
cents) were 72% above 2020 with a 28.0% effective tax rate on
underlying earnings1, compared with 29.5% in 2020.
– $1.6 billion of net cash1 at year end, compared with net debt1 of
$0.7 billion at the start of the year, reflected the free cash flow1 of
$17.7 billion, partly offset by $15.4 billion of cash returns to shareholders.
– $16.8 billion full-year dividend, equivalent to 1,040 US cents per
share and 79% of underlying earnings, includes $6.7 billion record
final ordinary dividend (417 US cents per share) and $1.0 billion final
special dividend (62 US cents per share) declared today.
US$ billion
US cents
per share
6.1
6.7
12.8
3.0
1.0
16.8
376
417
793
185
62
1,040
$16.8 billion* of dividends declared for 2021: payout ratio averages 74% over past six years
* Based on weighted average number of shares and declared dividends per share for the respective periods excluding foreign exchange impacts on payment.
Strong cash flow from operations
Net cash generated from operating activities
Purchases of property, plant and equipment and intangible assets
Sales of property, plant and equipment
Lease principal payments
Free cash flow1
Disposals
Dividends paid to equity shareholders
Share buy-backs
Other
Decrease in net debt1
Footnotes are set out on page 35.
Strategic report
2021
US$m
25,345
(7,384)
61
(358)
17,664
4
(15,357)
—
(71)
2,240
2020
US$m
15,875
(6,189)
45
(324)
9,407
10
(6,132)
(208)
(90)
2,987
– $25.3 billion in net cash generated from operating activities, 60%
higher than 2020, primarily driven by higher prices for our major
commodities, which also led to an increase in dividends received
from equity accounted units and paid to joint venture partners. It is
net of an increase in taxes and royalties paid in line with higher
profits and a rise in working capital, primarily due to higher iron ore
portside inventories following higher volumes of SP10 and
constrained availability of high-grade blending stocks in the
fourth quarter.
– $7.4 billion capital expenditure was comprised of $0.6 billion of
growth capital, $3.3 billion of replacement capital and $3.5 billion of
sustaining capital. In 2021, we funded our capital expenditure from
operating activities and expect to continue funding our capital
programme from internal sources, except for the Oyu Tolgoi
underground development, which is currently project-financed.
– $15.4 billion of dividends paid in 2021 was comprised of the 2020
final paid in April 2021 ($6.4 billion) and the 2021 interim paid in
September ($9.0 billion, including foreign exchange impacts).
– As a result of the above, net debt1 improved by $2.2 billion in 2021,
ending the year with net cash1 of $1.6 billion.
Net debt turned into net cash at 2021 year-end
($ billion)
Net debt as at 31 December 2020
Net cash generated from
operating activities
Purchases of property, plant and
equipment and intangible assets
Dividends
Other
Net cash as at 31 December 2021
-0.7-0.7-0.7
+25.3
+25.3
+25.3
-7.4-7.4-7.4
-15.4
-15.4
-15.4
-0.2-0.2-0.2
+1.6+1.6+1.6
-5
0
5
10
15
20
25
32
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
33
Financial review continued
Our projects and development options
– We increased our exploration and evaluation spend by 16% to
$726 million in 2021, as we advanced our evaluation projects,
progressed our greenfield exploration programmes and unlocked
new opportunities.
– Commissioning and ramp-up of Pilbara growth and brownfield mine
replacement projects has been impacted by ongoing COVID-19
restrictions, including labour access and supply chain quality issues.
The latter have been exacerbated by an inability to conduct
pre-delivery quality assurance and control at international steel and
equipment manufacturers due to limitations on travel.
– The $2.6 billion3 Gudai-Darri greenfield iron ore mine in Western
Australia is advancing. The first train was loaded from the mobile
crushing and screening facilities in December and first production
from the main plant is expected in the second quarter of 2022,
subject to the continuing impacts of COVID-19. This first phase of
Gudai-Darri, with a 43 million tonne annual capacity, will replace
depleting orebodies and provide some incremental capacity.
– The $0.9 billion3 (Rio Tinto share) investment in the Robe River
Joint Venture replacement iron ore mines is progressing. First ore
at West Angelas (C and D deposits) was achieved in June and are
now fully commissioned. First ore at Robe Valley (Mesa B, C, H)
was achieved in August. Ongoing Mesa A wet plant construction
and commissioning challenges have impacted production
ramp-up. New wet plant components are on order and production
will operate at a reduced capacity until repairs are completed.
– The $0.8 billion3 Western Turner Syncline phase 2 mine, which will
also replace existing iron ore production, achieved first ore in
October, following commissioning of the autonomous mining
truck fleet. Some residual brownfield plant works are due to be
complete during mid-year shutdowns.
– Underground operations are now under way at the Oyu Tolgoi
underground copper/gold project in Mongolia, following the
comprehensive agreement reached with our partners on 25 January
2022. Sustainable production is expected in the first half of 2023,
with the capital forecast at $6.925 billion, including $175 million of
estimated COVID-19 impacts to the end of 20214.
– The $0.9 billion first phase of the south wall pushback at Kennecott
in the US, extending mine life to 2026, is now complete and we
are gradually accessing higher copper grades. Stripping for
the $1.5 billion second phase, extending operations to 2032,
remains on track. In July, we announced a $108 million investment
for underground characterisation studies: potential underground
mining would occur concurrently with open pit operations and result
in increased output.
– At the Jadar lithium-borates project, we committed $2.4 billion of
funding in July, subject to receiving all relevant approvals, permits
and licences. In January 2022, the Government of Serbia cancelled
the Spatial Plan for the Jadar project and required all related permits
to be revoked. We are disappointed by this announcement and are
committed to exploring all options and are reviewing the legal basis
of the decision and the implications for our activities and people
in Serbia.
– The Zulti South project at Richards Bay Minerals (RBM) in South Africa
remains on full suspension.
– At the Winu copper-gold project in Western Australia, there has
been progress towards securing consent from the Traditional
Owners to the Project Agreement in advance of submitting the
necessary environmental and regulatory approvals. Drilling,
fieldwork and study activities continue to progress to schedule.
– At the Resolution Copper project in Arizona, we continue to work
with the US Forest Service to secure approval of the Final
Environmental Impact Statement. In parallel, mine studies and
engagement with the Native American tribes and local communities
continue to progress.
– At the Simandou iron ore project in Guinea, we continue to engage
with key stakeholders in-country including the Government of
Guinea. We remain committed to an inclusive partnership, seeking
mutual and sustainable benefits by developing our project in line
with international social and environmental standards. A new drilling
programme has commenced, and expressions of interest are being
sourced for construction and early development works expected to
be carried out in 2022.
Underlying EBITDA and underlying earnings by product group
Year ended 31 December
Iron Ore
Aluminium
Copper
Minerals
Reportable segment total
Other operations
Inter-segment transactions
Product group total
Central pension costs, share-based payments, insurance and derivatives
Restructuring, project and one-off costs
Other central costs
Central exploration and evaluation
Net interest
Total
Underlying EBITDA
Underlying earnings
2021
US$m
27,592
4,382
3,969
2,603
2020
Adjusted
US$m
18,837
2,152
2,084
1,710
38,546
24,783
(28)
42
24
(94)
38,560
24,713
110
(80)
(613)
(257)
117
(133)
(545)
(250)
Change
%
46%
104%
90%
52%
56%
(217)%
(145)%
56%
(6)%
(40)%
12%
3%
2021
US$m
17,323
2,468
1,579
888
2020
Adjusted
US$m
11,398
471
754
580
22,258
13,203
(84)
19
(48)
(32)
22,193
13,123
133
(51)
(585)
(215)
(95)
118
(108)
(455)
(216)
(14)
37,720
23,902
58%
21,380
12,448
Change
%
52%
424%
109%
53%
69%
75%
(159)%
69%
13%
(53)%
29%
—%
579%
72%
The financial information by Product group has been recast in accordance with the organisational restructure announced on 28 January 2021. See page 320 for further information. Underlying
EBITDA and underlying earnings are non-GAAP alternative performance measures ("APMs") used by management to assess the performance of the business, and provide additional
information which investors may find useful. APMs are reconciled to directly comparable IFRS financial measures on pages 343 to 347.
34
Annual Report 2021 | riotinto.com
Financial review continued
Strategic report
Our projects and development options
– We increased our exploration and evaluation spend by 16% to
$726 million in 2021, as we advanced our evaluation projects,
progressed our greenfield exploration programmes and unlocked
new opportunities.
– Commissioning and ramp-up of Pilbara growth and brownfield mine
replacement projects has been impacted by ongoing COVID-19
restrictions, including labour access and supply chain quality issues.
The latter have been exacerbated by an inability to conduct
pre-delivery quality assurance and control at international steel and
equipment manufacturers due to limitations on travel.
– The $2.6 billion3 Gudai-Darri greenfield iron ore mine in Western
Australia is advancing. The first train was loaded from the mobile
crushing and screening facilities in December and first production
from the main plant is expected in the second quarter of 2022,
subject to the continuing impacts of COVID-19. This first phase of
Gudai-Darri, with a 43 million tonne annual capacity, will replace
depleting orebodies and provide some incremental capacity.
– The $0.9 billion3 (Rio Tinto share) investment in the Robe River
Joint Venture replacement iron ore mines is progressing. First ore
at West Angelas (C and D deposits) was achieved in June and are
now fully commissioned. First ore at Robe Valley (Mesa B, C, H)
was achieved in August. Ongoing Mesa A wet plant construction
and commissioning challenges have impacted production
ramp-up. New wet plant components are on order and production
will operate at a reduced capacity until repairs are completed.
also replace existing iron ore production, achieved first ore in
October, following commissioning of the autonomous mining
truck fleet. Some residual brownfield plant works are due to be
complete during mid-year shutdowns.
– Underground operations are now under way at the Oyu Tolgoi
underground copper/gold project in Mongolia, following the
comprehensive agreement reached with our partners on 25 January
2022. Sustainable production is expected in the first half of 2023,
with the capital forecast at $6.925 billion, including $175 million of
estimated COVID-19 impacts to the end of 20214.
– The $0.9 billion first phase of the south wall pushback at Kennecott
in the US, extending mine life to 2026, is now complete and we
are gradually accessing higher copper grades. Stripping for
the $1.5 billion second phase, extending operations to 2032,
remains on track. In July, we announced a $108 million investment
for underground characterisation studies: potential underground
mining would occur concurrently with open pit operations and result
in increased output.
– At the Jadar lithium-borates project, we committed $2.4 billion of
funding in July, subject to receiving all relevant approvals, permits
and licences. In January 2022, the Government of Serbia cancelled
the Spatial Plan for the Jadar project and required all related permits
to be revoked. We are disappointed by this announcement and are
committed to exploring all options and are reviewing the legal basis
of the decision and the implications for our activities and people
in Serbia.
– The Zulti South project at Richards Bay Minerals (RBM) in South Africa
remains on full suspension.
– At the Winu copper-gold project in Western Australia, there has
been progress towards securing consent from the Traditional
Owners to the Project Agreement in advance of submitting the
necessary environmental and regulatory approvals. Drilling,
fieldwork and study activities continue to progress to schedule.
– At the Resolution Copper project in Arizona, we continue to work
with the US Forest Service to secure approval of the Final
Environmental Impact Statement. In parallel, mine studies and
engagement with the Native American tribes and local communities
– At the Simandou iron ore project in Guinea, we continue to engage
with key stakeholders in-country including the Government of
Guinea. We remain committed to an inclusive partnership, seeking
mutual and sustainable benefits by developing our project in line
with international social and environmental standards. A new drilling
programme has commenced, and expressions of interest are being
sourced for construction and early development works expected to
be carried out in 2022.
– The $0.8 billion3 Western Turner Syncline phase 2 mine, which will
continue to progress.
Underlying EBITDA and underlying earnings by product group
Underlying EBITDA
Underlying earnings
Year ended 31 December
Iron Ore
Aluminium
Copper
Minerals
Reportable segment total
Other operations
Inter-segment transactions
Product group total
Restructuring, project and one-off costs
Other central costs
Central exploration and evaluation
Net interest
Total
Central pension costs, share-based payments, insurance and derivatives
2021
US$m
27,592
4,382
3,969
2,603
(28)
42
110
(80)
(613)
(257)
2020
Adjusted
US$m
18,837
2,152
2,084
1,710
24
(94)
117
(133)
(545)
(250)
Change
%
46%
104%
90%
52%
56%
(217)%
(145)%
56%
(6)%
(40)%
12%
3%
38,546
24,783
22,258
13,203
38,560
24,713
22,193
13,123
2021
US$m
17,323
2,468
1,579
888
(84)
19
133
(51)
(585)
(215)
(95)
2020
Adjusted
US$m
11,398
471
754
580
(48)
(32)
118
(108)
(455)
(216)
(14)
Change
%
52%
424%
109%
53%
69%
75%
(159)%
69%
13%
(53)%
29%
—%
579%
72%
37,720
23,902
58%
21,380
12,448
The financial information by Product group has been recast in accordance with the organisational restructure announced on 28 January 2021. See page 320 for further information. Underlying
EBITDA and underlying earnings are non-GAAP alternative performance measures ("APMs") used by management to assess the performance of the business, and provide additional
information which investors may find useful. APMs are reconciled to directly comparable IFRS financial measures on pages 343 to 347.
Continuing to prioritise our central
exploration programmes
We have a strong portfolio of exploration projects with activity in
18 countries across seven commodities in early exploration and
studies stages, reflected in our pre-tax central spend of
$257 million. All projects have followed government COVID-19
requirements, while focusing on protecting the wellbeing and
health of local communities. In 2021, we continued to prioritise our
exploration portfolio, with a particular focus on copper projects in
Australia, Canada, United States, Kazakhstan and Zambia and
increased activity on greenfield nickel projects in Canada and
Finland. We continue to partner with other companies in all
regions where we explore: examples are our agreement with
KoBold Metals for copper and nickel exploration and our
agreement with Western Copper and Gold Corporation, where we
made a strategic investment to advance exploration on the
Casino copper-gold project located in Yukon, Canada. We also
signed a mineral investment contract with the Republic of Angola
and Endiama to explore for diamonds, and continued mine-lease
exploration at our managed businesses including Pilbara Iron in
Australia and Diavik in Canada. We renewed our exploration
technology strategy and further invested in technology to support
our exploration teams on the ground.
Commentary on financial results
To provide additional insight into the performance of our business, we
report underlying EBITDA and underlying earnings. The principal
factors explaining the movements in underlying EBITDA are set out in
this table.
2020 underlying EBITDA
Prices
Exchange rates
Volumes and mix
General inflation
Energy
Operating cash unit costs
Higher exploration and evaluation spend
Non-cash costs/other
2021 underlying EBITDA
US$m
23,902
17,464
(606)
(583)
(690)
(398)
(1,051)
(101)
(217)
37,720
Strong financial results driven by significant
momentum from higher prices
We have continued to safely run our world-class assets and are
working hard to improve our operational performance, despite
challenging operating conditions from prolonged COVID-19
disruptions. The recovery of the global economy resulted in significant
price strength for our major commodities: we maintained our financial
discipline in 2021 and were able to retain around 80% of the benefit
from higher prices, achieving record financial results.
The strong commodity prices drove a $17,464 million uplift in
underlying EBITDA compared with 2020. This was primarily from the
strength in the Platts index for 62% iron fines, partially offset by a higher
proportion of lower quality products (+$11,589 million). Higher London
Metal Exchange (LME) prices were the main driver for a significant
price uplift for copper (+$1,896 million) and for our Aluminium business
(+$3,027 million). We have included a table of prices and exchange
rates on page 418.
The 2021 monthly average Platts index for 62% iron fines converted to
an FOB basis was 45% higher on average compared with 2020. There
was a strong resurgence in demand for iron ore, with global crude steel
production estimated to have grown by 6%. Chinese demand strength
was most apparent in the first half of 2021 while the recovery in
demand for steel and iron ore in developed and other emerging
economies maintained its momentum. At the same time, seaborne iron
ore supply recovered, albeit at a slower than anticipated rate.
The average LME price for copper was 50% higher, while the LME
aluminium price was 46% higher, compared with 2020. The gold
price rose 2%.
The mid-west premium duty paid for aluminium in the US averaged
$584 per tonne, 119% higher than in 2020.
Australian and Canadian dollars strengthened
during 2021
Compared with 2020, on average, the US dollar weakened by 9%
against the Australian dollar, by 7% against the Canadian dollar and by
11% against the South African rand. Currency movements lowered
underlying EBITDA by $606 million relative to 2020.
Lower iron ore sales volumes impact underlying
EBITDA
Lower sales volumes and changes in product mix across the portfolio
reduced underlying EBITDA by $583 million compared to 2020. This
was mostly attributable to a 3% decline in iron ore shipments from the
Pilbara, as a result of above average rainfall in the first half of the year,
our focus on cultural heritage management and delays in growth and
brownfield mine replacement tie-in projects. Other key variances
included lower volumes at Iron Ore Company of Canada (labour and
equipment availability challenges) and reduced copper sales volumes
at Escondida (prolonged COVID-19 impact leading to lower recoveries
and throughput). These were partly offset by higher product premiums
in our Aluminium business, increased gold sales from Oyu Tolgoi (the
significant improvement in grades is expected to reverse in 2022) and
higher refined copper sales at Kennecott despite a furnace failure in
September 2021 (2020 was significantly impacted by an earthquake
and a major smelter maintenance shutdown).
1. This financial performance indicator is a non-GAAP Alternative Performance Measure (APM). It is used internally by management to assess the performance of the business and is therefore
considered relevant to readers of this document. It is presented here to give more clarity around the underlying business performance of the Group’s operations. APMs are reconciled to directly
comparable IFRS financial measures on pages 343 to 347.
2. Refer to page 243 for pre-tax analysis of impairment charge.
3. Potential for capital cost to rise by around 15% due to ongoing COVID-19 restrictions on commissioning and ramp-up of Pilbara growth and brownfield mine replacement projects, including
labour access and supply chain quality issues. The latter has been exacerbated by an inability to conduct pre-delivery quality assurance and control at international steel and equipment
manufacturers due to limitations on travel.
4. These estimates exclude any impacts of delays to work schedules caused by restricted approved budgets since the start of 2021. This, together with any ongoing COVID-19 impacts, will
be assessed following the commencement of underground operations with further updates provided to the market in due course. Panels 1 and 2 studies will be ongoing throughout 2022.
Further study work is also under way to assess the extraction methodology and ultimate recovery of the Panel 0 recoverable pillars.
34
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
35
Financial review continued
Impact of rising inflation and rebound in
energy prices
Average movements in energy prices compared with 2020 reduced
underlying EBITDA by $398 million, mainly due to higher diesel prices
for our trucks, trains and ships and an increase in power costs at
Kennecott. Rising general price inflation across our global operations
resulted in a $690 million reduction in underlying EBITDA.
Focus on cost control
We remained focused on cost control throughout the year, in particular
maintaining discipline on our long-run fixed costs: however, a rise in
our operating cash unit costs reduced underlying EBITDA by
$1,051 million (on a unit cost basis) compared with 2020. This reflects
fixed cost inefficiencies from the reduction in volumes, along with
temporary cost pressures over and above general inflation, reflecting
higher market-linked prices for raw materials and the constraints that
COVID-19 has placed on resourcing and supply chains. We also made
targeted investments in our ESG and CSP teams in 2021, in order to
advance our social licence priorities. Unit costs at our Pilbara iron ore
operations rose to $18.6 per tonne ($19.1 per tonne including
COVID-19 costs) contributing to the variance, reflecting: higher input
prices, including labour and explosives, an increase in the mine work
index, operational readiness costs for our growth and brownfield mine
replacement tie-in projects and fixed cost inefficiencies from lower
volumes. At our Aluminium business, we incurred cyclical cost
increases for coke, pitch and alloys, while our Bauxite business in
Queensland experienced higher maintenance costs following overruns
on planned shutdowns. These cost pressures were partly offset by
fixed cost efficiencies at Oyu Tolgoi in line with higher copper and
gold production.
Increasing our global exploration and
evaluation activity
We increased our exploration and evaluation spend by $101 million,
or 16%, to $726 million. This was focused on our greenfield
programmes across 18 countries and our highest value evaluation
projects, particularly the Winu copper-gold project in Western
Australia, Resolution Copper in Arizona, Simandou iron ore in Guinea
and Jadar lithium-borates in Serbia.
Non-cash costs/other
Movements in non-cash costs, one-off and other items lowered
underlying EBITDA by $217 million compared with 2020. This mainly
reflected the impact of community disruption at RBM in 2021
(-$162 million); reduced capacity at the Kitimat aluminium smelter
(-$280 million) following the strike which commenced in July, with
agreement reached in October; and additional provisions (-$218 million),
mainly environmental, for our legacy operations and Pacific Aluminium
smelters. This was partly offset by the non-recurrence of the pot
failures at Kitimat in 2020 ($206 million) and the impact of community
disruption at RBM in 2020 ($91 million). COVID-19 costs across the
Group were $39 million lower than in 2020.
Net earnings
$21.1bn
116% increase
36
Annual Report 2021 | riotinto.com
Net earnings
The principal factors explaining the movements in underlying earnings
and net earnings are set out here.
2020 net earnings
Total changes in underlying EBITDA
Increase in depreciation and amortisation (pre-tax) in
underlying earnings
Decrease in interest and finance items (pre-tax) in
underlying earnings
Increase in tax on underlying earnings
Increase in underlying earnings attributable
to outside interests
Total changes in underlying earnings
Changes in exclusions from underlying earnings:
Movement in net impairment charges
Gain on recognition of a new wharf at Kitimat, Canada
Movement in exchange differences and gains/losses on debt
Movement in closure estimates (non-operating and fully
impaired sites)
2021 net earnings
US$m
9,769
13,818
(372)
(100)
(3,574)
(840)
8,932
918
336
1,810
(671)
21,094
Depreciation and amortisation, net interest, tax
and non-controlling interests
The depreciation and amortisation charge was $372 million higher than
2020, mainly due to the impact of the stronger Australian and Canadian
dollars against the US dollar.
Lower interest and finance items (pre-tax) were reflective of a lower
level of net debt on average during the year, in part due to repayment
of $526 million of Euro Bonds, which matured in May 2020. It also
reflected more of our debt being at floating interest rates and lower
LIBOR rates.
The 2021 effective corporate income tax rate on underlying earnings,
excluding equity accounted units, was 28.0%, compared with 29.5% in
2020, mainly due to the re-recognition of deferred tax assets in
Australia. The effective tax rate on underlying earnings in Australia was
30% in 2021 compared with 32% in 2020. We anticipate an effective
tax rate on underlying earnings of approximately 30% in 2022.
Items excluded from underlying earnings
Net impairment charges decreased by $918 million compared with
2020. In 2021, we impaired the value of the Kitimat aluminium smelter
by $197 million: as a result of a workforce strike in mid-2021, output
was reduced to 25% and ramp-up to full capacity will extend through
2022, giving rise to an impairment test. In 2020, we recognised
$1,115 million of impairment charges, consisting of $472 million related
to three of our Pacific Aluminium smelters (NZAS, Bell Bay and Boyne),
$131 million related to the ISAL smelter in Iceland, $220 million for the
Sohar smelter in Oman and $292 million related to our interest in the
Diavik Diamond Mine.
There is a detailed explanation of the impairment process on pages
243 to 245.
On 3 December, we gained control over a new wharf at Kitimat,
Canada that was built and paid for by LNG Canada. The $336 million
gain on recognition has been excluded from underlying earnings on
the grounds of materiality and linkage to the impairment.
Financial review continued
Strategic report
Impact of rising inflation and rebound in
Net earnings
higher market-linked prices for raw materials and the constraints that
Movement in net impairment charges
resulted in a $690 million reduction in underlying EBITDA.
Increase in depreciation and amortisation (pre-tax) in
energy prices
Average movements in energy prices compared with 2020 reduced
underlying EBITDA by $398 million, mainly due to higher diesel prices
for our trucks, trains and ships and an increase in power costs at
Kennecott. Rising general price inflation across our global operations
Focus on cost control
We remained focused on cost control throughout the year, in particular
maintaining discipline on our long-run fixed costs: however, a rise in
our operating cash unit costs reduced underlying EBITDA by
$1,051 million (on a unit cost basis) compared with 2020. This reflects
fixed cost inefficiencies from the reduction in volumes, along with
temporary cost pressures over and above general inflation, reflecting
COVID-19 has placed on resourcing and supply chains. We also made
targeted investments in our ESG and CSP teams in 2021, in order to
advance our social licence priorities. Unit costs at our Pilbara iron ore
operations rose to $18.6 per tonne ($19.1 per tonne including
COVID-19 costs) contributing to the variance, reflecting: higher input
prices, including labour and explosives, an increase in the mine work
index, operational readiness costs for our growth and brownfield mine
replacement tie-in projects and fixed cost inefficiencies from lower
volumes. At our Aluminium business, we incurred cyclical cost
increases for coke, pitch and alloys, while our Bauxite business in
Queensland experienced higher maintenance costs following overruns
on planned shutdowns. These cost pressures were partly offset by
fixed cost efficiencies at Oyu Tolgoi in line with higher copper and
gold production.
Increasing our global exploration and
evaluation activity
We increased our exploration and evaluation spend by $101 million,
or 16%, to $726 million. This was focused on our greenfield
programmes across 18 countries and our highest value evaluation
projects, particularly the Winu copper-gold project in Western
Australia, Resolution Copper in Arizona, Simandou iron ore in Guinea
and Jadar lithium-borates in Serbia.
Non-cash costs/other
Movements in non-cash costs, one-off and other items lowered
underlying EBITDA by $217 million compared with 2020. This mainly
reflected the impact of community disruption at RBM in 2021
(-$162 million); reduced capacity at the Kitimat aluminium smelter
(-$280 million) following the strike which commenced in July, with
agreement reached in October; and additional provisions (-$218 million),
mainly environmental, for our legacy operations and Pacific Aluminium
smelters. This was partly offset by the non-recurrence of the pot
failures at Kitimat in 2020 ($206 million) and the impact of community
disruption at RBM in 2020 ($91 million). COVID-19 costs across the
Group were $39 million lower than in 2020.
Net earnings
$21.1bn
116% increase
36
Annual Report 2021 | riotinto.com
The principal factors explaining the movements in underlying earnings
and net earnings are set out here.
2020 net earnings
Total changes in underlying EBITDA
underlying earnings
underlying earnings
Decrease in interest and finance items (pre-tax) in
Increase in tax on underlying earnings
Increase in underlying earnings attributable
to outside interests
Total changes in underlying earnings
Changes in exclusions from underlying earnings:
Gain on recognition of a new wharf at Kitimat, Canada
Movement in exchange differences and gains/losses on debt
Movement in closure estimates (non-operating and fully
impaired sites)
2021 net earnings
US$m
9,769
13,818
(372)
(100)
(3,574)
(840)
8,932
918
336
1,810
(671)
21,094
Depreciation and amortisation, net interest, tax
and non-controlling interests
The depreciation and amortisation charge was $372 million higher than
2020, mainly due to the impact of the stronger Australian and Canadian
dollars against the US dollar.
Lower interest and finance items (pre-tax) were reflective of a lower
level of net debt on average during the year, in part due to repayment
of $526 million of Euro Bonds, which matured in May 2020. It also
reflected more of our debt being at floating interest rates and lower
LIBOR rates.
The 2021 effective corporate income tax rate on underlying earnings,
excluding equity accounted units, was 28.0%, compared with 29.5% in
2020, mainly due to the re-recognition of deferred tax assets in
Australia. The effective tax rate on underlying earnings in Australia was
30% in 2021 compared with 32% in 2020. We anticipate an effective
tax rate on underlying earnings of approximately 30% in 2022.
Items excluded from underlying earnings
Net impairment charges decreased by $918 million compared with
2020. In 2021, we impaired the value of the Kitimat aluminium smelter
by $197 million: as a result of a workforce strike in mid-2021, output
was reduced to 25% and ramp-up to full capacity will extend through
2022, giving rise to an impairment test. In 2020, we recognised
$1,115 million of impairment charges, consisting of $472 million related
to three of our Pacific Aluminium smelters (NZAS, Bell Bay and Boyne),
$131 million related to the ISAL smelter in Iceland, $220 million for the
Sohar smelter in Oman and $292 million related to our interest in the
Diavik Diamond Mine.
243 to 245.
There is a detailed explanation of the impairment process on pages
On 3 December, we gained control over a new wharf at Kitimat,
Canada that was built and paid for by LNG Canada. The $336 million
gain on recognition has been excluded from underlying earnings on
the grounds of materiality and linkage to the impairment.
In 2021, we recognised non-cash exchange and derivative gains of
$546 million. This was mainly on US dollar debt in non-US dollar
functional currency Group companies, intragroup balances, and the
revaluation of certain derivatives which do not qualify for hedge
accounting. These gains compared with a 2020 loss of $1,264 million,
giving rise to a positive year-on-year movement of $1,810 million. The
exchange gains are largely offset by currency translation losses
recognised in equity. The quantum of US dollar debt is largely
unaffected and we will repay it from US dollar sales receipts.
our preliminary findings from the pre-feasibility study. On completion
of the study in 2021 a true-up was recorded and has been excluded, in
line with the treatment of the initial increase in 2020, which was
excluded from underlying earnings as Diavik was fully impaired during
the year. Other closure costs excluded in 2020 were the increase in the
Gove refinery provision offset by a decrease in the Argyle mine
provision on completion of pre-feasibility studies at each site. These
are included in Movement in closure estimates. Further analysis can be
found on page 240.
In 2021, we recognised a $671 million increase in closure costs relating
to the Diavik Diamond Mine, Gove refinery, ERA and some of our
legacy sites, where the environmental impact preceded our ownership.
The adjustments at ERA and the Gove refinery have been recognised
in the income statement as these are non-operating sites, and
excluded from underlying earnings due to the magnitude of the
individual updates and materiality when aggregated. In 2020, we
initially recognised an increase in the Diavik closure provision based on
Net earnings and underlying earnings
Profit
Net earnings and underlying earnings refer to amounts attributable to
the owners of Rio Tinto. The net profit attributable to the owners of
Rio Tinto in 2021 was $21.1 billion (2020: $9.8 billion). We recorded a
profit after tax in 2021 of $22.6 billion (2020: $10.4 billion) of which a
profit of $1.5 billion (2020: $0.6 billion) was attributable to non-
controlling interests.
The differences between underlying earnings and net earnings are set out in this table (all numbers are after tax and exclude non-controlling interests).
Underlying earnings
Items excluded from underlying earnings
Impairment charges net of reversals
Gain on recognition of a new wharf at Kitimat, Canada
Foreign exchange and derivative gains/(losses) on net debt and intragroup balances and derivatives not qualifying for hedge
accounting
Net losses from movements to closure estimates (non-operating and fully impaired sites)
Net earnings
2021
US$m
21,380
(197)
336
546
(971)
21,094
2020
US$m
12,448
(1,115)
—
(1,264)
(300)
9,769
On page 240 there is a detailed reconciliation from underlying earnings
to net earnings, including pre-tax amounts and additional explanatory
notes. The differences between Profit after tax and underlying EBITDA
are set out in the table on page 343.
The Facilities remained undrawn throughout the period, mature in
November 2026 (previously November 2023) and include two
consecutive one-year extension options.
Balance sheet
Net debt reduced by $2.2 billion in 2021, resulting in a net cash position
of $1.6 billion at 31 December 2021. This reflected our strong free cash
flow, partly offset by dividend payments of $15.4 billion.
Our net gearing ratio (net (cash) / debt to total capital) improved to -3%
at 31 December 2021 (31 December 2020: 1%).
Our total financing liabilities excluding net debt derivatives at
31 December 2021 (see page 256) were US$13.5 billion (31 December
2020: $13.8 billion) and the weighted average maturity was around 11
years. At 31 December 2021, approximately 85% of these liabilities
were at floating interest rates (94% excluding leases).
On 28 October, we issued $1.25 billion 30-year fixed rate SEC-
registered bonds with a coupon of 2.75%. The proceeds of the new
issuance were used to fund the early redemption and extinguishment
of the company’s $1.20 billion 3.75% bonds due to mature in June
2025. The maximum amount within non-current borrowings maturing
in any one calendar year is $1.4 billion, which matures in 2024.
We had $15.2 billion in cash and cash equivalents plus other short-term
cash investments at 31 December 2021 (31 December 2020:
$12.9 billion). In November, we took advantage of strong market
conditions and completed the renewal of our $7.5 billion of fully
committed Revolving Credit Facilities with 26 participating banks.
Provision for closure costs
At 31 December 2021, provisions for close-down and restoration costs
and environmental clean-up obligations were $14.5 billion
(31 December 2020: $13.3 billion). The principal movements during the
year were weaker Australian and Canadian currencies (-$0.5 billion),
increases in existing and new provisions adjusted to mining
properties ($0.5 billion) and charged to profit ($1.5 billion), partly offset
by utilisations of the provision through spend (-$0.5 billion). Of the
$14.5 billion in provisions, $10.7 billion relates to operating sites and
$3.8 billion is for legacy sites. Remaining lives of operations and
infrastructure range from one to over 50 years with an average for all
sites, weighted by present closure obligation, of around 16 years
(2020: 17 years).
The provisions are based on risk-adjusted cash flows using a real-rate
discount rate of 1.5% to reflect the obligations at present value.
In 2022, we expect to utilise around $0.7 billion of the provisions as we
advance our closure activities at Argyle, ERA, Gove alumina refinery
and legacy sites.
We have disclosed further information, including the composition of the
provision by cost category and by geography, on pages 258 to 259.
Annual Report 2021 | riotinto.com
37
Financial review continued
Our shareholder returns policy
The Board is committed to maintaining an appropriate balance
between cash returns to shareholders and investment in the business,
with the intention of maximising long-term shareholder value.
At the end of each financial period, the Board determines an
appropriate total level of ordinary dividend per share. This takes into
account the results for the financial year, the outlook for our major
commodities, the Board’s view of the long-term growth prospects of
the business and the company’s objective of maintaining a strong
balance sheet. The intention is that the balance between the interim
and final dividend be weighted to the final dividend.
The Board expects total cash returns to shareholders over the longer
term to be in a range of 40 to 60% of underlying earnings in aggregate
through the cycle. Acknowledging the cyclical nature of the industry,
it is the Board’s intention to supplement the ordinary dividend with
additional returns to shareholders in periods of strong earnings and
cash generation.
Our payout ratio has averaged 74% over the
past six years
2016
2017
2018
2019
2020
2021
60%60% 70%70%
60%60%
83%83%
60%60%
71%71%
60%60%
70%70%
60%60%
72%72%
60%60%
79%79%
Ordinary dividend
Additional return
Record cash returns* declared: 74% average payout over past six years
Ordinary dividend
Interim
Final
Full-year ordinary dividend
Additional returns
Special dividend announced in July 2021, paid in September 2021
Special dividend announced in February, paid in April of the following year
Total cash returns to shareholders declared for each year
Combined total as % of underlying earnings
2021
US$ billion
2020
US$ billion
6.1
6.7
12.8
3.0
1.0
16.8
79%
2.5
5.0
7.5
n/a
1.5
9.0
72%
*Based on weighted average number of shares and declared dividends per share for the respective periods and excluding foreign exchange impacts on payment.
We determine dividends in US dollars. We declare and pay Rio Tinto plc dividends in pounds sterling and Rio Tinto Limited dividends in Australian
dollars. The 2021 final dividend has been converted at exchange rates applicable on 22 February 2022 (the latest practicable date before the
dividend was declared). American Depositary Receipt (ADR) holders receive dividends at the declared rate in US dollars.
Ordinary dividend per share declared
2021 dividends
2020 dividends
Rio Tinto Group
Interim (US cents)
Final (US cents)
Full-year (US cents)
Rio Tinto plc
Interim (UK pence)
Final (UK pence)
Full-year (UK pence)
Rio Tinto Limited
Interim (Australian cents)
Final (Australian cents)
Full-year (Australian cents)
38
Annual Report 2021 | riotinto.com
376.00
417.00
793.00
270.84
306.72
577.56
509.42
577.04
1,086.46
155.00
309.00
464.00
119.74
221.86
341.60
216.47
397.48
613.95
Financial review continued
Strategic report
Our shareholder returns policy
Our payout ratio has averaged 74% over the
Special dividend per share declared
2021 dividends
2020 dividends
past six years
The Board is committed to maintaining an appropriate balance
between cash returns to shareholders and investment in the business,
with the intention of maximising long-term shareholder value.
At the end of each financial period, the Board determines an
appropriate total level of ordinary dividend per share. This takes into
account the results for the financial year, the outlook for our major
commodities, the Board’s view of the long-term growth prospects of
the business and the company’s objective of maintaining a strong
balance sheet. The intention is that the balance between the interim
and final dividend be weighted to the final dividend.
2016
2017
2018
2019
2020
2021
The Board expects total cash returns to shareholders over the longer
term to be in a range of 40 to 60% of underlying earnings in aggregate
Ordinary dividend
Additional return
through the cycle. Acknowledging the cyclical nature of the industry,
it is the Board’s intention to supplement the ordinary dividend with
additional returns to shareholders in periods of strong earnings and
cash generation.
Record cash returns* declared: 74% average payout over past six years
60%60% 70%70%
60%60%
83%83%
60%60%
71%71%
60%60%
70%70%
60%60%
72%72%
60%60%
79%79%
Ordinary dividend
Interim
Final
Full-year ordinary dividend
Additional returns
Special dividend announced in July 2021, paid in September 2021
Special dividend announced in February, paid in April of the following year
Total cash returns to shareholders declared for each year
Combined total as % of underlying earnings
*Based on weighted average number of shares and declared dividends per share for the respective periods and excluding foreign exchange impacts on payment.
We determine dividends in US dollars. We declare and pay Rio Tinto plc dividends in pounds sterling and Rio Tinto Limited dividends in Australian
dollars. The 2021 final dividend has been converted at exchange rates applicable on 22 February 2022 (the latest practicable date before the
dividend was declared). American Depositary Receipt (ADR) holders receive dividends at the declared rate in US dollars.
Ordinary dividend per share declared
2021 dividends
2020 dividends
2021
US$ billion
2020
US$ billion
6.1
6.7
12.8
3.0
1.0
16.8
79%
376.00
417.00
793.00
270.84
306.72
577.56
509.42
577.04
1,086.46
2.5
5.0
7.5
n/a
1.5
9.0
72%
155.00
309.00
464.00
119.74
221.86
341.60
216.47
397.48
613.95
Rio Tinto Group
Interim (US cents)
Final (US cents)
Full-year (US cents)
Rio Tinto plc
Interim (UK pence)
Final (UK pence)
Full-year (UK pence)
Rio Tinto Limited
Interim (Australian cents)
Final (Australian cents)
Full-year (Australian cents)
185.00
62.00
133.26
45.60
250.64
85.80
—
93.00
—
66.77
—
119.63
Rio Tinto Group
Interim (US cents)
Final (US cents)
Rio Tinto plc
Interim (UK pence)
Final (UK pence)
Rio Tinto Limited
Interim (Australian cents)
Final (Australian cents)
The 2021 final ordinary dividend and the special dividend to be paid to
our Rio Tinto Limited shareholders will be fully franked. The Board
expects Rio Tinto Limited to be in a position to pay fully franked
dividends for the foreseeable future.
On 21 April 2022, we will pay the 2021 final ordinary dividend and the
special dividend to holders of ordinary shares and holders of ADRs on
the register at the close of business on 11 March 2022 (record date).
The ex-dividend date is 10 March 2022.
Rio Tinto plc shareholders may choose to receive their dividend in
Australian dollars, and Rio Tinto Limited shareholders may choose to
receive theirs in pounds sterling. Currency conversions will be based
on the pound sterling and Australian dollar exchange rates five
business days before the dividend payment date. Rio Tinto plc and Rio
Tinto Limited shareholders must register their currency elections by
29 March 2022.
We will operate our Dividend Reinvestment Plans for the 2021 final
dividend – see our website riotinto.com for details. Rio Tinto plc and
Rio Tinto Limited shareholders’ election notice for the Dividend
Reinvestment Plans must be received by 29 March 2022. Purchases
under the Dividend Reinvestment Plan are made on or as soon as
practicable after the dividend payment date and at prevailing market
prices. There is no discount available.
38
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
39
Portfolio management
Capital projects
Projects
(Rio Tinto 100%
owned unless
otherwise stated)
Completed in 2021
Investment in the Greater Tom Price operations (Western
Turner Syncline phase 2) to sustain iron ore production
capacity in the Pilbara region of Western Australia. The
investment includes construction of a new crusher and a
13-kilometre conveyor.
Investment in the south wall pushback, to extend mine life
at Kennecott, Utah, US, from 2019 to 2026.
Ongoing and approved
Iron Ore
Total approved
capital cost
(100% unless
otherwise stated)
Status/Milestones
$0.8bn Approved in November 2019, the investment will enable us to sustain production of
our Pilbara BlendTM and facilitate mining of existing and new deposits around Tom
Price. The project achieved first ore in October, in line with previous guidance.
$0.9bn
Funding for the continuation of open pit mining via the push back of the south wall:
the transition to the south wall is complete, with copper head grade exceeding 0.5%
in the second half of 2021.
Investment in the Robe River Joint Venture (West Angelas
C and D and Mesa B, C and H at Robe Valley) in the Pilbara
to sustain production capacity.
$0.9bn
(Rio Tinto share)
Approved in October 2018, the investments will enable us to sustain production of
our Pilbara BlendTM and Robe Valley products. First ore at West Angelas (C and D)
was achieved in June 2021. At Robe Valley, the autonomous mining truck fleet has
been commissioned: since achieving first ore in August, ongoing wet plant
construction and commissioning challenges have impacted production ramp-up1.
Investment in Gudai-Darri, a new production hub in the
Pilbara region of Western Australia. The investment
incorporates a processing plant and infrastructure
including a 166-kilometre rail line connecting the mine to
our existing network. Once complete, the mine will have
an initial annual capacity of 43 million tonnes.
Aluminium
Investment in a second tunnel at the 1000MW Kemano
hydropower facility at Kitimat, British Columbia, Canada,
which will ensure the long-term reliability of the power
supply to the Kitimat smelter.
Ongoing and approved
Copper
$2.6bn Approved in November 2018. Labour shortages have impacted both steel
fabrication and site construction activities in 2021. The railway is operational with
the first train loaded from the mobile crushing and screening facilities in December.
First production from the main plant is now expected in the second quarter of 2022,
subject to the continuing impacts of COVID-191.
$0.8bn
The project was first approved in 2017, with $155 million of additional capital
approved in 2020 and a further $132 million approved in July 2021. Works resumed
at full capacity in 2021 first half and tunnel boring excavation is now complete.
The project is scheduled to complete in the second half of 2022, subject to there
being no further COVID-19 delays.
Phase two of the south wall pushback to extend mine life
at Kennecott by a further six years.
$1.5bn Approved in December 2019, the investment will further extend strip waste rock
mining and support additional infrastructure development. This will allow mining to
continue into a new area of the orebody between 2026 and 2032.
Development of the Oyu Tolgoi underground copper/gold
mine in Mongolia (Rio Tinto 34%), which is expected to
produce (from the open pit and underground) an average of
~500,000 tonnes2 of copper per year from 2028 to 2036
and an average of ~350,000 tonnes2 of copper per year
for a further five years, compared with 163,000 tonnes in
2021 (open pit).
Minerals
$6.925bn3
The project was originally approved in May 2016 for $5.3 billion, with an additional
$1.45 billion approved by the Rio Tinto Board in December 2020, following
completion of the Definitive Estimate. It now includes $175 million of estimated
COVID-19 impacts to the end of 20213. First sustainable production is expected in
the first half of 2023, following the comprehensive agreement between the Oyu
Tolgoi partners announced in January 2022.
Development of the Zulti South project at Richards Bay
Minerals (RBM) in South Africa (Rio Tinto 74%).
$0.5bn Approved in April 2019 to underpin RBM’s supply of zircon and ilmenite over the life
of the mine. The project remains on full suspension.
Development of the greenfield Jadar lithium-borates
project in Serbia. The development will include an
underground mine with associated infrastructure and
equipment, including electric haul trucks, as well as a
beneficiation chemical processing plant.
40
Annual Report 2021 | riotinto.com
$2.4bn
The Board committed the funding in July 2021, subject to receiving all relevant
approvals, permits and licences. First saleable production was expected in 2027
with ramp-up to full production of 58,000 tonnes of battery-grade lithium carbonate,
160,000 tonnes of boric acid (B2O3 units) and 255,000 tonnes of sodium sulphate
per year.4 In January 2022, the Government of Serbia cancelled the Spatial Plan for
the Jadar project and required all related permits to be revoked. We are
disappointed by this announcement and are committed to exploring all options and
are reviewing the legal basis of the decision and the implications for our activities
and people in Serbia.
Strategic report
Portfolio management
Capital projects
Projects
(Rio Tinto 100%
owned unless
otherwise stated)
Completed in 2021
Turner Syncline phase 2) to sustain iron ore production
capacity in the Pilbara region of Western Australia. The
investment includes construction of a new crusher and a
13-kilometre conveyor.
Ongoing and approved
Iron Ore
Pilbara region of Western Australia. The investment
incorporates a processing plant and infrastructure
including a 166-kilometre rail line connecting the mine to
our existing network. Once complete, the mine will have
an initial annual capacity of 43 million tonnes.
Aluminium
hydropower facility at Kitimat, British Columbia, Canada,
which will ensure the long-term reliability of the power
supply to the Kitimat smelter.
Ongoing and approved
Copper
at Kennecott by a further six years.
2021 (open pit).
Minerals
project in Serbia. The development will include an
underground mine with associated infrastructure and
equipment, including electric haul trucks, as well as a
beneficiation chemical processing plant.
Total approved
capital cost
(100% unless
otherwise stated)
Status/Milestones
Future growth options
Iron Ore: Pilbara brownfields
Investment in the Greater Tom Price operations (Western
$0.8bn Approved in November 2019, the investment will enable us to sustain production of
The capacity of our Pilbara system over the medium term is between 345
and 360 million tonnes per annum. To reach and sustain the upper end of the
range will require the next tranche of replacement mines to be approved and
brought onstream.
Key projects include Western Range, Bedded Hill Top and Hope Downs 2 as well
as Brockman Syncline 1 to be delivered between 2025 and 2027. We continue to
engage with and work closely with our communities, Traditional Owners, and
governments to seek approval for the new mining projects.
our Pilbara BlendTM and facilitate mining of existing and new deposits around Tom
Price. The project achieved first ore in October, in line with previous guidance.
Aluminium: ELYSIS
Investment in the south wall pushback, to extend mine life
$0.9bn
Funding for the continuation of open pit mining via the push back of the south wall:
at Kennecott, Utah, US, from 2019 to 2026.
the transition to the south wall is complete, with copper head grade exceeding 0.5%
The ELYSISTM inert anode technology eliminates all direct greenhouse gases
from aluminium smelting, and instead produces oxygen.
With the current development pathway, ELYSIS aims to have its technology
available for installation from 2024 and the production of larger volumes of
carbon-free aluminium approximately two years later.
in the second half of 2021.
Copper: Resolution
Investment in the Robe River Joint Venture (West Angelas
$0.9bn
Approved in October 2018, the investments will enable us to sustain production of
C and D and Mesa B, C and H at Robe Valley) in the Pilbara
our Pilbara BlendTM and Robe Valley products. First ore at West Angelas (C and D)
to sustain production capacity.
(Rio Tinto share)
was achieved in June 2021. At Robe Valley, the autonomous mining truck fleet has
been commissioned: since achieving first ore in August, ongoing wet plant
construction and commissioning challenges have impacted production ramp-up1.
Investment in Gudai-Darri, a new production hub in the
$2.6bn Approved in November 2018. Labour shortages have impacted both steel
fabrication and site construction activities in 2021. The railway is operational with
the first train loaded from the mobile crushing and screening facilities in December.
First production from the main plant is now expected in the second quarter of 2022,
subject to the continuing impacts of COVID-191.
The Resolution Copper project is a proposed underground copper mine in the
Copper Triangle, in Arizona, United States. It has the potential to supply up to
25% of US copper demand.
We continue to work with the US Forest Service to secure approval of the Final
Environmental Impact Statement. In parallel, mine studies and engagement with
the Native American tribes and local communities continue to progress.
Copper: Winu
In late 2017, we discovered copper-gold mineralisation at the Winu project in the
Paterson Province in Western Australia. In 2020, we declared a Maiden Inferred
Mineral Resource.
There has been progress towards securing consent from the Traditional Owners
to the Project Agreement in advance of submitting the necessary environmental
and regulatory approvals. Drilling, fieldwork and study activities continue to
progress to schedule.
Iron Ore: Simandou
The Simandou resource in Guinea contains one of the world’s largest and richest
high-grade iron ore deposits, demand for which is increasing as steelmakers
look to reduce carbon emissions. It complements the long-term attractiveness of
our Pilbara BlendTM.
We continue to engage with key stakeholders in-country and remain committed
to an inclusive partnership, seeking to develop the project in line with
international social and environmental standards. A new drilling programme has
commenced, and market engagement has been initiated for construction and
early development works expected to be carried out in 2022.
Investment in a second tunnel at the 1000MW Kemano
$0.8bn
The project was first approved in 2017, with $155 million of additional capital
Lithium: Rincon
In December, we entered into a binding agreement to acquire the Rincon lithium
project in Argentina. The transaction is expected to be complete in the first half
of 2022, subject to approval by Australia’s Foreign Investment Review Board.
Located in the heart of the lithium triangle in Salta Province, Rincon is a long-life,
scaleable resource capable of producing battery-grade lithium carbonate. It
also has the potential to have one of the lowest carbon footprints in the industry.
approved in 2020 and a further $132 million approved in July 2021. Works resumed
at full capacity in 2021 first half and tunnel boring excavation is now complete.
The project is scheduled to complete in the second half of 2022, subject to there
being no further COVID-19 delays.
Phase two of the south wall pushback to extend mine life
$1.5bn Approved in December 2019, the investment will further extend strip waste rock
mining and support additional infrastructure development. This will allow mining to
continue into a new area of the orebody between 2026 and 2032.
Development of the Oyu Tolgoi underground copper/gold
$6.925bn3
The project was originally approved in May 2016 for $5.3 billion, with an additional
mine in Mongolia (Rio Tinto 34%), which is expected to
$1.45 billion approved by the Rio Tinto Board in December 2020, following
produce (from the open pit and underground) an average of
completion of the Definitive Estimate. It now includes $175 million of estimated
~500,000 tonnes2 of copper per year from 2028 to 2036
and an average of ~350,000 tonnes2 of copper per year
for a further five years, compared with 163,000 tonnes in
COVID-19 impacts to the end of 20213. First sustainable production is expected in
the first half of 2023, following the comprehensive agreement between the Oyu
Tolgoi partners announced in January 2022.
Development of the Zulti South project at Richards Bay
$0.5bn Approved in April 2019 to underpin RBM’s supply of zircon and ilmenite over the life
Minerals (RBM) in South Africa (Rio Tinto 74%).
of the mine. The project remains on full suspension.
Development of the greenfield Jadar lithium-borates
$2.4bn
The Board committed the funding in July 2021, subject to receiving all relevant
approvals, permits and licences. First saleable production was expected in 2027
with ramp-up to full production of 58,000 tonnes of battery-grade lithium carbonate,
160,000 tonnes of boric acid (B2O3 units) and 255,000 tonnes of sodium sulphate
per year.4 In January 2022, the Government of Serbia cancelled the Spatial Plan for
the Jadar project and required all related permits to be revoked. We are
disappointed by this announcement and are committed to exploring all options and
are reviewing the legal basis of the decision and the implications for our activities
and people in Serbia.
1. Potential for capital cost to rise by around 15% due to ongoing COVID-19 restrictions on commissioning and ramp-up of Pilbara growth and brownfield mine replacement projects, including
labour access and supply chain quality issues. The latter has been exacerbated by an inability to conduct pre-delivery quality assurance and control at international steel and equipment
manufacturers due to limitations on travel.
2. The 500ktpa target (stated as recovered metal) for the Oyu Tolgoi underground and open pit mines is underpinned 17% by Proved Ore Reserves and 83% by Probable Ore Reserves for the
years 2028-2036. The 350ktpa production target for the following five years is underpinned 18% by Proved Ore Reserves and 82% by Probable Ore Reserves. These production targets have
been scheduled from current mine designs by Competent Persons in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Minerals Resources and
Ore Reserves, 2012 Edition (the JORC code).
3. These estimates exclude any impacts of delays to work schedules caused by restricted approved budgets since the start of 2021. This, together with any ongoing COVID-19 impacts, will be
assessed following the commencement of underground operations with further updates provided to the market in due course. Panels 1 and 2 studies will be ongoing throughout 2022. Further
study work is also underway to assess the extraction methodology and ultimate recovery of the Panel 0 recoverable pillars.
4. These production targets are reported in a release to the Australian Securities Exchange (ASX) dated 23 February 2022, “Rio Tinto updates Ore Reserves and Mineral Resources at Jadar”. All
material assumptions underpinning the production targets continue to apply and have not materially changed.
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Annual Report 2021 | riotinto.com
41
Iron Ore
We are one of the world’s leading producers of iron ore, the
primary raw material in steelmaking. In the Pilbara region of
Western Australia (WA), we operate a network of 17 iron ore
mines, four port terminals and a rail network spanning nearly
2,000 kilometres. Steel remains essential for ongoing
urbanisation and will support the global shift to decarbonise.
We produce five mainstream iron ore products in WA, including the
Pilbara BlendTM, the world’s most traded brand of iron ore. Our Iron
Ore product group includes Dampier Salt – also in WA – the world’s
largest exporter of seaborne salt.
Our fully integrated portfolio of quality assets, highly valued product
suite and committed people allow us to export our products to our
customers safely, reliably and efficiently.
We continue to transform our safe operating performance by
implementing the Rio Tinto Safe Production System (RTSPS).
RTSPS will become the blueprint for how we continuously improve
our business. In 2021, two of our iron ore operations started RTSPS
pilot projects.
We are focused on building new mines for a better future. In 2021,
we progressed the replacement of around 40% of our mine
capacity with brownfield mines at Robe Valley, West Angelas and
Western Turner Syncline Phase 2, and continued the construction
of our most technologically advanced mine, Gudai-Darri. This is
the largest mine replacement programme in our history, safely
progressed during the pandemic, and it will enable us to continue
to deliver the product blends the market needs.
We commissioned more autonomous haul trucks in 2021 than in
any prior year, which means that around 80% of our fleet will be
autonomous in 2022. In addition, AutoHaulTM, our automated train
network, has delivered benefits beyond expectations.
We are on a pathway to decarbonising our business with plans to
electrify our Pilbara operations. The delivery of one gigawatt of
renewables in the Pilbara will support abatement of about one
million tonnes of our CO2 emissions. Two-thirds will come from the
displacement of power generation gas emissions, and one-third
from providing electricity to enable the transition away from diesel.
With people at the heart of everything we do, nothing is more
important than the physical and psychological safety of our people.
We are committed to creating a workplace that is safe, respectful
and inclusive for everyone, everywhere, and we are taking a number
of actions to make this a lived reality for our people.
The destruction of the rock shelters at Juukan Gorge in May 2020
was a clear breach of our values. We have redesigned our planning
and operational practices to protect heritage sites. This includes
removing 100 million tonnes of reserves from our mine plans in
the past two years and continuing a process to modernise and
strengthen our agreements with Traditional Owners to ensure the
destruction of a site of such exceptional cultural and archaeological
significance never happens again. We have placed the accountability
for Traditional Owner relationships with senior leaders of our
Pilbara assets, to create direct partnerships. Read more about
our communities and social performance commitments on
pages 94 and 95.
We are committed to continuing to engage with our partners and
build the business we need for the future.
42
Annual Report 2021 | riotinto.com
Iron Ore
We are one of the world’s leading producers of iron ore, the
primary raw material in steelmaking. In the Pilbara region of
Western Australia (WA), we operate a network of 17 iron ore
mines, four port terminals and a rail network spanning nearly
2,000 kilometres. Steel remains essential for ongoing
urbanisation and will support the global shift to decarbonise.
We produce five mainstream iron ore products in WA, including the
We are on a pathway to decarbonising our business with plans to
Pilbara BlendTM, the world’s most traded brand of iron ore. Our Iron
electrify our Pilbara operations. The delivery of one gigawatt of
Ore product group includes Dampier Salt – also in WA – the world’s
renewables in the Pilbara will support abatement of about one
largest exporter of seaborne salt.
Our fully integrated portfolio of quality assets, highly valued product
suite and committed people allow us to export our products to our
customers safely, reliably and efficiently.
We continue to transform our safe operating performance by
implementing the Rio Tinto Safe Production System (RTSPS).
RTSPS will become the blueprint for how we continuously improve
our business. In 2021, two of our iron ore operations started RTSPS
pilot projects.
We are focused on building new mines for a better future. In 2021,
we progressed the replacement of around 40% of our mine
capacity with brownfield mines at Robe Valley, West Angelas and
Western Turner Syncline Phase 2, and continued the construction
of our most technologically advanced mine, Gudai-Darri. This is
the largest mine replacement programme in our history, safely
progressed during the pandemic, and it will enable us to continue
to deliver the product blends the market needs.
We commissioned more autonomous haul trucks in 2021 than in
any prior year, which means that around 80% of our fleet will be
autonomous in 2022. In addition, AutoHaulTM, our automated train
network, has delivered benefits beyond expectations.
million tonnes of our CO2 emissions. Two-thirds will come from the
displacement of power generation gas emissions, and one-third
from providing electricity to enable the transition away from diesel.
With people at the heart of everything we do, nothing is more
important than the physical and psychological safety of our people.
We are committed to creating a workplace that is safe, respectful
and inclusive for everyone, everywhere, and we are taking a number
of actions to make this a lived reality for our people.
The destruction of the rock shelters at Juukan Gorge in May 2020
was a clear breach of our values. We have redesigned our planning
and operational practices to protect heritage sites. This includes
removing 100 million tonnes of reserves from our mine plans in
the past two years and continuing a process to modernise and
strengthen our agreements with Traditional Owners to ensure the
destruction of a site of such exceptional cultural and archaeological
significance never happens again. We have placed the accountability
for Traditional Owner relationships with senior leaders of our
Pilbara assets, to create direct partnerships. Read more about
our communities and social performance commitments on
pages 94 and 95.
We are committed to continuing to engage with our partners and
build the business we need for the future.
Working together for a better future
17
integrated
mines in
Western
Australia
4
port terminals
13,000
employees
5
mainstream iron
ore products
3
solar salt
operations
3.0Mt
CO2e emissions
(our share)
Snapshot of the year
0.67
AIFR
(2020: 0.53)
76%
Pilbara
underlying FOB
EBITDA margin
(2020: 74%)
$27.6bn
underlying
EBITDA
$39.6bn
gross product
sales
(2020: $18.8bn)
(2020: $27.5bn)
$19.2bn
net cash
generated from
operating
activities
(2020: $13.2bn)
$3.9bn
capital
expenditure
(2020: $2.9bn)
42
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Annual Report 2021 | riotinto.com
43
Pilbara iron ore operations, Western Australia.
Iron Ore continued
Iron Ore
2021 year-end results
Pilbara production (million tonnes – 100%)
Pilbara shipments (million tonnes – 100%)
Salt production (million tonnes – Rio Tinto share)1
Gross product sales (US$ millions)
Average realised price (US$ per dry metric tonne, FOB basis)
Underlying EBITDA (US$ millions)
Pilbara underlying FOB EBITDA margin2
Underlying earnings (US$ millions)
Net cash generated from operating activities (US$ millions)
Capital expenditure (US$ millions)3
Free cash flow (US$ millions)
Underlying return on capital employed4
2021
319.7
321.6
5.8
39,582
143.8
27,592
76%
17,323
19,177
(3,947)
15,172
100%
2020
333.4
330.6
4.9
27,508
98.9
18,837
74%
11,398
13,218
(2,941)
10,233
74%
Change
(4)%
(3)%
20%
44%
45%
46%
52%
45%
34%
48%
1. Dampier Salt is reported within Iron Ore, reflecting management responsibility. Iron Ore Company of Canada continues to be reported within Minerals. The Simandou iron ore project in Guinea is
reported within Copper.
2. The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara underlying EBITDA divided by Pilbara gross product sales, excluding freight revenue.
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings excluding net interest divided by average capital employed.
Enabling the low-carbon transition
Iron ore is an essential ingredient of steel, one of the most efficient
construction materials in the world. In many applications, there is no
viable substitute for steel. The challenge is to remove carbon from
the steel manufacturing process, enabling green steel to play a critical
role in reducing global carbon emissions. We are committed to
developing the technology needed to prepare Pilbara iron ore for a
green-steel future.
The Pilbara, with its natural advantages in solar and wind, is at the
forefront of our global plans to decarbonise. We are on a pathway to
decarbonise our business through multiple initiatives:
– We are electrifying our Pilbara operations, including haul trucks,
mobile equipment and rail operations, replacing existing emissions-
heavy diesel fleets with battery or hydrogen technology, while
continuing to produce iron ore for the world’s energy transition.
– A key focus for the Iron Ore product group will be deploying one
gigawatt of renewable energy to power our mining operations and
communities in the Pilbara.
– The Group’s estimated $7.5 billion in capital expenditure to
decarbonise our business has a focus on renewable power for iron
ore, and we have applications for new tenure to support potential
wind power initiatives.
– The construction of our first 34MW solar plant at the Gudai-Darri
mine is an important step in reducing our carbon footprint in the
Pilbara. The average annual emissions savings (battery and solar
combined) are equivalent to powering about 6,000 homes.
– We are partnering with Komatsu and Caterpillar to fast-track the
development and implementation of zero-emission haulage
solutions, including haul trucks. To support these partnerships, we
are also collaborating with the industry more broadly on the Charge
On Innovation Challenge, an innovative problem-solving partnership
to develop mobile fleet charging solutions.
Immediate reductions across our iron ore operations will not occur
overnight, as research and development, and the deployment of these
technologies will take some years.
44
Annual Report 2021 | riotinto.com
In 2021, Iron Ore’s absolute greenhouse gas emissions were
3.0Mt CO2e (on an equity basis), an increase of 0.34Mt CO2e
compared to the 2018 emissions baseline, driven largely by an increase
in diesel emissions due to increased haul distances, pre-strip ratios
and material movement.
Safety and wellbeing
In 2021, the number of potentially fatal incidents (PFIs) increased by
25% compared to 2020. We are focusing on impactful actions
stemming from incident investigations, to ensure learnings are
embedded across the business, and we have allocated dedicated
resources to address specific critical risks such as falling objects.
The rate of injuries also increased with our all-injury frequency rate
(AIFR) at 0.67 for 2021 compared to 0.53 for 2020. The rate of injuries
was higher in our contractor workforce than our employees. A tight
labour market and onboarding challenges (particularly for our contract
partners) contributed to this increase.
Specific focus areas for 2022 include the safety of our onsite
contractors, improving our first line assurance, reducing fatigue risks,
and fostering a healthy workplace. We continue to implement the
safety maturity model and our mental wellbeing framework to achieve
our objective of creating a physically and mentally healthy workplace
for our employees and contractor partners.
In 2021, we conducted planned health and hygiene monitoring for
known workplace exposures such as noise and dust. We also
continued to assess the individual health status of exposed workers for
the purpose of early detection and intervention including hearing and
lung function screening. A new periodic medical programme was
trialled across two locations, to proactively identify and manage
non-work related health conditions with potential safety impacts.
In October, the WA Government announced COVID-19 vaccinations
would be mandatory for workers in the resources industry. As such,
all employees, contractors and visitors accessing a Rio Tinto
workplace in Western Australia are required to have up-to-date
COVID-19 vaccinations.
In 2021, we worked with the WA Government to boost vaccination rates
across Western Australia. In partnership with the State Government,
we set up vaccination clinics at Perth Airport and regional locations,
including Tom Price, Paraburdoo and Pannawonica, helping to vaccinate
more than 10,000 of our workforce and community members.
Iron Ore continued
Iron Ore
2021 year-end results
Pilbara production (million tonnes – 100%)
Pilbara shipments (million tonnes – 100%)
Salt production (million tonnes – Rio Tinto share)1
Gross product sales (US$ millions)
Average realised price (US$ per dry metric tonne, FOB basis)
Net cash generated from operating activities (US$ millions)
Underlying EBITDA (US$ millions)
Pilbara underlying FOB EBITDA margin2
Underlying earnings (US$ millions)
Capital expenditure (US$ millions)3
Free cash flow (US$ millions)
Underlying return on capital employed4
reported within Copper.
2021
319.7
321.6
5.8
39,582
143.8
27,592
76%
17,323
19,177
(3,947)
15,172
100%
2020
333.4
330.6
4.9
27,508
98.9
18,837
74%
11,398
13,218
(2,941)
10,233
74%
Change
(4)%
(3)%
20%
44%
45%
46%
52%
45%
34%
48%
1. Dampier Salt is reported within Iron Ore, reflecting management responsibility. Iron Ore Company of Canada continues to be reported within Minerals. The Simandou iron ore project in Guinea is
2. The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara underlying EBITDA divided by Pilbara gross product sales, excluding freight revenue.
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings excluding net interest divided by average capital employed.
Enabling the low-carbon transition
Iron ore is an essential ingredient of steel, one of the most efficient
construction materials in the world. In many applications, there is no
viable substitute for steel. The challenge is to remove carbon from
the steel manufacturing process, enabling green steel to play a critical
role in reducing global carbon emissions. We are committed to
developing the technology needed to prepare Pilbara iron ore for a
green-steel future.
The Pilbara, with its natural advantages in solar and wind, is at the
forefront of our global plans to decarbonise. We are on a pathway to
decarbonise our business through multiple initiatives:
In 2021, Iron Ore’s absolute greenhouse gas emissions were
3.0Mt CO2e (on an equity basis), an increase of 0.34Mt CO2e
compared to the 2018 emissions baseline, driven largely by an increase
in diesel emissions due to increased haul distances, pre-strip ratios
and material movement.
Safety and wellbeing
In 2021, the number of potentially fatal incidents (PFIs) increased by
25% compared to 2020. We are focusing on impactful actions
stemming from incident investigations, to ensure learnings are
embedded across the business, and we have allocated dedicated
resources to address specific critical risks such as falling objects.
– We are electrifying our Pilbara operations, including haul trucks,
The rate of injuries also increased with our all-injury frequency rate
mobile equipment and rail operations, replacing existing emissions-
(AIFR) at 0.67 for 2021 compared to 0.53 for 2020. The rate of injuries
heavy diesel fleets with battery or hydrogen technology, while
continuing to produce iron ore for the world’s energy transition.
was higher in our contractor workforce than our employees. A tight
labour market and onboarding challenges (particularly for our contract
– A key focus for the Iron Ore product group will be deploying one
gigawatt of renewable energy to power our mining operations and
communities in the Pilbara.
– The Group’s estimated $7.5 billion in capital expenditure to
decarbonise our business has a focus on renewable power for iron
ore, and we have applications for new tenure to support potential
wind power initiatives.
– The construction of our first 34MW solar plant at the Gudai-Darri
mine is an important step in reducing our carbon footprint in the
Pilbara. The average annual emissions savings (battery and solar
combined) are equivalent to powering about 6,000 homes.
– We are partnering with Komatsu and Caterpillar to fast-track the
development and implementation of zero-emission haulage
solutions, including haul trucks. To support these partnerships, we
are also collaborating with the industry more broadly on the Charge
On Innovation Challenge, an innovative problem-solving partnership
to develop mobile fleet charging solutions.
Immediate reductions across our iron ore operations will not occur
overnight, as research and development, and the deployment of these
COVID-19 vaccinations.
technologies will take some years.
partners) contributed to this increase.
Specific focus areas for 2022 include the safety of our onsite
contractors, improving our first line assurance, reducing fatigue risks,
and fostering a healthy workplace. We continue to implement the
safety maturity model and our mental wellbeing framework to achieve
our objective of creating a physically and mentally healthy workplace
for our employees and contractor partners.
In 2021, we conducted planned health and hygiene monitoring for
known workplace exposures such as noise and dust. We also
continued to assess the individual health status of exposed workers for
the purpose of early detection and intervention including hearing and
lung function screening. A new periodic medical programme was
trialled across two locations, to proactively identify and manage
non-work related health conditions with potential safety impacts.
In October, the WA Government announced COVID-19 vaccinations
would be mandatory for workers in the resources industry. As such,
all employees, contractors and visitors accessing a Rio Tinto
workplace in Western Australia are required to have up-to-date
In 2021, we worked with the WA Government to boost vaccination rates
across Western Australia. In partnership with the State Government,
we set up vaccination clinics at Perth Airport and regional locations,
including Tom Price, Paraburdoo and Pannawonica, helping to vaccinate
more than 10,000 of our workforce and community members.
Leveraging our success to create value
for others
In 2021, we spent almost A$8 billion on goods and services with more
than 2,000 Western Australian businesses, including nearly
A$300 million with local Indigenous businesses.
Learn more about how we are working with local
businesses at riotinto.com/stories.
Financial performance
Our Pilbara iron ore shipments decreased by 3% compared with 2020.
Shipments were impacted by lower mined production due to above-
average rainfall in the first half of 2021, cultural heritage management
and delays in growth and brownfield mine replacement tie-in projects.
Underlying EBITDA of $27.6 billion was 46% higher than 2020, driven
by higher prices ($10.3 billion), with a 45% rise in the monthly average
Platts index for 62% iron fines adjusted to an FOB basis compared with
2020. This more than compensated for the impact from reduced
shipments and rising unit costs.
2021 Pilbara unit cash costs, which were $18.6 per tonne (excluding
COVID-19 costs of $0.5 per tonne), marginally exceeded guidance of
$18.0 to 18.5 per tonne and compared with $14.8 per tonne in 2020
(excluding COVID-19 costs of $0.6 per tonne). Unit cost performance
was driven by higher input prices including labour, explosives and
energy, a 9% stronger Australian dollar, an increase in the mine work
index, operational readiness costs for our growth and brownfield
mine replacement tie-in projects and fixed cost inefficiencies from
lower volumes.
We have continued investing in productivity and automation: around
80% of the haul truck fleet is now autonomous.
Our Pilbara operations delivered an underlying FOB EBITDA margin of
76%, compared with 74% in 2020.
We price the majority of our iron ore sales (77%) by reference to the
average index price for the month of shipment. In 2021, we priced
approximately 11% of sales with reference to the prior quarter’s average
index lagged by one month with the remainder sold either on current
quarter average, current month average or on the spot market. We made
approximately 72% of sales including freight and 28% on an FOB basis.
We achieved an average iron ore price of $132.3 per wet metric tonne on
an FOB basis (2020: $91.0 per wet metric tonne) across our product
suite. This equates to $143.8 per dry metric tonne, assuming 8%
moisture (2020: $98.9 per dry metric tonne), which compares with the
monthly average Platts index for 62% iron fines converted to an FOB
basis of $146.9 per dry metric tonne (2020: $101.3 per dry metric tonne).
The slightly lower realised price compared to the Platts index was due to
the higher proportion of SP10 volumes and the increased discounts for
lower grade products, particularly in the second half of 2021.
Gross product sales for our Pilbara operations included freight revenue
of $2.7 billion (2020: $1.5 billion).
Net cash generated from operating activities of $19.2 billion was 45%
higher than 2020, in line with the movement in underlying EBITDA. Free
cash flow of $15.2 billion was 48% higher than 2020, due to a 34%
increase in capital expenditure to $3.9 billion, relating to construction
of growth and brownfield mine replacement tie-in projects.
Review of operations
Pilbara operations produced 319.7 million tonnes (Rio Tinto share
266.8 million tonnes) in 2021, 4% lower than 2020, for the reasons
mentioned above. Ongoing COVID-19 restrictions and a tight labour
market have further impacted our ability to access experienced
contractors and particular skill sets.
Production from the new greenfield mine at Gudai-Darri and brownfield
mine replacement project at Robe Valley was delayed due to the
COVID-19 impact on labour availability and other factors, including an
inability to conduct pre-delivery quality assurance and control at
international steel manufactures due to limitations on travel. First ore
from Gudai-Darri was railed in December from the modular crushing
and screening plant installed to supplement production and mitigate
commissioning delays. Robe Valley production was significantly
impacted by the Mesa A wet plant commissioning delays.
2021 shipments of 321.6 million tonnes (Rio Tinto share 267.9 million
tonnes) included 36.6 million tonnes of lower grade SP10 products,
11% of shipments, on a 100% basis (2020: 3%). As growth and
replacement mines ramp up through the first half of 2022, we expect to
see a gradual decrease in SP10 over the medium term.
We continue to increase our iron ore portside sales in China, with a total
of 14.0 million tonnes in 2021 (2020: 5.5 million tonnes). We experienced
increased inventory levels of Pilbara product at the port at December
(2021: 8.8 million tonnes, 2020: 1.7 million tonnes), due to higher volumes
of SP10 and constrained availability of high grade blending stocks in the
fourth quarter. Our portside operation handles product from the Pilbara
and Canada as well as third-party product, and provides blending and
screening capabilities. Approximately 81% of portside sales in 2021 were
either blended or screened in Chinese ports.
44
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
45
Iron Ore continued
Our principal projects and growth options
Our people
In 2021, building on the work of the Everyday Respect task force, we
took steps towards fostering a psychologically safer work environment.
In addition to the task force’s listening sessions and survey, we further
opened up discussions with our teams through the Stop for Respect
initiative, where we took the unprecedented step to stop all of our WA
operations and projects for at least 30 minutes, allowing people time to
reflect on what a respectful workplace is, share stories, and commit to
actions to become more respectful and inclusive.
We also announced our plans to partner across industry, education,
government and subject matter experts to design education
awareness packages to increase awareness of bullying, sexual
harassment, and racism – collectively referred to as Psychosocial
Awareness. In time, these packages will be made available across
broader industries and shared in other parts of Australia.
We still have much more to do in this space and we are committed to
taking further action on the findings and recommendations outlined in
the Everyday Respect report and Inquiry recommendations.
Commissioning and ramp-up of Pilbara growth and brownfield mine
replacement projects have been impacted by ongoing COVID-19
restrictions, including labour access and supply chain quality issues.
The latter have been exacerbated by an inability to conduct
pre-delivery quality assurance and control at international steel and
equipment manufacturers due to limitations on travel.
Mining and operational readiness activities are progressing at the
$2.6 billion1 Gudai-Darri mine and the railway is operational. The first
train was loaded from the mobile crushing and screening facilities in
December and first production from the main plant is now expected in
the second quarter of 2022, subject to the continuing impacts of
COVID-19. This new production hub will be our most technologically
advanced, incorporating a processing plant and infrastructure
including an airport, camp and a 166-kilometre rail line connecting the
mine to our existing network. Once fully commissioned, this first phase
will have an annual capacity of 43 million tonnes, replacing depleting
orebodies and providing some incremental capacity.
Our $0.8 billion1 investment in the Western Turner Syncline phase
2 mine, part of Greater Tom Price operations, will facilitate mining of
new deposits and includes construction of a new crusher and a
13-kilometre conveyor. The project achieved first ore in October,
following commissioning of the autonomous mining truck fleet. Some
residual brownfield plant works are due to be complete during
mid-year shutdowns.
We are also investing $1.7 billion1 with our joint venture partners, Mitsui
and Nippon Steel Corporation (our 53% share is $0.9 billion), at the
Robe Valley and West Angelas operations. First ore at West Angelas C
and D was achieved in June, and the mines are now commissioned.
At Robe Valley (Mesa B, C, H), the autonomous mining truck fleet has
been commissioned. Since achieving first ore in August, ongoing Mesa
A wet plant construction and commissioning challenges have
impacted production ramp-up. New wet plant components are on
order and production will operate at a reduced capacity until repairs
are completed.
1. Potential for capital cost to rise by around 15% due to ongoing COVID-19 restrictions on commissioning and ramp-up of Pilbara growth and brownfield mine replacement projects, including
labour access and supply chain quality issues. The latter has been exacerbated by an inability to conduct pre-delivery quality assurance and control at international steel and equipment
manufacturers due to limitations on travel.
46
Annual Report 2021 | riotinto.com
Iron Ore continued
Our principal projects and growth options
Our people
Commissioning and ramp-up of Pilbara growth and brownfield mine
In 2021, building on the work of the Everyday Respect task force, we
replacement projects have been impacted by ongoing COVID-19
took steps towards fostering a psychologically safer work environment.
restrictions, including labour access and supply chain quality issues.
The latter have been exacerbated by an inability to conduct
pre-delivery quality assurance and control at international steel and
equipment manufacturers due to limitations on travel.
In addition to the task force’s listening sessions and survey, we further
opened up discussions with our teams through the Stop for Respect
initiative, where we took the unprecedented step to stop all of our WA
operations and projects for at least 30 minutes, allowing people time to
Mining and operational readiness activities are progressing at the
reflect on what a respectful workplace is, share stories, and commit to
$2.6 billion1 Gudai-Darri mine and the railway is operational. The first
actions to become more respectful and inclusive.
We also announced our plans to partner across industry, education,
government and subject matter experts to design education
awareness packages to increase awareness of bullying, sexual
harassment, and racism – collectively referred to as Psychosocial
Awareness. In time, these packages will be made available across
broader industries and shared in other parts of Australia.
We still have much more to do in this space and we are committed to
taking further action on the findings and recommendations outlined in
the Everyday Respect report and Inquiry recommendations.
train was loaded from the mobile crushing and screening facilities in
December and first production from the main plant is now expected in
the second quarter of 2022, subject to the continuing impacts of
COVID-19. This new production hub will be our most technologically
advanced, incorporating a processing plant and infrastructure
including an airport, camp and a 166-kilometre rail line connecting the
mine to our existing network. Once fully commissioned, this first phase
will have an annual capacity of 43 million tonnes, replacing depleting
orebodies and providing some incremental capacity.
Our $0.8 billion1 investment in the Western Turner Syncline phase
2 mine, part of Greater Tom Price operations, will facilitate mining of
new deposits and includes construction of a new crusher and a
13-kilometre conveyor. The project achieved first ore in October,
following commissioning of the autonomous mining truck fleet. Some
residual brownfield plant works are due to be complete during
mid-year shutdowns.
We are also investing $1.7 billion1 with our joint venture partners, Mitsui
and Nippon Steel Corporation (our 53% share is $0.9 billion), at the
Robe Valley and West Angelas operations. First ore at West Angelas C
and D was achieved in June, and the mines are now commissioned.
At Robe Valley (Mesa B, C, H), the autonomous mining truck fleet has
been commissioned. Since achieving first ore in August, ongoing Mesa
A wet plant construction and commissioning challenges have
impacted production ramp-up. New wet plant components are on
order and production will operate at a reduced capacity until repairs
are completed.
Iron ore is an essential
ingredient of steel,
one of the most efficient
construction materials in
the world. We are working
with our stakeholders to
remove carbon from the
steel manufacturing
process, enabling green
steel to play a critical role
in the energy transition.
1. Potential for capital cost to rise by around 15% due to ongoing COVID-19 restrictions on commissioning and ramp-up of Pilbara growth and brownfield mine replacement projects, including
labour access and supply chain quality issues. The latter has been exacerbated by an inability to conduct pre-delivery quality assurance and control at international steel and equipment
manufacturers due to limitations on travel.
46
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Annual Report 2021 | riotinto.com
47
Aluminium
As a global leader in low-carbon aluminium, we are uniquely
positioned to further decarbonise our business and support
the world's transition towards a lower-carbon footprint.
A critical material – lightweight and infinitely recyclable
– aluminium is found in diverse products ranging from
solar panels to electric vehicles and smartphones.
The aluminium industry is highly energy-intensive and contributes
significantly to the world’s carbon emissions. Around 60% of
the world’s smelters currently use coal-based electricity.
Decarbonising the industry, therefore, represents significant
challenges and opportunities.
We produce some of the highest-quality, lowest-carbon footprint
aluminium in the world. The greenhouse gas emissions intensity of
our Canadian smelters is more than 80% lower than the industry
average. This is possible in part to our hydro facilities, which we
have operated for almost 100 years.
Our ELYSIS partnership with Alcoa, supported by Apple and the
Governments of Canada and Quebec, is scaling up a technology
with the potential to transform the aluminium industry through a
significant reduction in its carbon footprint. In 2021, ELYSIS
achieved a key milestone by successfully producing carbon-free
aluminium at the Industrial Research and Development Centre
in Saguenay.
Work is now focused on accelerating the scale-up of the zero
carbon ELYSISTM technology towards the demonstration of even
larger commercial-size cells in 2023. Construction of the first
commercial-scale prototype cells using ELYSISTM inert anode
technology has now begun at our Alma smelter in Saguenay–Lac-
Saint-Jean, Quebec, Canada.
In November, we announced an $87 million investment to increase
our low-carbon aluminium production in Canada with 16 new smelting
cells at our AP60 smelter, in the Saguenay–Lac-Saint-Jean region.
The project is expected to be completed by the end of 2023.
We continue to partner with governments, organisations and
communities to further decarbonise the aluminium supply chain.
In 2021, we developed partnerships in Australia to find ways to
repower our smelters and to study the use of green hydrogen to
replace natural gas in our alumina refineries.
Our structurally advantaged integrated business includes bauxite
mines, alumina refineries and smelters producing aluminium
certified as responsible. Managing the process from mine to metal
allows us to independently deliver fully traceable products to our
customers, reliably and efficiently. In 2021, we launched START, the
first sustainability label for aluminium, which is being delivered to
customers using blockchain technology.
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Working together for a better future
4
bauxite mines in
Australia, Brazil
and Guinea1
14
aluminium
smelters in
Canada,
Australia, New
Zealand, Iceland
and Oman1
7
hydropower
plants
generating most
of the electricity
we use in
Canada
14,000
employees
4
alumina
refineries in
Australia, Brazil1
and Canada
2.17t
CO2e/ t Al
emissions
intensity of our
managed
Atlantic smelters
Snapshot of the year
0.33
AIFR
(2020: 0.34)2
38%
underlying
EBITDA margin
(integrated
operations)
(2020: 26%)
$4.4bn
underlying
EBITDA
$12.7bn
gross product
sales
(2020: $2.2bn)
(2020: $9.3bn)
$3.6bn
net cash
generated from
operating
activities
(2020: $1.9bn)
$1.3bn
capital
expenditure
(2020: $1.0bn)
Aluminium
As a global leader in low-carbon aluminium, we are uniquely
positioned to further decarbonise our business and support
the world's transition towards a lower-carbon footprint.
A critical material – lightweight and infinitely recyclable
– aluminium is found in diverse products ranging from
solar panels to electric vehicles and smartphones.
The aluminium industry is highly energy-intensive and contributes
In November, we announced an $87 million investment to increase
significantly to the world’s carbon emissions. Around 60% of
our low-carbon aluminium production in Canada with 16 new smelting
the world’s smelters currently use coal-based electricity.
cells at our AP60 smelter, in the Saguenay–Lac-Saint-Jean region.
Decarbonising the industry, therefore, represents significant
The project is expected to be completed by the end of 2023.
challenges and opportunities.
We continue to partner with governments, organisations and
We produce some of the highest-quality, lowest-carbon footprint
communities to further decarbonise the aluminium supply chain.
aluminium in the world. The greenhouse gas emissions intensity of
In 2021, we developed partnerships in Australia to find ways to
our Canadian smelters is more than 80% lower than the industry
repower our smelters and to study the use of green hydrogen to
average. This is possible in part to our hydro facilities, which we
replace natural gas in our alumina refineries.
have operated for almost 100 years.
Our ELYSIS partnership with Alcoa, supported by Apple and the
mines, alumina refineries and smelters producing aluminium
Governments of Canada and Quebec, is scaling up a technology
certified as responsible. Managing the process from mine to metal
with the potential to transform the aluminium industry through a
allows us to independently deliver fully traceable products to our
significant reduction in its carbon footprint. In 2021, ELYSIS
customers, reliably and efficiently. In 2021, we launched START, the
achieved a key milestone by successfully producing carbon-free
first sustainability label for aluminium, which is being delivered to
aluminium at the Industrial Research and Development Centre
customers using blockchain technology.
Our structurally advantaged integrated business includes bauxite
in Saguenay.
Work is now focused on accelerating the scale-up of the zero
carbon ELYSISTM technology towards the demonstration of even
larger commercial-size cells in 2023. Construction of the first
commercial-scale prototype cells using ELYSISTM inert anode
technology has now begun at our Alma smelter in Saguenay–Lac-
Saint-Jean, Quebec, Canada.
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49
Boyne Smelters Limited. Queensland, Australia.
1. Non-managed joint ventures.
2. Our Gove operations’ closure unit was transferred from Aluminium to Closure,
causing change in historical AIFR, previously noted as 0.36 in our 2020 Annual Report.
Aluminium continued
Aluminium
2021 year-end results
Bauxite production (000 tonnes – Rio Tinto share)
Alumina production (000 tonnes – Rio Tinto share)
Aluminium production (000 tonnes – Rio Tinto share)
Gross product sales (US$ millions)
Average realised aluminium price (US$ per tonne)
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (integrated operations)
Underlying earnings (US$ millions)1
Net cash generated from operating activities (US$ millions)
Capital expenditure – excluding EAUs (US$ millions)2
Free cash flow (US$ millions)
Underlying return on capital employed3
2021
54.3
7.9
3.2
12,695
2,899
4,382
38%
2,468
3,606
(1,300)
2,272
16%
2020
56.1
8.0
3.2
9,314
1,946
2,152
26%
471
1,930
(1,009)
892
3%
Change
(3)%
(2)%
(1)%
36%
49%
104%
424%
87%
29%
155%
1. Underlying earnings includes a $0.2 billion benefit for the recognition of previously written down deferred tax assets in Australia (2020: $0.2 billion charge for the partial de-recognition of
deferred tax assets in Australia).
2. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets. It excludes
equity accounted units (EAUs).
3. Underlying return on capital employed (ROCE) is defined as underlying earnings excluding net interest divided by average capital employed.
Enabling the low-carbon transition
Safety and wellbeing
Aluminium is one of the world’s fastest-growing major metals.
We produce some of the highest-quality, lowest-carbon footprint
aluminium in the world. The Scope 1 and 2 greenhouse gas emissions
intensity of our Canadian smelters is less than one-fifth of the
industry average.
Our Aluminium business supports our pathway to zero emissions
through several initiatives:
– Construction of the first commercial-scale prototype cells of
ELYSISTM inert anode technology has now begun at our Alma smelter
in Saguenay–Lac-Saint-Jean.
– We signed a Statement of Cooperation with the Queensland
Government, agreeing to work together to help the Central
Queensland region decarbonise. This includes finding the best
pathway to repower our Australian smelters to make them more
competitive and sustainable.
– We are partnering with Carbfix to capture carbon and permanently
store it underground at our ISAL aluminium smelter in Iceland.
– We began construction of a new 4MW solar farm and battery storage
at Weipa. This will triple the local electricity network’s solar generation
capacity and help provide cleaner power to our operations.
– We partnered with the Australian Renewable Energy Agency
(ARENA) to research the potential for using green hydrogen to
replace natural gas in the calcination process of alumina refining at
Yarwun. We partnered with Sumitomo Corporation on a study into
building a hydrogen pilot plant at Yarwun.
More information on Carbfix, ELYSIS and our Yarwun hydrogen
partnerships can be found in our Innovation pages 70-71.
In 2021, our Aluminium business’s absolute greenhouse gas emissions
(21.9Mt CO2e) were 1% lower than the 2018 equity baseline (22.1Mt CO2e).
This reduction includes improvements in processing efficiency, an
increased use of hydroelectric boilers in refining, instead of natural gas
boilers, and a reduction of production at the Kitimat smelter due to a
strike. The 2021 emissions intensity of our managed Atlantic smelters,
powered by hydroelectricity, was 2.17t CO2e per tonne of aluminium.
Our Vaudreuil alumina refinery has the lowest carbon footprint of any
alumina refinery in the world today.
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Annual Report 2021 | riotinto.com
In 2021, the number of potentially fatal incidents (PFIs) more than
doubled compared with 2020. Increased incident identification and
proactive learning from each has been a positive improvement in the
safety culture. Given that falling objects accounted for 60% of the PFIs,
a work programme was undertaken at our sites to address overhead
asset maintenance. A robust monthly PFI-sharing meeting was also
introduced to encourage our people to share learnings across our sites
and leverage technical support to the sites as needed.
We ended 2021 with an all-injury frequency rate (AIFR) of 0.26 among
our employees and 0.44 among our contractors. While our overall AIFR
decreased to its lowest ever at 0.33, we saw a slight regression for
employees when compared to 2020 (0.20) and an improvement for
contractors when compared to 2020 (0.57).
While 2021 marked the seventh consecutive fatality-free year for our
managed operations, sadly a non-managed operation, Compagnie
des Bauxites de Guinée, experienced three fatalities. We are working
closely with the teams on-site to ensure process safety and
incident prevention.
We continued to improve the safety maturity of our sites by
emphasising leadership coaching and critical risk management.
In 2021, we completed over 215,000 verifications on critical controls,
including more than 39,000 verifications specific to COVID-19.
Aluminium has the largest number of water and tailings dams in the
company. In 2021, we implemented a telemetry programme across our
tailings and water storage facilities to collect measurements and data
from remote points and automatically transmit them for monitoring.
This work, to be completed by the first quarter of 2022, will ensure that
all our major water and tailings facilities have real-time monitoring.
We have also begun implementing the new Global Industry Standard in
Tailings Management (GISTM), with a particular focus on the
community engagement and dam design safety elements.
In partnership with local governments, we administered more than
18,000 vaccines against COVID-19 to employees, contractors, families
and the community at Aluminium-supported vaccination centres in
Kitimat and Saguenay, Canada; Queensland, Northern Territory and
Tasmania, Australia; and New Zealand.
Aluminium continued
Aluminium
2021 year-end results
Bauxite production (000 tonnes – Rio Tinto share)
Alumina production (000 tonnes – Rio Tinto share)
Aluminium production (000 tonnes – Rio Tinto share)
Gross product sales (US$ millions)
Average realised aluminium price (US$ per tonne)
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (integrated operations)
Underlying earnings (US$ millions)1
Net cash generated from operating activities (US$ millions)
Capital expenditure – excluding EAUs (US$ millions)2
Free cash flow (US$ millions)
Underlying return on capital employed3
2021
54.3
7.9
3.2
12,695
2,899
4,382
38%
2,468
3,606
(1,300)
2,272
16%
2020
56.1
8.0
3.2
9,314
1,946
2,152
26%
471
1,930
(1,009)
892
3%
Change
(3)%
(2)%
(1)%
36%
49%
104%
424%
87%
29%
155%
1. Underlying earnings includes a $0.2 billion benefit for the recognition of previously written down deferred tax assets in Australia (2020: $0.2 billion charge for the partial de-recognition of
2. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets. It excludes
deferred tax assets in Australia).
equity accounted units (EAUs).
3. Underlying return on capital employed (ROCE) is defined as underlying earnings excluding net interest divided by average capital employed.
Enabling the low-carbon transition
Safety and wellbeing
Aluminium is one of the world’s fastest-growing major metals.
In 2021, the number of potentially fatal incidents (PFIs) more than
We produce some of the highest-quality, lowest-carbon footprint
doubled compared with 2020. Increased incident identification and
aluminium in the world. The Scope 1 and 2 greenhouse gas emissions
proactive learning from each has been a positive improvement in the
intensity of our Canadian smelters is less than one-fifth of the
safety culture. Given that falling objects accounted for 60% of the PFIs,
industry average.
Our Aluminium business supports our pathway to zero emissions
through several initiatives:
– Construction of the first commercial-scale prototype cells of
ELYSISTM inert anode technology has now begun at our Alma smelter
in Saguenay–Lac-Saint-Jean.
– We signed a Statement of Cooperation with the Queensland
Government, agreeing to work together to help the Central
Queensland region decarbonise. This includes finding the best
pathway to repower our Australian smelters to make them more
competitive and sustainable.
a work programme was undertaken at our sites to address overhead
asset maintenance. A robust monthly PFI-sharing meeting was also
introduced to encourage our people to share learnings across our sites
and leverage technical support to the sites as needed.
We ended 2021 with an all-injury frequency rate (AIFR) of 0.26 among
our employees and 0.44 among our contractors. While our overall AIFR
decreased to its lowest ever at 0.33, we saw a slight regression for
employees when compared to 2020 (0.20) and an improvement for
contractors when compared to 2020 (0.57).
While 2021 marked the seventh consecutive fatality-free year for our
managed operations, sadly a non-managed operation, Compagnie
des Bauxites de Guinée, experienced three fatalities. We are working
closely with the teams on-site to ensure process safety and
– We are partnering with Carbfix to capture carbon and permanently
store it underground at our ISAL aluminium smelter in Iceland.
incident prevention.
– We began construction of a new 4MW solar farm and battery storage
We continued to improve the safety maturity of our sites by
at Weipa. This will triple the local electricity network’s solar generation
emphasising leadership coaching and critical risk management.
capacity and help provide cleaner power to our operations.
In 2021, we completed over 215,000 verifications on critical controls,
– We partnered with the Australian Renewable Energy Agency
(ARENA) to research the potential for using green hydrogen to
replace natural gas in the calcination process of alumina refining at
Yarwun. We partnered with Sumitomo Corporation on a study into
building a hydrogen pilot plant at Yarwun.
More information on Carbfix, ELYSIS and our Yarwun hydrogen
partnerships can be found in our Innovation pages 70-71.
In 2021, our Aluminium business’s absolute greenhouse gas emissions
(21.9Mt CO2e) were 1% lower than the 2018 equity baseline (22.1Mt CO2e).
This reduction includes improvements in processing efficiency, an
increased use of hydroelectric boilers in refining, instead of natural gas
boilers, and a reduction of production at the Kitimat smelter due to a
strike. The 2021 emissions intensity of our managed Atlantic smelters,
powered by hydroelectricity, was 2.17t CO2e per tonne of aluminium.
Our Vaudreuil alumina refinery has the lowest carbon footprint of any
alumina refinery in the world today.
including more than 39,000 verifications specific to COVID-19.
Aluminium has the largest number of water and tailings dams in the
company. In 2021, we implemented a telemetry programme across our
tailings and water storage facilities to collect measurements and data
from remote points and automatically transmit them for monitoring.
This work, to be completed by the first quarter of 2022, will ensure that
all our major water and tailings facilities have real-time monitoring.
We have also begun implementing the new Global Industry Standard in
Tailings Management (GISTM), with a particular focus on the
community engagement and dam design safety elements.
In partnership with local governments, we administered more than
18,000 vaccines against COVID-19 to employees, contractors, families
and the community at Aluminium-supported vaccination centres in
Kitimat and Saguenay, Canada; Queensland, Northern Territory and
Tasmania, Australia; and New Zealand.
Meeting growing demand for
transparency and traceability
START Responsible Aluminium sets the standard for sustainable
aluminium production through transparency, traceability and
technology. Key information is provided for ten Rio Tinto Aluminium
sustainability criteria, from mine to metal.
Learn more about START at riotinto.com/stories.
In 2022, we will continue to improve our safety culture and
performance by emphasising a psychologically safe environment that
encourages employees to raise safety issues and concerns. This will
improve the rigour in our incident investigations to drive to systemic
root causes, ensuring that our critical risk controls are regularly and
thoroughly verified. Our daily visible leadership in the field will also
continue to build trusting, transparent relationships and reinforces safe
work behaviours.
Financial performance
In 2021, aluminium prices rallied to multi-year highs, following a firm
recovery in global demand and extensive power-related supply
disruptions in China, which led to a global market deficit. This rebound
in sales prices, together with increased demand for value-added
product (VAP), were the key drivers for our aluminium business to
more than double underlying EBITDA and deliver a substantial
increase in cash flow.
Underlying EBITDA of $4.4 billion, which was 104% higher than 2020,
benefited from the stronger pricing environment, in particular for
primary metal and alumina, and higher product premiums for primary
metal. This was only partly offset by the impact of stronger local
currencies, lower bauxite and alumina shipments and cyclical cost
inflation for coke, pitch and alloys. This increased our industry-
leading underlying EBITDA margin to 38%.
We achieved an average realised aluminium price of $2,899 per tonne,
49% higher than 2020 ($1,946 per tonne). This comprised the LME price,
a market premium and a product (VAP) premium. The cash LME price
averaged $2,480 per tonne, 46% higher than 2020, while in our key US
market, the midwest premium duty paid increased by 119% to $584 per
tonne (2020: $267 per tonne). Our VAP sales represented 50% of the
primary metal we sold (2020: 43%) and generated product premiums
averaging $230 per tonne of VAP sold (2020: $213 per tonne).
We generated $3.6 billion in net cash from operating activities,
reflective of the higher underlying EBITDA achieved, net of a
$0.5 billion build in working capital, driven by the higher pricing
environment and supply chain constraints. Free cash flow increased by
155% to $2.3 billion.
Review of operations
Bauxite production of 54.3 million tonnes was 3% lower than 2020 due
to severe wet weather in the first quarter impacting system stability
throughout the year, equipment reliability issues and overruns on
planned shutdowns at our Pacific operations.
We shipped 37.6 million tonnes of bauxite to third parties in 2021, 4%
lower than the same period of 2020 due to the major weather events in
the first quarter causing shipment delays. In 2021, gross product sales
for bauxite declined 4% to $2.2 billion: this includes freight revenue of
$462 million (2020: $423 million).
Alumina production of 7.9 million tonnes was 2% lower than 2020, as a
result of outages during the year at the Yarwun refinery in Queensland,
Australia and at Vaudreuil refinery in Quebec, Canada. Production at
the Queensland refinery remained stable year on year.
Aluminium production of 3.2 million tonnes was 1% lower than 2020
due to reduced capacity at our Kitimat smelter in British Columbia
following a strike which commenced in July. Agreement was reached
with the labour union and employees in October, with a gradual restart
in 2022 and full capacity expected to be reached by December 2022.
The reduced capacity was partly offset by a robust performance
across the remaining smelting portfolio.
Our principal projects and growth options
At the Kemano project in Kitimat, British Columbia, where we are
constructing a second tunnel to de-risk our 100% owned hydropower
facility, the tunnel boring machine is being dismantled and removed
following breakthrough in October. Although COVID-19 continues to
affect the workforce, completion remains on schedule for the second
half of 2022. Total approved capital stands at $0.8 billion.
In December 2021, we opened a newly extended wharf that will
increase the capacity of our port facilities in Kitimat and support
economic diversification in Northern British Columbia. The new wharf
will be used for imports of alumina, anodes and other supplies, and for
exports of low-carbon aluminium made at our BC Works smelter in
Kitimat. As the wharf was built and paid for by LNG Canada, when we
gained control over it in December we recognised a $336 million gain,
which has been excluded from underlying earnings on the grounds of
materiality and linkage to the impairment recognised in 2021.
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51
Aluminium continued
ELYSIS, our joint venture with Alcoa, supported by Apple and the
Governments of Canada and Quebec, is developing a breakthrough
technology that eliminates all direct greenhouse gases from the
aluminium smelting process. In 2021, ELYSIS successfully produced
aluminium at its Industrial Research and Development Center in the
Saguenay, Quebec. Construction of the first commercial-scale
prototype cells of ELYSISTM inert anode technology has now begun at
our Alma smelter. These prototype cells are expected to become
operational in 2023. ELYSIS aims to have its technology available for
installation from 2024 and production of larger volumes of carbon-free
aluminium approximately two years later.
We announced an $87 million investment to increase aluminium
production with 16 new smelting cells at our AP60 smelter, in the
Saguenay. Production will rise by around 45%, or 26,500 tonnes of
primary aluminium per year, to a capacity of 86,500 metric tonnes.
We announced a number of investments to sustain our assets in the
Saguenay, including C$92 million to refurbish the Isle-Maligne
hydroelectric power station, the oldest in our network, commissioned
95 years ago, and C$105 million to modernise the Port-Alfred
port facilities.
At our Weipa bauxite mine in northern Queensland, construction of a
new 4MW solar farm and 4MW/4MWh battery storage commenced,
which will triple the local electricity network’s solar generation
capacity. The new facility will be built, owned and operated by EDL and
will complement the existing 1.6MW solar farm at Weipa, which was
completed in 2015.
We partnered with the Australian Renewable Energy Agency to
research the potential for using clean hydrogen to replace natural gas
in the calcination process of alumina refining at Yarwun. We are also
partnering with Sumitomo Corporation to study the construction of a
pilot plant at Yarwun, which could produce hydrogen for the Gladstone
Hydrogen Ecosystem.
Our people
Our priority is to be a people-centric organisation where all employees
have a sense of purpose, responsibility and empowerment to make
decisions regarding our business. We continue to invest in enhancing
the skills and leadership capabilities that influence safety and business
performance. In parallel, we are embedding our new core values —
care, courage and curiosity — to assist in creating an environment
where everyone feels comfortable to speak up and challenge.
The strike and situation in Kitimat is a case where we have a large gap
to close. We are committed to implementing a new way of working
based on trust where the entire workforce feels listened to and cared
for. The cultural reset is under way and has included a reorganisation of
the BC Works leadership team. Beyond this, the team is focusing on
training, redesigning some operational processes and more structured
engagement with the workforce and union leaders.
We also continued our focus on inclusion and diversity. In 2021, we
increased our workforce gender balance by 1.6%, to 16.4%. Over 40%
of our senior leadership positions are held by women. Specific actions
occurred on all sites across our Atlantic and Pacific operations to
increase attraction, development and retention of a diverse workforce
at all levels. Our sites in Gladstone introduced a female leadership
development pilot to build career pathways and develop the capability
of our female talent in frontline leader roles. Our Alma smelter, in
partnership with the USW Alma union in Quebec, conducted a pilot to
increase female representation by understanding women’s
experiences, addressing issues and incorporating mechanisms to
better integrate and retain them in operations.
In 2021, our leadership across the organisation committed to improving
the psychological safety and wellbeing of our employees through
collegiality, feedback and everyday respect. This will remain a focus for
the coming years.
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Aluminium continued
ELYSIS, our joint venture with Alcoa, supported by Apple and the
Governments of Canada and Quebec, is developing a breakthrough
technology that eliminates all direct greenhouse gases from the
aluminium smelting process. In 2021, ELYSIS successfully produced
aluminium at its Industrial Research and Development Center in the
Saguenay, Quebec. Construction of the first commercial-scale
prototype cells of ELYSISTM inert anode technology has now begun at
our Alma smelter. These prototype cells are expected to become
operational in 2023. ELYSIS aims to have its technology available for
installation from 2024 and production of larger volumes of carbon-free
aluminium approximately two years later.
We announced an $87 million investment to increase aluminium
production with 16 new smelting cells at our AP60 smelter, in the
Saguenay. Production will rise by around 45%, or 26,500 tonnes of
primary aluminium per year, to a capacity of 86,500 metric tonnes.
We announced a number of investments to sustain our assets in the
Saguenay, including C$92 million to refurbish the Isle-Maligne
hydroelectric power station, the oldest in our network, commissioned
95 years ago, and C$105 million to modernise the Port-Alfred
port facilities.
At our Weipa bauxite mine in northern Queensland, construction of a
new 4MW solar farm and 4MW/4MWh battery storage commenced,
which will triple the local electricity network’s solar generation
capacity. The new facility will be built, owned and operated by EDL and
will complement the existing 1.6MW solar farm at Weipa, which was
completed in 2015.
We partnered with the Australian Renewable Energy Agency to
research the potential for using clean hydrogen to replace natural gas
in the calcination process of alumina refining at Yarwun. We are also
partnering with Sumitomo Corporation to study the construction of a
Our people
Our priority is to be a people-centric organisation where all employees
have a sense of purpose, responsibility and empowerment to make
decisions regarding our business. We continue to invest in enhancing
the skills and leadership capabilities that influence safety and business
performance. In parallel, we are embedding our new core values —
care, courage and curiosity — to assist in creating an environment
where everyone feels comfortable to speak up and challenge.
The strike and situation in Kitimat is a case where we have a large gap
to close. We are committed to implementing a new way of working
based on trust where the entire workforce feels listened to and cared
for. The cultural reset is under way and has included a reorganisation of
the BC Works leadership team. Beyond this, the team is focusing on
training, redesigning some operational processes and more structured
engagement with the workforce and union leaders.
We also continued our focus on inclusion and diversity. In 2021, we
increased our workforce gender balance by 1.6%, to 16.4%. Over 40%
of our senior leadership positions are held by women. Specific actions
occurred on all sites across our Atlantic and Pacific operations to
increase attraction, development and retention of a diverse workforce
at all levels. Our sites in Gladstone introduced a female leadership
development pilot to build career pathways and develop the capability
of our female talent in frontline leader roles. Our Alma smelter, in
partnership with the USW Alma union in Quebec, conducted a pilot to
increase female representation by understanding women’s
experiences, addressing issues and incorporating mechanisms to
better integrate and retain them in operations.
In 2021, our leadership across the organisation committed to improving
the psychological safety and wellbeing of our employees through
collegiality, feedback and everyday respect. This will remain a focus for
pilot plant at Yarwun, which could produce hydrogen for the Gladstone
the coming years.
Hydrogen Ecosystem.
Aluminium is an essential
material in a low-carbon
world, but it is currently
one of the most carbon
and energy intensive
materials to produce.
The breakthrough of
ELYSISTM – carbon-free
aluminium – will help us
address the paradox that
aluminium represents.
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53
Copper
Copper is essential to modern life and plays a
fundamental role in creating a sustainable,
low-carbon world. Rapid electrification and an
increasing adoption of renewable energy sources,
like wind and solar, are set to drive greater demand
for copper. With assets spanning the globe,
we are well-positioned to deliver on this potential.
We are building on over 100 years of history and experience, with
world-class deposits and operations as the bedrock for future
growth. Kennecott, our US operation based in Salt Lake City, Utah,
has been mining and processing minerals since 1903, with the
largest open pit mine in operation in the world and one of only two
copper smelters in the US. Kennecott’s long history of innovation is
set to continue as we explore growth projects for this valuable
asset. Building on this experience, we are developing the equally
transformational Oyu Tolgoi copper and gold mine in the South
Gobi Desert of Mongolia, a project that is almost unrivalled in the
industry in its complexity and scale - where we are building one of
the largest block cave mines in the world to access an orebody
nearly the size of Manhattan island.
At every site and asset, we maintain a strong focus on innovation
and responsible production. We delivered strong safety and
financial performance despite significant challenges in 2021, from
managing the varying and complex impacts of the COVID-19
pandemic across our global footprint, to major geotechnical issues
at Oyu Tolgoi and Kennecott. Our team demonstrated resilience
and technical capability in keeping our assets running and our
people safe.
We also continued our focus on safety and wellbeing outside of our
operations, strengthening our partnerships with communities,
stakeholders and Indigenous peoples with ancestral connections
neighbouring our assets – by providing critical support in areas
ranging from food security to wildfire response.
As the world’s demand for copper grows, we are ready to grow
with it, with a pipeline of growth projects at various stages of
development. In Arizona, US, the Resolution Copper project
continues to progress through comprehensive and independent
social and environmental regulatory reviews. In parallel, we
advanced our consultation and partnerships with neighbouring
communities and Native American tribes throughout 2021.
Of particular note is our partnership with Western Apache
tribes and the US Forest Service to implement the Emory Oak
Collaborative Tribal Restoration Initiative, centred on advancing
Indigenous Traditional Ecological Knowledge.
Management of Winu, our copper-gold discovery in Western
Australia, transitioned from the Exploration group to Copper.
Over the year, we have focused on engaging Traditional Owners
on project plans, agreements and regulatory approvals while
continuing drilling activities. Importantly, we successfully piloted
our approach for Net Zero Pathway studies, and developed an
assessment methodology for physical resilience to climate change
risks, which will be replicated across other assets.
In addition to copper, our product group also includes the
Simandou project in Guinea, the largest known undeveloped
high-grade iron ore deposit in the world. High-grade iron ore is a
key pillar for the decarbonisation of the steelmaking process,
and a critical priority as the world progresses on the road to a
low-carbon future.
54
Annual Report 2021 | riotinto.com
Working together for a better future
3
copper
operations
in the US,
Mongolia
and Chile
3
2
copper growth
projects in the
US, Australia
and Mongolia
Copper Mark
certifications,
verifying responsibly
produced copper
from Kennecott and
Oyu Tolgoi
2.2Mt
CO2e emissions
(our share)
1
high-grade iron
ore growth
project in Guinea
7,000
employees
Snapshot of the year
Copper
Copper is essential to modern life and plays a
fundamental role in creating a sustainable,
low-carbon world. Rapid electrification and an
increasing adoption of renewable energy sources,
like wind and solar, are set to drive greater demand
for copper. With assets spanning the globe,
we are well-positioned to deliver on this potential.
We are building on over 100 years of history and experience, with
As the world’s demand for copper grows, we are ready to grow
world-class deposits and operations as the bedrock for future
with it, with a pipeline of growth projects at various stages of
growth. Kennecott, our US operation based in Salt Lake City, Utah,
development. In Arizona, US, the Resolution Copper project
has been mining and processing minerals since 1903, with the
continues to progress through comprehensive and independent
largest open pit mine in operation in the world and one of only two
social and environmental regulatory reviews. In parallel, we
copper smelters in the US. Kennecott’s long history of innovation is
advanced our consultation and partnerships with neighbouring
set to continue as we explore growth projects for this valuable
communities and Native American tribes throughout 2021.
asset. Building on this experience, we are developing the equally
Of particular note is our partnership with Western Apache
transformational Oyu Tolgoi copper and gold mine in the South
tribes and the US Forest Service to implement the Emory Oak
Gobi Desert of Mongolia, a project that is almost unrivalled in the
Collaborative Tribal Restoration Initiative, centred on advancing
industry in its complexity and scale - where we are building one of
Indigenous Traditional Ecological Knowledge.
the largest block cave mines in the world to access an orebody
nearly the size of Manhattan island.
Management of Winu, our copper-gold discovery in Western
Australia, transitioned from the Exploration group to Copper.
At every site and asset, we maintain a strong focus on innovation
Over the year, we have focused on engaging Traditional Owners
and responsible production. We delivered strong safety and
on project plans, agreements and regulatory approvals while
financial performance despite significant challenges in 2021, from
continuing drilling activities. Importantly, we successfully piloted
managing the varying and complex impacts of the COVID-19
our approach for Net Zero Pathway studies, and developed an
pandemic across our global footprint, to major geotechnical issues
assessment methodology for physical resilience to climate change
at Oyu Tolgoi and Kennecott. Our team demonstrated resilience
risks, which will be replicated across other assets.
and technical capability in keeping our assets running and our
people safe.
In addition to copper, our product group also includes the
Simandou project in Guinea, the largest known undeveloped
We also continued our focus on safety and wellbeing outside of our
high-grade iron ore deposit in the world. High-grade iron ore is a
operations, strengthening our partnerships with communities,
key pillar for the decarbonisation of the steelmaking process,
stakeholders and Indigenous peoples with ancestral connections
and a critical priority as the world progresses on the road to a
neighbouring our assets – by providing critical support in areas
low-carbon future.
ranging from food security to wildfire response.
0.21
AIFR
(2020: 0.25)
59%
underlying
EBITDA margin
(product group
operations)
(2020: 50%)
$7.8bn
$2.6bn
gross product
sales
(2020: $5bn)
net cash
generated from
operating
activities
(2020: $1bn)
$4.0bn
underlying
EBITDA
(2020: $2.1bn)
$1.3bn
capital
expenditure
(2020: $1.7bn)
54
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Annual Report 2021 | riotinto.com
55
Kennecott copper mine. Utah, US.
Copper continued
Copper
2021 year-end results
Mined copper production (000 tonnes – Rio Tinto share)
Refined copper production (000 tonnes – Rio Tinto share)
Gross product sales (US$ millions)
Average realised copper price (US cents per pound)1
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (product group operations)
Underlying earnings (US$ millions)
Net cash generated from operating activities (US$ millions)2
Capital expenditure – excluding EAUs3 (US$ millions)
Free cash flow (US$ millions)
Underlying return on capital employed (product group operations)4
2021
494
202
7,827
424
3,969
59%
1,579
2,634
(1,328)
1,295
14%
Adjusted5
2020
528
155
4,969
283
2,084
50%
754
982
(1,659)
(687)
8%
Change
(7)%
30%
58%
50%
90%
109%
168%
(20)%
289%
1. Average realised price for all units sold. Realised price does not include the impact of the provisional pricing adjustments, which positively impacted revenues by $246 million (2020: $182 million).
2. Net cash generated from operating activities excludes the operating cash flows of equity accounted units (EAUs) but includes dividends from EAUs (Escondida).
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets. It excludes EAUs.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings (product group operations) excluding net interest divided by average capital employed.
5. Following a reorganisation of the management team in 2021, the Diamonds business is reported within Minerals and the Simandou iron ore project in Guinea is reported within Copper. 2020
comparatives have been adjusted accordingly.
In 2021, our Copper product group’s greenhouse gas emissions were
2.2Mt CO2e, a reduction of 1.2Mt CO2e or approximately 35%
compared to our 2018 emissions baseline*.
Safety and wellbeing
Our operations recorded a third fatality-free year, but there was a slight
deterioration in other key safety metrics, including a doubling of
reported potentially fatal incidents (PFIs) to 18, due in part to improving
the culture around reporting and transparency. We ended 2021 with
all-injury frequency rates (AIFRs) of 0.25 among employees and 0.17
among our contractors, compared to 0.21 and 0.28 respectively
in 2020.
In addition, we achieved a significant improvement in the effectiveness
of our controls through critical risk elimination and engineering actions.
Despite COVID-19 challenges, we completed over 200,000 critical risk
management verifications, including over 41,000 COVID-19 verifications.
Our people continued to sustain our operations through the pandemic
and we recognise the personal and professional challenges that many
have experienced. In line with the Group health and wellbeing
frameworks, we built on existing resources to deliver tailored and
integrated approaches to improving safety and wellbeing dialogue
among our workforce at each of our assets.
COVID-19 continues to present challenges and our workforce has
become fatigued – this was made clear by our People Survey. We are
adapting and introducing new workplace procedures to address these
challenges, as well as supporting vaccination rollouts across our assets
to try to ensure that our workforce remains protected, healthy and safe.
Enabling the low-carbon transition
Copper plays a key role in electrification and power generation,
including renewable energy and electric vehicles. A single 1MW
offshore wind turbine uses more than six tonnes of copper, and electric
vehicles have a copper intensity three to four times higher than
traditional combustion engine vehicles. Across our own operational
footprint, we are developing pathways to zero emissions through
multiple initiatives, supported by a cross-functional team responsible
for identifying a pipeline of emissions reduction projects.
– In partnership with ENGIE, we completed an emissions reduction
pilot study at Winu in early 2021 to better understand existing and
emerging technologies for improving renewable power to our
operations. Having evaluated the emissions profile and current
demands at one of our projects, plans are under way to apply this
approach across all Copper assets, expected to be completed
in 2022.
– At Kennecott, we are updating eight haul trucks with lower emission
engines, as well as conducting a trial to understand the potential for
using renewable diesel, for completion in 2022. We also received
approval for a 30MW solar power plant to be constructed in two phases:
5MW to be completed by 2023, expanding to 30MW by 2025.
– Following the closure of Kennecott’s coal-fired power plant in 2019,
the annual 1.5MWh Renewable Energy Certificates (RECs) acquired
far exceeded Kennecott’s requirements. In 2021, we transferred
excess RECs from Kennecott to Resolution Copper, resulting in zero
carbon emissions from electricity for both assets.
– At Oyu Tolgoi, we are working on several initiatives to reduce energy
consumption and introduce renewable solutions. Studies on the use
of solar power to provide energy to camp areas and other ancillary
buildings will be initiated in 2022. In addition, the opportunity for
wind-based renewable energy is being explored via a wind
feasibility assessment.
– At Winu, we piloted a new risk assessment methodology delivered
by EY to assess business resilience to potential physical impacts of
climate change. The assessment included key climatic variables
relevant to the mine site, transportation routes and key infrastructure.
The methodology and lessons learned from the Winu pilot will be
replicated across our sites and operations on a priority basis
beginning in 2022.
* The Copper group's carbon emissions are reported on an equity basis and therefore include Rio Tinto's 30% share in Escondida. The new power contract at Escondida, which replaces
fossil-fuel based electricity with renewable energy, came into effect in 2021, and is a major contributor to emissions reduction of the Copper group.
56
Annual Report 2021 | riotinto.com
Copper continued
Copper
2021 year-end results
Mined copper production (000 tonnes – Rio Tinto share)
Refined copper production (000 tonnes – Rio Tinto share)
Gross product sales (US$ millions)
Average realised copper price (US cents per pound)1
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (product group operations)
Underlying earnings (US$ millions)
Net cash generated from operating activities (US$ millions)2
Capital expenditure – excluding EAUs3 (US$ millions)
Free cash flow (US$ millions)
Underlying return on capital employed (product group operations)4
2021
494
202
7,827
424
3,969
59%
1,579
2,634
(1,328)
1,295
14%
Adjusted5
2020
528
155
4,969
283
2,084
50%
754
982
(1,659)
(687)
8%
Change
(7)%
30%
58%
50%
90%
109%
168%
(20)%
289%
1. Average realised price for all units sold. Realised price does not include the impact of the provisional pricing adjustments, which positively impacted revenues by $246 million (2020: $182 million).
2. Net cash generated from operating activities excludes the operating cash flows of equity accounted units (EAUs) but includes dividends from EAUs (Escondida).
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets. It excludes EAUs.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings (product group operations) excluding net interest divided by average capital employed.
5. Following a reorganisation of the management team in 2021, the Diamonds business is reported within Minerals and the Simandou iron ore project in Guinea is reported within Copper. 2020
comparatives have been adjusted accordingly.
Enabling the low-carbon transition
Copper plays a key role in electrification and power generation,
including renewable energy and electric vehicles. A single 1MW
In 2021, our Copper product group’s greenhouse gas emissions were
2.2Mt CO2e, a reduction of 1.2Mt CO2e or approximately 35%
compared to our 2018 emissions baseline*.
offshore wind turbine uses more than six tonnes of copper, and electric
vehicles have a copper intensity three to four times higher than
Safety and wellbeing
traditional combustion engine vehicles. Across our own operational
Our operations recorded a third fatality-free year, but there was a slight
footprint, we are developing pathways to zero emissions through
deterioration in other key safety metrics, including a doubling of
multiple initiatives, supported by a cross-functional team responsible
reported potentially fatal incidents (PFIs) to 18, due in part to improving
for identifying a pipeline of emissions reduction projects.
– In partnership with ENGIE, we completed an emissions reduction
pilot study at Winu in early 2021 to better understand existing and
emerging technologies for improving renewable power to our
operations. Having evaluated the emissions profile and current
demands at one of our projects, plans are under way to apply this
approach across all Copper assets, expected to be completed
in 2022.
– At Kennecott, we are updating eight haul trucks with lower emission
engines, as well as conducting a trial to understand the potential for
using renewable diesel, for completion in 2022. We also received
approval for a 30MW solar power plant to be constructed in two phases:
5MW to be completed by 2023, expanding to 30MW by 2025.
the culture around reporting and transparency. We ended 2021 with
all-injury frequency rates (AIFRs) of 0.25 among employees and 0.17
among our contractors, compared to 0.21 and 0.28 respectively
in 2020.
In addition, we achieved a significant improvement in the effectiveness
of our controls through critical risk elimination and engineering actions.
Despite COVID-19 challenges, we completed over 200,000 critical risk
management verifications, including over 41,000 COVID-19 verifications.
Our people continued to sustain our operations through the pandemic
and we recognise the personal and professional challenges that many
have experienced. In line with the Group health and wellbeing
frameworks, we built on existing resources to deliver tailored and
integrated approaches to improving safety and wellbeing dialogue
– Following the closure of Kennecott’s coal-fired power plant in 2019,
among our workforce at each of our assets.
COVID-19 continues to present challenges and our workforce has
become fatigued – this was made clear by our People Survey. We are
adapting and introducing new workplace procedures to address these
challenges, as well as supporting vaccination rollouts across our assets
to try to ensure that our workforce remains protected, healthy and safe.
the annual 1.5MWh Renewable Energy Certificates (RECs) acquired
far exceeded Kennecott’s requirements. In 2021, we transferred
excess RECs from Kennecott to Resolution Copper, resulting in zero
carbon emissions from electricity for both assets.
– At Oyu Tolgoi, we are working on several initiatives to reduce energy
consumption and introduce renewable solutions. Studies on the use
of solar power to provide energy to camp areas and other ancillary
buildings will be initiated in 2022. In addition, the opportunity for
wind-based renewable energy is being explored via a wind
feasibility assessment.
– At Winu, we piloted a new risk assessment methodology delivered
by EY to assess business resilience to potential physical impacts of
climate change. The assessment included key climatic variables
relevant to the mine site, transportation routes and key infrastructure.
The methodology and lessons learned from the Winu pilot will be
replicated across our sites and operations on a priority basis
beginning in 2022.
* The Copper group's carbon emissions are reported on an equity basis and therefore include Rio Tinto's 30% share in Escondida. The new power contract at Escondida, which replaces
fossil-fuel based electricity with renewable energy, came into effect in 2021, and is a major contributor to emissions reduction of the Copper group.
A decade of innovation, a lifetime of opportunity
Award-winning copper, enriched communities, an underground oasis,
and sustainable cashmere are among the many standout moments
during Oyu Tolgoi’s first ten years of operation.
Learn more about Oyu Tolgoi at riotinto.com/stories.
Financial performance
The improvement in our financial performance was primarily
attributable to strong market conditions, with the copper price
driven higher by renewed speculative interest, declining LME stocks,
a weaker US dollar and COVID-19 related supply constraints. We also
benefited from higher sales volumes of refined metal at Kennecott in
the US and temporarily higher gold grades at Oyu Tolgoi in Mongolia.
These compensated for lower volumes at Escondida in Chile, where
ongoing preventive measures in response to COVID-19 continued to
impact workforce availability. As a result, underlying EBITDA was up
90% to $4.0 billion, with margins rising to 59%.
Price movements for all products benefited underlying EBITDA by
$2.2 billion for the full year. Our average realised copper price increased
by 50% to 424 US cents per pound, even before taking into account the
provisional pricing benefit to revenues of $246 million in 2021, while the
benchmark gold price rose just 2% to $1,799 per ounce. We incurred
additional costs related to our response to COVID-19, higher energy
costs, notably in the US driven by higher diesel costs, and higher unit
costs at Escondida due to lower concentrator throughput. These were
offset by an improvement in volumes at Oyu Tolgoi and higher refined
copper volumes at Kennecott, despite a furnace failure in September
2021, which was followed by safe restart in October. Downtime in 2020
was more significant, due to an earthquake and a major smelter
maintenance shutdown.
Our copper unit costs, at 82 cents per pound in 2021, were 26% lower
than in 2020, but marginally above guidance of 75 to 80 cents per
pound. Lower throughput and grades at Escondida and higher
royalties, in line with stronger prices, at Kennecott and Oyu Tolgoi were
offset by higher production of copper and, in particular, gold at Oyu
Tolgoi, driven by higher grades.
We continue to advance our future evaluation projects, in particular at
Resolution Copper in Arizona, at Winu in Western Australia and at the
Simandou iron ore project in Guinea.
We generated $2.6 billion in net cash from our operating activities, a
168% increase on 2020, from the same drivers as underlying EBITDA
and a $0.8 billion increase in dividends from our 30% equity holding in
Escondida to $1.4 billion, partly offset by a $0.4 billion tax payment in
Mongolia. Free cash flow of $1.3 billion reflected the higher operating
cash flow and high level of capital investment ($1.3 billion), mainly
relating to the ongoing development of the Oyu Tolgoi underground
project, where we have a 34% effective interest but fully consolidate
on the basis of management control.
Review of operations
Mined copper, at 494 thousand tonnes, was 7% lower than 2020, due
to lower recoveries and throughput at Escondida as a result of the
prolonged impact of COVID-19, partly offset by higher recoveries and
grades at Oyu Tolgoi and Kennecott.
Kennecott's mined copper production was 14% higher than 2020, with
higher grades and recovery but less than expected production due to
a slope failure in May. The transition to the south wall is complete, with
copper head grade exceeding 0.5% in the second half. Refined
copper production was 69% higher than 2020 as a result of improved
performance through most of the year relative to 2020, despite the
furnace failure in September 2021. The smelter was safely restarted in
late October and has been stable since. In 2020, there was significant
downtime following an earthquake and major maintenance.
Escondida's mined copper production was 17% lower than 2020,
mainly due to 10% lower grade in ore feed to the concentrators, 4%
lower throughput and 31% lower recoverable copper in ore stacked for
leaching, mostly caused by continuous COVID-19 restrictions in 2021
which impacted mine development due to lower workforce availability.
Oyu Tolgoi's mined copper production from the open pit was 9%
higher than 2020 with improved performance, a temporary increase in
grades and increased mill feed following geotechnical issues in the first
half, partly offset by lower staffing levels due to COVID-19.
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57
Copper continued
Our principal projects and growth options –
Oyu Tolgoi underground project
The Oyu Tolgoi underground project in Mongolia is expected to
produce 500,000 tonnes of copper per year on average, from 2028 to
2036, from the open pit and underground and an average of around
350,000 tonnes for a further five years (from 2037 to 2041)1, compared
to 163,000 tonnes from the open pit in 2021. The underground Ore
Reserve has an average copper grade of 1.52%, which is more than
three times higher than the open pit Ore Reserve, and contains 0.31
grammes of gold per tonne.2
By 2030, Oyu Tolgoi is expected to be the fourth-largest copper mine
in the world. It is a complex greenfield project comprising an
underground block cave mine and copper concentrator as well as an
open pit mine which has been successfully operating for ten years. It is
also one of the most modern, safe, sustainable and water-efficient
operations globally, with a workforce which is more than 96%
Mongolian. Since 2010, Oyu Tolgoi has spent a total of $13.4 billion
in-country, including $3.6 billion of taxes, fees and other payments to
Mongolian national and local governments. The size and quality of this
Tier 1 asset provides additional options, which could see production
sustained for many decades.
In December 2021, the updated Resources and Reserves were
registered in Mongolia in accordance with Mongolian regulations, and
approval from the Mongolian authorities of the 2022 Annual Mine Plan
was received.
A comprehensive agreement was reached with all partners on
25 January 2022, resetting the relationship between the partners,
increasing the value the project delivers for Mongolia, and allowing
underground operations to commence.
As part of a comprehensive package, Turquoise Hill Resources (TRQ)
agreed to waive in full, funding balances arising from a carry account
loan with Erdenes Oyu Tolgoi (EOT) of $2.4 billion, comprising the
amount of common share investments in Oyu Tolgoi LLC funded by TRQ
on behalf of EOT to build the project to date, plus accrued interest.
The Parliament of Mongolia has approved a resolution (Resolution 103)
that substantially resolves the outstanding issues that have been
subject to negotiations with the Government of Mongolia over the last
two years in relation to addressing Parliament Resolution 92
(December 2019).
An updated funding plan has been agreed to address the current
estimated funding requirement for the project. Until sustainable
underground production is achieved, Oyu Tolgoi will be funded by
cash on hand and rescheduling of existing debt repayments, together
with a pre-paid copper concentrate sales agreement with TRQ. This is
in line with restrictions on debt financing contained in Resolution 103,
passed by the Parliament of Mongolia on 30 December 2021.
Rio Tinto and TRQ have amended the Heads of Agreement signed in
April 2021 to ensure they appropriately fund Oyu Tolgoi, including
seeking to reschedule existing project finance repayments and raising
additional supplemental debt on terms acceptable to all the parties, as
well as a loan facility from Rio Tinto and up to $1.5 billion of equity
offerings by TRQ, with an initial offering of at least $650 million in 2022.
The capital forecast stands at $6.925 billion, including $175 million of
estimated COVID-19 impacts to the end of 20213, with sustainable
production expected in the first half of 2023. A reforecast will be
undertaken in the first half of 2022 to determine a revised cost and
schedule estimate that will reflect any further COVID-19 impacts; any
additional time-based impacts and market price escalation arising
from resequencing due to 2021 budget constraints (as a result of the
Oyu Tolgoi Board not approving the capital budget uplift at the time the
Definitive Estimate was finalised); and updated risk ranging reflecting
the latest project execution risks.
The Oyu Tolgoi Board has also approved the signing of an electricity
supply agreement to provide Oyu Tolgoi with a long-term source of
power from the Mongolian grid, under terms already agreed with the
Government of Mongolia. In meeting Oyu Tolgoi’s commitment to
sourcing power domestically, we will work with the Government to
support long-term renewable energy generation in support of the
Mongolian grid. The Government of Mongolia and Oyu Tolgoi are in
constructive discussions with the Inner Mongolia Power International
Cooperation Company (IMPIC) for an extension of current power
import arrangements beyond the current agreement of July 2023.
IMPIC has indicated its support for an extension and commercial terms
are being finalised.
Other principal projects and growth options
The $0.9 billion investment in phase one of the south wall pushback
project at Kennecott, extending mine life to 2026, is complete and we
are gradually accessing higher grades. The $1.5 billion phase two
investment will further extend pre-stripping and support additional
infrastructure development, allowing mining to continue into a new
area of the ore body between 2026 and 2032, generating attractive
returns. Pre-feasibility studies are also being progressed to extend
open-pit mining beyond 2032, with a further pushback of the north
wall. In July, we announced the approval of a $108 million investment to
support an underground mine below the existing open pit, with studies
due to be complete by 2024. Potential underground mining would
occur concurrently with open pit operations and result in increased
copper output.
At the Resolution Copper project in Arizona, the US Forest Service
(USFS) published the Final Environmental Impact Statement (FEIS) in
January 2021, six months behind the target date in its original project
schedule set in 2015 by the Obama Administration. In March 2021,
the US Department of Agriculture directed the USFS to rescind the
FEIS to allow the agency to undertake further review and consultation.
Resolution Copper has used this time to deepen dialogue and
partnerships with local communities and Native American tribes, building
on the significant consultation undertaken over the past decade.
1. The 500ktpa target (stated as recovered metal) for the Oyu Tolgoi underground and open pit mines is underpinned 17% by Proved Ore Reserves and 83% by Probable Ore Reserves for the
years 2028-2036. The 350ktpa production target for the following five years is underpinned 18% by Proved Ore Reserves and 82% by Probable Ore Reserves. These production targets have
been scheduled from current mine designs by Competent Persons in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Minerals Resources and
Ore Reserves, 2012 Edition (the JORC code).
2. This information in relation to the underground Ore Reserves was previously reported in the release to the ASX dated 16 December 2020. The Competent Persons responsible for reporting the
Ore Reserves were Ferrin Prince and Mark Bixley, Competent Persons, who are a Member and Fellow respectively of The Australasian Institute of Mining and Metallurgy. Rio Tinto is not aware of
any new information or data that materially affect these Ore Reserve estimates and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply
and have not materially changed. The form and context in which the Competent Persons’ findings are presented have not been materially modified from the release dated 16 December 2020.
3. These estimates exclude any impacts of delays to work schedules caused by restricted approved budgets since the start of 2021. This, together with any ongoing COVID-19 impacts,
will be assessed following the commencement of underground operations with further updates provided to the market in due course. Panels 1 and 2 studies will be ongoing throughout 2022.
Further study work is also under way to assess the extraction methodology and ultimate recovery of the Panel 0 recoverable pillars.
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Copper continued
Strategic report
We continued to engage with the Guinean authorities on potential
mechanisms for collaboration on infrastructure development,
while seeking mutual and sustainable benefits by developing our
projects in line with international social and environmental standards
and practices. We have continued to work closely with local
communities, supporting them through the COVID-19 pandemic.
We remain committed to the development of Simandou, one of the
world's largest and richest iron ore deposits, demand for which is
increasing as steelmakers look to reduce carbon emissions, while
delivering benefits to our partners, local communities and the people
of Guinea.
Our people
Our people are a critical differentiator as we future-proof our business
and continue the decarbonisation journey. One example this year of
our people’s role in our future success could be seen at Kennecott,
where we are building on a foundation of more than 100 years of
pioneering history.
Our Kennecott Concentrator was chosen as the first site across
Rio Tinto to test, improve and embed the Rio Tinto Safe Production
System (RTSPS). The system is different to what we have tried in the
past. This time we are designing and building it from the ground up,
with our people’s voices being heard right across the business. Critical
to our success will be how we lead. Our leaders are becoming coaches
so our people have the autonomy they need to make decisions at the
right level, to innovate, and to problem solve. Our people are building a
production system that simplifies what we do, upskills our workforce in
problem solving and brings consistency to our operations by sharing
best practices and continuously improving them.
As we continue to roll out RTSPS, we are building the foundation of a
new way of working that is future-ready and brings us together to
become the best operator.
There are five different Native American groups, the O’odham, Hopi,
Pueblo of Zuni, Western Apache, and Yavapai, who traditionally used
and occupied this land, each with unique histories and interactions,
cultural traditions, and perspectives on the way of life. The O’odham,
Hopi and Zuni have ties to this land dating back thousands of years.
From these five groups, there are 11 federally recognised tribes which
establishes them as domestic dependent nations within the US with
inherent sovereign authority who are part of the formal consultation
process, all of whom have different views around this project. We are
already progressing partnerships with over half of these tribes and our
aim is to have a mutual dialogue with all tribes. For example, in the
second quarter of 2021 the USFS, in partnership with Resolution
Copper and Western Apache Tribal elders began a restoration effort
for Emory Oak trees, guided by Indigenous Traditional and Ecological
Knowledge. The project has advanced restoration activities at a dozen
priority Emory Oak Groves identified by Western Apache elders on
Arizona National Forests, White Mountain Apache Tribal lands and
Resolution Copper private property.
In 2021, we also hosted tribal leaders and elders in our business
and local community to share the importance of their culture and
acknowledge their ancestral ties to Arizona’s landscape. Throughout
the year, we continued to support fieldwork by Native American tribal
monitors who use traditional knowledge to identify ancestral sites, seeps,
springs and medicinal plants on Resolution Copper private lands and
partner with us on preservation and co-management approaches.
At the Winu copper-gold project in the Paterson Province of Western
Australia, we continue to actively engage with the Traditional Owners
and have begun discussions on the initial scope and mine design with
Western Australia’s Environmental Protection Authority. We have taken
particular care to build transparent, credible and trusting relationships
with the Traditional Owners and continue to prioritise building these
partnerships moving forward. Drilling, fieldwork and development
activities continue to progress to schedule. Timelines to sanction and
first production will be disclosed on completion of relevant agreements
and permitting processes.
At the Simandou iron ore project4 in Guinea, technical optimisation
work continued in 2021 with the support of China-based institutions
and partners. Progress continued on updating and implementing
our 2012 Social and Environmental Impact Assessment, alongside
a new drilling programme that commenced in the fourth quarter.
We established a new office in Conakry to accommodate our
expanding in-country team and have issued expressions of interest
for construction and early development works and in-country activities
to be carried out in 2022.
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59
4. Operating under the Simfer joint venture where the government of Guinea holds 15% and Simfer Jersey holds 85%. Simfer Jersey is owned by Chalco Iron Ore Holdings (CIOH) (47%) and Rio
Tinto (53%). CIOH is owned by Chinalco (75%), Baosteel Resources (20%), China Civil Engineering Construction Corporation (CCECC) (2.5%) and China Harbour Engineering Company
(CHEC) (2.5%). This structure has been in place since 2017.
Our principal projects and growth options –
Oyu Tolgoi underground project
The Oyu Tolgoi underground project in Mongolia is expected to
produce 500,000 tonnes of copper per year on average, from 2028 to
2036, from the open pit and underground and an average of around
350,000 tonnes for a further five years (from 2037 to 2041)1, compared
to 163,000 tonnes from the open pit in 2021. The underground Ore
Reserve has an average copper grade of 1.52%, which is more than
three times higher than the open pit Ore Reserve, and contains 0.31
grammes of gold per tonne.2
Rio Tinto and TRQ have amended the Heads of Agreement signed in
April 2021 to ensure they appropriately fund Oyu Tolgoi, including
seeking to reschedule existing project finance repayments and raising
additional supplemental debt on terms acceptable to all the parties, as
well as a loan facility from Rio Tinto and up to $1.5 billion of equity
offerings by TRQ, with an initial offering of at least $650 million in 2022.
The capital forecast stands at $6.925 billion, including $175 million of
estimated COVID-19 impacts to the end of 20213, with sustainable
production expected in the first half of 2023. A reforecast will be
undertaken in the first half of 2022 to determine a revised cost and
schedule estimate that will reflect any further COVID-19 impacts; any
additional time-based impacts and market price escalation arising
By 2030, Oyu Tolgoi is expected to be the fourth-largest copper mine
from resequencing due to 2021 budget constraints (as a result of the
in the world. It is a complex greenfield project comprising an
Oyu Tolgoi Board not approving the capital budget uplift at the time the
underground block cave mine and copper concentrator as well as an
Definitive Estimate was finalised); and updated risk ranging reflecting
open pit mine which has been successfully operating for ten years. It is
the latest project execution risks.
also one of the most modern, safe, sustainable and water-efficient
operations globally, with a workforce which is more than 96%
Mongolian. Since 2010, Oyu Tolgoi has spent a total of $13.4 billion
in-country, including $3.6 billion of taxes, fees and other payments to
Mongolian national and local governments. The size and quality of this
Tier 1 asset provides additional options, which could see production
sustained for many decades.
In December 2021, the updated Resources and Reserves were
The Oyu Tolgoi Board has also approved the signing of an electricity
supply agreement to provide Oyu Tolgoi with a long-term source of
power from the Mongolian grid, under terms already agreed with the
Government of Mongolia. In meeting Oyu Tolgoi’s commitment to
sourcing power domestically, we will work with the Government to
support long-term renewable energy generation in support of the
Mongolian grid. The Government of Mongolia and Oyu Tolgoi are in
constructive discussions with the Inner Mongolia Power International
registered in Mongolia in accordance with Mongolian regulations, and
Cooperation Company (IMPIC) for an extension of current power
approval from the Mongolian authorities of the 2022 Annual Mine Plan
import arrangements beyond the current agreement of July 2023.
was received.
A comprehensive agreement was reached with all partners on
25 January 2022, resetting the relationship between the partners,
increasing the value the project delivers for Mongolia, and allowing
underground operations to commence.
As part of a comprehensive package, Turquoise Hill Resources (TRQ)
agreed to waive in full, funding balances arising from a carry account
loan with Erdenes Oyu Tolgoi (EOT) of $2.4 billion, comprising the
amount of common share investments in Oyu Tolgoi LLC funded by TRQ
on behalf of EOT to build the project to date, plus accrued interest.
The Parliament of Mongolia has approved a resolution (Resolution 103)
that substantially resolves the outstanding issues that have been
subject to negotiations with the Government of Mongolia over the last
two years in relation to addressing Parliament Resolution 92
(December 2019).
An updated funding plan has been agreed to address the current
estimated funding requirement for the project. Until sustainable
underground production is achieved, Oyu Tolgoi will be funded by
cash on hand and rescheduling of existing debt repayments, together
with a pre-paid copper concentrate sales agreement with TRQ. This is
in line with restrictions on debt financing contained in Resolution 103,
passed by the Parliament of Mongolia on 30 December 2021.
IMPIC has indicated its support for an extension and commercial terms
are being finalised.
Other principal projects and growth options
The $0.9 billion investment in phase one of the south wall pushback
project at Kennecott, extending mine life to 2026, is complete and we
are gradually accessing higher grades. The $1.5 billion phase two
investment will further extend pre-stripping and support additional
infrastructure development, allowing mining to continue into a new
area of the ore body between 2026 and 2032, generating attractive
returns. Pre-feasibility studies are also being progressed to extend
open-pit mining beyond 2032, with a further pushback of the north
wall. In July, we announced the approval of a $108 million investment to
support an underground mine below the existing open pit, with studies
due to be complete by 2024. Potential underground mining would
occur concurrently with open pit operations and result in increased
copper output.
At the Resolution Copper project in Arizona, the US Forest Service
(USFS) published the Final Environmental Impact Statement (FEIS) in
January 2021, six months behind the target date in its original project
schedule set in 2015 by the Obama Administration. In March 2021,
the US Department of Agriculture directed the USFS to rescind the
FEIS to allow the agency to undertake further review and consultation.
Resolution Copper has used this time to deepen dialogue and
partnerships with local communities and Native American tribes, building
on the significant consultation undertaken over the past decade.
1. The 500ktpa target (stated as recovered metal) for the Oyu Tolgoi underground and open pit mines is underpinned 17% by Proved Ore Reserves and 83% by Probable Ore Reserves for the
years 2028-2036. The 350ktpa production target for the following five years is underpinned 18% by Proved Ore Reserves and 82% by Probable Ore Reserves. These production targets have
been scheduled from current mine designs by Competent Persons in accordance with the requirements of the Australasian Code for Reporting of Exploration Results, Minerals Resources and
Ore Reserves, 2012 Edition (the JORC code).
2. This information in relation to the underground Ore Reserves was previously reported in the release to the ASX dated 16 December 2020. The Competent Persons responsible for reporting the
Ore Reserves were Ferrin Prince and Mark Bixley, Competent Persons, who are a Member and Fellow respectively of The Australasian Institute of Mining and Metallurgy. Rio Tinto is not aware of
any new information or data that materially affect these Ore Reserve estimates and confirms that all material assumptions and technical parameters underpinning the estimates continue to apply
and have not materially changed. The form and context in which the Competent Persons’ findings are presented have not been materially modified from the release dated 16 December 2020.
3. These estimates exclude any impacts of delays to work schedules caused by restricted approved budgets since the start of 2021. This, together with any ongoing COVID-19 impacts,
will be assessed following the commencement of underground operations with further updates provided to the market in due course. Panels 1 and 2 studies will be ongoing throughout 2022.
Further study work is also under way to assess the extraction methodology and ultimate recovery of the Panel 0 recoverable pillars.
Minerals
Our Minerals portfolio encompasses a global suite of
businesses producing materials essential for sustainable
development in a decarbonising world. Our products are
crucial to a wide variety of industries, ranging from agriculture
to renewable energy and electric vehicles.
Our Minerals product group produces high-grade, low-impurity
iron ore pellets and concentrate, titanium dioxide, diamonds, and
borates from operations in Canada, Madagascar, South Africa and
the US. We contribute to Rio Tinto’s sustainable growth by
unlocking value from our high-grade orebodies and developing
new materials. By reprocessing mining waste to extract valuable
by-products, we are expanding our frontiers and meeting the
increasing demand for critical minerals. We apply innovative
technology and processes to deliver products that contribute to a
decarbonising and sustainable world.
Our borates business, U.S. Borax, supplies almost 30% of the
global demand for borates. It is used in everything from agriculture
to fibreglass insulation and in materials for renewable energy –
for both wind and solar projects.
Our iron and titanium business is a major global producer of
high-grade titanium dioxide, with operations in Canada,
Madagascar and South Africa. We also operate a metal powder
annealing facility in Suzhou, China. Titanium dioxide is used to
whiten a wide range of products, from paint and textiles to paper.
When it is smelted and processed into metallic form, titanium is light,
resilient and corrosion-resistant. The nature of the orebodies allows
us to produce by-products such as monazite and scandium.
Located in northeast Canada, the Iron Ore Company of Canada
(IOC) is a fully integrated business with mine, processing, railway,
and port facilities. IOC is the leading North American producer and
exporter of premium iron ore pellets and high-grade concentrate
with some of the lowest levels of impurities in the market.
The Diavik Diamond Mine is known for its beautiful and sought-after
white diamonds. Situated 200km south of the Arctic Circle, Diavik is
committed to protecting the biodiversity of this delicate ecosystem.
The site is home to an award-winning wind farm that has offset over
28 million litres of diesel since its inception – prioritising
environmental sustainability in the way that we mine.
Rio Tinto’s 2021 Argyle Pink Diamonds™ Tender of 70 rare pink and
red diamonds delivered the most significant record breaking results
in its 38 year history. We will retain and manage the Argyle Pink
Diamonds brand and associated intellectual property through a
proprietary Argyle pink diamond trading platform, certification
processes and ongoing collaborations with trusted partners.
We have made significant progress across critical minerals that
are essential for a low-carbon future through our lithium and
scandium projects. This year, we entered into a binding agreement
to acquire the Rincon lithium project in Argentina from Rincon
Mining, for $825 million. We also committed $2.4 billion to the
Jadar lithium-borates project in Serbia. The project remains
subject to receiving all relevant approvals, permits and licences.
In January 2022, the Government of Serbia cancelled the Spatial
Plan for the Jadar project and required all related permits to be
revoked. We remain committed to exploring all options and are
reviewing the legal basis of the decision and the implications for our
activities and people in Serbia.
We also successfully produced battery-grade lithium from waste
rock at a demonstration plant at the Boron mine in California, US.
We are extracting scandium sustainably from the waste streams of
titanium dioxide production, without the need for any additional
mining at our new commercial-scale demonstration plant at the
Rio Tinto Fer et Titane (RTFT) metallurgical complex in Sorel-Tracy,
Quebec. Scandium oxide is used to improve the performance of
solid oxide fuel cells and to produce high-performance aluminium-
scandium alloys for the aerospace, defence, and 3D printing industries.
Looking ahead, the Minerals product group strives to be a leader in
the green economy, a growth contributor, and an employer and
partner of choice. Collaboration with our stakeholders, including
governments and the communities surrounding our operations,
is central to our strategy.
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Minerals
Working together for a better future
6
mine sites
3
7
by-products
recovered from
waste
smelters,
refineries, and
processing
plants
9,000
employees
Our Minerals portfolio encompasses a global suite of
businesses producing materials essential for sustainable
development in a decarbonising world. Our products are
crucial to a wide variety of industries, ranging from agriculture
to renewable energy and electric vehicles.
Snapshot of the year
0.38
AIFR
(2020: 0.43)
43%
$2.6bn
$6.5bn
$1.4bn
underlying
EBITDA margin
(product group
operations)
(2020: 35%)
underlying
EBITDA
gross product
sales
(2020: $1.7bn)
(2020: $5.2bn)
net cash
generated from
operating
activities
(2020: $1.1bn)
3.4Mt
18,000
CO2e emissions
(our share)
solar panels to
power our QIT
Madagascar
Minerals
operations by
end of 2022
$0.6bn
capital
expenditure
(2020: $0.5bn)
Our Minerals product group produces high-grade, low-impurity
Rio Tinto’s 2021 Argyle Pink Diamonds™ Tender of 70 rare pink and
iron ore pellets and concentrate, titanium dioxide, diamonds, and
red diamonds delivered the most significant record breaking results
borates from operations in Canada, Madagascar, South Africa and
in its 38 year history. We will retain and manage the Argyle Pink
the US. We contribute to Rio Tinto’s sustainable growth by
Diamonds brand and associated intellectual property through a
unlocking value from our high-grade orebodies and developing
proprietary Argyle pink diamond trading platform, certification
new materials. By reprocessing mining waste to extract valuable
processes and ongoing collaborations with trusted partners.
by-products, we are expanding our frontiers and meeting the
increasing demand for critical minerals. We apply innovative
technology and processes to deliver products that contribute to a
decarbonising and sustainable world.
We have made significant progress across critical minerals that
are essential for a low-carbon future through our lithium and
scandium projects. This year, we entered into a binding agreement
to acquire the Rincon lithium project in Argentina from Rincon
Our borates business, U.S. Borax, supplies almost 30% of the
Mining, for $825 million. We also committed $2.4 billion to the
global demand for borates. It is used in everything from agriculture
Jadar lithium-borates project in Serbia. The project remains
to fibreglass insulation and in materials for renewable energy –
subject to receiving all relevant approvals, permits and licences.
for both wind and solar projects.
Our iron and titanium business is a major global producer of
high-grade titanium dioxide, with operations in Canada,
Madagascar and South Africa. We also operate a metal powder
annealing facility in Suzhou, China. Titanium dioxide is used to
In January 2022, the Government of Serbia cancelled the Spatial
Plan for the Jadar project and required all related permits to be
revoked. We remain committed to exploring all options and are
reviewing the legal basis of the decision and the implications for our
activities and people in Serbia.
whiten a wide range of products, from paint and textiles to paper.
We also successfully produced battery-grade lithium from waste
When it is smelted and processed into metallic form, titanium is light,
rock at a demonstration plant at the Boron mine in California, US.
resilient and corrosion-resistant. The nature of the orebodies allows
us to produce by-products such as monazite and scandium.
We are extracting scandium sustainably from the waste streams of
titanium dioxide production, without the need for any additional
Located in northeast Canada, the Iron Ore Company of Canada
mining at our new commercial-scale demonstration plant at the
(IOC) is a fully integrated business with mine, processing, railway,
Rio Tinto Fer et Titane (RTFT) metallurgical complex in Sorel-Tracy,
and port facilities. IOC is the leading North American producer and
Quebec. Scandium oxide is used to improve the performance of
exporter of premium iron ore pellets and high-grade concentrate
solid oxide fuel cells and to produce high-performance aluminium-
with some of the lowest levels of impurities in the market.
scandium alloys for the aerospace, defence, and 3D printing industries.
The Diavik Diamond Mine is known for its beautiful and sought-after
Looking ahead, the Minerals product group strives to be a leader in
white diamonds. Situated 200km south of the Arctic Circle, Diavik is
the green economy, a growth contributor, and an employer and
committed to protecting the biodiversity of this delicate ecosystem.
partner of choice. Collaboration with our stakeholders, including
The site is home to an award-winning wind farm that has offset over
governments and the communities surrounding our operations,
28 million litres of diesel since its inception – prioritising
is central to our strategy.
environmental sustainability in the way that we mine.
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61
QIT Madagascar Minerals (QMM).
Minerals continued
Minerals
2021 year-end results
Iron ore pellets and concentrates production1 (million tonnes – Rio Tinto share)
Titanium dioxide slag production (000 tonnes – Rio Tinto share)
Borates production (000 tonnes – Rio Tinto share)
Diamonds production (000 carats – Rio Tinto share)2
Gross product sales (US$ millions)
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (product group operations)
Underlying earnings (US$ millions)
Net cash generated from operating activities (US$ millions)
Capital expenditure (US$ millions)3
Free cash flow (US$ millions)
Underlying return on capital employed (product group operations)4
1.
Iron Ore Company of Canada continues to be reported within Minerals.
2021
9.7
1,014
488
3,847
6,481
2,603
43%
888
1,433
(644)
762
21%
Adjusted5
2020
10.4
1,120
480
14,676
5,170
1,710
35%
580
1,122
(455)
642
14%
Change
(6)%
(9)%
2%
(74)%
25%
52%
53%
28%
42%
19%
2. Diamonds production for 2021 solely relates to Diavik Diamond Mine, following the closure of Argyle in 2020. On 17 November 2021, Rio Tinto’s interest in Diavik increased from 60% to 100%.
Production and financials reflect this from 1 November 2021.
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings (product group operations) excluding net interest divided by average capital employed.
5. Following a reorganisation of the management team in 2021, the Diamonds business is reported within Minerals and the Simandou iron ore project in Guinea is reported within Copper. 2020
comparatives have been adjusted accordingly.
Enabling the low-carbon transition
The minerals we produce are essential to a low-carbon future.
Our premium iron ore pellets and high-grade concentrate from the
Iron Ore Company of Canada (IOC) enable our customers to operate
more productively, reduce emissions and produce higher-quality steel
for the modern world. With lithium, we will support the growing demand
for electric vehicles and renewable energy storage. We also recover
valuable minerals from waste, making the most of what we extract from
the ground.
The Minerals product group supports our pathway to zero emissions
through several initiatives:
– We are investing in battery manufacturer InoBat Auto to support the
development of a battery ecosystem in Europe, one of the world’s
largest and rapidly growing electric vehicle (EV) markets. InoBat is a
European-based battery technology and manufacturing company
with a battery research and development centre and pilot battery
line under development in Voderady, Slovakia. Our investment
follows a memorandum of understanding (MoU) signed with InoBat
in May 2021 to help fund and complete this facility. In our MoU, we
have agreed to work together to progress the establishment of a
“cradle-to-cradle” EV battery value chain in Europe – covering the
full commodity lifecycle from mining through to recycling of lithium.
– We have partnered with the US Department of Energy’s Critical
Materials Institute (CMI) to develop processes to extract lithium from
waste material.
– In December, we announced the launch of the construction of the
renewable energy plant that will power our QIT Madagascar
Minerals (QMM) operations, with our partner CrossBoundary Energy.
The plant will consist of over 18,000 solar panels and four wind
turbines. The solar plant is expected to be operational in 2022, and
the wind power facility will be completed in 2023.
– At the IOC operations in Canada, we are working on developing
low-emissions process heat technology, including the trialling of
plasma torches.
– Our Diavik Diamond Mine reduced diesel consumption by
approximately 4.5 million litres in 2021 alone through their award-
winning wind farm. This amount accounts for about 10% of Diavik’s
annual diesel consumption.
– Boron in California, US, started to trial the first renewable diesel-
powered haul truck in Rio Tinto. Manufactured using organic
biomass, the renewable diesel fuel is set to produce up to 80% fewer
greenhouse gas emissions than regular diesel on a lifecycle basis.
– We are pursuing a project to produce hot briquetted iron (HBI) with
high-grade iron ore and hydro-based green hydrogen in Canada.
– We are also working on initiatives that will help decarbonise our
energy supply in Africa and implement alternative industrial heat
sources and reductants for our industrial processes across
our operations.
In 2021, our Minerals product group’s absolute greenhouse emissions
were 3.4Mt CO2e, a reduction of approximately 8% from 2018 levels.
The decrease in emissions was mainly driven by reductions in
production and associated energy use at Richards Bay Minerals (RBM)
due to halted operations.
Safety and wellbeing
Our Minerals operations recorded notable progress across key safety
metrics this year. For a third year in a row, we recorded zero fatalities.
The rate of injuries decreased, with our all-injury frequency rate (AIFR)
at 0.38 compared to 0.43 in 2020. The number of potentially fatal
incidents (PFI) was 47% lower than in 2020. For 2021, we had six
process safety incidents, up from five last year. Our focus on reducing
injuries at the sites results from our continued implementation of best
practice standards in health and safety, and completing significant
projects to remove our people from hazard exposure. We have
thoroughly reviewed our risks across the product group and improved
controls to mitigate and manage them. We strongly believe our leaders
have a key role in our health and safety performance, and we were able
to continue our coaching approach across all our sites despite
COVID-19 restrictions. We have also made significant progress with
our contractors’ safety performance, resulting in an AIFR of 0.22,
compared to 0.38 in 2020.
The QMM team marked a significant safety milestone by reaching,
at the end of 2021, 14 million hours worked without lost-time incidents.
The RBM team recorded exceptional safety performance with an
AIFR of 0.06 in 2021. The Jadar project recorded three years without
recordable injuries, and the Borates packaging and distribution
facility in Nules, Spain, reached an impressive 25 years without a
lost-time incident.
62
Annual Report 2021 | riotinto.com
Minerals continued
Minerals
2021 year-end results
Iron ore pellets and concentrates production1 (million tonnes – Rio Tinto share)
Titanium dioxide slag production (000 tonnes – Rio Tinto share)
Borates production (000 tonnes – Rio Tinto share)
Diamonds production (000 carats – Rio Tinto share)2
Gross product sales (US$ millions)
Underlying EBITDA (US$ millions)
Underlying EBITDA margin (product group operations)
Underlying earnings (US$ millions)
Net cash generated from operating activities (US$ millions)
Capital expenditure (US$ millions)3
Free cash flow (US$ millions)
Underlying return on capital employed (product group operations)4
1.
Iron Ore Company of Canada continues to be reported within Minerals.
Production and financials reflect this from 1 November 2021.
2021
9.7
1,014
488
3,847
6,481
2,603
43%
888
1,433
(644)
762
21%
Adjusted5
2020
10.4
1,120
480
14,676
5,170
1,710
35%
580
1,122
(455)
642
14%
Change
(6)%
(9)%
2%
(74)%
25%
52%
53%
28%
42%
19%
2. Diamonds production for 2021 solely relates to Diavik Diamond Mine, following the closure of Argyle in 2020. On 17 November 2021, Rio Tinto’s interest in Diavik increased from 60% to 100%.
3. Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets.
4. Underlying return on capital employed (ROCE) is defined as underlying earnings (product group operations) excluding net interest divided by average capital employed.
5. Following a reorganisation of the management team in 2021, the Diamonds business is reported within Minerals and the Simandou iron ore project in Guinea is reported within Copper. 2020
comparatives have been adjusted accordingly.
Enabling the low-carbon transition
The minerals we produce are essential to a low-carbon future.
Our premium iron ore pellets and high-grade concentrate from the
Iron Ore Company of Canada (IOC) enable our customers to operate
more productively, reduce emissions and produce higher-quality steel
for the modern world. With lithium, we will support the growing demand
– Boron in California, US, started to trial the first renewable diesel-
powered haul truck in Rio Tinto. Manufactured using organic
biomass, the renewable diesel fuel is set to produce up to 80% fewer
greenhouse gas emissions than regular diesel on a lifecycle basis.
– We are pursuing a project to produce hot briquetted iron (HBI) with
high-grade iron ore and hydro-based green hydrogen in Canada.
for electric vehicles and renewable energy storage. We also recover
– We are also working on initiatives that will help decarbonise our
valuable minerals from waste, making the most of what we extract from
energy supply in Africa and implement alternative industrial heat
the ground.
The Minerals product group supports our pathway to zero emissions
through several initiatives:
– We are investing in battery manufacturer InoBat Auto to support the
development of a battery ecosystem in Europe, one of the world’s
largest and rapidly growing electric vehicle (EV) markets. InoBat is a
European-based battery technology and manufacturing company
with a battery research and development centre and pilot battery
line under development in Voderady, Slovakia. Our investment
follows a memorandum of understanding (MoU) signed with InoBat
in May 2021 to help fund and complete this facility. In our MoU, we
have agreed to work together to progress the establishment of a
“cradle-to-cradle” EV battery value chain in Europe – covering the
full commodity lifecycle from mining through to recycling of lithium.
sources and reductants for our industrial processes across
our operations.
In 2021, our Minerals product group’s absolute greenhouse emissions
were 3.4Mt CO2e, a reduction of approximately 8% from 2018 levels.
The decrease in emissions was mainly driven by reductions in
production and associated energy use at Richards Bay Minerals (RBM)
due to halted operations.
Safety and wellbeing
Our Minerals operations recorded notable progress across key safety
metrics this year. For a third year in a row, we recorded zero fatalities.
The rate of injuries decreased, with our all-injury frequency rate (AIFR)
at 0.38 compared to 0.43 in 2020. The number of potentially fatal
incidents (PFI) was 47% lower than in 2020. For 2021, we had six
– We have partnered with the US Department of Energy’s Critical
process safety incidents, up from five last year. Our focus on reducing
Materials Institute (CMI) to develop processes to extract lithium from
injuries at the sites results from our continued implementation of best
waste material.
– In December, we announced the launch of the construction of the
renewable energy plant that will power our QIT Madagascar
Minerals (QMM) operations, with our partner CrossBoundary Energy.
The plant will consist of over 18,000 solar panels and four wind
turbines. The solar plant is expected to be operational in 2022, and
the wind power facility will be completed in 2023.
practice standards in health and safety, and completing significant
projects to remove our people from hazard exposure. We have
thoroughly reviewed our risks across the product group and improved
controls to mitigate and manage them. We strongly believe our leaders
have a key role in our health and safety performance, and we were able
to continue our coaching approach across all our sites despite
COVID-19 restrictions. We have also made significant progress with
our contractors’ safety performance, resulting in an AIFR of 0.22,
– At the IOC operations in Canada, we are working on developing
compared to 0.38 in 2020.
low-emissions process heat technology, including the trialling of
plasma torches.
– Our Diavik Diamond Mine reduced diesel consumption by
approximately 4.5 million litres in 2021 alone through their award-
winning wind farm. This amount accounts for about 10% of Diavik’s
annual diesel consumption.
The QMM team marked a significant safety milestone by reaching,
at the end of 2021, 14 million hours worked without lost-time incidents.
The RBM team recorded exceptional safety performance with an
AIFR of 0.06 in 2021. The Jadar project recorded three years without
recordable injuries, and the Borates packaging and distribution
facility in Nules, Spain, reached an impressive 25 years without a
lost-time incident.
A critical mineral hiding in the desert
At our Boron operations in the US, we are testing a process to extract
high grades of lithium from waste rock created from over 90 years
of mining boron.
Learn more at riotinto.com/stories.
This year, we felt immense sadness when one of our colleagues was
tragically killed on his way to work at RBM in South Africa. Sadly,
another colleague was killed in a public bus accident near RBM. Our
sympathies are with their families and loved ones, and we are offering
ongoing support to their families and colleagues.
In 2022, we will continue to grow our safety culture in line with our safety
maturity model (SMM) by learning from the best sites within the business.
We will also continue to integrate SMM with our contractors, building on
the success of our teams at RBM who reduced the contractors’ rolling
AIFR from 0.85 in January 2020 to 0.00 in May 2021 and recorded one
injury for the contractor workforce in 2021, down from three in 2020. To
support our ambition of becoming the best operator, we will also roll out
the Rio Tinto Safe Production System (RTSPS), which was launched this
year at the Iron Ore Company of Canada.
As COVID-19 continues to be prevalent in our everyday lives, our
teams across all Minerals sites are taking proactive steps to ensure the
health and safety of our employees and host communities. We maintain
a range of COVID-19 specific measures to align with directives from
governments and health authorities in the respective jurisdictions.
Our strict COVID-19 protocols allow us to continue to operate while
simultaneously reducing the risk of transmission for our employees,
contractors and communities.
In 2021, we supported government vaccination campaigns. For example,
in Canada, we partnered with governments, communities and other
local businesses to deploy vaccination clinics at our facilities and
trained staff to administer doses to employees and members of
the communities.
Financial performance
In 2021, we benefited from strong market conditions in particular for
iron ore pellets and concentrate, but also for titanium dioxide pigment
and borates, driven by global economic growth and underpinned by
a robust construction market. We also saw a recovery in diamond
prices following a pandemic-related build-up of demand and low
inventory levels.
The business continued to comply with government-imposed
COVID-19 restrictions, notably in Canada, the US and South
Africa. At our titanium dioxide business we experienced 9% lower
production, as a result of community disruptions and subsequent
curtailment of operations at Richards Bay Minerals (RBM) in South
Africa for around three months coupled with an extended ramp-up
period, as well as unplanned maintenance and equipment reliability
issues at Rio Tinto Fer et Titane (RTFT) in Canada.
Underlying EBITDA of $2.6 billion was 52% higher than 2020, primarily
due to the strong pricing environment which more than offset the
impact of lower volumes, which in turn drove up cash unit costs due to
fixed cost inefficiencies.
We generated net cash of $1.4 billion from our operating activities, and
$0.8 billion of free cash flow, 28% and 19% higher than 2020,
respectively, reflecting the strong pricing environment and higher
dividends paid to holders of non-controlling interests at Iron Ore
Company of Canada.
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63
Minerals continued
Review of operations
Iron Ore Company of Canada (IOC)
Iron ore production was 6% lower than 2020 due to prolonged labour
and equipment availability issues impacting product feed and various
other operational challenges throughout the year.
Iron & Titanium
Titanium dioxide production of 1.0 million tonnes was 9% lower than
2020 as a result of community disruptions and subsequent curtailment
of operations at RBM and unplanned maintenance and equipment
reliability issues at RTFT. On 24 August, RBM resumed operations
following stabilisation of the security situation, supported by the
national and provincial government, as well as engagement with host
communities and their traditional authorities.
Borates
Borates production was in line with 2020 and benefited from improved
refinery operating rates following the successful implementation of
productivity initiatives supporting system stability.
Diamonds
On 18 November, we announced we had become the sole owner
of Diavik Diamond Mine in the Northwest Territories of Canada,
continuing its leading role in the Canadian diamond industry. Carats
recovered at Diavik were 3% higher than in 2020, due to the increased
share of production from November, which offset lower ore grade.
The 74% decline in diamond production reflects the closure of the
Argyle mine on 3 November 2020.
Our principal projects and growth options
The $463 million Zulti South project at RBM remains on full suspension.
On 27 July, the Board committed $2.4 billion of funding for the Jadar
lithium-borates project in Serbia, subject to receiving all relevant
approvals, permits and licences. In January 2022, the Government of
Serbia cancelled the Spatial Plan for the Jadar project and required all
related permits to be revoked. We are disappointed by this
announcement and are committed to exploring all options and are
reviewing the legal basis of the decision and the implications for our
activities and people in Serbia.
In December, we entered into a binding agreement to acquire the
Rincon lithium project in Argentina, demonstrating our commitment to
build our battery materials business and strengthen our portfolio for the
global energy transition. Located in the heart of the lithium triangle in
Salta Province, Rincon is a long-life, scaleable resource capable of
producing battery-grade lithium carbonate. It also has the potential to
have one of the lowest carbon footprints in the industry that can help
deliver on our commitment to decarbonise our portfolio. The
transaction is expected to be complete in the first half of 2022, subject
to approval by Australia’s Foreign Investment Review Board.
At our Boron operations in California, US, we have successfully
produced battery-grade lithium from waste rock at our lithium
demonstration plant as part of continued research, development,
testing and experimentation of our proprietary technology in this
space. The demonstration plant has a design capacity of ten tonnes
per year. We are progressing with a feasibility study to evaluate options
to expand to a 5,000 tonne per annum capacity.
Our people
Caring for our people is a top priority. Across Minerals operations and
offices, initiatives have been put in place to ensure that our employees
feel safe, heard, included and motivated.
One example is the Women in Mining Forum at our RBM operations in
South Africa, sponsored by the site leadership team. Discussion forums
between senior management and female employees at the site were
held to foster dialogue and identify areas for improvement to break
down gender bias and inequality. The forum also spearheaded
community initiatives to support young girls attending high school, with
care packages and career guidance.
As a result of these joint efforts, this year’s graduate cohort is 70%
female. The Imbokodo programme – implemented in 2005 – is a
second initiative led by RBM to improve gender diversity in the
workplace by providing training and career opportunities to women in
our surrounding communities.
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Minerals continued
Review of operations
Our principal projects and growth options
Iron Ore Company of Canada (IOC)
The $463 million Zulti South project at RBM remains on full suspension.
Iron ore production was 6% lower than 2020 due to prolonged labour
and equipment availability issues impacting product feed and various
other operational challenges throughout the year.
Iron & Titanium
On 27 July, the Board committed $2.4 billion of funding for the Jadar
lithium-borates project in Serbia, subject to receiving all relevant
approvals, permits and licences. In January 2022, the Government of
Serbia cancelled the Spatial Plan for the Jadar project and required all
related permits to be revoked. We are disappointed by this
announcement and are committed to exploring all options and are
Titanium dioxide production of 1.0 million tonnes was 9% lower than
reviewing the legal basis of the decision and the implications for our
2020 as a result of community disruptions and subsequent curtailment
activities and people in Serbia.
of operations at RBM and unplanned maintenance and equipment
reliability issues at RTFT. On 24 August, RBM resumed operations
following stabilisation of the security situation, supported by the
national and provincial government, as well as engagement with host
communities and their traditional authorities.
Borates production was in line with 2020 and benefited from improved
refinery operating rates following the successful implementation of
productivity initiatives supporting system stability.
Borates
Diamonds
On 18 November, we announced we had become the sole owner
of Diavik Diamond Mine in the Northwest Territories of Canada,
continuing its leading role in the Canadian diamond industry. Carats
recovered at Diavik were 3% higher than in 2020, due to the increased
share of production from November, which offset lower ore grade.
The 74% decline in diamond production reflects the closure of the
Argyle mine on 3 November 2020.
In December, we entered into a binding agreement to acquire the
Rincon lithium project in Argentina, demonstrating our commitment to
build our battery materials business and strengthen our portfolio for the
global energy transition. Located in the heart of the lithium triangle in
Salta Province, Rincon is a long-life, scaleable resource capable of
producing battery-grade lithium carbonate. It also has the potential to
have one of the lowest carbon footprints in the industry that can help
deliver on our commitment to decarbonise our portfolio. The
transaction is expected to be complete in the first half of 2022, subject
to approval by Australia’s Foreign Investment Review Board.
At our Boron operations in California, US, we have successfully
produced battery-grade lithium from waste rock at our lithium
demonstration plant as part of continued research, development,
testing and experimentation of our proprietary technology in this
space. The demonstration plant has a design capacity of ten tonnes
per year. We are progressing with a feasibility study to evaluate options
to expand to a 5,000 tonne per annum capacity.
Our people
Caring for our people is a top priority. Across Minerals operations and
offices, initiatives have been put in place to ensure that our employees
feel safe, heard, included and motivated.
One example is the Women in Mining Forum at our RBM operations in
South Africa, sponsored by the site leadership team. Discussion forums
between senior management and female employees at the site were
held to foster dialogue and identify areas for improvement to break
down gender bias and inequality. The forum also spearheaded
community initiatives to support young girls attending high school, with
care packages and career guidance.
As a result of these joint efforts, this year’s graduate cohort is 70%
female. The Imbokodo programme – implemented in 2005 – is a
second initiative led by RBM to improve gender diversity in the
workplace by providing training and career opportunities to women in
our surrounding communities.
The minerals we
produce are essential
to a low-carbon future.
We also recover valuable
minerals from waste,
making the most of
what we extract from
the ground.
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65
Commercial
Our Commercial group includes our global sales and marketing, procurement,
and marine and logistics operations. We are the primary interface with markets,
customers and suppliers – local, regional and global – through a network of
37,000 suppliers and almost 2,000 customers.
Our Commercial group is focused on building industry-leading
customer and supplier partnerships to deliver innovation, ESG
leadership, and create future value for the company.
In 2021, we refocused the Commercial group to prioritise the delivery
of marketing and procurement excellence, provide sustainability
leadership, drive optimisation across the Group, and establish
integrated trading activities.
This year also saw an increased focus on the Asia region for the
Commercial group as our Chief Commercial Officer also became the
Group Executive responsible for China, Japan and South Korea.
The expansion of our marketing activity is helping position us to meet
demand for Rio Tinto products driven by customer expectations and
consumer behaviour, government stimulus initiatives in response to
COVID-19 impacts, and the longer-term opportunities generated by
climate change policies.
We are already seeing enduring market changes – whether it be
mechanisms such as premium pricing for green products or demand
advantage for low-carbon products.
There is a growing number of customers who require products to be
responsibly produced, and who seek access to favourable green
financing or opportunities that mandate green credentials.
Safety and wellbeing
In 2021, we continued to focus on the safety and health of our
employees, contractors and stakeholders, recording zero fatalities and
a 0.07 all-injury frequency rate (AIFR) for the year.
COVID-19 continues to be a global risk, managed across our
workforce and supply chains with appropriate physical mitigations in
place; regular facilitated discussions on mental health, resilience
and wellbeing; and the collaborative sourcing and delivery of critical
health equipment to colleagues and communities in medically
underserved regions.
As our business continues to navigate COVID-19 impacts, we have
maintained our strong focus on critical risk management and
prevention programmes across areas of greatest exposure.
For example, we continue to undertake risk analysis for each
of our dangerous goods supply chains, and develop appropriate
critical control plans.
In 2021, the Commercial group successfully managed a maritime fleet
of more than 230 contracted and owned vessels. Our Marine team
focuses on managing fatal risks by ensuring Critical Control Verifications
are performed for all tasks. Over 300,000 operator verifications were
performed and recorded during 2021, the highest number within the
company during the past 12 months. This has helped our Marine team
deliver an outstanding safety performance on our fleet of 17 owned
vessels with a zero AIFR for 2021 and 12 months rolling, with the last
recordable injury in July 2020. We are working hard with our partners
to achieve the same results at our non-managed marine operations
where we tragically witnessed three fatalities in 2021 and one in early
2022 on chartered vessels. We started collecting data on these
fatalities in 2019, with three fatalities on non-managed vessels in 2019
and 2020.
To manage risks to seafarers from COVID-19 restrictions on crew
changeovers, we continued to work with the industry, our shipowner
partners, and regulators to support crew changes and protect crew
welfare. This commitment was confirmed when we became a founding
signatory to the Neptune Declaration on Seafarer Wellbeing and
Crew Change.
Customer focus
We continue to lead the industry in the availability of our products, use
of secure technology and application of streamlined financial
platforms. For example, the increasing use of bonded warehousing and
portside sales for our iron ore and aluminium products in China is
supporting customer diversity with more than 20 million tonnes of
portside iron ore sales achieved.
Our pioneering first paperless iron ore transaction in Chinese renminbi
between Rio Tinto and Baosteel last year was recognised for industry
excellence at the 2021 Asset Awards, and as one of the best deals from
the market by Global Trade Review.
In 2021, we continued to simplify the customer experience by
incorporating secure digital platforms, such as WeChat into our Boron
marketing and Ouyeel and EFFITRADE into our iron ore sales.
During the year, we celebrated major destination milestones with the
delivery of our three billionth tonne of iron ore to China and two billionth
tonne of iron ore to Japan.
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Commercial
Our Commercial group includes our global sales and marketing, procurement,
and marine and logistics operations. We are the primary interface with markets,
customers and suppliers – local, regional and global – through a network of
37,000 suppliers and almost 2,000 customers.
Our Commercial group is focused on building industry-leading
In 2021, the Commercial group successfully managed a maritime fleet
customer and supplier partnerships to deliver innovation, ESG
of more than 230 contracted and owned vessels. Our Marine team
leadership, and create future value for the company.
focuses on managing fatal risks by ensuring Critical Control Verifications
In 2021, we refocused the Commercial group to prioritise the delivery
of marketing and procurement excellence, provide sustainability
leadership, drive optimisation across the Group, and establish
integrated trading activities.
This year also saw an increased focus on the Asia region for the
Commercial group as our Chief Commercial Officer also became the
Group Executive responsible for China, Japan and South Korea.
The expansion of our marketing activity is helping position us to meet
demand for Rio Tinto products driven by customer expectations and
consumer behaviour, government stimulus initiatives in response to
COVID-19 impacts, and the longer-term opportunities generated by
climate change policies.
We are already seeing enduring market changes – whether it be
mechanisms such as premium pricing for green products or demand
advantage for low-carbon products.
There is a growing number of customers who require products to be
responsibly produced, and who seek access to favourable green
financing or opportunities that mandate green credentials.
Safety and wellbeing
In 2021, we continued to focus on the safety and health of our
employees, contractors and stakeholders, recording zero fatalities and
a 0.07 all-injury frequency rate (AIFR) for the year.
COVID-19 continues to be a global risk, managed across our
workforce and supply chains with appropriate physical mitigations in
place; regular facilitated discussions on mental health, resilience
and wellbeing; and the collaborative sourcing and delivery of critical
health equipment to colleagues and communities in medically
underserved regions.
As our business continues to navigate COVID-19 impacts, we have
maintained our strong focus on critical risk management and
prevention programmes across areas of greatest exposure.
For example, we continue to undertake risk analysis for each
of our dangerous goods supply chains, and develop appropriate
critical control plans.
are performed for all tasks. Over 300,000 operator verifications were
performed and recorded during 2021, the highest number within the
company during the past 12 months. This has helped our Marine team
deliver an outstanding safety performance on our fleet of 17 owned
vessels with a zero AIFR for 2021 and 12 months rolling, with the last
recordable injury in July 2020. We are working hard with our partners
to achieve the same results at our non-managed marine operations
where we tragically witnessed three fatalities in 2021 and one in early
2022 on chartered vessels. We started collecting data on these
fatalities in 2019, with three fatalities on non-managed vessels in 2019
and 2020.
To manage risks to seafarers from COVID-19 restrictions on crew
changeovers, we continued to work with the industry, our shipowner
partners, and regulators to support crew changes and protect crew
welfare. This commitment was confirmed when we became a founding
signatory to the Neptune Declaration on Seafarer Wellbeing and
Crew Change.
Customer focus
We continue to lead the industry in the availability of our products, use
of secure technology and application of streamlined financial
platforms. For example, the increasing use of bonded warehousing and
portside sales for our iron ore and aluminium products in China is
supporting customer diversity with more than 20 million tonnes of
portside iron ore sales achieved.
Our pioneering first paperless iron ore transaction in Chinese renminbi
between Rio Tinto and Baosteel last year was recognised for industry
excellence at the 2021 Asset Awards, and as one of the best deals from
the market by Global Trade Review.
In 2021, we continued to simplify the customer experience by
incorporating secure digital platforms, such as WeChat into our Boron
marketing and Ouyeel and EFFITRADE into our iron ore sales.
During the year, we celebrated major destination milestones with the
delivery of our three billionth tonne of iron ore to China and two billionth
tonne of iron ore to Japan.
Strategic report
We partnered with Comptech to bring a new generation of aluminium
alloys to the market for use in advanced technologies such as electric
vehicles and 5G antennas.
We signed an MoU with InoBat to establish a “cradle-to-cradle” battery
manufacturing and recycling value chain, and we marked the first sale
of aluminium-scandium alloys to Amaero for use in 3D printing of
industrial products.
We are also progressing innovative ways to reduce waste from our
operations and strengthen our position in the supply of critical minerals
by converting it into valuable products and services. Some new
potential revenue streams include the extraction of tellurium at
Kennecott in Utah, pathways to extract lithium from tailings at Boron in
California, and the extraction of high-purity scandium from titanium
dioxide production in Sorel-Tracy, Quebec and monazite at QMM
in Madagascar.
Our commitment to a sustainable circular economy also included a
first-of-its-kind, multi-product collaboration with Schneider Electric.
We announced the development of zero-emissions technologies and
applications for mine-haulage systems with key supplier partners
Komatsu and Caterpillar. By 2025, we will be piloting both zero-
emissions haul trucks and locomotives with the goal to stop buying
new diesel haul trucks and locomotives before 2030.
Partnerships aimed at delivering low-carbon and sustainable value
chains have also continued with China Baowu, Tsinghua University and
Nippon Steel Corporation, and new ones were created with Sumitomo
Corporation, POSCO, the Australian Renewable Energy Agency,
BlueScope and others.
More information on our low-carbon initiatives can be found in the
Innovation pages 70-71.
Market insight and outlook
2021 presented a number of challenges along the path of economic
revival, but perhaps most surprising was the breadth of the
recovery itself.
Following China’s remarkable, commodity-intensive recovery from the
COVID-19 pandemic in 2020, other major economies also largely
navigated out of the restrictions that impacted economic activity
in 2021.
The vaccine rollout, while geographically uneven, defied most
expectations and, coupled with ongoing accommodative monetary
policy, allowed business across much of the world to begin the process
of rejuvenation.
Unfortunately, the force of the global recovery caused numerous
supply and demand imbalances that tested the world’s production,
commerce and trade.
Although we remain cautious of ongoing supply chain and COVID-19
challenges, we are encouraged by growth prospects in the coming year.
Supplier focus
We had more than 2,100 contracts under management in 2021,
creating commercial advantage for us through key partnerships,
lower costs, release of working capital and better productivity.
We worked to embed greenhouse gas emissions into our sourcing
criteria, and we are expanding that to include other ESG factors.
During the year, our Procurement team managed $17.9 billion in
contestable spend globally, while working to realise our local spend
commitments and secure and diversify our supply chains through a
continuing period of significant disruption due to COVID-19.
Our Procurement team’s focus on local spend resulted in A$400 million
spent with Indigenous suppliers in Australia in 2021, an increase of
almost 40% on the previous year.
To further support our supplier partners, we introduced new shorter
payment terms to pay Indigenous, small and regional suppliers faster.
Our China Sourcing strategy worked to provide competitive, quality
options, and our spend with Chinese suppliers increased 44%
compared to 2020.
Marine and logistics
We have already delivered a reduction in shipping emissions on our
owned and time-chartered fleet with the use of more efficient vessels,
weather routing and schedule optimisation, which will help us exceed
the International Maritime Organization’s 2030 targets of a 40%
reduction by 2025.
From 2023, we will also begin to include the first dual-fuelled liquified
natural gas (LNG)-powered ships in our fleet and continue to support
the development of technologies and industry partnerships to
accelerate the delivery of our climate commitments on shipping.
This includes the potential use of alternative fuels, supporting the
viability of zero-emissions fuels, such as ammonia, through our
memorandum of understanding (MoU) with ITOCHU Corporation, and
our alignment with the Global Maritime Forum’s Call to Action for
Shipping Decarbonisation.
Circular economy, sustainable value chain
initiatives and new markets
In 2021, we created and progressed innovative partnerships with key
customers, suppliers, industry groups, technology providers and others
on climate change, value chain decarbonisation and market growth.
Our commitment to sustainability was underscored by the launch of
START – a new standard in transparency and traceability for the
aluminium industry – where customer and consumer demand for a
sustainable product is supported through reporting on key ESG criteria
regarding our production process via secure blockchain technology.
In Iceland, our ISAL smelter was certified by the Aluminium
Stewardship Initiative (ASI) for meeting the highest internationally
recognised standards for responsible aluminium production. We now
offer ASI Aluminium from eight smelters.
The transition to a lower-carbon world also offers us opportunities to
grow our business. For example, to meet the growing demand for
boron and zinc in fertilisation programmes, U.S. Borax launched two
new products – AnhyborTM and ZincuborTM – to help farmers and
fertiliser manufacturers unlock crop potential.
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67
Commercial continued
Iron ore
Copper
Iron ore demand and prices rose to record highs during 2021 as
China’s imports remained well above one billion tonnes while
consumption in the rest of the world largely recovered to
pre-COVID levels.
Copper prices peaked in May at all-time highs (486c/lb LME copper
cash, official daily price) driven by renewed speculative interest,
declining LME stocks, a weaker dollar and lower production that
suggested COVID-related supply problems would persist.
Prices eased over the remainder of 2021, barring a brief spike above
480c/lb in October due to speculation by financial investors and low
exchange inventories on the major commodities exchanges of LME,
COMEX and SHFE.
Despite headwinds of renewed lockdowns and logistical issues,
softening demand and subsequent deterioration in global
macroeconomic sentiment, full-year demand surpassed its pre-
pandemic highs.
Supply struggled to keep up with rising demand as the lingering effects
of COVID-19, workforce constraints and adverse weather conditions
limited operating rates.
Supply growth is expected to pick up in 2022 as projects approved in
2017-2018 enter the market.
Copper inventories are at low levels. Throughout 2021, total visible
inventory continued to decline, and Chinese inventories reached the
lowest level on record. Stocks in LME warehouses rose with inflows to
European warehouses in the first half of the year.
Minerals
Underlying demand for titanium dioxide pigment has been strong
throughout 2021, underpinned by robust construction. Leading
indicators, such as housing starts in the US, suggest continued growth
in 2022.
Structural factors relating to orebody depletion remain favourable for
high-grade TiO2 feedstock and zircon markets.
Lithium prices have risen sharply through 2021 amid accelerated
demand and growth projections for electric vehicles. Increased model
variety and the adoption of targets to transition to electric vehicles by
major economies underpin this growth.
A strong demand uptick for borates in 2021 was driven by economic
growth, with specific applications to construction and elevated crop
prices. Supply bottlenecks further contributed to market tightness.
Underlying fundamentals remain intact for 2022.
In diamonds, pandemic-related build-up of demand resulted in robust
rough sales. Inventory levels dropped to an all-time low, resulting in a
recovery in prices.
Global scrap generation and consumption also regained their
pre-pandemic volumes, but significant incremental high-cost iron ore
supply was required to balance the market.
The monthly average Platts Index for 62% iron fines converted to a free
on board (FOB) basis rose by 45% (from $101/dmt in 2020 to $147/dmt
in 2021 in nominal terms) year on year in order to incentivise the
seaborne supply response.
With the exception of products sold at ports in China, all of our Pilbara
products are priced with reference to the 62% index.
The steel intensity of the global economic recovery also lifted steel
prices and steelmaking profitability across regions to record levels, and
global crude steel production grew by almost 100 million tonnes year
on year – one of its largest absolute annual increments in history –
to an unprecedented total of almost two billion tonnes.
Steel output in Europe and North America rebounded by 16% and 19%
year on year, respectively, and exceeded pre-pandemic levels in India,
ASEAN and the Middle East.
On the seaborne iron ore supply side, the major producers maintained
their 2020 aggregate shipments, but volumes remained below those
delivered in the 2018 calendar year (pre-Brumadinho tragedy) for the
third consecutive year.
The demand and price premiums for iron ore concentrate and pellets
were supported by the recovery in ex-China steel production as
steelmakers in developed regions responded to record margins by
seeking to ramp up capacity and boost productivity using high-quality
raw materials.
Aluminium
Aluminium prices rallied in 2021 to multi-year highs, on firm recovery in
global demand, and extensive power-related supply disruptions in
China. This led to a global market deficit. Coupled with logistical
disruptions, raw materials and energy cost inflation, physical markets
remained tight and supportive of higher prices.
Aluminium semi-fabricated demand rose by approximately 7% in 2021,
following a decline of approximately 4% in 2020. A robust recovery in
global demand across end-use sectors, including packaging,
transport, building and construction, led the recovery. This was despite
the impact of the semiconductor shortage on automotive production.
Demand recovery was notable in Europe and the US, leading to strong
value-added products demand for extrusions billet and rolled sheet.
We expect overall global demand to improve in 2022, but geopolitical
risks remain, as well as lower growth in China.
The global alumina market remains in overcapacity, which led to
subdued prices earlier in 2021. However, severe disruptions to
refineries in the Atlantic and China led to a spike in prices later in the
year, but prices retreated by the fourth quarter on ample supply
in China.
China continues to drive demand in the global seaborne bauxite
market as a result of stricter environmental measures and the depletion
of domestic bauxite.
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Commercial continued
Iron ore
Copper
Iron ore demand and prices rose to record highs during 2021 as
Copper prices peaked in May at all-time highs (486c/lb LME copper
China’s imports remained well above one billion tonnes while
cash, official daily price) driven by renewed speculative interest,
consumption in the rest of the world largely recovered to
declining LME stocks, a weaker dollar and lower production that
pre-COVID levels.
suggested COVID-related supply problems would persist.
Global scrap generation and consumption also regained their
Prices eased over the remainder of 2021, barring a brief spike above
pre-pandemic volumes, but significant incremental high-cost iron ore
480c/lb in October due to speculation by financial investors and low
supply was required to balance the market.
exchange inventories on the major commodities exchanges of LME,
The monthly average Platts Index for 62% iron fines converted to a free
COMEX and SHFE.
on board (FOB) basis rose by 45% (from $101/dmt in 2020 to $147/dmt
Despite headwinds of renewed lockdowns and logistical issues,
in 2021 in nominal terms) year on year in order to incentivise the
softening demand and subsequent deterioration in global
seaborne supply response.
macroeconomic sentiment, full-year demand surpassed its pre-
With the exception of products sold at ports in China, all of our Pilbara
products are priced with reference to the 62% index.
pandemic highs.
The steel intensity of the global economic recovery also lifted steel
prices and steelmaking profitability across regions to record levels, and
limited operating rates.
Supply struggled to keep up with rising demand as the lingering effects
of COVID-19, workforce constraints and adverse weather conditions
global crude steel production grew by almost 100 million tonnes year
Supply growth is expected to pick up in 2022 as projects approved in
on year – one of its largest absolute annual increments in history –
2017-2018 enter the market.
to an unprecedented total of almost two billion tonnes.
Steel output in Europe and North America rebounded by 16% and 19%
inventory continued to decline, and Chinese inventories reached the
year on year, respectively, and exceeded pre-pandemic levels in India,
lowest level on record. Stocks in LME warehouses rose with inflows to
ASEAN and the Middle East.
European warehouses in the first half of the year.
Copper inventories are at low levels. Throughout 2021, total visible
On the seaborne iron ore supply side, the major producers maintained
their 2020 aggregate shipments, but volumes remained below those
delivered in the 2018 calendar year (pre-Brumadinho tragedy) for the
Minerals
third consecutive year.
The demand and price premiums for iron ore concentrate and pellets
were supported by the recovery in ex-China steel production as
steelmakers in developed regions responded to record margins by
seeking to ramp up capacity and boost productivity using high-quality
in 2022.
raw materials.
Aluminium
Aluminium prices rallied in 2021 to multi-year highs, on firm recovery in
major economies underpin this growth.
Underlying demand for titanium dioxide pigment has been strong
throughout 2021, underpinned by robust construction. Leading
indicators, such as housing starts in the US, suggest continued growth
Structural factors relating to orebody depletion remain favourable for
high-grade TiO2 feedstock and zircon markets.
Lithium prices have risen sharply through 2021 amid accelerated
demand and growth projections for electric vehicles. Increased model
variety and the adoption of targets to transition to electric vehicles by
A strong demand uptick for borates in 2021 was driven by economic
growth, with specific applications to construction and elevated crop
prices. Supply bottlenecks further contributed to market tightness.
Underlying fundamentals remain intact for 2022.
In diamonds, pandemic-related build-up of demand resulted in robust
rough sales. Inventory levels dropped to an all-time low, resulting in a
recovery in prices.
global demand, and extensive power-related supply disruptions in
China. This led to a global market deficit. Coupled with logistical
disruptions, raw materials and energy cost inflation, physical markets
remained tight and supportive of higher prices.
Aluminium semi-fabricated demand rose by approximately 7% in 2021,
following a decline of approximately 4% in 2020. A robust recovery in
global demand across end-use sectors, including packaging,
transport, building and construction, led the recovery. This was despite
the impact of the semiconductor shortage on automotive production.
Demand recovery was notable in Europe and the US, leading to strong
value-added products demand for extrusions billet and rolled sheet.
We expect overall global demand to improve in 2022, but geopolitical
risks remain, as well as lower growth in China.
The global alumina market remains in overcapacity, which led to
subdued prices earlier in 2021. However, severe disruptions to
refineries in the Atlantic and China led to a spike in prices later in the
year, but prices retreated by the fourth quarter on ample supply
in China.
China continues to drive demand in the global seaborne bauxite
market as a result of stricter environmental measures and the depletion
of domestic bauxite.
Our Commercial group’s
role is to unlock the full
potential across our value
chains, from suppliers to
customers, and generate
optionality and growth for
Rio Tinto while navigating
increasing volatility and
complexity in our markets.
68
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
69
Innovation
Innovation has always been a significant differentiator for Rio Tinto, and it plays a
critical role in enabling us to lead change for our future success. Empowering our
people to innovate is especially important as we tackle climate change and
support our customers on their own journeys to decarbonisation.
In 2021, we cemented our focus on research and development (R&D)
and technology with the appointment of our Chief Scientist and the
development of detailed R&D roadmaps to support the delivery of our
business priorities. These include technology and inventions that
deliver improved health and safety outcomes, productivity benefits and
contribute to our climate goals. This year, we progressed both small
initiatives and game-changing innovations across each area.
Improving health and safety
through technology
Health and safety are at the centre of everything we do, and
technology solutions remained key in keeping our operations running
safely during the year. Some health and safety initiatives included:
– Investment in personal monitoring technology to help manage the
risk of fatigue and heat stress in our workforce, particularly important
where our people are exposed to extreme temperatures and
humidity. The technology was tested at our Resolution Copper
project in Arizona this year, and the trial identified key learnings and
positive outcomes. Further options will be reviewed in future phases.
– At Oyu Tolgoi, a pilot for a Vehicle Interaction Management
Situational Awareness System. This new system will improve and
support underground mine safety by enhancing environmental
visibility and awareness for underground mobile equipment
operators. The pilot included 26 vehicles and went live as a fully
operational safety system in January 2022.
– Automation of high-risk tasks to reduce our people’s exposure to
live-energy sources and confined spaces – two critical fatality risks
in our business. For example, our Aluminium business has used
robots to complete non-destructive testing as a proof of concept,
and drones to inspect confined spaces.
Working smarter
A strategic priority in 2021 has been to continue our investment in
next-generation technologies to deliver greater efficiency and lower
production costs. Some initiatives include:
– Deployment of a decision support and alerting software application
across our Pilbara mine operations. This technology puts rich,
real-time information into the hands of our frontline mine operations
workforce, so they can make more informed and productive
operational decisions.
– Deployment of the world’s first fully autonomous water trucks
at Gudai-Darri in the Pilbara, in collaboration with Caterpillar.
These joined our autonomous heavy mobile equipment fleet,
including haul trucks and autonomous drills.
– Application of computer vision, a type of artificial intelligence, on our
Kemano T2 hydropower project in British Columbia, Canada.
This intelligence delivered productivity improvements in our tunnel
boring machine as it journeyed through more than seven kilometres
of mountainside to ensure the long-term reliability of the power
supply for our BC Works smelter in Kitimat.
– Construction of a tellurium recovery plant at our Kennecott
operations. This is part of our commitment to minimise waste streams
by optimising extraction from the material we mine and process.
An increasingly valuable by-product of copper smelting, tellurium is
a critical mineral and an essential component of cadmium telluride,
a semiconductor used to manufacture thin film photovoltaic
solar panels. The $2.9 million investment has moved tellurium
production forward with a commissioning phase that began in 2021.
The plant is set to produce approximately ten tonnes of tellurium
annually, developing a new US supply stream for the renewable
energy industry.
– Development of a world-first Jadarite extraction process for our
project in Jadar, Serbia. As Jadarite is a new mineral, there was
previously no known process to extract it. At our Bundoora
Technical Development Centre in Melbourne, Australia we created a
pilot plant to develop and test extraction processes and validated a
viable process.
– We began the design and rollout of the Rio Tinto Safe Production
System (RTSPS), which simplifies what we do, frees our people up to
innovate, and brings consistency of performance to our operations.
Through RTSPS, we make sure our people can contribute to their full
potential by upskilling them in problem solving. We are also drawing
on data more efficiently to understand asset health, maintenance
scheduling and bottleneck solutions, to optimise the end-to-end
value chain. We have selected a number of pilot sites across our
product groups to progressively test and refine the system as we
look to deploy it globally over the next five years.
Accelerating the net zero transition
Tackling our operational emissions
We all have a role to play in addressing the climate challenge, and we
know we cannot realise a decarbonised world without significant
progress in technology solutions. Partnering with suppliers, industry
and other organisations to reduce emissions, as well as growing and
developing new markets, remain key components in our
decarbonisation journey. Some of our activities this year include:
Decarbonising power:
– Long duration energy storage (between eight to 150 hours) will be
required as we decarbonise our businesses through the adoption of
renewable power from wind and solar sources as they become the
dominant source of energy. In 2021, we became an Anchor member
of the newly created Long Duration Energy Storage Council, which
was launched at COP26. Through the Council, we aim to partner
70
Annual Report 2021 | riotinto.com
Innovation
Innovation has always been a significant differentiator for Rio Tinto, and it plays a
critical role in enabling us to lead change for our future success. Empowering our
people to innovate is especially important as we tackle climate change and
support our customers on their own journeys to decarbonisation.
In 2021, we cemented our focus on research and development (R&D)
This intelligence delivered productivity improvements in our tunnel
and technology with the appointment of our Chief Scientist and the
boring machine as it journeyed through more than seven kilometres
development of detailed R&D roadmaps to support the delivery of our
of mountainside to ensure the long-term reliability of the power
business priorities. These include technology and inventions that
supply for our BC Works smelter in Kitimat.
deliver improved health and safety outcomes, productivity benefits and
contribute to our climate goals. This year, we progressed both small
initiatives and game-changing innovations across each area.
Improving health and safety
through technology
– Construction of a tellurium recovery plant at our Kennecott
operations. This is part of our commitment to minimise waste streams
by optimising extraction from the material we mine and process.
An increasingly valuable by-product of copper smelting, tellurium is
a critical mineral and an essential component of cadmium telluride,
a semiconductor used to manufacture thin film photovoltaic
solar panels. The $2.9 million investment has moved tellurium
Health and safety are at the centre of everything we do, and
production forward with a commissioning phase that began in 2021.
technology solutions remained key in keeping our operations running
The plant is set to produce approximately ten tonnes of tellurium
safely during the year. Some health and safety initiatives included:
annually, developing a new US supply stream for the renewable
– Investment in personal monitoring technology to help manage the
risk of fatigue and heat stress in our workforce, particularly important
where our people are exposed to extreme temperatures and
humidity. The technology was tested at our Resolution Copper
project in Arizona this year, and the trial identified key learnings and
positive outcomes. Further options will be reviewed in future phases.
– At Oyu Tolgoi, a pilot for a Vehicle Interaction Management
Situational Awareness System. This new system will improve and
support underground mine safety by enhancing environmental
visibility and awareness for underground mobile equipment
operators. The pilot included 26 vehicles and went live as a fully
operational safety system in January 2022.
– Automation of high-risk tasks to reduce our people’s exposure to
live-energy sources and confined spaces – two critical fatality risks
in our business. For example, our Aluminium business has used
robots to complete non-destructive testing as a proof of concept,
and drones to inspect confined spaces.
Working smarter
A strategic priority in 2021 has been to continue our investment in
production costs. Some initiatives include:
– Deployment of a decision support and alerting software application
across our Pilbara mine operations. This technology puts rich,
real-time information into the hands of our frontline mine operations
workforce, so they can make more informed and productive
operational decisions.
– Deployment of the world’s first fully autonomous water trucks
at Gudai-Darri in the Pilbara, in collaboration with Caterpillar.
These joined our autonomous heavy mobile equipment fleet,
including haul trucks and autonomous drills.
– Application of computer vision, a type of artificial intelligence, on our
Kemano T2 hydropower project in British Columbia, Canada.
energy industry.
– Development of a world-first Jadarite extraction process for our
project in Jadar, Serbia. As Jadarite is a new mineral, there was
previously no known process to extract it. At our Bundoora
Technical Development Centre in Melbourne, Australia we created a
pilot plant to develop and test extraction processes and validated a
viable process.
– We began the design and rollout of the Rio Tinto Safe Production
System (RTSPS), which simplifies what we do, frees our people up to
innovate, and brings consistency of performance to our operations.
Through RTSPS, we make sure our people can contribute to their full
potential by upskilling them in problem solving. We are also drawing
on data more efficiently to understand asset health, maintenance
scheduling and bottleneck solutions, to optimise the end-to-end
value chain. We have selected a number of pilot sites across our
product groups to progressively test and refine the system as we
look to deploy it globally over the next five years.
Accelerating the net zero transition
Tackling our operational emissions
know we cannot realise a decarbonised world without significant
progress in technology solutions. Partnering with suppliers, industry
and other organisations to reduce emissions, as well as growing and
developing new markets, remain key components in our
decarbonisation journey. Some of our activities this year include:
Decarbonising power:
– Long duration energy storage (between eight to 150 hours) will be
required as we decarbonise our businesses through the adoption of
renewable power from wind and solar sources as they become the
dominant source of energy. In 2021, we became an Anchor member
of the newly created Long Duration Energy Storage Council, which
was launched at COP26. Through the Council, we aim to partner
next-generation technologies to deliver greater efficiency and lower
We all have a role to play in addressing the climate challenge, and we
Nurturing an innovative culture
At Rio Tinto, innovation is core to what we do. We are driving
change internally, encouraging our people to show care, courage and
curiosity through our Pioneering Pitch programme. It is an inclusive,
global programme designed to capture our employees’ creative ideas
and accelerate innovative solutions by providing seed funding to
develop those ideas further.
In 2021, we held our sixth Pioneering Pitch session and funded eight
projects for further development. In total, we have funded 47 projects
and invested over $8 million in our employees’ ideas and projects.
Learn more about Pioneering Pitch at riotinto.com/stories.
Partnering to address emissions across our value chains
We operate in energy- and carbon-intensive value chains –
particularly steel and aluminium production – and recognise that we
have an important role to play in addressing the resulting emissions.
Our approach to Scope 3 emissions is to work in partnership with our
customers to support the decarbonisation of their processes. In the
steel value chain, our goal is to invest in technologies that could deliver
reductions in steelmaking carbon intensity of at least 30% from 2030.
We are also working in partnerships to develop breakthrough
technologies with potential to deliver carbon-neutral steelmaking
pathways by 2050. These are subject to deployment by our customers.
Examples of some initiatives include:
– Supporting our customers' blast furnace optimisation to enable
sizeable potential carbon emission reductions.
– Developing three decarbonisation pathways for our Pilbara iron ore:
– Iron ore beneficiation and agglomeration with customers and
research institutions.
– Assessing a mid-grade direct reduced iron (DRI) produced with
green hydrogen and processed in an electric melter.
– A new low-carbon steel process that aims to replace coking
coal with sustainable plant biomass when converting iron ore
fines into steel. The patent-pending, laboratory-proven process
has been developed over the past decade and is now being
further tested in a small-scale pilot plant as the initial step in our
scale-up process.
– Pursuing a project to produce hot briquetted iron (HBI) with
high-grade iron ore and hydro-based green hydrogen in Canada.
– In China, we are working with China Baowu, the world’s largest steel
group, to support low-carbon steelmaking projects and research.
The first $5 million committed in 2021 will initially prioritise the
development of lower-carbon ore preparation processes. We
committed a further A$4.5 million over five years to our partnership
with China’s Tsinghua University to support research projects at the
Tsinghua-Rio Tinto Joint Research Centre for Resources, Energy
and Sustainable Development.
– Through our memorandum of understanding (MoU) with Japan’s
Nippon Steel Corporation, we identified areas of mutual interest and
are progressing projects in decarbonisation of iron and steelmaking,
and shipping.
Further details on these initiatives can be found in our 2021 Climate
Change Report. Our initiatives relating to our products can be found in
our Commercial pages 66-68 in this report.
with technology providers, industry and services customers,
equipment manufacturers, capital providers and low-energy system
integrators and developers to discover how these technologies and
their materials’ requirements can support us and society to
decarbonise our energy systems.
Decarbonising process heat:
– At our Iron Ore Company of Canada (IOC) operations, we continued
to work on the development of low-emissions process heat
technology, including plasma torches.
– We formed two partnerships to research using hydrogen to reduce
emissions in alumina refining: a study with the Australian Renewable
Energy Agency to assess hydrogen use in industry and support a
coordinated approach to developing a local supply chain; and a
study with Sumitomo Corporation on building a hydrogen pilot plant
at our Yarwun alumina refinery in Gladstone, Queensland, Australia.
Decarbonising mobile diesel (vehicles and rail):
– We launched the Charge On Innovation Challenge as Founding
Patrons, alongside Vale and BHP and facilitated by Austmine.
This global initiative challenges technology innovators to develop
concepts for large-scale haul truck electrification systems to help
the mining sector to reduce its consumption of diesel fuel and
significantly cut emissions from surface mine operations.
– We are also fast-tracking the development of zero-emission mining
haulage solutions, including autonomous haul trucks, through
partnerships with key suppliers Komatsu and Caterpillar.
Decarbonising anodes and reductants:
– ELYSIS marked a significant milestone, successfully producing
aluminium without any direct greenhouse emissions at its Industrial
Research and Development Centre in Saguenay, Quebec, Canada.
ELYSIS is our joint venture with Alcoa, supported by Apple and the
Governments of Canada and Quebec.
Carbon-neutral solutions:
– We began collaborating with Carbfix, an academic-industrial
partnership that has developed a novel approach to capturing and
storing CO2. Carbfix will use our land surrounding the ISAL smelter in
Iceland for onshore CO2 injection in the world’s first carbon mineral
storage hub, the Coda Terminal. Liquified CO2 will be captured from
European industrial plants’ emissions and transported to Iceland by
specifically designed ships operating on sustainable fuel.
70
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Annual Report 2021 | riotinto.com
71
Sustainability
2021 was a year of learning from the past
and looking to the future. We spent the year
listening, learning and reflecting on who we are
as a business, to better understand stakeholder
expectations of us and how we can make a more
meaningful contribution to addressing some of
the world’s most urgent challenges.
We have had some difficult conversations, both within our
business and with stakeholders, about our actions, performance
and culture. This feedback has helped shape a new direction for our
leadership team and our business as a whole.
We are looking to the future and our role in tackling climate change,
as well as the opportunities doing so might bring. The world is not
doing enough to reduce carbon emissions and curtail the impact of
climate change. Our business strategy, released in October 2021,
has sustainability at its core. It sets a new direction for Rio Tinto, and
an accelerated timeframe for us to deliver significant reductions in
emissions from our operations and our value chain.
In 2021, we also set a goal to achieve impeccable environmental,
social and governance (ESG) credentials, in line with societal
expectations. We know that responsibly managing our business
impacts is fundamental if we want to continue to
grow and deliver on our strategy.
We can only achieve this in a culture of care, courage and curiosity
– our new values.
We faced some confronting truths about our culture this year
as we worked to better understand people’s experiences of
bullying, sexual harassment, racism and other forms of
discrimination in the workplace through a comprehensive,
independent review of our culture. Following the feedback from
more than 10,000 of our people, we have set out a plan of action to
improve how we prevent and respond to harmful behaviours in the
workplace. This will, over time, contribute to a more safe, respectful
and inclusive work environment.
We know we have lots of work to do, but we are optimistic
about our future.
Our people demonstrated enormous resilience and commitment as
we navigated the second year of the global pandemic, which for
many presented even greater challenges than 2020. We continued
to work closely with our employees and contractors, communities
and governments to protect people’s health and safety and
facilitate access to vaccinations.
In 2021, we boosted our in-house expertise and capability
across several disciplines, including communities, cultural heritage,
social performance and environment, to support our operations.
We also reviewed many of our organisational structures, standards
and processes to ensure we have the right systems in place to
effectively manage our impacts.
72
Annual Report 2021 | riotinto.com
Sustainability
2021 was a year of learning from the past
and looking to the future. We spent the year
listening, learning and reflecting on who we are
as a business, to better understand stakeholder
expectations of us and how we can make a more
meaningful contribution to addressing some of
the world’s most urgent challenges.
We have had some difficult conversations, both within our
We faced some confronting truths about our culture this year
business and with stakeholders, about our actions, performance
as we worked to better understand people’s experiences of
and culture. This feedback has helped shape a new direction for our
bullying, sexual harassment, racism and other forms of
leadership team and our business as a whole.
We are looking to the future and our role in tackling climate change,
as well as the opportunities doing so might bring. The world is not
doing enough to reduce carbon emissions and curtail the impact of
climate change. Our business strategy, released in October 2021,
has sustainability at its core. It sets a new direction for Rio Tinto, and
discrimination in the workplace through a comprehensive,
independent review of our culture. Following the feedback from
more than 10,000 of our people, we have set out a plan of action to
improve how we prevent and respond to harmful behaviours in the
workplace. This will, over time, contribute to a more safe, respectful
and inclusive work environment.
an accelerated timeframe for us to deliver significant reductions in
We know we have lots of work to do, but we are optimistic
emissions from our operations and our value chain.
about our future.
In 2021, we also set a goal to achieve impeccable environmental,
Our people demonstrated enormous resilience and commitment as
social and governance (ESG) credentials, in line with societal
we navigated the second year of the global pandemic, which for
expectations. We know that responsibly managing our business
many presented even greater challenges than 2020. We continued
impacts is fundamental if we want to continue to
grow and deliver on our strategy.
We can only achieve this in a culture of care, courage and curiosity
– our new values.
to work closely with our employees and contractors, communities
and governments to protect people’s health and safety and
facilitate access to vaccinations.
In 2021, we boosted our in-house expertise and capability
across several disciplines, including communities, cultural heritage,
social performance and environment, to support our operations.
We also reviewed many of our organisational structures, standards
and processes to ensure we have the right systems in place to
effectively manage our impacts.
72
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
73
Rehabilitation at QIT Madagascar Minerals (QMM).
Our approach to sustainability
Sustainability is core to our business. Our strategy, objectives and values guide our
approach to sustainability.
Decarbonisation is an urgent priority for us and the world. Our strategy
sets a new direction for us to decarbonise our assets and our products,
and grow by investing in those materials that are essential to a
low-carbon future.
To deliver the strategy, we are focused on four key objectives,
including our drive for impeccable ESG credentials and maintaining
our social licence to operate.
We must ensure all our stakeholders benefit from the success of
Rio Tinto. To do this, our business priorities and performance must
align with society’s expectations, which are constantly evolving.
Robust and trusting relationships with our stakeholders are essential to
secure a strong future for our business while ensuring we make
meaningful contributions to our host communities and help address the
world’s most urgent challenges.
Our sustainability framework describes how we manage issues
important to us and to our stakeholders and how we contribute to the
United Nations Sustainable Development Goals (UN SDGs).
Our sustainability framework
We are entrusted with accessing the world’s essential materials and
making them available for society’s use.
These resources are finite, and we recognise our responsibility to
extract the full value from the minerals and materials we produce while
avoiding harm and mitigating impacts to people and the planet.
Excellence in managing the fundamentals of our business gives us
the opportunity to make more substantial and meaningful contributions
to society. We are working in partnership with others to support fairer,
more sustainable and inclusive communities where we operate.
It has been a transitional year at Rio Tinto and in 2022, we will further
define ambitions for each of our objectives, in line with our goal to
achieve impeccable ESG credentials.
t
c
a
p
m
i
s
m
e
t
s
y
S
s
n
o
i
t
a
d
n
u
o
F
Planet
People and society
Sustainability framework
Supplying
Low-intensity Materials
Decarbonising our value chains
(Scope 3) and maximising
the full value of our resources
(Critical Minerals & Circularity).
D G 1 2
d S
a
L e
Low-intensity
Materials
Lead S
D
G 8
Economic
Opportunity &
Just Transition
Supporting
Economic Opportunity
Catalysing improved economic
outcomes in host communities
and regions and playing our role to
advance a fair and socially inclusive
energy transition.
Scope 1 & 2
Reduction
Environmental
Stewardship
S
u
p
p
o
r
t
i
n
g
S
D
G
6
9
1
3
1
5
Mining
& Metal
Practices
Caring for
our Planet
Being a trusted
steward of resources.
Minimising environmental and heritage
impacts and managing the interrelationship
between water, biodiversity and our
resilience to a changing environment.
Transparent,
values-based,
ethical business
operations
SDG 17
Community
Engagement &
Social Investment
Health, Safety
& Wellbeing
Heritage,
Culture and
Indigenous
Peoples
Human
Rights
5
0 1
o rtin g S D G 3 4 5 1
Talent,
Diversity &
Inclusion
p
p
u
S
Caring for People
& Communities
Being a socially responsible
business partner
Building a healthy, diverse and
inclusive workforce, supporting local
communities to achieve their goals and
aspirations and delivering enduring
positive social outcomes
S
y
s
t
e
m
s
i
m
p
a
c
t
F
o
u
n
d
a
t
i
o
n
s
74
Annual Report 2021 | riotinto.com
Our approach to sustainability
Sustainability is core to our business. Our strategy, objectives and values guide our
approach to sustainability.
Decarbonisation is an urgent priority for us and the world. Our strategy
sets a new direction for us to decarbonise our assets and our products,
Our sustainability framework
and grow by investing in those materials that are essential to a
We are entrusted with accessing the world’s essential materials and
low-carbon future.
making them available for society’s use.
To deliver the strategy, we are focused on four key objectives,
These resources are finite, and we recognise our responsibility to
including our drive for impeccable ESG credentials and maintaining
extract the full value from the minerals and materials we produce while
our social licence to operate.
We must ensure all our stakeholders benefit from the success of
Rio Tinto. To do this, our business priorities and performance must
align with society’s expectations, which are constantly evolving.
Robust and trusting relationships with our stakeholders are essential to
avoiding harm and mitigating impacts to people and the planet.
Excellence in managing the fundamentals of our business gives us
the opportunity to make more substantial and meaningful contributions
to society. We are working in partnership with others to support fairer,
more sustainable and inclusive communities where we operate.
secure a strong future for our business while ensuring we make
It has been a transitional year at Rio Tinto and in 2022, we will further
meaningful contributions to our host communities and help address the
define ambitions for each of our objectives, in line with our goal to
world’s most urgent challenges.
achieve impeccable ESG credentials.
Our sustainability framework describes how we manage issues
important to us and to our stakeholders and how we contribute to the
United Nations Sustainable Development Goals (UN SDGs).
t
c
a
p
m
i
s
m
e
t
s
y
S
s
n
o
i
t
a
d
n
u
o
F
Planet
People and society
Sustainability framework
Supplying
Low-intensity Materials
Decarbonising our value chains
(Scope 3) and maximising
the full value of our resources
(Critical Minerals & Circularity).
D G 1 2
d S
a
L e
Low-intensity
Materials
Lead S
D
G 8
Economic
Opportunity &
Just Transition
Supporting
Economic Opportunity
Catalysing improved economic
outcomes in host communities
and regions and playing our role to
advance a fair and socially inclusive
energy transition.
S
y
s
t
e
m
s
i
m
p
a
c
t
Scope 1 & 2
Reduction
Environmental
Stewardship
S
u
p
p
o
r
t
i
n
g
S
D
G
6
9
1
3
1
5
Mining
& Metal
Practices
Transparent,
values-based,
ethical business
operations
SDG 17
Heritage,
Culture and
Indigenous
Peoples
Human
Rights
Community
Engagement &
Social Investment
Talent,
Diversity &
Inclusion
Health, Safety
& Wellbeing
5
0 1
o rtin g S D G 3 4 5 1
p
p
u
S
Caring for
our Planet
Being a trusted
steward of resources.
Minimising environmental and heritage
impacts and managing the interrelationship
between water, biodiversity and our
resilience to a changing environment.
F
o
u
n
d
a
t
i
o
n
s
Caring for People
& Communities
Being a socially responsible
business partner
Building a healthy, diverse and
inclusive workforce, supporting local
communities to achieve their goals and
aspirations and delivering enduring
positive social outcomes
Our approach to the United Nations Sustainable
Development Goals
In 2021, we refreshed the way we think about sustainability and more clearly articulated how we are supporting
our priority United Nations Sustainable Development Goals (UN SDGs).
Our sustainability framework reflects our focus on the two lead goals – SDG 12 (responsible consumption and
production) and SDG 8 (decent work and economic growth) – that we feel are most relevant to operating our business
responsibly, and where we can have the most significant impact. Our business operations also contribute to eight
supporting SDGs (3, 4, 5, 6, 9, 10, 13, 15) while SDG 17 (partnerships for goals) reflects our approach to achieving
our sustainability objectives.
SDG 12 relates to how we mine, process and produce materials and
contribute to ethical global supply chains, including trusted lifecycle
assessments. This SDG builds on our existing health, safety,
environment and community performance standards and our
membership of responsible production and product stewardship
programmes. It extends our thinking into how we can, in partnership,
accelerate efforts to decarbonise our own operations, and those of our
customers, and extract the most value from the materials we produce.
SDG 8 speaks directly to our values and commitments to creating
a safe and inclusive working environment, as well as promoting
education and training partnerships that support social and economic
development, and help develop skills for the future. We are committed
to ensuring Traditional Owners and Indigenous peoples have a
stronger voice in the decisions that affect their lands. Alignment with
this goal also requires us to think carefully about how the decisions we
make today will impact communities in the future.
To further this goal in 2021, we:
To further this goal in 2021, we:
– Announced new climate targets, including new commitments to
reduce Scope 1 and 2 emissions by 50% by 2030. We also intend to
invest an estimated $7.5 billion in climate abatement projects until
2030, including the installation of one gigawatt of solar and wind
power in the Pilbara.
– Recovered critical mineral by-products from waste across several
sites, including tellurium, a critical mineral used in solar panels, from
Kennecott, lithium from our Borates business in the US, scandium
oxide at Rio Tinto Fer et Titane and monazite at QIT Madagascar
Minerals (QMM).
– Launched START, the first sustainability label for aluminium using
blockchain technology, setting a new standard in transparency and
traceability for the industry.
– Achieved industry and commodity accreditations and certifications,
including the Aluminium Stewardship Initiative, the Copper Mark,
the Responsible Jewellery Council, and the Mining Association of
Canada’s Towards Sustainable Mining standard to independently
verify our ESG performance.
– Signed two memoranda of understanding (MoU) with POSCO
and BlueScope to investigate options to decarbonise the steel
value chain.
– Developed a business model and signed an MoU with our partner
RESOLVE to form Regeneration Enterprises, a for-purpose and
for-profit company that will combine the re-mining and processing
of waste with site closure and rehabilitation, with the ambition to
create full restoration outcomes.
– Expanded our target of a 2% increase in the number of women in
leadership roles, to a 2% increase in women in all roles across our
business. We did not meet the target. On a broader level, we
increased the representation of women in our workforce by 1.5%.
– Committed $50 million in Indigenous leadership development in
Australia over five years. In 2021, the number of Australian
Indigenous leaders in our business increased fivefold.
– Continued our commitment to source and hire locally, wherever
possible, through asset-based employment and local procurement
targets. For example, in Mongolia more than 96.5% of Oyu Tolgoi’s
workforce is Mongolian, of which 22% are from the neighbouring
communities in our host Umnugovi province. In 2021, 71% of our total
operational procurement was spent in-country.
– Developed partnerships and contributed $72 million to community
programmes covering the health, education, environmental
protection, housing, agricultural and business development sectors.
Some initiatives included:
– A partnership with the Mongolian University of Science and
Technology to build the capability of geotechnical and mining
professionals in Mongolia.
– A partnership with Université du Québec à Chicoutimi (UQAC)
for an institutional research structure dedicated to the
indigenisation of higher education focused on training the next
generation of Indigenous scientists.
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75
Our approach to sustainability continued
Reporting what matters
We complete a sustainability materiality
assessment every year to ensure we
understand what issues matter to our
stakeholders and our business. We expanded
our approach in 20211 to gather information
from external stakeholders and a cross-section
of employees via interviews, surveys, and
reviews of publicly available materials.
We asked participants what was important to
them now, and what they think will be important
in five to ten years.
What is important now
We found that our top four priority issues were clearly aligned
with those of our external stakeholders. Climate change clearly stood
out as the most important issue for all of us.
Concerns about climate change extended beyond emissions
reduction to the need to consider our impact on nature more
holistically, for example, on water and biodiversity, and how resilient the
natural environment is to climate-induced change.
Respecting human rights, cultural and heritage site management,
and health, safety and wellbeing, were the next most significant topics
for both internal and external stakeholders. The safety and wellbeing
of our people remains our highest priority and we have, over a number
of years, made significant progress in ensuring our people return
home safely. Business integrity and governance, and local community
relations, remain important topics as we continue to rebuild trust with
our stakeholders.
Lower materiality
Medium materiality
Higher materiality
l
s
r
e
d
o
h
e
k
a
t
s
o
t
y
t
i
l
a
i
r
e
t
a
M
Impact of
technology
Climate
change
Respecting
human rights
ESG transparency
& disclosure
Business
integrity &
governance
Local
community
relations
Health, safety
& wellbeing
Cultural &
heritage site
management
Industrial
environment
impacts
Business performance
Inclusion, diversity & equality
Tailings &
mineral waste
management
Water management
Future-proof
assets
Biodiversity
& ecosystems
Supply chain
transparency
Responsible
tax & royalty
payments
Pandemic
response
& public
health
Closure, post-mining
& land rehabilitation
Employment
& talent
retention
End-to-end
materials
management
Risk management &
cyber security
Materiality to Rio Tinto
1. Note: Based on 60 internal and 68 external stakeholders (note: some interviewees chose not to answer one or more questions). The score represents an average of all respondents in each
stakeholder group. Source: Primary interviews and surveys.
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We complete a sustainability materiality
What is important now
What will be important in the future
Non-financial information statement
Strategic report
This section provides information as required by regulation in relation to:
– Environmental matters - pages 72-89
– Our employees - pages 101-103
– Social matters - pages 90-95
– Human rights - page 104
– Corruption and bribery - pages 107-108
Other related information can be found as follows:
– Our business model – page 23
– Principal risks and how they are managed – pages 117-130
– Non-financial key performance indicators – pages 24-28
Notes on data
The data summarised in this sustainability section relates to calendar
years. Unless stated otherwise, parameters are reported for all managed
operations without adjustment for equity interests. Where possible, we
include data for operations acquired before 1 October of the reporting
period. Divested operations are included in data-collection processes
up until the transfer of management control.
We report against the GRI standards and the requirements of other
select reporting frameworks, and we reflect the ten principles of the
ICMM and the mandatory requirements in the ICMM position
statements within our policies, standards and procedures.
Visit riotinto.com/policies for more information.
Our internal and external stakeholders feel that climate change will only
continue to increase in importance over the next decade, as will
geopolitical uncertainty, the impact of technology, and end-to-end
materials management. Other emerging topics include water
management due to the reliance of local communities and mining
operations on an increasingly scarce resource, and biodiversity due to
the increasing impacts of climate change. Human rights will also
continue to be of high importance – it is a critical foundation of our
social licence to operate.
It is also clear that supply chain accountability and ESG transparency
are becoming increasingly important to customers, consumers,
investors and financial markets, including our insurance providers.
As we produce more critical minerals for batteries, electric vehicles
and renewable energy technology, there will be a higher burden of
proof in value chain provenance.
Reporting our performance
Our sustainability materiality assessment records the threshold at
which an issue or topic becomes important enough to be reported on
externally. Not all sustainability-related topics have the same risk
profile. A sustainability materiality assessment differs from financial
materiality, which may use financial metrics or other quantitative
analyses to determine what would be considered a significant or
material impact.
As a member of the International Council on Mining and Metals
(ICMM), we commit to reporting on our sustainability performance
against Global Reporting Initiative (GRI) standards (Core option).
The majority of our sustainability reporting is incorporated into our
Annual Report and supplemented by our full Sustainability Fact Book
containing current and historical data on topics, including health,
safety, environment, climate, communities, human rights, responsible
sourcing and transparency. Additional information is available
at riotinto.com.
Governance and assurance
The Sustainability Committee oversees strategies to manage social
and environmental risks, including management processes and
standards. The Committee reviews the effectiveness of management
policies and procedures relating to safety, health, employment
practices (apart from remuneration, which is the responsibility
of the Remuneration Committee), relationships with neighbouring
communities, environment, security and human rights, land access,
political involvement and sustainable development. Given its strategic
significance, climate change is overseen directly by the Board. See the
Governance section (pages 156-158) for more information about the
Sustainability Committee.
This year, KPMG, the Group’s auditor, was again engaged to provide
the Directors of Rio Tinto with assurance on selected sustainability
subject matters.
KPMG’s limited assurance statement satisfies the requirements of
subject matters 1 to 4 of the ICMM assurance procedure. See pages
153-154 in the Governance section for more information about our
external auditors and internal assurance.
Our approach to sustainability continued
Reporting what matters
assessment every year to ensure we
understand what issues matter to our
stakeholders and our business. We expanded
our approach in 20211 to gather information
from external stakeholders and a cross-section
of employees via interviews, surveys, and
reviews of publicly available materials.
We asked participants what was important to
them now, and what they think will be important
in five to ten years.
We found that our top four priority issues were clearly aligned
with those of our external stakeholders. Climate change clearly stood
out as the most important issue for all of us.
Concerns about climate change extended beyond emissions
reduction to the need to consider our impact on nature more
holistically, for example, on water and biodiversity, and how resilient the
natural environment is to climate-induced change.
Respecting human rights, cultural and heritage site management,
and health, safety and wellbeing, were the next most significant topics
for both internal and external stakeholders. The safety and wellbeing
of our people remains our highest priority and we have, over a number
of years, made significant progress in ensuring our people return
home safely. Business integrity and governance, and local community
relations, remain important topics as we continue to rebuild trust with
our stakeholders.
Lower materiality
Medium materiality
Higher materiality
Climate
change
Respecting
human rights
Health, safety
& wellbeing
Cultural &
heritage site
management
s
r
e
d
l
o
h
e
k
a
t
s
o
t
y
t
i
l
a
i
r
e
t
a
M
ESG transparency
& disclosure
Business
integrity &
governance
Local
community
relations
Supply chain
transparency
Industrial
environment
impacts
Business performance
Tailings &
mineral waste
management
Inclusion, diversity & equality
Water management
Future-proof
assets
Biodiversity
& ecosystems
Closure, post-mining
& land rehabilitation
Impact of
technology
End-to-end
materials
management
Responsible
tax & royalty
payments
Pandemic
response
& public
health
Employment
& talent
retention
Risk management &
cyber security
Materiality to Rio Tinto
1. Note: Based on 60 internal and 68 external stakeholders (note: some interviewees chose not to answer one or more questions). The score represents an average of all respondents in each
stakeholder group. Source: Primary interviews and surveys.
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77
Our approach to sustainability continued
2021 performance against targets
Targets
Performance
To reach zero fatalities, and to eliminate workplace injuries
and catastrophic events.
– Zero fatalities at managed operations.
– All-injury frequency rate (AIFR) at 0.40 (target: 0.33).
– 1.3 million critical risk management (CRM) verifications.
To have all of our businesses identify at least one critical health
hazard material to their business, and demonstrate a year-on-year
reduction of exposure to that hazard.
– In 2021, 13 of our assets across Rio Tinto achieved an exposure
reduction to known health risks (airborne contaminants and noise);
these exposure reduction projects positively impacted over 6,500
employees and contractors.
To reduce the rate of new occupational illnesses each year.
– 28% decrease in the rate of new occupational illnesses since 20201
To reduce our absolute Scope 1 and 2 emissions by 15%
and our emissions intensity by 30% by 2030 (relative to our 2018
equity baseline).
These targets were updated on 20 October 2021. Our new targets are
to reduce our absolute Scope 1 and 2 emissions by 15% by 2025 and
by 50% by 2030.
To disclose for all managed operations by 2023, their permitted
surface water allocation volumes, annual allocation usage and the
estimated surface water allocation catchment runoff from average
annual rainfall.
To achieve local water stewardship targets for selected sites by 2023.
To demonstrate local economic benefits from employment and
procurement of goods and services by reporting yearly against
a locally defined target.
To capture and manage community complaints effectively and
reduce repeat and significant complaints each year.
These targets will be updated for 2022-2026.
– The 2021 Scope 1 and 2 emissions were 31.1Mt CO2e – a reduction
of 1.4Mt CO2e (4.3%) relative to our 2018 baseline.
The water stewardship targets have progressed well with the Group
target, with 4 of the 6 asset level targets remaining on track. Kennecott
and Ranger site-based targets are at risk, but both are considered
recoverable with additional focus. For further details on our water
performance, see pages 83-86.
– 95% (20 out of 21 asset groupings2) have met their 2021 repeat
complaints target.
– 90% (19 out of 21 asset groupings2) have met their 2021 significant
complaints target.
– 81% (17 out of 21 asset groupings2) have met their locally set
procurement target.
– 53% (10 out of 19 asset groupings2) have met their locally set
employment target3.
To improve diversity in our business by:
– 25% of our Executive Committee were women, up 2% from 2020.
– Increasing women in the business (including in senior leadership)
by 2% each year.
– Aiming for 50% women in our graduate intake, and 30% from
places where we are developing new businesses.
– 27.4% of senior leadership4 were women, up 1.3% from 2020.
– 21.6% of our workforce were women, up 1.5% from 20205.
– 58% of our graduate intake were women, down 2% from 2020.
– 36.4% of Board roles were held by women, up 3.1% from 2020.
– 35% of our graduate intake was from places where we are
developing new businesses6, up 9% from 2020.
Improving our employee engagement and satisfaction.
– 2-point decrease in our employee satisfaction score (eSAT7)
from 2020.
1. Fewer health assessments were completed in 2021 due to COVID-19 restrictions, which may have impacted the frequency of new cases of occupational illnesses.
2. Refer to the Sustainability Fact Book on riotinto.com/sustainabilityreport for details on the asset groupings.
3. COVID-19 restrictions, workforce supply constraints and organisational restructures are the primary drivers which have impacted asset achievement of locally set employment targets. Two asset
groupings are not reporting against the employment target in 2021. Further explanatory notes for each asset are provided in the Sustainability Fact Book.
4. We define senior leadership as General Managers, Group Advisers and Chief Advisers as well as employees in leadership roles who report directly to Executive Committee members.
5. From 2021, the definition used to calculate diversity was changed to include people not available for work, and contractors (those engaged on temporary contracts to provide services under the
direction of Rio Tinto leaders), excluding project contractors.
6. Identifying with a nationality is not mandatory. More than 48% of our graduates have not formally reported a nationality.
7. eSAT (employee satisfaction) is a measure of how happy an employee is to work at Rio Tinto. It is calculated by averaging the responses on a 1-7 scale and expressing this out of 100.
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Our approach to sustainability continued
2021 performance against targets
Caring for the planet
Producing the materials the world needs means we have an
impact on the environment. We work in remote locations and
sensitive environments, our activities have the potential to cause
harm through pollution, and we have a significant carbon footprint.
We recognise the responsibility we are entrusted with and see
ourselves as long-term stewards of natural resources, including land
and water, and the ecosystems they support. Our commitment to
understanding and mitigating the risks and impacts of our operations
extends from the very beginning of an operation’s life to beyond
closure. More immediately, we are accelerating action to reduce our
carbon emissions and investing to help reduce emissions generated
by the use of our products. We have an important role to play.
Targets
and catastrophic events.
To reach zero fatalities, and to eliminate workplace injuries
– Zero fatalities at managed operations.
Performance
– All-injury frequency rate (AIFR) at 0.40 (target: 0.33).
– 1.3 million critical risk management (CRM) verifications.
To have all of our businesses identify at least one critical health
– In 2021, 13 of our assets across Rio Tinto achieved an exposure
hazard material to their business, and demonstrate a year-on-year
reduction to known health risks (airborne contaminants and noise);
reduction of exposure to that hazard.
these exposure reduction projects positively impacted over 6,500
employees and contractors.
To reduce the rate of new occupational illnesses each year.
– 28% decrease in the rate of new occupational illnesses since 20201
To reduce our absolute Scope 1 and 2 emissions by 15%
– The 2021 Scope 1 and 2 emissions were 31.1Mt CO2e – a reduction
and our emissions intensity by 30% by 2030 (relative to our 2018
of 1.4Mt CO2e (4.3%) relative to our 2018 baseline.
These targets were updated on 20 October 2021. Our new targets are
to reduce our absolute Scope 1 and 2 emissions by 15% by 2025 and
equity baseline).
by 50% by 2030.
annual rainfall.
To disclose for all managed operations by 2023, their permitted
The water stewardship targets have progressed well with the Group
surface water allocation volumes, annual allocation usage and the
target, with 4 of the 6 asset level targets remaining on track. Kennecott
estimated surface water allocation catchment runoff from average
and Ranger site-based targets are at risk, but both are considered
recoverable with additional focus. For further details on our water
performance, see pages 83-86.
To achieve local water stewardship targets for selected sites by 2023.
To demonstrate local economic benefits from employment and
– 95% (20 out of 21 asset groupings2) have met their 2021 repeat
procurement of goods and services by reporting yearly against
complaints target.
a locally defined target.
– 90% (19 out of 21 asset groupings2) have met their 2021 significant
To improve diversity in our business by:
– 25% of our Executive Committee were women, up 2% from 2020.
To capture and manage community complaints effectively and
reduce repeat and significant complaints each year.
These targets will be updated for 2022-2026.
– Increasing women in the business (including in senior leadership)
by 2% each year.
– Aiming for 50% women in our graduate intake, and 30% from
places where we are developing new businesses.
– 81% (17 out of 21 asset groupings2) have met their locally set
– 53% (10 out of 19 asset groupings2) have met their locally set
complaints target.
procurement target.
employment target3.
– 27.4% of senior leadership4 were women, up 1.3% from 2020.
– 21.6% of our workforce were women, up 1.5% from 20205.
– 58% of our graduate intake were women, down 2% from 2020.
– 36.4% of Board roles were held by women, up 3.1% from 2020.
– 35% of our graduate intake was from places where we are
developing new businesses6, up 9% from 2020.
Improving our employee engagement and satisfaction.
– 2-point decrease in our employee satisfaction score (eSAT7)
from 2020.
1. Fewer health assessments were completed in 2021 due to COVID-19 restrictions, which may have impacted the frequency of new cases of occupational illnesses.
2. Refer to the Sustainability Fact Book on riotinto.com/sustainabilityreport for details on the asset groupings.
3. COVID-19 restrictions, workforce supply constraints and organisational restructures are the primary drivers which have impacted asset achievement of locally set employment targets. Two asset
groupings are not reporting against the employment target in 2021. Further explanatory notes for each asset are provided in the Sustainability Fact Book.
4. We define senior leadership as General Managers, Group Advisers and Chief Advisers as well as employees in leadership roles who report directly to Executive Committee members.
5. From 2021, the definition used to calculate diversity was changed to include people not available for work, and contractors (those engaged on temporary contracts to provide services under the
direction of Rio Tinto leaders), excluding project contractors.
6. Identifying with a nationality is not mandatory. More than 48% of our graduates have not formally reported a nationality.
7. eSAT (employee satisfaction) is a measure of how happy an employee is to work at Rio Tinto. It is calculated by averaging the responses on a 1-7 scale and expressing this out of 100.
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79
Solar power plant, Weipa. Queensland, Australia.
Caring for the planet continued
Climate change
The transition to a net zero carbon emissions
world will create additional demand for our
commodities. Copper, lithium, aluminium and
other minerals are essential to increase
renewables capacity and for electric vehicles.
Steel is an irreplaceable material in many
applications, and iron ore is an essential
ingredient for the new technologies required to
produce green steel.
We have an important role to play in supporting and enabling
the transition to net zero emissions. We will do this by producing
materials that are essential to the energy transition, decarbonising our
own assets, and partnering to develop the technologies and products
that will enable our customers to decarbonise their own processes.
Most of our assets sit in the low end of their commodity carbon
intensity curves and 75% of the electricity used at our managed
operations is from renewable sources. Our absolute Scope 1 and 2
emissions in 2021 were 31.1Mt CO2e (2020: 31.5Mt CO2e), 4.3% below
our 2018 equity emissions baseline. The reductions achieved since
2018 are primarily the result of switching to renewable electricity
contracts at Kennecott in the US and the Escondida mine in Chile
(managed by BHP; Rio Tinto owns 30%), and also relate to unplanned
operational disruptions in 2021 at Richards Bay Minerals in South Africa
and the Kitimat aluminium smelter in Canada.
Decarbonising our operations
In the lead up to the UN Climate Change Summit in Glasgow, we
announced that we will accelerate actions to decarbonise our assets in
the short term and aim for a 15% reduction in emissions by 2025 – five
years earlier than originally planned. We increased our 2030 target to a
50% reduction in our Scope 1 and 2 emissions and remain committed
to reaching net zero by 2050.
To achieve this, we aim to:
– Develop renewable power in the Pilbara. The 34MW solar plant at
Gudai-Darri and the 45MW battery system at Tom Price that we
approved in 2020 are expected to come online in 2022. We are now
targeting the rapid deployment of one gigawatt of wind and solar
power. This will replace gas power and meet demand from our fixed
plants and infrastructure, as well as support the early electrification
and decarbonisation of our mobile fleet.
– Work with state and federal governments, power companies and
renewable developers to dramatically increase the availability of
renewables in eastern Australia, and aim to develop green
repowering solutions for the Boyne Island and Tomago smelters.
– Advance the projects in our Marginal Abatement Cost Curve such
as the deployment of zero-emission trucks and the use of hydrogen
at our alumina refineries.
– Use a $75/t CO2e internal carbon price to incentivise energy-
efficiency investments and identify new mitigation projects.
– Scale up the ELYSISTM technology with the goal to have it available
for installation from 2024. Construction of the first commercial-scale
prototype cells of the inert anode technology has begun at our Alma
smelter in Saguenay–Lac-Saint-Jean, Quebec.
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We estimate that we will invest approximately $7.5 billion in capital
between 2022 and 2030 to deliver our decarbonisation strategy
(approximately $1.5 billion over the period 2022 to 2024). There will
also be incremental operating expenditure on building new
capabilities, energy efficiency initiatives, and research and
development of approximately $200 million per year to 2030.
Alignment with 1.5°C
We conclude that our Scope 1 and 2 targets for 2030 and our
commitment to reach net zero emissions by 2050 are aligned with efforts
to limit warming to 1.5°C, which is aligned with the stretch goal of the
Paris Agreement. While there is no universal standard for assessing the
alignment of targets with the Paris Agreement goals, the basis for our
conclusion is provided in the 2021 Climate Change Report.
KPMG has provided limited assurance over our Scope 1 and 2 target
information presented in the 2021 Climate Change Report, including
the process to set the target, the alignment with 1.5°C and the roadmap
to achieving the target.
Partnerships across our value chains
We operate in energy- and carbon-intensive value chains –
particularly steel and aluminium production – and recognise that we
have a role to play in addressing the resulting emissions. We have
updated our approach to calculating Scope 3 emissions to use
regional factors rather than a global average. Our estimated Scope 3
emissions in 2021 were 553.5Mt CO2e, and around 95% is from the
processing of iron ore, bauxite and other products by our customers.
Aside from the revision to the reporting methodology, the change from
2020 is primarily due to changes in production of iron ore and bauxite.
94% of these processing emissions take place at our customer
facilities in China, South Korea, Japan and other countries that have
pledged to be carbon neutral by around mid-century.
Our approach to addressing Scope 3 emissions is to engage with our
customers on climate change, to share information on respective goals
and targets, and work with them to develop the technologies to
decarbonise steel and aluminium production. We will continue to report
on progress each year.
Steel value chain
Steel is a vital material for low-carbon infrastructure and, with limits to
recycling, our iron ore products have an important future role to play.
The future trajectory of our Scope 3 emissions is dependent on our
customers’ decarbonisation roadmaps, which in turn will be guided by
technology development and government policies, including carbon
pricing. The Net-Zero Steel Initiative (NZSI) is an industry platform, part
of the Mission Possible Partnership, that brings together stakeholders
across the whole steel supply chain to help put the sector on a path to
net zero emissions by mid-century. The NZSI considers 20 technology
archetypes and the decision-making process to deploy these at
individual steel plants based on lowest total cost of ownership. Should
the industry follow the NZSI Tech Moratorium scenario, we estimate
that Rio Tinto’s iron ore-related Scope 3 emissions would fall by 23%
by 2035 and 42% by 2040, relative to our 2020 emissions.
About 28% of our iron ore sales are directly to steel producers that
have already set public targets for their Scope 1 and 2 emissions
(our Scope 3), and have ambitions to reach net zero by around
mid-century. In 2022, we commit to engage with all our direct iron
ore customers (representing approximately 75% of our iron ore sales
and related Scope 3 emissions) to share information on our respective
climate change goals and roadmaps, and actively seek areas of mutual
collaboration on pathways to net zero, such as those highlighted in our
iron and steel decarbonisation goals.
Caring for the planet continued
Strategic report
Climate change
The transition to a net zero carbon emissions
world will create additional demand for our
commodities. Copper, lithium, aluminium and
other minerals are essential to increase
renewables capacity and for electric vehicles.
Steel is an irreplaceable material in many
applications, and iron ore is an essential
ingredient for the new technologies required to
produce green steel.
We have an important role to play in supporting and enabling
the transition to net zero emissions. We will do this by producing
materials that are essential to the energy transition, decarbonising our
own assets, and partnering to develop the technologies and products
that will enable our customers to decarbonise their own processes.
Most of our assets sit in the low end of their commodity carbon
intensity curves and 75% of the electricity used at our managed
operations is from renewable sources. Our absolute Scope 1 and 2
emissions in 2021 were 31.1Mt CO2e (2020: 31.5Mt CO2e), 4.3% below
our 2018 equity emissions baseline. The reductions achieved since
2018 are primarily the result of switching to renewable electricity
contracts at Kennecott in the US and the Escondida mine in Chile
(managed by BHP; Rio Tinto owns 30%), and also relate to unplanned
operational disruptions in 2021 at Richards Bay Minerals in South Africa
and the Kitimat aluminium smelter in Canada.
Decarbonising our operations
In the lead up to the UN Climate Change Summit in Glasgow, we
announced that we will accelerate actions to decarbonise our assets in
the short term and aim for a 15% reduction in emissions by 2025 – five
years earlier than originally planned. We increased our 2030 target to a
50% reduction in our Scope 1 and 2 emissions and remain committed
to reaching net zero by 2050.
To achieve this, we aim to:
We estimate that we will invest approximately $7.5 billion in capital
between 2022 and 2030 to deliver our decarbonisation strategy
(approximately $1.5 billion over the period 2022 to 2024). There will
also be incremental operating expenditure on building new
capabilities, energy efficiency initiatives, and research and
development of approximately $200 million per year to 2030.
Alignment with 1.5°C
We conclude that our Scope 1 and 2 targets for 2030 and our
commitment to reach net zero emissions by 2050 are aligned with efforts
to limit warming to 1.5°C, which is aligned with the stretch goal of the
Paris Agreement. While there is no universal standard for assessing the
alignment of targets with the Paris Agreement goals, the basis for our
conclusion is provided in the 2021 Climate Change Report.
KPMG has provided limited assurance over our Scope 1 and 2 target
information presented in the 2021 Climate Change Report, including
the process to set the target, the alignment with 1.5°C and the roadmap
to achieving the target.
Partnerships across our value chains
We operate in energy- and carbon-intensive value chains –
particularly steel and aluminium production – and recognise that we
have a role to play in addressing the resulting emissions. We have
updated our approach to calculating Scope 3 emissions to use
regional factors rather than a global average. Our estimated Scope 3
emissions in 2021 were 553.5Mt CO2e, and around 95% is from the
processing of iron ore, bauxite and other products by our customers.
Aside from the revision to the reporting methodology, the change from
2020 is primarily due to changes in production of iron ore and bauxite.
94% of these processing emissions take place at our customer
facilities in China, South Korea, Japan and other countries that have
pledged to be carbon neutral by around mid-century.
Our approach to addressing Scope 3 emissions is to engage with our
customers on climate change, to share information on respective goals
and targets, and work with them to develop the technologies to
decarbonise steel and aluminium production. We will continue to report
on progress each year.
Steel value chain
– Develop renewable power in the Pilbara. The 34MW solar plant at
Gudai-Darri and the 45MW battery system at Tom Price that we
approved in 2020 are expected to come online in 2022. We are now
targeting the rapid deployment of one gigawatt of wind and solar
power. This will replace gas power and meet demand from our fixed
plants and infrastructure, as well as support the early electrification
and decarbonisation of our mobile fleet.
Steel is a vital material for low-carbon infrastructure and, with limits to
recycling, our iron ore products have an important future role to play.
The future trajectory of our Scope 3 emissions is dependent on our
customers’ decarbonisation roadmaps, which in turn will be guided by
technology development and government policies, including carbon
pricing. The Net-Zero Steel Initiative (NZSI) is an industry platform, part
of the Mission Possible Partnership, that brings together stakeholders
across the whole steel supply chain to help put the sector on a path to
– Work with state and federal governments, power companies and
net zero emissions by mid-century. The NZSI considers 20 technology
renewable developers to dramatically increase the availability of
archetypes and the decision-making process to deploy these at
renewables in eastern Australia, and aim to develop green
individual steel plants based on lowest total cost of ownership. Should
repowering solutions for the Boyne Island and Tomago smelters.
the industry follow the NZSI Tech Moratorium scenario, we estimate
– Advance the projects in our Marginal Abatement Cost Curve such
as the deployment of zero-emission trucks and the use of hydrogen
that Rio Tinto’s iron ore-related Scope 3 emissions would fall by 23%
by 2035 and 42% by 2040, relative to our 2020 emissions.
at our alumina refineries.
– Use a $75/t CO2e internal carbon price to incentivise energy-
efficiency investments and identify new mitigation projects.
– Scale up the ELYSISTM technology with the goal to have it available
for installation from 2024. Construction of the first commercial-scale
prototype cells of the inert anode technology has begun at our Alma
smelter in Saguenay–Lac-Saint-Jean, Quebec.
About 28% of our iron ore sales are directly to steel producers that
have already set public targets for their Scope 1 and 2 emissions
(our Scope 3), and have ambitions to reach net zero by around
mid-century. In 2022, we commit to engage with all our direct iron
ore customers (representing approximately 75% of our iron ore sales
and related Scope 3 emissions) to share information on our respective
climate change goals and roadmaps, and actively seek areas of mutual
collaboration on pathways to net zero, such as those highlighted in our
iron and steel decarbonisation goals.
Our approach is to pursue and support a range of decarbonisation
options aligned with the technology pathways highlighted by the NZSI
analysis, through proactive partnerships with our customers, including
China Baowu, Nippon Steel Corporation, POSCO and BlueScope,
as well as technology providers, universities and research institutes.
This is consolidated under the following focus areas:
– Support our customers’ blast furnace optimisation, with potential
carbon emission reductions of up to 30%;
– Explore future carbon-neutral pathways for our Pilbara iron ores
through: existing and new technologies to beneficiate Pilbara ores;
a proprietary low-carbon research project using microwave energy
and sustainable biomass as a reductant; and assessing a mid-grade
direct reduced iron (DRI) produced with green hydrogen and
processed in an electric melter;
– Pursue a project to produce hot briquetted iron (HBI) with high-grade
iron ore and hydro-based green hydrogen in Canada;
– Find a pathway to develop Simandou to meet the future demand of
high-quality iron ore for low-carbon steelmaking technologies.
Aluminium value chain
As a leading producer of low-carbon aluminium, we are actively
involved in the decarbonisation of the value chain from bauxite to
alumina and primary metal production, and we are committed to
support the industry’s transition. About 74% of our Scope 3 emissions
related to the downstream processing of bauxite and alumina sold to
our customers is from the use of electricity, predominantly in China.
The remainder is from the energy used for process heat at the alumina
refineries of our bauxite customers and from the use of carbon anodes
in aluminium smelting. Our plan is to address these through:
– A commitment to engage with all our bauxite customers to seek
areas of mutual collaboration in alumina decarbonisation projects,
leveraging existing technical support relationships;
– The continued development of the ELYSISTM inert anode technology,
with the goal to have it available for installation at our smelters from
2024, following the construction of large-scale commercial
prototype cells at our Alma smelter in the Saguenay by 2023;
– Leveraging START, a new standard we launched in 2021 for
transparency and traceability across the aluminium value chain, to
support customer and consumer demand for sustainable products.
Shipping
We have an ambition to reach net zero emissions from the shipping of
our products by 2050 and expect to meet the International Maritime
Organisation (IMO) decarbonisation goal of 40% reduction in shipping
emissions intensity by 2025, five years ahead of the IMO deadline.
We expect to introduce net-zero emission vessels into our portfolio
by 2030.
Enhancing our resilience to physical
climate risk
Our assets, infrastructure, communities and broader value chains are
exposed to chronic and acute climate change risks, such as the
impacts of extreme weather events. Managing physical climate change
risk through risk-based adaptation practices is essential to enhance
the resilience of assets and communities, and it is the fourth pillar of our
approach to climate change. Following a Group-wide exposure
assessment, the next stage has been to conduct asset-level risk
assessments to confirm the effectiveness of our controls. This work
was paused in 2020 due to the prioritisation of the COVID-19 response
and restrictions on travel to our sites. In 2021, the Energy and Climate
Change Centre of Excellence and Risk Area of Expertise have been
preparing to engage the product groups for detailed physical risk
assessments in 2022.
Revolutionising aluminium production
The ELYSISTM technology will reduce the carbon footprint
and operating costs of aluminium smelters while increasing
production capacity. In Canada alone, the ELYSISTM
technology has the potential to reduce greenhouse gas
emissions by 7 million tonnes.
Learn more about ELYSISTM at riotinto.com/stories.
Disclosures consistent with the TCFD
recommendations
Climate-related disclosures on governance, strategy, risk management,
as well as metrics and targets, are integrated into this Annual Report in
the following sections: Strategic Context, Key Performance Indicators,
Innovation, Risk Management, Principal risks and Uncertainties,
Governance, the Sustainability Committee report, the Remuneration
Committee report and in the notes to the accounts.
Given space constraints in the Annual Report, other reports
supplement the disclosures on climate-related governance, strategy,
risk management and metrics and targets that are made in this report.
These are available at riotinto.com/reports. Our 2021 Climate Change
Report provides further detail on our approach including our Climate
Action Plan, the way we evaluate and manage climate-related risks,
progress towards our targets and our value chain partnerships.
Our 2021 Sustainability Fact Book provides a full list of the 11 main
TCFD recommendations alongside references to our disclosure
against them. Our 2020 Climate Change Report includes further detail
on our approach to scenario analysis, including our consideration
of 1.5°C scenarios. These disclosures together meet all of the
disclosures required under the TCFD Recommendations and
Recommended Disclosures.
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Greenhouse gas emissions
Scope 1 and 2 emissions - equity basis
Equity greenhouse gas emissions - million tonnes carbon dioxide equivalent (Mt CO2e)
Total Scope 1 & 2 GHG emissions
Scope 1 emissions
Scope 2 emissions
2018 GHG emissions target baseline (adjusted for acquisitions & divestments)
Scope 3 emissions
Operational greenhouse gas emissions intensity (t CO2e / t Cu-eq) (equity)2
2021 equity greenhouse gas emissions by product group & source (Mt CO2e)
Aluminium
Aluminium (Pacific)
Aluminium (Atlantic)
Bauxite & Alumina
Minerals
Iron Ore
Copper
Other (includes Shipping and corporate functions)
Total
2021 equity greenhouse gas emissions by location (Mt CO2e)
Australia
Canada
South Africa
US
Other: Rest of Africa
Other: Europe
Other: Asia, New Zealand, Central America, South America
Total
Scope 3 emissions - equity basis
Total equity Scope 3 greenhouse gas emissions (Mt CO2e)
Upstream
Processing of goods sold
Iron Ore
Bauxite & Alumina
Other goods sold
Other Downstream
Total – 2021 reporting method
Electricity3
10.4
8.1
0.6
1.6
1.4
0.8
1.3
0.1
14.0
2021
31.1
22.7
8.4
553.5
6.4
2020
31.5
22.8
8.7
5701
6.2
2019
31.5
23.1
8.3
–
6.1
2018
34
24.7
9.3
32.5
–
6.2
Anodes &
Reductants
Process
Heat3
Mobile
Diesel3
Other
2021 Total
emissions
(Mt CO2e)
5.2
1.7
3.5
–
1.2
–
–
–
6.4
4.9
0.2
0.5
4.3
0.5
0.1
0.2
–
5.6
0.3
–
–
0.3
0.3
2.1
0.8
0.5
4.0
Scope 1
emissions
(Mt CO2e)
12.8
6.0
0.3
1.0
0.2
0.4
2.0
22.7
1.1
0.2
0.6
0.3
0.1
–
–
–
1.1
21.9
10.2
5.2
6.5
3.4
3.0
2.2
0.6
31.1
Scope 2
emissions
(Mt CO2e)
Total
emissions
(Mt CO2e)
6.0
0.0
1.1
0.0
0.0
0.0
1.3
8.4
2021
27.5
364.6
144.5
14.2
2.7
553.5
18.8
6.0
1.4
1.0
0.2
0.4
3.3
31.1
2020
23.7
376.4
152
14.4
3.0
570
1. 2020 Scope 3 emissions have been re-estimated using the 2021 methodology (using the 2020 methodology our total Scope 3 emissions were reported as 519.4Mt CO2e). Please see our 2021
Scope 1, 2 and 3 Emissions Calculation Methodology report at riotinto.com/climatereport.
2. Historical information for copper equivalent intensity has been restated in line with the 2021 review of commodity pricing to allow comparability over time.
3. Electricity includes imported power and own generation; process heat includes diesel consumption from stationary sources such as pumps; mobile diesel sources are haul trucks, locomotives
and other mining fleet.
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Strategic report
2021 equity greenhouse gas emissions by product group & source (Mt CO2e)
Anodes &
Reductants
Process
Heat3
Mobile
Diesel3
Other
2021 Total
emissions
(Mt CO2e)
Greenhouse gas emissions
Scope 1 and 2 emissions - equity basis
Equity greenhouse gas emissions - million tonnes carbon dioxide equivalent (Mt CO2e)
Total Scope 1 & 2 GHG emissions
2018 GHG emissions target baseline (adjusted for acquisitions & divestments)
Operational greenhouse gas emissions intensity (t CO2e / t Cu-eq) (equity)2
Scope 1 emissions
Scope 2 emissions
Scope 3 emissions
Aluminium
Aluminium (Pacific)
Aluminium (Atlantic)
Bauxite & Alumina
Minerals
Iron Ore
Copper
Total
Australia
Canada
South Africa
US
Other: Rest of Africa
Other: Europe
Total
Other (includes Shipping and corporate functions)
2021 equity greenhouse gas emissions by location (Mt CO2e)
Other: Asia, New Zealand, Central America, South America
Scope 3 emissions - equity basis
Total equity Scope 3 greenhouse gas emissions (Mt CO2e)
Upstream
Processing of goods sold
Iron Ore
Bauxite & Alumina
Other goods sold
Other Downstream
Total – 2021 reporting method
Electricity3
10.4
8.1
0.6
1.6
1.4
0.8
1.3
0.1
14.0
5.2
1.7
3.5
–
1.2
–
–
–
6.4
2021
31.1
22.7
8.4
553.5
6.4
4.9
0.2
0.5
4.3
0.5
0.1
0.2
–
5.6
2020
31.5
22.8
8.7
5701
6.2
0.3
–
–
0.3
0.3
2.1
0.8
0.5
4.0
6.0
0.3
1.0
0.2
0.4
2.0
22.7
2019
31.5
23.1
8.3
–
6.1
1.1
0.2
0.6
0.3
0.1
–
–
–
1.1
6.0
0.0
1.1
0.0
0.0
0.0
1.3
8.4
2021
27.5
364.6
144.5
14.2
2.7
553.5
2018
34
24.7
9.3
32.5
–
6.2
21.9
10.2
5.2
6.5
3.4
3.0
2.2
0.6
31.1
18.8
6.0
1.4
1.0
0.2
0.4
3.3
31.1
2020
23.7
376.4
152
14.4
3.0
570
Scope 1
emissions
(Mt CO2e)
12.8
Scope 2
emissions
(Mt CO2e)
Total
emissions
(Mt CO2e)
1. 2020 Scope 3 emissions have been re-estimated using the 2021 methodology (using the 2020 methodology our total Scope 3 emissions were reported as 519.4Mt CO2e). Please see our 2021
Scope 1, 2 and 3 Emissions Calculation Methodology report at riotinto.com/climatereport.
2. Historical information for copper equivalent intensity has been restated in line with the 2021 review of commodity pricing to allow comparability over time.
3. Electricity includes imported power and own generation; process heat includes diesel consumption from stationary sources such as pumps; mobile diesel sources are haul trucks, locomotives
and other mining fleet.
Environment
In 2021, we improved our ability to manage
environmental impacts consistently across the
business. We increased our internal technical
expertise and capability by recruiting subject
matter experts in a number of disciplines to
support practitioners at the asset level. We
reviewed our control framework across all
Environment disciplines and identified critical
controls at a Group level to better manage risks
across the portfolio. We also worked on our
data collection and monitoring processes to
improve data access and analysis to allow
better data-driven decision-making and
management practices, more transparency
and improved environmental outcomes.
Water
Increasingly disrupted weather patterns and more
extreme weather events due to climate change, and a
growing world population, mean efficiently managing our
water impacts is more important than ever. Water is a
shared resource critical to sustaining biodiversity, people
and their economic prosperity. The way we think about
water, and manage the risks, reflects the diversity of our
operations and geographic locations.
Water scarcity is an issue for some of our assets operating in desert
locations, while others must remove excess water to allow safe
mining operations. Some of our assets are powered by water via
hydroelectricity and, in all locations, we carefully manage our use and
reuse of water, and consider the potential long-term impacts on water
sources. This complexity means we are developing a catchment-level
approach to water management and manage our impacts, risks and
potential solutions within our operations with the understanding that we
share water with surrounding communities and nature. We understand
this responsibility extends beyond the life of our operations.
We aim to avoid permanent impacts to water resources by carefully
managing the quality and quantity of the water we use and return to
the environment. We work to balance our operational needs with those
of local communities and ecosystems, and factor in the impact of
climate change, which is already affecting rainfall and water security
at many of our sites. We use baseline water stress as determined by the
World Resource Institute to identify operational catchments of most
concern. Visit riotinto.com/water for more information.
Protecting a national treasure
Iron Ore’s Water Resource Evaluation team is helping us
meet the water target for our Pilbara operations.
Learn more about their work and
the importance of water in the region
at riotinto.com/stories.
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To manage our water impacts well, we first need to understand the
specific risks at more than 50 operating sites, as well as our overall
Group impacts. To do this, we think about water issues in four ways:
1. Water resource
2. Quality and quantity
3. Dewatering
4. Long-term obligations
We use this framework to identify, assess and manage water risks.
This comprehensive approach extends beyond our mandatory
reporting obligations and allows us to have relevant conversations
about water risks internally and with stakeholders in the communities
where we operate.
Our Group water risk profile (below) shows the level of exposure
against each of the four themes, or risks. Most of our water risks sit in
the “low” to “moderate” range. There are some in “very high” and “high”
categories for each. Regardless of the level of risk, we apply rigorous
standards and processes to manage them.
Group water risk profile (% of managed operations)1
Water resource
Water quality/quantity
Dewatering
Long-term obligations
Is there enough water available
for both environment and
community needs, and our
operational use?
9%
11%
Does the way we manage water
on site, or discharge excess
water, cause environmental
impacts or operational
constraints?
2%
37%
28%
43%
Does the removal of water from
the operational areas of our sites
impact regional aquifers or our
mine plans?
Do our operational activities
generate long-term or ongoing
obligations related to water?
11%
26%
22%
31%
22%
57%
33%
9%
6%
17%
15%
20%
Low
Moderate
High
Very high
Not applicable
The water resource risk at
Oyu Tolgoi in Mongolia is
assessed as moderate, even
though it is located in the Gobi
Desert. Oyu Tolgoi sources its
water requirements from a deep
water supply, the Gunii Hooloi
aquifer, a 150-metre deep
resource holding around
6.8 billion cubic metres of
non-drinkable saline water.
Oyu Tolgoi uses this water source
efficiently with water recycling
and conservation practices
implemented across the
operation. For more information
see riotinto.com/water.
Our QIT Madagascar Minerals
(QMM) operation in Madagascar
operates in a highly sensitive
area from a water, broader
environment and community
perspective. The discharges
from our operation have the
potential to impact receiving
water quality and, therefore,
the water quality risk is assessed
as high. We are working to
improve management activities
on site, including our ability
to more accurately measure
our water discharge quality,
and the deployment of a
dedicated water treatment
plant to adjust the discharge pH.
For more information see
riotinto.com/water.
Impacts associated with
dewatering and water supply
activities in the Pilbara are
recognised as a very high risk for
our business. Returning water to
the aquifers impacted by our
mining activities in a controlled
manner is the focus of a number
of studies. More information on
our current programme of
managed aquifer recharge trials
in the Pilbara is available on
riotinto.com/water.
We may sometimes generate
impacts that we are required to
manage over the long term.
Whether they are associated
with the management of
post-closure pit lakes formed in
our mining pits in the Pilbara, or
the ongoing management of
potential seepage from our
waste rock or tailings facilities in
our aluminium and copper
facilities, our systems and
standards aim to ensure that the
risk is identified early and
managed appropriately and
responsibly throughout the asset
lifecycle.
1. Queensland Alumina Limited is a non-managed operation, but is part of our water stewardship target programme.
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Strategic report
To manage our water impacts well, we first need to understand the
We use this framework to identify, assess and manage water risks.
specific risks at more than 50 operating sites, as well as our overall
This comprehensive approach extends beyond our mandatory
Group impacts. To do this, we think about water issues in four ways:
reporting obligations and allows us to have relevant conversations
1. Water resource
2. Quality and quantity
3. Dewatering
4. Long-term obligations
about water risks internally and with stakeholders in the communities
where we operate.
Our Group water risk profile (below) shows the level of exposure
against each of the four themes, or risks. Most of our water risks sit in
the “low” to “moderate” range. There are some in “very high” and “high”
categories for each. Regardless of the level of risk, we apply rigorous
standards and processes to manage them.
Our water balance
The Group water balance for 2021 (below) provides a simplified visual summary of where water was withdrawn from, discharged to,
recycled/reused and consumed at our operations.
With regard to operational withdrawal water quality, 439 GL1 or 40% of overall 2021 withdrawals were of freshwater, or category 1, quality.
This compares against our 2020 freshwater breakdown of 35%. Freshwater, or category 1 quality, is water that is generally suitable for consumption
with minimal treatment required. Where possible, we aim to minimise our extractions from water sources of this quality.
The reported categories correlate with reporting requirements for the International Council on Mining and Metals (ICMM), Minerals Council
of Australia (MCA) and Global Reporting Initiatives (GRI). See the Sustainability Fact Book for more detailed water balance information.
Group water risk profile (% of managed operations)1
Water resource
Water quality/quantity
Dewatering
Long-term obligations
Is there enough water available
Does the way we manage water
Does the removal of water from
Do our operational activities
for both environment and
community needs, and our
operational use?
9%
11%
on site, or discharge excess
water, cause environmental
impacts or operational
constraints?
2%
37%
28%
43%
the operational areas of our sites
generate long-term or ongoing
impact regional aquifers or our
obligations related to water?
mine plans?
11%
26%
22%
31%
Water use on site
Recycled water
310 GL
Surface water
340 GL
Groundwater
193 GL
Entrained in ore
52 GL
Marine
435 GL
22%
57%
33%
9%
6%
17%
15%
20%
Third Party & Municipal
59 GL
Change in storage during year
+5.5 GL
Low
Moderate
High
Very high
Not applicable
Other managed water (surface & groundwater)
185 GL
Total discharges
661 GL
Total consumption
598 GL
1. A gigalitre (GL) is 1,000 megalitres, or 1,000,000,000 litres.
439 GL is the category 1 quality water withdrawn, out of a total 1080 GL of operational water withdrawals. Please refer to the Sustainability Fact Book for additional detail.
The water resource risk at
Oyu Tolgoi in Mongolia is
Our QIT Madagascar Minerals
Impacts associated with
We may sometimes generate
(QMM) operation in Madagascar
dewatering and water supply
impacts that we are required to
assessed as moderate, even
operates in a highly sensitive
activities in the Pilbara are
manage over the long term.
though it is located in the Gobi
area from a water, broader
recognised as a very high risk for
Whether they are associated
Desert. Oyu Tolgoi sources its
environment and community
our business. Returning water to
with the management of
water requirements from a deep
perspective. The discharges
the aquifers impacted by our
post-closure pit lakes formed in
water supply, the Gunii Hooloi
from our operation have the
mining activities in a controlled
our mining pits in the Pilbara, or
aquifer, a 150-metre deep
resource holding around
6.8 billion cubic metres of
potential to impact receiving
water quality and, therefore,
manner is the focus of a number
the ongoing management of
of studies. More information on
potential seepage from our
the water quality risk is assessed
our current programme of
waste rock or tailings facilities in
non-drinkable saline water.
as high. We are working to
managed aquifer recharge trials
our aluminium and copper
Oyu Tolgoi uses this water source
improve management activities
in the Pilbara is available on
facilities, our systems and
efficiently with water recycling
on site, including our ability
riotinto.com/water.
standards aim to ensure that the
risk is identified early and
managed appropriately and
responsibly throughout the asset
lifecycle.
and conservation practices
implemented across the
to more accurately measure
our water discharge quality,
operation. For more information
and the deployment of a
see riotinto.com/water.
dedicated water treatment
plant to adjust the discharge pH.
For more information see
riotinto.com/water.
1. Queensland Alumina Limited is a non-managed operation, but is part of our water stewardship target programme.
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Our 2019–2023 water targets
Our five-year water targets allow us to be more transparent about our
water usage, risk profile, management and specific challenges.
These targets, and the data required to measure progress against
them, are helping us become better water stewards.
Our water targets were set in 2019 and consist of one Group target
and six site-based targets, again reflecting our catchment-based
approach and recognising that we manage vastly different water-
related risks across our business. The site-based targets were
chosen based on their water risk profile, our International Council on
Mining and Metals (ICMM) commitments, and local community and
environmental interdependencies.
We continued to make progress against our Group target in 2021 and
remain on track to meet it by 2023. We collected water allocation
volume data for all sites and estimated surface water catchment
rainfall-runoff volumes for our managed operations. We also
implemented the last component of the framework – the Group water
control library – which describes all controls identified to manage our
water risks. In 2022, we will continue embedding our water risk
framework and associated controls across our product groups and
focus on delivering our site-based targets.
Progress against our targets
Group target
Rio Tinto Group (Tier 1)
By 2023, we will disclose – for all managed operations –
permitted surface water allocation volumes, annual
allocation usage and the associated surface water
allocation catchment rainfall-runoff volume estimate.
Water risk theme Status
Commentary
Water resource
On track
Progress remains on track against target schedule. Additional
specialist water expertise added to central team during 2021.
Site-based target
Water risk theme Status
Commentary
Pilbara operations, Iron Ore (Tier 1)
Our Iron Ore product group will complete six managed
aquifer recharge investigations by 2023.
Dewatering
(aquifer reinjection)
On track
Successful completion of three of the proposed six managed
aquifer recharge investigations.
Oyu Tolgoi, Copper (Tier 1)
Oyu Tolgoi will maintain average annual water
use efficiency at 550 L/tonne of ore to concentrator
from 2019-23.
Water resource
(intensity and
efficiency)
Achieved for
2019-21
Average annual water use efficiency maintained below 550 L/
tonne for 2019-21 period.
Kennecott Utah Copper, Copper (Tier 1)
Kennecott will reduce average annual imported
water per tonne of ore milled by 5% over the 2014-18
baseline of 393 gal/tonne (1,487L/tonne) at the Copperton
Concentrator by 2023.
Water resource
(import reduction)
At risk,
recoverable
Kennecott has allocated additional budget in 2022 to prioritise
the understanding of the conditions that influence water import
demands at the concentrator and to determine solutions to
mitigate and lower these demands.
Ranger Mine1, Energy Resources of Australia Limited (ERA), Closure (Tier 1)
ERA will achieve the planned total process water
inventory treatment volume by 2023, as assumed in
the Ranger water model.
Quantity/quality
(inventory reduction)
At risk
QIT Madagascar Minerals (QMM), Minerals (Tier 2)
QMM will develop and implement an improved integrated
site water management approach by 2023.
Quantity/quality
(discharge quality)
On track
Following the ASX announcement on 19 November 2021, work is
continuing on the reforecast of both cost and schedule in relation
to the calculation of the rehabilitation provision and timing for
completion of the Ranger project area.
Given this, the ERA target remains at risk subject to the reforecast of
target treatment volumes as part of the Ranger water model update.
Progress remains on track against target schedule. Completed
development of the integrated site water management approach
and implementation of identified site improvements is under way.
Queensland Alumina Limited (QAL), Aluminium (non-managed joint venture) (Tier 2)
QAL will complete the following four water-related
improvement projects from the QAL five-year
Environment Strategy by 2023:
– Project L1 – integrity of bunds and drains
– Project W3 – caustic pipe and wasteline 4 integrity
– Project W6 – residue disposal area surface/ground
water impacts
– Project W7 – residue disposal area release to
receiving environment
Quality/quantity
(discharge quality)
On track
Progress of nominated water-related improvement projects is
aligned with current project schedules.
Joint venture
performance
improvement
Tier 1 water targets form part of the Rio Tinto external limited assurance programme.
Tier 2 water targets do not form part of the Rio Tinto external limited assurance programme.
More detailed information about our progress against our site-based water targets is available at riotinto.com/water.
1. Ranger Mine is owned and operated by ERA; Rio Tinto is a 86.3% shareholder in ERA.
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Our 2019–2023 water targets
Our five-year water targets allow us to be more transparent about our
water usage, risk profile, management and specific challenges.
These targets, and the data required to measure progress against
them, are helping us become better water stewards.
Our water targets were set in 2019 and consist of one Group target
and six site-based targets, again reflecting our catchment-based
approach and recognising that we manage vastly different water-
related risks across our business. The site-based targets were
chosen based on their water risk profile, our International Council on
Mining and Metals (ICMM) commitments, and local community and
environmental interdependencies.
We continued to make progress against our Group target in 2021 and
remain on track to meet it by 2023. We collected water allocation
volume data for all sites and estimated surface water catchment
rainfall-runoff volumes for our managed operations. We also
implemented the last component of the framework – the Group water
control library – which describes all controls identified to manage our
water risks. In 2022, we will continue embedding our water risk
framework and associated controls across our product groups and
focus on delivering our site-based targets.
Progress against our targets
Group target
Rio Tinto Group (Tier 1)
permitted surface water allocation volumes, annual
allocation usage and the associated surface water
allocation catchment rainfall-runoff volume estimate.
Pilbara operations, Iron Ore (Tier 1)
Water risk theme Status
Commentary
By 2023, we will disclose – for all managed operations –
Water resource
On track
Progress remains on track against target schedule. Additional
specialist water expertise added to central team during 2021.
Site-based target
Water risk theme Status
Commentary
Our Iron Ore product group will complete six managed
Dewatering
On track
Successful completion of three of the proposed six managed
aquifer recharge investigations by 2023.
(aquifer reinjection)
aquifer recharge investigations.
Oyu Tolgoi, Copper (Tier 1)
Oyu Tolgoi will maintain average annual water
use efficiency at 550 L/tonne of ore to concentrator
from 2019-23.
Water resource
(intensity and
efficiency)
Kennecott Utah Copper, Copper (Tier 1)
Achieved for
Average annual water use efficiency maintained below 550 L/
2019-21
tonne for 2019-21 period.
Kennecott will reduce average annual imported
Water resource
At risk,
Kennecott has allocated additional budget in 2022 to prioritise
water per tonne of ore milled by 5% over the 2014-18
(import reduction)
recoverable
the understanding of the conditions that influence water import
baseline of 393 gal/tonne (1,487L/tonne) at the Copperton
Concentrator by 2023.
demands at the concentrator and to determine solutions to
mitigate and lower these demands.
Ranger Mine1, Energy Resources of Australia Limited (ERA), Closure (Tier 1)
ERA will achieve the planned total process water
Quantity/quality
At risk
Following the ASX announcement on 19 November 2021, work is
inventory treatment volume by 2023, as assumed in
(inventory reduction)
continuing on the reforecast of both cost and schedule in relation
the Ranger water model.
to the calculation of the rehabilitation provision and timing for
completion of the Ranger project area.
Given this, the ERA target remains at risk subject to the reforecast of
target treatment volumes as part of the Ranger water model update.
QIT Madagascar Minerals (QMM), Minerals (Tier 2)
QMM will develop and implement an improved integrated
Quantity/quality
On track
Progress remains on track against target schedule. Completed
site water management approach by 2023.
(discharge quality)
development of the integrated site water management approach
and implementation of identified site improvements is under way.
Queensland Alumina Limited (QAL), Aluminium (non-managed joint venture) (Tier 2)
QAL will complete the following four water-related
improvement projects from the QAL five-year
Quality/quantity
(discharge quality)
On track
Progress of nominated water-related improvement projects is
aligned with current project schedules.
Environment Strategy by 2023:
– Project L1 – integrity of bunds and drains
– Project W3 – caustic pipe and wasteline 4 integrity
– Project W6 – residue disposal area surface/ground
water impacts
– Project W7 – residue disposal area release to
receiving environment
Joint venture
performance
improvement
Tier 1 water targets form part of the Rio Tinto external limited assurance programme.
Tier 2 water targets do not form part of the Rio Tinto external limited assurance programme.
More detailed information about our progress against our site-based water targets is available at riotinto.com/water.
1. Ranger Mine is owned and operated by ERA; Rio Tinto is a 86.3% shareholder in ERA.
Contributing to a resilient environment
Our environment technical experts work with our
process safety and operational engineers to ensure our
operating systems and processes are managed to
prevent harmful discharges or releases to
the environment.
At a minimum, we comply with national and local environmental
regulations related to waste management, water discharge and air
emissions. We also apply our own standards, which set the minimum
requirements to define, monitor and manage emissions at all our
managed operations to prevent harm to people and the environment.
These standards require us to set performance requirements for
resource efficiency, particularly relating to mineral and non-mineral
waste management.
We contribute to sustainability initiatives across the value
chain through our work with peers, industry associations, and
customers. And we continually improve our due-diligence mechanisms
and assess the environmental performance of new suppliers
and customers.
Managing waste
Waste and residues from our operational activities are a key area of
environmental risk management for us. In 2021, we renewed our focus
on managing potential contamination from these sources. We
conducted a detailed analysis of hazardous materials and non-mineral
waste to assess and prioritise our contamination risks. To reduce
further contamination risks, we are banning the use of PFAS
(perfluoroalkyl and polyfluoroalkyl substances) in fire-suppression
systems at our sites by the end of 2022.
At some of our long-life assets, waste management practices of the
past have led to a need for remediation in the present. For example,
at New Zealand’s Aluminium Smelter (NZAS), which has operated for
more than 50 years, a detailed site investigation was completed in 2021
to guide remediation work. The study identified localised areas of
contamination confined to the smelter footprint, informing a targeted
rehabilitation strategy for the site. NZAS has committed to removing
all Spent Cell Lining waste generated in the process of relining
reduction cells with refractory materials, managing waste and
remediating the site.
Biodiversity
The associated impacts of climate change and
biodiversity loss pose significant risks to people and
the environment on which we all rely. We recognise
our responsibility to effectively mitigate the impact
of our operations on nature – and we are mindful
of our own dependence on healthy ecosystems to
run a successful business.
Healthy natural environments with relatively intact ecosystems are
key to climate resilience. They also provide important services to the
communities where we operate and our business. We are committed
to protecting biodiversity with the ambition of achieving no net loss.
This means striking a balance between negative impacts on
biodiversity and positive outcomes achieved through mitigation.
In 2020, we reported on the biodiversity sensitivity of our assets using
a database developed by the UN Environment Programme World
Conservation Monitoring Centre (UNEP WCMC) methodology that
combined global datasets of threatened species and conservation and
protected areas. Building on this, in 2021 we worked with Birdlife
International to understand how our biodiversity programmes might
also contribute to carbon sequestration and began to understand how
we might apply nature-based solutions within our landholdings.
This work will continue to mature in 2022.
As a founding partner of UNEP WCMC’s 19-year-old Proteus
Partnership, we committed to the next five-year phase of this cross-
sectoral association. Through this partnership, and as part of our drive
to build our internal capability, we have delivered biodiversity training
to more than 200 employees across the business in 2021.
We were unable to complete an independent review of the monitoring
programmes of our high-priority biodiversity sites in 2021 due to
pandemic-related restrictions. However, we had independent
assessments completed for five of eight sites and completed an internal
assessment of all plans. We aim to complete this work in 2022 to ensure
that management plans and actions adequately address risks to nature.
Land stewardship
In 2021, our land footprint – total disturbed area –
was 3,734 square kilometres, an increase of 105 square
kilometres compared to 2020. This includes all disturbance
of our operating assets and activities, such as exploration
activities, smelters, mines and supporting infrastructure.
We are temporary custodians of the land on which we operate,
and our aim is to rehabilitate the land as soon as it becomes available.
In 2021, we rehabilitated 20 square kilometres of land, mostly at our
bauxite mines in Australia, mineral sands mines in South Africa and
Madagascar, and exploration areas in the Pilbara, Western Australia.
Our rehabilitation teams work in partnership with research centres and
universities to refine rehabilitation approaches and improve outcomes.
In 2021, as a member of the Cooperative Research Centre for
Transformations in Mining Economies, we participated in foundational
projects intended to identify gaps affecting rehabilitation, closure and
post-closure outcomes to guide upcoming research that will assist our
Australian operations. In another example, through a partnership with
the company Virotec, we are reprocessing a by-product from bauxite
refining (red mud) into a commercial product that can be used in the
treatment and regeneration of soils. In addition, 22 of our operations
completed rehabilitation trials to improve outcomes relating to seed
germination, erosion and topsoil quality.
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Caring for the planet continued
Protecting air quality
Clean air is critical for the health of our host communities and of the
surrounding ecosystems. Across the business, we continue to pursue
improvements to air quality management, focusing on emissions of
greenhouse gases and particulate matter and gases emitted by our
operational activities, including mining, materials handling, processing
and transportation. The potentially hazardous emissions we monitor at
operations are:
– Sulphur oxides (SOx), mainly at our aluminium and
copper smelters
– Nitrogen oxides (NOx), mainly from burning fossil fuels
– Gaseous fluoride emissions from aluminium smelters
– Respirable particulate emissions (PM10 and PM2.5), very fine
particles from mining and processing operations, and from
burning fossil fuels
Our emphasis is on prevention, managing air quality through
operational discipline and process improvement.
Many of our assets have multi-year air quality improvement projects in
place. For example, at the Iron Ore Company of Canada (IOC), plans
are under way to reduce emissions with additional dust collection and
to reconfigure the stacks to improve dispersion in the atmosphere.
At our Atlantic aluminium smelting operations in Canada, enhanced
monitoring for key air pollutants that links emissions and operational
data has reduced response times for upset conditions. Phase 1 of this
project has reduced, by 90%, the amount of time stack emissions
exceed recommended particulate concentrations.
In some instances, we did not comply with permissible emission limits.
For example, our Kennecott smelter experienced temporary equipment
failures that, for safety reasons, required us to vent gases containing
sulphur oxides directly to the stack. This resulted in short-term
non-compliance but we remained compliant with our daily and annual
limits and our continuous monitoring system indicated there was no
adverse impact on ambient air quality.
Topsoil-free rehabilitation
With topsoil in short supply at our Gove bauxite mine in the
Northern Territory, Australia, we have been working on a new
topsoil-free rehabilitation approach to reduce reliance on
topsoil in the future while minimising environmental impacts
and cost.
Learn more about our rehabilitation
work at riotinto.com/stories.
Operational environment overview (2017-2021)
Significant environmental incidents
Fines and prosecutions – environment ($’000)4
Land footprint – disturbed (square kilometres)
Land footprint – rehabilitated (square kilometres)
Mineral waste disposed or stored (million tonnes)
Non-mineral waste disposed or stored (million tonnes)
SOx emissions (thousand tonnes)
NOx emissions (thousand tonnes)1
Fluoride emissions (thousand tonnes)
Particulate (PM10) emissions (thousand tonnes)2
2021
3
7.4
3,734
495
1,005
0.65
70.2
88.5
2.36
139.6
2020
0
27.4
3,629
491
9873
0.473
75.73
85.6
2.273
143.23
2019
0
19.0
3,626
490
905
0.28
79.0
64.3
2.34
2018
0
284.7
3,595
485
886
0.27
84.2
62.0
2.61
2017
0
89.5
3,616
497
1,188
0.33
86.9
65.8
2.49
131.53
136.23
112.43
1. The increase of NOx emissions from 2019 to 2020 is due to a change in the calculation method from emissions factors to direct measurement using stack sampling data.
2. PM10 emissions have increased due to a change in calculation methodology, figures for 2017 to 2020 have been restated.
3. Numbers restated from those originally published to ensure comparability over time.
4. In 2021, we paid environmental fines totalling $7,414 resulting from non-compliance for snow management at Alma, Canada; the death of a goitered gazelle in Mongolia; and the violation of
Eastern Kern Air Pollution Control District Rules and Regulations at Boron Operations, US.
Please refer to the Sustainability Fact Book at riotinto.com/sustainabilityreport for more details.
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Protecting air quality
Clean air is critical for the health of our host communities and of the
surrounding ecosystems. Across the business, we continue to pursue
improvements to air quality management, focusing on emissions of
greenhouse gases and particulate matter and gases emitted by our
operational activities, including mining, materials handling, processing
and transportation. The potentially hazardous emissions we monitor at
operations are:
– Sulphur oxides (SOx), mainly at our aluminium and
copper smelters
– Nitrogen oxides (NOx), mainly from burning fossil fuels
– Gaseous fluoride emissions from aluminium smelters
– Respirable particulate emissions (PM10 and PM2.5), very fine
particles from mining and processing operations, and from
burning fossil fuels
Our emphasis is on prevention, managing air quality through
operational discipline and process improvement.
Many of our assets have multi-year air quality improvement projects in
place. For example, at the Iron Ore Company of Canada (IOC), plans
are under way to reduce emissions with additional dust collection and
to reconfigure the stacks to improve dispersion in the atmosphere.
At our Atlantic aluminium smelting operations in Canada, enhanced
monitoring for key air pollutants that links emissions and operational
data has reduced response times for upset conditions. Phase 1 of this
project has reduced, by 90%, the amount of time stack emissions
exceed recommended particulate concentrations.
In some instances, we did not comply with permissible emission limits.
For example, our Kennecott smelter experienced temporary equipment
failures that, for safety reasons, required us to vent gases containing
sulphur oxides directly to the stack. This resulted in short-term
non-compliance but we remained compliant with our daily and annual
limits and our continuous monitoring system indicated there was no
adverse impact on ambient air quality.
Topsoil-free rehabilitation
With topsoil in short supply at our Gove bauxite mine in the
Northern Territory, Australia, we have been working on a new
topsoil-free rehabilitation approach to reduce reliance on
topsoil in the future while minimising environmental impacts
and cost.
Learn more about our rehabilitation
work at riotinto.com/stories.
Operational environment overview (2017-2021)
Significant environmental incidents
Fines and prosecutions – environment ($’000)4
Land footprint – disturbed (square kilometres)
Land footprint – rehabilitated (square kilometres)
Mineral waste disposed or stored (million tonnes)
Non-mineral waste disposed or stored (million tonnes)
SOx emissions (thousand tonnes)
NOx emissions (thousand tonnes)1
Fluoride emissions (thousand tonnes)
Particulate (PM10) emissions (thousand tonnes)2
2021
3
7.4
3,734
495
1,005
0.65
70.2
88.5
2.36
139.6
2020
0
27.4
3,629
491
9873
0.473
75.73
85.6
2.273
143.23
2019
0
19.0
3,626
490
905
0.28
79.0
64.3
2.34
2018
0
284.7
3,595
485
886
0.27
84.2
62.0
2.61
2017
0
89.5
3,616
497
1,188
0.33
86.9
65.8
2.49
131.53
136.23
112.43
1. The increase of NOx emissions from 2019 to 2020 is due to a change in the calculation method from emissions factors to direct measurement using stack sampling data.
2. PM10 emissions have increased due to a change in calculation methodology, figures for 2017 to 2020 have been restated.
3. Numbers restated from those originally published to ensure comparability over time.
4. In 2021, we paid environmental fines totalling $7,414 resulting from non-compliance for snow management at Alma, Canada; the death of a goitered gazelle in Mongolia; and the violation of
Eastern Kern Air Pollution Control District Rules and Regulations at Boron Operations, US.
Please refer to the Sustainability Fact Book at riotinto.com/sustainabilityreport for more details.
Since the launch of GISTM in August 2020, we have continued work on
our implementation plan. We completed a gap analysis against our
internal tailings management, environment, and communities and
social performance standards, and developed improvement plans to
close identified gaps. While COVID-19 restrictions delayed a few items,
we plan to complete all outstanding actions as quickly as possible,
while adhering to restrictions in each jurisdiction. We are on track to
have all TSFs with a potential consequence rated “extreme” or “very
high” in conformance with GISTM by August 2023, with all remaining
facilities in conformance by August 2025.
We played an active role in the International Council on Mining and
Metals (ICMM) tailings working group in 2021, which focused on the
development of the GISTM conformance protocol as well as a tailings
good practice guide designed to help support industry-wide adoption.
This year, we also:
– Appointed Accountable Executives for tailings and established the
Tailings Management Committee, which provides governance of
tailings management practices across the Group to ensure we meet
the GISTM and the relevant Rio Tinto standard requirements.
– Updated our tailings disclosure information and released our
updated D5 Standard for the management of tailings and water
storage facilities on our website in May 2021.
– Published our Tailings Policy on our website in August 2021.
– Consolidated our Group-wide controls for tailings management in
our centralised risk management system so that, no matter where in
the world our people are, controls relating to tailings can be
consistently applied and verified.
– Continued to support the Future Tails partnership, a collaboration
between Rio Tinto, BHP and the University of Western Australia
(UWA), launched the first micro-credentials, and enrolled the first
cohort of more than 90 students for the Graduate Certificate in
Tailings Management at UWA.
Tailings
Responsibly managing waste from mining
operations is essential, as is being transparent
with our stakeholders about our tailings storage
facilities and how we manage them. We engage
with stakeholders throughout the lifecycle of
our tailings storage facilities, from design
to closure.
We manage 106 tailings storage facilities (TSFs) across our global
assets. There are a further 41 non-managed TSFs. Altogether, there are
65 active TSFs, 36 are inactive and 46 are closed. There have been no
external wall failures at any of our TSFs for more than 20 years.
We work through technical committees and joint venture relationships
to support leading practice in tailings management. Our full tailings
disclosure is available at riotinto.com/tailings and we periodically
update the list of TSFs to reflect operational and ownership changes,
including changes due to the transition of closure or remediation
obligations for legacy assets and reclassification of facilities. Our list of
TSFs also includes those managed by our joint venture partners.
In May 2021, we updated previously disclosed information on each of
our global TSFs. All facilities were assigned a consequence
classification in accordance with the regulatory or industry body that
oversees tailings in each region or jurisdiction. Additional technical
data from updated downstream impact assessments, required under
the Global Industry Standard on Tailings Management (GISTM) and
Rio Tinto’s internal standard for tailings and water storage facilities,
resulted in a modification to hazard classifications of some facilities.
Consequence classifications are not ratings of the condition of a
facility or the likelihood of failure; instead, they rate the potential
consequence if they were to fail.
Our facilities are regulated, permitted and have been managed for
many years to comply with local laws, regulations, permits, licences
and other requirements. Tailings management has been included in the
Group risk register since 2010, and our Group safety standard for
tailings and water storage facilities has been in place since 2015. Our
internal assurance processes verify that our managed TSFs operate in
accordance with this standard, which we updated in 2020.
Our operational TSFs have emergency response plans – tested
through training exercises in collaboration with stakeholders such as
local emergency services – and follow strict business resilience and
communications protocols.
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Caring for society and people
We know our operations have a far-reaching impact on society.
Our longevity and success depend on the enduring relationships
and strong partnerships we develop with our people, our host
communities, governments and broader society. The ability to work
together to deliver positive outcomes is increasingly important as
society comes together to address global challenges like climate
change. We are engaging with our people and our stakeholders to
learn how we can play our role.
Seeds collected by Traditional Owners as part of the
Community Collection programme for Weipa Operations.
These seeds will be used for rehabilitation in areas
post-mining, providing the opportunity for Indigenous
peoples to participate economically in the area.
Weipa, Australia.
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Caring for society and people
We know our operations have a far-reaching impact on society.
Our longevity and success depend on the enduring relationships
and strong partnerships we develop with our people, our host
communities, governments and broader society. The ability to work
together to deliver positive outcomes is increasingly important as
society comes together to address global challenges like climate
change. We are engaging with our people and our stakeholders to
learn how we can play our role.
Seeds collected by Traditional Owners as part of the
Community Collection programme for Weipa Operations.
These seeds will be used for rehabilitation in areas
post-mining, providing the opportunity for Indigenous
peoples to participate economically in the area.
Weipa, Australia.
Strategic report
Communities
The communities where we live and work are
fundamental to our business. They include
Indigenous peoples, landowners, governments,
business partners, neighbours and our
colleagues – without their support, we cannot
operate. We aim to contribute to a shared future
and positive legacy by developing lasting
relationships with people, learning about and
supporting their goals and aspirations, avoiding
or mitigating adverse impacts, and respecting
connections to lands and waters.
The destruction of the rock shelters at Juukan Gorge in May 2020
was a clear breach of our values and the trust placed in us by the
Indigenous peoples to respect the lands on which we operate. It was a
tragedy that prompted us to review our mindset and practices and
commit to improve. In May 2021, we recognised a year since the
destruction of the Juukan Gorge rock shelters by reflecting on the loss
and hurt that we caused and renewing our commitment to learn the
lessons from Juukan Gorge.
How we work with communities
Mining and processing, by its very nature, disturbs the environment
and can impact surrounding communities. It also delivers significant
economic and social benefits, including the production of essential
materials, employment, small business development, tax and royalty
streams, training and skills development, and socioeconomic
programmes. We recognise that while many of the benefits of our
activities are widespread, many of the negative impacts are localised.
Our teams work in partnership with communities to understand how
our activities impact their lives, culture and heritage. Through
meaningful engagement, we can respond to community concerns,
optimise socioeconomic benefits and mitigate negative impacts.
Engaging with communities on a
low-carbon future
We believe we have an important role to play in ensuring that the green
energy transition is progressed in a fair and socially inclusive way.
This will be a key focus for our Communities and Social Performance
teams from 2022 and will include active community engagement,
managing potential adverse social and human rights impacts, and
exploring and enabling ways for host communities to share in
economic opportunities. In 2021, QIT Madagascar Minerals (QMM) and
its partners laid the foundation stone for a new solar and wind energy
plant. This, in addition to allowing Rio Tinto’s operations in Madagascar
to reach carbon neutrality by 2023, will replace the majority of the
electricity it currently supplies to the town of Fort Dauphin and its
80,000 community members with clean energy. QMM and its partners
are working with local authorities to develop manufacturing capacity to
produce equipment for the renewable industry locally.
Strengthening social performance
We have strengthened our social performance structure, governance
approach and processes. In September 2021, we released our
Communities and Social Performance Commitments Disclosure Interim
Report, our first report dedicated to sharing the progress on the actions
from the 2020 Board Review of cultural heritage management. Read
more about progress on our commitments on pages 94-95.
Working with First Nations, Canada
In Canada, we continue to work with Indigenous peoples on the
implementation of agreements signed with communities, and we are
progressing discussions on four new agreements with Indigenous
communities in Quebec, Saskatchewan and British Columbia.
To advance reconciliation efforts in 2021, we focused on strengthening
our employees’ cultural awareness. In June, our business celebrated
National Indigenous History Month by supporting a series of events
across the country, including a fireside chat between Former National
Chief Phil Fontaine and our Aluminium Chief Executive, Ivan Vella.
In September, we commemorated National Truth and Reconciliation
Day by hosting an awareness session which provided employees with
information on the residential schools in Canada, including a first-hand
account from a survivor.
Resolution Copper project, Arizona, US
At our Resolution Copper project in Arizona, we continue to build
relationships with impacted communities and Native American tribes.
We recognise the enduring historical connection Native American
tribes have with the land at, or near, the proposed mine. We are
committed to ongoing consultation with Native American tribes and
working together in a manner consistent with the International Council
on Mining and Metals (ICMM) Statement on Indigenous Peoples and
Mining. We are progressing partnerships with over half of these tribes
and our aim is to have a mutual dialogue with all tribes. Since 2013, the
US Forest Service (USFS) has led a rigorous review of the project,
including consulting 11 Native American tribes with historic
connections to the land around Resolution Copper. This dialogue has
led to changes in the project design and the implementation of other
measures to address stakeholder concerns. While the USFS published
the Final Environmental Impact Statement in January 2021, the US
Department of Agriculture directed the USFS to review and engage
further with consulting Native American tribes. We support the National
Environmental Policy Act process and continue to engage with local
communities and Native American tribes to further shape the
Resolution Copper project.
Richards Bay Minerals (RBM), South Africa
We are committed to fostering broad-based development of the
four local communities that host our RBM mine in the province of
KwaZulu-Natal. However, following a series of business disruptions
that put the safety of our employees at risk, we declared force majeure
at the operation in June 2021. Significant work has been done to
improve the situation, including reaching milestone agreements with
traditional leaders, local youth and business forums. In August 2021,
RBM and representatives of all four communities reached an
agreement to release 130 million rand from the community trusts.
These funds will be channelled towards local economic development
initiatives. The agreement also aims to secure improved community
trust governance.
Simandou project, Guinea
At our Simandou iron ore project in Guinea, we continue to engage
with stakeholders and local communities to deliver a range of
economic development and community health initiatives, including
COVID-19 and Ebola response programmes. We are working with
communities to help them prepare for future operations, identify and
manage our impacts, and design and deliver regional and local
economic development programmes. We engaged with other mining
projects in Guinea to discuss the potential for enhancing offset options,
as well as supporting the Centre Forestier N’Zérékoré and Pic de Fon
Classified Forest management committee.
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Compagnie des Bauxites de
Guinée SA (CBG), Guinea
CBG is a bauxite operation in Guinea owned by Halco Mining Inc.
(51%) and the Guinean Government (49%). Halco is a consortium
comprised of Rio Tinto (45%), Alcoa (45%) and Dadco Investments
(10%). We participate on the boards of Halco and CBG, with
representation on various shareholder oversight committees.
Through our board and committee roles, we have been proactively
monitoring CBG’s approach to environmental protection, community
issues and human rights. We are aware of the concerns regarding
access to land and water, the pace of livelihood restoration
programmes as well as aspects of CBG’s stakeholder engagement.
In 2021, sustainability advisory committees were created at Halco and
CBG levels, strengthening our oversight and providing support to
CBG for the improvement of its social and environmental practices,
including their response to a complaint made to the International
Finance Corporation’s (IFC) Office of the Compliance Advisor
Ombudsman (CAO).
The mediation process facilitated by the CAO reached an important
milestone in 2021 with an agreement to adjust the mitigation measures
related to blasting.
Halco continues to participate in the mediation process as an observer,
alongside the IFC.
Socioeconomic contribution
In 2021, our direct economic contribution was $66.6 billion, including
the total value of operating costs, employee wages and benefits,
payments to providers of capital, payments to governments,
development contributions, payments to landowners and community
investments. Catalysing economic opportunities for our host
communities and regions continues to be a priority. We strive to
employ local people, buy local products and engage local services.
For example, we awarded contracts valued at over A$500 million to
local Western Australian and Pilbara Aboriginal businesses for the
Greater Tom Price operations.
Through social investment, we seek to deliver positive, measurable
social outcomes and support communities to achieve their goals and
aspirations. Our total voluntary global social investments amounted to
$72 million, covering health, education, environment, agricultural and
business development programmes. This is an increase of
approximately 53% on our 2020 voluntary social investment spend.
This increase is associated with the completion of the $25 million
COVID-19 pledge, a review of social investment strategies across
product groups, and the launch of a number of significant multi-year
partnerships, particularly through Rio Tinto Iron Ore.
Caring for society and people continued
Oyu Tolgoi, Mongolia
Oyu Tolgoi supports economic opportunities through livelihood and
economic diversification initiatives for communities in Umnugovi
aimag. We support herders’ cooperatives and work with local subject
matter experts to improve livestock health services, increase the
productivity of livestock, encourage vegetable and dairy production,
and foster new business development through capacity building,
strengthening market linkages and nurturing entrepreneurial mindsets
amongst local communities. Our Oyu Tolgoi South Gobi Development
Strategy will expand on this work over the next five years to boost local
procurement and employment above their current levels of 24.5% and
24.8%, respectively.
Jadar lithium-borates project, Serbia
In 2021, we committed $2.4 billion to the Jadar lithium-borates project
in Serbia, one of the world’s largest greenfield lithium projects.
In January 2022, the Government of Serbia cancelled the Spatial Plan
for the Jadar project and required all related permits to be revoked.
We remain committed to exploring all options and are reviewing the
implications for our activities and our people in Serbia.
We acknowledge the concerns from local communities and are
committed to meaningful engagement to explore ways to address
these concerns.
Panguna mine, Bougainville, Papua New Guinea
The Panguna mine was operated by Bougainville Copper Limited
(BCL), majority-owned by Rio Tinto, for 17 years from 1972 until 1989,
when operations were suspended due to an uprising against the mine
and a civil war. Rio Tinto has not had access to the mine for over 30
years. In 2016, Rio Tinto transferred its 53.83% majority shareholding in
BCL to the Autonomous Bougainville Government (ABG) and the
Papua New Guinea (PNG) Government for no consideration, enabling
the ABG and PNG to hold an equal share in BCL of 36.4% each.
In September 2020, the Human Rights Law Centre (HRLC) filed a
complaint against Rio Tinto on behalf of 156 Bougainville residents with
the Australian National Contact Point (AusNCP) regarding the Panguna
site. The complaint alleges that we are accountable for significant
breaches of the OECD Guidelines for Multinational Enterprises relating
to past and ongoing environmental and human rights impacts arising
from the Panguna mine.
In July 2021, following months of constructive discussions facilitated by
the AusNCP, Rio Tinto and Bougainville community members,
represented by the HRLC, announced an agreement to identify and
assess the legacy impacts of the mine.
A joint committee of stakeholders, the Panguna Mine Legacy Impact
Assessment Committee, has been formed to oversee a detailed
independent assessment of the Panguna mine to identify and better
understand the environmental and human rights impacts of the mine.
The Committee was established by the ABG and the parties to the
AusNCP process (Rio Tinto, the HRLC and the community members
the HRLC represents). It is chaired by an independent facilitator with
representatives from the Independent State of PNG and BCL, as well as
other clan landowners and community representatives. The first
meeting of the Committee was held on 30 November 2021. This was a
constructive and important first step towards resolving the highly
complex legacy of the Panguna mine.
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Caring for society and people continued
Oyu Tolgoi, Mongolia
Oyu Tolgoi supports economic opportunities through livelihood and
economic diversification initiatives for communities in Umnugovi
aimag. We support herders’ cooperatives and work with local subject
matter experts to improve livestock health services, increase the
productivity of livestock, encourage vegetable and dairy production,
and foster new business development through capacity building,
strengthening market linkages and nurturing entrepreneurial mindsets
amongst local communities. Our Oyu Tolgoi South Gobi Development
Strategy will expand on this work over the next five years to boost local
procurement and employment above their current levels of 24.5% and
24.8%, respectively.
Jadar lithium-borates project, Serbia
Compagnie des Bauxites de
Guinée SA (CBG), Guinea
CBG is a bauxite operation in Guinea owned by Halco Mining Inc.
(51%) and the Guinean Government (49%). Halco is a consortium
comprised of Rio Tinto (45%), Alcoa (45%) and Dadco Investments
(10%). We participate on the boards of Halco and CBG, with
representation on various shareholder oversight committees.
Through our board and committee roles, we have been proactively
monitoring CBG’s approach to environmental protection, community
issues and human rights. We are aware of the concerns regarding
access to land and water, the pace of livelihood restoration
programmes as well as aspects of CBG’s stakeholder engagement.
In 2021, sustainability advisory committees were created at Halco and
In 2021, we committed $2.4 billion to the Jadar lithium-borates project
CBG levels, strengthening our oversight and providing support to
in Serbia, one of the world’s largest greenfield lithium projects.
CBG for the improvement of its social and environmental practices,
In January 2022, the Government of Serbia cancelled the Spatial Plan
for the Jadar project and required all related permits to be revoked.
We remain committed to exploring all options and are reviewing the
implications for our activities and our people in Serbia.
including their response to a complaint made to the International
Finance Corporation’s (IFC) Office of the Compliance Advisor
Ombudsman (CAO).
The mediation process facilitated by the CAO reached an important
milestone in 2021 with an agreement to adjust the mitigation measures
We acknowledge the concerns from local communities and are
committed to meaningful engagement to explore ways to address
related to blasting.
Panguna mine, Bougainville, Papua New Guinea
The Panguna mine was operated by Bougainville Copper Limited
alongside the IFC.
Socioeconomic contribution
(BCL), majority-owned by Rio Tinto, for 17 years from 1972 until 1989,
In 2021, our direct economic contribution was $66.6 billion, including
when operations were suspended due to an uprising against the mine
the total value of operating costs, employee wages and benefits,
and a civil war. Rio Tinto has not had access to the mine for over 30
payments to providers of capital, payments to governments,
years. In 2016, Rio Tinto transferred its 53.83% majority shareholding in
development contributions, payments to landowners and community
BCL to the Autonomous Bougainville Government (ABG) and the
investments. Catalysing economic opportunities for our host
Papua New Guinea (PNG) Government for no consideration, enabling
communities and regions continues to be a priority. We strive to
the ABG and PNG to hold an equal share in BCL of 36.4% each.
employ local people, buy local products and engage local services.
In September 2020, the Human Rights Law Centre (HRLC) filed a
complaint against Rio Tinto on behalf of 156 Bougainville residents with
the Australian National Contact Point (AusNCP) regarding the Panguna
For example, we awarded contracts valued at over A$500 million to
local Western Australian and Pilbara Aboriginal businesses for the
Greater Tom Price operations.
site. The complaint alleges that we are accountable for significant
Through social investment, we seek to deliver positive, measurable
breaches of the OECD Guidelines for Multinational Enterprises relating
social outcomes and support communities to achieve their goals and
to past and ongoing environmental and human rights impacts arising
aspirations. Our total voluntary global social investments amounted to
Social investment highlights (in figures)
In 2021, some of our social investment activities included:
– Delivering life opportunities to young Indigenous peoples through a
A$1.265 million Indigenous Advancement partnership with the
Western Australia Football Commission.
– Investing A$12 million over three years to improve the health
and wellbeing of children in Western Australia and supporting
further research into mental health and juvenile diabetes with
the Telethon Institute.
– Providing 1,800 community members with access to Computerised
Tomography (CT) services in Weipa, North Queensland, through the
provision of a CT scanner. The A$1.15 million partnership between
Rio Tinto and Old Mapoon Aboriginal Corporation to leverage a
A$1.35 million contribution from the Queensland Government.
– Supporting charities through the RioGivers programme, enabling our
employees to make donations to selected charities and have these
matched by Rio Tinto on a dollar-for-dollar basis. In 2021, A$222,000
was matched through the RioGivers Australia programme, and
C$660,000 through the Canada Employee Giving programme.
– Investing in future Canadian leaders through C$1 million in Let’s Talk
Science experiential STEM-learning programmes over the next
four years.
– Renewing our partnership with the Breakfast Club of Canada with
C$750,000 over three years to provide nutritious meals to over
4,000 students in 18 Indigenous schools in British Columbia
and Quebec.
– Establishing an institutional research structure dedicated to the
indigenisation of higher education through a C$1.5 million
partnership with Université du Québec à Chicoutimi (UQAC).
The structure will be established in collaboration with several
Indigenous communities and will focus, among other things, on
training the next generation of Indigenous scientists.
– Supporting STEM and robotics programmes in local schools in
Superior, Arizona, US through a $1.2 million partnership with the
Superior Unified School District.
– Building the capability of geotechnical and mining professionals in
Mongolia through a $2.75 million partnership with the Mongolian
University of Science and Technology.
– Supporting increased COVID-19 testing capacity through a
$1.66 million partnership with the Regional Public Health Directorate
in Fort Dauphin, Madagascar.
these concerns.
Halco continues to participate in the mediation process as an observer,
Economic contributions ($ million) (2021)
Gross product sales
Net cash generated from operating activities1
Underlying earnings
Underlying earnings per share (US cents)
Profit/(loss) after tax for the year
Net cash/(debt)
Capital expenditure2
Employment costs
Payables to governments3
Amounts paid by Rio Tinto
Amounts paid by Rio Tinto on behalf of its employees
2021
66,568
25,345
21,380
1,321
22,575
1,576
(7,384)
(5,513)
(12,789)
n/a4
n/a4
2020
47,018
15,875
12,448
770
10,400
(664)
(6,189)
(4,770)
(8,224)
(8,404)
(1,353)
2019
45,367
14,912
10,373
636
6,972
(3,651)
(5,488)
(4,522)
(7,175)
(7,635)
(1,284)
2018
42,835
11,821
8,808
512
13,925
255
(5,430)
(4,728)
(7,217)
(6,575)
(1,342)
2017
41,867
13,884
8,627
483
8,851
(3,845)
(4,482)
(4,765)
(6,637)
(5,138)
(1,402)
from the Panguna mine.
In July 2021, following months of constructive discussions facilitated by
the AusNCP, Rio Tinto and Bougainville community members,
represented by the HRLC, announced an agreement to identify and
assess the legacy impacts of the mine.
A joint committee of stakeholders, the Panguna Mine Legacy Impact
Assessment Committee, has been formed to oversee a detailed
independent assessment of the Panguna mine to identify and better
understand the environmental and human rights impacts of the mine.
The Committee was established by the ABG and the parties to the
AusNCP process (Rio Tinto, the HRLC and the community members
the HRLC represents). It is chaired by an independent facilitator with
representatives from the Independent State of PNG and BCL, as well as
other clan landowners and community representatives. The first
meeting of the Committee was held on 30 November 2021. This was a
constructive and important first step towards resolving the highly
complex legacy of the Panguna mine.
$72 million, covering health, education, environment, agricultural and
business development programmes. This is an increase of
approximately 53% on our 2020 voluntary social investment spend.
This increase is associated with the completion of the $25 million
COVID-19 pledge, a review of social investment strategies across
product groups, and the launch of a number of significant multi-year
partnerships, particularly through Rio Tinto Iron Ore.
1. Data includes dividends from equity accounted units, and is after payments of interest, taxes and dividends to non-controlling interests in subsidiaries.
2. Capital expenditure is presented gross before taking into account any disposals of property, plant and equipment.
3. Total payables to governments includes corporate taxes, government royalties and employer payroll taxes.
4. Our Taxes Paid Report will be published later this year on riotinto.com.
Community investment (discretionary)5
Development contributions (non-discretionary)6
Payment to landowners (non-discretionary)7
2021
(72.1)8
(19.1)
2020
(47)
(12.8)
(222.9)
(165.9)
2019
(36.4)
(12)9
(147)
5. Community investments are voluntary financial commitments, including in-kind donations of assets and employee time, made by Rio Tinto managed operations to third parties to address
identified community needs or social risks.
6. Development contributions are defined as non-discretionary financial commitments, including in-kind donations of assets and employee time, made by Rio Tinto to a third party to deliver social,
economic and/or environmental benefits for a community, which Rio Tinto is mandated to make under a legally binding agreement, by a regulatory authority or otherwise by law.
7. Payment to landowners are non-discretionary compensation payments made by Rio Tinto to third parties under land access, mine development, native title, impact benefit and other legally
binding compensation agreements.
8. The notable increase in community investment is associated with the completion of the $25 million COVID-19 pledge, a review of social investment strategies across product groups and the
launch of a number of significant multi-year partnerships, particularly through Rio Tinto Iron Ore and Rio Tinto corporate teams.
9. In 2019, $13 million was reported for development contributions. This has been revised down to $12 million due to an error noted in reporting.
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93
Caring for society and people continued
Progress on our communities
and social performance
commitments
Following the destruction of the rock shelters
at Juukan Gorge in May 2020, we have
strengthened our approach to managing
Indigenous cultural heritage. We are
determined to build more meaningful and
genuine relationships with Indigenous peoples
and host communities around the globe.
As part of our efforts to improve transparency, we have committed to
providing updates on the work we are undertaking to enhance our
communities and social performance practices. In September 2021, we
released our first Communities and Social Performance Commitments
Disclosure Interim Report.
On 18 October 2021, the Joint Standing Committee for Northern
Australia (JSCNA) released its final report. JSCNA restated the
recommendations made in the December 2020 interim report and
focused on the legislative frameworks governing the protection of
cultural heritage. Recognising that there is still much work ahead, we
are learning from the outcomes of the review and our ongoing dialogue
with stakeholders as we continue to deliver on our commitments to
ensure a tragic incident like Juukan Gorge never happens again.
An update on our commitments is provided below.
1. Remedying and rebuilding our relationship
with the PKKP people
We are working under the direct guidance of the Puutu Kunti
Kurrama and Pinikura (PKKP) people to remediate Country.
Throughout our journey with the PKKP people, they have graciously
shared their knowledge to ensure our remediation efforts deliver the
best possible outcomes. During this time, we have been reminded
of the importance of trusted relationships and valued partnerships
through listening and continuously demonstrating mutual respect.
We continue to work in partnership with the PKKP people to finalise
co-management principles under which we can work together to
enhance protection of heritage and achieve better outcomes.
The new model will involve earlier and more detailed consultation,
increased sharing of information and greater involvement of PKKP
representatives in Rio Tinto’s decision making throughout the
lifecycle of the mine.
2. Partnering with Pilbara Traditional Owners in
modernising and improving agreements
During the year, we continued to actively engage with Traditional
Owners in Western Australia to better understand existing and
historic issues and define ways we can jointly deliver more effective
outcomes. We have developed a set of principles to guide the
agreement modernisation process which seeks to address areas
where current agreements have not met the Traditional Owners’
aspirations of partnership.
It is our intention that revised agreements will seek to agree on a
clear pathway for resolution of any differences of views that may
emerge. We will also continue to work with Traditional Owners and
local communities to build sustainable business development and
employment participation opportunities.
In Canada, we currently have 11 active long-term Life of Mine
agreements and are engaging on four new agreements with
Indigenous communities in Quebec, Saskatchewan and
British Columbia.
3. Establishing the new Communities and Social
Performance model
In 2021, we established our new Communities and Social
Performance (CSP) model to increase our social performance
capacity and capability across the business. We now have more
than 400 technical CSP professionals working on 60 sites in 35
countries (compared with 250 professionals in 2020).
A central CSP Area of Expertise complements our asset-based
teams by monitoring external societal trends, developing and
reviewing standards, systems and risk and assurance processes,
building capability, and providing strategic regional and technical
advice to our businesses.
4. Building local capability and capacity to support the
site General Manager
Operational leaders play a critical role alongside our CSP teams
in our social performance. Product group Chief Executives have
overall accountability for relationships with Indigenous peoples,
supported by line managers who have direct responsibility for
maintaining relationships with host communities, including
Indigenous peoples.
5. Improving our governance, planning and systems
where it relates to communities
In 2021, we designed a new social performance strategy and set
CSP targets for 2022 to 2026 to support its achievement. We also
strengthened our governance including a review of our global
CSP Standard and Cultural Heritage Group Procedure for
Australian businesses, and improved assurance and risk
management processes.
As part of our global Risk Control Framework, we created a
standardised library of cultural heritage controls across the Group.
This will enhance control effectiveness across our business.
A substantive independent review of our cultural heritage
performance is currently under way at all our businesses, to
redefine best practice for cultural heritage management in our
organisation. Phase one of the review focuses on Australian assets,
in consultation with a number of Indigenous groups, and is being led
by the sustainability consultancy Environmental Resources
Management. Phase two is due to be awarded at the end of the first
quarter, with completion planned for the end of 2022.
We have also established an internal global Indigenous
Coordination Committee which meets monthly to ensure cross-
functional alignment on Indigenous strategy and activities.
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Caring for society and people continued
Strategic report
As part of our efforts to improve transparency, we have committed to
countries (compared with 250 professionals in 2020).
are learning from the outcomes of the review and our ongoing dialogue
Operational leaders play a critical role alongside our CSP teams
Progress on our communities
and social performance
commitments
Following the destruction of the rock shelters
at Juukan Gorge in May 2020, we have
strengthened our approach to managing
Indigenous cultural heritage. We are
determined to build more meaningful and
genuine relationships with Indigenous peoples
and host communities around the globe.
providing updates on the work we are undertaking to enhance our
communities and social performance practices. In September 2021, we
released our first Communities and Social Performance Commitments
Disclosure Interim Report.
On 18 October 2021, the Joint Standing Committee for Northern
Australia (JSCNA) released its final report. JSCNA restated the
recommendations made in the December 2020 interim report and
focused on the legislative frameworks governing the protection of
cultural heritage. Recognising that there is still much work ahead, we
with stakeholders as we continue to deliver on our commitments to
ensure a tragic incident like Juukan Gorge never happens again.
An update on our commitments is provided below.
1. Remedying and rebuilding our relationship
with the PKKP people
We are working under the direct guidance of the Puutu Kunti
Kurrama and Pinikura (PKKP) people to remediate Country.
Throughout our journey with the PKKP people, they have graciously
shared their knowledge to ensure our remediation efforts deliver the
best possible outcomes. During this time, we have been reminded
of the importance of trusted relationships and valued partnerships
through listening and continuously demonstrating mutual respect.
We continue to work in partnership with the PKKP people to finalise
co-management principles under which we can work together to
enhance protection of heritage and achieve better outcomes.
The new model will involve earlier and more detailed consultation,
increased sharing of information and greater involvement of PKKP
representatives in Rio Tinto’s decision making throughout the
lifecycle of the mine.
2. Partnering with Pilbara Traditional Owners in
modernising and improving agreements
Owners in Western Australia to better understand existing and
historic issues and define ways we can jointly deliver more effective
outcomes. We have developed a set of principles to guide the
agreement modernisation process which seeks to address areas
where current agreements have not met the Traditional Owners’
aspirations of partnership.
It is our intention that revised agreements will seek to agree on a
clear pathway for resolution of any differences of views that may
emerge. We will also continue to work with Traditional Owners and
local communities to build sustainable business development and
employment participation opportunities.
In Canada, we currently have 11 active long-term Life of Mine
agreements and are engaging on four new agreements with
Indigenous communities in Quebec, Saskatchewan and
British Columbia.
3. Establishing the new Communities and Social
Performance model
In 2021, we established our new Communities and Social
Performance (CSP) model to increase our social performance
capacity and capability across the business. We now have more
than 400 technical CSP professionals working on 60 sites in 35
A central CSP Area of Expertise complements our asset-based
teams by monitoring external societal trends, developing and
reviewing standards, systems and risk and assurance processes,
building capability, and providing strategic regional and technical
advice to our businesses.
4. Building local capability and capacity to support the
site General Manager
in our social performance. Product group Chief Executives have
overall accountability for relationships with Indigenous peoples,
supported by line managers who have direct responsibility for
maintaining relationships with host communities, including
Indigenous peoples.
5. Improving our governance, planning and systems
where it relates to communities
In 2021, we designed a new social performance strategy and set
CSP targets for 2022 to 2026 to support its achievement. We also
strengthened our governance including a review of our global
CSP Standard and Cultural Heritage Group Procedure for
Australian businesses, and improved assurance and risk
management processes.
As part of our global Risk Control Framework, we created a
standardised library of cultural heritage controls across the Group.
This will enhance control effectiveness across our business.
A substantive independent review of our cultural heritage
performance is currently under way at all our businesses, to
redefine best practice for cultural heritage management in our
organisation. Phase one of the review focuses on Australian assets,
in consultation with a number of Indigenous groups, and is being led
by the sustainability consultancy Environmental Resources
Management. Phase two is due to be awarded at the end of the first
We have also established an internal global Indigenous
Coordination Committee which meets monthly to ensure cross-
functional alignment on Indigenous strategy and activities.
During the year, we continued to actively engage with Traditional
quarter, with completion planned for the end of 2022.
6. Reducing barriers to, and increasing,
8. Establishing a process to redefine and improve
Indigenous employment
cultural heritage management standards
We know that a diverse workforce is an important factor in business
performance, and we are committed to Indigenous peoples having
a stronger voice. In Australia, we have committed $50 million over
five years to attract, retain and grow Indigenous leaders, and we
have increased the number of Australian Indigenous leaders in our
business fivefold since November 2020.
We are partnering with Traditional Owners and local stakeholders
to deliver initiatives that contribute to improving the pathways to
employment for Indigenous peoples, increasing the number of
employment opportunities and providing positive experiences for
current and future employees. In 2021, 76 Indigenous employees
paired with senior leaders participated in our two-way mentoring
programme across our Australia business to deepen cross-cultural
understanding and responsiveness. In Western Australia, we have
launched an Indigenous participation strategy which seeks to
improve the opportunities for Indigenous peoples to participate
in employment.
7. Increasing Indigenous leadership and developing
cultural competency within Rio Tinto
The Indigenous leadership commitment is designed to fast-track
Indigenous Australians into professional and leadership roles.
During the year, 126 Indigenous employees earned promotions
across Australia.
In Australia, 80% of our senior leaders completed our Cultural
Connection programme in 2021. We also launched a
digital cultural onboarding platform to enhance and support
cultural safety and understanding. In the second half of 2021, 65
employees and new starters completed the experience with
their leaders.
A component of our 2021 ESG short-term incentive was linked to an
increase in cultural awareness training. The target was risk-based,
by identifying cohorts of employees and contractors whose roles
interface with cultural heritage. Business units and product groups
identified their training cohorts, and training programmes were
designed to reflect the local context. The length of programmes
varied according to context and risk profile.
In our Iron Ore group, our immersive virtual reality cultural
awareness training was rolled out in 2021 and is now part of our
onboarding process. We are also implementing regionally specific,
Traditional Owner-led cultural awareness training.
In North America, two virtual cultural awareness sessions were
facilitated by an Indigenous-owned business, and numerous
site-based sessions were held in 2021, including at our
IOC operations, which have introduced mandatory cultural
awareness for employees and contractors and achieved full
compliance in 2021. We have also launched online cultural
awareness training on Canadian Indigenous peoples’ history,
culture and industry interaction.
In Iron Ore, our Integrated Heritage Management Process (IHMP)
ensures heritage considerations are embedded throughout the
mine development process, from early resource planning and
studies through to closure. By the end of 2021, we had reviewed
over 2,200 heritage sites in the Pilbara, adding further protection
controls. Through ongoing consultation with Traditional Owners,
we have removed 100 million dry tonnes of iron ore from reserves in
2020 and 2021 through this process.
The core principles from IHMP have informed the Cultural Heritage
Group Procedure update and our cultural heritage global control
library, and we continue to explore opportunities to embed these
across the business.
9. Establishing an Australian Advisory Group
We have established an Australian Advisory Group (AAG) to
provide guidance on current and emerging issues, and better
manage policies and positions that are important to both Australian
communities and our broader business. We have confirmed the
inaugural Chairperson as Professor Peter Yu, and other members
include Michelle Deshong, Nyadol Nyuon, Yarlalu Thomas,
Djawa Yunupingu, Cris Parker, and Shona Reid. The first AAG
meeting will be held in the first quarter of 2022.
10. Elevating external consultation
In 2021, we established the Chief Executive Australia role to
focus on rebuilding trust and strengthening external relationships
across Australia, and a Chief Adviser Civil Society and Outreach
role to expand our capacity to engage on key matters globally.
We continue to increase our dialogue with government, civil society
organisations, Indigenous leaders, Traditional Owners and other
stakeholders at all levels of our organisation, and will explore further
opportunities to engage in 2022.
11. Elevating employee engagement
We are focused on keeping our people informed of our
commitments and achievements, through the implementation of
new communications tools, channels and platforms. And through
training, networking opportunities and cultural competency
programmes, we are increasing cultural awareness at every level
of our business.
Progress on best practice cultural
heritage management
We remain committed to achieving best practice cultural heritage
management. We will continue to work with Indigenous peoples and
communities to ensure we better understand their priorities and
concerns, minimise our impacts, and responsibly manage Indigenous
cultural heritage within our operations.
We support the strengthening of cultural heritage legislation
and advocate for more meaningful engagement, the protection of
heritage values, strengthened agreement-making, and certainty
for all stakeholders.
More information is available in our Communities and Social
Performance Commitments Disclosure Interim Report. Our next
dedicated report is due to be released in the third quarter of 2022.
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Caring for society and people continued
Closure
We aspire to leave a positive legacy for
future generations. We do this in partnership
with our stakeholders, embedding closure
considerations throughout the entire lifespan of
our assets – in the way we design, build, run,
close and transition them.
Although mining and processing activities extend over decades,
we recognise they are temporary and that other activities and land
use will follow. To mitigate the impacts of a shift to a new use, we
engage our stakeholders early and transparently, to contribute to a
shared vision for the future of the land and associated communities.
We balance environmental and social considerations with costs
and look for opportunities associated with progressive closure,
remediation and repurposing, and where appropriate, long-term
monitoring and maintenance.
Closure execution
In 2021, we progressed closure execution work at a number of assets,
including the Gove refinery and the Argyle diamond mine, and our
subsidiary Energy Resources of Australia Ltd (ERA) continues to
progress the closure of the Ranger uranium mine.
Argyle diamond mine
Our Argyle diamond mine, in Western Australia, ceased production in
2020. We are in the first year of a four-year plan to dismantle the
operational infrastructure, reshape the land and undertake
revegetation activities to enable the re-establishment of a natural
ecosystem. Once completed, as agreed with the Traditional Owners
and the Western Australian Government, we will release our
landholding and support the land being returned to the Traditional
Owners for activities such as cattle grazing, Indigenous cultural
tourism, cultural use and possibly small-scale agriculture and native
food production alongside longer-term monitoring activities. We are
committed to support the development of long-term sustainable local
businesses and local employment. In 2021, we spent 14% of our annual
closure budget with Traditional Owner business.
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Gove refinery and residue disposal areas
While mining continues at our Gove bauxite operations in the Northern
Territory, we are implementing progressive closure activities, including
the decommissioning and demolition of the refinery and progressive
capping of the red mud ponds. The refinery demolition is one of the
largest in Australia. The Gove closure execution programme will take
approximately ten years to complete followed by ongoing monitoring,
with mining operations expected to cease no later than 2030. This
year’s work saw the commencement of the capping of pond 5 within
the Residue Disposal Area; the completion of the feasibility study of the
refinery complex; and optimisation of our waste liquor treatment plant
performance. Our Closure team is working with the Gove operations
team, Traditional Owners, local business, and the Northern Territory
Government, to contribute to the Traditional Owners’ future vision for
the Gove Peninsula, with the intention to maximise commercial
opportunities that Rio Tinto has available through to closure. As agreed
with stakeholders, the refinery will be demolished and the underlying
land will be remediated. It can then be used for industrial purposes with
the intent that certain assets, such as the light fuel farm, cargo wharf,
warehouses and administration buildings may be retained for future
use by Traditional Owners.
Ranger uranium mine
The Ranger uranium mine in the Northern Territory is owned and
operated by ERA. ERA’s shares are publicly held and traded on the
Australian Securities Exchange, with Rio Tinto holding 86.3% of ERA's
shares. In accordance with the Ranger s41 Authority, production at the
Ranger uranium mine ceased in January 2021.
On 2 February 2022, ERA released the preliminary findings from its
reforecast of the cost and schedule for the Ranger rehabilitation
project, which had been subject to an independent review. Rio Tinto is
reviewing the preliminary findings of this reforecast and have advised
ERA that we are committed to working with the company to ensure the
rehabilitation of the Ranger Project Area is successfully achieved to a
standard that will establish an environment similar to the adjacent
Kakadu National Park.
Legacy sites
We also manage a number of historic sites – known as legacy sites –
some we did not operate but acquired through corporate acquisitions
after they were closed. Where required, we rehabilitate these sites and,
where and when we can, transfer them to local authorities or third
parties for future land use. In North America, we are progressing the
remediation of a number of sites. We have settled our obligations at the
Vernon, a former aluminium cast plate facility in California, and are
undertaking seven studies at other sites to develop a path to divest our
landholdings or optimise ongoing monitoring and maintenance.
In Europe, we are remediating the historic white and red mud deposits
at Salindres, France, and have commissioned a soil treatment plant at
Dammarie to enable the site to be repurposed in the future. In the UK,
we continue to optimise our long-term treatment of water at
Whinnyhall, a historic bauxite residue disposal site.
At the end of 2021, closure provisions on our balance sheet totalled
$14.5 billion (compared with $13.3 billion in 2020). We continue to
optimise closure costs through sharing good practice with product
groups, finding more efficient closure execution methods, building
synergies through sequential closures, and targeting research and
development opportunities (including water and waste treatment,
material movement, community engagement methodologies
and partnering).
Caring for society and people continued
Strategic report
Closure
We aspire to leave a positive legacy for
future generations. We do this in partnership
with our stakeholders, embedding closure
considerations throughout the entire lifespan of
our assets – in the way we design, build, run,
close and transition them.
Although mining and processing activities extend over decades,
we recognise they are temporary and that other activities and land
use will follow. To mitigate the impacts of a shift to a new use, we
engage our stakeholders early and transparently, to contribute to a
shared vision for the future of the land and associated communities.
We balance environmental and social considerations with costs
and look for opportunities associated with progressive closure,
remediation and repurposing, and where appropriate, long-term
monitoring and maintenance.
Closure execution
In 2021, we progressed closure execution work at a number of assets,
including the Gove refinery and the Argyle diamond mine, and our
subsidiary Energy Resources of Australia Ltd (ERA) continues to
progress the closure of the Ranger uranium mine.
Argyle diamond mine
Our Argyle diamond mine, in Western Australia, ceased production in
2020. We are in the first year of a four-year plan to dismantle the
operational infrastructure, reshape the land and undertake
revegetation activities to enable the re-establishment of a natural
ecosystem. Once completed, as agreed with the Traditional Owners
and the Western Australian Government, we will release our
landholding and support the land being returned to the Traditional
Owners for activities such as cattle grazing, Indigenous cultural
tourism, cultural use and possibly small-scale agriculture and native
food production alongside longer-term monitoring activities. We are
committed to support the development of long-term sustainable local
businesses and local employment. In 2021, we spent 14% of our annual
closure budget with Traditional Owner business.
Gove refinery and residue disposal areas
While mining continues at our Gove bauxite operations in the Northern
Territory, we are implementing progressive closure activities, including
the decommissioning and demolition of the refinery and progressive
capping of the red mud ponds. The refinery demolition is one of the
largest in Australia. The Gove closure execution programme will take
approximately ten years to complete followed by ongoing monitoring,
with mining operations expected to cease no later than 2030. This
year’s work saw the commencement of the capping of pond 5 within
the Residue Disposal Area; the completion of the feasibility study of the
refinery complex; and optimisation of our waste liquor treatment plant
performance. Our Closure team is working with the Gove operations
team, Traditional Owners, local business, and the Northern Territory
Government, to contribute to the Traditional Owners’ future vision for
the Gove Peninsula, with the intention to maximise commercial
opportunities that Rio Tinto has available through to closure. As agreed
with stakeholders, the refinery will be demolished and the underlying
land will be remediated. It can then be used for industrial purposes with
the intent that certain assets, such as the light fuel farm, cargo wharf,
warehouses and administration buildings may be retained for future
use by Traditional Owners.
Ranger uranium mine
The Ranger uranium mine in the Northern Territory is owned and
operated by ERA. ERA’s shares are publicly held and traded on the
Australian Securities Exchange, with Rio Tinto holding 86.3% of ERA's
shares. In accordance with the Ranger s41 Authority, production at the
Ranger uranium mine ceased in January 2021.
On 2 February 2022, ERA released the preliminary findings from its
reforecast of the cost and schedule for the Ranger rehabilitation
project, which had been subject to an independent review. Rio Tinto is
reviewing the preliminary findings of this reforecast and have advised
ERA that we are committed to working with the company to ensure the
rehabilitation of the Ranger Project Area is successfully achieved to a
standard that will establish an environment similar to the adjacent
Kakadu National Park.
Legacy sites
We also manage a number of historic sites – known as legacy sites –
some we did not operate but acquired through corporate acquisitions
after they were closed. Where required, we rehabilitate these sites and,
where and when we can, transfer them to local authorities or third
parties for future land use. In North America, we are progressing the
remediation of a number of sites. We have settled our obligations at the
Vernon, a former aluminium cast plate facility in California, and are
undertaking seven studies at other sites to develop a path to divest our
landholdings or optimise ongoing monitoring and maintenance.
In Europe, we are remediating the historic white and red mud deposits
at Salindres, France, and have commissioned a soil treatment plant at
Dammarie to enable the site to be repurposed in the future. In the UK,
we continue to optimise our long-term treatment of water at
Whinnyhall, a historic bauxite residue disposal site.
At the end of 2021, closure provisions on our balance sheet totalled
$14.5 billion (compared with $13.3 billion in 2020). We continue to
optimise closure costs through sharing good practice with product
groups, finding more efficient closure execution methods, building
synergies through sequential closures, and targeting research and
development opportunities (including water and waste treatment,
material movement, community engagement methodologies
and partnering).
To realise these opportunities, we must have the basics in place.
All our operating assets have closure plans aligned with our closure
framework. We regularly update these plans to ensure they reflect
stakeholder expectations and build on experience from closure
practices as we learn from them. We have an internal assurance
programme, and closure plans are audited every five years against our
internal requirements. At operations with joint ownership structures, we
work in partnership with the asset owners to embed closure into asset
design, planning and operations.
In 2021, we completed asset closure strategies covering another six of
our operating assets. These strategies are now in place for 42 assets,
contributing to host communities’ vision for future land use after our
operations cease and ensuring closure is considered throughout the
asset lifecycle to identify opportunities while in operation.
This year, to enhance our internal governance processes, we updated
our Closure Standard that outlines our minimum closure requirements
to mitigate risks associated with the permanent cessation of
exploration, mining, processing, and logistics operations. We also
updated the internal procedure for how we estimate and report on
closure costs. More information on closure provisions and financial
statements can be found on pages 229-230 of this report.
Strengthening our approach
Successful closure needs to meet our host communities and
long-term stewards’ expectations. To achieve this, we are working
with host communities, including Indigenous partners, on rehabilitation,
revegetation and long-term monitoring of the land at many sites.
In 2021, the first Argyle Rangers completed their Conservation and
Land Management traineeship and joined our team full-time. The
programme was developed to upskill Traditional Owners on various
land management, community and cultural activities that will be
undertaken during the closure execution phase, and post-closure
monitoring and maintenance phase. Our focus is to support Traditional
Owners to ultimately lead the important environmental monitoring and
maintenance work required on site until approximately 2035.
In some locations, our landholdings are a significant contributor to land,
water and biodiversity value. We have earmarked land for transfer to
national parks and support a number of protected forests and parks
across our portfolio. We are exploring options to repurpose several
legacy sites for renewable energy, such as our pilot photovoltaic cell
facility at Marignac, France, a former ferroalloy plant.
We have expanded our partnerships with universities and other
organisations to find opportunities to repurpose and reprocess waste,
improve water and waste treatment, and explore the social aspects of
mine closure.
For example:
– Together, with our partner RESOLVE, we developed a business
model and signed a memorandum of understanding to form
Regeneration Enterprises, a for-purpose and for-profit company
that will combine the re-mining and processing of waste with
site closure and rehabilitation, with the ambition to create full
restoration outcomes.
– As part of RemovAL, a European Commission H2020-funded
Innovation Action, we continue to work with ZaaK Technologies
to demonstrate at pilot scale the upcycling of bauxite residue into
Smart Spheres® – an engineered lightweight aggregate that can be
used in a range of civil engineering applications.
– We are a partner in the ReActiv project, which looks at new uses for
bauxite residue produced during alumina refining in cement production.
– We are a member of the Social Aspects of Mine Closure Research
Consortium, an initiative of the University of Queensland’s Centre for
Social Responsibility in Mining. The consortium was established in
2019 and is a multi-party, industry-university research collaboration
to conduct research that challenges industry norms and practices,
and places people at the centre of mine closure activities.
Holden mine remediation leads to
land conservation
In 2021, we contributed to the Chelan-Douglas Land Trust’s
establishment of the Chelan Coulees Reserve for permanent
conservation as part of an environmental offset for work on
the Holden remediation project. The long-term conservation
will support native species and habitats unique to the Chelan
area and provide benefits for generations to come.
Learn more about our remediation work at
riotinto.com/stories.
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97
Caring for society and people continued
Health, safety and wellbeing
Caring for one another is one of our values –
it is part of who we are and the way we work,
every shift, every day. Nothing is more
important than the safety and wellbeing of our
employees, contractors and communities.
We believe all incidents and injuries are preventable, so our focus is on
identifying, managing and, where possible, eliminating risks. In 2021,
for the third year in a row, we had zero fatalities. While we recognise the
commitment made by all our employees and contractors to achieve
this milestone, we know we can always do better.
Although we have had no fatalities on our managed sites in 2021,
we are saddened by the loss of life at our suppliers and non-managed
operations this year. Two people tragically drowned when a marine
vessel delivering materials sank while en route to our Kemano
operations in British Columbia, Canada. Three mariners also lost their
lives in incidents on chartered vessels. At one of our non-managed
joint-ventures, the Compagnie des Bauxites de Guinée SA (CBG),
three workers lost their lives in three separate workplace incidents.
We are working closely with our partners to understand what
happened in each of these events. We will work with our contractor
partners and joint venture owners to support the implementation of
actions to make these facilities and operations safer and eliminate
fatalities in our industry. We also felt immense sadness this year when
one of our colleagues from Richards Bay Minerals (RBM) lost his life
tragically to violence on his way to work.
Safety and health performance1 2017-2021
Fatalities at managed operations
All-injury frequency rate (per 200,000 hours worked)
Number of lost-time injuries
Lost-time injury frequency rate (per 200,000 hours worked)
Safety maturity model (SMM) score3
New cases of occupational illness (per 10,000 employees)
Number of employees4
Fines and prosecutions – safety (US$'000)
Fines and prosecutions – health (US$'000)8
We still see some serious incidents at our own operations. A significant
risk at our sites is falling objects, accounting for 38% of our potentially
fatal incidents (PFIs). Focused improvements are under way to manage
this critical risk. In the second half of the year, three people fell from
significant heights in three separate events causing serious injury that
could have resulted in a fatality. These incidents are stark reminders
that we must continue to share the learnings across our business, both
among our employees and our contractor partners. Over the last year,
we have included contractors more in our safety efforts and are taking
action across our product groups to support greater consistency in the
application of our safety systems.
We had another challenging year managing the pandemic and we saw
a small increase in the number of people hurt on the job. Our all-injury
frequency rate (AIFR) in 2021 was 0.40 compared to 0.37 in 2020.
While we continue to build our safety maturity, we are seeing the
impacts of COVID-19 restrictions on our operations, with fatigue
across the organisation and, in some areas, tightness in the labour pool.
In 2021, we launched our Health, Safety, Environment and Security
(HSES) Transformation programme, a three-year programme to
transform the way we access and use our health, safety and
environment data, improving our data collection processes and,
ultimately, our strategic decision making.
2021
0
0.40
218
0.25
5.7
12.15
2020
0
0.37
1872
0.22
5.4
16.92
2019
0
0.42
2292
0.27
4.5
21.32
2018
3
0.44
226
0.27
–
29.6
2017
1
0.42
199
0.25
–
24.6
49,000
47,500
46,000
47,500
47,000
646.26
58
25.4
0
40.77
1.4
59
0
29
7.1
1. Data relating to fatalities, all-injury frequency rate and lost-time injury frequency rate includes all employee and contractor exposure hours and incidents at managed operations. New cases of
occupational illness are reported for employees only.
2. Numbers adjusted from previous years to ensure comparability over time.
3. Figures in the table represent the Rio Tinto Group average SMM score at the end of each year. Each year, assets are added or removed from the SMM programme based on Project and
Closure cycles. New assets to the programme are baselined in the first quarter of each year and added to the Group average at the end of the year.
4. Includes our share of joint ventures and associates (rounded) and excludes contractors.
5. Fewer health assessments were completed in 2021 due to COVID-19 restrictions, which may have impacted the frequency of new cases of occupational illness.
6. In 2021, we have incurred safety violations fines whilst MSHA inspections at our Boron Operations, California, USA; Kennecott Copper and Bingham Canyon mines, Utah, USA. Our Kitimat
smelter, Canada, received a fine from WorkSafe BC regarding implementation of exposure control plan for process dust.
7. Safety fines and prosecution amount for year 2019 is restated as WorkSafe BC has reversed the penalty at Kitimat in entirety in 2021.
8. In 2021, we have incurred a fine from the Department of Environmental Quality for misplacing a radioactive gauge at our Kennecott Copper mine, Utah, USA.
Contributing causes for newly reported illness cases (2021)
Noise-induced hearing loss
Musculoskeletal disorders
Mental stress
Other
Note: There can be one or more illnesses reported for each employee/contractor.
98
Annual Report 2021 | riotinto.com
2021
14 (27%)
27 (53%)
1 (2%)
9 (18%)
Caring for society and people continued
Strategic report
Health, safety and wellbeing
Caring for one another is one of our values –
it is part of who we are and the way we work,
every shift, every day. Nothing is more
important than the safety and wellbeing of our
employees, contractors and communities.
We still see some serious incidents at our own operations. A significant
risk at our sites is falling objects, accounting for 38% of our potentially
fatal incidents (PFIs). Focused improvements are under way to manage
this critical risk. In the second half of the year, three people fell from
significant heights in three separate events causing serious injury that
could have resulted in a fatality. These incidents are stark reminders
that we must continue to share the learnings across our business, both
among our employees and our contractor partners. Over the last year,
we have included contractors more in our safety efforts and are taking
action across our product groups to support greater consistency in the
application of our safety systems.
We believe all incidents and injuries are preventable, so our focus is on
identifying, managing and, where possible, eliminating risks. In 2021,
We had another challenging year managing the pandemic and we saw
for the third year in a row, we had zero fatalities. While we recognise the
a small increase in the number of people hurt on the job. Our all-injury
commitment made by all our employees and contractors to achieve
frequency rate (AIFR) in 2021 was 0.40 compared to 0.37 in 2020.
this milestone, we know we can always do better.
Although we have had no fatalities on our managed sites in 2021,
we are saddened by the loss of life at our suppliers and non-managed
While we continue to build our safety maturity, we are seeing the
impacts of COVID-19 restrictions on our operations, with fatigue
across the organisation and, in some areas, tightness in the labour pool.
operations this year. Two people tragically drowned when a marine
In 2021, we launched our Health, Safety, Environment and Security
vessel delivering materials sank while en route to our Kemano
(HSES) Transformation programme, a three-year programme to
operations in British Columbia, Canada. Three mariners also lost their
transform the way we access and use our health, safety and
lives in incidents on chartered vessels. At one of our non-managed
environment data, improving our data collection processes and,
joint-ventures, the Compagnie des Bauxites de Guinée SA (CBG),
ultimately, our strategic decision making.
three workers lost their lives in three separate workplace incidents.
We are working closely with our partners to understand what
happened in each of these events. We will work with our contractor
partners and joint venture owners to support the implementation of
actions to make these facilities and operations safer and eliminate
fatalities in our industry. We also felt immense sadness this year when
one of our colleagues from Richards Bay Minerals (RBM) lost his life
tragically to violence on his way to work.
Safety and health performance1 2017-2021
Fatalities at managed operations
All-injury frequency rate (per 200,000 hours worked)
Number of lost-time injuries
Lost-time injury frequency rate (per 200,000 hours worked)
Safety maturity model (SMM) score3
New cases of occupational illness (per 10,000 employees)
Number of employees4
Fines and prosecutions – safety (US$'000)
Fines and prosecutions – health (US$'000)8
2021
0
0.40
218
0.25
5.7
12.15
646.26
58
2020
0
0.37
1872
0.22
5.4
16.92
25.4
0
2019
0
0.42
2292
0.27
4.5
21.32
40.77
1.4
2018
3
0.44
226
0.27
–
29.6
59
0
2017
1
0.42
199
0.25
–
24.6
29
7.1
49,000
47,500
46,000
47,500
47,000
1. Data relating to fatalities, all-injury frequency rate and lost-time injury frequency rate includes all employee and contractor exposure hours and incidents at managed operations. New cases of
occupational illness are reported for employees only.
2. Numbers adjusted from previous years to ensure comparability over time.
3. Figures in the table represent the Rio Tinto Group average SMM score at the end of each year. Each year, assets are added or removed from the SMM programme based on Project and
Closure cycles. New assets to the programme are baselined in the first quarter of each year and added to the Group average at the end of the year.
4. Includes our share of joint ventures and associates (rounded) and excludes contractors.
5. Fewer health assessments were completed in 2021 due to COVID-19 restrictions, which may have impacted the frequency of new cases of occupational illness.
6. In 2021, we have incurred safety violations fines whilst MSHA inspections at our Boron Operations, California, USA; Kennecott Copper and Bingham Canyon mines, Utah, USA. Our Kitimat
smelter, Canada, received a fine from WorkSafe BC regarding implementation of exposure control plan for process dust.
7. Safety fines and prosecution amount for year 2019 is restated as WorkSafe BC has reversed the penalty at Kitimat in entirety in 2021.
8. In 2021, we have incurred a fine from the Department of Environmental Quality for misplacing a radioactive gauge at our Kennecott Copper mine, Utah, USA.
Contributing causes for newly reported illness cases (2021)
Noise-induced hearing loss
Musculoskeletal disorders
Mental stress
Other
Note: There can be one or more illnesses reported for each employee/contractor.
98
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2021
14 (27%)
27 (53%)
1 (2%)
9 (18%)
Mental health and wellbeing
Mental health is a core part of our safety culture. We have continued to
support several initiatives, including flexible work schedules, greater
access to health and medical resources, improved benefits for better
access to mental health specialists and virtual care packs, to help our
people manage the impacts of COVID-19 on their mental health
and wellbeing.
In 2021, we progressed the implementation of our mental health
framework to raise awareness of mental wellbeing, reduce stigma
and increase the capacity of our leaders to recognise and support
individuals experiencing mental illness. We have used this framework
in our product groups to better understand the current state of our
employees’ mental health, and to put in place control measures for
mental wellbeing based on ease of implementation and breadth
of impact.
To support the proactive management of mental wellbeing and to give
our employees the tools and skills they need to build resilience and
positive mental health, we continue to provide and promote the
Employee Assistance Programme (EAP), our mental health toolkit and
our Peer Support Programme, which has expanded globally to now
include 1,200 peer supporters worldwide.
In October 2021, we held our mental health week, with the aim of
increasing mental wellbeing in the communities where we operate and
encouraging our people to support and look out for one another. We
also continue to support global mental health campaigns, including
World Mental Health Day and R U OK? Day.
In 2021, we continued the rollout of our domestic violence support
programmes, which now cover 100% of our employees.
Our mental health strategy has moved us from an individual wellbeing
mindset to a psychological health and safety risk management focus.
We plan to progress our efforts in 2022 by addressing psychosocial
hazards in the workplace using a risk management approach to further
support better workplace mental health.
Occupational health
In 2021, we recorded fewer occupational health illnesses compared to
the previous year, with 51 (2020: 68). However, we conducted fewer
health assessments due to COVID-19 restrictions. We completed more
than 366,000 health control verifications, of which 221,000 were
COVID-19 control verifications, to assess the efficiency of our health
controls, such as physical distancing and hygiene controls.
This year, we were able to return most of our operations to their routine
hygiene-sampling activities to gather data on exposures to noise, dust
and other contaminants, to evaluate the risk to people and determine
control effectiveness and compliance. We reinstated health
surveillance activities for those with exposures in the workplace,
including fitness assessments as well as hearing and blood tests.
We have not yet universally returned to lung-function testing due to
difficulties with COVID-19 controls, but we are looking at strategies to
reinstate this activity as soon as it can be safely conducted.
Strengthening our safety performance
Eliminating fatalities requires a strong safety culture and systems
designed to mitigate risk and continually improve the safety of our
work. Much of the success of our safety culture is a result of the work
accomplished through the implementation of our safety maturity model
(SMM), now in its third year. The SMM provides a roadmap for leaders
to advance the foundations of safety without being overly prescriptive.
These foundations include leadership and engagement, learning and
improvement, risk management, and work planning and execution.
We assess our assets’ progress annually against each of these elements.
In 2021, we undertook an extensive review of the model and committed
to introducing some enhancements from 2022 onwards, addressing
areas where we can improve, including bridging the disparity in safety
performance between employees and contractors and assessing the
maturity of core systems, symbols and behaviours that drive safe
operations. We will also place a greater emphasis on our people and
their mindsets to build psychologically safe operations and extend our
leadership maturity approach to environment and health management.
Our critical risk management (CRM) system, a tool used to verify
controls to prevent fatalities are in place before starting each task, is
fundamental. In 2020, we expanded CRM to include COVID-19 critical
controls and, in 2021, we further strengthened the system with
improvements to the existing set of control verification checklists, in
consultation with frontline leaders, and the addition of new checklists
to address emerging risks such as the use of autonomous equipment.
We have also identified opportunities to improve safety in our Marine
business and have embarked on a multi-year programme to improve
all aspects of safety, health and the wellbeing of seafarers. A key focus
will be the increased data collection of safety incidents and sharing
learnings through training and coaching to avoid repeat incidents.
Our goal is to drive visibility and accountability by engaging and
partnering with other organisations to foster a safer future for
the industry.
Transforming our HSES systems
The three-year HSES Transformation Programme was established in
2021 to simplify our health, safety, environment and security processes
and technology systems into a handful of integrated tools. This will free
up our leaders’ time, and make our data more reliable and our business
safer. This year’s focus has been on the global design process, building
and testing the processes and technology, and planning for rollout
during 2022 and 2023.
Safety standards
Our standards (available at riotinto.com) and procedures provide a
consistent approach to managing hazards across our managed
operations. We audit managed operations against our standards and
require our businesses to meet their health and safety performance
requirements and targets.
In 2021, we reviewed our underground control framework, updating the
underground safety standard and adding 13 new Group procedures to
support our understanding of our critical controls. We trained our
underground leaders and implemented improved assurance activities
to ensure our underground operations and projects have the technical
capability to manage major hazards. We are now applying new
technology underground to support geotechnical monitoring at
Oyu Tolgoi, and in 2022, we will trial Battery Electric Vehicles (BEV)
at our underground project at Kennecott.
Annual Report 2021 | riotinto.com
99
Caring for society and people continued
COVID-19
When COVID-19 emerged as a global pandemic,
we put strict protocols in place in line with government
directives, many of which still remain. In 2021, we
focused our efforts on the pathway out of the pandemic.
We helped governments boost vaccination rates by
opening our own vaccination hubs and encouraged
our communities to get vaccinated to protect their
loved ones.
Building on measures introduced in 2020, all our operations and offices
adopted screening measures, such as health questionnaires and
temperature checks and, in most locations, virus screening. We track
the situation in every region where we operate, and adapt control
measures as needed, in line with government directives. Our specialist
in-house team follows the latest health research and advice, and
monitors new variants. Their expertise also helps to inform our policies
and control measures.
The pandemic is ongoing and is continuing to present new challenges
for our operations and supply chains. We are constantly evaluating the
situation and addressing emerging issues as they arise.
Supporting our communities
With COVID-19, none of us will be safe until everyone is safe.
While we saw hope in some parts of the world, in other parts,
there was an alarming resurgence of the virus. As the pandemic
continues to evolve with the appearance of variants such as Delta and
Omicron, our Business Resilience teams throughout the world, together
with Group Services, Global Procurement and our Global Health teams
worked to safeguard the health and safety of our people by securing
medical services and equipment. We also worked with our partners to
extend our care to vulnerable people in the communities.
COVID-19 vaccination support
Now that vaccines are available, we have supported government
vaccination campaigns and set up vaccination clinics near our
operations in several locations across the US, Mongolia, South Africa,
Madagascar, Canada and Australia – for our employees, contractors,
their families, and community members.
Position statement on COVID-19 vaccination
In line with our commitment to the safety, health and wellbeing of our
employees, contractors, their families, and the communities where we
operate, we have updated our position statement regarding COVID-19
vaccinations. It reflects our commitment to ensuring our people are
vaccinated against COVID-19, based on key principles, including
regional risk assessments to determine whether certain roles, locations
or tasks require individuals to be vaccinated. Our approach is guided
by our commitment to respect human rights. Any vaccination
requirements will be closely managed with care and will consider those
who are unable to be fully vaccinated.
Iron Ore Company of Canada (IOC), operations.
100
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Caring for society and people continued
Strategic report
COVID-19
When COVID-19 emerged as a global pandemic,
we put strict protocols in place in line with government
directives, many of which still remain. In 2021, we
focused our efforts on the pathway out of the pandemic.
We helped governments boost vaccination rates by
opening our own vaccination hubs and encouraged
our communities to get vaccinated to protect their
loved ones.
Building on measures introduced in 2020, all our operations and offices
adopted screening measures, such as health questionnaires and
temperature checks and, in most locations, virus screening. We track
the situation in every region where we operate, and adapt control
measures as needed, in line with government directives. Our specialist
in-house team follows the latest health research and advice, and
monitors new variants. Their expertise also helps to inform our policies
and control measures.
The pandemic is ongoing and is continuing to present new challenges
for our operations and supply chains. We are constantly evaluating the
situation and addressing emerging issues as they arise.
Supporting our communities
With COVID-19, none of us will be safe until everyone is safe.
While we saw hope in some parts of the world, in other parts,
there was an alarming resurgence of the virus. As the pandemic
continues to evolve with the appearance of variants such as Delta and
Omicron, our Business Resilience teams throughout the world, together
with Group Services, Global Procurement and our Global Health teams
worked to safeguard the health and safety of our people by securing
medical services and equipment. We also worked with our partners to
extend our care to vulnerable people in the communities.
COVID-19 vaccination support
Now that vaccines are available, we have supported government
vaccination campaigns and set up vaccination clinics near our
operations in several locations across the US, Mongolia, South Africa,
Madagascar, Canada and Australia – for our employees, contractors,
their families, and community members.
Position statement on COVID-19 vaccination
In line with our commitment to the safety, health and wellbeing of our
employees, contractors, their families, and the communities where we
operate, we have updated our position statement regarding COVID-19
vaccinations. It reflects our commitment to ensuring our people are
vaccinated against COVID-19, based on key principles, including
regional risk assessments to determine whether certain roles, locations
or tasks require individuals to be vaccinated. Our approach is guided
by our commitment to respect human rights. Any vaccination
requirements will be closely managed with care and will consider those
who are unable to be fully vaccinated.
Iron Ore Company of Canada (IOC), operations.
100
Annual Report 2021 | riotinto.com
People
Empowered and engaged colleagues are key to
our success, but we recognise that the work
culture in some parts of our business has not
always supported this. As a result, we have
launched a number of initiatives to evolve our
culture, so our people feel safe, respected and
included, and they are supported to use their
knowledge and experience, drive improvements,
and deliver transformation and growth.
2021 was a challenging year with COVID-19 continuing to impact our
ways of working and our lives at home. Our new leadership team
focused on building trust and listening to our people. With the safety
and wellbeing of our 49,000 employees top of mind, we have taken
steps to shift our mindsets and simplify our processes.
Evolving our culture
In 2021, we launched our new strategy as well as our new values of care,
courage and curiosity, which will reinforce the culture change that we
are driving and enable greater performance. We recognise that
embedding our values and evolving our culture will take time, but we are
making important progress.
Within the mining industry, and across society as a whole, we see
unacceptable behaviours such as bullying, sexual harassment, racism.
To address this proactively within our own company, we commissioned
expert and former Australian Sex Discrimination Commissioner,
Elizabeth Broderick*, to conduct an independent review of our
workplace culture, as part of our Everyday Respect task force. More
than 10,000 people shared their experiences and suggestions, through
listening sessions, surveys and written submissions.
The Board and Executive Committee fully endorse the
recommendations set out in the report, which focus on a framework for
prevention and response via three key areas:
– Leadership and behavioural change: A commitment from the company’s
leadership to create safe, respectful and inclusive working environments
to prevent harmful behaviours and better support people in vulnerable
situations. This includes increasing diversity within the company.
– Safe and inclusive facilities: Ensuring the company’s camp and village
facilities are safe and inclusive. This includes applying the same safety
and risk processes that Rio Tinto uses to prevent harm in operations to
create a safe environment for all employees and contractors.
– Caring response: Making it as easy and safe as possible for all people
to call out unacceptable behaviours, highlight issues when they
happen and receive support. This includes introducing early
intervention options and improving how the company responds to
formal complaints in the workplace.
In 2021, we also took part in the Western Australian Parliamentary
Inquiry into sexual harassment of women in the fly-in, fly-out (FIFO)
mining industry. We made our submission to the Inquiry in August and
are absolutely committed to eradicating all forms of sexual harassment,
racism and bullying in our workplace, wherever we operate globally.
Everyone deserves to feel physically and psychologically safe at work,
without exception. This is core to our values and what we stand for as
a company.
This year, we also updated our confidential reporting programme,
myVoice, with a number of enhancements designed to make it easier
for our people to voice concerns when something at work does not feel
right. The myVoice programme will continue to evolve to reflect the
feedback received through the independent review. More information
is available on page 107.
We know that addressing these issues will, over time, contribute to a
safer, more inclusive and respectful work environment. It will help
improve wellbeing, increase collaboration, and help to attract and
retain diverse people. Continuing to focus on our culture will remain a
key priority for all leaders in 2022.
To help catalyse change, we rolled out a major leadership development
programme to our top 115 leaders. Over the next two years, a further
400 of our senior leaders will go through the same programme. We are
also investing in developing our frontline colleagues, and we are
focusing on more delegation and empowerment, as well as simplifying
our governance processes. In 2022, we will also review our incentives
and rewards to ensure they support and align with our desired culture,
values and strategy.
In 2021, we also undertook two Group-wide employee engagement
surveys to help us understand how our people feel about the company
and our direction. In our latest survey in October, close to 27,000
employees completed the survey and provided over 62,000
comments. Results show that the new strategy was well-received, and
our new values resonated for many who felt they have a stronger
human connection and reflect what we want to be as a company.
However, our employee satisfaction (eSAT) score, which measures
how happy people are working at Rio Tinto, has gone down from 73 to
71. This is the first decline since 2017, and is seen across most levels,
geographies and parts of the business. This is consistent with what
Glint, our survey provider and expert in engagement, is seeing across
organisations. After a broad increase in eSAT during the first year of the
pandemic, there has been a general decline across many industries
and organisations as fatigue increases. This is a combination of
increasing workload to cover absenteeism, additional pandemic-
related work and the isolation for those working from home leading to
higher levels of employee burnout.
Building a workforce that reflects the diversity
of our community
In 2021, our workforce grew by 3,001 and we hired 7,895 people, of which
3,098 were contractors who became permanent Rio Tinto employees.
We continue to focus on the representation of women across all levels.
This year, we expanded our gender diversity targets beyond women in
senior leadership to women at all levels and increased the representation
of women in our workforce by 1.5%. Overall, we increased female
representation from 20.1% to 21.6%, hiring 2,524 women, 32% of all new
hires. Gender diversity also improved among our senior leadership, up
1.3% to 27.4%. Also, for the first time in five years, our frontline operator
female representation grew by 0.9%, from 14.2% to 15.1%.
Initiatives to increase the representation of women include the Women in
Mining Forum at our Richards Bay Minerals (RBM) operations in South
Africa, sponsored by the site leadership team. Discussion forums were
held between senior management and female employees at the site to
foster dialogue and identify areas for improvement to break down
gender bias and inequality. Our Gladstone leadership development pilot
programme is another example from this year where we focused on
building career pathways to develop the capability of our female talent in
frontline leader roles. The programme was rolled out across the Boyne
Smelters, Queensland Alumina and our Yarwun refinery, and our plan is
to deploy this programme across our Pacific Operations.
* Elizabeth Broderick AO, Principal, Elizabeth Broderick & Co. Elizabeth was formerly Australia’s longest-serving Sex Discrimination Commissioner, and is Founder and Convenor of the
Champions of Change Coalition, Adjunct Professor at The University of Sydney, and an Independent Expert to the UN Working Group on Discrimination against Women and Girls.
Annual Report 2021 | riotinto.com
101
Caring for society and people continued
Our graduate programme is one avenue where we can make sure our
leaders of tomorrow reflect the diversity of our community. For our
2021 intake, 58% of the graduates are female and 35% from
nationalities where we are building new businesses. In Australia, 10% of
the graduate intake and 15% of our vacation student programme are
Indigenous, both up from 8% in 2020. We are also investing in the
development of our graduates through our new graduate development
programme. Due to COVID-19, this programme is now a two-year
virtual journey that ensures that all graduates, regardless of where they
are located, have access to the same curriculum. It prepares graduates
to be future leaders with experiences including the future of work and
our role in society. In 2021, the programme received an innovation
award through the Human Resources Canada Awards.
We know that having an inclusive and diverse workforce improves
performance, and we are committed to Indigenous peoples having a
stronger voice across our business. We are one of the largest
employers of Indigenous Australians, with almost 1,500 Indigenous
employees and contractors working across our Australian business,
but we recognise that we have more work to do to increase
representation in professional and leadership roles. We have
committed $50 million over five years to attract, retain and grow
Indigenous professionals and leaders in Australia, and we have
increased the number of Australian Indigenous leaders in our business
fivefold since November 2020. We have also developed a national
cultural competence programme which was launched in 2021 and will
continue to be delivered to our leaders across our business in 2022.
Ensuring equality through pay equity
Equity is intrinsically linked to our commitment to inclusion and
diversity. Ensuring that employees with similar skills, knowledge,
qualifications, experience and performance are paid equally for the
same or comparable work remains a core focus. Our gender pay gap
reporting consists of two metrics:
– Our equal pay gap, the primary lens we use when assessing gender
pay, measures the extent to which women and men employed by
our company in the same location and performing work of equal
value receive the same pay. In 2021, we further reduced our gender
pay gap compared to 2020, which is less than 1.5% in favour of men.
– Gender pay is a measure of the difference between the average
earnings of women and men across the Group (excluding incentive
pay), regardless of role, expressed as a percentage of men’s
earnings. In 2021, our gender pay gap is unchanged with just over
1% in favour of women.
Multiple factors impact this more high-level indicator, including our
approach to promoting equity, reflecting higher increases in average
earnings for women and an increase in the number of women in
higher-paying roles. During the year, we increased our headcount by
around 7%. This included a significant proportion of male hires in lower
paying roles within the operational workforce, which contributed to the
overall outcome. More information on our commitment to pay equity
can be found at riotinto.com/payequity.
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Annual Report 2021 | riotinto.com
Other activities in 2021:
– Launched the development of the Rio Tinto Safe
Production System (RTSPS) to support our ambition
of becoming the best operator. RTSPS empowers our
frontline employees, simplifies what we do, frees our
people to innovate and brings consistency to our
operations. We began testing the model at five sites
in 2021: at our copper concentrator at Kennecott,
Yandicoogina Fixed Plant, and drill and blast at
West Angelas in the Pilbara, the casthouse system
at Grande-Baie in the Saguenay, and the concentrator
at the Iron Ore Company of Canada (IOC).
– Launched a programme to streamline processes and
remove bureaucracy to further empower our people.
As an example, we are ensuring authority is delegated to
the appropriate level and have completed improvements
to our workflows, representing approximately 16,750
approvals per year and returning almost 2,800 hours
annually to our leaders.
– Expanded our technical expertise through the RioExcel
programme with 36 people formally recognised as
technical RioExperts, bringing our total number to 109. Of
these, 18% are women and our total RioExpert population
represents 14 technical disciplines across six countries.
– Partnered with Mindgym to conduct 15 virtual learning
sessions for over 500 people globally (in English and
French) about inclusion, being a better ally and creating a
sense of belonging.
– Continued to encourage skills development through
LinkedIn Learning. Since its launch in May 2020, more than
17,000 of our colleagues have registered for the platform
and completed more than 16,200 courses and 24,500
hours of learning.
– Increased the employee contribution caps in our
Global Employee Share Plan, myShare, further increasing
the attractiveness of the programme. The number of
employees who hold Rio Tinto shares through
myShare increased by 14% this year – to more than
25,000 employees.
– Researched our global mobile talent to understand the
impact of the pandemic on how people view international
assignments and what support they need to thrive.
Outcomes from this research will inform the shape of the
mobility programme to ensure we provide the right support
and growth opportunities.
– Established a partnership with the Australian Graduate
School of Management (AGSM) at the University of New
South Wales to deliver the Rio Tinto Emerging Indigenous
Executive Leaders Programme (EIELP) to 20 Indigenous
leaders. This programme focuses on developing
executive-ready Indigenous future leaders who will have
an influential role in shaping the future of our business.
– Completed the first round of the Indigenous two-way
mentoring programme. We matched 31 of our Indigenous
employees with senior leaders across our Australia
businesses. We have now launched round two of this
programme, with 45 Indigenous employees participating.
Caring for society and people continued
Our graduate programme is one avenue where we can make sure our
leaders of tomorrow reflect the diversity of our community. For our
2021 intake, 58% of the graduates are female and 35% from
nationalities where we are building new businesses. In Australia, 10% of
the graduate intake and 15% of our vacation student programme are
Indigenous, both up from 8% in 2020. We are also investing in the
development of our graduates through our new graduate development
programme. Due to COVID-19, this programme is now a two-year
virtual journey that ensures that all graduates, regardless of where they
are located, have access to the same curriculum. It prepares graduates
to be future leaders with experiences including the future of work and
our role in society. In 2021, the programme received an innovation
award through the Human Resources Canada Awards.
We know that having an inclusive and diverse workforce improves
performance, and we are committed to Indigenous peoples having a
stronger voice across our business. We are one of the largest
employers of Indigenous Australians, with almost 1,500 Indigenous
employees and contractors working across our Australian business,
but we recognise that we have more work to do to increase
representation in professional and leadership roles. We have
committed $50 million over five years to attract, retain and grow
Indigenous professionals and leaders in Australia, and we have
increased the number of Australian Indigenous leaders in our business
fivefold since November 2020. We have also developed a national
cultural competence programme which was launched in 2021 and will
continue to be delivered to our leaders across our business in 2022.
Ensuring equality through pay equity
Equity is intrinsically linked to our commitment to inclusion and
diversity. Ensuring that employees with similar skills, knowledge,
qualifications, experience and performance are paid equally for the
same or comparable work remains a core focus. Our gender pay gap
reporting consists of two metrics:
pay, measures the extent to which women and men employed by
our company in the same location and performing work of equal
value receive the same pay. In 2021, we further reduced our gender
pay gap compared to 2020, which is less than 1.5% in favour of men.
– Gender pay is a measure of the difference between the average
earnings of women and men across the Group (excluding incentive
pay), regardless of role, expressed as a percentage of men’s
earnings. In 2021, our gender pay gap is unchanged with just over
1% in favour of women.
Multiple factors impact this more high-level indicator, including our
approach to promoting equity, reflecting higher increases in average
earnings for women and an increase in the number of women in
higher-paying roles. During the year, we increased our headcount by
around 7%. This included a significant proportion of male hires in lower
paying roles within the operational workforce, which contributed to the
overall outcome. More information on our commitment to pay equity
can be found at riotinto.com/payequity.
– Our equal pay gap, the primary lens we use when assessing gender
hours of learning.
Other activities in 2021:
– Launched the development of the Rio Tinto Safe
Production System (RTSPS) to support our ambition
of becoming the best operator. RTSPS empowers our
frontline employees, simplifies what we do, frees our
people to innovate and brings consistency to our
operations. We began testing the model at five sites
in 2021: at our copper concentrator at Kennecott,
Yandicoogina Fixed Plant, and drill and blast at
West Angelas in the Pilbara, the casthouse system
at Grande-Baie in the Saguenay, and the concentrator
at the Iron Ore Company of Canada (IOC).
– Launched a programme to streamline processes and
remove bureaucracy to further empower our people.
As an example, we are ensuring authority is delegated to
the appropriate level and have completed improvements
to our workflows, representing approximately 16,750
approvals per year and returning almost 2,800 hours
annually to our leaders.
– Expanded our technical expertise through the RioExcel
programme with 36 people formally recognised as
technical RioExperts, bringing our total number to 109. Of
these, 18% are women and our total RioExpert population
represents 14 technical disciplines across six countries.
– Partnered with Mindgym to conduct 15 virtual learning
sessions for over 500 people globally (in English and
French) about inclusion, being a better ally and creating a
sense of belonging.
– Continued to encourage skills development through
LinkedIn Learning. Since its launch in May 2020, more than
17,000 of our colleagues have registered for the platform
and completed more than 16,200 courses and 24,500
– Increased the employee contribution caps in our
Global Employee Share Plan, myShare, further increasing
the attractiveness of the programme. The number of
employees who hold Rio Tinto shares through
myShare increased by 14% this year – to more than
25,000 employees.
– Researched our global mobile talent to understand the
impact of the pandemic on how people view international
assignments and what support they need to thrive.
Outcomes from this research will inform the shape of the
mobility programme to ensure we provide the right support
and growth opportunities.
– Established a partnership with the Australian Graduate
School of Management (AGSM) at the University of New
South Wales to deliver the Rio Tinto Emerging Indigenous
Executive Leaders Programme (EIELP) to 20 Indigenous
leaders. This programme focuses on developing
executive-ready Indigenous future leaders who will have
an influential role in shaping the future of our business.
– Completed the first round of the Indigenous two-way
mentoring programme. We matched 31 of our Indigenous
employees with senior leaders across our Australia
businesses. We have now launched round two of this
programme, with 45 Indigenous employees participating.
Supporting a career path for our
technical experts
In many organisations, career progression means taking on responsibility
for leading teams. But through our RioExcel programme, we offer our
technical specialists an alternative career path – one where they can
focus on building and sharing their expertise. Our RioExperts are
selected by a panel of senior technical leaders and must prove they
are at the forefront of their domain to share their knowledge.
Learn more about our RioExcel programme
at riotinto.com/people.
Employee hiring and turnover rates1, 2, 3 (2021)
Gender4
Age group
Employee hiring rate5, 6
18.8%
32.0%
68.0%
38.7%
32.2%
18.8%
Employee turnover rate7
8.7%
8.6%
8.8%
11.7%
8.3%
6.7%
10.2%
10.5%
1.5%
5.7%
27.2%
6.7%
Total
Female
Male
Under 30
30-39
40-49
Over 50
Africa
Americas
Australia/
New
Zealand
60.3%
11.3%
Asia
7.4%
4.9%
Region
Europe
3.6%
7.6%
1.
Includes our total workforce based on managed operations (excludes the Group’s share of non-managed operations and joint ventures) as at 31 December 2021.
2. Excludes Non-Executive Directors and contractors.
3. Rates have been calculated over average monthly headcount in the year per category.
4. Less than 1% of the workforce gender is undeclared.
5. Total hiring rate is calculated as total employee hires over average employee headcount for the year.
6. Hiring rate includes total employee hires per category over total hires for the year.
7. Turnover rate excludes temporary workers and the reduction of employees due to business divestment. Turnover rate includes total terminations per category over average monthly headcount
in the year per category.
Employees by employment type8, 9 (2021)
Category
Senior leaders
Managers
Supervisory and professional
Operations and general support
Graduates
Total
Female
(count)
147
1,119
4,729
4,051
178
Male
(count)
390
2,389
11,597
22,695
119
10,224
37,190
Female %
27.4%
31.9%
29.0%
15.1%
59.9%
21.6%
Gender10
Male %
72.6%
68.1%
71.0%
84.9%
40.1%
78.4%
8. Includes our total workforce based on managed operations (excludes the Group’s share of non-managed operations and joint ventures) as at 31 December 2021.
9. Excludes Non-Executive Directors, Executive Committee, contractors and people not available for work. From 2021, the definition used to calculate diversity was changed to include people not
available for work and contractors (those engaged on temporary contracts to provide services under the direction of Rio Tinto leaders) excluding project contractors.
10. Less than 1% of the workforce gender is undeclared.
Workforce data by region11, 12
Region
Africa
Americas
Asia
Australia/New Zealand
Europe
Total16
Average
employee
headcount13
2,360
14,289
4,144
20,288
1,018
Headcount
distribution % Absenteeism14
Average
contractor
headcount15
Headcount
distribution %
5.6%
33.9%
9.8%
48.3%
2.4%
2.8%
1.6%
2.0%
4.2%
0.9%
3.0%
69
689
430
4,000
36
1.3%
13.2%
8.2%
76.6%
0.7%
5,223
100.0%
42,099
100.0%
102
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Annual Report 2021 | riotinto.com
103
11. Includes our total workforce based on managed operations (excludes the Group’s share of non-managed operations and joint ventures) as at 31 December 2021.
12. Rates have been calculated over average monthly headcount in the year.
13. Employee headcount excludes Non-Executive Directors, contractors and people not available for work.
14. Absenteeism includes unplanned leave (sick leave, disability, parental and other unpaid leave) for populations on global, centralised HR systems. Excludes Non-Executive Directors and contractors.
15. Contractors include those engaged on temporary contracts to provide services under the direction of Rio Tinto leaders.
16. The sum of the categories may be slightly different to the Rio Tinto total due to rounding.
Caring for society and people continued
Human rights
Our commitment to human rights is core to our
values. It is fundamentally about treating people
with dignity and respect – our employees and
contractors, workers in our value chain,
communities and others with whom we interact.
Our Board Sustainability Committee oversees our approach, as we
work to improve our human rights performance. This includes
strengthening our processes to prevent any involvement in adverse
human rights impacts and, importantly, to provide for, or co-operate in,
remediation when we identify that we have caused, or contributed to,
human rights harm.
Our salient human rights issues are those where we could have the
most severe impacts on people through our own activities or business
relationships. Taking into account our operational footprint, value chain
and external contexts, we updated our salient human rights issues in
2021 to include land access and use; Indigenous peoples’ rights;
security; inclusion and diversity; community health, safety and
wellbeing; workplace health and safety; labour rights; and climate
change and just transition (respecting human rights while transitioning
to a low-carbon economy).
We recognise the importance of acting on any involvement we might
have in human rights harm through our business relationships with our
suppliers, customers and joint venture partners, in line with the UN
Guiding Principles on Business and Human Rights and international
standards. We look for ways to work with our business partners to
advance respect for human rights in line with international standards
and our values.
Using a risk-based approach, we pre-screen potential business
partners on human rights and require suppliers (including
subcontractors) to adhere to our Supplier Code of Conduct, which
requires respect for human rights. Our standard global supply contract
and purchase order terms and conditions, as well as our Marine
chartering contracts, include modern slavery provisions.
We build our employees’ understanding through general and targeted
human rights training.
Commitment to international standards
We are committed to respecting all internationally recognised human
rights, as set out in the Universal Declaration of Human Rights, and
implementing the UN Guiding Principles on Business and Human
Rights (UNGPs). We voluntarily uphold a range of other international
standards, including the Voluntary Principles on Security and Human
Rights (VPSHR), the OECD Guidelines for Multinational Enterprises
(OECD Guidelines) and the UN Global Compact’s Ten Principles.
Consistent with the UN Declaration on the Rights of Indigenous
Peoples, we are committed to acknowledging and respecting
Indigenous peoples’ connections to lands and waters and
strengthening the application of the principles of Free, Prior and
Informed Consent of affected Indigenous communities in line with the
International Council on Mining and Metals Position Statement on
Indigenous Peoples and Mining. We acknowledge that the destruction
of the rock shelters at Juukan Gorge was a breach of our values,
standards and procedures, including those that help us respect human
rights. This year, we progressed a remedy process with the Puutu Kunti
Kurrama and Pinikura (PKKP) people. We continue to engage with
Traditional Owners, Indigenous groups, civil society organisations and
other stakeholders, to inform our approach to the management and
protection of cultural heritage.
104
Annual Report 2021 | riotinto.com
Key actions during 2021
Governance
– Revised our salient human rights issues.
– Consulted on an updated human rights policy to be
published in 2022.
– Started development of a responsible sourcing labour
rights action plan to evolve our approach on labour
rights risk management across Rio Tinto Procurement
managed suppliers.
– Completed an external audit of our community
complaints, disputes and grievance mechanisms
for alignment with the UNGPs’ criteria for effective
non-judicial grievance mechanisms.
– Integrated human rights considerations into our
refreshed marine safety and crew welfare strategy.
Training and awareness-raising
– Delivered mandatory human rights training for
Rio Tinto Procurement and Logistics.
– Provided targeted human rights training for our Sales
and Marketing, Ethics and Compliance, Legal,
Communities and Social Performance, and Marine
teams, including our ship managers for our Rio Tinto
owned fleet.
– Refreshed our VPSHR training for security personnel.
Stakeholder engagement and reporting
– Published our fourth VPSHR Implementation Report
and our fifth Modern Slavery Statement in compliance
with the Australian and UK Modern Slavery Acts.
– Engaged with the Australian National Contact Point
responsible for promoting the OECD Guidelines, the
Human Rights Law Centre and community representatives
regarding the former Panguna copper mine in Bougainville.
More information can be found on page 92.
– Provided support to the Compagnie des Bauxites de
Guinée SA, in its discussions with the International Finance
Corporation’s Office of the Compliance Advisor
Ombudsman and community complainants regarding the
Sangaredi mine in Guinea.
– Engaged with human rights-related shipping initiatives,
including in relation to the risks faced by seafarers during
the COVID-19 pandemic.
– Hosted more than 40 civil society organisations in three
environmental, social and governance roundtables with
Board and Executive Committee members in North
America, Europe and the UK, and Australia which included
discussions about human rights.
Caring for society and people continued
Human rights
Our commitment to human rights is core to our
values. It is fundamentally about treating people
with dignity and respect – our employees and
contractors, workers in our value chain,
communities and others with whom we interact.
Our Board Sustainability Committee oversees our approach, as we
work to improve our human rights performance. This includes
strengthening our processes to prevent any involvement in adverse
human rights impacts and, importantly, to provide for, or co-operate in,
remediation when we identify that we have caused, or contributed to,
human rights harm.
Our salient human rights issues are those where we could have the
most severe impacts on people through our own activities or business
relationships. Taking into account our operational footprint, value chain
and external contexts, we updated our salient human rights issues in
2021 to include land access and use; Indigenous peoples’ rights;
security; inclusion and diversity; community health, safety and
wellbeing; workplace health and safety; labour rights; and climate
change and just transition (respecting human rights while transitioning
to a low-carbon economy).
We recognise the importance of acting on any involvement we might
have in human rights harm through our business relationships with our
suppliers, customers and joint venture partners, in line with the UN
Guiding Principles on Business and Human Rights and international
standards. We look for ways to work with our business partners to
advance respect for human rights in line with international standards
and our values.
Using a risk-based approach, we pre-screen potential business
partners on human rights and require suppliers (including
subcontractors) to adhere to our Supplier Code of Conduct, which
requires respect for human rights. Our standard global supply contract
and purchase order terms and conditions, as well as our Marine
chartering contracts, include modern slavery provisions.
We build our employees’ understanding through general and targeted
human rights training.
Commitment to international standards
We are committed to respecting all internationally recognised human
rights, as set out in the Universal Declaration of Human Rights, and
implementing the UN Guiding Principles on Business and Human
Rights (UNGPs). We voluntarily uphold a range of other international
standards, including the Voluntary Principles on Security and Human
Rights (VPSHR), the OECD Guidelines for Multinational Enterprises
(OECD Guidelines) and the UN Global Compact’s Ten Principles.
Consistent with the UN Declaration on the Rights of Indigenous
Peoples, we are committed to acknowledging and respecting
Indigenous peoples’ connections to lands and waters and
strengthening the application of the principles of Free, Prior and
Informed Consent of affected Indigenous communities in line with the
International Council on Mining and Metals Position Statement on
Indigenous Peoples and Mining. We acknowledge that the destruction
of the rock shelters at Juukan Gorge was a breach of our values,
standards and procedures, including those that help us respect human
rights. This year, we progressed a remedy process with the Puutu Kunti
Kurrama and Pinikura (PKKP) people. We continue to engage with
Traditional Owners, Indigenous groups, civil society organisations and
other stakeholders, to inform our approach to the management and
protection of cultural heritage.
Key actions during 2021
Governance
– Revised our salient human rights issues.
– Consulted on an updated human rights policy to be
published in 2022.
– Started development of a responsible sourcing labour
rights action plan to evolve our approach on labour
rights risk management across Rio Tinto Procurement
managed suppliers.
– Completed an external audit of our community
complaints, disputes and grievance mechanisms
for alignment with the UNGPs’ criteria for effective
non-judicial grievance mechanisms.
– Integrated human rights considerations into our
refreshed marine safety and crew welfare strategy.
Training and awareness-raising
– Delivered mandatory human rights training for
Rio Tinto Procurement and Logistics.
– Provided targeted human rights training for our Sales
and Marketing, Ethics and Compliance, Legal,
Communities and Social Performance, and Marine
teams, including our ship managers for our Rio Tinto
owned fleet.
– Refreshed our VPSHR training for security personnel.
Stakeholder engagement and reporting
– Published our fourth VPSHR Implementation Report
and our fifth Modern Slavery Statement in compliance
with the Australian and UK Modern Slavery Acts.
– Engaged with the Australian National Contact Point
responsible for promoting the OECD Guidelines, the
Human Rights Law Centre and community representatives
regarding the former Panguna copper mine in Bougainville.
More information can be found on page 92.
– Provided support to the Compagnie des Bauxites de
Guinée SA, in its discussions with the International Finance
Corporation’s Office of the Compliance Advisor
Ombudsman and community complainants regarding the
Sangaredi mine in Guinea.
– Engaged with human rights-related shipping initiatives,
including in relation to the risks faced by seafarers during
the COVID-19 pandemic.
– Hosted more than 40 civil society organisations in three
environmental, social and governance roundtables with
Board and Executive Committee members in North
America, Europe and the UK, and Australia which included
discussions about human rights.
Transparent and responsible business
The way we do business is increasingly important to our
stakeholders who want assurance that we not only conduct
ourselves responsibly, but also that suppliers and customers
across our value chain do so as well. We look for opportunities to
improve transparency about our business practices and work to
ensure our people understand and fulfil their obligations. We
participate in assessment and accreditation programmes to verify
our performance and identify opportunities for improvement
so our stakeholders can have confidence in the way we work.
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105
Cape Lambert ship loading operations. The Pilbara, Australia.
Transparent and responsible business continued
Value chain
As consumers become more mindful of the
sustainability of the products they choose, they
want reassurance that the materials consumed
reflect responsible practices throughout the
value chain. Materials used in products today
may not be the preferred choice in the future if
they cannot establish their environmental,
social and governance (ESG) credentials or
develop strong circular solutions. This starts
with transparency and includes our suppliers,
operations and customers.
We are part of a huge ecosystem that includes 37,000 suppliers and 2,000
customers across multiple industries and countries. More than 230 marine
vessels transport our products. We are improving our knowledge of
suppliers through enhanced due diligence and ongoing monitoring.
Working across our value chain
We progressed a number of activities to reduce our impacts in 2021.
Our Supplier Code of Conduct lays out our expectations on human
and labour rights, safety and environment. Our global supply contract
outlines our expectations for how our suppliers should manage modern
slavery risks.
In our operations, we are providing our customers with assurance
that our value chain is responsible through independent industry
stewardship programmes. Our Kennecott and Oyu Tolgoi copper
operations have been awarded the Copper Mark, the copper industry’s
independently assessed responsible production programme. In 2021,
our ISAL smelter in Iceland was certified under the Aluminium
Stewardship Initiative, joining other aluminium assets in Canada,
Australia and New Zealand. Our three Canadian mines – Diavik
Diamond Mine, Iron Ore Company of Canada, and Rio Tinto Fer et
Titane – are assured under the Towards Sustainable Mining programme.
See the 2021 Sustainability Fact Book for more information.
We also have a product stewardship strategy and programmes that
guide our approach to managing regulatory and sustainability risks and
opportunities in delivering our product to market. Our programmes
address the regulatory requirements of both our host countries and
end markets, as well as those that apply during transport.
Mining
Processing
and production
Distribution and
customer use
End of life
– Electrifying mine trucks
through the Charge On
Innovation Challenge
– Zero-emission autonomous
mining haulage with
Caterpillar and Komatsu
– Trialling our first renewable
diesel-powered haul truck
using organic biomass at
Boron in the US
– Additional solar generation
capacity at Weipa in Australia
– Renewable energy for QMM
in Madagascar
– Transforming iron ore pellets
into hot briquetted iron
using green hydrogen and
hydro-electricity
– Producing low-carbon
aluminium at the ELYSIS
Industrial Research and
Development Centre
– Developing a new steel
powder and aluminium-
scandium alloy for 3D
printing applications using
materials extracted
from waste
– Assessing the use of
hydrogen in alumina refining
processes with ARENA
– Studying ammonia as a
zero-carbon marine fuel
with ITOCHU
– Building a fleet of liquefied
natural gas (LNG) dual-fuel
vessels
– Transitioning to a low-
carbon emission steel value
chain with POSCO
– Exploring low-carbon
steelmaking using Pilbara
iron ores with BlueScope
– Researching low-carbon
ironmaking, combining raw,
sustainable biomass
with microwaves
– Extracting high-purity
scandium oxide from
waste streams of titanium
dioxide production
– Recovering tellurium
as a by-product of
copper smelting
– Melting scrap to make alloys
with recycled content for
aluminium customers with
Shawinigan Aluminium Inc.
– Launching Regeneration
Enterprises to re-mine and
process waste from legacy
mine sites with the ambition
to create full restoration
outcomes
Lifecycle
– Exploring a lithium battery lifecycle initiative with InoBat
– Joined Japan’s Green Value Chain Platform Network to lead
transparent decarbonisation efforts
– Launched START, an aluminium traceability and
transparency initiative
106
Annual Report 2021 | riotinto.com
Transparent and responsible business continued
Strategic report
Value chain
As consumers become more mindful of the
slavery risks.
sustainability of the products they choose, they
want reassurance that the materials consumed
reflect responsible practices throughout the
value chain. Materials used in products today
may not be the preferred choice in the future if
they cannot establish their environmental,
social and governance (ESG) credentials or
develop strong circular solutions. This starts
with transparency and includes our suppliers,
operations and customers.
We are part of a huge ecosystem that includes 37,000 suppliers and 2,000
customers across multiple industries and countries. More than 230 marine
vessels transport our products. We are improving our knowledge of
suppliers through enhanced due diligence and ongoing monitoring.
Working across our value chain
We progressed a number of activities to reduce our impacts in 2021.
Our Supplier Code of Conduct lays out our expectations on human
and labour rights, safety and environment. Our global supply contract
outlines our expectations for how our suppliers should manage modern
In our operations, we are providing our customers with assurance
that our value chain is responsible through independent industry
stewardship programmes. Our Kennecott and Oyu Tolgoi copper
operations have been awarded the Copper Mark, the copper industry’s
independently assessed responsible production programme. In 2021,
our ISAL smelter in Iceland was certified under the Aluminium
Stewardship Initiative, joining other aluminium assets in Canada,
Australia and New Zealand. Our three Canadian mines – Diavik
Diamond Mine, Iron Ore Company of Canada, and Rio Tinto Fer et
Titane – are assured under the Towards Sustainable Mining programme.
See the 2021 Sustainability Fact Book for more information.
We also have a product stewardship strategy and programmes that
guide our approach to managing regulatory and sustainability risks and
opportunities in delivering our product to market. Our programmes
address the regulatory requirements of both our host countries and
end markets, as well as those that apply during transport.
Mining
Processing
and production
Distribution and
customer use
End of life
– Electrifying mine trucks
– Transforming iron ore pellets
– Studying ammonia as a
through the Charge On
Innovation Challenge
into hot briquetted iron
zero-carbon marine fuel
using green hydrogen and
with ITOCHU
– Extracting high-purity
scandium oxide from
waste streams of titanium
dioxide production
– Zero-emission autonomous
mining haulage with
Caterpillar and Komatsu
– Trialling our first renewable
diesel-powered haul truck
Boron in the US
– Additional solar generation
capacity at Weipa in Australia
– Renewable energy for QMM
in Madagascar
hydro-electricity
– Building a fleet of liquefied
– Producing low-carbon
natural gas (LNG) dual-fuel
– Recovering tellurium
aluminium at the ELYSIS
Industrial Research and
Development Centre
vessels
– Transitioning to a low-
as a by-product of
copper smelting
carbon emission steel value
– Melting scrap to make alloys
powder and aluminium-
scandium alloy for 3D
printing applications using
materials extracted
from waste
– Assessing the use of
hydrogen in alumina refining
processes with ARENA
– Exploring low-carbon
steelmaking using Pilbara
iron ores with BlueScope
– Researching low-carbon
ironmaking, combining raw,
sustainable biomass
with microwaves
with recycled content for
aluminium customers with
Shawinigan Aluminium Inc.
– Launching Regeneration
Enterprises to re-mine and
process waste from legacy
mine sites with the ambition
to create full restoration
outcomes
using organic biomass at
– Developing a new steel
chain with POSCO
Lifecycle
– Exploring a lithium battery lifecycle initiative with InoBat
– Joined Japan’s Green Value Chain Platform Network to lead
transparent decarbonisation efforts
– Launched START, an aluminium traceability and
transparency initiative
Ethics and Compliance
We expect our people to uphold the highest
standard of integrity and to act ethically.
Sometimes this requires courage, which is one
of our values. This expectation extends to our
partners, that they behave and operate in a way
that aligns with our values and priorities.
Business integrity
Our code of conduct is clear that we do not offer, pay or accept bribes,
no matter where we operate, what the amount, what the situation, and
who is involved. Our code of conduct applies to all our people and is
available to our external partners and stakeholders at riotinto.com/ethics.
In 2021, we updated the code of conduct to reflect our new values of
care, courage and curiosity and the new name of our confidential
reporting programme, myVoice. Our Business Integrity Standard and
Procedure require our employees, core contractors and any third
parties acting for, or on behalf of, the company to not commit, authorise
or be involved in bribery, corruption, fraud or other economic crimes.
We also have clear rules regarding third-party benefits, managing
conflicts of interest, facilitation payments, sponsorships, donations and
community support, mergers, acquisitions and joint ventures, and
engaging third parties. Our Ethics and Compliance team helps our
people navigate any grey areas.
This year, we updated our Business Integrity Standard and Procedure
to simplify and optimise the efficiency of our processes and better
guide our people on how to make the right decisions and demonstrate
ethical behaviours. In 2021, we updated the New Country Entry
Procedure outlining steps to assess the potential risks (including
corruption risks), and internal approvals process, for us to enter a new
country. This year, we also established the Export Controls Procedure
setting out the requirements for compliance with export control laws.
We have further enhanced our Risk Monitoring Review Forum to
regularly review Group-level business integrity risks, and to identify
and mitigate new and existing business integrity risks across our
operations. In 2021, we established the Group Ethics & Compliance
Committee, a sub-committee of the Executive Committee, to provide
strategic oversight and input on compliance matters. The Committee
provides a formal, structured forum for senior leaders to discuss
compliance risks, and ensure the compliance programme is working
effectively in practice. In addition, the Board oversees ethics
and compliance matters, including myVoice, our confidential
reporting programme.
We encourage and equip our people to do the right thing. Our employees
are required to complete annual online compliance training, tailored to
suit the risks they are most likely to encounter in their specific role and
team. We are also continuing our ethics ambassador programme to
extend the sharing and reach of integrity initiatives and champion an
integrity-driven culture across the business. In 2022, we will update our
code of conduct to align with our new strategy and values. We will also
ensure it reflects our increased focus on supporting a culture where
everyone feels safe to challenge and speak up freely when something
does not feel right.
Working with third parties
Understanding the beneficial ownership and activities of the parties
with whom we transact business is an important part of living our values
and maintaining impeccable environmental, social and governance
(ESG) credentials.
In 2021, we amalgamated the Know Your Supplier and Know Your
Customer Procedures into a single Know Your Third Party Procedure.
This simplified document aligns risk criteria and clearly articulates the
due-diligence requirements for all types of third parties. We have also
included additional risk criteria to address human rights, labour rights,
and modern slavery risk. We also implemented a new Sanctions
Standard in March 2021, setting out the requirements and framework
for compliance with applicable economic sanctions laws and
regulations in the jurisdictions where we operate, and all our third
parties are screened for sanctions.
EY completed an external review of our due diligence process. This work
will help guide us to streamline and automate processes and better align
the level of due diligence with the assessed third party's inherent risk.
myVoice, confidential reporting programme
In 2021, we launched our enhanced confidential reporting programme,
myVoice, designed to help our people voice concerns about potential
misconduct or improper behaviour. We have increased the independence
and effectiveness of the programme through organisational changes
and clearly defined governance, responsibilities and accountabilities.
The programme is managed by a dedicated Business Conduct Office
(BCO) reporting to the Chief Legal Officer & External Affairs. The BCO
and the Investigations team report regularly to the Group Ethics &
Compliance Committee.
Our employees’ response has been positive, and we are seeing an
increase in reporting and believe this means that more people are
feeling comfortable to share their concerns. In 2021, for the period
from 1 January to 31 December, we received 1,246 reports through
the myVoice programme channels. Of these cases, 51% were
substantiated including 18 cases which were reports received in 2020.
The substantiation rate increase in 2021 reflects a single substantiated
incident where 139 reports were received.
myVoice – confidential reporting programme
myVoice1 case activity
Number of reports
Number of reports per 1,000 employees
Substantiated claims (%)
2021
1246
26.0
51%
2020
748
16.3
42%
2019
805
17.9
34%
2018
679
14.3
34%
2017
712
15.1
33%
1.
In March 2021, Rio Tinto launched its new confidential reporting programme called myVoice. myVoice replaces the programme formerly known as Talk to Peggy or Speak-OUT.
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107
Transparent and responsible business continued
Transparency
Being open and transparent about our tax payments, mineral
development contracts, beneficial ownership and our stance on a
range of other sustainability issues – like climate change – allows us
to enter into open, fact-based conversations with our stakeholders
in detail, and provides a better understanding of everyone’s roles
and responsibilities.
We are recognised as a leader in transparent tax reporting: we were
the first in our industry to disclose our payments to governments in
detail, and we have been reporting on our taxes and royalties paid,
and our economic contribution, in increasing detail since 2010. We are
a founding member of the Extractive Industry Transparency Initiative
(EITI) and have actively supported EITI’s principles and global
transparency and accountability standards since 2003. In 2018,
we became a signatory to the B Team Responsible Tax Principles.
In 2021, we reinforced our commitment to transparency over tax
reporting by being one of the first companies to fully implement
the disclosure requirements under the Global Reporting Initiative
Tax standard GRI 207.
In 2021, we joined other leading extractive-sector companies in
confirming our commitment to support beneficial ownership
transparency, including through the disclosure of ownership
information, and in using ownership information in undertaking due
diligence on partners and suppliers.
Political integrity
We do not favour any political party, group or individual, or involve
ourselves in party political matters. We prohibit the use of funds to
support political candidates or parties. Our business integrity
procedure includes strict guidelines for dealing with current and former
government officials and politicians, and they cannot be appointed to
senior employee positions or engaged as consultants, in certain
circumstances, without the approval of executive management and our
Chief Ethics & Compliance Officer.
We regularly engage with governments and share information and our
experiences on issues that affect our operations and our industry.
We join industry associations where membership provides
value to our business, investors and other stakeholders.
At riotinto.com/industryassociations, we outline the principles
that guide our participation, the way we engage, as well as a
list of the top five associations by membership fees paid.
We also track and disclose how we engage on climate policy issues,
disclosing when the policies and advocacy positions adopted by
industry associations differ materially from ours.
This year, we have further strengthened our approach and disclosures
on industry associations.
Training
In total, 4,307 employees and contractors in 18 countries had face-to-
face training, and over 23,000 had online training in recognising and
managing business integrity dilemmas.
Value chain
Due-diligence checks on third parties
Due-diligence checks on third parties – baseline screening only
Centrally monitored third parties1
1. Once third parties are screened, they then form part of ongoing monitoring.
Partnering to strengthen business ethics
in Mongolia
In partnership with the Mongolian National Chamber of
Commerce and Industry (MNCCI), and Transparency
International Mongolia, we launched a new Business
Integrity Centre in 2021 to help support the country’s
efforts to promote transparency, business ethics, and
corporate governance.
Learn more at riotinto.com/ethics.
2021
4,754
8,040
44,495
We have applied the reporting principles of GRI 101: Foundation 2016 Standard in this report.
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Transparent and responsible business continued
Strategic report
Transparency
Being open and transparent about our tax payments, mineral
development contracts, beneficial ownership and our stance on a
range of other sustainability issues – like climate change – allows us
to enter into open, fact-based conversations with our stakeholders
in detail, and provides a better understanding of everyone’s roles
and responsibilities.
We are recognised as a leader in transparent tax reporting: we were
the first in our industry to disclose our payments to governments in
detail, and we have been reporting on our taxes and royalties paid,
and our economic contribution, in increasing detail since 2010. We are
a founding member of the Extractive Industry Transparency Initiative
(EITI) and have actively supported EITI’s principles and global
transparency and accountability standards since 2003. In 2018,
we became a signatory to the B Team Responsible Tax Principles.
In 2021, we reinforced our commitment to transparency over tax
reporting by being one of the first companies to fully implement
the disclosure requirements under the Global Reporting Initiative
Tax standard GRI 207.
In 2021, we joined other leading extractive-sector companies in
confirming our commitment to support beneficial ownership
transparency, including through the disclosure of ownership
information, and in using ownership information in undertaking due
diligence on partners and suppliers.
Political integrity
We do not favour any political party, group or individual, or involve
ourselves in party political matters. We prohibit the use of funds to
support political candidates or parties. Our business integrity
procedure includes strict guidelines for dealing with current and former
government officials and politicians, and they cannot be appointed to
senior employee positions or engaged as consultants, in certain
circumstances, without the approval of executive management and our
Chief Ethics & Compliance Officer.
We regularly engage with governments and share information and our
experiences on issues that affect our operations and our industry.
We join industry associations where membership provides
value to our business, investors and other stakeholders.
At riotinto.com/industryassociations, we outline the principles
that guide our participation, the way we engage, as well as a
list of the top five associations by membership fees paid.
We also track and disclose how we engage on climate policy issues,
disclosing when the policies and advocacy positions adopted by
industry associations differ materially from ours.
This year, we have further strengthened our approach and disclosures
on industry associations.
Training
Value chain
In total, 4,307 employees and contractors in 18 countries had face-to-
face training, and over 23,000 had online training in recognising and
managing business integrity dilemmas.
Due-diligence checks on third parties
Due-diligence checks on third parties – baseline screening only
Centrally monitored third parties1
1. Once third parties are screened, they then form part of ongoing monitoring.
Partnering to strengthen business ethics
in Mongolia
In partnership with the Mongolian National Chamber of
Commerce and Industry (MNCCI), and Transparency
International Mongolia, we launched a new Business
Integrity Centre in 2021 to help support the country’s
efforts to promote transparency, business ethics, and
corporate governance.
Learn more at riotinto.com/ethics.
2021
4,754
8,040
44,495
Voluntary commitments,
accreditations and
memberships
We take part in a number of global, national
and regional organisations and initiatives that
inform our sustainability approach and
standards, which in turn allows us to better
manage our risks. External organisations and
initiatives assess and recognise our
performance, and we participate in industry
accreditation programmes for some of our
products. These organisations and initiatives
include the following:
Aluminium Stewardship Initiative (ASI)
The ASI aims to create sustainability and transparency throughout the
aluminium industry. It has developed the world’s first global
Responsible Aluminium Standard, used to assess environmental, social
and governance practices across the aluminium supply chain for
responsible sourcing. We were the first company in the world to
receive certification under the ASI.
Blue Green Alliance (BGA)
The BGA aims to solve environmental challenges in ways that create
and maintain quality jobs and build a stronger, fairer economy. We are
on the Advisory Board of the BGA.
International Council on Mining and Metals
(ICMM)
As a member, we commit to implementing and reporting on ICMM’s
Ten Principles for Sustainable Development. These cover corporate
governance, environmental stewardship and community engagement.
Our Chief Executive is a member of the ICMM Council, and we
participate actively in various working groups, such as the climate
change and energy working group. In 2021, our Chief Executive signed
the ICMM Climate Change statement, committing Rio Tinto and other
member companies to a goal of net zero by 2050 or sooner.
We are also committed to implementing the ICMM Performance
Expectations (PEs). The ICMM Mining Principles framework focuses on
the implementation of systems and practices related to a broad range
of sustainability areas. Eleven Rio Tinto managed assets completed
self-assessments in 2021. These assets met the requirements in the
areas of ethical business practice, decision making, health and safety,
social performance, and stakeholder engagement. Our teams
identified opportunities to improve our performance in human rights,
risk management, environmental performance, conservation of
biodiversity, and responsible production.
ICMM performance expectations
self-assessment outcomes
-
4%
6%
90%
Meet
Partially meets
Does not meet
Not applicable
Business for Social Responsibility (BSR)
Kimberley Process (KP)
BSR is a global non-profit organisation that works with its network of
more than 250 member companies and other partners to build a just
and sustainable world. As a member, we share information on
sustainable practices.
Extractive Industries Transparency Initiative (EITI)
We are a founding member of the EITI and have played an active role in
this global standard since 2003. The EITI promotes open and
accountable management of natural resources to make sure our
activities benefit the many, not the few. We are transparent about the
taxes and royalties we pay – publishing an annual Taxes Paid Report
since 2010.
Global Reporting Initiative (GRI)
GRI is an international independent organisation with an international
framework and standards for sustainability reporting. Our Group-level
sustainability reporting is informed by the GRI Sustainability
Reporting Standards (Core option) and the GRI Mining and Metals
Sector Supplement.
We participate in the Kimberley Process through our involvement with
the World Diamond Council (WDC). The KP is a joint initiative between
governments, diamond industry bodies and civil society organisations,
mandated by the United Nations and the World Trade Organization, to
stem the flow of “conflict diamonds”.
London Bullion Market Association (LBMA)
The LBMA has renewed Rio Tinto Kennecott's responsible gold and
silver certificate, which guarantees that the precious metals produced
from Kennecott's refinery are accepted and traded globally. The
certificate is one of the requirements for precious metal refineries to be
placed on the LBMA's Good Delivery List (GDL), an internationally
recognised standard for quality and responsible production. Many
precious metal exchanges will accept gold and silver bars only from
refiners that appear on the GDL.
We have applied the reporting principles of GRI 101: Foundation 2016 Standard in this report.
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Transparent and responsible business continued
Natural Diamond Council
Towards Sustainable Mining (TSM)
We are a founding member of the Natural Diamond Council whose
mission is to advance the integrity of the diamond and jewellery
industry to inspire, educate and protect the consumer.
We participate in the TSM programme through our membership of
the Mining Association of Canada (MAC). TSM is a sustainability
certification that applies to members of MAC operating in Canada.
OECD Guidelines for Multinational Enterprises
United Nations Global Compact (UNGC)
The UNGC is a voluntary initiative based on CEO commitments to
implement universal sustainability principles and to take steps to
support UN goals. As members, we incorporate the Ten Principles of
the UN Global Compact into our strategies, policies and procedures.
United Nations Guiding Principles on Business
and Human Rights (UNGPs)
The UNGPs are a global reference point for preventing and addressing
the risk of adverse impacts on human rights linked to business. We seek
to operate in a manner consistent with the UNGPs.
United Nations Sustainable Development
Goals (SDGs)
The SDGs are a set of 17 goals and 169 targets endorsed by the UN in
2015. These present a broad sustainability agenda focused on the
need to end poverty, fight inequality and injustice, and respond to
climate change by 2030. Please see page 75 for more on our approach
to the SDGs.
United Nations Universal Declaration of Human
Rights (UDHR)
The UDHR is a milestone document in the history of human rights,
which sets out, for the first time, fundamental human rights to be
respected. We respect and support all internationally recognised
human rights consistent with the UDHR.
Voluntary Principles on Security and Human
Rights (VPSHR)
The VPSHR guides extractives companies on how to maintain the
safety and security of their operations in line with respect for human
rights. Participants, including governments, companies and non-
governmental organisations, agree to proactively implement or support
the implementation of the VPSHR. We published our VPSHR Report for
the first time in 2018 (previously only provided to other participants)
and have committed to doing this each year.
World Economic Forum (WEF)
WEF brings together the foremost political, business, cultural and other
leaders of society to shape global, regional and industry agendas. It is
independent, impartial and not tied to any special interests. The Forum
strives to demonstrate entrepreneurship in the global public interest
while upholding the highest standards of governance.
The OECD Guidelines for Multinational Enterprises are
recommendations by governments to multinational enterprises
operating in or from adhering countries. They include non-binding
principles and standards for responsible business conduct in a global
context consistent with applicable laws and internationally recognised
standards. These guidelines are a multilaterally agreed and
comprehensive code of responsible business conduct that
governments have committed to promoting.
Proteus Partnership
The Proteus Partnership was formed in 2003 as a collaborative effort
between leading extractive companies and the United Nations
Environment Programme World Conservation Monitoring Centre
(UNEP-WCMC) to improve accessibility to biodiversity data for better
decision making and support the development of global biodiversity
resources. As a Proteus Partner, we have access to the UNEP-WCMC
online biodiversity assessment tool, which allows us to scan for
potential sensitive areas in places where we are seeking tenure before
major investments are made.
Responsible Jewellery Council (RJC)
The RJC is an international non-profit organisation that promotes
transparent and responsible ethical, human rights, social and
environmental practices throughout the jewellery industry – from mine
to retail. We are a founding member and were the first mining company
to be certified in 2012. Since then, we have continued to uphold the
ESG standards and maintained RJC certification, which needs to be
renewed every three years. We were re-certified in 2021 against the
RJC Code of Practice Standards. RJC certification covers operations
or activities of our businesses that produce diamonds, gold or gold in
concentrates that contribute to the jewellery supply chain. This includes
our Diavik Diamond Mine in Canada and our Kennecott copper mine in
Utah for gold.
The B Team Responsible Tax Principles
We are a signatory to The B Team Responsible Tax Principles,
developed by a group of cross-sector, cross-regional companies to
define what leadership in responsible tax looks like. The disclosures in
our Taxes Paid Report, available at riotinto.com/taxespaidreport,
demonstrate our approach to The B Team’s seven Responsible
Tax Principles.
The Copper Mark
Developed by the International Copper Association – with input from a
range of stakeholders, including customers, NGOs and producers
– The Copper Mark is a comprehensive assurance framework to
demonstrate the copper industry’s responsible production practices
and contribution to the United Nations Sustainable Development Goals.
Our Kennecott mine, in Utah, US, and Oyu Tolgoi, in Mongolia, were the
first producers to be awarded the Copper Mark – verifying our copper
as responsibly produced.
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Transparent and responsible business continued
Strategic report
Natural Diamond Council
Towards Sustainable Mining (TSM)
External assessment
External assessment of our activities and performance, and associated ratings, provides important inputs that help us better understand
stakeholder expectations, drives transparency and helps us improve.
Indices and ratings
Sustainability indices
Dow Jones Sustainability Index (DJSI)
FTSE4 Good
Rating providers
CDP
EcoVadis
ISS OEKOM
ISS Corporate Solutions
Environment
Social
Governance
MSCI
RMI (Responsible Mining Index)
Economic development
Business conduct
Lifecycle management
Community wellbeing
Working conditions
Environmental responsibility
Sustainalytics
Environment
Social
Governance
Disclosure
Vigeo Eiris
Other initiatives
Corporate Human Rights Benchmark
Transition Pathway Initiative
Maximum rating
100
5
Maximum rating
A
100
A+
1
AAA
6
6
2021
76
4.0
2021
B
55
C+
1
1
6
A
3
3
3
3
3
3
3
Risk rating – Low
High
1001
100
Maximum rating
100, 26 (2020)
Level 4
–
–
–
–
53
2021
–
2020
68
4.3
2020
B
50
C+
1
1
2
A
–
1.43
3.08
2.01
1.49
2.26
2.17
High
–
–
–
–
53
2020
23.5
2019
66
4.3
2019
C
53
C
1
1
3
A
–
–
–
–
–
–
–
Medium
–
–
–
–
2018
67
4.3
2018
C
47
C
3
1
3
BBB
–
1.20
2.69
1.13
0.83
2.13
2.06
High
–
–
–
–
54
Responded
2017
67
4.2
2017
B
45
–
2
1
1
BBB
–
–
–
–
–
–
–
–
56
60
98
97
–
2019
76
2018
76.3
2017
63
Workforce Disclosure Initiative (WDI)
Responded
Responded
Responded
Responded
–
–
1. From 2018, ranking and metrics were changed from numerical to risk rating.
2. From 2019, the maximum scoring was against 6 compared to earlier which was 1.
3. 2021 rating pending at time of publication.
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111
Level 4
Level 4
Level 4
Level 4
Level 4
We are a founding member of the Natural Diamond Council whose
We participate in the TSM programme through our membership of
mission is to advance the integrity of the diamond and jewellery
the Mining Association of Canada (MAC). TSM is a sustainability
industry to inspire, educate and protect the consumer.
certification that applies to members of MAC operating in Canada.
OECD Guidelines for Multinational Enterprises
United Nations Global Compact (UNGC)
The OECD Guidelines for Multinational Enterprises are
The UNGC is a voluntary initiative based on CEO commitments to
recommendations by governments to multinational enterprises
implement universal sustainability principles and to take steps to
operating in or from adhering countries. They include non-binding
support UN goals. As members, we incorporate the Ten Principles of
principles and standards for responsible business conduct in a global
the UN Global Compact into our strategies, policies and procedures.
context consistent with applicable laws and internationally recognised
standards. These guidelines are a multilaterally agreed and
comprehensive code of responsible business conduct that
governments have committed to promoting.
Proteus Partnership
The Proteus Partnership was formed in 2003 as a collaborative effort
between leading extractive companies and the United Nations
Environment Programme World Conservation Monitoring Centre
(UNEP-WCMC) to improve accessibility to biodiversity data for better
decision making and support the development of global biodiversity
resources. As a Proteus Partner, we have access to the UNEP-WCMC
online biodiversity assessment tool, which allows us to scan for
potential sensitive areas in places where we are seeking tenure before
major investments are made.
Responsible Jewellery Council (RJC)
The RJC is an international non-profit organisation that promotes
transparent and responsible ethical, human rights, social and
environmental practices throughout the jewellery industry – from mine
to retail. We are a founding member and were the first mining company
to be certified in 2012. Since then, we have continued to uphold the
ESG standards and maintained RJC certification, which needs to be
renewed every three years. We were re-certified in 2021 against the
RJC Code of Practice Standards. RJC certification covers operations
or activities of our businesses that produce diamonds, gold or gold in
concentrates that contribute to the jewellery supply chain. This includes
our Diavik Diamond Mine in Canada and our Kennecott copper mine in
Utah for gold.
The B Team Responsible Tax Principles
We are a signatory to The B Team Responsible Tax Principles,
developed by a group of cross-sector, cross-regional companies to
our Taxes Paid Report, available at riotinto.com/taxespaidreport,
demonstrate our approach to The B Team’s seven Responsible
Tax Principles.
The Copper Mark
range of stakeholders, including customers, NGOs and producers
– The Copper Mark is a comprehensive assurance framework to
demonstrate the copper industry’s responsible production practices
and contribution to the United Nations Sustainable Development Goals.
Our Kennecott mine, in Utah, US, and Oyu Tolgoi, in Mongolia, were the
first producers to be awarded the Copper Mark – verifying our copper
as responsibly produced.
United Nations Guiding Principles on Business
and Human Rights (UNGPs)
The UNGPs are a global reference point for preventing and addressing
the risk of adverse impacts on human rights linked to business. We seek
to operate in a manner consistent with the UNGPs.
United Nations Sustainable Development
Goals (SDGs)
The SDGs are a set of 17 goals and 169 targets endorsed by the UN in
2015. These present a broad sustainability agenda focused on the
need to end poverty, fight inequality and injustice, and respond to
climate change by 2030. Please see page 75 for more on our approach
to the SDGs.
United Nations Universal Declaration of Human
Rights (UDHR)
The UDHR is a milestone document in the history of human rights,
which sets out, for the first time, fundamental human rights to be
respected. We respect and support all internationally recognised
human rights consistent with the UDHR.
Voluntary Principles on Security and Human
Rights (VPSHR)
The VPSHR guides extractives companies on how to maintain the
safety and security of their operations in line with respect for human
rights. Participants, including governments, companies and non-
governmental organisations, agree to proactively implement or support
the implementation of the VPSHR. We published our VPSHR Report for
the first time in 2018 (previously only provided to other participants)
World Economic Forum (WEF)
WEF brings together the foremost political, business, cultural and other
leaders of society to shape global, regional and industry agendas. It is
independent, impartial and not tied to any special interests. The Forum
Developed by the International Copper Association – with input from a
strives to demonstrate entrepreneurship in the global public interest
while upholding the highest standards of governance.
define what leadership in responsible tax looks like. The disclosures in
and have committed to doing this each year.
Risk management
Taking and managing risk responsibly is essential to operating
and growing our business safely, effectively and sustainably.
Our risk appetite
Our commitment to position our business for the transition to a low-carbon economy is reflected in our strategic priorities,
with high-risk appetite for growth and innovation.
Accelerate the
decarbonisation
of our assets
Develop products and
technologies to support our
customers’ decarbonisation
Grow in materials
that enable the
energy transition
We support the global effort to
address climate change and we
are committed to taking action. We are
accelerating the decarbonisation of our
assets and will seek to meet our Scope
1 and 2 targets, reaching a 15%
reduction by 2025 and a 50%
reduction by 2030 (over 2018 levels).
We intend to invest an estimated
$7.5 billion in capital expenditure
between 2022 and 2030 (inclusive)
in green energy and carbon
abatement projects.
We will apply an internal price of
$75 per tonne of CO2 to incentivise
energy efficiencies and carbon
abatement projects – prioritised in
our planning process.
Our products enable the energy
transition, giving us comfort in the level
of transition risk facing our business.
Some of our value chains, in particular
steel and aluminium, are energy
intensive and need to decarbonise.
To thrive in the long term we need to be
part of net zero value chains.
We are partnering with our customers,
competitors, suppliers and technology
developers as well as governments and
universities, to find solutions.
We are increasing our investments in
research and development, developing
new products and breakthrough
technologies that will enable our
customers to decarbonise in line with
our Scope 3 emission goals.
We are focused on excelling in
development in commodities that are
essential for the drive to net zero.
We have increased our appetite for
higher-risk jurisdictions and broadened
our target commodities.
Our ambition is to increase our
investment in growth capital expenditure
up to $3 billion per year and will
maintain capital discipline in pursuit
of value-accretive opportunities.
Our 2021 Climate Change Report provides further details on our analysis of transition risks to our portfolio and the decarbonisation
roadmaps to meet our Scope 1 and 2 targets, as well as our approach to and goals for Scope 3 emissions.
Our determination to be the best operator and have impeccable environmental, social and governance (ESG) credentials is
underpinned by our zero tolerance for non-compliance with our operational procedures, laws and our obligations. These expectations
are outlined in our Group policies, standards and procedures, published on our website at riotinto.com/policies.
Details of our management of principal risks to our performance, future prospects and reputation can be found in the principal risks and
uncertainties section of this report.
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Risk management
Taking and managing risk responsibly is essential to operating
and growing our business safely, effectively and sustainably.
Managing our risks effectively ensures we deliver our strategic priorities and
strengthens our social licence.
Strategic report
Our risk appetite
Our commitment to position our business for the transition to a low-carbon economy is reflected in our strategic priorities,
with high-risk appetite for growth and innovation.
Accelerate the
decarbonisation
of our assets
Develop products and
technologies to support our
customers’ decarbonisation
Grow in materials
that enable the
energy transition
We support the global effort to
address climate change and we
Our products enable the energy
We are focused on excelling in
transition, giving us comfort in the level
development in commodities that are
are committed to taking action. We are
of transition risk facing our business.
essential for the drive to net zero.
accelerating the decarbonisation of our
Some of our value chains, in particular
assets and will seek to meet our Scope
steel and aluminium, are energy
1 and 2 targets, reaching a 15%
reduction by 2025 and a 50%
intensive and need to decarbonise.
To thrive in the long term we need to be
reduction by 2030 (over 2018 levels).
part of net zero value chains.
We intend to invest an estimated
$7.5 billion in capital expenditure
We are partnering with our customers,
competitors, suppliers and technology
between 2022 and 2030 (inclusive)
developers as well as governments and
in green energy and carbon
abatement projects.
We will apply an internal price of
$75 per tonne of CO2 to incentivise
energy efficiencies and carbon
abatement projects – prioritised in
our planning process.
universities, to find solutions.
We are increasing our investments in
research and development, developing
new products and breakthrough
technologies that will enable our
customers to decarbonise in line with
our Scope 3 emission goals.
We have increased our appetite for
higher-risk jurisdictions and broadened
our target commodities.
Our ambition is to increase our
investment in growth capital expenditure
up to $3 billion per year and will
maintain capital discipline in pursuit
of value-accretive opportunities.
Our 2021 Climate Change Report provides further details on our analysis of transition risks to our portfolio and the decarbonisation
roadmaps to meet our Scope 1 and 2 targets, as well as our approach to and goals for Scope 3 emissions.
Our determination to be the best operator and have impeccable environmental, social and governance (ESG) credentials is
underpinned by our zero tolerance for non-compliance with our operational procedures, laws and our obligations. These expectations
are outlined in our Group policies, standards and procedures, published on our website at riotinto.com/policies.
Details of our management of principal risks to our performance, future prospects and reputation can be found in the principal risks and
uncertainties section of this report.
Our approach to risk management
Our Group’s strategy, values and risk appetite inform and shape our
risk management and internal controls framework. We embed risk
management at every level of the organisation to effectively manage
threats and opportunities to our business and host communities, and
our impact on the environment. The Board and the Executive
Committee provide oversight of our principal risks, and the Audit
Committee monitors the overall effectiveness of our risk management
processes and internal controls. All employees are required and
empowered to identify and manage the risks that arise within their area
of responsibility.
The tragic events at Juukan Gorge in May 2020, highlighted
the importance of having a strong risk culture as well as robust
risk management practices and systems, to ensure a resilient
organisation. To achieve this, we have enhanced our internal
training and guidance materials for leaders and risk owners on
risk management responsibilities and practices, including the
disclosure and escalation of risk information to ensure management
response is at the right level of the organisation.
We will continue to invest in ways to support and coach our leaders
and teams in risk management, ensuring alignment with our risk
appetite and code of conduct.
Our management system consists of six core elements (see page 114)
that we continuously monitor and improve to ensure that we are
effectively managing current risks and identifying emerging risks.
Our three lines of defence provide assurance that risks are effectively
managed in line with our policies, standards and procedures. You can
view our risk management policy and standard at riotinto.com/policies.
The risk management framework sets out clear roles and
responsibilities, standards and practices. The overall effectiveness of
the risk management framework requires clear expectations and
consistency in the application of internal controls across the Group.
To enable this, we have begun the journey to digitalise our control
requirements in line with our standards and procedures, within our
enterprise risk management platform.
Three lines of defence
Responsibilities
1st – All operational leaders
Identification, management, verification, and monitoring
of risks and controls
2nd – Centre of Excellence,
Areas of Expertise and
Group functions
Oversight of risks and control effectiveness, design of Group controls,
advice on capabilities and objective assurance of compliance with the
Group’s policies, standards and procedures
Accountability
Management
Management
3rd – Group Internal Audit
Independent objective assurance to evaluate the effectiveness of risk
management, internal controls and governance
Board and Board
committees
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113
Risk management continued
Risk management framework
Group roles and responsibilities, standards, procedures and guiding
principles for effective, consistent and integrated risk management.
Capability and culture
Risk capability is built through coaching and
training for leaders and teams across our business.
A risk culture of actively managing risks is
embedded into how we run our business.
A risk culture fosters the collective ability to
identify, understand, escalate and then openly
discuss and respond to current and future risks.
Risk assurance
We ensure that risks and critical controls are
being implemented and managed effectively.
Risk
management
effectiveness
Reporting and insights
Oversight is supported by proactive
and regular reporting to relevant Executive
and Board committees.
Decision making is supported by connected
and insightful risk and control analysis.
Systems, technology
and data analytics
We leverage systems and data analytics
to support risk and control analysis,
management and oversight.
Risk analysis and management
Risks are measured, monitored and managed, which requires critical
controls performance to also be measured, monitored and managed.
Risks and their control information are current, transparent and connected.
The analysis and management are led by leaders.
Risk analysis
Risk management
Initiate
the risk process
Identify
the risk
Evaluate
the risk
Plan and implement
risk response
Communicate
risk information
Maintain and update
risk information
Assurance (over control performance)
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Risk management continued
Strategic report
Risk management framework
Group roles and responsibilities, standards, procedures and guiding
principles for effective, consistent and integrated risk management.
Capability and culture
Risk capability is built through coaching and
training for leaders and teams across our business.
A risk culture of actively managing risks is
embedded into how we run our business.
A risk culture fosters the collective ability to
identify, understand, escalate and then openly
discuss and respond to current and future risks.
Risk assurance
We ensure that risks and critical controls are
being implemented and managed effectively.
Risk
management
effectiveness
Reporting and insights
Oversight is supported by proactive
and regular reporting to relevant Executive
and Board committees.
Decision making is supported by connected
and insightful risk and control analysis.
Systems, technology
and data analytics
We leverage systems and data analytics
to support risk and control analysis,
management and oversight.
Risk analysis and management
Risks are measured, monitored and managed, which requires critical
controls performance to also be measured, monitored and managed.
Risks and their control information are current, transparent and connected.
The analysis and management are led by leaders.
Risk analysis
Risk management
Initiate
the risk process
Identify
the risk
Evaluate
the risk
Plan and implement
risk response
Communicate
risk information
Maintain and update
risk information
Assurance (over control performance)
Emerging risks
COVID-19 continued to be prevalent in regions where we have assets
and offices, including Mongolia, India, the Americas and South Africa.
As the pandemic is now becoming more endemic with varying
pathways to recovery across countries, the longer-term impact of how
we adapt to this new normal is still uncertain. This includes the
productivity of a hybrid workforce environment, the impacts of tighter
labour markets, and supply chain disruptions.
The recent disruptions caused by the post-pandemic demand surge
and the inability of supply chains to keep up, have highlighted the
complexity and vulnerability of the global supply chain infrastructure.
Supply chain disruptions can also be caused by a number of principal
risk events – as described in our principal risks and uncertainties
section – such as natural disasters and geopolitical tensions.
Inflationary pressures may also affect the competitiveness of suppliers,
leading to supplier market contraction further impacting supply chain
resilience. Severe supply chain disruptions have the potential to impact
not only inbound and outbound flows of our feedstock, services and
products, but also the delivery of our sustaining and growth projects.
In the longer term, as the world transitions to a low-carbon future and
consumer demand for sustainable goods flows through the value
chain, the supply-demand dynamics of commodities are expected to
shift. This will lead to increasing demand for sources and solutions with
low CO2 emissions, and a lower social and environmental footprint, in
addition to a growing demand for transparent, sustainable and circular
value chains. While the commodities within our portfolio are needed in
a decarbonising world, this shift will shape the future of the mining
industry, impacting supply cost structures, and demand for global
commodities, and increasing the focus on the non-financial
performance measures.
Our future reserves are increasingly overlapping with sensitive social
and ecological regions, requiring new extraction and technology
advancements to minimise our impact when exploring, mining and
processing. Technology advancement will not only be a key enabler for
us to reach our net-zero emissions ambition, but it will also play a key
role in how we achieve impeccable ESG credentials.
Our 2021 Climate Change Report explains in detail our current and
future initiatives and partnerships, and how they will help us meet our
Scope 1 and 2 targets.
Longer-term viability statement
Business planning process
Our long-term planning reflects our business model of running our
business in a way that is safer, smarter and more sustainable. To ensure
we remain resilient in the long term, our business model is continuously
stress tested against the key uncertainties within the emerging risks
areas with recommended actions to mitigate the potential downside.
These are presented to the Board annually as part of the Group
strategy discussions. We then develop our strategy and make capital
investment decisions based on this assessment. We also regularly
assess our financial capacity to ensure our capital commitments can
be funded in line with our disciplined approach to capital allocation.
Our business planning processes include preparing a one-year
detailed financial plan and a longer-term life-of-asset outlook.
This planning process includes modelling a series of macroeconomic
scenarios and using a range of assumptions that consider both internal
and external factors. As part of our robust risk management framework,
we closely track, monitor and mitigate principal risks to our business
plan and model.
The main assumptions underpinning our long-term plan include:
– long-term economic growth and commodity demand in major
markets, such as China;
– continued access to, and economic viability of, resources and
reserves to support organic and inorganic growth programmes;
– pathways to reduce our carbon footprint;
– sensitivities to potentially disruptive technologies and productivity
improvements;
– no operational risks materially impacting the long-term plan; and
– continued access to capital markets.
Viability assessment process and key assumptions
The assumptions underlying our business plan and macroeconomic
forecast have the greatest level of certainty for the first three years.
However, like last year, our longer-term viability assessment examines
the first five years (2022-2026) of the business plan. This enables a
detailed analysis of the potential impact of risks materialising in quick
succession in the first three years, and to further stress test the
business plan for risk materialising towards the end of the time period,
although with less certainty. This allows Directors to assess Rio Tinto’s
capacity to exercise financial and other levers available in both the
three-year and five-year timeframes to maintain the Group’s viability.
Our principal risks and uncertainties, as outlined in the following
section, are risks that could materially affect our performance,
future prospects or reputation. For the viability assessment,
we have considered principal risks that could have a severe
impact on the Group’s liquidity and solvency in addition to
non-financial consequences.
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115
Risk management continued
Assessment of viability
The principal risks and assumptions considered in our longer-term
viability assessment are as follows:
– Commodity economic risk (economic-focused risk):
A global financial crisis is triggered as the COVID-19 pandemic
persists and global tensions intensify, resulting in positive but low
growth in China and an economic downturn in the rest of the world.
Large negative pricing shocks are assumed in 2022, sustained
through 2023 and followed by slow growth rates.
There continues to be great uncertainty on the recovery pathway
from the COVID-19 pandemic as the situation evolves with new
variants and varying actions by governments. To mitigate some of
this uncertainty, and to give a greater level of confidence to the
Directors in assessing our long-term viability, we have assumed a
cautious recovery pathway in our scenario.
The Group has a suite of management actions available to preserve
resilience through the period of assessment, including accessing lines
of credit, reducing organic and inorganic growth capital expenditure,
and raising capital. Our financial flexibility could potentially be limited
during the peak of the crisis, but the longer-term viability of the Group
under all the scenarios tested remains sound.
We have also conducted reverse stress testing by assessing the
impact of reducing price levels, on a synchronised basis, and
concluded that the Group remains viable in a very low probability event
of prolonged price declines across all commodities.
The resilience of the Group’s business model is largely underpinned by
four factors:
– The competitive position and diversification of our commodities
portfolio.
– The disciplined capital allocation framework and commitment to
prudent financial policy.
– Major hazards risks (operationally focused risk):
– The payout shareholder return policy based on earnings, and
Occurrence of a singular catastrophic event resulting from a major
operational failure, such as a tailings and water storage facility
failure, an extreme weather event, or an underground or
geotechnical event resulting in multiple fatalities and/or the
cessation of operations incurring significant financial impacts. We
have assumed that two such events occur within the assessment
period ie in 2022 and 2025.
– ESG-focused risk:
Materialisation of an ESG-focused risk, impacting how we operate
and our ability to access current and future resources. This could
include a severe deterioration in our relationship with Indigenous
peoples or communities where we operate, new prohibitive laws or
regulations, or water scarcity. We have assumed an impact on our
current development pipeline and considered available alternatives.
The financial impact assumed here is in addition to any non-financial
impact, such as reputational damage to the Group or the disruption
to the culture and way of life of the communities where we operate.
We quantify the expected financial impact of each risk based on
internal macroeconomic and business analysis, as well as internal and
external benchmarking on similar risks. We apply a probabilistic
approach to quantify risks and impacts where relevant.
The first five years of the Group’s business plan were stress tested
for each risk to assess the impact on the Group’s longer-term viability,
including whether additional financing facilities would be required. In
addition to liquidity and solvency, the assessment also considered
other financial performance metrics as well as dividend payments.
These metrics are subject to robust stress tests and reverse
stress tests.
The most severe scenario considers the financial impact of all three
risks materialising at the start of the assessment period, followed by a
second operational risk occurring towards the end of the five-year time
period. Without management action, this scenario would create both
an immediate and prolonged severe impact, resulting in the Group’s
free cash flow performance over the assessment period being an
estimated negative $20 billion in aggregate.
accordingly more sustainable.
– The objective to achieve impeccable ESG performance and,
therefore, strengthening our social licence and allowing for growth
and maintaining access to debt capital and bank loan markets.
Taking into account the Group’s current position and the robust
assessment of our principal risks, the Directors have assessed the
prospects of the Group over the next five years (until 31 December 2026)
and have a reasonable expectation that we will be able to continue to
operate and meet our liabilities as they fall due over that period.
The following principal risks, which have longer-dated consequences
or continue to evolve, could potentially have a material impact on our
business beyond the viability assessment period. Please refer to the
Emerging risks and Principal risks and uncertainties sections for further
details and current management responses.
– Developing products and technologies that enable our customers
to decarbonise
As the global effort to tackle climate change continues, consumer
demand for sustainable goods is expected to flow through the value
chain. If our customers do not reduce Scope 3 emissions, demand
for our products may decline as lower-carbon alternatives are
developed and adopted.
– Our ability to replenish or convert resources to reserves in a
timely manner
As market dynamics, regulations, cultural and environmental
assessments, and societal expectations change, key assumptions
underlying our ore resources and reserves and project development
plans could change with material impact to the Group (positive or
negative). This is addressed in our principal risks “Growing in
materials essential for energy transition” and “Resources to reserves
conversion of our existing assets”.
– Closure, reclamation, rehabilitation and legacies
Plans and provisions for closure, reclamation and rehabilitation at our
operational and legacy sites could be impacted by changes in
stakeholders’ expectations, legislation, standards, technical
understanding and techniques.
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Risk management continued
Strategic report
Principal risks and uncertainties
The principal risks and uncertainties outlined in this section reflect the
risks that could materially affect (negatively or positively) our performance,
future prospects or reputation.
A principal risk is one or a combination of risks that emerge due to
external and internal factors, it could be of any nature and manifest and
escalate from any part of the business, as an opportunity or a threat.
Where risks are material to the Group, they are escalated to the
Executive Risk Management Committee and, as appropriate, to the
Board or its committees. This requires a strong risk culture, which we
continue to develop and foster.
such as natural disasters, where there is limited capacity in the
international insurance markets to transfer such risks. We closely
monitor these threats and develop business resilience plans. We also
seek to bring a commensurate level of rigour and discipline to our
managed and non-managed joint ventures as we do to our wholly
owned assets, through engagement and influence, in line with
applicable laws.
We regularly assess the potential impact and likelihood of our principal
risks to support the prioritisation of our efforts and resources.
The assessment of these principal risks, and the effectiveness of our
associated controls, reflect management’s current expectations,
forecasts and assumptions, and by definition, involve subjective
judgments and are subject to changes in our internal and external
environments. While we deploy preventative and mitigative controls to
reduce the likelihood, and to manage potential impacts, the following
describes the inherent risks to our business. Certain threats remain,
Our principal risks, in the table below, note the interconnectivity of our
Strategic1, Economic2 and Operational3 risks within an Environmental4,
Social5 and Governance6 (ESG) framework.
The timeframe of principal risks is within five years, unless explicitly
stated otherwise. The principal risks, uncertainties and trends outlined
in this report should be considered as forward-looking statements and
are subject to the cautionary statement on page 420.
Current assessment of principal risks
As of February 2022
Principal risk
1
Living our corporate values
2 Attracting, developing and retaining talent
3 Decarbonising our business competitively
4 Developing products and technologies that enable our
customers to decarbonise
Focus
Strategic, ESG
Strategic, ESG
Strategic, ESG
Strategic, ESG
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Assessment of viability
The principal risks and assumptions considered in our longer-term
viability assessment are as follows:
– Commodity economic risk (economic-focused risk):
A global financial crisis is triggered as the COVID-19 pandemic
persists and global tensions intensify, resulting in positive but low
growth in China and an economic downturn in the rest of the world.
Large negative pricing shocks are assumed in 2022, sustained
through 2023 and followed by slow growth rates.
The Group has a suite of management actions available to preserve
resilience through the period of assessment, including accessing lines
of credit, reducing organic and inorganic growth capital expenditure,
and raising capital. Our financial flexibility could potentially be limited
during the peak of the crisis, but the longer-term viability of the Group
under all the scenarios tested remains sound.
We have also conducted reverse stress testing by assessing the
impact of reducing price levels, on a synchronised basis, and
concluded that the Group remains viable in a very low probability event
of prolonged price declines across all commodities.
The resilience of the Group’s business model is largely underpinned by
There continues to be great uncertainty on the recovery pathway
from the COVID-19 pandemic as the situation evolves with new
variants and varying actions by governments. To mitigate some of
this uncertainty, and to give a greater level of confidence to the
Directors in assessing our long-term viability, we have assumed a
cautious recovery pathway in our scenario.
four factors:
portfolio.
– The competitive position and diversification of our commodities
– The disciplined capital allocation framework and commitment to
prudent financial policy.
– Major hazards risks (operationally focused risk):
– The payout shareholder return policy based on earnings, and
Occurrence of a singular catastrophic event resulting from a major
operational failure, such as a tailings and water storage facility
failure, an extreme weather event, or an underground or
geotechnical event resulting in multiple fatalities and/or the
cessation of operations incurring significant financial impacts. We
have assumed that two such events occur within the assessment
period ie in 2022 and 2025.
– ESG-focused risk:
Materialisation of an ESG-focused risk, impacting how we operate
and our ability to access current and future resources. This could
include a severe deterioration in our relationship with Indigenous
peoples or communities where we operate, new prohibitive laws or
regulations, or water scarcity. We have assumed an impact on our
current development pipeline and considered available alternatives.
The financial impact assumed here is in addition to any non-financial
impact, such as reputational damage to the Group or the disruption
to the culture and way of life of the communities where we operate.
We quantify the expected financial impact of each risk based on
internal macroeconomic and business analysis, as well as internal and
external benchmarking on similar risks. We apply a probabilistic
approach to quantify risks and impacts where relevant.
accordingly more sustainable.
– The objective to achieve impeccable ESG performance and,
therefore, strengthening our social licence and allowing for growth
and maintaining access to debt capital and bank loan markets.
Taking into account the Group’s current position and the robust
assessment of our principal risks, the Directors have assessed the
prospects of the Group over the next five years (until 31 December 2026)
and have a reasonable expectation that we will be able to continue to
operate and meet our liabilities as they fall due over that period.
The following principal risks, which have longer-dated consequences
or continue to evolve, could potentially have a material impact on our
business beyond the viability assessment period. Please refer to the
Emerging risks and Principal risks and uncertainties sections for further
details and current management responses.
– Developing products and technologies that enable our customers
to decarbonise
As the global effort to tackle climate change continues, consumer
demand for sustainable goods is expected to flow through the value
chain. If our customers do not reduce Scope 3 emissions, demand
for our products may decline as lower-carbon alternatives are
developed and adopted.
The first five years of the Group’s business plan were stress tested
– Our ability to replenish or convert resources to reserves in a
for each risk to assess the impact on the Group’s longer-term viability,
timely manner
including whether additional financing facilities would be required. In
addition to liquidity and solvency, the assessment also considered
other financial performance metrics as well as dividend payments.
These metrics are subject to robust stress tests and reverse
stress tests.
As market dynamics, regulations, cultural and environmental
assessments, and societal expectations change, key assumptions
underlying our ore resources and reserves and project development
plans could change with material impact to the Group (positive or
negative). This is addressed in our principal risks “Growing in
The most severe scenario considers the financial impact of all three
materials essential for energy transition” and “Resources to reserves
risks materialising at the start of the assessment period, followed by a
conversion of our existing assets”.
second operational risk occurring towards the end of the five-year time
period. Without management action, this scenario would create both
an immediate and prolonged severe impact, resulting in the Group’s
free cash flow performance over the assessment period being an
estimated negative $20 billion in aggregate.
– Closure, reclamation, rehabilitation and legacies
Plans and provisions for closure, reclamation and rehabilitation at our
operational and legacy sites could be impacted by changes in
stakeholders’ expectations, legislation, standards, technical
understanding and techniques.
5 Growing in materials essential for energy transition through
Strategic, ESG
excelling in development
6 Building trusted relationships with Indigenous peoples
7 Building trusted relationships with communities
8 Maintaining our competitiveness through economic cycles
9 Resources to reserves conversion of our existing assets
10 Geopolitics impact on our trade or investments
Strategic, ESG
Strategic, ESG
Economic
Economic
Economic
11 Global and domestic tax policy and administration instability
Economic, ESG
12 Breach of our policies, standards and procedures, obligations
Operational, ESG
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or regulations
13 Major hazard or safety event
Operational, ESG
14 Physical resilience to natural disasters and extreme weather
Operational, ESG
15 Significant biodiversity-related ecological impact
16 Water scarcity and management
17 Closure, reclamation, rehabilitation and legacies
18 Cyber breach
19 Pandemic prolonged
Operational, ESG
Operational, ESG
Operational, ESG
Operational, ESG
Operational, ESG
11
7
12
2
17
5
1
6
4
9
8
10 14
15 16 18
19
3
13
Very Low
Low
Moderate
High
Very High
Increasing financial and non-financial consequences
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117
1. Strategic – risks arising from uncertainties that may impact our ability to achieve our
4. Environment – risks arising from our business that have the potential to impact air, land,
strategic objectives.
water, ecosystems and human health.
2. Economic – risks that directly impact financial performance and realisation of future
5. Social – risks arising from our business that have the potential to impact society, including
economic benefits.
health and safety.
3. Operational – risks arising from our business that have the potential to impact people,
environment, community and operational performance, including our supply chain.
Health, Safety, Environment and Security (HSES) risks are specific operational risks.
6. Governance – risks arising from our workplace culture, business conduct and governance.
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Principal risks and uncertainties continued
1. Living our corporate values
Living our values (care, courage and curiosity) goes to the heart of our Group’s performance,
prospects and reputation. Sharing and demonstrating our values unlocks opportunities in all that
we do, every day. We are focused on building a culture where all our people are trusted and
empowered to be their best selves and help drive change. This begins with a workplace where
everyone feels safe, respected and included.
Strategic | ESG
Potential impact
– Group reputation
– Licence to operate
– Future financial and operational
performance
– Attraction, engagement and retention
of our people
Opportunities
Threats
Our reputation and ability to build respectful
and trusting partnerships depend on our
business conduct being consistent with
our values.
Greater transparency is expected of
organisations on how they are preventing
and addressing behaviours not consistent
with their values.
Management’s response:
We are embarking on a cultural change programme led by the launch of our new values in 2021. Our code of conduct, The Way We Work, clearly
sets the standard of behaviour for our people, and provides guidance on how we should conduct our business, no matter where we work or where
we are from.
Management’s response includes:
– Launching our new values, and a programme to support how they
– Offering behavioural training for leaders and employees, to reinforce
are embedded
positive behaviours
– Launching the Everyday Respect task force, to better understand and
address bullying, sexual harassment and racism and other forms of
discrimination in our workplace
– Reinvigorating our internal whistleblowing programme (myVoice)
managed by a dedicated Business Conduct Office, open to our
workforce and external stakeholders to report on conduct inconsistent
with our values and code of conduct
– Offering business integrity training tailored to role responsibilities and
risk exposures
– Conducting bi-annual People Survey and presenting an annual values
scorecard to the Executive Committee and the Board
2. Attracting, developing and retaining people with the requisite skills
Our ability to achieve our business strategy depends on attracting, developing and retaining a
wide range of internal and external skilled and experienced people.
Strategic | ESG
Potential impact
– Access to skilled labour
– Future financial and operational
performance
– Communities and social performance
– Group reputation
Opportunities
Threats
Enhancing productivity, innovation and business
resilience through investment in critical skills
required now and for the future.
Business interruption or underperformance
may arise from a lack of access to
capability. Tight labour markets are leading
to heightened competition for diverse talent
and critical skills, such as digital, climate
and energy.
Changing societal expectations are placing
pressure on our corporate and employer
brand – who we are and what we stand for.
Management’s response includes:
– Implementing Group-wide initiatives to positively shape our
workplace culture and employee experience, focused on creating a
safe, respectful and inclusive workplace. Examples include the
Rio Tinto Safe Production System and the Everyday Respect
task force
– Maintaining competitive remuneration and benefits
– Providing learning and career development opportunities for our
people to build skills for today and our future
– Ensuring talent management and planning across our global assets
– Hosting a global graduate programme and taking part in strategic
and for critical technical capabilities
partnerships with universities
– Talent acquisition strategy which targets multiple labour markets,
– Offering local trainee (apprenticeship) programmes and other
and a diverse range of skills
future-skills development partnerships
118
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Living our values (care, courage and curiosity) goes to the heart of our Group’s performance,
prospects and reputation. Sharing and demonstrating our values unlocks opportunities in all that
we do, every day. We are focused on building a culture where all our people are trusted and
empowered to be their best selves and help drive change. This begins with a workplace where
everyone feels safe, respected and included.
Opportunities
Threats
Our reputation and ability to build respectful
Greater transparency is expected of
and trusting partnerships depend on our
business conduct being consistent with
organisations on how they are preventing
and addressing behaviours not consistent
our values.
with their values.
We are embarking on a cultural change programme led by the launch of our new values in 2021. Our code of conduct, The Way We Work, clearly
sets the standard of behaviour for our people, and provides guidance on how we should conduct our business, no matter where we work or where
Potential impact
– Group reputation
– Licence to operate
– Future financial and operational
performance
of our people
– Attraction, engagement and retention
Management’s response:
we are from.
Management’s response includes:
Principal risks and uncertainties continued
Strategic report
1. Living our corporate values
3. Decarbonising our business competitively
Strategic | ESG
Ensuring our ability to deliver longer-term strategic objectives and our Scope 1 and 2 targets
within the required timeframe, while balancing the need to invest for growth, deliver superior
shareholder returns and remain competitive.
Strategic | ESG
Potential impact
– Business model and value
– Future financial and operational
performance
– Group reputation
– Partner to operate
– Litigation
– Social and human rights impacts
Opportunities
Threats
Decarbonising our assets has the potential to
enhance our competitive advantage as well as
embed a culture of energy efficiency. It also
allows us to explore economic opportunities that
will benefit our host communities.
Any delay in priority initiatives threatens our
Scope 1 and 2 target delivery and ability to
respond proactively and competitively.
The pace of electricity grid decarbonisation
plays an important part in our plans for
our aluminium smelters in Australia and
is a key uncertainty. Successful research
and development investment is a
critical enabler.
Failure to follow our social and human rights
standards during implementation of the
decarbonisation project could adversely
impact people, relationships and our
capacity to meet our targets.
– Launching our new values, and a programme to support how they
– Offering behavioural training for leaders and employees, to reinforce
are embedded
positive behaviours
– Launching the Everyday Respect task force, to better understand and
– Offering business integrity training tailored to role responsibilities and
address bullying, sexual harassment and racism and other forms of
risk exposures
discrimination in our workplace
– Reinvigorating our internal whistleblowing programme (myVoice)
scorecard to the Executive Committee and the Board
– Conducting bi-annual People Survey and presenting an annual values
managed by a dedicated Business Conduct Office, open to our
workforce and external stakeholders to report on conduct inconsistent
with our values and code of conduct
Management’s response includes:
– We intend to invest an estimated $7.5 billion to the delivery of our
targets, for example through the development of 1GW of solar and
wind power in the Pilbara. We are also looking at green-energy
solutions for our Boyne and Tomago smelters, and accelerating
current abatement projects by introducing an internal carbon pricing
of $75/t CO2
– Investing in new technologies and research and development, such
as ELYSISTM, hydrogen pilots and cross-sector partnerships to
develop zero-carbon trucks with Caterpillar and Komatsu
– Integrating our commitment to implementing core business and
human rights standards, including the UN Guiding Principles on
Business and Human Rights (UNGPs), into our decarbonisation plans
and actions
2. Attracting, developing and retaining people with the requisite skills
Our ability to achieve our business strategy depends on attracting, developing and retaining a
wide range of internal and external skilled and experienced people.
Strategic | ESG
Potential impact
– Access to skilled labour
– Future financial and operational
performance
– Communities and social performance
– Group reputation
Opportunities
Threats
Enhancing productivity, innovation and business
Business interruption or underperformance
resilience through investment in critical skills
may arise from a lack of access to
required now and for the future.
capability. Tight labour markets are leading
to heightened competition for diverse talent
and critical skills, such as digital, climate
and energy.
Changing societal expectations are placing
pressure on our corporate and employer
brand – who we are and what we stand for.
Management’s response includes:
– Implementing Group-wide initiatives to positively shape our
workplace culture and employee experience, focused on creating a
safe, respectful and inclusive workplace. Examples include the
Rio Tinto Safe Production System and the Everyday Respect
task force
– Maintaining competitive remuneration and benefits
– Providing learning and career development opportunities for our
people to build skills for today and our future
– Ensuring talent management and planning across our global assets
– Hosting a global graduate programme and taking part in strategic
and for critical technical capabilities
partnerships with universities
– Talent acquisition strategy which targets multiple labour markets,
– Offering local trainee (apprenticeship) programmes and other
and a diverse range of skills
future-skills development partnerships
4. Developing products and technologies that enable our customers to decarbonise
Our opportunity to decarbonise our value chain (Scope 3) by partnering with suppliers and
innovating with our customers.
Strategic | ESG
Potential impact
– Business model and value
– Future financial and operational
performance
– Group reputation
Opportunities
Threats
Collaborating on the development of new
technologies with our customers, universities
and research institutes to reduce emissions from
the processing of our products.
If our customers do not reduce Scope 3
emissions, demand for our products may
decline as alternate lower-carbon
alternatives are developed and adopted.
Technologies being developed to decarbonise
our business may assist in reducing the
emissions of our customers and consequently
our Scope 3 emissions, capturing the increasing
demand for responsibly produced products and
taking advantage of low-carbon offerings.
Exposure: Iron ore sales contributed
approximately 60% of revenue in 2020 and
our customers’ processing of that iron ore
contributed 73% of our overall Scope 3
emissions of 519Mt CO2e. Processing of
bauxite and alumina contributed 22% of
Scope 3 emissions.
Management’s response includes:
– Establishing a dedicated steel decarbonisation team to support the
transition of the steel value chain towards net zero, collaborating
with steel mills, research institutes and technology providers,
focused on both blast furnace optimisation and green steel
pathways. We continue to assess the feasibility of green hot
briquetted iron (HBI) production with hydrogen from hydro-
electricity in Canada
– Seeking to bring additional tonnes of high-grade iron ore to
market from IOC and Simandou which can meet direct
reduction specifications
– Partnering with our suppliers and developing sustainable supply
chains with an aim to only purchase zero-emission haul trucks and
locomotives and introduce net-zero emissions vessels by 2030
– Working with our customers on all ESG metrics by offering
responsibly produced products, such as low-carbon aluminium
RenewAl, and transparency and traceability of our aluminium
products via START and the Copper Mark out of our
Kennecott operations
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119
Principal risks and uncertainties continued
5. Growing in materials essential for energy transition through excelling in development
Our ability to deliver our growth strategy lies in the success of our exploration and/or acquisition
activities, and our ability to develop these resources faster and more competitively than others.
Developing these projects organically or inorganically requires complex multi-year study and
execution plans and carries significant delivery risk.
Strategic | ESG
Potential impact
– Valuation
– Future financial and operational
performance
– Group reputation
– Ability to attract and retain key talent
Opportunities
Threats
Exploration and M&A have the potential to
increase resources in commodities currently
within our portfolio or diversify into new
commodities. Our ESG credentials may provide
a competitive advantage in accessing deposits.
Through operational efficiencies, deployment of
new technologies or improved understanding of
our orebodies, we may convert a greater
proportion of resources to reserves available
more competitively.
Our Scope 1 and 2 targets may limit the
target pool for M&A activity. New high-
quality deposits are increasingly scarce and
may require advances in processing
technology and/or significant capital
investment in infrastructure.
As studies and projects progress, they are
susceptible to changes in technical
requirements, approvals, societal
expectations or changes in underlying
commercial or economic assumptions.
Current material threats include the delivery
of our large underground projects,
ie Oyu Tolgoi underground expansion,
Resolution and Jadar. In the short term,
project delivery remains susceptible to
COVID-related supply chain disruptions
and travel restrictions.
Management’s response includes:
– Increasing our appetite for growth capital expenditure
– Implementing our objective to excel in development to deliver
inorganic and organic growth through alignment across the Group,
leveraging our in-house capabilities and focusing on capital intensity
– Broadening our scope of jurisdictions and targets, ie include
higher-risk jurisdictions and consider minimum viable projects that
can grow and create optionality
– Ensuring a disciplined approach to all material acquisitions,
including a detailed, objective due diligence and a stage-gate
approval process
– Conducting post-investment reviews on divestments and
acquisitions to identify key learnings and embed them in
future initiatives
– Ensuring robust ESG and human rights due diligence during M&A
and new country entry
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Principal risks and uncertainties continued
Strategic report
5. Growing in materials essential for energy transition through excelling in development
6. Building trusted relationships with Indigenous peoples
Our ability to deliver our growth strategy lies in the success of our exploration and/or acquisition
activities, and our ability to develop these resources faster and more competitively than others.
Developing these projects organically or inorganically requires complex multi-year study and
execution plans and carries significant delivery risk.
Strategic | ESG
Our partnerships with Indigenous peoples play a material role in delivering on our operational and
strategic goals, and a loss of trust may impact current and future partnerships and our ability to
operate. Our partnership approach is with a view to the long-term development of trusted
relationships with Indigenous peoples.
Strategic | ESG
Potential impact
– Valuation
performance
– Group reputation
– Future financial and operational
Opportunities
Threats
Exploration and M&A have the potential to
Our Scope 1 and 2 targets may limit the
increase resources in commodities currently
target pool for M&A activity. New high-
within our portfolio or diversify into new
quality deposits are increasingly scarce and
commodities. Our ESG credentials may provide
may require advances in processing
a competitive advantage in accessing deposits.
technology and/or significant capital
– Ability to attract and retain key talent
Through operational efficiencies, deployment of
investment in infrastructure.
new technologies or improved understanding of
our orebodies, we may convert a greater
proportion of resources to reserves available
more competitively.
As studies and projects progress, they are
susceptible to changes in technical
requirements, approvals, societal
expectations or changes in underlying
commercial or economic assumptions.
Current material threats include the delivery
of our large underground projects,
ie Oyu Tolgoi underground expansion,
Resolution and Jadar. In the short term,
project delivery remains susceptible to
COVID-related supply chain disruptions
and travel restrictions.
Management’s response includes:
– Increasing our appetite for growth capital expenditure
– Ensuring a disciplined approach to all material acquisitions,
– Implementing our objective to excel in development to deliver
inorganic and organic growth through alignment across the Group,
approval process
including a detailed, objective due diligence and a stage-gate
leveraging our in-house capabilities and focusing on capital intensity
– Conducting post-investment reviews on divestments and
– Broadening our scope of jurisdictions and targets, ie include
higher-risk jurisdictions and consider minimum viable projects that
future initiatives
acquisitions to identify key learnings and embed them in
can grow and create optionality
– Ensuring robust ESG and human rights due diligence during M&A
and new country entry
Potential impact
– Future financial and operational
performance
– Withdrawal of social licence to operate
restricting access to orebodies
– Valuation
– Group reputation
Opportunities
Threats
Partnerships offer opportunities to create
mutual benefits and shared value for all parties
involved by leveraging the differing strengths of
the participants.
This may be realised through increased
Indigenous participation in employment
and procurement opportunities, access
to resources, increased shareholder
returns, or reduced political, portfolio
and operational risks.
Mining activities may strain relationships with
Indigenous peoples, particularly where
actual or perceived damage (cumulative
and/or acute) of significant cultural value
occurs without consent. This may result in
loss of trust between Indigenous peoples
and our company, impacting our ESG
credentials or ability to excel in development.
Exposure: Resolution, modernisation of
agreements in the Pilbara, British Columbia
Management’s response includes:
– Implementing an integrated cultural heritage management system
and ensuring Community and Social Performance (CSP) metrics are
embedded in approvals and decision-making processes at all levels
of the organisation
– Strengthening consultation and engagement processes to
demonstrate progress towards, or achievement of Free, Prior and
Informed Consent of affected Indigenous and land-connected
communities across all stages of the asset lifecycle, in accordance
with the ICMM Indigenous Peoples and Mining Position Statement
– Modernising our agreements with Traditional Owners in the Pilbara,
which includes modifying clauses to ensure respect, transparency
and mutual benefit
– Setting clear guidance on how we should conduct our business, no
matter where we work or where we are from, through our code of
conduct, CSP standard and Human Rights policy
– Building cultural responsiveness and competence (including for
cultural heritage) across our leadership teams and workforce
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Principal risks and uncertainties continued
7. Building trusted relationships with communities
Rio Tinto may not be viewed as a trusted partner by communities and broader society, impacting
our performance, future prospects and reputation.
Strategic | ESG
Potential impact
– Group reputation
– Future financial and
operational performance
– Growth projects
– Communities and social performance
– Safety and security of employees and
communities
Opportunities
Threats
Strong relationships with the communities in
which we operate provide stable operating
environments. Positive engagement with
communities, governments and other
stakeholders can support access to new
resources, create stable and predictable
investment and operating environments, and
help shape mutually beneficial economic social
and environmental outcomes.
Access to land and resources may be
impacted if we are not considered a trusted
partner that respects people’s rights,
manages adverse social and environmental
impacts and sustainably improves the social
and economic outcomes in existing or
potential host communities. Other potential
actions can include operational disruption,
security incidents, expropriation, export or
foreign investment restrictions, increased
government regulation and delays in
approvals, which may threaten the
investment proposition, title, or carrying
value of assets.
Exposure: RBM, CBG, Resolution, QMM,
Jadar and Simandou.
Management’s response includes:
– Setting out clear accountability of asset leaders for relationship
management with host communities
– Uplifting capability in our leadership and teams across our
organisation supported by our CSP Area of Expertise to coach in
and elevate CSP expectations
– Delivering sustainable, long-term outcomes through strategic
community investment, regional economic development and
mutually beneficial partnerships
– Setting local procurement policies and targets, including local
content commitments for major capital projects
– Implementing an integrated cultural heritage management system
– Deploying specialist technical resources where required to support
and ensuring CSP metrics are embedded in approvals and
decision-making processes at all levels of the organisation
business units to manage more complex issues and risks
– Ensuring respect for communities’ human rights, aligning our
– Establishing appropriate social performance targets and reporting
commitments with international standards
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Principal risks and uncertainties continued
Strategic report
7. Building trusted relationships with communities
8. Maintaining our competitiveness through economic cycles
Rio Tinto may not be viewed as a trusted partner by communities and broader society, impacting
Strategic | ESG
our performance, future prospects and reputation.
Potential impact
– Group reputation
– Future financial and
operational performance
– Growth projects
Opportunities
Threats
Strong relationships with the communities in
Access to land and resources may be
which we operate provide stable operating
impacted if we are not considered a trusted
environments. Positive engagement with
partner that respects people’s rights,
communities, governments and other
stakeholders can support access to new
manages adverse social and environmental
impacts and sustainably improves the social
– Communities and social performance
resources, create stable and predictable
and economic outcomes in existing or
– Safety and security of employees and
communities
investment and operating environments, and
potential host communities. Other potential
help shape mutually beneficial economic social
actions can include operational disruption,
and environmental outcomes.
security incidents, expropriation, export or
foreign investment restrictions, increased
government regulation and delays in
approvals, which may threaten the
investment proposition, title, or carrying
value of assets.
Exposure: RBM, CBG, Resolution, QMM,
Jadar and Simandou.
Management’s response includes:
– Setting out clear accountability of asset leaders for relationship
– Delivering sustainable, long-term outcomes through strategic
management with host communities
community investment, regional economic development and
– Uplifting capability in our leadership and teams across our
mutually beneficial partnerships
organisation supported by our CSP Area of Expertise to coach in
– Setting local procurement policies and targets, including local
and elevate CSP expectations
content commitments for major capital projects
– Implementing an integrated cultural heritage management system
– Deploying specialist technical resources where required to support
and ensuring CSP metrics are embedded in approvals and
decision-making processes at all levels of the organisation
business units to manage more complex issues and risks
– Ensuring respect for communities’ human rights, aligning our
– Establishing appropriate social performance targets and reporting
commitments with international standards
The viability of our business is most sensitive to commodity economics. Our cost-competitive,
diversified commodities portfolio, strong balance sheet, prudent financial policies and our
decarbonisation efforts/targets help preserve the Group’s resilience, including maintaining access
to debt capital and bank loan markets.
Economic
Potential impact
– Future financial performance
– Liquidity
– Group reputation
– Credit risk/rating
– Financial flexibility
Opportunities
Threats
Favourable market conditions and strong internal
capital discipline increase our liquidity and/or
balance sheet strengths, allowing us to pursue
investment or growth opportunities, pay down
debt and/or enhance returns to shareholders.
China continues to be the largest market
for our products.
Falling commodity prices reduce cash flow,
limiting profitability and shareholder returns.
These may trigger impairments and/or
impact our credit rating. Extended subdued
prices impact cash flow streams and our
ability to raise sufficient funds for investment
and/or growth opportunities. Unfavourable
changes in the cost of production can arise,
such as increased labour or freight cost.
Management’s response includes:
– Implementing the Rio Tinto Safe Production System (RTSPS) across
the Group to find a sustainable way of working that is safer, more
productive and cleaner, combined with specific improvement
initiatives focused on debottlenecking, both of which aim to maintain
or enhance our competitiveness
– Further diversifying our global commodity portfolio to include
“greener” alternatives and alloys and critical minerals
– Working with partners to make our current portfolio more resilient to
carbon pricing
– Ensuring capital discipline commensurate with a strong investment-
grade credit rating including investment governance processes and
a payout shareholder returns policy that adjusts returns through
the cycle
– Maintaining a Revolving Credit Facility and a diversified source of
– Maintaining a global portfolio of customers and contracts
funding in different capital markets and shelf programmes
9. Resources to reserves conversion of our existing assets
Our estimates of mineral resources and ore reserves are based on an assessment of geological,
social, environmental, economic, commercial and technical information available at the time of
reporting. As new information becomes known, the economic viability of some ore reserves,
production plans, the timing of approvals and developments can be restated with material impacts
(positive or negative).
Economic
Potential impact
– Future financial performance
– Valuation
Opportunities
Threats
Through the deployment of new technologies or
improved understanding of our orebodies and
effective management of permitting and
approval processes, we may convert a greater
proportion of our resources to reserves.
Failure to secure mining approvals or
capture the benefits of new technologies,
geotechnical variation or changes in
product demand/specifications may reduce
the economies of reserves or future
conversion of resources to reserves in the
required timeframe.
Exposure: Pilbara, Resolution.
Management’s response includes:
– Increasing investment in resource development programmes to
improve orebody knowledge
– Establishing the Iron Ore Mine Replenishment
Programme (MRP)
– Complying with the Group’s Resources and Reserves Standard,
– Progressing required regulatory and environmental
and monitoring KPIs to track variation from expected asset
production plans with assurance from the Orebody Knowledge
Centre of Excellence
approvals for future mining areas, including cultural heritage
impact risk assessments
122
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123
Principal risks and uncertainties continued
10. Geopolitics impact on our trade or investments
Geopolitical tensions have the potential to impact our key markets, operations and investments.
Economic
Potential impact
– Future financial and
operational performance
– Communities and social performance
– Group reputation
Opportunities
Threats
Partnering with governments to realise their
resource sustainability and security ambitions
through our portfolio of products.
Leveraging new strategic alliances
between countries as a result of global
geopolitical alignment.
Increased trade tensions may undermine
rule-based trading systems and lead to
trade actions (increased tariffs, retaliations,
and sanctions) potentially impacting our
key markets, operations or investments.
Current material threats include the
potential development of further sanctions
between Australia and China and the
evolving situation of the coup in Guinea
and, more broadly, the tensions between
the US and China.
Management’s response includes:
– Continually testing the resilience and optionality from
our increasingly diverse portfolio of commodities, markets
and jurisdictions
– Monitoring on an ongoing basis of the political environments where
we operate as well as our key markets and close engagement with
governments and customers in those areas
– Establishing the Group External Affairs function providing subject
matter expertise, global insight and intelligence to inform and guide
our business strategy and decision making
– Implementing the new Sanctions Standard and Export
Control Procedure
124
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Geopolitical tensions have the potential to impact our key markets, operations and investments.
Economic
Potential impact
– Future financial and
operational performance
– Group reputation
– Communities and social performance
through our portfolio of products.
Leveraging new strategic alliances
between countries as a result of global
geopolitical alignment.
Opportunities
Threats
Partnering with governments to realise their
Increased trade tensions may undermine
resource sustainability and security ambitions
rule-based trading systems and lead to
trade actions (increased tariffs, retaliations,
and sanctions) potentially impacting our
key markets, operations or investments.
Current material threats include the
potential development of further sanctions
between Australia and China and the
evolving situation of the coup in Guinea
and, more broadly, the tensions between
the US and China.
Management’s response includes:
– Continually testing the resilience and optionality from
– Establishing the Group External Affairs function providing subject
our increasingly diverse portfolio of commodities, markets
matter expertise, global insight and intelligence to inform and guide
and jurisdictions
our business strategy and decision making
– Monitoring on an ongoing basis of the political environments where
– Implementing the new Sanctions Standard and Export
we operate as well as our key markets and close engagement with
Control Procedure
governments and customers in those areas
Principal risks and uncertainties continued
Strategic report
10. Geopolitics impact on our trade or investments
11. Global and domestic tax policy and administration instability
Instability in tax policy and administration may result in significant impact to business value and/or
reputation. COVID-19 recovery, resource nationalism and the recent G20 and Inclusive
Framework consensus on the OECD digital global tax framework, are creating a time of
unprecedented change in global and domestic tax policies.
Economic
Potential impact
– Future financial performance
– Valuations
– Stakeholder relations
– Licence to operate
Opportunities
Threats
While additional tax cost is expected as a
consequence of these developments, there is an
opportunity to work with local governments on
domestic policy proposals to strike a balance
which raises additional revenue while also
supporting growth and investment.
Where additional tax is expected under the OECD
digital reforms there is potential to increase tax
payments to host governments rather than HQ
locations, to support local communities.
Political imperatives driving tax policy
may result in aggressive proposals.
Implementation of these proposals poses
the threat of contagion across other
jurisdictions. The OECD digital reforms may
incentivise additional domestic proposals,
raising the risk of double taxation and/or
bi-lateral and multi-lateral disputes.
The translation of the new global tax
framework into domestic law poses
significant uncertainty and potential
for double taxation/disputes. Increasing
pressure on stabilisation/investment
agreements is expected.
Exposure: The potential financial
consequences of these risks are significant
given the political dynamic and the
COVID-19 economic recovery effort.
Domestic resource tax proposals in
countries like Chile would have a material
impact on business value and pose
contagion threat across that region.
The OECD digital proposals are expected
to result in material additional taxation
and will place additional strain on
stabilisation arrangements.
Management’s response includes:
– Engaging constructively in local and international tax reform
dialogue to contribute to the development of sustainable and
effective tax systems, including becoming a trusted adviser to the
OECD to support the development of the new global tax framework
– Ensuring our tax policies and governance seek to keep pace with
increasing community expectations, increasing tax authority and
government expectations, and civil society initiatives promoting
responsible tax and transparency
– Maintaining our commitment to the B Team Responsible Tax
Principles, which are intended to provide a leadership standard
driving best practice in tax governance, reporting and interactions
with tax authorities. These principles are embedded in our Tax Policy
– Verifying our compliance to our Tax Policy through our Internal
Audit which sets the following expectations:
– Ensuring full compliance with statutory obligations accompanied
by full disclosure
– Ensuring high standards of tax risk management
– Fostering constructive working relationships with tax administrators
– Proactively managing taxes pursuant to a robust tax
governance framework
124
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Annual Report 2021 | riotinto.com
125
Principal risks and uncertainties continued
12. Breach of our policies, standards and procedures, obligations or regulations
This risk can materialise through the illegal actions of just one employee through inappropriate
conduct or through a lack of competency or governance, but can greatly impact our reputation
and licence to operate. We need to foster a culture aligned with our values, provide regular
education and guidance and proactive compliance monitoring to maintain the highest standards
in the way we conduct our business.
Operational | ESG
Potential impact
– Group reputation
– Licence to operate
– Future financial and operational
performance
– HSES & communities
Opportunities
Threats
Good corporate citizens are acknowledged to
operate to a high ethical standard, thus attracting
talent and securing access to resources and
investment opportunities.
A serious breach in our operations or in our
value chain of anti-trust rules, anti-corruption
legislation or sanctions, human rights or
inappropriate business conduct, could result
in serious harm to people and significant
reputational and financial damage.
Management’s response includes:
– Integrating our commitments to core business and human rights
standards, including the UN Guiding Principles on Business and
Human Rights (UNGPs), into our business plans and actions
– Ensuring compliance with our policies, standards and procedures,
including the new third party due diligence procedure and
human rights due diligence in the supply chain
– Ensuring dedicated legal and compliance teams to assist our
– Implementing the Voluntary Principles on Security and
businesses in identifying, understanding and complying with current
and emerging regulatory obligations
Human Rights and a strong security management framework
– Maintaining management oversight and reporting through risk,
– Ensuring a centralised Litigation team and Centres of Excellence in
the areas of Anti-Bribery and Corruption, Anti-Trust, and Export
Controls & Sanctions
assurance and compliance forums with operational and functional
teams, supported by Ethics and Compliance Risk Management
Review forums
– Providing training and awareness on regulatory obligations for
employees working in high-risk roles and third parties
13. Major hazard or safety event
Our operations and projects are inherently hazardous, with the potential to cause illness or injury,
damage to the environment, and disruption to communities. Major hazards include process safety,
underground mining, slope geotechnical and tailings management.
Operational | ESG
Potential impact
– Multiple fatalities
– Operations disruption
– Communities and social performance
– Group reputation
– Financial loss
Management’s response includes:
Opportunities
Threats
Meeting and exceeding our commitments in
safety and hazard management.
Failure to manage our major hazards
or mass passenger transport, could
result in a catastrophic event or other
long-term damage.
Exposure: mass passenger transport;
tailings facility; underground operations;
open pit walls or dumps; processing facilities.
Nothing is more important than the safety and wellbeing of our employees, contractors and communities.
Management’s response includes:
– Providing oversight by the Sustainability Committee and support by
the Group’s Risk Management Committee, with quarterly Major
Hazard Steering Committee meetings at each product group
– Conducting regular review and audit of HSES processes, training
and controls to promote and improve effectiveness at managed
and (where practicable) non-managed operations
– Providing the second line assurance by our central support functions
and technical CoE teams to verify compliance with Group policies,
standards and procedures
– Reporting, investigating and sharing learnings from HSES incidents
and ensuring monthly monitoring of HSES performance at the Group
level including Group-wide PFI sharing
– Implementing slope geotechnical, tailings management,
underground mining and process safety technical and safety
standards and procedures
– Building safety targets into personal performance metrics to
incentivise safe behaviour and effective risk management
(see page 175 of the Remuneration report)
– Focusing on fatality elimination through our critical risk management
– Planning for business resilience and execution exercises for severe
but plausible scenarios
126
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Principal risks and uncertainties continued
Strategic report
12. Breach of our policies, standards and procedures, obligations or regulations
14. Physical resilience to natural disaster or extreme weather
Operational | ESG
Our operating sites may be vulnerable to natural disasters or extreme weather events. Climate
change may increase the frequency and severity of these events including rising sea levels,
floods, droughts, bushfires or extreme temperature impacts on operating environments.
Operational | ESG
Potential impact
– Multiple fatalities
– Operations disruption
– Financial loss
Opportunities
Threats
By understanding specific exposures
across our portfolio, our capital programmes
can incorporate measures to improve resilience
in the event of a natural disaster or extreme
climatic event.
Natural disasters or extreme weather
events can endanger our workforce and
communities, damage our assets or cause
significant operational interruption.
Exposure: An extension of the tropical
cyclone season in the Pilbara would impact
our Iron Ore operations and surrounding
communities. A significant warming trend,
particularly influencing maximum
temperatures, may impact the way we
operate, including the impacts on employee
health and assets operating outside optimal
conditions. Physical resilience of our supply
chain also requires monitoring.
Management’s response includes:
– Incorporating potential changes to climate into the way we design,
operate and close our assets through increased understanding of
our exposure at each asset, eg Critical Risk Assessment (CRA)
Programme and Climate Change physical impact assessments
– Assessing medium and long-term risks by the Energy and Climate
Change Centre of Excellence
– Developing business resilience plans and emergency response
plans, training and annual exercises to prepare for a natural disaster
event, including established communication plans and co-ordination
with local, regional and state agencies
– Providing capital expenditure for resilience projects, such as
those planned for Cape Lambert jetty and Dampier to Yurralyi
Maya Power Station
This risk can materialise through the illegal actions of just one employee through inappropriate
conduct or through a lack of competency or governance, but can greatly impact our reputation
and licence to operate. We need to foster a culture aligned with our values, provide regular
education and guidance and proactive compliance monitoring to maintain the highest standards
in the way we conduct our business.
Potential impact
– Group reputation
– Licence to operate
– Future financial and operational
performance
– HSES & communities
Management’s response includes:
Opportunities
Threats
Good corporate citizens are acknowledged to
A serious breach in our operations or in our
operate to a high ethical standard, thus attracting
value chain of anti-trust rules, anti-corruption
talent and securing access to resources and
legislation or sanctions, human rights or
investment opportunities.
inappropriate business conduct, could result
in serious harm to people and significant
reputational and financial damage.
– Integrating our commitments to core business and human rights
– Ensuring compliance with our policies, standards and procedures,
standards, including the UN Guiding Principles on Business and
including the new third party due diligence procedure and
Human Rights (UNGPs), into our business plans and actions
human rights due diligence in the supply chain
– Ensuring dedicated legal and compliance teams to assist our
– Implementing the Voluntary Principles on Security and
businesses in identifying, understanding and complying with current
Human Rights and a strong security management framework
and emerging regulatory obligations
– Maintaining management oversight and reporting through risk,
– Ensuring a centralised Litigation team and Centres of Excellence in
assurance and compliance forums with operational and functional
the areas of Anti-Bribery and Corruption, Anti-Trust, and Export
teams, supported by Ethics and Compliance Risk Management
Controls & Sanctions
Review forums
– Providing training and awareness on regulatory obligations for
employees working in high-risk roles and third parties
Our operations and projects are inherently hazardous, with the potential to cause illness or injury,
damage to the environment, and disruption to communities. Major hazards include process safety,
underground mining, slope geotechnical and tailings management.
Operational | ESG
Opportunities
Threats
Meeting and exceeding our commitments in
Failure to manage our major hazards
safety and hazard management.
or mass passenger transport, could
result in a catastrophic event or other
long-term damage.
Exposure: mass passenger transport;
tailings facility; underground operations;
open pit walls or dumps; processing facilities.
13. Major hazard or safety event
Potential impact
– Multiple fatalities
– Operations disruption
– Group reputation
– Financial loss
– Communities and social performance
Management’s response includes:
Management’s response includes:
Nothing is more important than the safety and wellbeing of our employees, contractors and communities.
– Providing oversight by the Sustainability Committee and support by
– Conducting regular review and audit of HSES processes, training
the Group’s Risk Management Committee, with quarterly Major
and controls to promote and improve effectiveness at managed
Hazard Steering Committee meetings at each product group
and (where practicable) non-managed operations
– Providing the second line assurance by our central support functions
– Reporting, investigating and sharing learnings from HSES incidents
and technical CoE teams to verify compliance with Group policies,
and ensuring monthly monitoring of HSES performance at the Group
standards and procedures
level including Group-wide PFI sharing
– Implementing slope geotechnical, tailings management,
– Building safety targets into personal performance metrics to
underground mining and process safety technical and safety
incentivise safe behaviour and effective risk management
standards and procedures
(see page 175 of the Remuneration report)
– Focusing on fatality elimination through our critical risk management
– Planning for business resilience and execution exercises for severe
but plausible scenarios
126
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Annual Report 2021 | riotinto.com
127
Principal risks and uncertainties continued
15. Significant biodiversity-related ecological impact
Our operations and projects are inherently hazardous, requiring proactive management to
minimise potential biodiversity loss or ecosystems degradation.
Operational | ESG
Potential impact
– Group reputation
– Environment
– Communities
Opportunities
Threats
Development of a carbon-credit business, in
collaboration with governments and host
communities, that generates carbon and
biodiversity credits for the Group, while
remediating disturbed lands, protecting
existing pristine areas and supporting the
development of associated socioeconomic
opportunities independent of mining
(thus addressing dependencies).
A number of our operations and future
development opportunities exist within,
or close to, sensitive biodiverse regions.
Our licence to operate and develop
requires us to demonstrate our capability to
protect ecosystems through improved
practices and technological solutions.
Exposure: QMM, Simandou, RBM, Weipa,
non-managed operations.
Management’s response includes:
– Fostering proactive relationships with international civil society
organisations, governments and environment departments to
support protective legislation
– Ensuring operations proactively manage their land and water
stewardship risks to protect ecosystems that rely on these resources
– Identifying and acting on opportunities to contribute to
– Applying protective principles—instead of a compliance-driven
nature conservation
approach—at all our operations
16. Water scarcity and management
Across geographies and commodities, proactive water management is required in new asset
developments, existing operations and closures. In some regions where we work, water scarcity is
an inherent risk. Many other sites also experience variations in rainfall and water availability due to
climate change.
Operational | ESG
Potential impact
– Financial
– Valuations
– Production and growth constraints
– Reputational impact
– Ecosystem impacts
– Stakeholder relationships
Opportunities
Threats
Improving the way we design and run
our operations, to avoid permanent impacts
to water resources and carefully manage
the quality and quantity of the water we use and
return to the environment.
Our water management may cause
unacceptable operational, environmental,
cultural heritage or community impacts.
Exposure: Gobi Desert, Pilbara,
Northern Queensland.
Management’s response includes:
– Balancing our operational water needs with those of local
communities, Indigenous peoples and ecosystems by managing
against four risk areas: water resource, quantity and quality,
dewatering and long-term obligations
– This framework allows us to identify, assess, manage and
communicate water risk, controls and actions both internally and to
the communities where we operate
– Providing water management plans and controls and Annual
Environmental Certification across all assets
– Actively supporting and reporting our practices against the
commitments outlined in the International Council on Mining and
Metals’ position statement on water stewardship
128
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Principal risks and uncertainties continued
Strategic report
15. Significant biodiversity-related ecological impact
17. Closure, reclamation, rehabilitation and legacies
Our operations and projects are inherently hazardous, requiring proactive management to
minimise potential biodiversity loss or ecosystems degradation.
Operational | ESG
Our closure, reclamation, rehabilitation and legacy plans, assumptions and expectations may
change, impacting financial outcomes and reputation.
Operational | ESG
Potential impact
– Group reputation
– Environment
– Communities
Opportunities
Threats
Development of a carbon-credit business, in
A number of our operations and future
collaboration with governments and host
communities, that generates carbon and
biodiversity credits for the Group, while
remediating disturbed lands, protecting
development opportunities exist within,
or close to, sensitive biodiverse regions.
Our licence to operate and develop
requires us to demonstrate our capability to
existing pristine areas and supporting the
protect ecosystems through improved
development of associated socioeconomic
practices and technological solutions.
opportunities independent of mining
(thus addressing dependencies).
Exposure: QMM, Simandou, RBM, Weipa,
non-managed operations.
Management’s response includes:
– Fostering proactive relationships with international civil society
– Ensuring operations proactively manage their land and water
organisations, governments and environment departments to
stewardship risks to protect ecosystems that rely on these resources
– Applying protective principles—instead of a compliance-driven
nature conservation
– Identifying and acting on opportunities to contribute to
support protective legislation
approach—at all our operations
Across geographies and commodities, proactive water management is required in new asset
developments, existing operations and closures. In some regions where we work, water scarcity is
an inherent risk. Many other sites also experience variations in rainfall and water availability due to
Operational | ESG
Opportunities
Threats
Improving the way we design and run
Our water management may cause
our operations, to avoid permanent impacts
unacceptable operational, environmental,
to water resources and carefully manage
cultural heritage or community impacts.
the quality and quantity of the water we use and
return to the environment.
Exposure: Gobi Desert, Pilbara,
Northern Queensland.
16. Water scarcity and management
climate change.
Potential impact
– Financial
– Valuations
– Production and growth constraints
– Reputational impact
– Ecosystem impacts
– Stakeholder relationships
Management’s response includes:
– Balancing our operational water needs with those of local
– Providing water management plans and controls and Annual
communities, Indigenous peoples and ecosystems by managing
Environmental Certification across all assets
against four risk areas: water resource, quantity and quality,
dewatering and long-term obligations
– Actively supporting and reporting our practices against the
commitments outlined in the International Council on Mining and
communicate water risk, controls and actions both internally and to
the communities where we operate
Potential impact
– Valuation
– Future financial and operational
performance
– Group reputation
– Communities and social performance
Opportunities
Threats
We are actively assessing opportunities to find
solutions to repurpose and reuse sites for future
economic or social benefit through working
collaboratively with our stakeholders. For all
new asset developments, we incorporate closure
into the design of our assets, and find ways
to optimise decommissioning, remediation
and any long-term management obligations.
For existing operations, where possible, we aim
to progressively rehabilitate land throughout the
life of the operations.
Plans and provisions for closure,
reclamation and rehabilitation may vary
over time due to changes in stakeholders’
expectations, legislation, standards,
technical understanding and techniques.
In addition, the expected timing of
expenditure could change significantly
due to changes in the business environment
and orebody knowledge that might vary
the life of an operation.
Exposure: Pilbara operations and near-term
closure including Channar, NZAS, Argyle,
Diavik and ERA.
Management’s response includes:
– Complying with Group policies and standards, which provide
– Collaborating with key stakeholders and participating in strategic
guidance concerning risk management, communities and social
performance. This is overseen by our Closure Steering Committee
partnerships and/or governance structures to create opportunities
and mitigate threats
– Maintaining a central closure capability to develop leading practices,
influence operations, manage closure execution to realise
efficiencies and synergies across assets, and proactively manage
the legacy portfolio
18. Cyber breach
Cyber risk, if materialised, may disrupt our operations, affect how our employees work
and/or breach data privacy and other sensitive information related to customers, contractors and
suppliers.
Operational | ESG
Potential impact
– Operational disruption and/or breach of
operational integrity
– Breach of data privacy or commercially
Opportunities
N/A
sensitive data
– Group reputation
– Financial loss
Threats
Cyber breaches can come from malicious
external or internal attacks, but also
inadvertently through human error.
In addition, Rio Tinto data may reside
on service provider systems and rely on the
effectiveness of controls on those networks.
Management’s response includes:
– Improving IS&T asset management with executive-level sponsorship
– Ensuring business resilience plans for cyber breaches across all
– This framework allows us to identify, assess, manage and
Metals’ position statement on water stewardship
and oversight from our Cyber Security Steering Committee
critical assets
– Investing on an ongoing basis in IS&T infrastructure, technology
solutions and upskilling to advance our automation projects,
safeguard our assets and improve cyber threat detection and
response for critical assets
128
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Annual Report 2021 | riotinto.com
129
Principal risks and uncertainties continued
19. Pandemic recovery prolonged
The potential for transmission across our teams, communities and supply chains continues to be a
threat that requires proactive management. The pathways and speed of recovery remain variable
across our markets, operations, communities and supply chains.
Operational | ESG
Potential impact
– Heath, safety and security
– Future financial and operational
performance
– Group reputation
Opportunities
N/A
Threats
While COVID-19 continues to circulate,
the chance of further variants developing
remains. A new variant could lead to further
health impacts to our workforce and
disruption to our operations and/or supply
chain. Global supply chain disruptions and
reduced freight capacity could continue if
further outbreaks occur, impacting the
inbound and outbound flow of our feedstock
and products, eg recent disruptions have
increased the risks of stock shortages
for alumina and aluminium at our North
American operations. In Mongolia, the
situation continues to be challenging,
with high case rates in Ulaanbaatar.
Management’s response includes:
– Fostering proactive relationships with governments and health
departments to support vaccination programmes and align
responses to outbreaks. This includes travel management protocols
to sites and offices to prevent transmission among vulnerable people
and communities
– Ensuring supply chain resilience planning by our operations and
procurement teams, eg securing alternative sources for critical
goods and services
130
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Principal risks and uncertainties continued
Strategic report
19. Pandemic recovery prolonged
The potential for transmission across our teams, communities and supply chains continues to be a
threat that requires proactive management. The pathways and speed of recovery remain variable
across our markets, operations, communities and supply chains.
Operational | ESG
Potential impact
– Heath, safety and security
– Future financial and operational
performance
– Group reputation
Opportunities
N/A
Threats
While COVID-19 continues to circulate,
the chance of further variants developing
remains. A new variant could lead to further
health impacts to our workforce and
disruption to our operations and/or supply
chain. Global supply chain disruptions and
reduced freight capacity could continue if
further outbreaks occur, impacting the
inbound and outbound flow of our feedstock
and products, eg recent disruptions have
increased the risks of stock shortages
for alumina and aluminium at our North
American operations. In Mongolia, the
situation continues to be challenging,
with high case rates in Ulaanbaatar.
Management’s response includes:
– Fostering proactive relationships with governments and health
– Ensuring supply chain resilience planning by our operations and
departments to support vaccination programmes and align
procurement teams, eg securing alternative sources for critical
responses to outbreaks. This includes travel management protocols
goods and services
to sites and offices to prevent transmission among vulnerable people
and communities
Five-year review
Selected financial data
The selected consolidated financial information below has been derived from the historical audited consolidated financial statements of the
Rio Tinto Group. The selected consolidated financial data should be read in conjunction with, and qualified in their entirety by reference to,
the 2021 financial statements and notes thereto. The financial statements as included on pages 212-311 have been prepared in accordance
with IFRS as defined in note 1.
Rio Tinto Group
Income statement data
For the years ending 31 December
Amounts in accordance with IFRS
Consolidated sales revenue
Group operating profit1
Profit for the year
Basic earnings for the year per share (US cents)
Diluted earnings for the year per share (US cents)
Dividends per share
Dividends declared during the year
US cents
– interim
– interim special
– final
– special
UK pence
– interim
– interim special
– final
– special
Australian cents
– interim
– interim special
– final
– special
Dividends paid during the year (US cents)
– ordinary
– special
Weighted average number of shares basic (millions)
Weighted average number of shares diluted (millions)
Share buy-back ($ million)
Balance sheet data
Total assets
Share capital/premium
Total equity/Net assets
Equity attributable to owners of Rio Tinto
2021
$m
63,495
29,817
22,575
1,303.4
1,295.0
376.0
185.0
417.0
62.0
270.84
133.26
306.72
45.60
509.42
250.64
577.04
85.80
685.0
278.0
1,618.4
1,628.9
–
102,896
8,097
56,590
51,432
2020
$m
44,611
16,829
10,400
604.0
599.8
155.0
–
309.0
93.0
119.74
–
221.86
66.77
216.47
–
397.48
119.63
386.0
–
1,617.4
1,628.6
208
97,390
8,302
51,903
47,054
2019
$m
43,165
11,466
6,972
491.4
487.8
151.0
61.0
231.0
123.32
49.82
177.47
219.08
88.50
349.74
331.0
304.0
1,630.1
1,642.1
1,552
87,802
7,968
45,242
40,532
2018
$m
40,522
17,687
13,925
793.2
787.6
2017
$m
40,030
14,135
8,851
490.4
486.9
127.0
110.0
180.0
243.0
180.0
96.82
83.13
135.96
183.55
170.84
250.89
338.70
307.0
–
1,719.3
1,731.7
5,386
90,949
8,000
49,823
43,686
129.43
137.7
228.5
235
–
1,786.7
1,799.5
2,083
95,726
8,666
51,115
44,711
1. Group operating profit or loss includes the effects of charges and reversals resulting from impairments (other than impairments of equity accounted units) and profit and loss on disposals of
interests in businesses. Group operating profit or loss amounts shown above excludes equity accounted operations, finance items, tax and discontinued operations.
Directors’ approval statement
This Strategic report is delivered in accordance with a resolution of the Board, and has been signed on behalf of the Board by:
Simon Thompson
Chairman
23 February 2022
130
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131
Directors’ report
The future success of Rio Tinto will be secured through
effective and responsive corporate governance. This section
outlines how the Board and its committees have sought to
fulfil this objective in 2021.
Directors’ report
Governance
Chairman’s introduction
Board of Directors
Executive Committee
Board insights
Our stakeholders – our section 172(1) statement
Matters discussed in 2021
Governance framework
Evaluating our performance
Nominations Committee report
Audit Committee report
Sustainability Committee report
Remuneration report
Annual statement by the Remuneration Committee Chair
Response to 2021 AGMs voting outcomes
Remuneration at a glance
Implementation report
Additional statutory disclosure
Compliance with governance codes and standards
133
134
136
138
140
143
145
146
148
151
156
160
163
165
171
199
205
132
Annual Report 2021 | riotinto.com
Chairman’s introduction
Effective corporate governance is a
continuous process of prioritisation
and improvement, and we must adapt
our processes and activities to be
relevant to the evolving external and
internal landscapes.
As expectations about the role of business in society evolve, we must
adapt and continuously improve our corporate governance processes
to ensure that they remain fit for purpose in a rapidly changing internal
and external environment.
The matters on which the Board and its committees focused in 2021
evolved in line with developments in the external environment, the
unprecedented senior management changes that took place at the
start of the year, the approval of our new strategy and values, and the
need to ensure that the lessons learned from the tragic events at
Juukan Gorge in May 2020 are fully embedded in our management
processes and culture.
Culture and values
As Rio Tinto resets its strategy and priorities under the new leadership
team, culture and values will play a critical role in meeting the
company’s aspiration to become the best operator, to excel in
development and to achieve impeccable ESG credentials, while
strengthening our social licence to operate.
Among the many lessons from Juukan Gorge was the recognition that
any risk management system will fail unless we create a work culture
where everyone considers the impact of our individual and collective
actions on other people and the environment, actively listens and
questions how we can do things better, and feels empowered to speak
up when something is wrong.
These lessons were reinforced by the findings and recommendations
outlined in the Everyday Respect report, which we commissioned
to better understand and improve our work culture. This year we
introduced our new values of care, courage and curiosity. These values
will guide how we work and how we treat each other, drive better
decision-making, strengthen relationships and enable us to deliver
superior performance by unlocking the knowledge and insights of the
entire workforce.
Feedback from our employee engagement survey, conducted in late
2021, suggests that the new values resonate well with our workforce.
But actions speak louder than words and it will take time and consistent
commitment by leaders throughout the organisation to embed the
changes we are seeking.
Workforce engagement
The Board has long recognised the importance of understanding the
views of our workforce to ensure they are considered in Board
discussions and decision making. In 2021, we took a further step to
enhance this approach with the appointment of Simon McKeon as the
designated Non-Executive Director for workforce engagement. In this
role, Simon oversees the annual programme of engagements and
regularly reports back to the Board on the insights gained, to ensure
our people’s voices are heard and acted upon in the boardroom.
Board changes and succession planning
We welcomed Ben Wyatt as a Non-Executive Director this year.
Together with the three Non-Executive Director appointments in 2020,
these new voices in the boardroom have challenged and tested our
thinking in a very positive way and brought fresh and diverse
perspectives to our discussions.
This continual refreshment of Board composition will receive further
impetus in 2022 under Dominic Barton’s leadership, with mining
experience a key focus.
The other matters we discussed in 2021 are detailed on the following
pages. This work has taken place within the context of continuing
COVID-19 restrictions, largely preventing meetings in person and
Board visits to operations. While there is no substitute for face-to-face
meetings, I am grateful to my colleagues for the commitment and
flexibility they have shown to enable our programme of work to be
completed so effectively via virtual Board meetings.
Simon Thompson
Chairman
23 February 2022
Directors’ report
The future success of Rio Tinto will be secured through
effective and responsive corporate governance. This section
outlines how the Board and its committees have sought to
fulfil this objective in 2021.
Our stakeholders – our section 172(1) statement
Directors’ report
Governance
Chairman’s introduction
Board of Directors
Executive Committee
Board insights
Matters discussed in 2021
Governance framework
Evaluating our performance
Nominations Committee report
Audit Committee report
Sustainability Committee report
Remuneration report
Annual statement by the Remuneration Committee Chair
Response to 2021 AGMs voting outcomes
Remuneration at a glance
Implementation report
Additional statutory disclosure
Compliance with governance codes and standards
133
134
136
138
140
143
145
146
148
151
156
160
163
165
171
199
205
132
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133
Board of Directors
Rio Tinto plc and Rio Tinto
Limited have a common
Board of Directors. The
Directors are collectively
responsible for the
stewardship and long-
term sustainable success
of the Group.
Simon Thompson
Chairman
MA, PhD. Age 62. Appointed April 2014;
Chairman from March 2018.
Skills and experience: Simon has significant global
experience in mining and metals, finance, and
corporate governance. Simon was an Executive
Director of Anglo American plc, where he held a
number of senior roles, including Chairman and
Chief Executive of the Base Metals Division and
Chairman of Tarmac. Earlier in his career, he held
various investment banking positions at S. G.
Warburg and N M Rothschild. Simon has chaired 3i
Group plc, from 2015 to 2021, and Tullow Oil plc and
has served as a Non-Executive Director on the
boards of AngloGold Ashanti Limited and Newmont
Mining Corporation. Simon is also a Commissioner
at the Energy Transitions Commission.
Simon will step down from the Board at the 2022
annual general meetings.
Current external appointments: None.
Jakob Stausholm
Chief Executive
Ms Economics. Age 53. Appointed
Chief Financial Officer September 2018;
Chief Executive from January 2021.
Skills and experience: As Chief Executive, Jakob
brings strategic and commercial expertise, and
governance experience, and a strong focus on
sustainability, particularly climate change, and a
continued focus on capital allocation and delivering
returns to shareholders. He is committed to
rebuilding trust with communities, Traditional
Owners and stakeholders globally, embedding
improved operational performance and creating
growth options for the Group.
Jakob has over 20 years’ experience, primarily in
senior finance roles, at Maersk Group and Royal
Dutch Shell plc including in capital-intensive,
long-cycle businesses, as well as in innovative
technology and supply chain optimisation. He was
also a Non-Executive Director of Woodside
Petroleum and Statoil (now Equinor).
Dominic Barton BMM
Chair-designate
Hinda Gharbi
Independent
Non-Executive Director
BA (Hons), M.Phil. Age 59. Appointment from
April 2022; Chair from May 2022.
Skills and experience: Dominic spent over 30 years
at McKinsey & Company, including nine years as
the Global Managing Partner. Most recently, he
served as Canada’s Ambassador to China. Dominic
brings a wealth of global business experience, as
well as a deep insight of geopolitics, corporate
sustainability and governance. Dominic was
previously Chair of Teck Resources, from 2018 to
2019, and, in 2019, served as a Non-Executive
Director at Singtel Group and Investor AB.
Current external appointments: Chancellor of the
University of Waterloo.
Megan Clark AC
Independent
Non-Executive Director
BSc, PhD. Age 63. Appointed November 2014.
Skills and experience: Megan’s experience in the
mining and metals industry and in science, research
and technology brings valuable insights on
sustainable development and innovation to the
Board. Previously, she was Head of the Australian
Space Agency and Chief Executive of the
Commonwealth Scientific and Industrial Research
Organisation (CSIRO). Following mining and
exploration roles with Western Mining Corporation,
Megan was a Director at N M Rothschild and a Vice
President Technology at BHP. Megan received the
Australian Academy of Science Medal in 2019.
Current external appointments: Non-Executive
Director of CSL Limited since 2016 and Chair of the
Advisory Board of the Australian Space Agency.
Peter Cunningham
Chief Financial Officer
BA (Hons), Chartered Accountant (England
and Wales). Age 55. Appointed Interim
Chief Financial Officer January 2021; Chief
Financial Officer from June 2021.
Skills and experience: As Chief Financial Officer,
Peter brings extensive commercial expertise from
working across the Group in various geographies.
He is strongly focused on the decarbonisation of our
assets, investing in the commodities essential for the
energy transition and delivering attractive returns to
shareholders while maintaining financial discipline.
After nearly three decades with Rio Tinto, Peter
has held a number of senior leadership roles,
including Group Controller, Chief Financial Officer –
Organisational Resources, Global Head of Health,
Safety, Environment & Communities, Head of Energy
and Climate Strategy, and Head of Investor Relations.
BSc, MSc. Age 51. Appointed March 2020.
Skills and experience: Hinda is Executive Vice
President of Services & Equipment at Schlumberger
Limited, based in the UK. With Schlumberger for
some 26 years, her previous roles include Executive
Vice President of Reservoir & Infrastructure, Vice
President of Human Resources for Schlumberger
Limited, President of the Reservoir Characterization
Group, President of Wireline, President of
Schlumberger Asia, and Vice President of Health,
Safety & Environment. Hinda has held technical and
management positions in operations, product
development, and human resources in France,
Thailand, the UK and the US. She began with
Schlumberger in 1996 as a Wireline Field Engineer
in Nigeria.
Current external appointments: None.
Simon Henry
Independent
Non-Executive Director
MA, FCMA. Age 60. Appointed April 2017.
Skills and experience: Simon has significant
experience in global finance, corporate governance,
mergers and acquisitions, international relations,
and strategy. He draws on over 30 years’
experience at Royal Dutch Shell plc, where he was
Chief Financial Officer between 2009 and 2017.
Current external appointments: Independent
Director of PetroChina Company Limited since
June 2017, Senior Independent Director of Harbour
Energy plc since March 2021, member of UK
Defence Board, member of the Advisory Board of
the Centre for European Reform, and member of the
Advisory Panel of the Chartered Institute of
Management Accountants (CIMA).
Sam Laidlaw
Independent
Non-Executive Director
MA, MBA. Age 66. Appointed February
2017; Senior Independent Director from
May 2019.
Skills and experience: Sam has more than 30 years’
experience of long-cycle, capital-intensive
industries in which safety, the low-carbon transition
and stakeholder management are critical. Sam has
held a number of senior roles in the energy industry,
including as CEO of both Enterprise Oil plc and
Centrica plc. He was also a member of the UK Prime
Minister’s Business Advisory Group.
Current external appointments: Chairman of
Neptune Energy Group Holdings Ltd, Chairman of
the National Centre of Universities & Business,
board member of Oxford Saïd Business School, and
advisory board member of the Smith School of
Enterprise and Environment.
Current external appointments: None.
Current external appointments: None.
134
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Board of Directors
Rio Tinto plc and Rio Tinto
Limited have a common
Board of Directors. The
Directors are collectively
responsible for the
stewardship and long-
term sustainable success
of the Group.
Simon Thompson
Chairman
MA, PhD. Age 62. Appointed April 2014;
Chairman from March 2018.
Skills and experience: Simon has significant global
experience in mining and metals, finance, and
corporate governance. Simon was an Executive
Director of Anglo American plc, where he held a
number of senior roles, including Chairman and
Chief Executive of the Base Metals Division and
Chairman of Tarmac. Earlier in his career, he held
various investment banking positions at S. G.
Warburg and N M Rothschild. Simon has chaired 3i
Group plc, from 2015 to 2021, and Tullow Oil plc and
has served as a Non-Executive Director on the
boards of AngloGold Ashanti Limited and Newmont
Mining Corporation. Simon is also a Commissioner
at the Energy Transitions Commission.
annual general meetings.
Current external appointments: None.
Jakob Stausholm
Chief Executive
Ms Economics. Age 53. Appointed
Chief Financial Officer September 2018;
Chief Executive from January 2021.
Skills and experience: As Chief Executive, Jakob
brings strategic and commercial expertise, and
governance experience, and a strong focus on
sustainability, particularly climate change, and a
continued focus on capital allocation and delivering
returns to shareholders. He is committed to
rebuilding trust with communities, Traditional
Owners and stakeholders globally, embedding
improved operational performance and creating
growth options for the Group.
Jakob has over 20 years’ experience, primarily in
senior finance roles, at Maersk Group and Royal
Dutch Shell plc including in capital-intensive,
long-cycle businesses, as well as in innovative
BA (Hons), M.Phil. Age 59. Appointment from
BSc, MSc. Age 51. Appointed March 2020.
April 2022; Chair from May 2022.
Skills and experience: Dominic spent over 30 years
at McKinsey & Company, including nine years as
the Global Managing Partner. Most recently, he
served as Canada’s Ambassador to China. Dominic
brings a wealth of global business experience, as
well as a deep insight of geopolitics, corporate
sustainability and governance. Dominic was
previously Chair of Teck Resources, from 2018 to
2019, and, in 2019, served as a Non-Executive
Director at Singtel Group and Investor AB.
Skills and experience: Hinda is Executive Vice
President of Services & Equipment at Schlumberger
Limited, based in the UK. With Schlumberger for
some 26 years, her previous roles include Executive
Vice President of Reservoir & Infrastructure, Vice
President of Human Resources for Schlumberger
Limited, President of the Reservoir Characterization
Group, President of Wireline, President of
Schlumberger Asia, and Vice President of Health,
Safety & Environment. Hinda has held technical and
management positions in operations, product
development, and human resources in France,
Current external appointments: Chancellor of the
Thailand, the UK and the US. She began with
University of Waterloo.
Schlumberger in 1996 as a Wireline Field Engineer
in Nigeria.
Current external appointments: None.
Megan Clark AC
Independent
Non-Executive Director
Simon Henry
Independent
Non-Executive Director
BSc, PhD. Age 63. Appointed November 2014.
Skills and experience: Megan’s experience in the
mining and metals industry and in science, research
and technology brings valuable insights on
MA, FCMA. Age 60. Appointed April 2017.
sustainable development and innovation to the
Skills and experience: Simon has significant
Board. Previously, she was Head of the Australian
experience in global finance, corporate governance,
Space Agency and Chief Executive of the
mergers and acquisitions, international relations,
Commonwealth Scientific and Industrial Research
and strategy. He draws on over 30 years’
Organisation (CSIRO). Following mining and
experience at Royal Dutch Shell plc, where he was
exploration roles with Western Mining Corporation,
Chief Financial Officer between 2009 and 2017.
President Technology at BHP. Megan received the
Current external appointments: Independent
Australian Academy of Science Medal in 2019.
Director of PetroChina Company Limited since
June 2017, Senior Independent Director of Harbour
Current external appointments: Non-Executive
Energy plc since March 2021, member of UK
Director of CSL Limited since 2016 and Chair of the
Defence Board, member of the Advisory Board of
Advisory Board of the Australian Space Agency.
the Centre for European Reform, and member of the
Advisory Panel of the Chartered Institute of
Management Accountants (CIMA).
Peter Cunningham
Chief Financial Officer
BA (Hons), Chartered Accountant (England
and Wales). Age 55. Appointed Interim
Chief Financial Officer January 2021; Chief
Financial Officer from June 2021.
Skills and experience: As Chief Financial Officer,
Peter brings extensive commercial expertise from
working across the Group in various geographies.
He is strongly focused on the decarbonisation of our
assets, investing in the commodities essential for the
energy transition and delivering attractive returns to
shareholders while maintaining financial discipline.
After nearly three decades with Rio Tinto, Peter
has held a number of senior leadership roles,
including Group Controller, Chief Financial Officer –
Sam Laidlaw
Independent
Non-Executive Director
MA, MBA. Age 66. Appointed February
2017; Senior Independent Director from
May 2019.
Skills and experience: Sam has more than 30 years’
experience of long-cycle, capital-intensive
industries in which safety, the low-carbon transition
and stakeholder management are critical. Sam has
held a number of senior roles in the energy industry,
including as CEO of both Enterprise Oil plc and
Centrica plc. He was also a member of the UK Prime
Minister’s Business Advisory Group.
Current external appointments: Chairman of
Neptune Energy Group Holdings Ltd, Chairman of
the National Centre of Universities & Business,
board member of Oxford Saïd Business School, and
advisory board member of the Smith School of
Enterprise and Environment.
technology and supply chain optimisation. He was
Organisational Resources, Global Head of Health,
also a Non-Executive Director of Woodside
Petroleum and Statoil (now Equinor).
Safety, Environment & Communities, Head of Energy
and Climate Strategy, and Head of Investor Relations.
Current external appointments: None.
Current external appointments: None.
134
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Simon will step down from the Board at the 2022
Megan was a Director at N M Rothschild and a Vice
Dominic Barton BMM
Chair-designate
Hinda Gharbi
Independent
Non-Executive Director
Jennifer Nason
Independent
Non-Executive Director
Ngaire Woods CBE
Independent
Non-Executive Director
Steve Allen
Group Company Secretary
Governance
BA, BCom (Hons). Age 61. Appointed
March 2020.
BA/LLB, D.Phil. Age 59. Appointed
September 2020.
BA, Solicitor (England and Wales).
Age 50. Appointed January 2017.
Skills and experience: Jennifer has over 35 years’
experience in corporate finance and capital
markets. She is a Global Chairman of Investment
Banking at JP Morgan, based in the US, and for the
past 20 years, she has led the Technology, Media
and Telecommunications global client practice.
During her time at JP Morgan, she has also worked
in the metals and mining sector team in Australia
and co-founded and chaired the Investment
Banking Women’s Network. She currently sits on
JP Morgan’s Executive Committee of Global Chairs
of Investment Banking.
Current external appointments: Board member of
the American Australian Association.
Skills and experience: Ngaire is the founding Dean of
the Blavatnik School of Government, Professor of
Global Economic Governance and the Founder of the
Global Economic Governance Programme at Oxford
University. As a recognised expert in public policy,
international development and governance, she has
served as an adviser to the African Development Bank,
the Asian Infrastructure Investment Bank, the Center
for Global Development, the International Monetary
Fund, and the European Union.
Current external appointments: Vice-Chair of the
Governing Council of the Alfred Landecker
Foundation and board member of the Mo Ibrahim
Foundation, the Van Leer Foundation, and the
Schwarzman Education Foundation.
Skills and experience: Steve is Company Secretary
of Rio Tinto plc and Joint Company Secretary of
Rio Tinto Limited. Before joining Rio Tinto, Steve
worked at BG Group plc, where he held a number of
senior legal roles, including Deputy General
Counsel, Company Secretary and Chief Counsel,
Corporate. Before joining BG Group, Steve was a
corporate lawyer for Herbert Smith LLP in London.
Current external appointments: Vice-Chair of the
Association of General Counsel and Company
Secretaries working in FTSE-100 companies, a
member of the Corporate Governance Council and
Industry Champion (Securities Sector) for the
Dormant Assets Expansion Board.
Simon McKeon AO
Independent
Non-Executive Director
Ben Wyatt
Independent
Non-Executive Director
Tim Paine
Joint Company Secretary,
Rio Tinto Limited
LLB, MSc. Age 47. Appointed September
2021.
BEc, LLB, FGIA, FCIS.
Age 58. Appointed January 2013.
Skills and experience: Ben had a prolific career in
the Western Australian Parliament, before retiring in
March 2021. He held a number of ministerial
positions and became the first Indigenous treasurer
of an Australian parliament. His extensive
knowledge of public policy, finance, international
trade and Indigenous affairs brings valuable insight
and adds to the depth of knowledge on the Board.
Ben was previously an officer in the Australian army
and went on to have a career in the legal profession,
as a barrister and solicitor.
Current external appointments: Non-Executive
Director of Woodside Petroleum Ltd from
June 2021.
Skills and experience: Tim joined Rio Tinto in 2012
and became Joint Company Secretary of Rio Tinto
Limited in January 2013. He has over 25 years’
experience in corporate counsel and company
secretary roles, including as General Counsel and
Company Secretary at Mayne Group, Symbion
Health and Skilled Group. Tim also spent 12 years at
ANZ Bank, including as Acting General Counsel and
Company Secretary.
Current external appointments: Company
secretary for the Foundation for Australia-Japan
Studies and member of the Governance Institute of
Australia’s Legislation Review Committee.
BCom, LLB, FAICD. Age 66. Appointed
January 2019; Senior Independent Director,
Rio Tinto Limited from September 2020.
Skills and experience: Simon brings insights into
sectors including financial services, the law,
government and charities. He practised as a solicitor
before working at Macquarie Group for 30 years,
including as Executive Chairman of its business in
Victoria, Australia. Simon served as Chairman of
AMP Limited, MYOB Limited, and the Commonwealth
Scientific and Industrial Research Organisation
(CSIRO) and was the first President of the Australian
Takeovers Panel.
Current external appointments: Chancellor of
Monash University, Chairman of the Australian
Industry Energy Transitions Initiative Steering
Group, and Non-Executive Director of National
Australia Bank Limited since February 2020.
Simon is the designated Non-Executive Director for
workforce engagement.
Former Directors
Michael L’Estrange stepped down from the Board on 6 May 2021.
Board committee membership key
Past external appointments over the last
three years
For details of each Director’s previous directorships of other listed
companies, see the Directors’ report on page 200.
Committee Chair
Audit Committee
Remuneration Committee
Nominations Committee
Sustainability Committee
Annual Report 2021 | riotinto.com
135
Executive Committee
Day-to-day management of the business is delegated by the Board to the
Chief Executive and, through him, to other members of the Executive Committee
and to certain management committees.
Jakob Stausholm
Chief Executive
Biography can be found on
page 134.
Peter Cunningham
Chief Financial Officer
Biography can be found on
page 134.
Bold Baatar
Chief Executive,
Rio Tinto Copper
Mark Davies
Chief Technical Officer
Bold was appointed Chief Executive, Copper in
February 2021. Prior to this, he led the Energy &
Minerals product group, a position he had held
since 2016. Since joining Rio Tinto in 2013, he has
held a number of leadership positions across
operations, marine, iron ore sales and marketing,
and Copper.
Mark was appointed to the Executive Committee in
2020 and became Chief Technical Officer in
October 2021. Mark joined Rio Tinto in 1995 as a
Senior Mechanical Engineer and has worked in
operational and functional leadership roles,
including in our Iron and Titanium business unit,
Group Risk, and Global Procurement.
Bold brings to the role deep experience
across geographies, commodities and markets.
A passionate advocate for the integration of
ESG into decision making across the business
landscape, he combines strong commercial and
business development expertise with a focus on
developing markets and partnerships with our host
communities and nations.
Mark is responsible for our development teams
including Exploration and Major Capital
Construction, Renewable Energy Projects, and
Closure teams working to rehabilitate and
repurpose mines and facilities at the end of the
development cycle. Mark’s remit also includes our
technical centres of excellence as well as the Office
of the Chief Scientist, which drives our global
research and development activities.
Alf Barrios
Chief Commercial Officer
Sinead Kaufman
Chief Executive,
Rio Tinto Minerals
Isabelle Deschamps
Chief Legal Officer
& External Affairs
Alf was appointed Chief Commercial Officer and
Chairman for China and Japan in 2021. He joined
Rio Tinto in 2014 as Chief Executive, Aluminium.
Alf has 30 years’ global experience in the resources
sector across operations, marketing, trading and
business development.
Since Sinead joined Rio Tinto in 1997 as a geologist,
she has held senior leadership and operational
roles across Aluminium, Copper & Diamonds,
Energy & Minerals, and Iron Ore. Most recently,
she was Managing Director, Operations,
at Copper & Diamonds.
Commercial is accountable for the Group’s sales
and marketing business, procurement, marine, and
logistics activities. Alf and the team drive
commercial value and growth across Rio Tinto by
working closely with our assets, customers and
suppliers. Alf is focused on building industry-
leading customer and supplier partnerships to
deliver innovation and ESG leadership, and create
future value for the company.
Sinead brings to her current role strong operational
expertise combined with a track record of delivering
future-focused sustainability outcomes. Since
joining the Executive Committee in early 2021,
Sinead has led the commitment of funding to our
Jadar lithium-borates project in Serbia and the
signing of a binding agreement to acquire the
Rincon lithium project in Argentina, in support of our
battery materials strategy, as well as other
sustainability initiatives to help us reach our
decarbonisation ambition.
Isabelle joined Rio Tinto in November 2021. She has
extensive international experience and is admitted
to the England and Wales Law Society and to the
Quebec (Canada) Bar. Most recently, Isabelle was
General Counsel of the AkzoNobel Group and a
member of its executive committee. Prior to this,
Isabelle worked at Unilever.
Alongside leading our global Legal, Communication,
and External Affairs teams, Isabelle oversees a
range of governance functions, including Company
Secretariat, Ethics & Compliance, and the Technical
Evaluation group. Isabelle is a pragmatic,
transparent leader with a passion for equal
opportunities, inclusion and diversity, continuous
learning, and driving a culture of integrity.
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Governance
Executive Committee
Day-to-day management of the business is delegated by the Board to the
Chief Executive and, through him, to other members of the Executive Committee
and to certain management committees.
Jakob Stausholm
Chief Executive
Biography can be found on
page 134.
Peter Cunningham
Chief Financial Officer
Biography can be found on
page 134.
Bold Baatar
Chief Executive,
Rio Tinto Copper
Mark Davies
Chief Technical Officer
Kellie Parker
Chief Executive,
Australia
Simon Trott
Chief Executive,
Rio Tinto Iron Ore
James Martin
Chief People Officer
Bold was appointed Chief Executive, Copper in
February 2021. Prior to this, he led the Energy &
Minerals product group, a position he had held
since 2016. Since joining Rio Tinto in 2013, he has
held a number of leadership positions across
operations, marine, iron ore sales and marketing,
and Copper.
Mark was appointed to the Executive Committee in
2020 and became Chief Technical Officer in
October 2021. Mark joined Rio Tinto in 1995 as a
Senior Mechanical Engineer and has worked in
operational and functional leadership roles,
including in our Iron and Titanium business unit,
Group Risk, and Global Procurement.
Bold brings to the role deep experience
across geographies, commodities and markets.
A passionate advocate for the integration of
ESG into decision making across the business
landscape, he combines strong commercial and
business development expertise with a focus on
developing markets and partnerships with our host
communities and nations.
Mark is responsible for our development teams
including Exploration and Major Capital
Construction, Renewable Energy Projects, and
Closure teams working to rehabilitate and
repurpose mines and facilities at the end of the
development cycle. Mark’s remit also includes our
technical centres of excellence as well as the Office
of the Chief Scientist, which drives our global
research and development activities.
Prior to being appointed Chief Executive, Australia
in 2021, Kellie was Managing Director, Pacific
Operations, Aluminium. She joined in 2001 and
has held a number of safety, operational and
leadership roles across both the Iron Ore and
Aluminium businesses.
Kellie represents our Australian interests with all
stakeholders and brings her operational experience
and community values to listen, respond and set the
direction for the business. Kellie also leads our
Health, Safety, Environment & Security (HSES) and
Communities & Social Performance (CSP) areas of
expertise. She has a people-centric approach, with
a strong commercial background and she is an
advocate for Indigenous Australians.
Simon has been with our company for over 20 years
and has held a variety of operating, commercial
and business development roles across a number of
commodities. Prior to his current role, Simon was
Chief Commercial Officer from 2018 to 2021. He has
also served as Managing Director of the salt,
uranium and borates division, overseeing operations
in Australia, Namibia and the US.
Simon knows Western Australia well and has a deep
understanding of the iron ore business and
customers globally. He is focused on transforming
Rio Tinto Iron Ore’s safe operational performance
while building the business we need for the future.
Prior to becoming our Chief People Officer in 2021,
James was at Egon Zehnder for 21 years. He led a
range of global practices and specialised in
coaching, talent management and leadership
development. Prior to this, he worked in equity
research and began his career as an air force pilot.
James has been supporting our culture evolution,
from building a new leadership programme, to
paving the way to a more inclusive work
environment and helping create our new values. His
vision is to help unlock more of our potential and to
inspire even more of our colleagues to feel the pride
in Rio Tinto that many already do.
Alf Barrios
Chief Commercial Officer
Sinead Kaufman
Chief Executive,
Rio Tinto Minerals
Isabelle Deschamps
Chief Legal Officer
& External Affairs
Arnaud Soirat
Chief Operating Officer
Ivan Vella
Chief Executive,
Rio Tinto Aluminium
Alf was appointed Chief Commercial Officer and
Since Sinead joined Rio Tinto in 1997 as a geologist,
Isabelle joined Rio Tinto in November 2021. She has
Chairman for China and Japan in 2021. He joined
she has held senior leadership and operational
extensive international experience and is admitted
Rio Tinto in 2014 as Chief Executive, Aluminium.
roles across Aluminium, Copper & Diamonds,
to the England and Wales Law Society and to the
Alf has 30 years’ global experience in the resources
Energy & Minerals, and Iron Ore. Most recently,
Quebec (Canada) Bar. Most recently, Isabelle was
sector across operations, marketing, trading and
she was Managing Director, Operations,
business development.
at Copper & Diamonds.
General Counsel of the AkzoNobel Group and a
member of its executive committee. Prior to this,
Isabelle worked at Unilever.
Commercial is accountable for the Group’s sales
Sinead brings to her current role strong operational
and marketing business, procurement, marine, and
expertise combined with a track record of delivering
Alongside leading our global Legal, Communication,
logistics activities. Alf and the team drive
future-focused sustainability outcomes. Since
and External Affairs teams, Isabelle oversees a
commercial value and growth across Rio Tinto by
joining the Executive Committee in early 2021,
range of governance functions, including Company
working closely with our assets, customers and
Sinead has led the commitment of funding to our
Secretariat, Ethics & Compliance, and the Technical
suppliers. Alf is focused on building industry-
Jadar lithium-borates project in Serbia and the
Evaluation group. Isabelle is a pragmatic,
leading customer and supplier partnerships to
signing of a binding agreement to acquire the
transparent leader with a passion for equal
deliver innovation and ESG leadership, and create
Rincon lithium project in Argentina, in support of our
opportunities, inclusion and diversity, continuous
future value for the company.
learning, and driving a culture of integrity.
battery materials strategy, as well as other
sustainability initiatives to help us reach our
decarbonisation ambition.
Arnaud joined in 2010 and was previously Chief
Executive, Copper & Diamonds from 2016 to 2020.
Prior to this, he had 20 years’ experience in
commercial and operations roles in the metals and
mining industry, including at Alcoa and Pechiney.
As Chief Operating Officer, Arnaud uses his
extensive operational and leadership experience to
drive company-wide, sustainable improvements in
our production system with deployments under way
at every product group. From his previous roles,
Arnaud brings significant experience in safety and
operational excellence, improving business
profitability and competitiveness, and deploying
lean manufacturing to help achieve stable and
optimised operations through stronger
employee engagement.
Ivan was appointed Chief Executive, Aluminium
in March 2021 and has held senior leadership
positions across the Iron Ore, Copper and Coal
product groups. He brings deep operational
experience and critical understanding of
end-to-end value chain processes to our
Aluminium business.
Under Ivan’s leadership, in 2021 we launched
partnerships with Carbfix to capture carbon at our
ISAL smelter in Iceland and with the Government of
Queensland to drive the state’s clean energy future.
He also continues to focus on building capability in
Rio Tinto to enhance the long-term positive role
mining can have when partnering with First Nations
and Indigenous peoples, along with the host
communities we operate in.
Former Executive Committee
members who served during the year
Vera Kirikova
Vera stepped down as Chief People Officer on
5 April 2021.
Peter Toth
Peter stepped down as Group Executive, Strategy
and Development on 18 October 2021.
Barbara Levi
Barbara stepped down as Chief Legal Officer &
External Affairs on 20 October 2021.
136
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137
Board insights
How the Board considered our new values
and culture
Lessons learned from Juukan Gorge
In 2021, the Board conducted a joint exercise with the Executive
Committee to learn the lessons from the destruction of the rock
shelters at Juukan Gorge, and the Group’s response to the tragic
events. In addition to strengthening crisis management and
communications, the key learnings which the Board and Executive
team are committed to addressing are: (i) promoting an inclusive, open
and transparent culture that empowers people to raise and escalate
concerns on operational and ethical issues; and (ii) applying a more
values-driven approach to guide decision making. Our new values of
care, courage and curiosity, support these desired behaviours.
Employee survey
The Board received and considered reports and updates from the
Chief People Officer on the results of our twice-yearly employee
engagement survey in July and December, which provided useful
insights into themes arising from the rollout of the Group’s new strategy
and values. In considering the reports, the Board made a number of
recommendations aimed at improving: (i) communications from senior
leadership to the wider workforce; (ii) opportunities for career growth
and learning; and (iii) psychological safety to embed the desired
leadership ethos in the organisation and support and incentivise the
desired behaviours and values.
Employee engagement sessions
As part of the Board’s ongoing commitment to engage with our people,
a number of interactive employee sessions were held during the year.
The first session was with Simon Thompson, Simon McKeon,
Simon Henry, Ngaire Woods, Hinda Gharbi and some of our RioExperts
(employee representatives from RioExcel, a Technical Excellence
initiative designed to grow technical expertise and capability by
creating a technical career pathway for recognised experts). At the
session, the group discussed our new values and how to embed them,
the importance of research and development, and enabling employees
to be innovative.
The second session was attended by Megan Clark, Jennifer Nason,
Ben Wyatt, Sam Laidlaw and a group of employees from our graduate
development programme. The discussions focused on leadership, our
culture, and our values, including why they have evolved and how to
embed and measure them.
We also held employee town halls in Melbourne, London and Serbia.
In Melbourne, Simon McKeon spoke about a range of issues, including:
his role as Senior Independent Director; the appointment of Dominic
Barton as Chair-designate; Juukan Gorge; climate change; and cultural
heritage. He took questions on our reputation, risk management, and
the challenges we might face in the future.
At the town hall in London, Simon Thompson shared his reflections on
the year, including on Board changes, our new priorities, values and
strategy, our safety performance, and the challenges of COVID-19.
He took questions from our people covering topics including why our
values have evolved, growth opportunities for the Group, embedding
our new strategy and values, and how to maintain employee wellbeing.
Employee dashboard
The Board received a quarterly “employee dashboard” which provides
insights into how management is progressing with employee-related
initiatives, key employee metrics, a summary of employees’ concerns
and interests, and people-focused activities that will be undertaken in
the following quarter.
The dashboard covers the following people metrics: progress with
female representation; fatigue management and annual leave usage;
reports received via myVoice (our enhanced confidential reporting
programme); Employee Assistance Programme usage; and employee
turnover and absenteeism.
In the fourth quarter of 2021, the following topics were top of mind for
employees: our Everyday Respect initiative; COVID-19 and vaccines;
fatigue and mental wellbeing; and our new strategy and values.
Ben Wyatt visits the Ranger Mine
In September, Ben Wyatt, Non-Executive Director, visited the Ranger
Mine near the town of Jabiru in the Northern Territory, Australia.
During the visit, Ben met with the Chief Executive, Australia, the
General Manager, Communities and Social Performance, and
representatives of Energy Resources of Australia (ERA) to discuss the
asset. ERA employees gave Ben a tour of Jabiru. He also met with the
CEO of Gundjeihmi Aboriginal Corporation (GAC), the Senior Adviser
to GAC, and a group of Traditional Owners.
Ben also visited the Ranger site and the Traditional Owners took
him to Madjedbebe, a very significant heritage site that confirms
human occupation of the area going back more than 50,000 years.
This is on the edge of the Jabiluka mineral lease and has very high
concentrations of rock art and a significant burial ground.
Simon Thompson and Megan Clark
visit Karratha
In 2021, Chairman Simon Thompson and Independent Director
Megan Clark visited the Pilbara to engage first-hand with stakeholders,
including representatives of a Pilbara Aboriginal Corporation.
Simon and Megan spent time listening and hearing stories to
understand the deeply felt experience stakeholders have with Rio Tinto
and how changes to the way we manage cultural heritage within our
operations are being received.
138
Annual Report 2021 | riotinto.com
Board insights
How the Board considered our new values
and culture
Lessons learned from Juukan Gorge
In 2021, the Board conducted a joint exercise with the Executive
Committee to learn the lessons from the destruction of the rock
shelters at Juukan Gorge, and the Group’s response to the tragic
events. In addition to strengthening crisis management and
communications, the key learnings which the Board and Executive
team are committed to addressing are: (i) promoting an inclusive, open
and transparent culture that empowers people to raise and escalate
concerns on operational and ethical issues; and (ii) applying a more
values-driven approach to guide decision making. Our new values of
care, courage and curiosity, support these desired behaviours.
Employee survey
The Board received and considered reports and updates from the
Chief People Officer on the results of our twice-yearly employee
engagement survey in July and December, which provided useful
insights into themes arising from the rollout of the Group’s new strategy
and values. In considering the reports, the Board made a number of
recommendations aimed at improving: (i) communications from senior
leadership to the wider workforce; (ii) opportunities for career growth
and learning; and (iii) psychological safety to embed the desired
leadership ethos in the organisation and support and incentivise the
desired behaviours and values.
Employee engagement sessions
As part of the Board’s ongoing commitment to engage with our people,
a number of interactive employee sessions were held during the year.
Simon Henry, Ngaire Woods, Hinda Gharbi and some of our RioExperts
(employee representatives from RioExcel, a Technical Excellence
initiative designed to grow technical expertise and capability by
creating a technical career pathway for recognised experts). At the
session, the group discussed our new values and how to embed them,
the importance of research and development, and enabling employees
to be innovative.
The second session was attended by Megan Clark, Jennifer Nason,
Ben Wyatt, Sam Laidlaw and a group of employees from our graduate
development programme. The discussions focused on leadership, our
culture, and our values, including why they have evolved and how to
embed and measure them.
We also held employee town halls in Melbourne, London and Serbia.
In Melbourne, Simon McKeon spoke about a range of issues, including:
his role as Senior Independent Director; the appointment of Dominic
Barton as Chair-designate; Juukan Gorge; climate change; and cultural
heritage. He took questions on our reputation, risk management, and
the challenges we might face in the future.
At the town hall in London, Simon Thompson shared his reflections on
the year, including on Board changes, our new priorities, values and
strategy, our safety performance, and the challenges of COVID-19.
He took questions from our people covering topics including why our
values have evolved, growth opportunities for the Group, embedding
our new strategy and values, and how to maintain employee wellbeing.
Employee dashboard
The Board received a quarterly “employee dashboard” which provides
insights into how management is progressing with employee-related
initiatives, key employee metrics, a summary of employees’ concerns
and interests, and people-focused activities that will be undertaken in
the following quarter.
The dashboard covers the following people metrics: progress with
female representation; fatigue management and annual leave usage;
reports received via myVoice (our enhanced confidential reporting
programme); Employee Assistance Programme usage; and employee
turnover and absenteeism.
In the fourth quarter of 2021, the following topics were top of mind for
employees: our Everyday Respect initiative; COVID-19 and vaccines;
fatigue and mental wellbeing; and our new strategy and values.
Ben Wyatt visits the Ranger Mine
In September, Ben Wyatt, Non-Executive Director, visited the Ranger
Mine near the town of Jabiru in the Northern Territory, Australia.
During the visit, Ben met with the Chief Executive, Australia, the
General Manager, Communities and Social Performance, and
representatives of Energy Resources of Australia (ERA) to discuss the
asset. ERA employees gave Ben a tour of Jabiru. He also met with the
CEO of Gundjeihmi Aboriginal Corporation (GAC), the Senior Adviser
Ben also visited the Ranger site and the Traditional Owners took
him to Madjedbebe, a very significant heritage site that confirms
human occupation of the area going back more than 50,000 years.
This is on the edge of the Jabiluka mineral lease and has very high
concentrations of rock art and a significant burial ground.
Simon Thompson and Megan Clark
visit Karratha
In 2021, Chairman Simon Thompson and Independent Director
Megan Clark visited the Pilbara to engage first-hand with stakeholders,
including representatives of a Pilbara Aboriginal Corporation.
Simon and Megan spent time listening and hearing stories to
understand the deeply felt experience stakeholders have with Rio Tinto
and how changes to the way we manage cultural heritage within our
operations are being received.
The first session was with Simon Thompson, Simon McKeon,
to GAC, and a group of Traditional Owners.
Governance
The Sustainability Committee: site visits
China Advisory Panel
Members of the Sustainability Committee participated in several site
visits during 2021. COVID-19 travel restrictions required in-person site
visits to be undertaken by individual committee members. Committee
members visited the Brockman mine and the Winu project in Western
Australia, the Resolution Copper project in Arizona, US, and Energy
Resources Australia in the Northern Territory, Australia.
At these site visits, Sustainability Committee members received
briefings on Health, Safety, Environment and Security (HSES) and
Community and Social Performance (CSP) matters and the
management of material HSES and CSP risks, and met with key
personnel. These visits gave the Directors a chance to observe
the culture and leadership, consider the CSP frameworks and
management systems, and see the daily cadence of risk management
with a diverse cross-section of the workforce from frontline to leaders,
partners and contractors. These visits provide a valuable opportunity
to assess whether we are meeting the expectations of Traditional
Owners, First Nations peoples, and local communities.
Winu project site, and Brockman 4 mine,
Western Australia
Megan Clark visited the Winu project in the Paterson region of Western
Australia and received briefings on engagement with Traditional
Owners, the Nyangumarta Warrarn and Martu, drilling results, health
and safety systems and risk management. Daily pre-start meetings
showed our safety maturity model in action.
She also visited Brockman 4 operations and reviewed the progress of
the Juukan Gorge remediation programme with the Puutu Kunti
Kurrama Elders. While on site, the front line leaders also shared real life
examples of the Integrated Heritage Management Process, including
the new heritage checklist for blasting activities and their approach to
water management.
At the China Advisory Panel in December 2021, members of the Board
and Executive Committee heard from a diverse group of external
experts, and discussed the potential impacts of domestic and
international China-related developments for the Group. The topics
discussed included:
China’s national climate change policy and the
implications for the mining industry and metal sectors
The discussion on this topic focused on the challenge of balancing
economic development with carbon reduction, the future development
of the aluminium industry in China, and on the policy framework to be
applied to energy and carbon-intensive industries, and the need for
technological innovation.
China’s 14th Five-Year Plan and implications for China’s
domestic social and economic development pathways
The policies were expected to serve the interest of healthier,
environmentally friendly, and fairer growth in the long term, and ensure
more resilient and sustainable economic and political development.
Recent Chinese Government policymaking and the potential impact on
foreign investment.
The attendees recognised the key dynamics influencing international
political and economic relations, and the role of trade and investment
for long-term sustainable growth and best practice sharing.
Employees at the Winu copper-gold project, Western Australia.
138
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139
Our stakeholders - Section 172(1) statement
The Board is required by the UK
Companies Act 2006 to promote
the success of the Company for the
benefit of our shareholders, and in
doing so, to take into account the
interests of our wider stakeholders.
Our key stakeholders are our
workforce, the communities in
which we operate, civil society
organisations, governments, our
investors, our customers, and
our suppliers.
On pages 20-22 of this report, we have set out why the interests of
these stakeholders are of strategic importance to Rio Tinto. In the
section below, we provide more information on how the Board
engages and communicates with stakeholders, and how it takes
account of their interests in its decision making.
This section, together with the information on pages 20-22, constitutes
our section 172(1) statement.
Our workforce
How we engage and communicate
We engage with our workforce regularly and through a wide variety of
channels. In 2021, these channels included twice-yearly engagement
surveys and more regular, local surveys to gauge concerns around
COVID-19, as well as email and video updates on subjects such as
people changes, safety shares and Group news, including video
interviews with the Chief Executive and Chairman during COP26. In
addition, we held focus groups with members of the Board, town halls
with the Chief Executive, Chairman, Executive Committee members
and our local Business Resilience Teams, and shared these events
more widely via our intranet, Element, and employee app, RT Connect.
During the year, we also launched a series of podcasts entitled
“Conversations with the Board”. In the first of these, Ben Wyatt and
Ngaire Woods spoke about their thoughts on the company’s key
priorities, its values, what attracted them to join Rio Tinto, and their
first impressions of the Board and the Group. The second podcast
featured Jennifer Nason and Simon McKeon who reflected on how the
Group has evolved since they joined the Board, how they see their role
in supporting our new strategy, with the low-carbon transition at its
heart, and what they took away from their engagement sessions with
some of our RioExperts and employees from our graduate
development programme.
In March, we launched a new, enhanced confidential reporting
programme – myVoice. It is designed to help our people voice
concerns when something at work does not feel right. To date, we have
seen a noticeable increase in reporting, which we believe indicates that
more people are feeling comfortable to share concerns and more
confident that they will be addressed.
140
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In response to employee focus groups held in 2020 and new research
into workplace culture, the Everyday Respect task force was launched
in March 2021 to improve how we prevent and respond to bullying,
sexual harassment, racism and other forms of discrimination at work.
The work of the task force has been shaped by our people, combined
with the support of independent, external subject matter experts and
well-founded research. The first step was to listen to our people. We
held 109 group listening sessions and had more than 10,000 survey
responses, and over 3,000 frontline insights were shared. More
information about Everyday Respect can be found on page 101.
How the Board has taken account of these interests
At the beginning of 2021, we appointed Simon McKeon as our
designated Non-Executive Director for workforce engagement. In this
role, Simon has overseen the development of the programme of
workforce engagement events (including the town halls, podcasts,
videos and site visits described above) and reports back to the Board
twice-yearly on feedback received via these engagements. These
reports are supplemented by a newly developed quarterly “employee
dashboard” which provides insights into our people’s interests and
concerns. See page 138 for more details on the employee dashboard.
The results and reflections of our twice-yearly People Survey are also
considered by the Board, together with proposed actions and
improvement ideas.
As part of our commitment to ensure sustained cultural change across
our global operations, we commissioned a comprehensive review of
our workplace culture by Elizabeth Broderick & Co. The review
identified disturbing findings of bullying, sexual harassment, racism and
other forms of discrimination throughout the Group.
The Board reviewed a draft of the report as part of the work being
undertaken by our Everyday Respect task force. The Board fully endorsed
management’s recommendation to publish the findings of the review in full
as part of the Group’s commitment to creating a safer, more respectful and
more inclusive workplace. It also fully supports the recommendations of
the report and will monitor the progress of their implementation.
In recognition of the findings in the Everyday Respect report, the
management team recommended that a downward adjustment be made
to the 2021 STIP payments. The Remuneration Committee concluded that
a reduction of 5% should be applied to the total STIP payment for current
Executive Committee members and an equivalent adjustment be made to
the 2020 unvested Bonus Deferral Awards (BDA) held by former Executive
Committee members. The STIP for 2022 will also include objectives linked
to the recommendations arising in the report.
Communities
How we engage and communicate
We have made numerous improvements to the way we connect with
communities and Traditional Owners. Accountability for Traditional
Owner and community relationships has been reallocated to sit clearly
with the site General Manager. This means that Traditional Owners and
those in the community now have direct access to the site team and
are able to resolve issues much more quickly.
Board members have met many Traditional Owners and communities
at site visits, four of which took place during the year. More information
on the site visits can be found on pages 138-139.
How the Board has taken account of these interests
In response to the Board Review following the tragic destruction of the
rock shelters at Juukan Gorge, a Communities and Social Performance
(CSP) Area of Expertise (AoE) was established, reporting to Kellie
Parker, our Chief Executive, Australia who is based in Brisbane and
is a member of our Executive Committee. The CSP AoE ensures
Our stakeholders - Section 172(1) statement
The Board is required by the UK
Companies Act 2006 to promote
the success of the Company for the
benefit of our shareholders, and in
doing so, to take into account the
interests of our wider stakeholders.
Our key stakeholders are our
workforce, the communities in
which we operate, civil society
organisations, governments, our
investors, our customers, and
our suppliers.
On pages 20-22 of this report, we have set out why the interests of
these stakeholders are of strategic importance to Rio Tinto. In the
section below, we provide more information on how the Board
engages and communicates with stakeholders, and how it takes
account of their interests in its decision making.
This section, together with the information on pages 20-22, constitutes
our section 172(1) statement.
Our workforce
How we engage and communicate
We engage with our workforce regularly and through a wide variety of
channels. In 2021, these channels included twice-yearly engagement
surveys and more regular, local surveys to gauge concerns around
COVID-19, as well as email and video updates on subjects such as
people changes, safety shares and Group news, including video
interviews with the Chief Executive and Chairman during COP26. In
addition, we held focus groups with members of the Board, town halls
with the Chief Executive, Chairman, Executive Committee members
and our local Business Resilience Teams, and shared these events
more widely via our intranet, Element, and employee app, RT Connect.
During the year, we also launched a series of podcasts entitled
“Conversations with the Board”. In the first of these, Ben Wyatt and
Ngaire Woods spoke about their thoughts on the company’s key
priorities, its values, what attracted them to join Rio Tinto, and their
first impressions of the Board and the Group. The second podcast
featured Jennifer Nason and Simon McKeon who reflected on how the
Group has evolved since they joined the Board, how they see their role
in supporting our new strategy, with the low-carbon transition at its
heart, and what they took away from their engagement sessions with
some of our RioExperts and employees from our graduate
development programme.
In March, we launched a new, enhanced confidential reporting
programme – myVoice. It is designed to help our people voice
concerns when something at work does not feel right. To date, we have
seen a noticeable increase in reporting, which we believe indicates that
more people are feeling comfortable to share concerns and more
confident that they will be addressed.
140
Annual Report 2021 | riotinto.com
In response to employee focus groups held in 2020 and new research
into workplace culture, the Everyday Respect task force was launched
in March 2021 to improve how we prevent and respond to bullying,
sexual harassment, racism and other forms of discrimination at work.
The work of the task force has been shaped by our people, combined
with the support of independent, external subject matter experts and
well-founded research. The first step was to listen to our people. We
held 109 group listening sessions and had more than 10,000 survey
responses, and over 3,000 frontline insights were shared. More
information about Everyday Respect can be found on page 101.
How the Board has taken account of these interests
At the beginning of 2021, we appointed Simon McKeon as our
designated Non-Executive Director for workforce engagement. In this
role, Simon has overseen the development of the programme of
workforce engagement events (including the town halls, podcasts,
videos and site visits described above) and reports back to the Board
twice-yearly on feedback received via these engagements. These
reports are supplemented by a newly developed quarterly “employee
dashboard” which provides insights into our people’s interests and
concerns. See page 138 for more details on the employee dashboard.
The results and reflections of our twice-yearly People Survey are also
considered by the Board, together with proposed actions and
improvement ideas.
As part of our commitment to ensure sustained cultural change across
our global operations, we commissioned a comprehensive review of
our workplace culture by Elizabeth Broderick & Co. The review
identified disturbing findings of bullying, sexual harassment, racism and
other forms of discrimination throughout the Group.
The Board reviewed a draft of the report as part of the work being
undertaken by our Everyday Respect task force. The Board fully endorsed
management’s recommendation to publish the findings of the review in full
as part of the Group’s commitment to creating a safer, more respectful and
more inclusive workplace. It also fully supports the recommendations of
the report and will monitor the progress of their implementation.
In recognition of the findings in the Everyday Respect report, the
management team recommended that a downward adjustment be made
to the 2021 STIP payments. The Remuneration Committee concluded that
a reduction of 5% should be applied to the total STIP payment for current
Executive Committee members and an equivalent adjustment be made to
the 2020 unvested Bonus Deferral Awards (BDA) held by former Executive
Committee members. The STIP for 2022 will also include objectives linked
to the recommendations arising in the report.
Communities
How we engage and communicate
We have made numerous improvements to the way we connect with
communities and Traditional Owners. Accountability for Traditional
Owner and community relationships has been reallocated to sit clearly
with the site General Manager. This means that Traditional Owners and
those in the community now have direct access to the site team and
are able to resolve issues much more quickly.
Board members have met many Traditional Owners and communities
at site visits, four of which took place during the year. More information
on the site visits can be found on pages 138-139.
How the Board has taken account of these interests
In response to the Board Review following the tragic destruction of the
rock shelters at Juukan Gorge, a Communities and Social Performance
(CSP) Area of Expertise (AoE) was established, reporting to Kellie
Parker, our Chief Executive, Australia who is based in Brisbane and
is a member of our Executive Committee. The CSP AoE ensures
Governance
conformance with Group policies, standards and procedures,
including the Integrated Heritage Management Process, and shares
best practice worldwide. The CSP AoE sits alongside the existing
Health, Safety, Environment and Security (HSES) function. This helps to
ensure that communities and heritage risk processes are aligned with
our existing robust health, safety and environmental systems. The CSP
AoE also oversees internal assessments and reviews, including deep
dives and operational reviews in conjunction with experts from our
Group Risk function.
The framework includes a rigorous annual self-assessment and
certification of impacts and risks. Internal Audit provides a third line
of defence.
In September 2021, we published our first Communities and Social
Performance Commitments Disclosure Interim Report. We are
committed to ensuring that the Traditional Owners of the lands on which
we operate contribute to and shape how we report. During July and
August 2021, we sought feedback from Traditional Owner groups in the
Pilbara on our progress regarding some of the commitments made as
part of the Board’s review of our management of cultural heritage.
We have established an Australian Advisory Group (AAG) which brings
together an eminent group of independent advisers to provide guidance
on current and emerging issues, and better manage policies and positions
that are important to both Australian communities and our broader
business. This is one of the 11 commitments we made as part of our
action to strengthen our processes and approach to cultural heritage,
following the destruction of the rock shelters at Juukan Gorge in May
2020. Advising the Chief Executive, Australia, the AAG will comprise a
minimum of 60% Aboriginal or Torres Strait Islander membership, with
an Indigenous Australian Chairperson. The Sustainability Committee
will engage with the AAG to share experiences in the Australian
context. The group has not yet met, with the first AAG meeting to be
held in late March, 2022. Recognising that trust still needs to be
earned, the inaugural meeting will explore how the group will work
together with Rio Tinto leaders. This will include setting of expectations
and co-designing protocols for the group’s governance. More
information can be found on page 95.
Civil society organisations
How we engage and communicate
We use different methods to engage with civil society organisations
and tailor those methods to the needs of each group. We have
established channels of dialogue with community organisations at our
sites and projects, and since 2018 have held annual regional
roundtable discussions involving civil society organisations, members
of the Board, Executive Committee members and senior leaders.
By highlighting concerns about environmental, social and governance
issues, and advising us on how we can improve, civil society
organisations can be an important advocate for change. We believe that
significant progress in preventing and addressing complex ESG
challenges will only be achieved through genuine dialogue and
engagement between governments, business, investors, consumers and
civil society organisations. The challenges include climate change, water
management, biodiversity, human rights violations, and bribery and
corruption. In order to build trust and sustain public support, we also
recognise that it is vital that all parties adopt high standards of integrity,
transparency and accountability in their work in these areas and that civil
society organisations maintain their independence from party politics.
How the Board has taken account of these interests
In November 2021, the Board held three roundtables in Australia, northern
America and Europe. A diverse group of civil society organisations
was represented. The agendas were tailored for each region
and informed by preparatory conversations with the participants.
Topics discussed were wide ranging and included our new strategy,
our new climate change targets, nature, Juukan Gorge, QIT
Madagascar Minerals (QMM), human rights, and our key projects.
A number of agreements were reached regarding information sharing,
follow-up meetings were arranged, and actions were agreed by
members of the Board, Executive Committee and senior leaders in
response to the issues raised by the civil society organisations that
attended. We also sought feedback on the sessions from the attendees
via a survey and some direct messages. In general, participants felt
the roundtables provided a valuable opportunity to engage with
senior leaders and welcomed the tone and openness to listening to
their perspectives.
The members of the Board who did not join the meetings received and
noted a paper which summarised the discussions and outcomes.
Representatives of civil society organisations are periodically invited to
engage directly with the Board to inform decision making on critical
areas of policy or strategy development. In 2021, the Board received a
presentation from the World Benchmarking Alliance, which represents
organisations working at global, regional and local levels to shape the
private sector’s contributions to achieving the United Nations
Sustainable Development Goals (UN SDGs). See page 75 for
information on our approach to the UN SDGs.
Governments
How we engage and communicate
We engage with governments at all levels on issues that affect, or could
affect, the Group. We do this via direct engagement and indirectly
through our trade association partners and international forums, such
as the Extractive Industries Transparency Initiative and the International
Council on Mining and Metals. We contribute relevant evidence and
information, and share experiences and expertise that help to inform
the development of robust public policy and regulation.
In 2021, we engaged with the Australian Government regarding our
senior leadership changes, heritage issues, our investment strategy,
energy and decarbonisation. With support from the Governments of
Canada and Quebec, we continue to progress ELYSIS, our project
with Alcoa that aims to eliminate direct greenhouse gases from the
aluminium smelting process. We continue to work with the Government
of Guinea to explore ways to optimise, develop and fund the world-
class Simandou iron ore deposit. We regularly contribute to EU public
policy development on issues such as critical minerals strategy, battery
legislation, green mining principles and due diligence legislation.
We work closely with the Government of South Africa to support the
operational stability at Richards Bay Minerals. In the US, we advocate
on public policy related to the North American supply chain and,
specifically, alignment on climate change, critical minerals and
materials, renewable energy, and trade.
How the Board has taken account of these interests
The Board receives regular updates and papers regarding all of these
projects and in doing so oversees engagement with governments
and considers their interests. Members of the Board also engaged
directly with representatives of the Governments of Australia, Guinea,
Serbia, Mongolia, Canada and the UK and discussed a wide range of
issues including:
– Heritage issues, investment and decarbonisation, in Australia.
– The Jadar project, the development of battery and electric vehicle
value chains in Serbia and Europe.
– The development of the Oyu Tolgoi underground project.
– Decarbonisation opportunities in Canada.
– The UK Government’s critical minerals strategy.
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141
Our stakeholders continued
Investors
How we engage and communicate
Customers
How we engage and communicate
We hold two annual general meetings (AGMs) each year, one in
Australia and one in the UK. Due to COVID-19-related restrictions,
our UK AGM was an online event for the second consecutive year.
However, we were able to host a hybrid AGM in Perth, Western
Australia. Institutional and retail investors were able to engage directly
with the Board and management at and around the AGMs.
We also maintain a programme of engagement with investors and
analysts to ensure both current and potential new investors have the
opportunity to hear from executives, the Chairman and subject matter
experts from across the business. We held an online Communities and
Social Performance seminar in March in which the Chair of our
Sustainability Committee, our Chief Executive, our Chief Executive,
Australia, our Chief Technical Officer and other experts from across the
Group provided investors and analysts with an update on our approach
to cultural heritage, which also included case studies from some of our
operations in Canada and the Northern Territory of Australia.
Every two years, we update financial markets on our strategy. In October,
we held an in-person Investor Seminar in London, hosted by our
Chief Executive and the entire Executive Committee, which included
presentations from Perth, Brisbane and Singapore. The focus of the
event was to outline the actions being taken to strengthen the business
and improve performance. At the event, we also unveiled our longer-
term strategy to ensure we thrive in a decarbonising world and
continue to deliver attractive shareholder returns, in line with our policy.
How the Board has taken account of these interests
In responding to feedback from investors, the Board has continued to
deliver a strategy of maximising shareholder returns while allocating
capital with discipline for future growth and sustained operational
performance through the macroeconomic and commodity cycles.
Given investor interest in ESG issues, including climate change and our
work with communities around the world, the Board considers these issues
during its strategy sessions when assessing our portfolio positions.
The Chairman engaged extensively with investors across multiple markets
in advance of our AGMs to understand their perspectives. He also led
twice-yearly meetings with the Climate Action 100+ (CA100+) investor
groups in Europe and Asia, to convey how our new strategy integrates
the net zero transition into our business, including our portfolio, capital
investment decisions, and business planning. The discussions focused
on the key indicators in the CA100+ Net Zero Company Benchmark.
In particular, our Scope 1 and 2 targets, the approach to Scope 3
emissions, capital allocation alignment, governance, and our climate
policy engagement. These engagements with CA100+ provide us with
a valuable sounding board as we implement our strategy, respond to
requisitioned resolutions and develop our reporting.
At the 2021 AGMs, we received strong shareholder support for our new
Remuneration Policy which included the introduction of ESG metrics
into our incentives. At the same AGMs, shareholders also registered a
vote against our Remuneration report, specifically in response to the
treatment of departing executives in the light of Juukan Gorge. The
Committee engaged extensively with shareholders and proxies before
and after the AGMs on remuneration-related matters. The feedback
received contributed to the establishment of the Consequence
Management Framework that provides a set of guardrails to guide the
Remuneration Committee in the exercise of discretion and application
of malus and clawback. In addition, we updated the Long term
incentive plan leaver provisions to further strengthen the Committee’s
ability to apply discretion so as to ensure that incentive pay outcomes
are fair, appropriate and defensible.
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Throughout 2021, we have expanded our commercial activities into
new areas to meet customer needs. This includes the expansion of our
portside sales presence to 15 ports in China, meeting demand from
more than 80 iron ore customers, and the expansion into bonded
warehouse sales for our aluminium business. Following a successful
rollout in other products, including iron ore, we expanded our WeChat
presence to the boron agriculture market in China. This new channel
provides a simple way for customers to interact with our local team.
Climate change is one of the biggest challenges facing our customers and
our supply chains, and it will take a coordinated effort to make meaningful
progress. We continue to focus on innovative partnerships with customers
to meet their needs and help produce sustainable products. This includes
partnering to develop new products such as with AB InBev to produce
beverage cans made from low-carbon aluminium that meets industry-
leading sustainability standards. We are also partnering with Shawinigan
Aluminium, to create custom alloys containing our lowest carbon metal
with our customers’ scrap. In addition, we are partnering with our
customers to support the decarbonisation of their processes to reduce
Scope 3 emissions. More information can be found on page 71.
For the past three years, we have sought feedback annually via our
customer survey, the results of which are shared with the Board
by the Chief Executive and allow us to continue to shape these
important relationships.
How the Board has taken account of these interests
In response to customer requirements for greater transparency on ESG
standards throughout the value chain, we have set a new standard in
traceability for the aluminium industry with START, a “nutritional label” for
responsible aluminium. Through blockchain technology, START helps
customers meet the demand from consumers for transparency on where
and how the products they purchase are made and aims to empower
end-users to make informed choices about the products they buy.
We continue to work closely with our customers to manage the
pressures placed on the supply chain as a result of COVID-19.
Suppliers
How we engage and communicate
Our suppliers are critical to the development and safe running of our
global operations and we are committed to continuing to build strong
relationships with them. We engage regularly with our supplier
partners. Throughout the COVID-19 pandemic our relationships with
our suppliers have deepened. We have partnered with key suppliers,
Komatsu and Caterpillar, to develop zero-emissions technologies and
applications for mine-haulage systems.
For the past two years, we have sought our suppliers’ feedback
annually via our supplier survey, the results of which are shared with the
Board by the Chief Executive. The survey results allow us to continue to
shape these important relationships, building on general satisfaction
and areas for improvement. The Board began tracking the progress of
supplier satisfaction from the baseline developed in the 2020 survey.
How the Board has taken account of these interests
We fully recognise the importance of paying suppliers promptly, in
particular in the case of smaller companies. In 2021, we introduced faster
payments for small suppliers across much of the world. We also reduced
payment terms for regional and Indigenous suppliers in Australia.
For more information on our work with our suppliers, including our
partnerships to reduce emissions and decarbonise, and our work with
local suppliers, see pages 66-67 and 70-71.
Our stakeholders continued
Governance
Investors
Customers
How we engage and communicate
How we engage and communicate
We hold two annual general meetings (AGMs) each year, one in
Throughout 2021, we have expanded our commercial activities into
Australia and one in the UK. Due to COVID-19-related restrictions,
new areas to meet customer needs. This includes the expansion of our
our UK AGM was an online event for the second consecutive year.
portside sales presence to 15 ports in China, meeting demand from
However, we were able to host a hybrid AGM in Perth, Western
more than 80 iron ore customers, and the expansion into bonded
Australia. Institutional and retail investors were able to engage directly
warehouse sales for our aluminium business. Following a successful
with the Board and management at and around the AGMs.
rollout in other products, including iron ore, we expanded our WeChat
We also maintain a programme of engagement with investors and
analysts to ensure both current and potential new investors have the
presence to the boron agriculture market in China. This new channel
provides a simple way for customers to interact with our local team.
opportunity to hear from executives, the Chairman and subject matter
Climate change is one of the biggest challenges facing our customers and
experts from across the business. We held an online Communities and
our supply chains, and it will take a coordinated effort to make meaningful
Social Performance seminar in March in which the Chair of our
progress. We continue to focus on innovative partnerships with customers
Sustainability Committee, our Chief Executive, our Chief Executive,
to meet their needs and help produce sustainable products. This includes
Australia, our Chief Technical Officer and other experts from across the
partnering to develop new products such as with AB InBev to produce
Group provided investors and analysts with an update on our approach
beverage cans made from low-carbon aluminium that meets industry-
to cultural heritage, which also included case studies from some of our
leading sustainability standards. We are also partnering with Shawinigan
operations in Canada and the Northern Territory of Australia.
Aluminium, to create custom alloys containing our lowest carbon metal
Every two years, we update financial markets on our strategy. In October,
we held an in-person Investor Seminar in London, hosted by our
Chief Executive and the entire Executive Committee, which included
with our customers’ scrap. In addition, we are partnering with our
customers to support the decarbonisation of their processes to reduce
Scope 3 emissions. More information can be found on page 71.
presentations from Perth, Brisbane and Singapore. The focus of the
For the past three years, we have sought feedback annually via our
event was to outline the actions being taken to strengthen the business
customer survey, the results of which are shared with the Board
and improve performance. At the event, we also unveiled our longer-
by the Chief Executive and allow us to continue to shape these
term strategy to ensure we thrive in a decarbonising world and
important relationships.
continue to deliver attractive shareholder returns, in line with our policy.
How the Board has taken account of these interests
How the Board has taken account of these interests
In response to customer requirements for greater transparency on ESG
In responding to feedback from investors, the Board has continued to
standards throughout the value chain, we have set a new standard in
deliver a strategy of maximising shareholder returns while allocating
traceability for the aluminium industry with START, a “nutritional label” for
capital with discipline for future growth and sustained operational
responsible aluminium. Through blockchain technology, START helps
performance through the macroeconomic and commodity cycles.
customers meet the demand from consumers for transparency on where
Given investor interest in ESG issues, including climate change and our
work with communities around the world, the Board considers these issues
and how the products they purchase are made and aims to empower
end-users to make informed choices about the products they buy.
during its strategy sessions when assessing our portfolio positions.
We continue to work closely with our customers to manage the
pressures placed on the supply chain as a result of COVID-19.
The Chairman engaged extensively with investors across multiple markets
in advance of our AGMs to understand their perspectives. He also led
twice-yearly meetings with the Climate Action 100+ (CA100+) investor
groups in Europe and Asia, to convey how our new strategy integrates
the net zero transition into our business, including our portfolio, capital
investment decisions, and business planning. The discussions focused
on the key indicators in the CA100+ Net Zero Company Benchmark.
In particular, our Scope 1 and 2 targets, the approach to Scope 3
emissions, capital allocation alignment, governance, and our climate
policy engagement. These engagements with CA100+ provide us with
a valuable sounding board as we implement our strategy, respond to
requisitioned resolutions and develop our reporting.
At the 2021 AGMs, we received strong shareholder support for our new
Remuneration Policy which included the introduction of ESG metrics
into our incentives. At the same AGMs, shareholders also registered a
vote against our Remuneration report, specifically in response to the
treatment of departing executives in the light of Juukan Gorge. The
Committee engaged extensively with shareholders and proxies before
and after the AGMs on remuneration-related matters. The feedback
received contributed to the establishment of the Consequence
Management Framework that provides a set of guardrails to guide the
Remuneration Committee in the exercise of discretion and application
of malus and clawback. In addition, we updated the Long term
incentive plan leaver provisions to further strengthen the Committee’s
ability to apply discretion so as to ensure that incentive pay outcomes
are fair, appropriate and defensible.
Suppliers
How we engage and communicate
Our suppliers are critical to the development and safe running of our
global operations and we are committed to continuing to build strong
relationships with them. We engage regularly with our supplier
partners. Throughout the COVID-19 pandemic our relationships with
our suppliers have deepened. We have partnered with key suppliers,
Komatsu and Caterpillar, to develop zero-emissions technologies and
applications for mine-haulage systems.
For the past two years, we have sought our suppliers’ feedback
annually via our supplier survey, the results of which are shared with the
Board by the Chief Executive. The survey results allow us to continue to
shape these important relationships, building on general satisfaction
and areas for improvement. The Board began tracking the progress of
supplier satisfaction from the baseline developed in the 2020 survey.
How the Board has taken account of these interests
We fully recognise the importance of paying suppliers promptly, in
particular in the case of smaller companies. In 2021, we introduced faster
payments for small suppliers across much of the world. We also reduced
payment terms for regional and Indigenous suppliers in Australia.
For more information on our work with our suppliers, including our
partnerships to reduce emissions and decarbonise, and our work with
local suppliers, see pages 66-67 and 70-71.
Matters discussed in 2021
The Board had seven scheduled meetings in 2021 and three additional meetings
were held to discuss matters outside the Board’s regular agenda items. Set out below
are some of the matters which the Board has considered during the year.
ESG
The Board has ultimate oversight of environmental, social and
governance matters, but has delegated responsibility for certain
matters to the Sustainability Committee.
During the year, the Board reviewed its forward agenda of matters to
be discussed, considered its constitution, composition and
performance, and reviewed any new or amended Group policies.
In addition, it considered the following governance matters:
– In February, the Board received and noted a paper regarding the
Board and committee evaluation plan.
– In April, the Board was updated on the steps being taken to rebuild
stakeholder relations in Australia following the tragic events at
Juukan Gorge in May 2020. During the update, the Board noted that
listening to our stakeholders and ensuring that we meet their
expectations will be critical to regain their trust. The need to focus on
improving and consistently demonstrating our ESG credentials was
also recognised. The management team continued to work on
defining initiatives to rebuild trust with each stakeholder group.
– In July, the Board received an update regarding a number of
initiatives to continue to strengthen and improve our approach to
cultural heritage and community relations. In particular, the Board
considered progress with the Australian Advisory Group and our
approach to the modernisation of our Rio Tinto Iron Ore agreements.
– In September, the Board and Executive Committee participated in a
joint review of the events surrounding the destruction of the Juukan
Gorge rock shelters. The aim was to analyse our response to the
crisis, share and understand each other’s experiences and
perceptions during the crisis, reach a common understanding of
lessons learned, reset and strengthen the relationship between the
Board and the new Executive Committee, and improve our collective
response to any future crisis.
– In December, the Board considered and endorsed the 2022 annual
plan and received and noted an update on ethics and compliance.
– In December, the Board noted a paper regarding the draft “say on
climate” resolution to be proposed at the 2022 AGMs.
At every Board meeting, the Chief Executive and Chief Financial
Officer report on the safety, operating and business performance of
the Group against our key performance indicators, as well as how
certain material stakeholder issues are being managed. The Board also
received detailed reports from the management team relating to
progress on major growth projects and updates on operations. In
addition, the Board invites external subject matter experts to present
on issues relevant to major strategic or operational matters. Examples
in 2021 included:
Growth projects
– In April, the Board considered and approved a proposal to enter into
binding heads of agreement with Turquoise Hill Resources for an
updated funding plan for the completion of the Oyu Tolgoi
underground project in Mongolia.
– In July, the Board considered and approved a request for
development capital of $2.4 billion for the Jadar lithium-borates
project in Serbia. This project remains subject to receiving all
relevant approvals, permits and licences.
– In December, the Board considered and approved a request to
acquire the Rincon lithium project in Argentina.
– In December, the Board also noted an update regarding our capital
projects, including Resolution Copper and Simandou.
Operational
– In February, the Board received an update on the Resolution Copper
project. The project had achieved a critical permitting milestone with
the publication of the Final Environmental Impact Statement under
the United States National Environmental Policy Act.
– In July, the Board received an update on Energy Resources of
Australia (ERA) and the transfer of tenure for the town of Jabiru. The
Board agreed to include ERA as a regular item on the Sustainability
Committee’s agenda as part of that Committee’s responsibility in
monitoring progress on cultural heritage management issues across
the Group.
– In July, the Board also received an update on challenges at Richards
Bay Minerals. The Board considered the security situation and
endorsed the management team’s proposal that operations would
not be restarted until the community-related issues were resolved
satisfactorily. The Board acknowledged that the priority was to
understand and resolve the root causes of the community issues.
– In December, the Board discussed and approved the Group’s IS&T
strategy and the Group’s risks and controls relating to cyber security.
– In December, the Board reviewed an evaluation of the status of the
Group’s ore reserves and mineral resources.
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143
Matters discussed in 2021 continued
People
The Board receives regular updates on our people-related initiatives to
attract, develop and retain the best people, which is crucial to our
success. Some of the topics covered in 2021 are below:
– In April, the Board discussed and approved the composition of the
new Executive Committee. The Board noted that the transition was
progressing as planned and that attention had turned to establishing
the teams and structures below the Executive Committee.
– In July and December, the Board received papers on the Group’s
twice-yearly people engagement survey results and noted the
initiatives being pursued in response to the findings.
– In December, the Board received an update on the Everyday
Respect task force, including an overview of the discovery
phase findings, recommendations and plan. (See page 101 for
more details.)
Strategy and risk
In 2021, the management team carried out a comprehensive review of
the Group’s strategy and presented strategic topics and analysis to the
Board in two separate meetings in May and September. The Board
considered options presented by the management team and approved
the new integrated Group strategy in September. (See pages 14-17 for
full details of our strategy.) The topics discussed included:
May
– Industry trends and strategic context for the business
– Climate change and sustainability
– The energy transition and green steel
– Advancement of the Rio Tinto Safe Production System
September
– Culture, enablers and Group values
– Green energy and the decarbonisation of our assets and value chain
– Battery minerals and copper growth opportunities
– Approach to our “excel in development” objective
– New integrated strategy and financial implications
In-depth reviews
In addition, the Board received deep dives in October and December
on key areas of the business including:
October
– Commercial update
– Risk management and assurance (three lines of defence)
– Review of our Iron Ore business
December
– An assessment of the Group’s principal risks and associated controls
– An update on the aluminium market and trends and our strategy
in response
– The China Advisory Panel provided perspectives on China domestic
policy priorities, implications of current reforms for doing business in
China and with Chinese business internationally, and China-relevant
geopolitical tends. The Panel provided the opportunity for the Board
to ask questions and test assumptions with a well-rounded group of
external experts.
Oyu Tolgoi copper and gold mine. South
Gobi Desert, Mongolia.
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Matters discussed in 2021 continued
Governance
People
The Board receives regular updates on our people-related initiatives to
attract, develop and retain the best people, which is crucial to our
success. Some of the topics covered in 2021 are below:
September
– Culture, enablers and Group values
– Green energy and the decarbonisation of our assets and value chain
– Battery minerals and copper growth opportunities
– In April, the Board discussed and approved the composition of the
– Approach to our “excel in development” objective
new Executive Committee. The Board noted that the transition was
progressing as planned and that attention had turned to establishing
the teams and structures below the Executive Committee.
– In July and December, the Board received papers on the Group’s
twice-yearly people engagement survey results and noted the
initiatives being pursued in response to the findings.
– In December, the Board received an update on the Everyday
Respect task force, including an overview of the discovery
phase findings, recommendations and plan. (See page 101 for
more details.)
Strategy and risk
– New integrated strategy and financial implications
In-depth reviews
In addition, the Board received deep dives in October and December
on key areas of the business including:
October
– Commercial update
– Risk management and assurance (three lines of defence)
– Review of our Iron Ore business
In 2021, the management team carried out a comprehensive review of
the Group’s strategy and presented strategic topics and analysis to the
Board in two separate meetings in May and September. The Board
December
– An assessment of the Group’s principal risks and associated controls
considered options presented by the management team and approved
– An update on the aluminium market and trends and our strategy
the new integrated Group strategy in September. (See pages 14-17 for
in response
full details of our strategy.) The topics discussed included:
– The China Advisory Panel provided perspectives on China domestic
policy priorities, implications of current reforms for doing business in
China and with Chinese business internationally, and China-relevant
geopolitical tends. The Panel provided the opportunity for the Board
to ask questions and test assumptions with a well-rounded group of
external experts.
May
– Industry trends and strategic context for the business
– Climate change and sustainability
– The energy transition and green steel
– Advancement of the Rio Tinto Safe Production System
Oyu Tolgoi copper and gold mine. South
Gobi Desert, Mongolia.
Governance framework
Good governance is about considering the right things, at the right time,
with the right people and insights. We have tried to structure the way the
Board works to support that objective, to strengthen our strategic focus,
and to improve both the challenge and the support that the Board provides
to the executive team. Here is a summary of the framework:
Board of Directors
Rio Tinto produces minerals and metals essential to human progress.
By doing so efficiently, effectively and sustainably, we aim to create long-term value for all stakeholders. Our purpose is supported by
three core values - care, courage and curiosity. The Board is collectively responsible for pursuing this purpose and approves the strategy,
budget and plans proposed by the Chief Executive to achieve this objective.
See the Board Charter for more information on the role of the Board and the delegation to management.
Available at riotinto.com
Board Charter
Audit
Committee
Nominations
Committee
Remuneration
Committee
Sustainability
Committee
Chairman’s
Committee
Chief
Executive
Helps the Board to
monitor decisions and
processes designed to
ensure the integrity of
financial reporting, the
independence and
effectiveness of the
external auditors, and
robust systems of
internal control and
risk management.
Helps the Board
determine its composition,
and that of its committees.
They are regularly
reviewed and refreshed,
so they are able to
operate effectively and
have the right mixture
of skills, experience
and background.
Helps the Board ensure
that remuneration
policy and practices
reward employees and
executives fairly and
responsibly, with a clear
link to corporate and
individual performance.
Helps the Board
oversee the Group’s
integrated approach to
sustainability and
strategies designed to
manage health and
safety and social and
environmental risks,
including management
processes and
standards.
Supports the
functioning of the
Board and will consider
urgent matters between
Board meetings.
Has delegated
responsibility for the
executive management
of Rio Tinto, consistent
with the Group’s
purpose and strategy,
and subject to matters
reserved for the Board,
as set out in the
Schedule of Matters
Reserved for the Board
(available at riotinto.
com), and in
accordance with the
Group’s delegation of
authority framework.
See page 151
See page 148
See page 160
See page 156
Australia Forum
China Advisory Panel
Advises the Board and Executive Committee on political, economic and social
developments in Australia and how they could affect the business.
Provides context and analysis to the Board and Executive Committee on
political, commercial and policy developments relevant to our operations in
China and with Chinese partners.
Executive Committee
Investment Committee
Closure Steering Committee
The Executive Committee
supports the Chief Executive in
the delivery of strategy, annual
plans and commercial objectives,
and managing the financial and
operational performance of
the Group.
The following management
committees support the Chief
Executive in the performance
of his duties.
Reviews proposals on investments, acquisitions and
disposals. Approves capital decisions within delegated
authority limits, and otherwise recommends matters for
approval to the Board, where appropriate.
Risk Management Committee
Oversees the management and mitigation of the principal
risks that could materially impact the Group’s business
objectives and exceed its risk tolerances.
Ore Reserves Steering Committee
Responsible for standards and control procedures in the
ore reserves estimation and disclosure process. Ensures that
these are effective in meeting internal objectives and
regulatory requirements.
Oversees the process and controls designed to
manage the material risks related to rehabilitation, closure
and legacy operations.
Disclosure Committee
Reviews and approves the release of all significant public
disclosures on behalf of the Group. Oversees the Group’s
compliance with its disclosure obligations in accordance with
all relevant legal and regulatory requirements, including
processes to ensure such disclosures are accurate and timely.
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145
Evaluating our performance
An effective Board depends on the personal development of individual Directors and
continuous improvement in the operation of the Board as a whole.
The Board recognises the benefit of an evaluation exercise that
provides meaningful insight to Board and committee members on how
they can improve their individual and collective contribution to the
leadership and effectiveness of the Group. The evaluation also
provides an important opportunity to agree on priorities for the coming
year and develop an appropriate Board agenda.
The Board undertakes an evaluation on an annual basis. This year,
we undertook an internal evaluation which was facilitated by the Group
Company Secretary and Lintstock, who consolidated responses to the
questionnaires. The evaluations of the Board and committees were
based on questionnaires distributed to all Directors. The views of
Directors were consolidated into formal reports which were discussed
by the Chairman with individual Directors and then in a plenary session
by the Board and the relevant committees. A questionnaire was also
sent to members of the Executive Committee and the Group Company
Secretary to obtain their perspectives on the effectiveness of the Board
and its committees.
Every third year, we engage a professional external adviser to carry out
the Board review to obtain an independent evaluation. The next
external review will take place in 2022.
Board and committee composition
While the size of the Board and the level of diversity amongst Directors
received high ratings, the range of skills and geographic representation
were identified as an area for further focus. It was agreed that the key
changes that should be made to the Board’s profile over the next three
to five years might include (i) greater mining expertise, (ii) China
experience, (iii) North America, particularly Canadian experience, and
(iv) stronger ESG/decarbonisation expertise. It was also agreed that the
Board should at least maintain the level of Australian representation.
Stakeholder oversight
The Board’s understanding of investors received a high rating, while
the knowledge of other key external stakeholders received positive
ratings overall. The value of the Board engaging with external
stakeholders directly was highlighted by a number of respondents,
for example through site and community visits, and the importance of
maintaining a balanced understanding of stakeholder relationships was
stressed. A few respondents indicated that there was scope to improve
the understanding of communities and civil society organisations in
particular. The importance of the monitoring of employee sentiment
and culture was highlighted, acknowledging the COVID-19 constraints
as in 2020. The decision to appoint a designated Non-Executive
Director for employee engagement was supported.
Actions:
– Make greater use of the China Advisory Panel and other
outside speakers.
– Schedule talent pipeline and succession planning for the Executive
Committee, including diversity.
– Promote culture and values.
– Enhance oversight of community management outside Australia and
environmental management (particularly water and biodiversity).
Board dynamics
It was noted that relationships are developing well with the new
Executive Committee, and that these benefited from the reset as part
of the lessons learned from Juukan Gorge. The importance of the
Board meeting face-to-face and resuming in-person site visits, when
possible, was emphasised.
Actions:
Management and focus of meetings
– Reinstate face-to-face meetings and site visits as soon as possible.
The management of Board meetings received high ratings.
– Add one additional member to the Audit Committee with recent and
relevant financial experience.
Actions:
– Review the size and composition of the Sustainability Committee.
– Increase regularity of updates on major projects, with emphasis on
– Review Board composition after appointment of the new Chair
what has changed since the last review.
to ensure appropriate geographical representation and
mining expertise.
– Increase focus on operational delivery, through individual product
group presentations.
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Evaluating our performance
continuous improvement in the operation of the Board as a whole.
The Board recognises the benefit of an evaluation exercise that
provides meaningful insight to Board and committee members on how
they can improve their individual and collective contribution to the
leadership and effectiveness of the Group. The evaluation also
provides an important opportunity to agree on priorities for the coming
year and develop an appropriate Board agenda.
The Board undertakes an evaluation on an annual basis. This year,
we undertook an internal evaluation which was facilitated by the Group
Company Secretary and Lintstock, who consolidated responses to the
questionnaires. The evaluations of the Board and committees were
based on questionnaires distributed to all Directors. The views of
Directors were consolidated into formal reports which were discussed
by the Chairman with individual Directors and then in a plenary session
by the Board and the relevant committees. A questionnaire was also
sent to members of the Executive Committee and the Group Company
Secretary to obtain their perspectives on the effectiveness of the Board
and its committees.
Every third year, we engage a professional external adviser to carry out
the Board review to obtain an independent evaluation. The next
external review will take place in 2022.
Stakeholder oversight
The Board’s understanding of investors received a high rating, while
the knowledge of other key external stakeholders received positive
ratings overall. The value of the Board engaging with external
stakeholders directly was highlighted by a number of respondents,
for example through site and community visits, and the importance of
maintaining a balanced understanding of stakeholder relationships was
stressed. A few respondents indicated that there was scope to improve
the understanding of communities and civil society organisations in
particular. The importance of the monitoring of employee sentiment
and culture was highlighted, acknowledging the COVID-19 constraints
as in 2020. The decision to appoint a designated Non-Executive
Director for employee engagement was supported.
Actions:
– Make greater use of the China Advisory Panel and other
outside speakers.
– Schedule talent pipeline and succession planning for the Executive
Committee, including diversity.
– Promote culture and values.
Board and committee composition
– Enhance oversight of community management outside Australia and
environmental management (particularly water and biodiversity).
While the size of the Board and the level of diversity amongst Directors
received high ratings, the range of skills and geographic representation
were identified as an area for further focus. It was agreed that the key
Board dynamics
changes that should be made to the Board’s profile over the next three
It was noted that relationships are developing well with the new
to five years might include (i) greater mining expertise, (ii) China
Executive Committee, and that these benefited from the reset as part
experience, (iii) North America, particularly Canadian experience, and
of the lessons learned from Juukan Gorge. The importance of the
(iv) stronger ESG/decarbonisation expertise. It was also agreed that the
Board meeting face-to-face and resuming in-person site visits, when
Board should at least maintain the level of Australian representation.
possible, was emphasised.
Actions:
Management and focus of meetings
– Add one additional member to the Audit Committee with recent and
relevant financial experience.
Actions:
– Review the size and composition of the Sustainability Committee.
– Review Board composition after appointment of the new Chair
what has changed since the last review.
to ensure appropriate geographical representation and
mining expertise.
– Increase focus on operational delivery, through individual product
group presentations.
– Increase regularity of updates on major projects, with emphasis on
An effective Board depends on the personal development of individual Directors and
Board support
Actions:
Governance
The Board packs were positively rated, although scope remained to
make some papers shorter, with greater use of summaries. A few
respondents identified scope to further improve the induction of
new Directors.
– Improve benchmarking against competitors.
– Arrange presentations from each product group to provide the link
between strategy and execution.
– Continue to focus on China and technology/digital.
Response to Juukan Gorge
Risk oversight
Respondents provided positive feedback on the extensive discussions
held in September 2021 in relation to the lessons learned following the
destruction of the Juukan Gorge rock shelters, and the benefit that
these sessions had in building cohesion within the Board, as well as
with the Executive Committee.
Strategy
The recent Board strategy session received high ratings, but the
importance of engaging on sustainability considerations more
proactively, rather than reactively, was stressed. A few respondents
indicated that gaining additional external perspectives on the company
would be useful. The importance of the Board devoting more time to
the understanding of new technologies and digitalisation, in terms of
the opportunities and threats they represent for the business,
was stressed.
Some respondents indicated that the Board should devote more time
to risk, and in supporting the Executive Committee in continuing to
enhance risk management processes. The importance of ensuring
balanced consideration of both financial and non-financial risks was
stressed. There was a range of additional recommendations made for
further enhancing the oversight of risk, which the Audit Committee will
follow up on in 2022.
Action:
– Enhance risk management oversight and processes (with Audit and
Sustainability Committees).
Directors’ attendance at scheduled Board and committee meetings during 20211
Committee appointments
Board
Audit
Nominations
Remuneration
Sustainability
– Reinstate face-to-face meetings and site visits as soon as possible.
The management of Board meetings received high ratings.
Michael L'Estrange – retired 6 May 20213
Simon McKeon
Jennifer Nason4
Ngaire Woods
Ben Wyatt – joined 1 September 2021
Chairman and Executive Directors
Simon Thompson
Jakob Stausholm
Peter Cunningham – joined 17 June 2021
Non-Executive Directors
Megan Clark
Hinda Gharbi2
Simon Henry
Sam Laidlaw
7/7
7/7
4/4
7/7
7/7
7/7
7/7
2/3
7/7
7/7
7/7
3/3
6/6
6/6
7/7
6/6
6/6
6/6
6/6
5/6
6/6
6/6
3/3
6/6
6/6
6/6
2/2
6/6
6/6
6/6
5/6
6/6
7/7
7/7
7/7
7/7
2/2
6/7
7/7
2/2
1. Outside of the scheduled meetings of the Board and committees for 2021, numerous ad hoc meetings took place to consider more urgent matters, including one Audit Committee meeting, six
Board meetings, four Nominations Committee meetings and four Remuneration Committee meetings.
2. Hinda Gharbi was unable to attend a Nominations Committee meeting in December due to a prior conflicting commitment.
3. Michael L’Estrange was unable to attend a Board meeting in February for personal reasons.
4. Jennifer Nason was unable to attend meetings of the Sustainability Committee in October and the Remuneration Committee in December due to COVID-19 restrictions.
Board committee membership key
Committee Chair
Audit Committee
Remuneration Committee
Nominations Committee
Sustainability Committee
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147
Nominations Committee report
The Nominations Committee seeks to ensure that the Board has the
requisite mixture of skills, knowledge and expertise to provide robust
oversight, and to identify and respond effectively to current and future
opportunities and challenges.
In our approach to succession planning and appointments, we are
committed to building an effective, diverse, knowledgeable, collegiate
Board that provides robust oversight, encourages differing
perspectives, promotes collaboration and inclusion, and convenes
outside expertise effectively to help it navigate the increasingly
complex opportunities and threats facing the Group.
The Nominations Committee was busy throughout the year, including
overseeing the appointments of our new Chief Financial Officer, Peter
Cunningham; a new Non-Executive Director, Ben Wyatt; and the new
Chair-designate, Dominic Barton. In his first few months as Chief
Executive, Jakob’s priorities included the appointment of his new
Executive Committee and a review of their development needs. The
Committee supported Jakob in this process. In addition to the
appointments of Peter as Chief Financial Officer, nine other members
of the Executive Committee took up new roles during 2021.
Following the departure in October 2021 of our Group Executive –
Strategy & Development, the Committee agreed with the
recommendation of management that the role should cease as an
Executive Committee position and endorsed a reallocation of the
responsibilities, including:
– Business Development, Mergers and Acquisition (M&A) and
Strategy now report to the Chief Financial Officer.
– Closure, Exploration and Energy & Climate Change report to the
Chief Technical Officer.
– Health, Safety, Environment & Security (HSES), Communities &
Social Performance (CSP) and Energy Resources of Australia report
to the Chief Executive, Australia.
– Brand and Reputation, Communications and Media report to the
Chief Legal Officer & External Affairs.
Following this period of unprecedented management change, during
2022 the Committee, and the Board, will refocus on broader talent
management and succession planning. Following the appointment of
Dominic Barton as our new Chair, the Committee will also review the
composition of the Board to ensure, amongst other things, that it has
adequate mining expertise.
Simon Thompson
Nominations Committee Chairman
23 February 2022
Chair succession
On 19 December 2021, the Board announced that it had selected
Dominic Barton to succeed Simon Thompson as Rio Tinto’s new
Chair. Dominic will join the Board with effect from 4 April 2022 and
be appointed to the role of Chair at the conclusion of the Rio Tinto
Limited annual general meeting on 5 May 2022. Simon Thompson
will step down as a Non-Executive Director of Rio Tinto and as
Chairman at the same time on 5 May 2022, having served as
Chairman for four years and as a Non-Executive Director
since 2014.
A Ugandan-born Canadian, Dominic spent over 30 years at
McKinsey & Company, including nine as the Global Managing
Partner and six as Asia Chairman. Most recently, he has been
Canada’s Ambassador to China since 2019. He brings a wealth of
global business experience having advised clients in a range of
industries, including banking, consumer goods, high tech and
industrials, as well as a deep insight of geopolitics, corporate
sustainability and governance.
Dominic’s previous corporate governance work includes being
Chair of Teck Resources, a Non-Executive Director at the Singtel
Group in Singapore and a Non-Executive Director at Investor AB
in Sweden. He has held various public sector leadership positions,
including Chair of Canada’s Advisory Council for Economic
Growth and Chair of the International Advisory Committee
to the President of South Korea on National Future and Vision.
His business acumen and public sector insights position
him to provide critical guidance and oversight to Rio Tinto’s
leadership team.
The Board is delighted to have appointed such an outstanding
individual and is confident Dominic will lead the Rio Tinto Board
with distinction. He has an impressive track record, with extensive
and broad business and international relations knowledge,
particularly in Asia, and a deep understanding of the link between
business, governments and society.
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Nominations Committee report
The Nominations Committee seeks to ensure that the Board has the
requisite mixture of skills, knowledge and expertise to provide robust
oversight, and to identify and respond effectively to current and future
opportunities and challenges.
In our approach to succession planning and appointments, we are
– Health, Safety, Environment & Security (HSES), Communities &
committed to building an effective, diverse, knowledgeable, collegiate
Social Performance (CSP) and Energy Resources of Australia report
Board that provides robust oversight, encourages differing
to the Chief Executive, Australia.
perspectives, promotes collaboration and inclusion, and convenes
outside expertise effectively to help it navigate the increasingly
complex opportunities and threats facing the Group.
The Nominations Committee was busy throughout the year, including
overseeing the appointments of our new Chief Financial Officer, Peter
Cunningham; a new Non-Executive Director, Ben Wyatt; and the new
Chair-designate, Dominic Barton. In his first few months as Chief
Executive, Jakob’s priorities included the appointment of his new
Executive Committee and a review of their development needs. The
Committee supported Jakob in this process. In addition to the
appointments of Peter as Chief Financial Officer, nine other members
of the Executive Committee took up new roles during 2021.
– Brand and Reputation, Communications and Media report to the
Chief Legal Officer & External Affairs.
Following this period of unprecedented management change, during
2022 the Committee, and the Board, will refocus on broader talent
management and succession planning. Following the appointment of
Dominic Barton as our new Chair, the Committee will also review the
composition of the Board to ensure, amongst other things, that it has
adequate mining expertise.
Following the departure in October 2021 of our Group Executive –
Strategy & Development, the Committee agreed with the
recommendation of management that the role should cease as an
Executive Committee position and endorsed a reallocation of the
23 February 2022
responsibilities, including:
Simon Thompson
Nominations Committee Chairman
– Business Development, Mergers and Acquisition (M&A) and
Strategy now report to the Chief Financial Officer.
– Closure, Exploration and Energy & Climate Change report to the
Chief Technical Officer.
Chair succession
On 19 December 2021, the Board announced that it had selected
Dominic’s previous corporate governance work includes being
Dominic Barton to succeed Simon Thompson as Rio Tinto’s new
Chair of Teck Resources, a Non-Executive Director at the Singtel
Chair. Dominic will join the Board with effect from 4 April 2022 and
Group in Singapore and a Non-Executive Director at Investor AB
be appointed to the role of Chair at the conclusion of the Rio Tinto
in Sweden. He has held various public sector leadership positions,
Limited annual general meeting on 5 May 2022. Simon Thompson
including Chair of Canada’s Advisory Council for Economic
will step down as a Non-Executive Director of Rio Tinto and as
Growth and Chair of the International Advisory Committee
Chairman at the same time on 5 May 2022, having served as
to the President of South Korea on National Future and Vision.
Chairman for four years and as a Non-Executive Director
His business acumen and public sector insights position
since 2014.
him to provide critical guidance and oversight to Rio Tinto’s
leadership team.
A Ugandan-born Canadian, Dominic spent over 30 years at
McKinsey & Company, including nine as the Global Managing
The Board is delighted to have appointed such an outstanding
Partner and six as Asia Chairman. Most recently, he has been
individual and is confident Dominic will lead the Rio Tinto Board
Canada’s Ambassador to China since 2019. He brings a wealth of
with distinction. He has an impressive track record, with extensive
global business experience having advised clients in a range of
and broad business and international relations knowledge,
industries, including banking, consumer goods, high tech and
particularly in Asia, and a deep understanding of the link between
industrials, as well as a deep insight of geopolitics, corporate
business, governments and society.
sustainability and governance.
Governance
Our key responsibilities
The purpose of the Nominations Committee is to review the
composition of the Board. The Committee leads the process for
appointments, making recommendations to the Board as part of
succession planning for both Non-Executive and Executive Directors.
It also approves proposals for appointments to the Executive
Committee and monitors the succession planning and development
of a diverse talent pipeline for Executive Committee members and
their direct reports.
Membership of the Committee
All Non-Executive Directors are members of the Nominations Committee.
The Chief Executive and the Chief People Officer are invited to attend
all or part of meetings, as appropriate. The Committee is chaired by the
Chairman of the Board, unless the matter under consideration relates
to the role of the Chairman. During 2021, the Chairman did not attend
meetings where his succession was discussed.
The Committee had six meetings in 2021. Attendance at these
meetings is included in the table on page 147.
Gender diversity
The Board recognises that it has a critical role to play in creating
an environment in which all contributions are valued, different
perspectives are embraced, and biases are acknowledged and
overcome. The Board shares ownership with the Executive Committee
of the Group’s inclusion and diversity policy, which can be found at
riotinto.com. We also discuss diversity and inclusion in the
Sustainability section of this Annual Report.
The proportion of women on the Board is 36.4% (four women and
seven men). The Group has continued to set measurable gender
diversity objectives for the composition of senior leadership and
graduate intake. Progress on diversity is shown in the Sustainability
section on pages 101-102, where we show a breakdown by seniority.
Length of tenure of Non-Executive Directors
2
4
5
0 – 3 years
+3 – 6 years
+6 – 9 years
Nominations Committee members
Simon Thompson (Chairman)
Michael L’Estrange1
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Simon McKeon
Jennifer Nason
Ngaire Woods
Ben Wyatt
1. A member during 2021, stood down at the Rio Tinto Limited AGM in May 2021.
Appointments to the Board – our policy
We base our appointments to the Board on merit, and on objective
selection criteria, with the aim of bringing a range of skills, knowledge
and experience to Rio Tinto. This involves a formal and rigorous
process to source strong candidates from diverse backgrounds and
conducting appropriate background and reference checks on the
shortlisted candidates. We aim to appoint people who will help us
address the operational and strategic challenges and opportunities
facing the company and ensure that our Board is diverse in terms of
gender, nationality, social background and cognitive style. As such,
we only engage recruitment agencies that are signed up to the
Voluntary Code of Conduct on diversity best practice.
When recruiting government or former government officials to join the
Rio Tinto Board, we comply with any restrictions and obligations existing
pursuant to relevant laws and regulations, including with respect to
confidentiality, lobbying and conflicts of interest. For example, the
timing and terms of the recent appointments of Ben Wyatt and
Dominic Barton complied with all relevant restrictions and obligations.
In Mr Wyatt’s case, there was no requirement for any “cooling off”
period between Mr Wyatt ceasing to serve as a government official
and joining the Rio Tinto Board as a Non-Executive Director. However,
as a matter of good practice, a six-month “cooling off” period after
leaving office was mutually agreed by both parties.
We believe that an effective Board combines a range of perspectives
with strong oversight, combining the experience of Directors who have
developed a deep understanding of our business over several years
with the fresh insights of newer appointees. We aim for our Board
composition to reflect the global nature of our business. We currently
have four different nationalities (including dual nationalities) on a
Board of 11.
The Committee engaged Spencer Stuart to support the search for a
new Chair. The recruitment of Ben Wyatt as a Non-Executive Director
was not supported by an external agency. The Committee is satisfied
that Spencer Stuart does not have any connections with the company
or individual Directors that may impair their independence.
The key skills and experience of our Board are set out in the table at the
end of this report.
Our diversity and inclusion policy sets out our expectations around
the behaviours needed for an inclusive and diverse workplace.
The policy is co-owned and supported by the Board and Executive
Committee. At a Group level, we report against gender diversity targets
(see page 28) and achievement of these targets contributes to the
variable remuneration of senior executives. In addition, each of our
operations has locally-set employment targets. Their performance
against these targets can be found in our 2021 Sustainability Fact Book.
Read our full policy on our website – riotinto.com/sustainability/policies.
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149
Nominations Committee report continued
The Chair appointment and induction process
Define
Review
Identify
An executive search agency was appointed to manage the process, working with the Senior Independent Directors, Sam Laidlaw (UK) and
Simon McKeon (Australia) and the Group Company Secretary. A candidate specification was prepared and agreed with the Committee.
The finalisation of the specification also included discussions with a cross-section of our shareholders in relation to the attributes, experience
and skills they expected in the new Chair. These included proven experience of managing highly complex, cross-border relationships across
multiple stakeholders, a strong track record of working in Asia and emerging markets, a commitment to the highest ESG standards, and a
proven ability to lead a Board and act as a mentor to the Executive team.
The executive search agency, Spencer Stuart, identified potential candidates to create a longlist and presented this to the Committee
for consideration.
The Board agreed the most suitable potential candidates from the longlist and instructed the executive search agency to approach them for
interview and assessment.
Assessment
The shortlisted candidates were invited for initial assessment and interview, initially by the executive search agency and then by the full Board.
Appointment
The successful candidate was recommended for appointment to the Board.
Induction
The Group Company Secretary has arranged a comprehensive induction programme for the Chair-designate. It includes meetings with each
Board member, the members of the Executive Committee and the senior leadership team. The overall programme is designed to ensure that
Dominic will gain a thorough understanding of our:
1. Purpose, strategy and values.
2. Culture and people, including visits to our major sites and projects, with opportunities to meet with the local management teams
and workforce.
3. Business and operations, through a series of tailored teach-ins, training programmes and site visits.
4. ESG agenda and what we are targeting to build our impeccable credentials.
5. Investors, including a detailed engagement plan with institutional and retail investors.
6. Key stakeholders, including host governments, communities, customers and suppliers.
7. Governance and regulatory framework, both in the UK and in Australia, and our capital and financing structure.
Skills and experience of the Chairman and Non-Executive Directors
Area of expertise
Business leadership
Capital projects
Financial
Board level experience in a major corporation.
Experience of developing large-scale, long-cycle capital projects.
Proficiency in financial accounting and reporting, corporate finance, internal
controls, treasury and associated risk management.
Mergers and acquisitions
Experience of mergers, acquisitions, disposals and joint ventures.
Global experience
Corporate governance
Work experience in multiple global locations, exposed to a range of political,
cultural, regulatory and business environments.
Experience on the board of a major corporation subject to rigorous corporate
governance standards.
Government and international
relations
Interaction with governments and regulators or involvement in public policy
development and implementation.
HSES/ESG
Climate change
Familiarity with issues associated with workplace health and safety, asset
integrity, environment and social responsibility, and communities.
Knowledge and experience of climate-related threats and opportunities
including climate science, low-carbon transition and public policy.
Communities and social
performance
Experience of working with communities to optimise the benefits and minimise
negative impacts of business activities.
Marketing
Mining
Senior executive experience in marketing, and the development of product
and/or customer management strategies.
Senior executive experience in a large, global mining organisation involved in
the discovery, development, operation and closure of mines.
HR/remuneration
Experience of talent recruitment, retention, development and incentives.
Technology/digital
Experience of managing research, development and innovation, including
digital technology.
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Annual Report 2021 | riotinto.com
No. of Directors
7
5
5
5
8
6
4
6
6
6
2
2
4
2
Nominations Committee report continued
The Chair appointment and induction process
Define
An executive search agency was appointed to manage the process, working with the Senior Independent Directors, Sam Laidlaw (UK) and
Simon McKeon (Australia) and the Group Company Secretary. A candidate specification was prepared and agreed with the Committee.
The finalisation of the specification also included discussions with a cross-section of our shareholders in relation to the attributes, experience
and skills they expected in the new Chair. These included proven experience of managing highly complex, cross-border relationships across
multiple stakeholders, a strong track record of working in Asia and emerging markets, a commitment to the highest ESG standards, and a
proven ability to lead a Board and act as a mentor to the Executive team.
The executive search agency, Spencer Stuart, identified potential candidates to create a longlist and presented this to the Committee
Review
Identify
for consideration.
interview and assessment.
The Board agreed the most suitable potential candidates from the longlist and instructed the executive search agency to approach them for
Assessment
The shortlisted candidates were invited for initial assessment and interview, initially by the executive search agency and then by the full Board.
Appointment
The successful candidate was recommended for appointment to the Board.
Induction
The Group Company Secretary has arranged a comprehensive induction programme for the Chair-designate. It includes meetings with each
Board member, the members of the Executive Committee and the senior leadership team. The overall programme is designed to ensure that
Dominic will gain a thorough understanding of our:
1. Purpose, strategy and values.
and workforce.
2. Culture and people, including visits to our major sites and projects, with opportunities to meet with the local management teams
3. Business and operations, through a series of tailored teach-ins, training programmes and site visits.
4. ESG agenda and what we are targeting to build our impeccable credentials.
5. Investors, including a detailed engagement plan with institutional and retail investors.
6. Key stakeholders, including host governments, communities, customers and suppliers.
7. Governance and regulatory framework, both in the UK and in Australia, and our capital and financing structure.
Board level experience in a major corporation.
Experience of developing large-scale, long-cycle capital projects.
Proficiency in financial accounting and reporting, corporate finance, internal
controls, treasury and associated risk management.
No. of Directors
Skills and experience of the Chairman and Non-Executive Directors
Area of expertise
Business leadership
Capital projects
Financial
relations
HSES/ESG
Climate change
performance
Marketing
Mergers and acquisitions
Experience of mergers, acquisitions, disposals and joint ventures.
Global experience
Work experience in multiple global locations, exposed to a range of political,
cultural, regulatory and business environments.
Corporate governance
Experience on the board of a major corporation subject to rigorous corporate
Government and international
Interaction with governments and regulators or involvement in public policy
governance standards.
development and implementation.
Communities and social
Experience of working with communities to optimise the benefits and minimise
Familiarity with issues associated with workplace health and safety, asset
integrity, environment and social responsibility, and communities.
Knowledge and experience of climate-related threats and opportunities
including climate science, low-carbon transition and public policy.
negative impacts of business activities.
Senior executive experience in marketing, and the development of product
and/or customer management strategies.
Mining
Senior executive experience in a large, global mining organisation involved in
the discovery, development, operation and closure of mines.
HR/remuneration
Experience of talent recruitment, retention, development and incentives.
Technology/digital
Experience of managing research, development and innovation, including
digital technology.
7
5
5
5
8
6
4
6
6
6
2
2
4
2
Audit Committee report
I am pleased to report on the work of the Audit Committee in 2021. This is set out in
detail over the following pages, but in this introduction I would just like to highlight a
few aspects of the year.
As usual, a significant proportion of the Committee’s time has been
spent considering the significant issues of judgment relating to the
financial statements. In 2021, these included impairment charges/
reversals, exclusions, closure provisions, climate change, tax, litigation
and, for the first time, potential provisions for liabilities associated with
Traditional Owners of land on which we operate. Our primary focus has
been on potential impairments of assets and future closure liabilities. In
each case, our work is focused on ensuring issues are identified early,
the correct accounting judgments are made and that these matters are
appropriately disclosed in our financial reporting. Further detail on these
issues is provided on page 153.
In 2021 the Board has seen a further intensification of the focus on climate
change. The Audit Committee has focused on the potential implications for
the financial statements, in particular on price scenarios, asset valuations,
lifetime of resources and future costs of closure. These matters contain
significant uncertainties and complexity from an accounting perspective,
and the Committee has carefully considered the accounting judgments
involved and appropriate disclosures in our financial reporting.
Further information on climate change-related financial reporting is
provided on page 155 of the Audit Committee report.
We closely monitor developing regulatory requirements in the three
jurisdictions in which we are listed, and have contributed fully to the
likely 2022 release of new requirements in the UK. Our intent is to be a
valued contributor to positive developments in corporate governance,
and to adopt new requirements in a timely way. In addition, it is clear
that regulator and societal expectations are increasing within existing
requirements, and we have worked with our external auditors to ensure
that our risk, control and assurance frameworks are developing at pace
in line with best practice. In 2021, together with the Sustainability
Committee, the Audit Committee has taken a particular interest in the
effective development and operation of the “three lines of defence”
assurance model. The Company’s Internal Audit function has played a
major role here, overseen by the Committee.
Lastly, I would like to express my thanks to my fellow Committee
members and to others who support the work of the Committee.
Sadly, 2021 has seen the continuation of the COVID-19 pandemic,
and the travel restrictions associated with it have meant it has remained
largely impossible for us to meet in person. That the Committee has
managed to complete its full programme of work despite this challenge
is testament to the skill and commitment of all involved.
I hope that readers will find the information set out on the following
pages interesting and informative.
Audit Committee members
Simon Henry (Chair)
Hinda Gharbi
Simon McKeon
Membership
The members of the Committee are all independent Non-Executive
Directors, and their biographies can be found on pages 134-135.
The Chairman of the Board is not a member of the Committee.
As Rio Tinto’s securities are listed in Australia, the UK and the US,
we follow the regulatory requirements and best practice governance
recommendations for audit committees in each of these markets.
Australian listing requirements
In Australia, the members, and the Committee as a whole, meet the
independence requirements of the ASX Principles. Specifically, the
Committee members between them have the accounting and financial
expertise and a sufficient understanding of the industry in which the
company operates to be able to discharge the Committee’s
mandate effectively.
UK listing requirements
In the UK, the members meet the requirements of the FCA’s Disclosure
Guidance and Transparency Rules, and the provisions of the UK
Corporate Governance Code relating to audit committee composition.
Simon Henry, the Chair of the Committee, is considered by the Board
to have recent and relevant financial experience.
Simon Henry and Hinda Gharbi both have extensive prior experience
of the natural resources sector. Simon McKeon has gained experience
of the mining sector by serving on the Board and on the Committee,
and through regular site visits, reports and presentations. The
Committee as a whole has competence relevant to the sector in which
the company operates.
US listing requirements
In the US, the requirements for the Committee’s composition and role
are set out in SEC and NYSE rules. The Board has designated Simon
Henry as an “audit committee financial expert”. The Board also believes
that the other members of the Committee are financially literate by
virtue of their wide business experience.
Simon Henry
Audit Committee Chair
23 February 2022
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151
Audit Committee report continued
Committee remit
Use of Committee meeting time in 2021
Financial reporting
40%
External audit
20%
Internal control and
risk management
Internal audit
Governance
20%
15%
5%
Other focus areas in 2021
In addition to our scheduled workload, the Committee also considered:
– An annual review and benchmarking of Rio Tinto’s accounting
policies and an overview of newly issued International Financial
Reporting Standards (IFRS) standards and interpretations.
– A summary of the key financial measures relating to the Group’s
pension plans and the factors affecting those figures.
– Possible enhancements to the Group’s long-term viability statement,
and the scenario modelling that underpins it, based on the
recommendation in the Brydon Report.
– After a robust process, in early 2022 the Committee recommended
to the Board that the draft 2021 Annual Report is, taken as a whole,
fair, balanced and understandable.
We also reviewed the quality and effectiveness of the Group’s internal
control and risk management systems in a joint session with the
Sustainability Committee, which oversees a number of key corporate
risks. This review included the effectiveness of the Group’s internal
controls over financial reporting, and the Group’s disclosure controls
and procedures in accordance with sections 404 and 302 of the US
Sarbanes-Oxley Act 2002. The Committee also considered reports
from GIA and KPMG on their work in reviewing and auditing the
control environment.
Contact with regulators
During the year, the Company received a letter from the FRC’s
Corporate Reporting Review team requesting information in relation
to their review of the 2020 financial statements. The principal areas
where they required further information related to: Funding of Oyu
Tolgoi, Alternative Performance Measures and deferred tax assets.
Management’s response was reviewed by the Committee Chair and
discussed with the external auditors and additional disclosure has
been incorporated in the 2021 financial statements in relation to these
areas. The FRC Review team was satisfied with the response from
the company and the proposed enhancements to disclosures.
The scope of the review by the FRC was limited to reviewing the
2020 Annual Report and correspondence with management and does
not provide assurance that the report and accounts are correct in all
material respects.
The Committee’s objectives and responsibilities are set out in our terms
of reference (see riotinto.com). These follow the relevant best practice
recommendations in Australia, the UK and the US.
Our main duties are:
Financial reporting – we review the key judgments needed to apply
accounting standards and to prepare the Group’s financial statements.
We also review the narrative reporting that goes with these, with the
aim of maintaining integrity in the Group’s financial reporting. Finally,
we monitor any exclusions made in deriving alternative (non-GAAP)
performance measures such as underlying earnings.
External audit – we oversee the relationship with the external auditors
and review all the non-audit services they provide, and the fees for
these, to safeguard the auditors’ independence and objectivity.
We also assess the effectiveness of the external audit and, when
necessary, carry out a formal tender process to select new auditors.
Framework for internal control and risk management – we monitor
the effectiveness of the Group’s internal controls, including those
over financial reporting. We also oversee the Group’s risk
management framework.
Group Internal Audit (GIA) – we oversee the work of GIA, and its head,
who reports functionally to our Committee Chair.
Mineral resources and ore reserves – we oversee the reporting and
assurance of mineral resources, and consider the impact on
financial reporting.
Distributable reserves – we provide assurance to the Board that
distributable reserves are sufficient, and in the correct corporate
entities, to support any dividend proposals.
These duties feed into an annual work plan that ensures we consider
issues on a timely basis. The Committee has authority to investigate
any matters within its remit. We have the power to use any Group
resources we may reasonably require, and we have direct access to
the external auditors. We can also obtain independent professional
advice at the Group’s expense, where we deem necessary. No such
advice was required during 2021.
The Committee Chair reports to the Board after each meeting on the
main items discussed, and the minutes of our meetings are circulated
to the Board.
We had six Committee meetings in 2021. Attendance at these
meetings is included in the table on page 147. The Committee has met
three times to date in 2022.
The Chairman of the Board, the Chief Financial Officer, the Group
Financial Controller and the heads of GIA and Risk regularly attend our
meetings, as do the Chief Legal Officer & External Affairs, and the
Group Company Secretary. We invite other senior executives and
subject-matter experts as needed.
The external auditors were present at all of the Committee meetings
during the year. The auditors review all materials on accounting or tax
matters in advance of each meeting, and their comments are included
in the papers circulated to Committee members. The audit partners
also meet with our Committee Chair ahead of each meeting to discuss
key issues and raise any concerns.
The Committee meets regularly in private sessions. We also hold
regular private discussions with the external auditors. Management do
not attend these sessions. The Committee Chair also has regular
contact and discussions with these stakeholders outside the formal
meetings.
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Audit Committee report continued
Governance
The Committee’s objectives and responsibilities are set out in our terms
of reference (see riotinto.com). These follow the relevant best practice
recommendations in Australia, the UK and the US.
Our main duties are:
Financial reporting – we review the key judgments needed to apply
accounting standards and to prepare the Group’s financial statements.
We also review the narrative reporting that goes with these, with the
aim of maintaining integrity in the Group’s financial reporting. Finally,
we monitor any exclusions made in deriving alternative (non-GAAP)
performance measures such as underlying earnings.
External audit – we oversee the relationship with the external auditors
and review all the non-audit services they provide, and the fees for
these, to safeguard the auditors’ independence and objectivity.
We also assess the effectiveness of the external audit and, when
necessary, carry out a formal tender process to select new auditors.
Framework for internal control and risk management – we monitor
the effectiveness of the Group’s internal controls, including those
over financial reporting. We also oversee the Group’s risk
management framework.
Group Internal Audit (GIA) – we oversee the work of GIA, and its head,
who reports functionally to our Committee Chair.
Mineral resources and ore reserves – we oversee the reporting and
Other focus areas in 2021
In addition to our scheduled workload, the Committee also considered:
– An annual review and benchmarking of Rio Tinto’s accounting
policies and an overview of newly issued International Financial
Reporting Standards (IFRS) standards and interpretations.
– A summary of the key financial measures relating to the Group’s
pension plans and the factors affecting those figures.
– Possible enhancements to the Group’s long-term viability statement,
and the scenario modelling that underpins it, based on the
recommendation in the Brydon Report.
Committee remit
Use of Committee meeting time in 2021
Significant issues relating to the financial statements
Financial reporting
40%
External audit
20%
Internal control and
risk management
20%
Internal audit
Governance
15%
5%
There were six significant issues considered by the Committee in relation to the financial statements:
Matters considered
Conclusion
Review of carrying value of cash-
generating units and impairment
charges/reversals
The Committee assessed management’s determination of cash-generating units, review of impairment
triggers and consideration of potential impairment charges and reversals over the course of the year.
Impairment triggers were identified at the Oyu Tolgoi and Kitimat cash-generating units. The Committee
considered the key judgments made by management in relation to discount rates, forecast commodity
prices and sensitivities in relation to climate change. Specifically with respect to Oyu Tolgoi the
Committee received an update on the status of negotiations with the Government of Mongolia, technical
readiness for the undercut and mine design. The Committee reviewed disclosures related to impairment
reviews in note 6 and the impairment charges of $0.3 billion.
Application of the policy for items
excluded from underlying earnings
The Committee reviewed the Group’s policy for exclusion of certain items from underlying earnings and
confirmed the consistent application of this policy year on year. The items excluded from underlying
earnings comprised a net expense of $0.3 billion. A reconciliation of underlying earnings to net earnings
is presented in note 2.
Estimate of provision for closure,
restoration and environmental
obligations
assurance of mineral resources, and consider the impact on
– After a robust process, in early 2022 the Committee recommended
Climate change
financial reporting.
Distributable reserves – we provide assurance to the Board that
distributable reserves are sufficient, and in the correct corporate
entities, to support any dividend proposals.
These duties feed into an annual work plan that ensures we consider
issues on a timely basis. The Committee has authority to investigate
any matters within its remit. We have the power to use any Group
resources we may reasonably require, and we have direct access to
the external auditors. We can also obtain independent professional
advice at the Group’s expense, where we deem necessary. No such
advice was required during 2021.
to the Board that the draft 2021 Annual Report is, taken as a whole,
fair, balanced and understandable.
We also reviewed the quality and effectiveness of the Group’s internal
control and risk management systems in a joint session with the
Sustainability Committee, which oversees a number of key corporate
risks. This review included the effectiveness of the Group’s internal
controls over financial reporting, and the Group’s disclosure controls
and procedures in accordance with sections 404 and 302 of the US
Sarbanes-Oxley Act 2002. The Committee also considered reports
from GIA and KPMG on their work in reviewing and auditing the
control environment.
The Committee Chair reports to the Board after each meeting on the
main items discussed, and the minutes of our meetings are circulated
Contact with regulators
to the Board.
The Group’s tax exposures
Litigation and disputes
The Committee reviewed the significant changes in the estimated provision for closure, restoration and
environmental obligations by product group and legacy management. The Committee received updates
on closure studies completed in the period and discussed with management the accounting policy for
legacy sites. The Committee noted the steps undertaken by management to review the preliminary
information available from the reforecast of the closure costs for the Ranger Rehabilitation area at the
Ranger Uranium mine and related controls undertaken as a result of the limited time available to reassess
the provision. At 31 December 2021, the Group’s balance sheet included a provision for close-down,
restoration and environmental obligations of $14.5 billion.
The Committee received an overview of the work management is undertaking in relation to climate
change and the potential financial reporting implications thereof. The Committee reviewed the climate
change summary provided in note 1 and discussed with management the three strategic scenarios,
the portfolio strategy, and the linkage to accounting judgments. The Committee was pleased to see
the enhanced voluntary disclosure of carrying value and useful economic lives of power generating
assets in note 14.
The Committee considered management’s assessment of the Group’s tax exposures, including
the recoverability of deferred tax assets which are uncertain due to the timing of expiry of tax loss
carry-forwards in certain jurisdictions. The Committee received updates on the status of ongoing
discussions with the Australian Tax Office relating to the transfer pricing of certain transactions with
the Group’s commercial centre in Singapore and considered the appropriateness of provisions for
uncertain tax positions.
The Committee considered any current or projected litigation and considered management’s
assessment of any financial provisions or contingent liabilities. This included discussion of the process to
modernise agreements with Traditional Owners. Provisions are regularly updated, reviewed with the
potential exposure and compared with the track record of settled outcomes.
External auditors
Engagement of the external auditors
For the 2021 financial year, KPMG are serving as our auditors. The UK
entity of KPMG audits Rio Tinto plc, and the Australian entity audits
Rio Tinto Limited. The UK audit engagement partner, Jonathan Downer,
was appointed in March 2021 and the Australian partner, Trevor Hart,
was appointed in 2020.
We agreed the scope of the auditors’ review of the half-year accounts,
and of their audit of the full-year accounts taking into consideration the
key risks and areas of material judgment for the Group. We also
approved the fees for this work and the engagement letters for
the auditors.
Safeguarding independence and objectivity,
and maintaining effectiveness
In our relationship with the external auditors we need to ensure that
they retain their independence and objectivity, and are effective in
performing the statutory audit.
Use of the external auditors for non-audit services
The external auditors have significant knowledge of our business and
of how we apply our accounting policies. That means it is sometimes
cost-efficient for them to provide non-audit services. There may also
be confidentiality reasons that make the external auditors the preferred
choice for a particular task.
However, safeguarding the external auditors’ objectivity and
independence is an overriding priority. For this reason, and in line with
the FRC’s Ethical Standard, the Committee ensures that the external
auditors do not perform any functions of management, undertake any
work which they may later need to audit or rely upon in the audit, or
serve in an advocacy role for the Group.
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153
During the year, the Company received a letter from the FRC’s
Corporate Reporting Review team requesting information in relation
to their review of the 2020 financial statements. The principal areas
where they required further information related to: Funding of Oyu
Tolgoi, Alternative Performance Measures and deferred tax assets.
Management’s response was reviewed by the Committee Chair and
discussed with the external auditors and additional disclosure has
been incorporated in the 2021 financial statements in relation to these
areas. The FRC Review team was satisfied with the response from
the company and the proposed enhancements to disclosures.
The scope of the review by the FRC was limited to reviewing the
2020 Annual Report and correspondence with management and does
not provide assurance that the report and accounts are correct in all
material respects.
We had six Committee meetings in 2021. Attendance at these
meetings is included in the table on page 147. The Committee has met
three times to date in 2022.
The Chairman of the Board, the Chief Financial Officer, the Group
Financial Controller and the heads of GIA and Risk regularly attend our
meetings, as do the Chief Legal Officer & External Affairs, and the
Group Company Secretary. We invite other senior executives and
subject-matter experts as needed.
The external auditors were present at all of the Committee meetings
during the year. The auditors review all materials on accounting or tax
matters in advance of each meeting, and their comments are included
in the papers circulated to Committee members. The audit partners
also meet with our Committee Chair ahead of each meeting to discuss
key issues and raise any concerns.
The Committee meets regularly in private sessions. We also hold
regular private discussions with the external auditors. Management do
not attend these sessions. The Committee Chair also has regular
contact and discussions with these stakeholders outside the formal
meetings.
Audit Committee report continued
We have a policy governing the use of the auditors to provide
non-audit services. The cap on the total fees that may be paid to the
external auditors for non-audit services in any given year is 70% of the
average of the audit fees for the preceding three years. This is in line
with the FRC’s Ethical Standard. Non-audit assignments fall into two
broad categories:
– Audit, audit-related or other “pre-approved” services where we
believe there is no threat to auditors’ independence and objectivity,
other than through the fees payable.
– Other services approved under delegated authority. We apply
different approval regimes to these areas of work. Approval of
“pre-approved” services is as follows:
– Up to $50,000 – subject to prior notification to management,
this work can be awarded.
– From $50,001 to $100,000 – requires the Chief Financial
Officer’s approval.
– Over $100,000 and with a tender process – if the external auditors
are successful in the tender, the appointment requires the Chief
Financial Officer’s approval.
– From $100,001 to $250,000 without a tender process – requires
the Chief Financial Officer’s approval.
– Over $250,000, without a tender process – requires the
Committee’s or Committee Chair’s approval.
In each case, the nature of the assignment and the fees payable are
reported to the Committee.
The Chief Financial Officer can approve other services up to the
value of $50,000 and an aggregate value of no more than $100,000.
Fees exceeding $100,000 in aggregate require approval from the
Committee or the Committee Chair.
At the half-year and year-ends, the Chief Financial Officer and the
external auditors report to the Committee on non-audit services
performed and the fees payable. Individual services are also reported
to the Committee at each meeting that have either been approved
since the previous meeting, or that require approval for
commencement following the meeting.
All of the non-audit services provided by KPMG in 2021 were either
within the predetermined approval levels or approved by the
Committee. We are satisfied that the provision of non-audit services
by KPMG in accordance with this procedure is compatible with the
general standard of independence for auditors and the other
requirements of the relevant Australian, UK and US regulations.
Fees for audit and non-audit services
The amounts payable to the external auditors, in each of the past
two years, were:
Audit fees
Non-audit service fees:
Assurance services
Taxation services
All other fees
Total non-audit service fees
Non-audit: audit fees (in-year)
2021
$m
21.2
3.7
0.0
0.2
3.9
18%
2020
$m
17.3
2.2
0.0
0.1
2.3
13%
For further analysis of these fees, please see note 38.
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None of the individual non-audit assignments was significant, either in
terms of the work done or the fees payable. We have reviewed the
non-audit work in aggregate. We are satisfied that neither the work
done, nor the fees payable, compromised the independence or
objectivity of KPMG as our external auditors.
Independence of the external auditors
KPMG are required to provide a declaration to the Directors in relation
to their compliance with the independence requirements of the
Australian Corporations Act 2001 and the professional code of
conduct for external auditors. A copy of this is on page 324.
No person who served as an officer of Rio Tinto during 2021 was a
director or partner of KPMG at a time when they conducted an audit of
the Group.
Effectiveness of the external auditors
We review the effectiveness of the external auditors annually. We
consider the results of a survey containing questions on the auditors’
objectivity, quality and efficiency. The survey, conducted in May 2021,
is completed by a range of operational and corporate executives
across the business, and by Committee members. In addition, the 2020
audit was the subject of an inspection by the Audit Quality Review
team of the FRC with no significant findings.
We are satisfied with the quality and objectivity of KPMG’s 2020 audit.
2020 represented KPMG’s first year as external auditor and,
unsurprisingly, some transition challenges were encountered which
were exacerbated by COVID-19-related restrictions impacting the
efficiency of the audit. We have seen improvement on this through
2021 as audit routines and testing programmes continue to embed
across our Group functions and businesses.
Appointment of the auditors
The Committee has reviewed the independence, objectivity and
effectiveness of KPMG as external auditors in 2021 and in the year to
date. We have recommended to the Board that KPMG should be
retained in this role for 2022, which the Board supports.
KPMG have indicated that they are willing to continue as auditors of
Rio Tinto. A resolution to reappoint them as auditors of Rio Tinto plc
will therefore be proposed as a joint resolution at the 2022 AGMs,
together with a separate resolution seeking authority for the Committee
to determine the external auditors’ remuneration.
Subject to the approval of the above resolution, KPMG will continue in
office as auditors of Rio Tinto Limited.
Risk management and internal controls
We review Rio Tinto’s internal control systems and the risk
management framework. We also monitor risks falling within our
remit, especially those relating to the integrity of financial reporting.
A summary of the business’s internal control and risk management
systems, and of the principal risks and uncertainties we face, is in the
strategic report on pages 117-130.
Importantly, responsibility for operating and maintaining the internal
control environment and risk management systems sits at asset level.
Leaders of our businesses and functions are required to confirm
annually: that adequate internal controls are in place; that these are
operating effectively and are designed to identify any failings and
weaknesses that may exist; and that any required actions are
taken promptly.
Audit Committee report continued
Governance
We have a policy governing the use of the auditors to provide
None of the individual non-audit assignments was significant, either in
non-audit services. The cap on the total fees that may be paid to the
terms of the work done or the fees payable. We have reviewed the
external auditors for non-audit services in any given year is 70% of the
non-audit work in aggregate. We are satisfied that neither the work
average of the audit fees for the preceding three years. This is in line
done, nor the fees payable, compromised the independence or
with the FRC’s Ethical Standard. Non-audit assignments fall into two
objectivity of KPMG as our external auditors.
believe there is no threat to auditors’ independence and objectivity,
KPMG are required to provide a declaration to the Directors in relation
broad categories:
– Audit, audit-related or other “pre-approved” services where we
other than through the fees payable.
– Other services approved under delegated authority. We apply
different approval regimes to these areas of work. Approval of
“pre-approved” services is as follows:
– Up to $50,000 – subject to prior notification to management,
this work can be awarded.
the Group.
Independence of the external auditors
to their compliance with the independence requirements of the
Australian Corporations Act 2001 and the professional code of
conduct for external auditors. A copy of this is on page 324.
No person who served as an officer of Rio Tinto during 2021 was a
director or partner of KPMG at a time when they conducted an audit of
Effectiveness of the external auditors
We review the effectiveness of the external auditors annually. We
consider the results of a survey containing questions on the auditors’
objectivity, quality and efficiency. The survey, conducted in May 2021,
is completed by a range of operational and corporate executives
across the business, and by Committee members. In addition, the 2020
audit was the subject of an inspection by the Audit Quality Review
team of the FRC with no significant findings.
We are satisfied with the quality and objectivity of KPMG’s 2020 audit.
2020 represented KPMG’s first year as external auditor and,
unsurprisingly, some transition challenges were encountered which
were exacerbated by COVID-19-related restrictions impacting the
efficiency of the audit. We have seen improvement on this through
2021 as audit routines and testing programmes continue to embed
across our Group functions and businesses.
Appointment of the auditors
The Committee has reviewed the independence, objectivity and
effectiveness of KPMG as external auditors in 2021 and in the year to
date. We have recommended to the Board that KPMG should be
retained in this role for 2022, which the Board supports.
KPMG have indicated that they are willing to continue as auditors of
Rio Tinto. A resolution to reappoint them as auditors of Rio Tinto plc
will therefore be proposed as a joint resolution at the 2022 AGMs,
together with a separate resolution seeking authority for the Committee
to determine the external auditors’ remuneration.
Subject to the approval of the above resolution, KPMG will continue in
office as auditors of Rio Tinto Limited.
– From $50,001 to $100,000 – requires the Chief Financial
Officer’s approval.
– Over $100,000 and with a tender process – if the external auditors
are successful in the tender, the appointment requires the Chief
Financial Officer’s approval.
– From $100,001 to $250,000 without a tender process – requires
the Chief Financial Officer’s approval.
– Over $250,000, without a tender process – requires the
Committee’s or Committee Chair’s approval.
In each case, the nature of the assignment and the fees payable are
reported to the Committee.
The Chief Financial Officer can approve other services up to the
value of $50,000 and an aggregate value of no more than $100,000.
Fees exceeding $100,000 in aggregate require approval from the
Committee or the Committee Chair.
At the half-year and year-ends, the Chief Financial Officer and the
external auditors report to the Committee on non-audit services
performed and the fees payable. Individual services are also reported
to the Committee at each meeting that have either been approved
since the previous meeting, or that require approval for
commencement following the meeting.
All of the non-audit services provided by KPMG in 2021 were either
within the predetermined approval levels or approved by the
Committee. We are satisfied that the provision of non-audit services
by KPMG in accordance with this procedure is compatible with the
general standard of independence for auditors and the other
requirements of the relevant Australian, UK and US regulations.
Fees for audit and non-audit services
The amounts payable to the external auditors, in each of the past
two years, were:
Two management committees, the Executive Committee and the
Disclosure Committee, review reports on the Group’s control
framework. The work they do satisfies the relevant requirements of the
Code, the ASX Principles, the NYSE Standards and section 404 of the
US Sarbanes-Oxley Act 2002.
The Audit Committee also regularly monitors our risk management and
internal control systems (including internal financial controls). We aim
to have appropriate policies, standards and procedures in place, and
ensure that they operate effectively.
As part of considering the risk management framework, the Committee
receives regular reports from the Group Financial Controller, the Chief
Legal Officer & External Affairs, and the Head of Tax on material
developments in the legal, regulatory and fiscal landscape in which the
Group operates.
The Board, supported by the Audit Committee, has completed its
formal annual review of the effectiveness of our risk management and
internal control systems. This review included consideration of our
material financial, operational and compliance controls. The Board
concluded that the Group has an effective system of risk management
and internal control.
Internal control over financial reporting
The main features of our internal control and risk management systems
in relation to financial reporting are explained on page 204.
Internal audit programme structure
GIA provides independent and objective assurance of the adequacy
and effectiveness of risk management and internal control systems. It
also may recommend improvements.
While the head of GIA reports administratively to the Chief Financial
Officer, appointment to, or removal from, this role requires the consent
of the Audit Committee Chair. The head of GIA is accountable to the
chairs of both the Audit and the Sustainability Committees,
communicates regularly with both, and attends all regular committee
meetings. Our GIA team therefore operates independently of
management. Its mandate is set out in a written charter, approved by
the Audit Committee. GIA uses a formal internal audit methodology,
which is consistent with the Institute of Internal Auditors’ (IIA’s)
internationally recognised standards.
When needed, the team brings in external partners to help achieve its
goals. There is a clear policy to address any conflicts of interest, which
complies with the IIA’s standards on independence. This policy identifies
a list of services which need prior approval from the head of GIA.
Risk management and internal controls
Governance of the annual plan
Audit fees
Non-audit service fees:
Assurance services
Taxation services
All other fees
Total non-audit service fees
Non-audit: audit fees (in-year)
2021
$m
21.2
3.7
0.0
0.2
3.9
18%
2020
$m
17.3
2.2
0.0
0.1
2.3
13%
We review Rio Tinto’s internal control systems and the risk
management framework. We also monitor risks falling within our
remit, especially those relating to the integrity of financial reporting.
A summary of the business’s internal control and risk management
systems, and of the principal risks and uncertainties we face, is in the
strategic report on pages 117-130.
Importantly, responsibility for operating and maintaining the internal
control environment and risk management systems sits at asset level.
Leaders of our businesses and functions are required to confirm
annually: that adequate internal controls are in place; that these are
operating effectively and are designed to identify any failings and
weaknesses that may exist; and that any required actions are
For further analysis of these fees, please see note 38.
taken promptly.
Each year’s internal audit plan is approved by the Audit Committee and
the Sustainability Committee. The plan is focused on higher-risk areas
and any specific areas or processes chosen by the committees. It is
also aligned with any risks identified by the external auditors. Both
committees are given regular updates on progress, including any
material findings, and can refine the plans as needed.
Effectiveness of the internal audit programme
The Audit Committee monitors the effectiveness of the GIA function
throughout the year, with updates on performance at every meeting.
We are satisfied that the quality, experience and expertise of GIA are
appropriate for the business and that GIA was objective and performed
its role effectively. We also monitored management’s response to
internal audits during the year. We are satisfied that improvements are
being implemented promptly in response to GIA findings, and believe
that management supports the effective working of the GIA function.
Committee effectiveness
The Committee reviews its effectiveness annually. In 2021, this was
accomplished through an internally facilitated evaluation of the Board
and its committees.
The performance of the Audit Committee was highly rated, with no
areas of concern raised and no significant changes recommended.
In terms of improvements, it was suggested that a further in-depth
session on risk management/risk tolerance would be useful, together
with the resumption of themed teach-ins (assuming a return to physical
meetings in 2022).
Climate change-related financial reporting
The Directors have considered the relevance of the risks of
climate change and transition risks associated with achieving
the goals of the Paris Agreement when preparing and signing
off the company’s accounts. The narrative reporting on
climate-related matters is consistent with the accounting
assumptions and judgments made in this report. The Audit
Committee reviews and approves all material accounting
estimates and judgments relating to financial reporting,
including those where climate issues are relevant.
In developing its commodity price forecasts, the Group
considers three strategic scenarios with differing underlying
assumptions about geopolitics, technology and society.
As existing climate policies in many countries are not aligned
with achieving the Paris Agreement, only one of the three
strategic scenarios assumes a temperature increase of well
below 2°C. The three scenarios include differing assumptions
on carbon pricing and result in differing commodity price
forecasts. Our central case commodity price forecasts
represent a blend of the three scenarios. As a consequence,
our central case is not aligned with the goals of the Paris
Agreement. These central case commodity price forecasts
are used pervasively in our financial processes including
impairment testing, estimating remaining economic life, and
discounting closure and rehabilitation provisions.
We have disclosed sensitivity information based on cash
flows flexed for the carbon and commodity price forecasts
generated by the one scenario that we believe is consistent
with achieving the goals of the Paris Agreement. These
sensitivities indicate that, in relation to impairment testing for
example, higher recoverable amounts would have been
determined had we applied commodity price forecasts
aligned with the Paris Agreement.
In addition to commodity price forecasts, given the
significant investment we are making to abate our carbon
emissions, we have also considered the potential for asset
obsolescence, with a particular focus on our investments in
the Pilbara, but no material changes to accounting estimates
have been necessary. The closure date and cost of closure is
also sensitive to climate assumptions, but no material changes
have been made in the year specific to climate change.
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Sustainability Committee report
Caring for our people and our communities, and helping to solve the world’s
biggest environmental challenges, sits at the heart of Rio Tinto’s approach to
sustainable development.
Tragically, there were eight fatalities across our non-managed
operations and contracted marine transportation operations during
2021. We continue to work with our joint venture partners and shipping
industry peers and counterparties to improve safety performance at
those operations.
We continue to work on rebuilding respectful relationships with the
Traditional Owners in the lands on which we operate following the
tragic destruction of the rock shelters at Juukan Gorge in May 2020.
The Committee reviewed actions to strengthen our approach and
processes for managing cultural heritage – both within our Iron Ore
business, and across our operations globally. On 30 September 2021,
to ensure transparency of the work we are undertaking in this area,
we released our first report on the progress we are making. The report
includes an update on our progress against the recommendations of
the interim report from the inquiry into Juukan Gorge by the Australian
Government’s Joint Standing Committee on Northern Australia. It also
includes feedback from Traditional Owner groups in the Pilbara on our
progress on some of the key commitments made as part of the
Rio Tinto Board’s 2020 review of our cultural heritage management.
The full report is available at riotinto.com and an update on our
progress is available on pages 94-95 of this report.
This year, our Chief Executive outlined a revised strategy that will see
the company accelerate its decarbonisation by switching to renewable
power, electrifying processing, and running electric mobile fleets.
An increased research and development spend on technologies will
enable our customers to decarbonise and we will prioritise growth
capital in commodities that are essential to build a clean energy future.
In 2021, the Group continued to navigate the significant challenges to
resourcing our operations presented by the COVID-19 pandemic.
Our leadership team is to be commended for the measures adopted to
keep our people healthy, and for keeping our operations running safely
and smoothly. We have developed a position supporting vaccination of
our people in line with the latest scientific knowledge, industry best
practice and local regulatory requirements, and we have stepped up
our support for employees in areas such as mental health, managing
fatigue, and adjusting to working from home.
The purpose of the Sustainability Committee is to enhance Rio Tinto’s
social licence to operate by supporting and monitoring the sustainable
development of Rio Tinto’s businesses. This includes our work to
support the health and safety of our people, the many ways we help our
local communities, and our partnerships with Traditional Owners and
First Nations peoples.
The Sustainability Committee oversees Rio Tinto’s frameworks,
management systems, and processes for ensuring the health
and safety of our employees and contractors; monitors our key
environmental risks such as water, tailings management and
biodiversity; and supports the Group’s contribution to the sustainable
development of the communities in which we operate. In 2021,
the Committee also monitored climate risk, and our progress against
our climate change strategy.
The Committee has overseen a focus on the UN Sustainable
Development Goals (UN SDGs) within the business, and the new
sustainability framework reflects our focus on two lead goals – SDG12
(responsible consumption and production) and SDG8 (decent work
and economic growth), which are most relevant to our business, and
where we can have the most significant impact. In 2021, progress on
SDG12 was made through a focus on recovery of critical minerals from
waste, sustainability transparency and traceability in the aluminium
value chain through START; and on SDG8 through increased
investment in Indigenous leadership development, leading to a fivefold
increase in Indigenous leaders in Australia, and an increase of
approximately 53% on our 2020 voluntary social investment
spend globally.
For the third year running, we experienced zero fatalities at our
managed operations. While this is heartening, our people are still
suffering injuries at our assets and we saw a small increase in our
all-injury frequency rate in 2021. We believe all injuries are preventable
and the Committee reviewed selected potentially fatal incidents with
business leaders during the year to ensure that important lessons are
learned from these incidents and communicated.
Core to our ongoing improvement in safety performance is the safety
maturity model, which focuses on leadership behaviours in the field
and critical risk management. In 2021, the Committee reviewed
contractor safety action plans developed by management for each
product group. We will further integrate contractors into the safety
maturity model from 2022, to close the disparity in safety performance
between employees and contractors. Our safety maturity model will
also assess mindsets and behaviours to help create a safe work
environment and support the work needed on the Everyday Respect
initiative to ensure our workplaces are free from bullying, sexual
harassment, racism and other forms of discrimination.
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Sustainability Committee report
Caring for our people and our communities, and helping to solve the world’s
biggest environmental challenges, sits at the heart of Rio Tinto’s approach to
sustainable development.
The purpose of the Sustainability Committee is to enhance Rio Tinto’s
Tragically, there were eight fatalities across our non-managed
social licence to operate by supporting and monitoring the sustainable
operations and contracted marine transportation operations during
development of Rio Tinto’s businesses. This includes our work to
2021. We continue to work with our joint venture partners and shipping
support the health and safety of our people, the many ways we help our
industry peers and counterparties to improve safety performance at
local communities, and our partnerships with Traditional Owners and
those operations.
First Nations peoples.
The Sustainability Committee oversees Rio Tinto’s frameworks,
Traditional Owners in the lands on which we operate following the
management systems, and processes for ensuring the health
tragic destruction of the rock shelters at Juukan Gorge in May 2020.
and safety of our employees and contractors; monitors our key
The Committee reviewed actions to strengthen our approach and
environmental risks such as water, tailings management and
processes for managing cultural heritage – both within our Iron Ore
biodiversity; and supports the Group’s contribution to the sustainable
business, and across our operations globally. On 30 September 2021,
development of the communities in which we operate. In 2021,
to ensure transparency of the work we are undertaking in this area,
the Committee also monitored climate risk, and our progress against
we released our first report on the progress we are making. The report
We continue to work on rebuilding respectful relationships with the
our climate change strategy.
The Committee has overseen a focus on the UN Sustainable
Development Goals (UN SDGs) within the business, and the new
sustainability framework reflects our focus on two lead goals – SDG12
(responsible consumption and production) and SDG8 (decent work
and economic growth), which are most relevant to our business, and
where we can have the most significant impact. In 2021, progress on
SDG12 was made through a focus on recovery of critical minerals from
includes an update on our progress against the recommendations of
the interim report from the inquiry into Juukan Gorge by the Australian
Government’s Joint Standing Committee on Northern Australia. It also
includes feedback from Traditional Owner groups in the Pilbara on our
progress on some of the key commitments made as part of the
Rio Tinto Board’s 2020 review of our cultural heritage management.
The full report is available at riotinto.com and an update on our
progress is available on pages 94-95 of this report.
waste, sustainability transparency and traceability in the aluminium
This year, our Chief Executive outlined a revised strategy that will see
value chain through START; and on SDG8 through increased
the company accelerate its decarbonisation by switching to renewable
investment in Indigenous leadership development, leading to a fivefold
power, electrifying processing, and running electric mobile fleets.
increase in Indigenous leaders in Australia, and an increase of
An increased research and development spend on technologies will
approximately 53% on our 2020 voluntary social investment
enable our customers to decarbonise and we will prioritise growth
spend globally.
capital in commodities that are essential to build a clean energy future.
For the third year running, we experienced zero fatalities at our
In 2021, the Group continued to navigate the significant challenges to
managed operations. While this is heartening, our people are still
resourcing our operations presented by the COVID-19 pandemic.
suffering injuries at our assets and we saw a small increase in our
Our leadership team is to be commended for the measures adopted to
all-injury frequency rate in 2021. We believe all injuries are preventable
keep our people healthy, and for keeping our operations running safely
and the Committee reviewed selected potentially fatal incidents with
and smoothly. We have developed a position supporting vaccination of
business leaders during the year to ensure that important lessons are
our people in line with the latest scientific knowledge, industry best
practice and local regulatory requirements, and we have stepped up
our support for employees in areas such as mental health, managing
fatigue, and adjusting to working from home.
learned from these incidents and communicated.
Core to our ongoing improvement in safety performance is the safety
maturity model, which focuses on leadership behaviours in the field
and critical risk management. In 2021, the Committee reviewed
contractor safety action plans developed by management for each
product group. We will further integrate contractors into the safety
maturity model from 2022, to close the disparity in safety performance
between employees and contractors. Our safety maturity model will
also assess mindsets and behaviours to help create a safe work
environment and support the work needed on the Everyday Respect
initiative to ensure our workplaces are free from bullying, sexual
harassment, racism and other forms of discrimination.
Governance
Other key areas of focus for the Committee in 2021 included:
The role of the Committee
– Major hazards: conducting deep dives on the major hazard risks and
their control frameworks in our business.
The Committee’s scope and responsibilities are set out in its terms
of reference which can be found at riotinto.com.
– Water: overseeing our approach to water management and
monitoring our progress against our water stewardship targets.
– Tailings: continuing to oversee the review of our control framework
for tailings dams and water storage, and monitoring our
implementation of the new Global Industry Standard for
Tailings Management.
– ESG goals: establishing specific environmental, social and
governance metrics to constitute one half of the individual
component of the 2021 short-term incentive plan for our
senior executives.
– Governance: reviewing our processes for oversight of key
sustainability risks, particularly in relation to communities and
social performance.
– Sustainability trends: reviewing emerging global sustainability trends
including external briefings on nature-based solutions for climate
change and growing the circular economy.
Site visits are an important element of the work of the Committee, and
this year, despite COVID-19 restrictions, our Committee members
made individual visits to our Iron Ore operations at Brockman in the
Pilbara, Western Australia; our bauxite operations at Gove, Northern
Territory; Energy Resources of Australia’s operations in the Northern
Territory; Kennecott’s operations in Salt Lake, Utah; our Resolution
Copper joint venture project in Arizona; and our lithium project at Jadar
in Serbia.
In 2022, the Committee will oversee further definition of our
sustainability ambitions and the introduction of additional ESG targets
across the business.
By supporting and monitoring the broad range of sustainability issues
facing our business, the Committee seeks to enhance Rio Tinto’s social
licence to operate for the benefit of our shareholders, employees and
contractors, the communities in which we operate, and the world in
which we live.
Megan Clark
Sustainability Committee Chair
23 February 2022
Activities in 2021
The Committee met seven times in 2021, and focused on:
Health and safety
– Group performance across key health and safety metrics.
– Potentially fatal incidents (PFIs) occurring across the Group.
– Analysis of PFIs between 2017 and 2021 relating to falling
objects and strategies to reduce the risk of injuries and fatalities
caused by falling objects.
– Management actions to develop targeted contractor safety
action plans for each product group.
– Group COVID-19 response, including developing a position
on vaccination.
– Group strategic health priorities for 2021 to 2024, and strategies
to meet the business’s evolving requirements to protect our
employees’ health and wellbeing.
– Deep dives into key safety risks and controls, including:
– mass passenger transport incident risk
– process safety risk
– functional safety systems risk
Environment, including climate change
– Group performance across key environmental metrics.
– Group environment risks, and progress in addressing those risks
in line with our strategic vision and priorities.
– Progress against our climate change targets and related projects
and partnerships.
– Assessment of the physical risk impacts from climate change,
and the steps taken to mitigate and develop resilience to those risks.
– Progress against the Group’s 2019 to 2023 water stewardship targets.
– An in-depth review of the Group’s water management framework,
risk profiles and controls.
– Implementation of an improved integrated site water management
approach at QIT Madagascar Minerals (QMM).
– Group implementation of the Global Industry Standard for
Tailings Management, and engagement with Accountable
Executives in line with the Standard’s requirements, and a review of
tailings storage facilities at the non-managed bauxite joint venture
Mineração Rio do Norte S.A. in Brazil.
Sustainability Committee members
Communities and Social Performance
Megan Clark (Chair)
Jennifer Nason
– The Communities and Social Performance (CSP) function’s annual
Hinda Gharbi
Simon Henry
Sam Laidlaw
Simon Thompson
Ngaire Woods
Ben Wyatt (from 1 September 2021)
plan and priorities for 2021.
– Group-wide review of CSP risks, and work to strengthen our
control framework around CSP risks in line with our CSP
standard, our Cultural Heritage Group Procedure and other
CSP guidance documents.
Michael L’Estrange (until retirement from the Board on 6 May 2021)
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Sustainability Committee report continued
– Iron Ore product group response to the findings of the Board
– water management control frameworks for the boron and
Pilbara operations
– key global sustainability trends associated with the circular
economy, and nature-based solutions
– Group risk management and internal controls systems to
support the Board’s risk disclosures in the Annual Report, in a
joint session with the Audit Committee
Other (including closure & remediation, and security)
– Our current and emerging closure portfolio, including progress
against the Group’s closure plan.
– Closure and remediation process for Energy Resources of
Australia’s Ranger uranium mine.
– Group security issues and key insights on risk assessments
and controls.
The chart below represents the allocation of the Committee’s
meeting time during 2021:
4%
17%
21%
18%
19%
Health and safety
Environment, including climate change
Risk management & assurance, and
global sustainability trends
Governance, executive incentive
metrics, and disclosure
21%
Communities and Social Performance
Other (including closure & remediation,
and security)
The Committee Chair reports to the Board after each meeting,
and our minutes are tabled before the Board. All Directors have
access to the Committee’s papers.
Sustainability disclosures
Our sustainability framework and performance are described in detail
on pages 74 to 78 of this report.
Further information in relation to Rio Tinto’s approach to sustainability
can be found on our website at riotinto.com/sustainability.
Our Climate Change Report can be found on our website
at riotinto.com/climatereport.
Our Communities and Social Performance Commitments
Disclosure Interim Report can be found on our website at
riotinto.com/communities.
Our 2020 Statement on Modern Slavery can be found on our
website at riotinto.com/modernslavery.
review and the parliamentary inquiry preliminary report into the
destruction of the rock shelters at Juukan Gorge, with particular
focus on engagements with the Puutu Kunti Kurrama and Pinikura
(PKKP) people, the agreement modernisation process, and the
Integrated Heritage Management Process.
– Engagement with Native American tribes and the operation of our
Integrated Heritage Management Process at our Resolution Copper
joint venture project in Arizona.
– CSP targets for 2022-2026.
Governance, executive incentive metrics
and disclosure
– Processes for oversight of key sustainability risks, particularly
in relation to CSP.
– Group’s 2020 short-term incentive plan in relation to safety,
and the metrics for the 2021 targets.
– ESG metrics which now constitute one half of the individual
component of the short-term incentive plan for our
senior executives.
– Recommendations to the Remuneration Committee for the Group
Safety and ESG metrics for the 2022 short-term incentive plan.
– Reviewed reporting materials including:
– 2020 Climate Change Report published in February 2021,
our third report
– Group 2020 Sustainability reporting materials, including the
Sustainable development sections of the 2020 Annual Report
– Group 2020 Statement on Modern Slavery, ahead of its
approval by the Board
– Communities and Social Performance Commitments
Disclosure Interim Report
– Assessment of the Group’s most material sustainability topics
to be reported on in the 2021 Annual Report, combining feedback
from internal leaders and subject-matter experts, and considering
stakeholder expectations as well as an analysis of the
external environment.
– Statutory due diligence obligations applicable to Directors and
officers under applicable workplace health and safety laws in the
key jurisdictions in which Rio Tinto operates.
– Sustainability Committee’s scope and responsibilities as
reflected in its terms of reference.
Risk management & assurance, and global
sustainability trends
– External assurance programme of the Group’s sustainability
reporting, and safety performance data supporting the safety
performance outcomes under the short-term incentive plan.
– Key sustainability risks for each product group and for the
Group’s marine operations as presented by product group heads.
– Reviews undertaken by the Group Internal Audit function
relating to matters within the Committee’s scope, including:
– mine planning processes, particularly processes for
obtaining cultural and environmental approvals
– the CSP function’s Assurance Programme for Cultural Heritage
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– Iron Ore product group response to the findings of the Board
– water management control frameworks for the boron and
Sustainability Committee report continued
review and the parliamentary inquiry preliminary report into the
destruction of the rock shelters at Juukan Gorge, with particular
focus on engagements with the Puutu Kunti Kurrama and Pinikura
(PKKP) people, the agreement modernisation process, and the
Integrated Heritage Management Process.
– Engagement with Native American tribes and the operation of our
Integrated Heritage Management Process at our Resolution Copper
joint venture project in Arizona.
– CSP targets for 2022-2026.
Governance, executive incentive metrics
and disclosure
in relation to CSP.
– Processes for oversight of key sustainability risks, particularly
– Group’s 2020 short-term incentive plan in relation to safety,
and the metrics for the 2021 targets.
– ESG metrics which now constitute one half of the individual
component of the short-term incentive plan for our
senior executives.
– Recommendations to the Remuneration Committee for the Group
Safety and ESG metrics for the 2022 short-term incentive plan.
– Reviewed reporting materials including:
– 2020 Climate Change Report published in February 2021,
our third report
– Group 2020 Sustainability reporting materials, including the
Sustainable development sections of the 2020 Annual Report
– Group 2020 Statement on Modern Slavery, ahead of its
approval by the Board
– Communities and Social Performance Commitments
Disclosure Interim Report
to be reported on in the 2021 Annual Report, combining feedback
from internal leaders and subject-matter experts, and considering
stakeholder expectations as well as an analysis of the
external environment.
– Statutory due diligence obligations applicable to Directors and
officers under applicable workplace health and safety laws in the
key jurisdictions in which Rio Tinto operates.
– Sustainability Committee’s scope and responsibilities as
reflected in its terms of reference.
Risk management & assurance, and global
sustainability trends
– External assurance programme of the Group’s sustainability
reporting, and safety performance data supporting the safety
performance outcomes under the short-term incentive plan.
– Key sustainability risks for each product group and for the
Group’s marine operations as presented by product group heads.
– Reviews undertaken by the Group Internal Audit function
relating to matters within the Committee’s scope, including:
– mine planning processes, particularly processes for
obtaining cultural and environmental approvals
– the CSP function’s Assurance Programme for Cultural Heritage
Pilbara operations
– key global sustainability trends associated with the circular
economy, and nature-based solutions
– Group risk management and internal controls systems to
support the Board’s risk disclosures in the Annual Report, in a
joint session with the Audit Committee
Other (including closure & remediation, and security)
– Our current and emerging closure portfolio, including progress
against the Group’s closure plan.
– Closure and remediation process for Energy Resources of
Australia’s Ranger uranium mine.
– Group security issues and key insights on risk assessments
and controls.
The chart below represents the allocation of the Committee’s
meeting time during 2021:
4%
17%
21%
18%
19%
Health and safety
Environment, including climate change
Risk management & assurance, and
global sustainability trends
Governance, executive incentive
metrics, and disclosure
21%
Communities and Social Performance
Other (including closure & remediation,
and security)
The Committee Chair reports to the Board after each meeting,
and our minutes are tabled before the Board. All Directors have
Sustainability disclosures
Our sustainability framework and performance are described in detail
on pages 74 to 78 of this report.
Further information in relation to Rio Tinto’s approach to sustainability
can be found on our website at riotinto.com/sustainability.
Our Climate Change Report can be found on our website
at riotinto.com/climatereport.
Our Communities and Social Performance Commitments
Disclosure Interim Report can be found on our website at
riotinto.com/communities.
Our 2020 Statement on Modern Slavery can be found on our
website at riotinto.com/modernslavery.
– Assessment of the Group’s most material sustainability topics
access to the Committee’s papers.
By supporting and
monitoring the broad
range of sustainability
issues facing our business,
the Sustainability
Committee seeks to
enhance Rio Tinto’s social
licence to operate.
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Remuneration report
Annual statement by the Remuneration Committee Chair
Response to 2021 AGMs voting outcomes
Remuneration at a glance
Implementation report
160
163
165
171
Annual statement by the
Remuneration Committee Chair
The Committee’s overarching purpose is to ensure the remuneration structure
and policies reward fairly and responsibly.
On behalf of the Board, I am pleased to introduce our 2021
Directors’ Remuneration report.
2021 AGMs voting outcome
Strategy and business performance
This was the first year under the leadership of our new Chief
Executive with a new management team.
The Board approved four objectives – to become the best operator;
achieve impeccable Environment, Social and Governance (ESG)
credentials; excel in development; and secure a strong licence to
operate – and a new strategy, including more ambitious targets to
tackle climate change. We have accelerated our target reduction of
15% in our absolute Scope 1 and 2 carbon emissions from 2030 to
2025, and established a new target to achieve a 50% reduction by
2030, more than tripling our previous target.
Despite operational challenges, Rio Tinto delivered record financial
results and returns to shareholders of US$15.4 billion during 2021.
In support of our battery materials strategy, we committed to fund the
high-quality Jadar lithium project, subject to receiving all relevant
approvals, permits and licences, and the announcement of a binding
agreement to acquire the Rincon lithium project. We continue to
make progress, identifying opportunities for operational improvement,
and advancing our ambitious ESG agenda.
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Although our Remuneration Policy received strong support (96.8%),
shareholders registered significant concerns about the treatment of
departing executives in light of the Juukan Gorge tragedy, with a
significant vote against the Remuneration report. The Committee
acknowledges that our pay policies, and the constraints they
imposed on our ability to exercise discretion, were found to be
insufficient in the unforeseen circumstances of the Juukan Gorge
tragedy.
Responding to this, the new Policy approved in 2021, includes an
expanded scope for the application of malus and clawback to
cover events that impact on our social licence to operate. It also
incorporates ESG targets in the short-term incentive plan (STIP)
that are meaningful, transparent and quantifiable, and in 2021
specifically recognised the importance of communities and social
performance, including heritage.
Over the past 12 months, I have engaged with shareholders and
proxy advisers to explain the rationale for the decisions reached
in 2021 and, most of all, to listen. The Committee revisited the
questions as to whether greater sanctions could be applied.
The legal advice remains that, following the agreements reached
with the relevant departing executives, greater sanctions are not
possible absent any new material information coming to light.
However, the Committee has responded to the concerns expressed
by shareholders by introducing two significant changes to
our Policy.
Governance
Consequence Management Framework
Financial performance
We have established a clear Consequence Management Framework
to provide guidelines as to how the Committee’s discretion to apply
malus and clawback will be exercised in the future. The framework
underpins the exercise of discretion in our incentive plan rules, the
scope of those discretions and their practical application across a
range of circumstances. This has been informed by insight from
remuneration consultants and external legal counsel, our own
experience, as well as the Juukan Gorge tragedy.
We fully recognise that this framework can only ever be a guide and
should avoid being overly prescriptive. Otherwise, it would deliver
formulaic outcomes that fail to take account of all relevant and
prevailing circumstances at any given point of time. We consider the
framework to be a critical and practical reference point for future
decision making in ensuring that our incentive pay is fair, transparent,
appropriate, proportionate and supportable.
The Committee recognises that voting outcomes on future
Remuneration reports will continue to be impacted by the actual
decisions made by the Committee, and we will provide a transparent
rationale for such decisions.
Equity Incentive Plan leaver provisions
We have also changed the structure of the leaver provisions in our
Equity Incentive Plan 2018 (EIP) rules that will apply to prospective
long-term awards. Prior to this change, the presumption is that
long-term awards vest except in bad (ineligible) leaver circumstances.
Going forward, awards will only vest if the Committee is satisfied the
individual is an eligible leaver. This meaningfully strengthens the
Committee’s hand in the instances where it is appropriate,
proportionate and fair to lapse all or part of unvested awards.
Pages 163-164 expand further on the Consequence Management
Framework and leaver provisions on a forward-looking basis, and
detail specific responses to investor feedback received during 2021.
Chief Financial Officer succession
The Committee also determined the remuneration of Peter
Cunningham in his new role as Chief Financial Officer, following
Jakob Stausholm’s appointment as Chief Executive on 1 January 2021.
All terms are consistent with the shareholder approved Remuneration
Policy. Further details are outlined on page 185.
Short-term incentive plan
Safety performance
Rio Tinto has now achieved three consecutive years fatality free. This is
a significant milestone given that 2019 was the first time in 147 years we
were fatality free.
The company had another challenging year managing the pandemic
and regrettably we saw a small increase in the number of people hurt
on the job. The all-injury frequency rate in 2021 was 0.40 compared to
0.37 in 2020. There were no permanent disabling injuries (PDI)
recorded across the Group in 2021.
The safety maturity model (SMM) was introduced to the business in
2019 and is now in its third year of implementation. Once again, most
sites showed improvement from their baseline score. There is an
increase across the Group from a combined average baseline of
5.0 (evolving) to an average maturity of 5.7 (evolving).
Overall, the Group’s safety performance is 66% of maximum.
As a reminder, in comparing financial performance against the annual
plan, we measure half against the original plan; the other half is “flexed”
to exclude the impact of variations during the year associated with
quoted metal and other prices along with foreign exchange rates,
which are outside management’s control. When commodity prices rise,
or the variation in exchange rates results in a favourable impact to the
financial results, we protect shareholder returns by ensuring that 50%
of the STIP opportunity (as relates to financial performance) is denied
the benefit of that rise. When the reverse happens, and commodity
prices fall or there is a negative impact of exchange rates, the STIP
opportunity is safeguarded (by 50%) against the fall. Our view is that
this approach maintains appropriate incentive for executives, even in
times of significant market volatility.
In 2021, Rio Tinto benefited from attractive trading conditions and the
company was able to achieve record financial results. However, certain
elements of operating performance were behind expectation. The
ongoing impacts from COVID-19 caused significant headwinds which
resulted in labour constraints, supply chain disruptions and project
delays. The Group’s unadjusted financial result of 60% of maximum is
underpinned by the high pricing environment experienced in 2021,
driving strong financial results on an unflexed basis (the earnings result
exceeded the outstanding range while the cash flow result was just
below outstanding). However, the challenging operating environment
during the year resulted in the financial targets being towards the lower
end of the range on a flexed basis.
The Committee considered whether any adjustments were warranted
to ensure the outcome was a fair reflection of underlying performance.
The adjustments made related to tax prepayments and the buyout
of the French pension plan which did not reflect current year
performance. Accordingly, the adjusted Group performance against
the financial targets is 63% of maximum.
ESG performance
As part of the new Policy, we introduced an ESG component into the
STIP scorecard in 2021 to complement the long-standing safety
component. Overall, good progress was made against the different
dimensions comprised in this component with an overall performance
outcome of 52.3% of maximum.
For the Environment component, important steps were taken in 2021 to
advance towards the company’s ambitious climate change targets by
approving abatement projects and the delivery of goals to progress
our Scope 3 partnership strategy.
For the Social component, Rio Tinto’s aspiration is to foster an
environment where all aspects of diversity are represented, included
and respected. Representation of women in the company’s workforce
increased by 1.5%, which was the highest increase in the last five years.
However, the target of 2% was not achieved.
Finally, for the Governance component, following the Juukan Gorge
tragedy, efforts were focused on strengthening the frameworks
and processes by delivering the Group communities and social
performance (CSP) improvements, developing and delivering locally
and regionally relevant cultural awareness training to employees
globally, as well as improving the Group’s assurance and risk
management.
Further details on our performance against the 2021 STIP measures are
set out on pages 175-177.
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Remuneration report
Annual statement by the Remuneration Committee Chair
Response to 2021 AGMs voting outcomes
Remuneration at a glance
Implementation report
160
163
165
171
Annual statement by the
Remuneration Committee Chair
The Committee’s overarching purpose is to ensure the remuneration structure
and policies reward fairly and responsibly.
On behalf of the Board, I am pleased to introduce our 2021
Directors’ Remuneration report.
2021 AGMs voting outcome
Strategy and business performance
This was the first year under the leadership of our new Chief
Executive with a new management team.
The Board approved four objectives – to become the best operator;
achieve impeccable Environment, Social and Governance (ESG)
credentials; excel in development; and secure a strong licence to
tragedy.
Although our Remuneration Policy received strong support (96.8%),
shareholders registered significant concerns about the treatment of
departing executives in light of the Juukan Gorge tragedy, with a
significant vote against the Remuneration report. The Committee
acknowledges that our pay policies, and the constraints they
imposed on our ability to exercise discretion, were found to be
insufficient in the unforeseen circumstances of the Juukan Gorge
operate – and a new strategy, including more ambitious targets to
Responding to this, the new Policy approved in 2021, includes an
tackle climate change. We have accelerated our target reduction of
expanded scope for the application of malus and clawback to
15% in our absolute Scope 1 and 2 carbon emissions from 2030 to
2025, and established a new target to achieve a 50% reduction by
2030, more than tripling our previous target.
Despite operational challenges, Rio Tinto delivered record financial
results and returns to shareholders of US$15.4 billion during 2021.
cover events that impact on our social licence to operate. It also
incorporates ESG targets in the short-term incentive plan (STIP)
that are meaningful, transparent and quantifiable, and in 2021
specifically recognised the importance of communities and social
performance, including heritage.
In support of our battery materials strategy, we committed to fund the
Over the past 12 months, I have engaged with shareholders and
high-quality Jadar lithium project, subject to receiving all relevant
proxy advisers to explain the rationale for the decisions reached
approvals, permits and licences, and the announcement of a binding
in 2021 and, most of all, to listen. The Committee revisited the
agreement to acquire the Rincon lithium project. We continue to
questions as to whether greater sanctions could be applied.
make progress, identifying opportunities for operational improvement,
and advancing our ambitious ESG agenda.
The legal advice remains that, following the agreements reached
with the relevant departing executives, greater sanctions are not
possible absent any new material information coming to light.
However, the Committee has responded to the concerns expressed
by shareholders by introducing two significant changes to
our Policy.
Annual statement by the Remuneration Committee Chair continued
Everyday Respect
Pay in the broader context
In March 2021, we launched our Everyday Respect task force to better
understand, prevent and respond to harmful behaviours in the
workplace, specifically bullying, sexual harassment, racism and other
forms of discrimination. To support the work of the task force, we
engaged Elizabeth Broderick & Co. to conduct an independent review
and to make recommendations to strengthen our culture and ensure
sustained change. The report was published on 1 February 2022 and
the findings shared are upsetting and confronting. We are committed
to making the changes required to create a safe, respectful and
inclusive workplace for our people.
Our new values of care, courage and curiosity reflect who we aspire to
be. They guide the Committee in its decision making and are
foundational to our remuneration-related policies, principles and
practices. In recognition of the findings in the Everyday Respect report,
the management team recommended that a downward adjustment be
made to the 2021 STIP payments. The Committee concluded that a
reduction of 5% should be applied to the total STIP payment for current
Executive Committee members and an equivalent adjustment be made
to the 2020 unvested Bonus Deferral Awards (BDA) held by former
Executive Committee members. The STIP for 2022 will also include
objectives linked to the recommendations arising in the report.
The Board continued to engage with employees through the year, as
detailed on page 140. These engagements enable the Board to hear
directly the views of our people on pay. The Committee remains
cognisant of executive pay in the broader context of a post COVID-19
world, ensuring our Policy is implemented with the desired attributes of
fairness, transparency, simplicity, proportionality, and alignment to
broader organisational culture and societal expectations.
The median Chief Executive pay ratio of 32:1 is materially lower than
last year, primarily because Jakob joined the Group after the award of
the 2017 LTIP that vests in 2022. His first LTIP award is to be
performance tested at the end of 2022.
Our focus on pay equity is evident in our gender pay metrics on which
we continue to make progress. Pay equity is a key pillar of our annual
remuneration approach. Gender diversity in senior management roles
also remains a key aspect of our broader agenda on diversity and
inclusion. Further details on both equal pay and the gender pay gap,
together with a wider discussion on diversity and inclusion, are
provided in the Sustainability section of this report on pages 101-103.
As always, I welcome shareholder feedback and comments on our
2021 Directors’ Remuneration report.
2021 short-term incentive plan awards
Yours sincerely,
Sam Laidlaw
Remuneration Committee Chair
23 February 2022
The adjusted 2021 STIP award for the Chief Executive is 61.3% of
maximum, and for the Chief Financial Officer is 57% of maximum.
This includes a personal performance score in which the Committee
considered their achievements against personal objectives.
The Committee considered the Chief Executive’s performance against
his individual objectives, which included redefining and restructuring
the Executive Committee, articulating the new strategy including the
four objectives, resetting the culture and launching the company’s
new values, further development of the projects portfolio, and making
good progress in restoring our reputation and licence to operate.
For the Chief Financial Officer, this included strengthening the balance
sheet through disciplined focus on cost management, being a key
contributor in the evaluation and approval of key growth projects
and capital improvement programmes, and leading our investor
relations strategies across key markets. The Committee determined
the Chief Executive’s performance to be 80% of maximum and
the Chief Financial Officer’s performance to be 50% of maximum.
Refer to pages 178-179 for further detail.
Long-term incentive plan
The estimated vesting for the 2017 Performance Share Award (PSA),
combining the two TSR and EBIT margin portions, is two-thirds of
maximum. In determining the estimated vesting of the 2017 PSA, the
Committee considered the Consequence Management Framework
principles to ensure the vesting outcome was fair and representative of
the shareholder experience.
The portion of the award relating to TSR vests on 24 February 2022.
The Committee will make a final determination of the relative
improvement in the EBIT margin measure when the final EBIT margin
performance of the comparator group companies becomes available
in May 2022. If applicable, this portion of the award will vest on
31 May 2022.
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Annual statement by the Remuneration Committee Chair continued
Governance
Everyday Respect
Pay in the broader context
In March 2021, we launched our Everyday Respect task force to better
understand, prevent and respond to harmful behaviours in the
workplace, specifically bullying, sexual harassment, racism and other
forms of discrimination. To support the work of the task force, we
engaged Elizabeth Broderick & Co. to conduct an independent review
and to make recommendations to strengthen our culture and ensure
sustained change. The report was published on 1 February 2022 and
the findings shared are upsetting and confronting. We are committed
to making the changes required to create a safe, respectful and
inclusive workplace for our people.
The Board continued to engage with employees through the year, as
detailed on page 140. These engagements enable the Board to hear
directly the views of our people on pay. The Committee remains
cognisant of executive pay in the broader context of a post COVID-19
world, ensuring our Policy is implemented with the desired attributes of
fairness, transparency, simplicity, proportionality, and alignment to
broader organisational culture and societal expectations.
The median Chief Executive pay ratio of 32:1 is materially lower than
last year, primarily because Jakob joined the Group after the award of
the 2017 LTIP that vests in 2022. His first LTIP award is to be
Our new values of care, courage and curiosity reflect who we aspire to
performance tested at the end of 2022.
be. They guide the Committee in its decision making and are
foundational to our remuneration-related policies, principles and
practices. In recognition of the findings in the Everyday Respect report,
the management team recommended that a downward adjustment be
made to the 2021 STIP payments. The Committee concluded that a
reduction of 5% should be applied to the total STIP payment for current
Executive Committee members and an equivalent adjustment be made
to the 2020 unvested Bonus Deferral Awards (BDA) held by former
Executive Committee members. The STIP for 2022 will also include
objectives linked to the recommendations arising in the report.
Our focus on pay equity is evident in our gender pay metrics on which
we continue to make progress. Pay equity is a key pillar of our annual
remuneration approach. Gender diversity in senior management roles
also remains a key aspect of our broader agenda on diversity and
inclusion. Further details on both equal pay and the gender pay gap,
together with a wider discussion on diversity and inclusion, are
provided in the Sustainability section of this report on pages 101-103.
As always, I welcome shareholder feedback and comments on our
2021 Directors’ Remuneration report.
2021 short-term incentive plan awards
Yours sincerely,
Sam Laidlaw
Remuneration Committee Chair
23 February 2022
The adjusted 2021 STIP award for the Chief Executive is 61.3% of
maximum, and for the Chief Financial Officer is 57% of maximum.
This includes a personal performance score in which the Committee
considered their achievements against personal objectives.
The Committee considered the Chief Executive’s performance against
his individual objectives, which included redefining and restructuring
the Executive Committee, articulating the new strategy including the
four objectives, resetting the culture and launching the company’s
new values, further development of the projects portfolio, and making
good progress in restoring our reputation and licence to operate.
For the Chief Financial Officer, this included strengthening the balance
sheet through disciplined focus on cost management, being a key
contributor in the evaluation and approval of key growth projects
and capital improvement programmes, and leading our investor
relations strategies across key markets. The Committee determined
the Chief Executive’s performance to be 80% of maximum and
the Chief Financial Officer’s performance to be 50% of maximum.
Refer to pages 178-179 for further detail.
Long-term incentive plan
The estimated vesting for the 2017 Performance Share Award (PSA),
combining the two TSR and EBIT margin portions, is two-thirds of
maximum. In determining the estimated vesting of the 2017 PSA, the
Committee considered the Consequence Management Framework
principles to ensure the vesting outcome was fair and representative of
the shareholder experience.
The portion of the award relating to TSR vests on 24 February 2022.
The Committee will make a final determination of the relative
improvement in the EBIT margin measure when the final EBIT margin
performance of the comparator group companies becomes available
in May 2022. If applicable, this portion of the award will vest on
31 May 2022.
Response to 2021 AGMs voting outcomes
The table below sets out the actions we have taken in response to feedback from shareholders and proxy advisers on the treatment of incentives
for departing executives. Our actions have focused on how the Remuneration Policy is implemented. It is noted that the Remuneration Policy
received support of 96.8% at the 2021 AGMs.
Changes approved
at the 2021 AGMs
– Malus and clawback under incentive plans have been expanded to specifically include any future events that
materially impact our social licence to operate.
– ESG measures have been introduced into the STIP and the implementation of these in 2021 meaningfully aligns with
our climate change ambition, our commitment to diversity and inclusion, our external partnerships and the
communities which we operate in, as well as the governance of our cultural heritage management.
Changes post the
2021 AGMs
– The establishment of a Consequence Management Framework to further underpin the exercise of discretion in the
incentive plan rules. The framework comprises a series of questions across a number of dimensions (including
individual demeanour, leadership standards and alignment to company values) to be considered by the Committee
in the context of exercising its discretion on future malus and clawback adjustments to variable pay outcomes.
Further details are set out below.
– The leaver provisions in the EIP rules made a presumption that eligible leaver treatment applied to all leavers, except
those leaving by reason of resignation, dismissal for cause or for any other reason as the Committee decided. For
future awards, the rules have been amended to presume that EIP awards lapse, unless the Committee determines
that eligible leaver status should apply.
Consequence Management Framework
The Consequence Management Framework tests the extent that incentive pay is fair, appropriate and defendable. In instances where this is not the
case, including scenarios where behavioural and leadership standards are not met, discretion would be exercised to adjust the outcome. The key
elements of the framework are set out below.
Proportionate in factoring
the appropriate levels of
responsibility, accountability
and materiality
Defendable against
external scrutiny, while
considered fair and
justifiable to the executive
Contextualised where
possible, learn from the past
and take any relevant
precedents (internal and
external) into account
Non-arbitrary and
evidence-based with a
clear rationale for decisions
made on executive pay
Framework guidelines
Discretion assessment
Determining incident severity
Nature and scope of adjustment
– Shareholder experience
– Other relevant factors and dimensions
– Exceptional events
– Severity of incident’s impact
– Extent of accountability/responsibility
– Individual demeanour and leadership
– Determine nature of adjustment (malus,
clawback, or suspension)
– Determine element(s) of variable
remuneration impacted
– Determine magnitude of adjustment
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Consequence Management Framework:
Application in practice
Step 1:
Determine if the
exercise of discretion
is warranted
Step 2:
Consider the type of
remedial action to be
taken, and the form and
magnitude of any
adjustment to variable
remuneration
Consider the relevant factors including corporate reputation and the extent of accountability in evaluating
whether the application of discretion is warranted. This is a broad discretion that would apply as an
overlay to the more formulaic calculation of the outturn on the performance metrics based on defined
calculation criteria and frameworks.
In circumstances where the Committee determines that the application of malus, clawback and/or
suspension is warranted under Step 1, Step 2 guides the Committee in determining the appropriate type
and extent of adjustment by considering the nature and severity of incidents both within the company and
more broadly, underpinned by a consistency check against other incidents. Step 2 will also include
consideration of the time horizon within which the issue arose to assist the Committee in determining
which awards should be subject to adjustments. Importantly, the Committee will consider the nature,
immediacy and extent of remedial actions, if any, that have been undertaken, and outstanding
remediation that needs to be undertaken.
Step 3:
Consideration of the
nature and severity of
the incident
In the first instance, careful consideration of the incident against the backdrop of our values including
codes of conduct (codified and implied) and behavioural standards needs to occur to guide the nature
and direction of the remedial action(s). In addition, the Committee will need to consider, where relevant,
the period of time it might take for the full extent of certain issues to emerge to enable a fulsome
assessment of the severity and impact. In certain instances, it may be appropriate to suspend or make an
initial adjustment to demonstrate timely action, position this accordingly and retain flexibility to revise it
when the full impact of the incident is known.
Step 4:
Types of incentives and
level of malus/clawback
Once the Committee has formed a view on the severity of the incident and determined that an adjustment
to pay outcomes is a component of the remedial action, the variable compensation element(s) in scope,
whether short-term, long-term or both, and the magnitude of the adjustment will need to be considered.
Step 5:
Consistency check
and communication
to executive(s)
Once the Committee has come to a provisional determination in relation to the remedial action(s)
and adjustment to be made to the relevant executive’s variable remuneration, a ‘consistency’ check
will be carried out. Whilst it is acknowledged that expectations and standards evolve and the past should
not automatically guide the future, it provides a useful additional lens and perspective which should
ensure that:
i. (if applicable) the proposed method and quantum of malus/clawback is consistent between different
employees involved in a similar incident or event;
ii. the determination is appropriate and proportionate when compared to previous unrelated malus/
clawback determinations made by the Committee pursuant to the framework; and
iii. if necessary, reassess precedent and establish a new standard.
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Consequence Management Framework:
Remuneration at a glance
Application in practice
Our Remuneration Policy applies to our Executive and Non-Executive Directors and to the Chair. In accordance with Australian law, it also sets out
the broad policy principles that apply to members of the Executive Committee who are not directors. Our Remuneration Policy as approved at our
2021 AGMs can be found at: riotinto.com/annualreport. The Remuneration Policy applicable to our executives is summarised in the table below.
Consider the relevant factors including corporate reputation and the extent of accountability in evaluating
whether the application of discretion is warranted. This is a broad discretion that would apply as an
overlay to the more formulaic calculation of the outturn on the performance metrics based on defined
calculation criteria and frameworks.
Element
Base salary
Purpose
Operation and opportunity
Competitive salaries are paid to
hire, motivate and retain high
calibre global talent.
– Base salaries are set to reflect broad alignment with comparable roles in the global external
market and the executive’s qualifications, responsibilities and experience.
– Base salaries are reviewed annually by the Committee and any increase is normally aligned
with the wider workforce, with a maximum individual annual increase of 5% plus CPI.
– An individual increase may be higher in specific circumstances such as promotion,
increased responsibilities or market competitiveness.
Governance
Pension or
superannuation
Competitive post-employment
benefits are provided in order to
hire and retain.
– Rio Tinto may choose to offer participation in a pension plan, superannuation fund, or a
cash allowance in lieu.
– The maximum annual benefit is set to reflect the pension arrangements for the wider
employee population and is currently capped at 14% of base salary.
Other benefits
Competitive benefits are provided
in order to hire and retain.
– Executives are eligible to receive benefits which may include private healthcare cover, life
and accident insurances, professional advice, and other minor benefits.
Short-term
incentive plan
(STIP)
STIP focuses participants on
achieving demanding annual
performance goals, which are
based on the Group’s objectives,
in pursuit of the creation of
sustainable value for our
stakeholders.
Long-term
incentive plan
(LTIP)
Performance Share Awards (PSA)
under the LTIP are designed to
provide a simple and transparent
mechanism to align executives’
rewards with the delivery and
execution of Rio Tinto’s long-term
strategy and ambitions which
delivers superior long-term
shareholder returns.
Shareholding
requirements
Aligning executives’ interests with
shareholders through the
requirement to build up and
maintain a material shareholding in
the company.
– Secondment, relocation and localisation benefits may also be made to and on behalf of
executives living outside their home country.
– Measures and the relative weightings for the scorecard are selected by the Committee that
are priorities for the financial year in question, including the achievement of financial, safety,
ESG and other individual business outcomes. At least 50% of the measures will relate to
financial performance and a significant component will relate to safety performance.
– For financial performance, threshold performance results in a nil award and outstanding
award results in 100%. The award is normally pro-rated on a straight-line basis between
threshold and outstanding.
– Maximum opportunity is capped at 200% of base salary for each executive.
– Normally, 50% of the STIP is delivered in cash and the balance is delivered in shares that
are deferred for three years as a BDA.
– Dividends (or equivalents) are not paid on unvested BDA. Dividends (or equivalents) may
accrue in respect of any BDA that vest.
– The Committee retains the right to exercise discretion to ensure that the level of award
payable is appropriate.
– Malus, clawback and suspension provisions apply to the STIP and BDA.
– Award levels are set to incentivise long-term strategic performance and to contribute
towards the competitiveness of the overall remuneration package.
– Performance is measured against TSR relative to the EMIX Global Mining Index and to the
MSCI World Index.
– The Committee will set performance conditions aligned with the Group’s long-term
strategic objectives for each PSA grant. Relative TSR has been chosen as the predominant
measure of long-term performance. The Committee retains the discretion to adjust the
performance measures and weightings as appropriate.
– Awards have a maximum face value of 400% of base salary and threshold performance
would result in the vesting of up to 22.5% of the face value of an award.
– The awards have an expected value of approximately 50% of face value.
– Dividends (or equivalents) are not paid on unvested LTIP. Dividends (or equivalents) may
accrue in respect of any PSA that vest.
– The Committee retains the right to exercise discretion and seeks to ensure that outcomes
are fair and reflective of the overall performance of the company during the performance
period.
– Malus, clawback and suspension provisions apply to LTIP awards.
– Over a five-year period, executives should reach a share ownership in Rio Tinto shares
equivalent in value to:
– Chief Executive: four times base salary
– Other executives: three times base salary
– Longer periods may be accepted for new appointments.
– Executive Directors are required to retain a holding for two years after leaving the Group in
line with the shareholding requirements.
Step 1:
Determine if the
exercise of discretion
is warranted
Step 2:
Consider the type of
remedial action to be
taken, and the form and
magnitude of any
adjustment to variable
remuneration
In circumstances where the Committee determines that the application of malus, clawback and/or
suspension is warranted under Step 1, Step 2 guides the Committee in determining the appropriate type
and extent of adjustment by considering the nature and severity of incidents both within the company and
more broadly, underpinned by a consistency check against other incidents. Step 2 will also include
consideration of the time horizon within which the issue arose to assist the Committee in determining
which awards should be subject to adjustments. Importantly, the Committee will consider the nature,
immediacy and extent of remedial actions, if any, that have been undertaken, and outstanding
remediation that needs to be undertaken.
Step 3:
Consideration of the
nature and severity of
the incident
In the first instance, careful consideration of the incident against the backdrop of our values including
codes of conduct (codified and implied) and behavioural standards needs to occur to guide the nature
and direction of the remedial action(s). In addition, the Committee will need to consider, where relevant,
the period of time it might take for the full extent of certain issues to emerge to enable a fulsome
assessment of the severity and impact. In certain instances, it may be appropriate to suspend or make an
initial adjustment to demonstrate timely action, position this accordingly and retain flexibility to revise it
when the full impact of the incident is known.
Step 4:
Types of incentives and
level of malus/clawback
Once the Committee has formed a view on the severity of the incident and determined that an adjustment
to pay outcomes is a component of the remedial action, the variable compensation element(s) in scope,
whether short-term, long-term or both, and the magnitude of the adjustment will need to be considered.
Step 5:
Consistency check
and communication
to executive(s)
Once the Committee has come to a provisional determination in relation to the remedial action(s)
and adjustment to be made to the relevant executive’s variable remuneration, a ‘consistency’ check
will be carried out. Whilst it is acknowledged that expectations and standards evolve and the past should
not automatically guide the future, it provides a useful additional lens and perspective which should
ensure that:
i. (if applicable) the proposed method and quantum of malus/clawback is consistent between different
employees involved in a similar incident or event;
ii. the determination is appropriate and proportionate when compared to previous unrelated malus/
clawback determinations made by the Committee pursuant to the framework; and
iii. if necessary, reassess precedent and establish a new standard.
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Remuneration at a glance continued
Element
Purpose
Operation and opportunity
Recruitment policy
Recruit high calibre global talent.
– No form of “golden hello” will be provided upon recruitment. In the case of internal
Termination policy
Appropriately reward eligible and
ineligible leavers.
appointments, existing commitments will be honoured.
– Our approach with respect to “buy-outs” is to determine a reasonable level of award, on a
like-for-like basis, consisting primarily of share-based awards, but also potentially cash,
taking into consideration the quantum of forfeited awards, their performance conditions
and vesting schedules.
– Other elements of remuneration are to be consistent with the Policy applicable to
other executives.
– An Executive Director’s notice period is normally 12 months, during which they will receive
their base salary and other benefits.
– Ineligible leavers forfeit their unvested LTIP and STIP entitlement.
– An eligible leaver may receive the following:
– A discretionary STIP award on a pro rata basis, payable on the normal STIP payment date
in cash.
– Any unvested BDA from prior year awards will normally vest on the scheduled
vesting date.
– Unvested LTIPs will normally be retained and vest on the scheduled vesting date, subject
to performance conditions where applicable.
– PSA and Management Share Awards (MSA), where applicable, will be reduced where the
executive leaves within 36 months of grant.
– STIP and LTIP awards are subject to malus, clawback and suspension following termination.
Malus, clawback
and suspension
Enables the Committee to use its
discretion to reduce incentive
awards in the event of exceptional
circumstances.
– Under both the malus and clawback provisions, where the Committee determines that an
exceptional circumstance has occurred, it may at its discretion, reduce the STIP award or
the number of shares to be received on vesting of an award, or, for a period of two years
after the vesting of an award, the Committee can clawback value from a participant.
– The Committee will apply the Consequence Management Framework and the
circumstances under which the Committee exercises such discretion may include,
inter alia:
– fraud, misconduct or an exceptional event which has had, or may have, a material effect
on the value or reputation or social licence of any member of the Group;
– an error in the Group’s financial statements which requires a material downward
restatement;
– personal performance and leadership behaviour of a participant, of their product group
or of the Group does not justify vesting or where the participant’s conduct or
performance has been in breach of their employment contract, any laws, rules or codes
of conduct applicable to them or the standards or demeanour reasonably expected of a
person in their position;
– misstatement or misrepresentation of performance;
– where any team, business area, member of the Group or profit centre in which the
participant works or worked has been found guilty in connection with any regulatory
investigation or has been in breach of any laws, rules or codes of conduct applicable to it
or the standards, leadership behaviour or demeanour reasonably expected of it;
– where the Committee determines that there has been material damage to the Group’s
social licence to operate; or
– a catastrophic safety or environmental event.
– Under the suspension provisions, the Committee may suspend the vesting of an award for
up to five years until the outcome of any internal or external investigation is concluded and
may then reduce or lapse the participant’s award based on the outcome of that
investigation. Where suspension applies, the 24-month clawback period will not extend
beyond the period commencing from the original vesting date.
– The Committee reserves the right to review all remuneration outcomes arising from
mechanistic application of performance conditions and to exercise discretion to make
adjustments where such outcomes do not properly reflect underlying performance or the
experience of shareholders or other stakeholders.
– The Committee may at its discretion adjust and/or set different performance measures if
events occur which cause the Committee to determine that the measures are no longer
appropriate or in the best interests of shareholders or other stakeholders, and that
amendment is required so that the measures, as far as possible, achieve their original
purpose. Such discretion will be exercised judiciously and clearly disclosed and explained
in the Implementation report.
Discretion
Ensures pay outcomes reflect the
Group’s overall performance and
risk appetite.
When developing the Remuneration Policy, the Committee considered the pay arrangements from the perspective of clarity, simplicity, risk,
predictability, proportionality and alignment to culture. Further detail is set out on page 151 of the 2020 Annual Report.
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Remuneration at a glance continued
Governance
Element
Purpose
Operation and opportunity
Recruitment policy
Recruit high calibre global talent.
– No form of “golden hello” will be provided upon recruitment. In the case of internal
When remuneration is delivered
The following chart provides a timeline of when remuneration is delivered, using 2021 as an example.
Termination policy
Appropriately reward eligible and
– An Executive Director’s notice period is normally 12 months, during which they will receive
ineligible leavers.
their base salary and other benefits.
Malus, clawback
and suspension
Enables the Committee to use its
– Under both the malus and clawback provisions, where the Committee determines that an
discretion to reduce incentive
exceptional circumstance has occurred, it may at its discretion, reduce the STIP award or
awards in the event of exceptional
the number of shares to be received on vesting of an award, or, for a period of two years
circumstances.
after the vesting of an award, the Committee can clawback value from a participant.
appointments, existing commitments will be honoured.
– Our approach with respect to “buy-outs” is to determine a reasonable level of award, on a
like-for-like basis, consisting primarily of share-based awards, but also potentially cash,
taking into consideration the quantum of forfeited awards, their performance conditions
– Other elements of remuneration are to be consistent with the Policy applicable to
and vesting schedules.
other executives.
– Ineligible leavers forfeit their unvested LTIP and STIP entitlement.
– An eligible leaver may receive the following:
– A discretionary STIP award on a pro rata basis, payable on the normal STIP payment date
– Any unvested BDA from prior year awards will normally vest on the scheduled
in cash.
vesting date.
– Unvested LTIPs will normally be retained and vest on the scheduled vesting date, subject
to performance conditions where applicable.
– PSA and Management Share Awards (MSA), where applicable, will be reduced where the
executive leaves within 36 months of grant.
– STIP and LTIP awards are subject to malus, clawback and suspension following termination.
– The Committee will apply the Consequence Management Framework and the
circumstances under which the Committee exercises such discretion may include,
inter alia:
restatement;
– fraud, misconduct or an exceptional event which has had, or may have, a material effect
on the value or reputation or social licence of any member of the Group;
– an error in the Group’s financial statements which requires a material downward
– personal performance and leadership behaviour of a participant, of their product group
or of the Group does not justify vesting or where the participant’s conduct or
performance has been in breach of their employment contract, any laws, rules or codes
of conduct applicable to them or the standards or demeanour reasonably expected of a
person in their position;
– misstatement or misrepresentation of performance;
– where any team, business area, member of the Group or profit centre in which the
participant works or worked has been found guilty in connection with any regulatory
investigation or has been in breach of any laws, rules or codes of conduct applicable to it
or the standards, leadership behaviour or demeanour reasonably expected of it;
– where the Committee determines that there has been material damage to the Group’s
social licence to operate; or
– a catastrophic safety or environmental event.
– Under the suspension provisions, the Committee may suspend the vesting of an award for
up to five years until the outcome of any internal or external investigation is concluded and
may then reduce or lapse the participant’s award based on the outcome of that
investigation. Where suspension applies, the 24-month clawback period will not extend
beyond the period commencing from the original vesting date.
experience of shareholders or other stakeholders.
– The Committee may at its discretion adjust and/or set different performance measures if
events occur which cause the Committee to determine that the measures are no longer
appropriate or in the best interests of shareholders or other stakeholders, and that
amendment is required so that the measures, as far as possible, achieve their original
purpose. Such discretion will be exercised judiciously and clearly disclosed and explained
in the Implementation report.
Discretion
Ensures pay outcomes reflect the
– The Committee reserves the right to review all remuneration outcomes arising from
Group’s overall performance and
mechanistic application of performance conditions and to exercise discretion to make
risk appetite.
adjustments where such outcomes do not properly reflect underlying performance or the
Year 2
2022
Year 3
2023
Year 4
2024
Year 5
2025
Year 6
2026
Year 1
2021
Salary
Benefits, pension, etc.
2021 performance year
50%
cash
50% deferred shares (BDA)
5-year performance period. Vests in February 2026.
Base salary
Benefits
STIP
LTIP (PSA)
Performance
period starts
March –
PSA grant
March –
STIP cash +
BDA grant
December –
BDA vest
Performance
period ends
February –
PSA vest
Incentives and link to strategy
Our new strategy reinforces our priority on ESG with decarbonisation at the centre of our focus to future proof our business.
Metrics / Group objectives
Best operator
Impeccable ESG credentials
Excel in development
STIP
ESG
Cash flow
Earnings
LTIP
TSR
Decarbonisation ambition
Link to remuneration
Accelerating
decarbonisation
Accelerate our own decarbonisation, switching to renewable
power, electrifying processing and running electric mobile fleets.
Bringing forward our 2030 target of reducing our Scope 1 and 2
emissions by 15% to 2025.
More than tripling our 2030 target, increasing it to a 50% reduction
in our Scope 1 and 2 emissions.
Investment in research and development to speed up the
development of technologies that will enable our customers to
decarbonise.
Investing an estimated US$7.5 billion in decarbonisation from 2022
to 2030.
Invest in a
low-carbon future
Prioritise growth capital in commodities that are essential for the
drive to net zero.
Increasing our investment in growth capital expenditure with an
ambition to increase growth capital by up to US$3 billion annually.
ESG metrics in STIP include progress of Scope 1 and 2 abatement
projects and the delivery of Scope 3 target milestones.
Long-term shareholder value creation and the delivery of the
strategic ambition is measured through TSR and incentivised in the
LTIP.
When developing the Remuneration Policy, the Committee considered the pay arrangements from the perspective of clarity, simplicity, risk,
predictability, proportionality and alignment to culture. Further detail is set out on page 151 of the 2020 Annual Report.
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167
Remuneration at a glance continued
2021 remuneration outcomes
2021 short-term incentive plan
Executive Director remuneration
(£’000)
The charts below set out the maximum and actual executive
remuneration, as calculated under the UK regulations. As explained on
page 171, there are differences in both reporting and methodology for
measuring remuneration under the Australian regulations.
Chief Executive
Jakob Stausholm
Performance
Weighting
Performance
Weighting
Performance
Weighting
13.2%
20%
31.5%
50%
7.9%
15%
Performance
Weighting
see page 177
15%
2021 Actual remuneration (percentage of maximum)
Group safety
Group financial
Group ESG
Individual
Negative discretion applied to overall outcome – see page 177.
100%100%
£1,378
£1,378
61%61%
£1,410
£1,410
£2,788
£2,788
Safety performance
2021 Threshold remuneration (percentage of maximum)
In 2021, the Group safety performance was above target at 66% of
maximum.
100%100%
£1,378
£1,378
25%25%
£575£575
2021 Maximum remuneration
100%100%
£1,378
£1,378
100%100%
£2,300
£2,300
Fixed
STIP
LTIP
£1,953
£1,953
Binary fatality measure 100%
All-injury frequency rate (AIFR) 25%
£3,678
£3,678
Implementation of safety maturity model (SMM) 52.5%
Chief Financial Officer
Peter Cunningham
2021 Actual remuneration (percentage of maximum)
100%100%
£463£463
57%57%
£433£433
67%67%
£891£891
£1,787
£1,787
Financial performance
In 2021, the Group financial STIP outcome was above target at 63%
of maximum.
Underlying earnings target range
(threshold to outstanding) – US$(bn)
12.2
21.2
Unflexed
Target: 16.3
17.8
30.7
Flexed
Target: 23.7
Actual: 21.3
2021 Threshold remuneration (percentage of maximum)
STIP free cash flow target range
(threshold to outstanding) – US$(bn)
100%100%
£463£463
25%25%
22.5%22.5%
£189£189
£301£301
2021 Maximum remuneration
100%100%
£463£463
100%100%
£756£756
100%100%
£1,337
£1,337
Fixed
STIP
LTIP
£953£953
13.3
23.2
Unflexed
Target: 17.8
19.8
34.6
Flexed
£2,555
£2,555
ESG performance
Target: 26.5
Actual: 23.0
In 2021, the Group ESG outcome was above target at 52.3% of
maximum.
Environment 57%
Social 0%
Governance 100%
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Remuneration at a glance continued
Governance
2021 remuneration outcomes
2021 short-term incentive plan
2017 – 2021 LTIP
Share ownership requirements
Performance
Weighting
Performance
Weighting
Performance
Weighting
33.3%
33.3%
33.3%
33.3%
Nil
33.3%
Following appointment to role in 2021, Jakob Stausholm and Peter
Cunningham are in the process of building up their interest in Rio Tinto
shares. Both are considered to be on target to reach their share
ownership requirement of four and three times base salary
respectively.
TSR relative to
EMIX Global
Mining Index
TSR relative
to MSCI World
Index
Relative financial performance –
EBIT margin improvement versus
sector peers (forecast)
Target
4.0x
Jakob Stausholm
Appointed January 2021
2021 shareholding
1.9x
x gross base salary
x gross base salary
Peter Cunningham
Appointed June 2021
2021 shareholding
2.6x
Target
3.0x
In addition, all past directors continue to meet their post-employment
shareholding requirements.
In 2021, the Group safety performance was above target at 66% of
LTIP
Performance for the 2017 grant was based on TSR relative to the EMIX
Global Mining Index (one third) and the MSCI World Index (one-third),
and improvement in EBIT margin relative to global mining comparators
(one-third).
Rio Tinto outperformed against the EMIX Global Mining Index and the
MSCI World Index, resulting in maximum vesting of two-thirds
of awards.
It is currently estimated that for EBIT margin improvement Rio Tinto
is ranked sixth against a comparator group of 10, which would result
in a vesting of nil out of a maximum one-third of the award for this
measure. The final performance and vesting outcome will be finalised
in May 2022.
Total shareholder return (five years)
400
350
300
250
200
150
100
2016
2017
2018
2019
2020
2021
Rio Tinto
EMIX Global Mining
MSCI World
(a) TSR for the MSCI and EMIX indices has been calculated using 12-month average Return Index data for the year sourced from DataStream.
(b) Rio Tinto’s Group TSR has been calculated using a weighted average for Rio Tinto plc and Rio Tinto Limited. The weighting is based on the free-float market capitalisation of each entity as at the
start of the period.
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169
Performance
Weighting
Performance
Weighting
Performance
Weighting
13.2%
20%
31.5%
50%
7.9%
15%
Performance
see page 177
Weighting
15%
Executive Director remuneration
(£’000)
The charts below set out the maximum and actual executive
remuneration, as calculated under the UK regulations. As explained on
page 171, there are differences in both reporting and methodology for
measuring remuneration under the Australian regulations.
Chief Executive
Jakob Stausholm
2021 Actual remuneration (percentage of maximum)
2021 Threshold remuneration (percentage of maximum)
maximum.
61%61%
£1,410
£1,410
25%25%
£575£575
100%100%
£2,300
£2,300
2021 Maximum remuneration
Fixed
STIP
LTIP
Group safety
Group financial
Group ESG
Individual
Negative discretion applied to overall outcome – see page 177.
£2,788
£2,788
Safety performance
£1,953
£1,953
Binary fatality measure 100%
All-injury frequency rate (AIFR) 25%
£3,678
£3,678
Implementation of safety maturity model (SMM) 52.5%
Chief Financial Officer
Peter Cunningham
2021 Actual remuneration (percentage of maximum)
57%57%
£433£433
67%67%
£891£891
25%25%
22.5%22.5%
£189£189
£301£301
2021 Maximum remuneration
100%100%
£756£756
100%100%
£1,337
£1,337
£1,787
£1,787
£2,555
£2,555
2021 Threshold remuneration (percentage of maximum)
STIP free cash flow target range
(threshold to outstanding) – US$(bn)
£953£953
13.3
23.2
Unflexed
In 2021, the Group financial STIP outcome was above target at 63%
Financial performance
of maximum.
Underlying earnings target range
(threshold to outstanding) – US$(bn)
12.2
21.2
Unflexed
Target: 16.3
17.8
30.7
Flexed
Target: 23.7
Actual: 21.3
Target: 17.8
19.8
34.6
Flexed
Target: 26.5
Actual: 23.0
ESG performance
maximum.
Environment 57%
Social 0%
Governance 100%
Fixed
STIP
LTIP
In 2021, the Group ESG outcome was above target at 52.3% of
100%100%
£1,378
£1,378
100%100%
£1,378
£1,378
100%100%
£1,378
£1,378
100%100%
£463£463
100%100%
£463£463
100%100%
£463£463
Remuneration at a glance continued
How is the Policy applied to the wider employee population?
The remuneration standard applied to the wider employee population is inspired by and consistent with the Policy
applicable to the executives. This allows the total reward offering to employees to be competitive and strongly linked
to performance whilst maintaining alignment with the company culture.
Remuneration principles
Competitive
reward
Reward
performance
Recognise
potential
Focus on
wellbeing
Retain
talent
Fairness
Facilitating the achievement of equal pay for equivalent roles, contribution and
performance. Pay equity is closely scrutinised and monitored through different lenses:
– In-depth pay equity analysis in the remuneration review process. Feeds into
managing pay gaps from multiple perspectives including gender.
– Minimum global standards implemented across all countries to ensure the
foundations of our total reward offerings meet levels determined by the Group
irrespective of local market practices. Examples include global standards for
parental leave and life assurance.
Ownership
– Promoting material participation in all-employee share plan (myShare)
to give employees a sense of ownership and alignment with shareholders.
– As at 31 December 2021, approximately 25,000 (2020: 22,000) of our employees
across more than 30 countries are shareholders in the company.
– Employees invest approximately US$16m (2020: US$14m) in Rio Tinto shares every
quarter through the myShare plan.
– Employees eligible for LTIP awards receive these as either MSA, vesting over three
years and not subject to performance conditions, and/or PSA which are
performance tested over five years.
Consistency
– Consistency in implementation of the Remuneration Policy allows for more
uniform approaches to remuneration across the Group.
– A good example is the incentive plans applicable to executives that are cascaded
down to the broader employee population.
Wellbeing
– Leading benefits programmes across multiple industries, focused on holistic
and integrated support for physical, mental and financial wellbeing.
– Providing flexible benefits that can be tailored to suit different needs and life stages,
including employee assistance, minimum standard for life, accident and disability
insurances, medical plans and virtual care, health screening and prevention, and
subsidised health and wellbeing services.
– Understanding life is about more than work: family-friendly leave provisions and
100% employee coverage for our Family and Domestic Violence programme.
Security
– Reward principles that protect employee purchasing power globally.
– Accurate and timely payment of remuneration.
– Appropriate balance between fixed and variable pay at all levels.
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<1.5%
Equal pay gap
in favour of men
25,000
employee
shareholders
21,000
STIP participants
1,800
LTIP participants
Remuneration at a glance continued
How is the Policy applied to the wider employee population?
The remuneration standard applied to the wider employee population is inspired by and consistent with the Policy
applicable to the executives. This allows the total reward offering to employees to be competitive and strongly linked
to performance whilst maintaining alignment with the company culture.
This Implementation report is presented to shareholders for approval at
our AGMs. It outlines how our Policy was implemented in 2021, and the intended
operation for 2022.
Implementation report
Remuneration principles
Competitive
reward
Reward
performance
Recognise
potential
Focus on
wellbeing
Retain
talent
Fairness
Facilitating the achievement of equal pay for equivalent roles, contribution and
performance. Pay equity is closely scrutinised and monitored through different lenses:
– In-depth pay equity analysis in the remuneration review process. Feeds into
managing pay gaps from multiple perspectives including gender.
– Minimum global standards implemented across all countries to ensure the
foundations of our total reward offerings meet levels determined by the Group
irrespective of local market practices. Examples include global standards for
parental leave and life assurance.
Ownership
– Promoting material participation in all-employee share plan (myShare)
to give employees a sense of ownership and alignment with shareholders.
– As at 31 December 2021, approximately 25,000 (2020: 22,000) of our employees
across more than 30 countries are shareholders in the company.
– Employees invest approximately US$16m (2020: US$14m) in Rio Tinto shares every
quarter through the myShare plan.
– Employees eligible for LTIP awards receive these as either MSA, vesting over three
years and not subject to performance conditions, and/or PSA which are
performance tested over five years.
– Consistency in implementation of the Remuneration Policy allows for more
uniform approaches to remuneration across the Group.
– A good example is the incentive plans applicable to executives that are cascaded
down to the broader employee population.
Consistency
Wellbeing
– Leading benefits programmes across multiple industries, focused on holistic
and integrated support for physical, mental and financial wellbeing.
– Providing flexible benefits that can be tailored to suit different needs and life stages,
including employee assistance, minimum standard for life, accident and disability
insurances, medical plans and virtual care, health screening and prevention, and
subsidised health and wellbeing services.
– Understanding life is about more than work: family-friendly leave provisions and
100% employee coverage for our Family and Domestic Violence programme.
Security
– Reward principles that protect employee purchasing power globally.
– Accurate and timely payment of remuneration.
– Appropriate balance between fixed and variable pay at all levels.
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<1.5%
Equal pay gap
in favour of men
25,000
employee
shareholders
21,000
STIP participants
1,800
LTIP participants
About our reporting
The differing approaches explained
As our shares are listed on both the Australian and London Stock
Exchanges, the information provided within our Remuneration report
must comply with the reporting requirements of both countries.
As well as the difference in methodology for measuring remuneration,
there are also key differences in how remuneration is reported in the
UK and Australia.
Our regulatory responsibilities impact the volume of information we
provide, as well as the complexity. In Australia, we need to report on a
wider group of executives, as described in the following paragraph. In
addition, as set out in the summary table below, the two reporting
regimes follow different methodologies for calculating remuneration.
In the UK, disclosure is required for the Board, including the Executive
Directors. The Australian legislation requires disclosures in respect of
“key management personnel” (KMP), being those persons having
authority and responsibility for planning, directing and controlling the
activities of the Group. Accordingly, our key management personnel
comprise the Board, all product group Chief Executives, the Chief
Commercial Officer, and until 18 October 2021, the Group Executive
Strategy & Development.
Throughout this Remuneration report, KMP are collectively referred to
as “executives”. They are listed on page 186, with details of the
positions held during the year and dates of appointment to those roles.
UK
– For reporting purposes, remuneration is divided into fixed and
variable elements.
– We report remuneration in the currency it is paid, for example, where
a UK executive is paid in pounds sterling, remuneration is reported in
pounds sterling.
Australia
– For reporting purposes, remuneration is divided into short and
long-term elements.
– All remuneration is reported in US dollars, so using the previous
example, the UK executives’ remuneration would be converted to US
dollars using the average exchange rate for the financial year
(except STIP, which is converted at the year-end exchange rate).
The single total figure of remuneration table on page 174 shows
remuneration for our Executive Directors, gross of tax and in the
relevant currency of award or payment.
The table below summarises the elements of each component of
remuneration, as well as the significant differences in the approaches
to measurement.
In table 1a on pages 191-192, we report information regarding
executives in accordance with Australian statutory disclosure
requirements. The information is shown gross of tax and in US dollars.
The remuneration details in table 1a include accounting values relating
to various parts of the remuneration package, most notably LTIP
awards, and require a different methodology for calculating the
pension value. The figures in the single total figure of remuneration
table are therefore not directly comparable with those in table 1a.
Where applicable, amounts have been converted using the relevant
average exchange rates included in the notes to table 1a.
In table 1b on page 193, we report the remuneration of the Chairman
and the Non-Executive Directors. Certain information contained within
the Remuneration report is audited, as outlined on page 198.
Shareholder voting
The Implementation report, together with the annual statement by
the Remuneration Committee Chair, is subject to an advisory vote
each year as required by UK legislation. Under Australian legislation,
the Remuneration report as a whole is subject to an advisory vote.
All remuneration-related resolutions will be voted on at the
AGMs as Joint Decision Matters by Rio Tinto plc and Rio Tinto
Limited shareholders.
UK
Fixed
Base salary
Benefits
Pension
The value of the pension
contribution and payment in lieu
of pension paid during the year.
Variable
STIP – cash element
STIP – deferred share element
Australia
Short-term
Base salary
STIP – cash element
Cash benefits
Non-monetary benefits
Long-term
STIP – deferred share element
Based on the amortised IFRS fair
value of deferred shares at the
time of grant.
LTIP
LTIP
Measured at point of vesting.
Based on the amortised IFRS fair
value of the award at time of grant.
Pension and superannuation
Accounting basis.
Total remuneration
Annual Report 2021 | riotinto.com
171
Implementation report continued
Remuneration Committee responsibilities
How we work
The Committee’s responsibilities are set out in our terms of reference,
which we review each year, and are published in the corporate
governance section of riotinto.com. Our responsibilities include:
– Determining the Group’s remuneration structure and policies, and
assessing their cost, including pension and superannuation
arrangements for executives.
– Determining the mix and use of short and long-term incentive plans
for executives and ensuring alignment with the company’s
strategic objectives.
– Overseeing the operation of the Group’s short and long-term
incentive plans for executives, including approving awards, setting
performance criteria, and determining any vesting, and where
necessary applying the Consequence Management Framework to
current and prior awards.
– Determining contractual notice periods and termination
commitments, and setting retention and termination arrangements
for executives.
– Determining awards under the Group’s all-employee share plan.
– Monitoring gender pay.
– Determining the terms of service upon appointment for the Chair
and executives, and any subsequent changes.
We consider the level of pay and conditions for all employees across
the Group when determining executive remuneration.
Committee membership
The members of the Committee during the year and to the date of this
report were:
Sam Laidlaw (Committee Chair)
Megan Clark
Simon McKeon
Simon Thompson
Jennifer Nason
Ngaire Woods
The Group Company Secretary (or their delegate) attends meetings as
secretary to the Committee. The Chief Executive, Chief People Officer
and Head of Reward attend appropriate parts of the meetings at the
invitation of the Committee Chair. No individual is in attendance during
discussions about their own remuneration.
Independent advisers
The Committee has a protocol for engaging and working
with remuneration consultants to ensure that “remuneration
recommendations” (being advice relating to the elements of
remuneration for KMP, as defined under the Australian Corporations
Act) are made free from undue influence by key management
personnel to whom they may relate. We monitored compliance
with these requirements throughout 2021. Deloitte, the appointed
advisers to the Committee, gave declarations to the effect that any
remuneration recommendations were made free from undue influence
by KMP to whom they related, and the Board has received assurance
from the Committee and is satisfied that this was the case.
Deloitte are members of the Remuneration Consultants’ Group,
and voluntarily operate under its Code of Conduct (the Code)
in relation to executive remuneration consulting in the UK. The Code
is based upon principles of transparency, integrity, objectivity,
competence, due care and confidentiality. Deloitte has confirmed
that they adhered to the Code throughout 2021 for all remuneration
services provided to Rio Tinto. The Code is available online at
remunerationconsultantsgroup.com.
The Committee is satisfied that the Deloitte engagement partners and
advisory teams that provided remuneration advice to the Committee
do not have any connections with the company or individual directors
that may impair their independence. During 2021, Deloitte’s services
also included attending Committee meetings, support on the new
Policy and giving advice in relation to management proposals and
shareholder consultations. Deloitte was paid US$365,777 (2020:
US$268,394) for these services. Fees were charged on the basis of
time and expenses incurred.
Willis Towers Watson provided general and technical executive
remuneration services. These services predominantly related to
remuneration of employees other than KMP. We received other
services and publications relating to remuneration data from a
range of sources. During the year, Deloitte also provided internal audit,
tax compliance and other non-audit advisory services. These services
were provided under separate engagement terms and the Committee
is satisfied that there were no conflicts of interest.
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Implementation report continued
Governance
Remuneration Committee responsibilities
How we work
How the Committee spent its time in 2021
The Committee’s responsibilities are set out in our terms of reference,
The Group Company Secretary (or their delegate) attends meetings as
During 2021, the Committee met ten times. We fulfilled our responsibilities as set out in our terms of reference.
which we review each year, and are published in the corporate
secretary to the Committee. The Chief Executive, Chief People Officer
governance section of riotinto.com. Our responsibilities include:
and Head of Reward attend appropriate parts of the meetings at the
Our work in 2021 included:
incentive plans for executives, including approving awards, setting
remuneration for KMP, as defined under the Australian Corporations
– Determining the Group’s remuneration structure and policies, and
assessing their cost, including pension and superannuation
arrangements for executives.
– Determining the mix and use of short and long-term incentive plans
for executives and ensuring alignment with the company’s
strategic objectives.
– Overseeing the operation of the Group’s short and long-term
performance criteria, and determining any vesting, and where
necessary applying the Consequence Management Framework to
current and prior awards.
– Determining contractual notice periods and termination
commitments, and setting retention and termination arrangements
for executives.
– Monitoring gender pay.
– Determining awards under the Group’s all-employee share plan.
– Determining the terms of service upon appointment for the Chair
and executives, and any subsequent changes.
We consider the level of pay and conditions for all employees across
the Group when determining executive remuneration.
Committee membership
The members of the Committee during the year and to the date of this
report were:
Sam Laidlaw (Committee Chair)
Megan Clark
Simon McKeon
Simon Thompson
Jennifer Nason
Ngaire Woods
invitation of the Committee Chair. No individual is in attendance during
discussions about their own remuneration.
Independent advisers
The Committee has a protocol for engaging and working
with remuneration consultants to ensure that “remuneration
recommendations” (being advice relating to the elements of
Act) are made free from undue influence by key management
personnel to whom they may relate. We monitored compliance
with these requirements throughout 2021. Deloitte, the appointed
advisers to the Committee, gave declarations to the effect that any
remuneration recommendations were made free from undue influence
by KMP to whom they related, and the Board has received assurance
from the Committee and is satisfied that this was the case.
Deloitte are members of the Remuneration Consultants’ Group,
and voluntarily operate under its Code of Conduct (the Code)
in relation to executive remuneration consulting in the UK. The Code
is based upon principles of transparency, integrity, objectivity,
competence, due care and confidentiality. Deloitte has confirmed
that they adhered to the Code throughout 2021 for all remuneration
services provided to Rio Tinto. The Code is available online at
remunerationconsultantsgroup.com.
The Committee is satisfied that the Deloitte engagement partners and
advisory teams that provided remuneration advice to the Committee
do not have any connections with the company or individual directors
that may impair their independence. During 2021, Deloitte’s services
also included attending Committee meetings, support on the new
Policy and giving advice in relation to management proposals and
shareholder consultations. Deloitte was paid US$365,777 (2020:
US$268,394) for these services. Fees were charged on the basis of
time and expenses incurred.
Willis Towers Watson provided general and technical executive
remuneration services. These services predominantly related to
remuneration of employees other than KMP. We received other
services and publications relating to remuneration data from a
range of sources. During the year, Deloitte also provided internal audit,
tax compliance and other non-audit advisory services. These services
were provided under separate engagement terms and the Committee
is satisfied that there were no conflicts of interest.
January 2021
February 2021
May 2021
– Reviewing and determining any
base salary adjustments and LTIP
grants for executives.
– Approving appointment terms
for the new Executive Committee
members.
– Reviewing and determining “threshold”,
“target” and “outstanding” targets for the
safety, financial and ESG components of
the 2021 STIP.
– Reviewing and determining the
final EBIT margin outcome for PSA
with a performance period ending
31 December 2020.
– Reviewing actual performance
– Considering shareholder feedback
against the targets for the 2020 STIP
and assessing applicable adjustments.
on the remuneration-related resolutions
for the 2021 AGMs, including the
company’s response to the voting
outcomes.
– Acting in accordance with the terms
of the deferral agreement for the former
Chief Executive, Sam Walsh.
June 2021
July 2021
August/September 2021
– Determining the terms of appointment for
– Completing scenario testing and further
the new Chief Financial Officer.
– Development of the Consequence
Management Framework and revision to
the leaver provisions in the EIP rules.
refinement of the Consequence
Management Framework and leaver
provisions in the EIP rules to discuss
with shareholders.
– Consultation with shareholders and proxy
advisers to obtain feedback on specific
proposals in relation to the Consequence
Management Framework and leaver
provisions in the EIP rules.
October 2021
November 2021
December 2021
– Discussion and further refinement of the
Consequence Management Framework
and leaver provisions in the EIP rules to
discuss with shareholders.
– Reviewing executives’ progress towards
the Group’s share ownership
requirements.
– Reviewing the strategy and annual reports
on the Group’s global benefit plans.
– Further consultations with shareholders
on specific proposals in relation to the
Consequence Management Framework
and leaver positions in the EIP rules.
– Preparing the Remuneration report
(including this Implementation report).
Performance review process for executives
Rio Tinto conducts annual performance reviews for all its executives. Our key objectives for the performance review process are to:
– Improve organisational effectiveness by creating alignment between the executive’s objectives, Rio Tinto’s strategy, the individual’s leadership
behaviours and the Company’s values.
– Provide a consistent, transparent and balanced approach to measure, recognise and reward executive performance.
The Chief Executive conducts the review for members of the Executive Committee and recommends the performance outcomes to the Committee.
The Chief Executive’s performance is assessed by the Chair of the Board and discussed and debated with the Committee and the full Board.
Performance reviews for all executives took place in 2021 or early 2022.
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Implementation report continued
Executive Directors
Single total figure of remuneration (£’000)
Bonus –
STIP payment
Value of
LTIP awards vesting(a)
Executive Director (£’000)
Year
Base
salary
Benefits
Pension
Total
fixed
Cash
Deferred
shares
Face
value
Share price
appreciation
Other
Total
variable
Single
total figure
Jakob Stausholm
(Chief Executive)
Peter Cunningham
(Chief Financial Officer)(b)
Jakob Stausholm
2021
1,150
2021
377
(Chief Financial Officer)
2020
789
67
33
83
161
1,378
705
705
–
–
53
463
216
217
441
450
–
–
1,410
2,788
1,324
1,787
174
1,046
564
565
–
–
1,129
2,175
(a) Dividend equivalent shares are valued at the grant price for the LTIP award and included in the face value figure, with the impact of share price change included under share price appreciation.
(b) The details for Peter Cunningham reflect remuneration from his appointment as Chief Financial Officer and Executive Director on 17 June 2021 to 31 December 2021. The LTIP granted in 2017
was in relation to his previous role.
At the end of the performance period, LTIP values are based on estimates of both the number of shares that will ultimately vest and the share price.
These estimates are restated in the following year, once actual values are known. Refer to page 181 for further detail.
Fixed remuneration
Base salary (2021)
Consistent with prior practice, annual base salary increases for executives are generally in line with the base salary increases applying to the
broader employee population. Base salaries are reviewed with a 1 March effective date.
Executive Director
Jakob Stausholm
Peter Cunningham
Benefits (2021)
Annual base salary
at appointment
1 January 2021
£’000
Annual base salary
at appointment
17 June 2021
£’000
Total base
salary paid in 2021
£’000
Annual base salary
at 1 March 2022
£’000
1,150
–
–
700
1,150
377
1,182
700
% change
2.8%
Nil
Includes healthcare, allowance for professional tax compliance services, and non-performance based awards under the all-employee share plans.
Pension (2021)
Pension benefits can either be paid as contributions to Rio Tinto’s company pension fund or as a cash allowance.
Executive Director
Jakob Stausholm
Peter Cunningham
Pension contributions paid to the
Rio Tinto pension fund
£’000
Cash in lieu of pension
contributions paid
£’000
4
3
157
50
Total
£’000
Pension provision as percentage
of base salary
161
53
14%
14%
Peter Cunningham opted out of future accruals in the defined benefit plan following his appointment as Chief Financial Officer.
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Governance
Executive Directors
Single total figure of remuneration (£’000)
STIP (2021)
2021 Outcome
Bonus –
STIP payment
Value of
LTIP awards vesting(a)
For an executive’s STIP outcome, the weighted safety, financial, ESG and individual STIP results are added to determine the total result. The
resultant STIP is delivered equally in cash and deferred shares.
Executive Director (£’000)
Year
Benefits
Pension
Base
salary
Total
fixed
Cash
Deferred
shares
Face
Share price
value
appreciation
Total
Single
Other
variable
total figure
2021
1,150
161
1,378
705
705
1,410
2,788
(Chief Financial Officer)(b)
2021
377
53
463
216
217
441
450
1,324
1,787
Jakob Stausholm
(Chief Executive)
Peter Cunningham
Jakob Stausholm
67
33
83
–
–
–
–
–
–
(Chief Financial Officer)
2020
789
174
1,046
564
565
1,129
2,175
(a) Dividend equivalent shares are valued at the grant price for the LTIP award and included in the face value figure, with the impact of share price change included under share price appreciation.
(b) The details for Peter Cunningham reflect remuneration from his appointment as Chief Financial Officer and Executive Director on 17 June 2021 to 31 December 2021. The LTIP granted in 2017
was in relation to his previous role.
Weighted result
Delivered in:
Percentage of:
Executive Director
Jakob Stausholm
Peter Cunningham(a)
Safety
(20%)
Financial
(50%)
ESG
(15%)
Individual
(15%)
13.2
13.2
31.5
31.5
7.9
7.9
12
7.5
Total STIP
(% of base
salary)
129.1
120.1
Base
salary
£’000
1,150
700
Total
64.6
60.1
STIP
£’000
1,485
456
Discretion
(% of total
STIP)(b)
Adjusted
STIP
£’000
(5)
(5)
1,410
433
Deferred
shares
£’000
705
217
Cash
£’000
705
216
Max
awarded
Max
forfeited
Target
awarded
61.3% 38.7% 122.6%
57.0% 43.0% 114.1%
(a) Values for Peter Cunningham only represent his time served as CFO from 17 June 2021 to 31 December 2021.
(b) Downward discretion of 5% applied to total STIP in relation to the findings of the Everyday Respect report.
Maximum STIP is capped at 200% of base salary with awards of:
– 50% of maximum for target
At the end of the performance period, LTIP values are based on estimates of both the number of shares that will ultimately vest and the share price.
– 100% of maximum for outstanding performance
These estimates are restated in the following year, once actual values are known. Refer to page 181 for further detail.
Half of the STIP award will be paid in cash in March 2022, and the remainder will be delivered in deferred shares as a BDA, vesting in December
2024. On cessation of employment, any unvested deferred shares will lapse unless the Committee decides the executive is an eligible leaver.
Consistent with prior practice, annual base salary increases for executives are generally in line with the base salary increases applying to the
broader employee population. Base salaries are reviewed with a 1 March effective date.
2021 STIP measures
Performance categories Weighting
Commentary
Annual base salary
Annual base salary
at appointment
1 January 2021
at appointment
Total base
Annual base salary
17 June 2021
salary paid in 2021
at 1 March 2022
£’000
1,150
–
£’000
–
700
£’000
1,150
377
£’000
1,182
700
% change
2.8%
Nil
Safety
20%
Our goal is zero harm, including, above all, the elimination of workplace fatalities, and we consider safety as a
key performance measure.
Safety measures for all executives in 2021 included a standalone binary fatality measure (40%), with the
remainder split between all-injury frequency rate (AIFR) (20%) and measures relating to our SMM (40%).
Financial
50%
Our current financial measures are based on two KPIs that are used in managing the business.
The first, underlying earnings, gives insight to cost management, production and performance efficiency.
A reconciliation of underlying earnings to net earnings is provided in note 2 (Operating segments)
on page 239.
The second, STIP free cash flow, is also an important measure to the business. It demonstrates how
we convert underlying earnings to cash, and provides further insight into how we are managing costs,
efficiency and productivity. STIP free cash flow comprises free cash flow (as reported on page 346),
adjusted to exclude dividends paid to holders of non-controlling interests in subsidiaries (US$1.1 billion)
and development capital expenditure (US$3.9 billion). This adjusted metric excludes the impact of those
components of free cash flow which are not directly related to performance in the year and therefore better
represents underlying business performance. In 2021, this measure was reduced by US$0.2 billion to include
capital expenditure originally included in the STIP target as sustaining capital, but later classified as
development capital in the Group’s 2021 financial results.
When we measure financial performance against the annual plan, half is measured against the original plan,
and half is “flexed” to exclude factors that are outside management’s control, such as the impact of
fluctuations in exchange rates, or quoted metal and other prices. “Flexed” financial targets are typically
higher than the “unflexed” targets set by the Board when commodity prices rise and lower when commodity
prices fall. Actual underlying earnings and STIP free cash flow results are compared against equally weighted
“flexed” and “unflexed” targets.
ESG
15%
A strong focus on ESG is critical to the success of our strategy. 2021 is the first year in which ESG measures
have been introduced for all executives and included Environmental measures (5%), Social measures (5%)
and Governance measures (5%).
Individual
15%
An assessment of individual performance against key priorities and objectives for the year.
The STIP measures for product group Chief Executive Officers (PGCEOs) include product group financial and safety measures in addition to Group
financial measures.
Fixed remuneration
Base salary (2021)
Executive Director
Jakob Stausholm
Peter Cunningham
Benefits (2021)
Pension (2021)
Executive Director
Jakob Stausholm
Peter Cunningham
Includes healthcare, allowance for professional tax compliance services, and non-performance based awards under the all-employee share plans.
Pension benefits can either be paid as contributions to Rio Tinto’s company pension fund or as a cash allowance.
Pension contributions paid to the
Rio Tinto pension fund
Cash in lieu of pension
contributions paid
£’000
4
3
£’000
157
50
Total
Pension provision as percentage
of base salary
£’000
161
53
14%
14%
Peter Cunningham opted out of future accruals in the defined benefit plan following his appointment as Chief Financial Officer.
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Implementation report continued
Calculation of 2021 STIP award
The following tables summarise the calculation of STIP award for the Executive Directors. Below threshold payout is nil on the Group safety and
financial measures.
Group safety measures
Weighting
(out of
100%)
2021 performance
Result
(% of
maximum)
Weighted
result
(out of
100%) Commentary on safety measures
Binary fatality
8%
No fatality
100%
8%
Threshold
Target
Maximum
All-injury
frequency rate
Safety maturity
model
4%
8%
Actual: 0.4
Actual: 5.7
5.7
0.4
5
Total
Group safety
20%
Group financial measures
0.33
0.3
25%
1%
6.7
6.5
52.5%
4.3%
66%
13.2%
For a third consecutive year in 2021, we achieved
zero fatalities. Performance against the binary
fatality measure was therefore maximum for
all executives.
There was a regression in the all-injury frequency
rate (AIFR) of 0.40 in 2021 (2020: 0.37) following
a strong performance in the previous year.
There were no PDI recorded across the Group.
The 2020 end of year SMM scores formed the
baseline (threshold) for the 2021 assessments.
The 2020 Group baseline score was 5.4. In H1
2021, nine assets were added and five removed
which resulted in an adjusted 2020 Group
baseline score of 5.0. The 2021 average Group
SMM achievement was 5.7. The Group SMM STIP
result is the average of the SMM STIP scores
achieved by the individual assets included in the
programme. The Group performance against the
safety targets is 66% of maximum.
Weighting
(out of
100%)
2021 performance (US$bn)
Result
(% of
maximum)
Weighted
result
(out of
100%) Commentary on financial measures
Underlying
earnings
Underlying
earnings – flexed
STIP free
cash flow
STIP free cash
flow – flexed
Total Group
financial
12.5%
12.5%
12.5%
12.5%
50%
Threshold
Target
Maximum
Actual: 21.3
12.2
17.8
13.3
16.3
23.7
17.8
Actual: 23
Actual: 23
19.8
26.5
Actual: 21.3
21.2
100%
12.5%
30.7
23.2
34.6
30%
3.8%
98%
12.3%
24%
3%
63%
31.5%
The Group’s unadjusted financial result is 60%
(of maximum 100%). The Committee considered
whether any adjustments were warranted to
ensure the outcome was a fair reflection of
underlying performance. The adjustments
approved related to tax prepayments and the
buyout of the French pension plan which did not
reflect current year performance. On its review of
the adjustments, the Committee was mindful of
the change to the payout slope approved as part
of the remuneration policy, which resulted in a
minimal number of adjustments approved.
Accordingly, the adjusted Group performance
against the financial targets is 63% of maximum.
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Governance
Calculation of 2021 STIP award
Group ESG measures
The following tables summarise the calculation of STIP award for the Executive Directors. Below threshold payout is nil on the Group safety and
financial measures.
Group safety measures
Weighting
(out of
100%)
2021 performance
maximum)
100%) Commentary on safety measures
Result
(% of
Weighted
result
(out of
Binary fatality
8%
No fatality
100%
8%
zero fatalities. Performance against the binary
For a third consecutive year in 2021, we achieved
fatality measure was therefore maximum for
Threshold
Target
Maximum
all executives.
All-injury
frequency rate
Safety maturity
model
4%
8%
Actual: 0.4
Actual: 5.7
5.7
0.33
0.3
25%
1%
6.7
6.5
52.5%
4.3%
There was a regression in the all-injury frequency
rate (AIFR) of 0.40 in 2021 (2020: 0.37) following
a strong performance in the previous year.
There were no PDI recorded across the Group.
The 2020 end of year SMM scores formed the
baseline (threshold) for the 2021 assessments.
The 2020 Group baseline score was 5.4. In H1
2021, nine assets were added and five removed
which resulted in an adjusted 2020 Group
baseline score of 5.0. The 2021 average Group
SMM achievement was 5.7. The Group SMM STIP
result is the average of the SMM STIP scores
achieved by the individual assets included in the
programme. The Group performance against the
2021 performance (US$bn)
maximum)
100%) Commentary on financial measures
Total
Group safety
20%
Group financial measures
Weighting
(out of
100%)
12.5%
12.5%
12.5%
50%
Underlying
earnings
Underlying
STIP free
cash flow
STIP free cash
flow – flexed
Total Group
financial
earnings – flexed
12.5%
Actual: 21.3
Threshold
Target
Maximum
16.3
23.7
17.8
Actual: 23
Actual: 21.3
21.2
30.7
23.2
34.6
Actual: 23
26.5
Result
(% of
Weighted
result
(out of
100%
12.5%
30%
3.8%
24%
3%
63%
31.5%
The Group’s unadjusted financial result is 60%
(of maximum 100%). The Committee considered
whether any adjustments were warranted to
ensure the outcome was a fair reflection of
underlying performance. The adjustments
approved related to tax prepayments and the
buyout of the French pension plan which did not
reflect current year performance. On its review of
the adjustments, the Committee was mindful of
of the remuneration policy, which resulted in a
minimal number of adjustments approved.
Accordingly, the adjusted Group performance
against the financial targets is 63% of maximum.
98%
12.3%
the change to the payout slope approved as part
0.4
5
12.2
17.8
13.3
19.8
Environment
Social
Governance
Total Group ESG
Approve 0.22Mt CO2e of abatement projects
Delivery of goals to progress Scope 3
partnership strategy
Percentage point increase of women in the overall
workforce against 2020 baseline
Support delivery of Group CSP improvements and
cultural awareness training
Target
Outstanding
Result
Weighting
(out of 100%)
Result
(% of maximum)
Weighted result
(out of 100%)
0.22Mt
CO2e
0.37Mt
CO2e
0.262Mt
CO2e
2.5%
3 out of 4
4 out of 4
3 of 4
2.5%
2%
3%
1.5%
5%
64%
50%
0%
1.6%
1.3%
0%
See footnote(a) See footnote(a)
3 of 3
2.5%
100%
2.5%
Improved assurance and risk management processes
See footnote(a) See footnote(a)
Stretch
achieved
2.5%
15%
100%
52.3%
2.5%
7.9%
(a) The performance for each metric was verified against detailed deliverables, evaluation criteria and evidence requirements by the CSP Area of Expertise and independently assured. The key
performance criteria were based on actions developed through the Trusted Partnership Program (TPP). The TPP was established in response to the Board’s Review of Cultural Heritage
Management which identified priority actions for the Iron Ore product group, Australia and the overall Group. Progress on TPP was reported to the Board’s Sustainability Committee on a regular
basis during 2021. The 2021 objectives under the Governance component contributed to the achievement of a number of the priorities identified in the Board review in the Group wide topic
areas of social performance, assurance and organisation alignment.
Commentary on ESG measures
Impeccable ESG credentials is one of our four objectives. As part of the policy review, we introduced an ESG component into our STIP scorecard in
2021 to complement our long-standing safety component. Overall, we made good progress against the three dimensions of this component with an
outcome of just above target.
66%
13.2%
safety targets is 66% of maximum.
On the environment, we took important foundational steps to advance towards our ambitious climate change targets by approving abatement
projects and progress our Scope 3 partnership strategy.
On social, our aspiration is to foster an environment where all aspects of diversity are represented, included, and respected. The target related to
improving female representation in the workforce by at least 2%. We achieved 1.5% which was the highest increase in the last five years but fell
short of target.
In March 2021, we commissioned an independent review into sexual harassment, racism and bullying the findings of which were published
1 February 2022. The findings are deeply disturbing and are a source of enormous regret to have learnt the extent to which bullying, racism and
sexual harassment are happening at Rio Tinto. This is not the kind of company we aspire to be. In recognition of the gravity of the findings, the
management team recommended that a downward adjustment be made to the individual STIP payments to Executive Committee members.
The Committee concluded, after applying the Consequence Management Framework, that a reduction of 5% should be applied to the total STIP
payment for current Executive Committee members and an equivalent adjustment be made to the 2020 unvested BDA held by former Executive
Committee members.
On governance, our efforts in 2021 were focused on strengthening our CSP frameworks, processes and risk management. This included important
work on our Standard and Cultural Heritage Group Procedure for external engagement, the development and delivery of locally and/or regionally
appropriate cultural awareness training to the majority of local risk owners and asset/project owners and the development of measurable
outcomes-based asset-level CSP metrics and targets across the Group up to 2026.
Individual performance
Jakob Stausholm
Peter Cunningham
Weighting
(out of 100%)
Result
(% of maximum)
Weighted
result
(out of 100%)
Commentary on
individual measures
15%
15%
80%
50%
12% Refer to page 178
7.5% Refer to page 179
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177
Implementation report continued
Jakob Stausholm
Priorities
Performance
Safety, operational and commercial
excellence drive superior margins
and returns
Portfolio
Low-cost, long-life
assets that deliver attractive returns
People
Building capability to drive
performance
Objectives
Achievements
Refocus organisation to become
best operator
– Third successive fatality free year, with greater focus on non-managed operations
and supply chain partners in 2022.
– Launch of the Rio Tinto Safe Production System, designed to improve operational
performance, which was deployed to the first sites in 2021 and will be significantly
ramped up in in 2022.
– Achieving record financial results with free cash flow of $17.7 billion and underlying
earnings of $21.4 billion, after taxes and government royalties of $13 billion.
This enables us to pay our highest total dividend ever of 1,040 US cents per share,
including a 247 US cents per share special dividend, representing a 79% payout.
However, underlying operational performance and project delivery in 2021 was
behind expectation partly due to COVID-19 and other impacts.
– Record annual average share price.
Develop growth pipeline for future
optionality
– Setting the Group’s objectives: to become the best operator; achieve impeccable
ESG credentials; excel in development; and secure a strong licence to operate.
– Launch of a new strategy, accelerating the decarbonisation of our assets through a
15% reduction in emissions by 2025 – five years earlier than originally planned.
– Further development of the project portfolio, with commitment to Jadar project and
Rincon acquisition as part of the Battery Minerals strategy.
– Significant engagement with technical teams and external partners on key growth
projects, Simandou, Resolution and Oyu Tolgoi (OT).
Re-set company leadership,
culture and values
– Appointment of a new Executive Committee team and intensively working on
developing teamwork.
– Successful roll-out of new Group values of care, courage and curiosity.
– Launch of Voyager, a company-wide leadership programme, focused on
development of the extended leadership team.
– Transparent disclosure of an external review of workplace culture (Everyday
Respect report published in February 2022).
– Good progress in restoring reputation in Australia, particularly with Traditional
Owners in the Pilbara and with government and other external stakeholders.
– Focus and engagement on the world’s transition to a low carbon economy as Chair
of the ICMM climate sub-group and through attendance at Cop26 in Glasgow.
– Publication of an interim report on the Group's CSP commitments.
– Re-setting of relations with the Government of Mongolia (leading in early 2022 to
the comprehensive agreement on how to take the OT project forward and
commencement of underground operations).
Partners
Re-build trust with stakeholders
Working with others for future
success
Prioritise impeccable ESG
credentials
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Implementation report continued
Governance
– Achieving record financial results with free cash flow of $17.7 billion and underlying
Portfolio
Contribute to the growth pipeline
– Key contribution in formulating and communicating the new strategy.
Peter Cunningham
Priorities
Performance
Safety, operational and
commercial excellence drive
superior margins and returns
Objectives
Achievements
Drive cash performance and
functional performance
– Strengthened the balance sheet, including through disciplined focus on cost
management in Annual Planning and Budget discussions.
– Delivery of key Treasury activity (bond issuance and new revolving credit facility).
– Design and implementation of rigorous monthly performance reviews, including
quarterly deep-dives on critical topics.
Low-cost, long-life
assets that deliver
attractive returns
People
Building capability to drive
performance
Partners
Working with others for future
success
– Successful re-set of new strategic direction for the Finance leadership team and
the Information Systems & Technology (IS&T) function.
– Implementation of key organisational changes (Business Development and
Strategy teams).
– Integral to the evaluating and approval of key growth projects, capital improvement
programmes and inorganic growth opportunities through role as Chair of the
Evaluation Committee and key member of the Investment Committee.
Build a capable and engaged
function
– Continued to upgrade the capability across the Finance function through several
strategic talent appointments and planning the succession pipeline.
– Key contribution in successful roll-out of new Group values: care, courage
and curiosity.
– Strong leadership and commitment to ‘The Way We Work’ and our ethics and
integrity priorities.
Re-build trust with key
stakeholders
– Continued to strengthen relationships with shareholders.
– Led our investor relations engagement strategies to reinforce our presence in
key markets.
Jakob Stausholm
Priorities
Performance
Safety, operational and commercial
excellence drive superior margins
and returns
Objectives
Achievements
Refocus organisation to become
– Third successive fatality free year, with greater focus on non-managed operations
best operator
and supply chain partners in 2022.
– Launch of the Rio Tinto Safe Production System, designed to improve operational
performance, which was deployed to the first sites in 2021 and will be significantly
ramped up in in 2022.
earnings of $21.4 billion, after taxes and government royalties of $13 billion.
This enables us to pay our highest total dividend ever of 1,040 US cents per share,
including a 247 US cents per share special dividend, representing a 79% payout.
However, underlying operational performance and project delivery in 2021 was
behind expectation partly due to COVID-19 and other impacts.
– Record annual average share price.
Portfolio
Develop growth pipeline for future
– Setting the Group’s objectives: to become the best operator; achieve impeccable
optionality
ESG credentials; excel in development; and secure a strong licence to operate.
Low-cost, long-life
assets that deliver attractive returns
– Launch of a new strategy, accelerating the decarbonisation of our assets through a
15% reduction in emissions by 2025 – five years earlier than originally planned.
– Further development of the project portfolio, with commitment to Jadar project and
Rincon acquisition as part of the Battery Minerals strategy.
– Significant engagement with technical teams and external partners on key growth
projects, Simandou, Resolution and Oyu Tolgoi (OT).
People
Re-set company leadership,
– Appointment of a new Executive Committee team and intensively working on
culture and values
developing teamwork.
Building capability to drive
performance
Partners
success
Working with others for future
Prioritise impeccable ESG
credentials
Re-build trust with stakeholders
– Good progress in restoring reputation in Australia, particularly with Traditional
– Successful roll-out of new Group values of care, courage and curiosity.
– Launch of Voyager, a company-wide leadership programme, focused on
development of the extended leadership team.
– Transparent disclosure of an external review of workplace culture (Everyday
Respect report published in February 2022).
Owners in the Pilbara and with government and other external stakeholders.
– Focus and engagement on the world’s transition to a low carbon economy as Chair
of the ICMM climate sub-group and through attendance at Cop26 in Glasgow.
– Publication of an interim report on the Group's CSP commitments.
– Re-setting of relations with the Government of Mongolia (leading in early 2022 to
the comprehensive agreement on how to take the OT project forward and
commencement of underground operations).
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Implementation report continued
2022 STIP
This section outlines the operation of the 2022 STIP which is broadly unchanged from 2021 with the safety measures now included within the ESG
scorecard.
2022 STIP measures, weightings and targets
Group STIP metrics
Financial: Underlying earnings
Financial: Free cash flow
ESG scorecard (including safety, climate change, diversity and governance)
Individual
Weighting out of
100%
25%
25%
35%
15%
The financial and individual targets that have been set for 2022 are considered by the Board to be commercially sensitive. As such, the specific
targets for these measures, and the performance against them, are expected to be described retrospectively in the 2022 Implementation report.
2022 ESG measures, weightings and targets
As safety is clearly linked to sustainability, we have decided to simplify the STIP in 2022 to combine all ESG measures (including safety) into an ESG
scorecard. The weighting for safety and other ESG metrics will remain consistent with 2021, however we have updated the ESG metrics to continue
to stretch our performance and drive towards achieving impeccable ESG credentials.
As expectations evolve and we improve across the three ESG pillars, we may replace or amend ESG metrics and targets included in the STIP in
future years. Other ESG-related objectives outside the STIP will continue to be actively managed and may form part of the executives’ individual
performance objectives. In selecting the focus areas and metrics for the ESG component, we have been conscious and mindful of the need to set
credible stretch targets aligned to our strategic agenda that are transparent and measurable whilst recognising some inevitable limitations of what
is possible.
The ESG metrics and targets for 2022 set out below were considered and approved by the Board.
Safety – Fatality prevention (Binary)
Safety – AIFR
Safety – SMM (basic and evolving assets)(a)
Safety – SMM (advanced assets)(a)
Progress of Scope 1 and 2 abatement projects:
projects >5kt CO2 approved and delivered in 2022
that reduce 2025 emissions(b)(d)
Deliver Scope 3 milestones for our highest emission
areas: steel decarbonisation, zero-carbon aluminium
and shipping(d)
Improve female representation in workforce(d)
Implement actions from Everyday Respect report(d)
Complete actions from the Juukan Senate Inquiry
Report and 2020 Board report(d)
Critical elements of the 2022 plan to implement the
Global Industry Standard on Tailings Management(d)
Total Group ESG
Threshold
n/a
0.44
Target
n/a
0.38
Outstanding
No fatality
0.30 + 0 PDI
Rebased end of
2021 score
Improvement of 0.7 or achieve a
total score of 6.0, whichever is less
Improvement of 1.5 or achieve a
total score of 7.3, whichever is less
Rebased end of
2021 score
Improvement of 0.5
Improvement of 1.5 or achieve a
total score of 7.3, whichever is less
Weighting
(out of 100%)
8%
4%
8%
0.8Mt CO2 reduction
1.65Mt CO2 reduction
2.5%
3 of 4 achieved
4 of 4 achieved
2.5%
2%
See footnote(c)
3%
See footnote(c)
90% actions complete
100% actions complete
All asset gap analyses complete
and no tailings incidents with
off-lease impacts
80% completion of asset work
plans to close gaps for “very high”
and “extreme” consequence
facilities
2.5%
2.5%
2.5%
2.5%
35.0%
(a) The SMM is now in the third consecutive year of implementation and it will be enhanced in 2022 to support the business through the next phase of safety improvement. The 2022 enhancements
to the SMM criteria require a reset of the baseline from the 2021 end of year assessment scores. In Q4 2021, a set of sample assessments was completed across the Group comparing score
outcomes against the existing and the enhanced models. The outcomes from these sample assessments have been used to set the criteria for determining 2022 baseline scores. Using the
criteria on the site end of year assessments conducted in Q4 2021, the 2022 baseline score is determined to be 4.4. During the course of the year, sites will be added or removed in line with
business reorganisations and the project and closure cycles, in which the 2022 baseline score will be updated. Changes will be fully disclosed in the 2022 Director’s Remuneration report.
Please refer to page 99 for more details of the 2022 enhancements.
(b) Projects that individually reduce 2025 emissions by 5kt CO2 which may include approved renewable energy, abatement and energy efficiency projects.
(c) There are two equal components to measure the implementation of actions from the Everyday Respect report. The first component is to have all leaders (approximately 6,000 individuals) trained
on responsibilities, prevention and response management of harmful behaviours in the workplace. The target and outstanding achievement is to have 80% and 100% of leaders complete the
training respectively. The second component is to have safe and inclusive facilities at our workplaces. The target achievement is to complete a facilities review through inclusive on the ground
engagement and implement safety critical upgrades of all facilities. The outstanding achievement is to implement all improvements of facilities that address inclusion and respect for all
employees and contractors.
(d) No payout below target. With the exception of the binary approach to fatality prevention, payout of 50% of maximum for achieving target, going up in a straight line to outstanding.
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Implementation report continued
Governance
2022 STIP measures, weightings and targets
2022 STIP
scorecard.
Group STIP metrics
Financial: Underlying earnings
Financial: Free cash flow
Individual
ESG scorecard (including safety, climate change, diversity and governance)
The financial and individual targets that have been set for 2022 are considered by the Board to be commercially sensitive. As such, the specific
targets for these measures, and the performance against them, are expected to be described retrospectively in the 2022 Implementation report.
2022 ESG measures, weightings and targets
This section outlines the operation of the 2022 STIP which is broadly unchanged from 2021 with the safety measures now included within the ESG
PSAs granted in 2017 were based on three performance conditions, all measured over a five-year performance period:
LTIP
Weighting out of
– Improvements in EBIT margin relative to global mining comparators – one-third.
– TSR relative to the EMIX Global Mining Index – one-third.
– TSR relative to the MSCI World Index – one-third.
Performance against the improvement in the EBIT margin measure cannot be finalised until May in the year following the end of the five-year
performance period. This is due to the reporting timeframes for companies in the EBIT margin comparator group and the time taken for the external
source (currently S&P Capital IQ) to report the relevant data. The EBIT margin comparator group includes Alcoa, Anglo American, Antofagasta,
Barrick Gold, BHP, Fortescue, Freeport, Glencore, Teck Resources and Vale.
Accordingly, the value of the shares vesting included in the single total figure of remuneration table for 2021 is an estimate, which is finalised once
the actual figures are known. The original estimate is based on:
– The TSR portion of the award (with estimated associated dividend equivalent shares) which vest in February following the end of the five-year
performance period.
As safety is clearly linked to sustainability, we have decided to simplify the STIP in 2022 to combine all ESG measures (including safety) into an ESG
– An estimate of vesting of the EBIT margin portion of the award (with estimated associated dividend equivalent shares) based on the analysis of
scorecard. The weighting for safety and other ESG metrics will remain consistent with 2021, however we have updated the ESG metrics to continue
the latest available EBIT margin ranking prior to publication of this report.
to stretch our performance and drive towards achieving impeccable ESG credentials.
As expectations evolve and we improve across the three ESG pillars, we may replace or amend ESG metrics and targets included in the STIP in
future years. Other ESG-related objectives outside the STIP will continue to be actively managed and may form part of the executives’ individual
performance objectives. In selecting the focus areas and metrics for the ESG component, we have been conscious and mindful of the need to set
credible stretch targets aligned to our strategic agenda that are transparent and measurable whilst recognising some inevitable limitations of what
is possible.
– The average share prices for Rio Tinto plc and Rio Tinto Limited over the last quarter of the relevant year, as the share price on the date on which
all shares vest is not ascertainable by the date on which the Remuneration report is approved by the Board.
The actual values associated with the PSA vesting are determined following the vesting of the EBIT margin portion of the award at the end of the
following May, based on the actual share prices on the date of vesting. The estimated LTIP values are then restated, if applicable, in the following
Remuneration report.
The ESG metrics and targets for 2022 set out below were considered and approved by the Board.
Calculation of 2017 PSA vesting
Safety – Fatality prevention (Binary)
Safety – AIFR
Threshold
n/a
0.44
Target
n/a
0.38
Outstanding
No fatality
0.30 + 0 PDI
Safety – SMM (basic and evolving assets)(a)
Rebased end of
Improvement of 0.7 or achieve a
Improvement of 1.5 or achieve a
2021 score
total score of 6.0, whichever is less
total score of 7.3, whichever is less
Rebased end of
2021 score
Improvement of 0.5
Improvement of 1.5 or achieve a
total score of 7.3, whichever is less
0.8Mt CO2 reduction
1.65Mt CO2 reduction
2.5%
3 of 4 achieved
4 of 4 achieved
2.5%
Safety – SMM (advanced assets)(a)
Progress of Scope 1 and 2 abatement projects:
projects >5kt CO2 approved and delivered in 2022
that reduce 2025 emissions(b)(d)
Deliver Scope 3 milestones for our highest emission
areas: steel decarbonisation, zero-carbon aluminium
and shipping(d)
Improve female representation in workforce(d)
Implement actions from Everyday Respect report(d)
Complete actions from the Juukan Senate Inquiry
Report and 2020 Board report(d)
Critical elements of the 2022 plan to implement the
Global Industry Standard on Tailings Management(d)
Total Group ESG
2%
See footnote(c)
3%
See footnote(c)
90% actions complete
100% actions complete
All asset gap analyses complete
80% completion of asset work
and no tailings incidents with
plans to close gaps for “very high”
off-lease impacts
and “extreme” consequence
facilities
(a) The SMM is now in the third consecutive year of implementation and it will be enhanced in 2022 to support the business through the next phase of safety improvement. The 2022 enhancements
to the SMM criteria require a reset of the baseline from the 2021 end of year assessment scores. In Q4 2021, a set of sample assessments was completed across the Group comparing score
outcomes against the existing and the enhanced models. The outcomes from these sample assessments have been used to set the criteria for determining 2022 baseline scores. Using the
criteria on the site end of year assessments conducted in Q4 2021, the 2022 baseline score is determined to be 4.4. During the course of the year, sites will be added or removed in line with
business reorganisations and the project and closure cycles, in which the 2022 baseline score will be updated. Changes will be fully disclosed in the 2022 Director’s Remuneration report.
Please refer to page 99 for more details of the 2022 enhancements.
(b) Projects that individually reduce 2025 emissions by 5kt CO2 which may include approved renewable energy, abatement and energy efficiency projects.
(c) There are two equal components to measure the implementation of actions from the Everyday Respect report. The first component is to have all leaders (approximately 6,000 individuals) trained
on responsibilities, prevention and response management of harmful behaviours in the workplace. The target and outstanding achievement is to have 80% and 100% of leaders complete the
training respectively. The second component is to have safe and inclusive facilities at our workplaces. The target achievement is to complete a facilities review through inclusive on the ground
engagement and implement safety critical upgrades of all facilities. The outstanding achievement is to implement all improvements of facilities that address inclusion and respect for all
employees and contractors.
(d) No payout below target. With the exception of the binary approach to fatality prevention, payout of 50% of maximum for achieving target, going up in a straight line to outstanding.
Our remuneration consultants, Deloitte, calculated performance against the TSR measures. The dual TSR measures recognise that the company
competes in the global market for investors as well as within the mining sector, and rewards executives for returns over the long term that
outperform both the broader market and the mining sector.
TSR relative to EMIX Global Mining Index
Threshold
Maximum
Actual
TSR relative to MSCI World Index
Threshold
Maximum
Actual
Improvement in EBIT margin
Threshold
Maximum
Estimate
Overall vesting
Performance
Equal to index
Outperformance of the index by 6% per annum
16.7% per annum
Equal to index
Outperformance of the index by 6% per annum
21.2% per annum
Above the sixth ranked company
Rank of 1st or 2nd
6th
Executive Director
Year
included
in single
figure
EBIT margin
rank out
of 11
Award
Overall
vesting %
Estimated
Dividend
equivalents
(% of face
value)
Shares
(including
dividend
equivalents)
5,200
Vesting
Weighting
Weighted
achievement
22.5%
100%
100%
22.5%
100%
100%
22.5%
100%
0%
One-third
One-third
One-third
Actual
One-third
One-third
Nil
Two-thirds
Share
price
PSA
outcome
(£’000)
EBIT
margin
rank out
of 11
Overall
vesting %
Share
price
PSA
outcome
(£’000)
Peter Cunningham
2021 2017 PSA
6th rank
66.7%
(38%)
18,892
£47.18
891
Will be determined in May 2022
The TSR component of the 2016 PSA vested in full on 18 February 2021 with Rio Tinto plc and Rio Tinto Limited share prices of £62.35 and
A$127.47 respectively. Final rank for the EBIT margin component was 6th which resulted in vesting of nil. Overall vesting outcome for the 2016 PSA
was therefore 66.7%. Dividend equivalents were equal to 20% of the vested awards.
Jakob Stausholm’s first LTIP award was granted in September 2018, with a performance period ending 31 December 2022.
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181
100%
25%
25%
35%
15%
Weighting
(out of 100%)
8%
4%
8%
2.5%
2.5%
2.5%
2.5%
35.0%
Implementation report continued
LTIP awards granted in 2021
These awards are subject to TSR performance relative to the EMIX Global Mining Index and MSCI World Index (equal weighting). Targets for
threshold and maximum performance are unchanged from prior years.
Executive Director
Type of award
Grant date
Face value of
award (% of
base salary)
Face value of
award
(£’000)
% of vesting
at threshold
performance
Grant price(a)
Conditional
shares awarded
Vesting
month
End of the period
over which the
performance
conditions have
to be fulfilled
Jakob Stausholm
PSA
18 March 2021
400%
4,600
22.5%
£44.44
103,510
Feb 2026
31 Dec 2025
Peter Cunningham’s 2021 LTIP grant detailed in Table 3 (page 195) was granted prior to his appointment as Chief Financial Officer. No top-up grant
was made in 2021 following his appointment.
LTIP to be granted in March 2022
Executive Director
Jakob Stausholm
Peter Cunningham
Type of award
Face value of award
(% of base salary)
Face value of
award
(£’000)
% of vesting
at threshold
performance
Grant price(a)
Conditional
shares awarded
Vesting
month
End of the period
over which the
performance
conditions have
to be fulfilled
PSA
PSA
400%
400%
4,728
2,800
22.5%
22.5%
£55.55
£55.55
85,126
Feb 2027
31 Dec 2026
50,405
Feb 2027
31 Dec 2026
(a)
In line with Policy, the grant price for PSA is determined by reference to the average share price for the calendar year prior to year of grant.
Performance measures
Performance measure (weighting)
Vesting schedule
TSR vs EMIX Global Mining
Targets for threshold and maximum performance are unchanged from prior years.
TSR vs MSCI World Index
Targets for threshold and maximum performance are unchanged from prior years.
Weighting
50%
50%
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was made in 2021 following his appointment.
LTIP to be granted in March 2022
Executive Director
Jakob Stausholm
Peter Cunningham
Face value of award
Type of award
(% of base salary)
PSA
PSA
400%
400%
Face value of
award
(£’000)
4,728
2,800
% of vesting
at threshold
performance
Grant price(a)
shares awarded
Conditional
Vesting
month
22.5%
22.5%
£55.55
£55.55
85,126
Feb 2027
31 Dec 2026
50,405
Feb 2027
31 Dec 2026
(a)
In line with Policy, the grant price for PSA is determined by reference to the average share price for the calendar year prior to year of grant.
Performance measures
Performance measure (weighting)
Vesting schedule
TSR vs EMIX Global Mining
Targets for threshold and maximum performance are unchanged from prior years.
TSR vs MSCI World Index
Targets for threshold and maximum performance are unchanged from prior years.
End of the period
over which the
performance
conditions have
to be fulfilled
End of the period
over which the
performance
conditions have
to be fulfilled
Weighting
50%
50%
Implementation report continued
Governance
LTIP awards granted in 2021
Executive Directors’ shareholding
These awards are subject to TSR performance relative to the EMIX Global Mining Index and MSCI World Index (equal weighting). Targets for
threshold and maximum performance are unchanged from prior years.
In line with our share ownership policy, Executive Directors’ shareholdings are calculated using the closing price of Rio Tinto shares on
31 December 2021.
Executive Director
Type of award
Grant date
Face value of
Face value of
award (% of
base salary)
% of vesting
at threshold
performance
Grant price(a)
shares awarded
Conditional
Vesting
month
Jakob Stausholm
PSA
18 March 2021
400%
22.5%
£44.44
103,510
Feb 2026
31 Dec 2025
award
(£’000)
4,600
Peter Cunningham’s 2021 LTIP grant detailed in Table 3 (page 195) was granted prior to his appointment as Chief Financial Officer. No top-up grant
Executive Director
Jakob Stausholm
Peter Cunningham
Multiple of base salary
Holding of ordinary shares
31 December
2021
Guidelines
Year
requirement
needs to be met
31 December
2021
31 December
2020
1.9
2.6
4.0
3.0
2024
2026
33,832
35,631
30,280
–
The multiple of base salary shown above includes the value of 50% unvested BDA held.
All past directors subject to post-employment shareholding requirements continue to meet their requirements.
Service contracts
Executive Director
Jakob Stausholm
Peter Cunningham
Position held during 2021
Chief Executive
Chief Financial Officer
Date of appointment to position
1 January 2021
17 June 2021
Notice period
12 months
12 months
Either party can terminate their contract with notice in writing, or immediately by the company by paying the base salary only in lieu of any
unexpired notice.
Executives’ external and other appointments
Neither of the Executive Directors currently has an external directorship.
Chief Executive’s remuneration over time: summary
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Chief Executive
Tom Albanese
Tom Albanese
Sam Walsh
Sam Walsh
Sam Walsh
Sam Walsh(b)
Jean-Sébastien Jacques
Jean-Sébastien Jacques
Jean-Sébastien Jacques
Jean-Sébastien Jacques
Jean-Sébastien Jacques(c)
Jakob Stausholm(d)
Single total figure of
remuneration (’000)
Annual STIP award
against maximum
opportunity
£4,040
£53
A$9,993
A$10,476
A$9,141
A$5,772
£3,116
£3,821
£4,551
£5,999
£8,670
£2,788
0.0%
0.0%
72.1%
88.4%
81.9%
68.2%
82.4%
73.4%
70.1%
74.8%
0.0%
61.3%
Long-term
incentive vesting
against maximum
opportunity
Long-term
incentive vesting
against maximum
opportunity
(SOP)(a)
100.0%
(PSA)(a)
61.7%
-
50.0%
49.0%
43.6%
50.5%
50.5%
66.7%
43.0%
76.0%
66.7%
-
(a) All outstanding but unvested LTIP awards earned in previous years lapsed and were forfeited when Tom Albanese left the Group. No LTIP award is due to vest for Jakob Stausholm until the end
of 2022, subject to the respective performance conditions being satisfied.
(b) STIP award and PSA vesting percentages restated following release from the deed of deferral.
(c) The 2020 single total figure of remuneration for Jean-Sébastien Jacques reported is based on the estimated vesting of the 2016 PSA of 66.7%. The 2020 single total figure of remuneration for
Jean-Sébastien Jacques reported in the 2020 Annual Report was £7,224 based on the estimated and final vesting of the 2016 PSA of 66.7%. The restated 2020 single total figure of
remuneration is £8,670 based on the actual vesting share price of £62.35.
(d) Jakob Stausholm joined Rio Tinto in September 2018 and became CEO on 1 January 2021. He therefore did not participate in the 2017 LTIP.
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183
Implementation report continued
TSR
We use relative TSR against the EMIX Global Mining Index and the MSCI World Index as two-thirds of our performance measures when
we determine the vesting of PSA granted in 2017. The remaining third is based on the improvement in EBIT margin relative to the comparator group.
The graph below shows Rio Tinto’s TSR performance for the 2017 PSA. It uses the same methodology as that used to calculate the vesting for the
PSA granted in 2017 with a performance period that ended on 31 December 2021.
Total shareholder return
400
350
300
250
200
150
100
50
0
2016
2017
2018
2019
2020
2021
Rio Tinto
EMIX Global Mining
MSCI World
(a) TSR for the MSCI and EMIX indices has been calculated using 12-month average Return Index data for the year sourced from DataStream.
(b) Rio Tinto’s Group TSR has been calculated using a weighted average for Rio Tinto plc and Rio Tinto Limited. The weighting is based on the free-float market capitalisation of each entity as at the
start of the period.
The following graph illustrates the TSR performance of the Group against the EMIX Global Mining Index and the MSCI World Index over the ten
years to the end of 2021.
The graph meets the requirements of Schedule 8 of the UK Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (as amended) and is not an indication of the likely vesting of PSA granted in 2017.
Total shareholder return
400
350
300
250
200
150
100
50
0
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Rio Tinto
EMIX Global Mining
MSCI World
(a) TSR has been calculated using spot return index data as at the last trading day for the year sourced from DataStream. The indices chosen are those used for measuring PSA performance.
(b) Rio Tinto’s Group TSR has been calculated using a weighted average for Rio Tinto plc and Rio Tinto Limited. The weighting is based on the free-float market capitalisation of each entity as at the
start of the period.
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Implementation report continued
Governance
TSR
400
350
300
250
200
150
100
50
0
400
350
300
250
200
150
100
50
0
We use relative TSR against the EMIX Global Mining Index and the MSCI World Index as two-thirds of our performance measures when
we determine the vesting of PSA granted in 2017. The remaining third is based on the improvement in EBIT margin relative to the comparator group.
The graph below shows Rio Tinto’s TSR performance for the 2017 PSA. It uses the same methodology as that used to calculate the vesting for the
PSA granted in 2017 with a performance period that ended on 31 December 2021.
Total shareholder return
2016
2017
2018
2019
2020
2021
Rio Tinto
EMIX Global Mining
MSCI World
(a) TSR for the MSCI and EMIX indices has been calculated using 12-month average Return Index data for the year sourced from DataStream.
(b) Rio Tinto’s Group TSR has been calculated using a weighted average for Rio Tinto plc and Rio Tinto Limited. The weighting is based on the free-float market capitalisation of each entity as at the
The following graph illustrates the TSR performance of the Group against the EMIX Global Mining Index and the MSCI World Index over the ten
The graph meets the requirements of Schedule 8 of the UK Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 (as amended) and is not an indication of the likely vesting of PSA granted in 2017.
start of the period.
years to the end of 2021.
Total shareholder return
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Rio Tinto
EMIX Global Mining
MSCI World
(a) TSR has been calculated using spot return index data as at the last trading day for the year sourced from DataStream. The indices chosen are those used for measuring PSA performance.
(b) Rio Tinto’s Group TSR has been calculated using a weighted average for Rio Tinto plc and Rio Tinto Limited. The weighting is based on the free-float market capitalisation of each entity as at the
start of the period.
Incoming director remuneration
Peter Cunningham was appointed as interim Chief Financial Officer
effective 1 January 2021, and subsequently, Chief Financial Officer
effective 17 June 2021.
The remuneration package offered to the new Chief Financial Officer is
aligned with our Remuneration Policy and is comprised of base salary
of £700,000; target STIP opportunity of 100% of base salary (with a
maximum opportunity of 200% of base salary); an LTIP award of up to
400% of base salary; a company pension contribution of 14% of base
salary; and other benefits such as company provided healthcare
coverage, and continued eligibility to participate in the all-employee
share plans.
A minimum shareholding requirement of 300% of base salary
(including a two-year post-employment holding requirement)
applies to his appointment.
Past-director payments
As previously disclosed, in light of the decision taken under the binding
dispute resolution, combined with no further material information
having emerged, the Board concluded that Sam Walsh should receive
the third and final stage of the deferral, together with associated
dividends and interest. Accordingly, he received a final payment of
A$1,446,136, less statutory deductions, on 31 May 2021.
For payments to past directors that have not been previously disclosed
the Remuneration Committee has adopted a de-minimis threshold of
£15,000 under UK requirements.
Discretion
In response to the findings of the Everyday Respect report, the
Committee will apply discretion to reduce the number of shares that
are due to vest on 1 December 2022 for former Executive Director
Jean-Sébastien Jacques in respect of his 2020 BDA award by 2,623
Rio Tinto plc shares.
Other executive KMP
This section sets out remuneration information pertaining to
KMP excluding the Chief Executive and Chief Financial Officer.
The Remuneration Policy applicable to the Executive Directors is
also applicable to the other executive KMP with variances specified
in this section.
The remuneration mix for other executive KMP under this Policy is set
out in the chart below.
Remuneration mix
Maximum
17% 14%
14%
Target
29%
12%
12%
55%
47%
Fixed pay
STIP – Cash
STIP – BDA
LTIP
Assumptions
The value of benefits is estimated at 11% of base salary.
Performance-related (At risk)
Target STIP and LTIP
performance
– STIP award of 50% of the maximum award (equates
to 100% of base salary)
– PSA expected value of 50% of face value,
calculated as 200% of base salary
Maximum STIP and
LTIP performance
– A maximum STIP award of 200% of base salary
– Maximum PSA face value of 400% of base salary
No assumption has been made for growth in share price and payment
of dividends.
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Implementation report continued
The table below outlines the positions held by the other executive KMP and the respective dates of appointment:
Name
Other executives
Bold Baatar
Bold Baatar
Alfredo Barrios
Alfredo Barrios
Sinead Kaufman
Arnaud Soirat(a)
Peter Toth(b)
Simon Trott
Simon Trott
Ivan Vella
Ivan Vella
Position(s) held during 2021
Date of appointment to position
Chief Executive Energy & Minerals
Chief Executive Copper
Chief Executive Aluminium
Chief Commercial Officer
Chief Executive Minerals
Chief Executive Copper & Diamonds
Group Executive Strategy & Development
Chief Commercial Officer
Chief Executive Iron Ore
Interim Chief Executive Iron Ore
Chief Executive Aluminium
1 December 2016
1 February 2021
1 June 2014
1 March 2021
1 March 2021
2 July 2016
1 October 2020
1 January 2018
1 March 2021
15 September 2020
1 March 2021
(a) Arnaud Soirat ceased to be a KMP on 1 February 2021 following his appointment as Chief Operating Officer.
(b) Peter Toth stepped down from the Executive Committee on 18 October 2021.
STIP
Overview of 2021 STIP weightings and measures
The following table shows the measures and weightings used to determine STIP awards for executives in 2021.
Safety – split between standalone binary measure for fatality, AIFR and SMM
Financial measures split equally between underlying earnings and STIP free cash flow for the Group
Financial measures split equally between underlying earnings and STIP free cash flow for the relevant product group
ESG
Individual measures based on key strategic initiatives of each role and contribution to overall company performance
The 2021 STIP awards are detailed in the table below.
Weighting for Executive
Directors and Group executives
Weighting for
PGCEOs
20%
50%
0%
15%
15%
20%
20%
30%
15%
15%
Percentage of:
(000’s)
Bold Baatar
Alfredo Barrios
Peter Cunningham(b)
Sinead Kaufman(c)
Arnaud Soirat(d)
Peter Toth(e)
Simon Trott
Ivan Vella(f)
2021 STIP award
(% of salary)
Adjusted
2021 STIP award
(% of salary)(a)
2021
STIP award
(’000)
Maximum STIP
awarded
Maximum STIP
forfeited
132.9%
119.4%
120.1%
123.1%
130.5%
60.1%
120.5%
117.1%
126.3%
113.4%
114.1%
116.9%
124.0%
57.0%
114.5%
111.2%
£754
S$1,248
£694
A$980
£59
£200
A$1,198
C$1,004
63.1%
56.7%
57.0%
58.5%
62.0%
28.5%
57.3%
55.6%
36.9%
43.3%
43.0%
41.5%
38.0%
71.5%
42.7%
44.4%
(a) Awards incorporating a downward discretion of 5% in relation to the findings of the Everyday Respect report. The values also represent the percentage of Target STIP awarded.
(b) STIP award pro-rated for the period of Interim Chief Financial Officer from 1 January to 16 June 2021 and Chief Financial Officer from 17 June to 31 December 2021. This full year amount is
therefore different to the Chief Financial Officer disclosure in the single total figure of remuneration.
(c) STIP award for the period 1 March to 31 December 2021.
(d) STIP award for the period 1 January to 31 January 2021.
(e) STIP award for the period 1 January to 18 October 2021.
(f) STIP award pro-rated for the period of Interim Chief Executive Iron Ore from 1 January to 28 February 2021 and Chief Executive Aluminium from 1 March to 31 December 2021.
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Governance
The table below outlines the positions held by the other executive KMP and the respective dates of appointment:
Position(s) held during 2021
Date of appointment to position
Share ownership
The following table shows the share ownership level for other KMP as a
multiple of base salary.
Bold Baatar
Alfredo Barrios
Sinead Kaufman
Simon Trott
Ivan Vella
Share ownership
level at
31 December 2021
as a multiple
of base salary
3.1
3.6
2.3
3.7
1.1
Share ownership level is calculated using the market price of Rio Tinto
shares on 31 December 2021, and we define “share ownership” in our
Remuneration Policy.
Service contracts
All executives have service contracts which can be terminated by the
company with 12 months’ notice in writing, or by the employee with six
months’ notice in writing, or immediately by the company by paying
base salary only in lieu of any unexpired notice.
Weighting for Executive
Directors and Group executives
Weighting for
PGCEOs
Other KMP appointments
All newly appointed executives have received a remuneration package
that is aligned with our Remuneration Policy and is comprised of base
salary in line with market benchmarks; target STIP opportunities of
100% of base salary (with maximum opportunities of 200% of base
salary); LTIP awards of up to 400% of base salary; company pension
contributions of 14% of base salary; and other benefits such as
company-provided healthcare coverage, and continued eligibility to
participate in the all-employee share plans. A minimum shareholding
requirement of 300% of base salary applies on appointment.
Departures from the Executive Committee
Peter Toth
Peter Toth resigned and stepped down from the Executive Committee
on 18 October 2021. He remained in an advisory role until the end
of 2021.
He will continue to receive his normal base salary and other contractual
benefits until 5 April 2022. He remained eligible to receive 50% of the
STIP award for the period 1 January 2021 to 31 December 2021, which
will be calculated on actual business and individual performance and
will be paid in cash in March 2022. The remaining 50% deferred into
the BDA will be forfeited. Outstanding LTIP awards were lapsed from
resignation. Unused and accrued vacation amounting to £24,251 will
be paid at his termination date in line with UK policy.
Chief Executive Energy & Minerals
Chief Executive Copper
Chief Executive Aluminium
Chief Commercial Officer
Chief Executive Minerals
Chief Executive Copper & Diamonds
Group Executive Strategy & Development
Chief Commercial Officer
Chief Executive Iron Ore
Interim Chief Executive Iron Ore
Chief Executive Aluminium
1 December 2016
1 February 2021
1 June 2014
1 March 2021
1 March 2021
2 July 2016
1 October 2020
1 January 2018
1 March 2021
15 September 2020
1 March 2021
(a) Arnaud Soirat ceased to be a KMP on 1 February 2021 following his appointment as Chief Operating Officer.
(b) Peter Toth stepped down from the Executive Committee on 18 October 2021.
Overview of 2021 STIP weightings and measures
The following table shows the measures and weightings used to determine STIP awards for executives in 2021.
Safety – split between standalone binary measure for fatality, AIFR and SMM
Financial measures split equally between underlying earnings and STIP free cash flow for the Group
Financial measures split equally between underlying earnings and STIP free cash flow for the relevant product group
Individual measures based on key strategic initiatives of each role and contribution to overall company performance
The 2021 STIP awards are detailed in the table below.
Name
Other executives
Bold Baatar
Bold Baatar
Alfredo Barrios
Alfredo Barrios
Sinead Kaufman
Arnaud Soirat(a)
Peter Toth(b)
Simon Trott
Simon Trott
Ivan Vella
Ivan Vella
STIP
ESG
(000’s)
Bold Baatar
Alfredo Barrios
Peter Cunningham(b)
Sinead Kaufman(c)
Arnaud Soirat(d)
Peter Toth(e)
Simon Trott
Ivan Vella(f)
Percentage of:
20%
50%
0%
15%
15%
63.1%
56.7%
57.0%
58.5%
62.0%
28.5%
57.3%
55.6%
20%
20%
30%
15%
15%
36.9%
43.3%
43.0%
41.5%
38.0%
71.5%
42.7%
44.4%
2021 STIP award
2021 STIP award
STIP award
Maximum STIP
Maximum STIP
(% of salary)
(% of salary)(a)
awarded
forfeited
Adjusted
126.3%
113.4%
114.1%
116.9%
124.0%
57.0%
114.5%
111.2%
2021
(’000)
£754
S$1,248
£694
A$980
£59
£200
A$1,198
C$1,004
132.9%
119.4%
120.1%
123.1%
130.5%
60.1%
120.5%
117.1%
(a) Awards incorporating a downward discretion of 5% in relation to the findings of the Everyday Respect report. The values also represent the percentage of Target STIP awarded.
(b) STIP award pro-rated for the period of Interim Chief Financial Officer from 1 January to 16 June 2021 and Chief Financial Officer from 17 June to 31 December 2021. This full year amount is
therefore different to the Chief Financial Officer disclosure in the single total figure of remuneration.
(c) STIP award for the period 1 March to 31 December 2021.
(d) STIP award for the period 1 January to 31 January 2021.
(e) STIP award for the period 1 January to 18 October 2021.
(f) STIP award pro-rated for the period of Interim Chief Executive Iron Ore from 1 January to 28 February 2021 and Chief Executive Aluminium from 1 March to 31 December 2021.
Broader employee disclosures
Chief Executive pay ratio
The ratio of the single total figure of remuneration for the Chief
Executive to the lower quartile, median and upper quartile Rio Tinto
Australian employee population for 2021 is set out in the table below.
2021
2020(a)
Lower quartile
Median
Upper quartile
49
131
32
94
26
77
(a) 2020 pay ratio data has been restated based on actual pay outcomes for the CEO in 2020.
The median CEO pay ratio of 32:1 is materially lower than last year,
primarily because Jakob joined the Group after the award of the 2017
LTIP that vested this year. The first LTIP award for which he was eligible
is due to vest at the end of the 2022 performance year. The Committee
continues to be mindful of the relationship between executive
remuneration and that of our broader workforce. The Committee’s
decision making will continue to be supported by regular and detailed
reporting on these matters.
As the company employs fewer than 250 employees in the UK,
this analysis has been provided on a voluntary basis.
Relative spend on remuneration
The table below shows our relative spend on remuneration across our
global employee population and distributions to shareholders in the
year. We have also shown other significant disbursements of the
company’s funds for comparison.
Stated in US$m
Remuneration paid(a)
Distributions to shareholders(b)
Purchase of property, plant and
equipment and intangible assets(c)
Corporate income tax paid(c)
2021
5,513
15,385
7,384
8,494
2020
4,770
6,340
6,189
5,289
Difference in
spend
743
9,045
1,195
3,205
(a) Total employment costs for the financial year as per note 5 to the financial statements.
(b) Distributions to shareholders include equity dividends paid to owners of Rio Tinto and own
shares purchased from owners of Rio Tinto as per the Group cash flow statement.
(c) Purchase of property, plant and equipment and intangible assets, and corporate income tax
paid during the financial year are as per the Group cash flow statement and are calculated
as per note 1 to the financial statements.
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Implementation report continued
Change in director and employee pay
In the table below, we compare the changes annual from in salary, benefits and annual incentives of the Directors for the past two years, to that of
the Australian employee population. The 2021 changes for Jakob Stausholm reflect his promotion to Chief Executive Officer at the start of the year.
Executive Directors
Jakob Stausholm
Peter Cunningham(d)
Non-Executive Directors
Simon Thompson
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange(e)
Simon McKeon
Jennifer Nason(e)
Ngaire Woods(e)
Ben Wyatt(d)
Australian workforce(f)
2019 to 2020
2020 to 2021
Percentage
change
in salary/
fees paid(a)
Percentage
change
in other
benefits paid
Percentage
change
in annual
incentive
Percentage
change
in salary/
fees paid(a)
Percentage
change
in other
benefits paid(b)
Percentage
change
in annual
incentive(c)
2%
–
0%
1%
–
3%
8%
46%
9%
–
–
–
4%
34%
–
3%
(54%)
–
(88%)
(87%)
(71%)
(72%)
–
–
–
5%
29%
–
–
–
–
–
–
–
–
–
–
–
19
46%
–
0%
(3%)
0%
0%
0%
(33%)
15%
0%
0%
–
4%
(19%)
–
260%
(93%)
174%
64%
(51%)
(88%)
(91%)
–
–
–
25%
–
–
–
–
–
–
–
–
–
–
–
0%
(18%)
(a) Change in salary and fees compared on an annualised basis to smooth the impact of part year appointments.
(b) There was no change in the benefit entitlement for directors in the year. Percentage changes are reflective of year on year variability in benefits for travel or tax support.
(c) The percentage change in annual incentive compares the incentive outcomes for the 2020 performance year to those for the 2021 performance year.
(d) No prior year data as appointed as a director in 2021.
(e) Fees compared on an annualised basis.
(f) Since Rio Tinto plc, the statutory entity for which this disclosure is required, does not have any employees, we have included voluntary disclosure of the change in employee pay for our
Australian employees who make up more than 40% of our employee population.
’–’ in the table signifies no reported change as a result of the absence of comparable data.
Non-Executive Directors
What we paid our Chairman and Non-Executive Directors
Positions held
We list the Non-Executive Directors who held office during 2021 below. Each held office for the whole of 2021 unless otherwise indicated.
Their years of appointment are reported in “Board of Directors” on pages 134-135.
Name
Simon Thompson
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange
Simon McKeon
Jennifer Nason
Ngaire Woods
Ben Wyatt
Service contracts
Title
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (to 6 May 2021)
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (from 1 September 2021)
The Chair and Non-Executive Directors' letters of appointment from the company stipulate their terms of appointment, including their duties and
responsibilities as directors. Each Non-Executive Director is appointed subject to their election and annual re-election by shareholders. The Chair's
appointment may be terminated by either party giving 12 months' notice and Non-Executive Directors' appointments may be terminated by either
party giving three months' notice.
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Governance
Change in director and employee pay
Annual fees payable
In the table below, we compare the changes annual from in salary, benefits and annual incentives of the Directors for the past two years, to that of
the Australian employee population. The 2021 changes for Jakob Stausholm reflect his promotion to Chief Executive Officer at the start of the year.
The table below shows the annual fees paid in 2021 and payable in 2022, to the Chair and Non-Executive Directors.
Director fees
Chair’s fee
Non-Executive Director base fee
Non-Executive Director base fee for Australian residents
Senior Independent Director
Committee fees
Audit Committee Chair
Audit Committee member
Remuneration Committee Chair
Remuneration Committee member
Sustainability Committee Chair
Sustainability Committee member
Nominations Committee member
Meeting allowances
Long distance (flights over 10 hours per journey)
Medium distance (flights of 5-10 hours per journey)
2022
2021
£730,000
£730,000
£95,000
£95,000
£105,000
£105,000
£45,000
£45,000
£40,000
£40,000
£25,000
£25,000
£35,000
£35,000
£20,000
£20,000
£35,000
£35,000
£20,000
£20,000
£7,500
£7,500
£10,000
£10,000
£5,000
£5,000
0%
(18%)
The Chair’s fee is determined by the Committee and was last increased on 1 July 2013. All other fees are subject to review by the Board on the
recommendation of the Chair’s Committee.
The Chair’s Committee conducted a review of Non-Executive Director fees in November 2021. Following this review, it was determined that all fees
and travel allowances should remain unchanged.
The additional £10,000 allowance for eligible Australian directors is to compensate them for additional UK National Insurance contributions which,
unlike directors based in other jurisdictions, they are not able to offset against their local tax payments.
We set out details of each element of remuneration, and the single total figure of remuneration, paid to the Chairman and Non-Executive Directors
during 2021 and 2020 in US dollars in table 1b on page 193. No post-employment, termination or share-based payments were made. Statutory
minimum superannuation contributions for Non-Executive Directors are deducted from the director’s overall fee entitlements when these are
required by Australian superannuation law.
The total fee and allowance payments made to the Chairman and Non-Executive Directors in 2021 are within the maximum aggregate annual
amount of £3 million set out in the Group’s constitutional documents, approved by shareholders at the 2009 AGMs.
Terms of appointment of the incoming Chair
Dominic Barton will join the Board with effect from 4 April 2022 and be appointed to the role of Chair at the conclusion of the Rio Tinto Limited annual
general meeting on 5 May 2022. On his appointment to Chair, he will receive the same base fee as his predecessor, Simon Thompson. Relocation
benefits will be provided in accordance with our Policy to include flights, shipping, short-term accommodation, tax filing and immigration support.
Share ownership policy for Non-Executive Directors
Rio Tinto has a policy that encourages Non-Executive Directors to build up a shareholding equal in value to one year’s base fee within three years
of their appointment. Details of Non-Executive Directors’ share interests in the Group, including total holdings, are set out in table 2 on page 194.
Non-Executive Directors’ share ownership
The Non-Executive Directors’ shareholdings are calculated using the market price of Rio Tinto shares on 31 December 2021:
Director
Simon Thompson
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Simon McKeon
Jennifer Nason
Ben Wyatt(b)
Ngaire Woods
Share ownership level at 31 December 2021
as a multiple of base fee (or Chair’s fee)(a)
Share ownership level at 31 December 2020
as a multiple of base fee (or Chair’s fee)
3.8 (0.5)
4.4 (0.6)
3.3
0.7
0.8
3.9
5.2
0.9
–
0.3
3.9
0.9
0.9
4.4
6.1
1.1
–
–
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(a) The fee multiple as at 31 December 2021 is lower than the multiple reported as at 31 December 2020 as a result of lower share prices.
(b) Ben Wyatt joined the Board on 1 September 2021.
2019 to 2020
2020 to 2021
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
change
in salary/
change
in other
fees paid(a)
benefits paid
change
in annual
incentive
change
in salary/
change
in other
fees paid(a)
benefits paid(b)
change
in annual
incentive(c)
29%
25%
2%
–
0%
1%
–
3%
8%
46%
9%
–
–
–
4%
34%
–
3%
(54%)
–
(88%)
(87%)
(71%)
(72%)
–
–
–
5%
46%
–
0%
(3%)
0%
0%
0%
(33%)
15%
0%
0%
–
4%
(19%)
–
260%
(93%)
174%
64%
(51%)
(88%)
(91%)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
19
–
–
–
–
–
–
–
–
–
–
–
Executive Directors
Jakob Stausholm
Peter Cunningham(d)
Non-Executive Directors
Simon Thompson
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange(e)
Simon McKeon
Jennifer Nason(e)
Ngaire Woods(e)
Ben Wyatt(d)
Australian workforce(f)
Positions held
Name
Simon Thompson
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange
Simon McKeon
Jennifer Nason
Ngaire Woods
Ben Wyatt
Service contracts
(a) Change in salary and fees compared on an annualised basis to smooth the impact of part year appointments.
(b) There was no change in the benefit entitlement for directors in the year. Percentage changes are reflective of year on year variability in benefits for travel or tax support.
(c) The percentage change in annual incentive compares the incentive outcomes for the 2020 performance year to those for the 2021 performance year.
(d) No prior year data as appointed as a director in 2021.
(e) Fees compared on an annualised basis.
(f) Since Rio Tinto plc, the statutory entity for which this disclosure is required, does not have any employees, we have included voluntary disclosure of the change in employee pay for our
Australian employees who make up more than 40% of our employee population.
’–’ in the table signifies no reported change as a result of the absence of comparable data.
Non-Executive Directors
What we paid our Chairman and Non-Executive Directors
We list the Non-Executive Directors who held office during 2021 below. Each held office for the whole of 2021 unless otherwise indicated.
Their years of appointment are reported in “Board of Directors” on pages 134-135.
Title
Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (to 6 May 2021)
Non-Executive Director (from 1 September 2021)
The Chair and Non-Executive Directors' letters of appointment from the company stipulate their terms of appointment, including their duties and
responsibilities as directors. Each Non-Executive Director is appointed subject to their election and annual re-election by shareholders. The Chair's
appointment may be terminated by either party giving 12 months' notice and Non-Executive Directors' appointments may be terminated by either
party giving three months' notice.
Implementation report continued
Other statutory disclosures
Other share plans
All-employee share plans
The Committee believes that all employees should be given the opportunity to become shareholders in our business, and that share plans help
engage, retain and motivate employees over the long term. Rio Tinto’s share plans are therefore part of its standard remuneration practice, to
encourage employee share ownership and create alignment with the shareholder experience. Executives may participate in broad-based share
plans that are available to Group employees generally and to which performance conditions do not apply.
A global employee share purchase plan is normally offered to all eligible employees unless there are local jurisdictional restrictions. Under the plan,
employees may acquire shares up to the value of US$5,250 (or equivalent in other currencies) per year, or capped at 15% of their base salary if
lower. Each share purchased will be matched by the company, providing the participant holds the shares, and is still employed, at the end of the
three-year vesting period.
Over 25,000 (54%) of our employees are shareholders as a result of participating in these plans. In the UK, these arrangements are partially
delivered through the UK Share Plan which is a UK tax approved arrangement. Under this plan, eligible participants may also receive an annual
award of Free Shares up to the limits prescribed under UK tax legislation.
Management Share Awards (MSA)
The MSA are designed to help the Group attract the best staff in a competitive labour market, and to retain key individuals as we deliver our
long-term strategy. MSA are conditional awards that are not subject to a performance condition. They vest at the end of three years subject to
continued employment. Shares to satisfy the awards are bought in the market or re-issued from treasury. Executive Committee members are not
eligible for the MSA after appointment.
Shareholder voting
In the table below, we set out the results of the remuneration-related resolutions voted on at the Group’s 2021 AGMs. Our meetings with
shareholders in 2021 provided an opportunity for the Committee Chair to consult with shareholders on the voting outcomes and next steps.
Resolution
Approval of the Directors’ Remuneration report: Implementation report
Approval of the Remuneration Policy
Approval of the Directors’ Remuneration report
Votes for
Votes against
Votes
withheld(a)
38.4%
96.8%
39.2%
61.6%
16,456,963
3.2%
22,272,424
60.8%
16,222,350
(a) A vote “withheld” is not a vote in law and is not counted in the calculation of the proportion of votes for and against the resolution.
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Governance
Other statutory disclosures
Other share plans
All-employee share plans
The Committee believes that all employees should be given the opportunity to become shareholders in our business, and that share plans help
engage, retain and motivate employees over the long term. Rio Tinto’s share plans are therefore part of its standard remuneration practice, to
encourage employee share ownership and create alignment with the shareholder experience. Executives may participate in broad-based share
plans that are available to Group employees generally and to which performance conditions do not apply.
A global employee share purchase plan is normally offered to all eligible employees unless there are local jurisdictional restrictions. Under the plan,
employees may acquire shares up to the value of US$5,250 (or equivalent in other currencies) per year, or capped at 15% of their base salary if
lower. Each share purchased will be matched by the company, providing the participant holds the shares, and is still employed, at the end of the
three-year vesting period.
Over 25,000 (54%) of our employees are shareholders as a result of participating in these plans. In the UK, these arrangements are partially
delivered through the UK Share Plan which is a UK tax approved arrangement. Under this plan, eligible participants may also receive an annual
award of Free Shares up to the limits prescribed under UK tax legislation.
The MSA are designed to help the Group attract the best staff in a competitive labour market, and to retain key individuals as we deliver our
long-term strategy. MSA are conditional awards that are not subject to a performance condition. They vest at the end of three years subject to
continued employment. Shares to satisfy the awards are bought in the market or re-issued from treasury. Executive Committee members are not
Management Share Awards (MSA)
eligible for the MSA after appointment.
Shareholder voting
In the table below, we set out the results of the remuneration-related resolutions voted on at the Group’s 2021 AGMs. Our meetings with
shareholders in 2021 provided an opportunity for the Committee Chair to consult with shareholders on the voting outcomes and next steps.
Resolution
Approval of the Directors’ Remuneration report: Implementation report
Approval of the Remuneration Policy
Approval of the Directors’ Remuneration report
Votes for
Votes against
Votes
withheld(a)
38.4%
96.8%
39.2%
61.6%
16,456,963
3.2%
22,272,424
60.8%
16,222,350
(a) A vote “withheld” is not a vote in law and is not counted in the calculation of the proportion of votes for and against the resolution.
Table 1a – Executives’ remuneration
Stated in US$‘000(a)
Executive Directors
Jakob Stausholm
Peter Cunningham(f)
Other executives
Bold Baatar
Alfredo Barrios
Sinead Kaufman(g)
Arnaud Soirat(h)
Peter Toth(i)
Simon Trott
Ivan Vella
Short-term benefits
Base salary
Cash bonus(b)
Other
cash-based
benefits(c)
Non-
monetary
benefits(d)(e)
Total
short-term
benefits
1,582
1,012
711
821
719
822
777
626
65
719
483
141
781
704
719
117
952
768
557
509
522
462
601
356
40
553
270
103
434
525
411
129
216
235
239
139
162
819
249
92
12
162
81
17
78
26
806
49
84
79
41
22
36
189
106
28
1
60
22
7
108
53
278
12
2,834
2,094
1,548
1,491
1,439
2,292
1,733
1,102
118
1,494
856
268
1,401
1,308
2,214
307
2021
2020
2021
2021
2020
2021
2020
2021
2021
2020
2021
2020
2021
2020
2021
2020
Notes to table 1a – Executives’ remuneration
(a) “Table 1a – Executives’ remuneration” is reported in US$ using A$1 = US$0.75153; £1 = US$1.37580; C$1 = US$0.79781; S$1 = US$0.74430 (2021 average rates), except for cash bonuses which
use A$1 = US$0.72535; £1 = US$1.34965; C$1 = US$0.78201; S$1 = US$0.73954 (2021 year-end rates).
(b) “Cash bonus” relates to the cash portion of the 2021 STIP award to be paid in March 2022.
(c) “Other cash-based benefits” typically includes cash in lieu of company pension or superannuation contributions.
(d) “Non-monetary benefits” for executives include healthcare coverage, professional tax compliance services/advice and flexible perquisites.
(e) “Non-monetary benefits” for executives living outside their home country include international assignment benefits comprising, where applicable, housing, relocation expenses, tax equalisation
and related compliance services, assignee and family home leave trips and international assignment payments made to and on their behalf.
(f) The details for 2021 reflect remuneration for the period 1 January to 31 December 2021 which includes both KMP roles as Acting Chief Financial Officer and Chief Financial Officer.
(g) The details for 2021 reflect remuneration for the period 1 March to 31 December 2021.
(h) The details for 2021 reflect remuneration for the period 1 January to 31 January 2021.
(i) The details for 2021 reflect remuneration for the period 1 January to 18 October 2021.
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191
Implementation report continued
Stated in US$’000(a)
Executive Directors
Jakob Stausholm
Peter Cunningham
Other executives
Bold Baatar
Alfredo Barrios
Sinead Kaufman(o)
Arnaud Soirat(h)
Peter Toth
Simon Trott
Ivan Vella
2021
2020
2021
2021
2020
2021
2020
2021
2021
2020
2021
2020
2021
2020
2021
2020
Long-term benefits: Value of shared-based awards(j)
Post-employment benefits(m)
BDA(k)
PSA
MSA
Others(l)
Pension and
superannuation
Other post-
employment
benefits
Termination
benefits
Total
remuneration(n)
Currency
of actual
payment
606
362
158
428
396
449
466
155
39
457
–
42
424
328
153
26
1,551
808
205
1,556
1,549
1,475
2,209
410
193
1,597
–
105
1,247
969
494
79
–
–
335
–
–
–
–
262
–
–
–
51
–
6
126
50
5
3
5
7
4
4
3
3
–
1
7
1
2
3
3
1
5
7
101
5
7
54
21
15
–
7
4
1
80
168
36
4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,001
3,274
2,352
3,487
3,395
4,274
4,432
1,947
350
3,556
867
468
3,154
2,782
3,026
467
£
£
£
£
£
C$ & S$
C$
A$
£
£
£
£
S$ & A$
S$
A$ & C$
A$
(j) The value of share-based awards has been determined in accordance with the recognition and measurement requirements of IFRS 2 “Share-based Payment”. The fair value of awards granted
as MSA, BDA and PSA have been calculated at their dates of grant using valuation models provided by external consultants, Lane Clark and Peacock LLP, including an independent
lattice-based option valuation model and a Monte Carlo valuation model which take into account the constraints on vesting attached to these awards. Further details of the valuation methods
and assumptions used for these awards are included in note 41 (Share-based Payments) in the financial statements. The fair value of other share-based awards is measured at the purchase cost
of the shares from the market. The share based values disclosed in this table do not reflect amounts actually paid in 2021 or the value of shares that will ultimately vest.
(k) “BDA” represents the portion of the 2018 – 2021 STIP awards deferred into Rio Tinto shares.
(l) “Others” includes the Global Employee Share Plan (myShare) and the UK Share Plan.
(m) The costs shown for defined benefit pension plans and post-retirement medical benefits are the service costs attributable to the individual, calculated in accordance with IAS 19. The cost for
defined contribution plans is the amount contributed in the year by the company.
(n) “Total remuneration” represents the disclosure of total emoluments and compensation required under the Australian Corporations Act 2001 and applicable accounting standards.
(o) Sinead Kaufman’s total remuneration for the year ending 31 December 2021 including the period 1 January to 28 February prior to appointment as KMP was US$2,245,000.
Further details in relation to aggregate compensation for executives, including directors, are included in note 37 (Directors’ and key
management remuneration).
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Governance
Stated in US$’000(a)
Executive Directors
Jakob Stausholm
Peter Cunningham
Other executives
Bold Baatar
Alfredo Barrios
Sinead Kaufman(o)
Arnaud Soirat(h)
Peter Toth
Simon Trott
Ivan Vella
2021
2020
2021
2021
2020
2021
2020
2021
2021
2020
2021
2020
2021
2020
2021
2020
Long-term benefits: Value of shared-based awards(j)
Post-employment benefits(m)
BDA(k)
PSA
MSA
Others(l)
superannuation
Pension and
Other post-
employment
benefits
Termination
Total
benefits
remuneration(n)
Currency
of actual
payment
606
362
158
428
396
449
466
155
39
457
–
42
424
328
153
26
1,551
808
205
1,556
1,549
1,475
2,209
410
193
1,597
–
105
1,247
969
494
79
335
–
–
–
–
–
–
–
–
–
–
6
262
51
126
50
5
3
5
7
4
4
3
3
–
1
7
1
2
3
3
1
5
7
101
5
7
54
21
15
–
7
4
1
80
168
36
4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5,001
3,274
2,352
3,487
3,395
4,274
4,432
1,947
350
3,556
867
468
3,154
2,782
3,026
467
£
£
£
£
£
£
£
£
£
C$ & S$
C$
A$
S$ & A$
A$ & C$
S$
A$
(j) The value of share-based awards has been determined in accordance with the recognition and measurement requirements of IFRS 2 “Share-based Payment”. The fair value of awards granted
as MSA, BDA and PSA have been calculated at their dates of grant using valuation models provided by external consultants, Lane Clark and Peacock LLP, including an independent
lattice-based option valuation model and a Monte Carlo valuation model which take into account the constraints on vesting attached to these awards. Further details of the valuation methods
and assumptions used for these awards are included in note 41 (Share-based Payments) in the financial statements. The fair value of other share-based awards is measured at the purchase cost
of the shares from the market. The share based values disclosed in this table do not reflect amounts actually paid in 2021 or the value of shares that will ultimately vest.
(k) “BDA” represents the portion of the 2018 – 2021 STIP awards deferred into Rio Tinto shares.
(l) “Others” includes the Global Employee Share Plan (myShare) and the UK Share Plan.
(m) The costs shown for defined benefit pension plans and post-retirement medical benefits are the service costs attributable to the individual, calculated in accordance with IAS 19. The cost for
defined contribution plans is the amount contributed in the year by the company.
(n) “Total remuneration” represents the disclosure of total emoluments and compensation required under the Australian Corporations Act 2001 and applicable accounting standards.
(o) Sinead Kaufman’s total remuneration for the year ending 31 December 2021 including the period 1 January to 28 February prior to appointment as KMP was US$2,245,000.
Further details in relation to aggregate compensation for executives, including directors, are included in note 37 (Directors’ and key
management remuneration).
Table 1b – Non-Executive Directors’ remuneration
Stated in US$’000(a)
Chairman
Simon Thompson
Non-Executive Directors
Megan Clark
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange(e)
Simon McKeon
Jennifer Nason
Ngaire Woods
Ben Wyatt(f)
Fees and
allowances(b)
Non-monetary
benefits(c)
Post-
employment
benefits
Single total
figure of
remuneration(d)
Currency of
actual payment
1,010
937
211
210
204
157
225
209
280
260
56
208
276
233
204
152
197
60
56
9
2
2
10
15
5
8
5
2
4
3
4
2
5
15
1
4
–
1
–
–
21
20
–
–
–
–
–
–
5
15
4
1
–
–
–
–
6
1,019
939
234
240
219
162
233
214
282
264
64
227
282
239
219
153
201
60
63
£
£
A$
A$
£
£
£
£
£
£
A$
A$
A$
A$
£
£
£
£
A$
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
(a) The remuneration is reported in US$. The amounts have been converted using the relevant 2020 average exchange rates of £1 = US$1.38361 and A$1 = US$0.75734 (1 January to 31 December
2021 average).
(b) “Fees and allowances” comprises the total fees for the Chairman and all Non-Executive Directors, and travel allowances for the Non-Executive Directors (other than the Chairman). The payment
of statutory minimum superannuation contributions for Australian Non-Executive Directors is required by Australian superannuation law. These contributions are included in the “Fees and
allowances” amount disclosed for Australian Non-Executive Directors.
(c) “Non-monetary benefits” include, as in previous years, amounts which are deemed by the UK tax authorities to be benefits in kind relating largely to the costs of Non-Executive Directors’
expenses in attending Board meetings held at the company’s UK registered office (including associated hotel and subsistence expenses) and professional tax compliance services/advice.
Given these expenses are incurred by directors in the fulfilment of their duties, the company pays the tax on them.
(d) Represents disclosure of the single total figure of remuneration under Schedule 8 of the Large- and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(as amended) and total remuneration under the Australian Corporations Act 2001 and applicable accounting standards.
(e) The amounts reported for Michael L’Estrange reflect the period of active Board membership from 1 January 2021 to 5 May 2021.
(f) The amounts reported for Ben Wyatt reflect the period of active Board membership from 1 September 2021 to 31 December 2021.
Further details in relation to aggregate compensation for executives, including directors, are included in note 37 (Directors’ and key
management remuneration).
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Implementation report continued
Table 2 – Directors’ and executives’ beneficial interests in Rio Tinto shares
Directors
Megan Clark
Peter Cunningham
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange(g)
Simon McKeon
Jennifer Nason
Jakob Stausholm
Simon Thompson
Ngaire Woods
Ben Wyatt(g)
Executives
Bold Baatar
Alfredo Barrios
Sinead Kaufman
Arnaud Soirat
Peter Toth
Simon Trott
Ivan Vella
Rio Tinto plc(a)
Rio Tinto Limited
Movements
1 Jan
2021(b)
31 Dec
2021(c)
8 Feb
2022(d)
1 Jan
2021(b)
31 Dec
2021(c)
8 Feb
2022(d) Compensation(e)
Other(f)
–
–
–
6,370
6,370
6,370
–
–
23,648
35,631
35,645
1,400
1,500
7,500
–
–
1,765
30,280
7,458
–
–
34,096
78,137
–
6,798
21,624
1,731
–
1,400
1,500
7,500
–
–
1,765
33,832
7,458
572
–
30,507
36,171
–
6,816
27,620
7,973
24
1,400
1,500
7,500
–
1,765
33,853
7,458
572
–
30,542
36,204
–
7,998
38
–
–
–
–
–
–
–
–
–
–
–
–
3,103
10,000
3,103
10,000
10,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15,563
14,875
–
24,730
5,222
20,963
14,875
–
24,864
9,847
20,997
24,864
9,857
18,293
(6,296)
–
–
–
–
–
–
3,937
–
–
–
20,626
67,202
3,506
18
16,586
15,248
7,646
–
–
–
–
–
–
(364)
–
572
–
(24,180)
(109,135)
1,928
–
(10,590)
(8,847)
(2,973)
(a) Rio Tinto plc ordinary shares or American Depositary Receipts.
(b) Or date of appointment, if later.
(c) Or date of retirement/date stepped down from the Executive Committee, if earlier.
(d) Latest practicable date prior to the publication of the 2021 Annual Report, in accordance with LR 9.8.6 R(1).
(e) Shares obtained through awards under the Rio Tinto UK Share Plan, the Global Employee Share Plan and/or vesting of the PSA, MSA and BDA granted under the Group’s LTIP arrangements.
(f) Share movements due to the sale or purchase of shares, or shares received under dividend reinvestment plans.
(g) Peter Cunningham was appointed as an Executive Director on 17 June 2021 and Ben Wyatt joined as Non-Executive Director on 1 September 2021. Michael L'Estrange retired as a
Non-Executive Director on 6 May 2021. Arnaud Soirat and Peter Toth were no longer considered persons discharging managerial responsibilities (PDMR) on 31 January 2021 and
18 October 2021 respectively. Sinead Kaufman joined the Executive Committee on 1 March 2021.
Interests in outstanding BDA, MSA and PSA are set out in table 3 (see pages 195-197).
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Implementation report continued
Governance
Table 2 – Directors’ and executives’ beneficial interests in Rio Tinto shares
Table 3 – Plan interests (awards of shares under long-term incentive plans)
Directors
Megan Clark
Peter Cunningham
Hinda Gharbi
Simon Henry
Sam Laidlaw
Michael L’Estrange(g)
Simon McKeon
Jennifer Nason
Jakob Stausholm
Simon Thompson
Ngaire Woods
Ben Wyatt(g)
Executives
Bold Baatar
Alfredo Barrios
Sinead Kaufman
Arnaud Soirat
Peter Toth
Simon Trott
Ivan Vella
Rio Tinto plc(a)
Rio Tinto Limited
Movements
1 Jan
2021(b)
31 Dec
2021(c)
8 Feb
2022(d)
1 Jan
2021(b)
31 Dec
2021(c)
8 Feb
2022(d) Compensation(e)
Other(f)
23,648
35,631
35,645
18,293
(6,296)
–
6,370
6,370
6,370
–
–
–
–
–
–
–
1,400
1,500
7,500
1,765
30,280
7,458
34,096
78,137
6,798
21,624
1,731
1,400
1,500
7,500
–
–
–
1,765
33,832
7,458
572
–
30,507
36,171
–
6,816
27,620
7,973
24
1,400
1,500
7,500
–
1,765
33,853
7,458
572
–
30,542
36,204
–
7,998
38
3,103
10,000
3,103
10,000
10,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15,563
14,875
24,730
5,222
20,963
14,875
24,864
9,847
20,997
24,864
9,857
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
572
3,937
(364)
20,626
67,202
3,506
18
16,586
15,248
7,646
(24,180)
(109,135)
1,928
–
(10,590)
(8,847)
(2,973)
(a) Rio Tinto plc ordinary shares or American Depositary Receipts.
(b) Or date of appointment, if later.
(c) Or date of retirement/date stepped down from the Executive Committee, if earlier.
(d) Latest practicable date prior to the publication of the 2021 Annual Report, in accordance with LR 9.8.6 R(1).
(e) Shares obtained through awards under the Rio Tinto UK Share Plan, the Global Employee Share Plan and/or vesting of the PSA, MSA and BDA granted under the Group’s LTIP arrangements.
(f) Share movements due to the sale or purchase of shares, or shares received under dividend reinvestment plans.
(g) Peter Cunningham was appointed as an Executive Director on 17 June 2021 and Ben Wyatt joined as Non-Executive Director on 1 September 2021. Michael L'Estrange retired as a
Non-Executive Director on 6 May 2021. Arnaud Soirat and Peter Toth were no longer considered persons discharging managerial responsibilities (PDMR) on 31 January 2021 and
18 October 2021 respectively. Sinead Kaufman joined the Executive Committee on 1 March 2021.
Interests in outstanding BDA, MSA and PSA are set out in table 3 (see pages 195-197).
Name
Bold Baatar
Bonus
Deferral
Awards
Performance
Share
Awards(d)
Alfredo Barrios
Bonus
Deferral
Awards
Performance
Share
Awards(d)
Award/grant
date
Market price
1 January
at award(a)(b)
2021 Awarded
Lapsed/
cancelled
Dividend
units
Vested
31 December
2021
8 February
2022
Vesting period
concludes
Date
of release
Market
price at
release
Market value
of award at
release
US$(c)
18 Mar 2019
£42.67
16 Mar 2020
£33.58
5,205
9,329
–
–
18 Mar 2021
£55.58
–
6,583
–
–
–
1,306
6,511
–
–
–
–
11 Mar 2016
£20.00
17,270
– (5,756) 2,326 13,840
–
9,329
6,583
–
–
1 Dec 2021
1 Dec 2021
£46.67
418,062
9,329
1 Dec 2022
6,583
1 Dec 2023
–
–
–
–
–
–
– 31 Dec 2020 18 Feb 2021
£62.61
1,192,161
9 Mar 2017
£32.03
85,174
15 May 2018
£42.30
63,039
18 Mar 2019
£42.67
51,752
16 Mar 2020
£33.58
53,272
–
–
–
–
18 Mar 2021
£55.58
– 54,005
18 Mar 2019
£42.67
16 Mar 2020
£33.58
6,715
8,724
–
–
18 Mar 2021
£55.58
–
7,497
–
–
–
–
–
–
–
–
11 Mar 2016
£20.00
73,140
– (24,379) 9,852 58,613
9 Mar 2017
£32.03
91,721
15 May 2018
£42.30
66,050
18 Mar 2019
£42.67
57,011
16 Mar 2020
£33.58
53,236
–
–
–
–
18 Mar 2021
£55.58
– 54,652
Peter Cunningham
Bonus
Deferral
Awards
18 Mar 2019
£42.67
16 Mar 2020
£33.58
1,447
1,802
–
–
18 Mar 2021
£55.58
–
1,402
15 May 2018
£42.30
18 Mar 2019
£42.67
16 Mar 2020
£33.58
29 Oct 2020
£43.34
29 Oct 2020
£43.34
3,614
3,244
3,713
1,325
1,325
–
–
–
–
–
18 Mar 2021
£55.58
–
4,781
Management
Share
Awards
Performance
Share
Awards(d)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
85,174
85,174 31 Dec 2021
63,039
63,039 31 Dec 2022
51,752
51,752 31 Dec 2023
53,272
53,272 31 Dec 2024
54,005
54,005 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,685
8,400
–
–
–
–
–
8,724
7,497
–
–
1 Dec 2021
1 Dec 2021
£46.67
539,352
8,724
1 Dec 2022
7,497
1 Dec 2023
–
–
–
–
–
–
31 Dec 2020 18 Feb 2021
£62.61 5,048,855
–
–
–
–
–
–
–
–
–
–
91,721
91,721 31 Dec 2021
66,050
66,050 31 Dec 2022
57,011
57,011 31 Dec 2023
53,236
53,236 31 Dec 2024
54,652
54,652 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
363
1,810
–
–
–
–
524
4,138
–
–
–
–
195
1,520
–
–
–
–
–
1,802
1,402
–
3,244
3,713
–
1,325
4,781
–
–
1 Dec 2021
1 Dec 2021
£46.67
116,218
1,802
1 Dec 2022
1,402
1 Dec 2023
–
–
–
–
–
–
– 15 Feb 2021 18 Feb 2021
£62.61
356,442
3,244 21 Feb 2022
3,713 20 Feb 2023
–
–
–
–
–
–
– 29 Oct 2021 29 Oct 2021
£45.96
96,112
1,325 16 May 2022
4,781
19 Feb 2024
–
–
–
–
–
–
– 31 Dec 2020 18 Feb 2021
£62.61
919,532
11 Mar 2016
£20.00
13,320
– (4,439)
1,794 10,675
9 Mar 2017
£32.03
20,538
15 May 2018
£42.30
18 Mar 2019
£42.67
16 Mar 2020
£33.58
7,229
6,489
7,426
–
–
–
–
18 Mar 2021
£55.58
–
9,564
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,538
20,538 31 Dec 2021
7,229
6,489
7,426
9,564
7,229 31 Dec 2022
6,489 31 Dec 2023
7,426 31 Dec 2024
9,564 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
194
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
195
Implementation report continued
Award/grant
date
Market price
1 January
at award(a)(b)
2021 Awarded
Lapsed/
cancelled
Dividend
units
Vested
31 December
2021
8 February
2022
Vesting period
concludes
Date
of release
Name
Sinead Kaufman
Market
price at
release
Market value
of award at
release
US$(c)
–
–
–
–
–
–
–
–
343
1,862
–
–
–
–
284
2,391
–
–
–
–
179
1,509
–
1,645
1,408
–
3,145
4,289
–
–
1 Dec 2021
1 Dec 2021 A$95.81
134,072
1,645
1 Dec 2022
1,408
1 Dec 2023
–
–
–
–
–
–
– 15 Feb 2021 18 Feb 2021 A$127.40
228,926
3,145 21 Feb 2022
4,289 20 Feb 2023
–
–
–
–
–
–
– 29 Oct 2021 29 Oct 2021 A$92.76
105,195
–
–
1,330
1,330 16 May 2022
–
–
–
(1,374)
504
3,254
–
– 31 Dec 2020 18 Feb 2021 A$127.40
311,554
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10,989
10,989 31 Dec 2021
4,848
6,322
6,291
8,579
4,848 31 Dec 2021
6,322 31 Dec 2022
6,291 31 Dec 2023
8,579 31 Dec 2024
41,207
41,207 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,237
11,150
–
–
1 Dec 2021
1 Dec 2021
£46.67
715,926
–
–
–
–
10,920
10,920
1 Dec 2022
6,979
6,979
1 Dec 2023
–
–
–
–
–
–
(6,743)
2,473 15,960
–
– 31 Dec 2020 18 Feb 2021 A$127.40 1,528,088
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
85,174
85,174 31 Dec 2021
57,657
57,657 31 Dec 2022
56,582
56,582 31 Dec 2023
53,272
53,272 31 Dec 2024
51,602
51,602 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
758
3,780
–
–
1 Dec 2021
1 Dec 2021
£46.67
242,708
–
–
–
–
–
–
–
–
–
–
–
–
13,454
13,454
1 Dec 2022
9,680
9,680
1 Dec 2023
29,886
29,886 31 Dec 2022
79,609
79,609 31 Dec 2023
74,711
74,711 31 Dec 2024
103,510
103,510 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Bonus
Deferral
Awards
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
1,519
1,645
–
–
18 Mar 2021 A$110.80
–
1,408
Management
Share
Awards
15 May 2018
A$83.61
18 Mar 2019
A$93.17
2,107
3,145
16 Mar 2020
A$77.65
4,289
Performance
Share
Awards(d)
Arnaud Soirat
Bonus
Deferral
Awards
Performance
Share
Awards(d)
29 Oct 2020 A$90.96
29 Oct 2020 A$90.96
11 Mar 2016
A$44.57
1,330
1,330
4,124
9 Mar 2017
A$60.14
10,989
15 May 2018
A$83.61
15 May 2018
A$83.61
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
4,848
6,322
6,291
8,579
18 Mar 2021 A$110.80
– 41,207
18 Mar 2019
£42.67
8,913
16 Mar 2020
£33.58
10,920
–
–
18 Mar 2021
£55.58
–
6,979
11 Mar 2016
A$44.57
20,230
9 Mar 2017
£32.03
85,174
15 May 2018
£42.30
57,657
18 Mar 2019
£42.67
56,582
16 Mar 2020
£33.58
53,272
–
–
–
–
–
18 Mar 2021
£55.58
– 51,602
Jakob Stausholm
Bonus
Deferral
Awards
18 Mar 2019
£42.67
3,022
16 Mar 2020
£33.58
13,454
–
–
18 Mar 2021
£55.58
–
9,680
Performance
Share
Awards(d)
10 Sep 2018
£35.16
29,886
18 Mar 2019
£42.67
79,609
16 Mar 2020
£33.58
74,711
–
–
–
18 Mar 2021
£55.58
– 103,510
196
Annual Report 2021 | riotinto.com
Implementation report continued
Governance
Name
date
at award(a)(b)
2021 Awarded
cancelled
units
Vested
2021
2022
concludes
of release
Award/grant
Market price
1 January
Lapsed/
Dividend
31 December
8 February
Vesting period
Date
Market
price at
release
Market value
of award at
release
US$(c)
343
1,862
–
1 Dec 2021
1 Dec 2021 A$95.81
134,072
Management
15 May 2018
A$83.61
284
2,391
– 15 Feb 2021 18 Feb 2021 A$127.40
228,926
Performance
11 Mar 2016
A$44.57
(1,374)
504
3,254
– 31 Dec 2020 18 Feb 2021 A$127.40
311,554
179
1,509
– 29 Oct 2021 29 Oct 2021 A$92.76
105,195
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
18 Mar 2021 A$110.80
–
1,408
Sinead Kaufman
Bonus
Deferral
Awards
Share
Awards
1,519
1,645
2,107
3,145
4,289
1,330
1,330
4,124
4,848
6,322
6,291
8,579
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
29 Oct 2020 A$90.96
29 Oct 2020 A$90.96
15 May 2018
A$83.61
15 May 2018
A$83.61
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
Share
Awards(d)
9 Mar 2017
A$60.14
10,989
Arnaud Soirat
Bonus
Deferral
Awards
Share
Awards(d)
18 Mar 2021 A$110.80
– 41,207
16 Mar 2020
£33.58
10,920
18 Mar 2021
£55.58
–
6,979
9 Mar 2017
£32.03
85,174
15 May 2018
£42.30
57,657
18 Mar 2019
£42.67
56,582
16 Mar 2020
£33.58
53,272
18 Mar 2021
£55.58
– 51,602
Jakob Stausholm
Bonus
Deferral
Awards
Share
Awards(d)
16 Mar 2020
£33.58
13,454
18 Mar 2021
£55.58
–
9,680
Performance
10 Sep 2018
£35.16
29,886
18 Mar 2019
£42.67
79,609
16 Mar 2020
£33.58
74,711
18 Mar 2021
£55.58
– 103,510
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,645
1,408
1,645
1 Dec 2022
1,408
1 Dec 2023
3,145
4,289
3,145 21 Feb 2022
4,289 20 Feb 2023
1,330
1,330 16 May 2022
10,989
10,989 31 Dec 2021
4,848
6,322
6,291
8,579
4,848 31 Dec 2021
6,322 31 Dec 2022
6,291 31 Dec 2023
8,579 31 Dec 2024
41,207
41,207 31 Dec 2025
10,920
10,920
1 Dec 2022
6,979
6,979
1 Dec 2023
85,174
85,174 31 Dec 2021
57,657
57,657 31 Dec 2022
56,582
56,582 31 Dec 2023
53,272
53,272 31 Dec 2024
51,602
51,602 31 Dec 2025
13,454
13,454
1 Dec 2022
9,680
9,680
1 Dec 2023
29,886
29,886 31 Dec 2022
79,609
79,609 31 Dec 2023
74,711
74,711 31 Dec 2024
103,510
103,510 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Performance
11 Mar 2016
A$44.57
20,230
(6,743)
2,473 15,960
– 31 Dec 2020 18 Feb 2021 A$127.40 1,528,088
18 Mar 2019
£42.67
8,913
2,237
11,150
–
1 Dec 2021
1 Dec 2021
£46.67
715,926
18 Mar 2019
£42.67
3,022
758
3,780
–
–
1 Dec 2021
1 Dec 2021
£46.67
242,708
Award/grant
date
Market price
1 January
at award(a)(b)
2021 Awarded
Lapsed/
cancelled
Dividend
units
Vested
31 December
2021
8 February
2022
Vesting period
concludes
Date
of release
Market
price at
release
Market value
of award at
release
US$(c)
Name
Peter Toth
Bonus
Deferral
Awards
Performance
Share
Awards(d)
Simon Trott
Bonus
Deferral
Awards
Performance
Share
Awards(d)
Ivan Vella
Bonus
Deferral
Awards
Management
Share
Awards
Performance
Share
Awards(d)
18 Mar 2019
£42.67
16 Mar 2020
£33.58
1,759
2,096
–
(1,759)
– (2,096)
18 Mar 2021
£55.58
–
2,412
(2,412)
–
–
–
–
–
–
Management
Share
Awards
15 May 2018
£42.30
18 Mar 2019
£42.67
16 Mar 2020
£33.58
3,991
3,582
4,099
–
–
579
4,570
– (3,582)
– (4,099)
–
–
–
–
11 Mar 2016
£20.00
14,808
– (4,935)
1,994
11,867
9 Mar 2017
£32.03
22,677
– (22,677)
15 May 2018
£42.30
7,982
– (7,982)
18 Mar 2019
£42.67
10,747
– (10,747)
16 Mar 2020
£33.58
8,199
–
(8,199)
18 Mar 2021
£55.58
– 39,603 (39,603)
–
–
–
–
–
–
–
–
–
–
18 Mar 2019
£42.67
16 Mar 2020
£33.58
6,140
9,615
–
–
18 Mar 2021
£55.58
–
6,392
–
–
–
1,541
7,681
–
–
–
–
(3,137)
1,150
7,425
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Dec 2021
1 Dec 2022
1 Dec 2023
–
–
–
–
–
–
–
–
–
15 Feb 2021 18 Feb 2021
£62.61
393,654
– 21 Feb 2022
– 20 Feb 2023
–
–
–
–
–
–
– 31 Dec 2020 18 Feb 2021
£62.61 1,022,209
– 31 Dec 2021
– 31 Dec 2022
– 31 Dec 2023
– 31 Dec 2024
– 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Dec 2021
1 Dec 2021
£46.67
493,186
9,615
6,392
–
9,615
1 Dec 2022
6,392
1 Dec 2023
–
–
–
–
–
–
– 31 Dec 2020 18 Feb 2021 A$127.40
710,905
–
–
–
–
–
–
–
–
–
–
–
11 Mar 2016
A$44.57
9 Mar 2017
A$60.14
9,412
8,085
15 May 2018
£42.30
57,188
18 Mar 2019
£42.67
50,598
16 Mar 2020
£33.58
52,838
–
–
–
–
–
18 Mar 2021
£55.58
– 49,571
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
1,046
1,201
–
–
18 Mar 2021
£55.58
–
1,525
15 May 2018
A$83.61
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
11 Mar 2016
A$44.57
9 Mar 2017
A$60.14
3,344
2,856
1,931
3,072
8,149
15 May 2018
A$83.61
13,376
18 Mar 2019
A$93.17
16 Mar 2020
A$77.65
8,570
3,862
–
–
–
–
–
–
–
–
18 Mar 2021
£55.58
– 51,025
–
–
–
–
–
–
–
–
–
–
8,085
8,085 31 Dec 2021
57,188
57,188 31 Dec 2022
50,598
50,598 31 Dec 2023
52,838
52,838 31 Dec 2024
49,571
49,571 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
236
1,282
–
–
–
–
450
3,794
–
–
–
–
–
1,201
1,525
–
2,856
1,931
–
–
1 Dec 2021
1 Dec 2021 A$95.81
92,309
1,201
1 Dec 2022
1,525
1 Dec 2023
–
–
–
–
–
–
15 Feb 2021 18 Feb 2021 A$127.40
363,256
2,856 21 Feb 2022
1,931 20 Feb 2023
–
–
–
–
–
–
– 31 Dec 2020 18 Feb 2021 A$127.40
232,085
(1,023)
375
2,424
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,149
8,149 31 Dec 2021
13,376
13,376 31 Dec 2022
8,570
3,862
8,570 31 Dec 2023
3,862 31 Dec 2024
51,025
51,025 31 Dec 2025
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(a) Awards denominated in pounds sterling were for Rio Tinto plc ordinary shares of 10 pence each and awards denominated in Australian dollars were for Rio Tinto Limited shares. All awards are
granted over ordinary shares.
(b) The weighted fair value per share of BDA and MSA granted in March 2021 was £54.60 for Rio Tinto plc and A$111.79 for Rio Tinto Limited and for PSA was £29.62 for Rio Tinto plc and A$60.68
for Rio Tinto Limited. Conditional awards are awarded at no cost to the recipient and no amount remains unpaid on any shares awarded.
(c) The amount in US dollars has been converted at the rate of US$1.3758 = £1 and US$0.75153 = A$1, being the average exchange rates for 2021.
(d) For the PSA granted on 9 March 2017 with a performance period that concluded on 31 December 2021, 100% of the award vested in relation to the TSR portion of the award. The remaining
performance condition of relative EBIT margin will be assessed later in 2022.
(e) The closing price at 31 December 2021 was £48.92 for Rio Tinto plc ordinary shares and was A$100.11 for Rio Tinto Limited ordinary shares. The high and low prices during 2021 of Rio Tinto plc
and Rio Tinto Limited shares were £67.88 and £43.54 and A$137.33 and A$87.28 respectively.
(f) As of 8 February 2022, the above members of the Executive Committee held 1,779,429 shares awarded and not vested under long-term incentive plans. No Executive Committee member held
any options.
196
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Annual Report 2021 | riotinto.com
197
Implementation report continued
Table 3a – Plan interests (award of shares under all-employee share arrangements)
myShare
UK Share Plan
Total activity in 2021
Plan
interests at
1 January
2021(a)
Value of
Matching
shares
awarded in
Value of
Matching
shares
year(b)
(‘000)
vested in year(c)
(‘000)
Value of
Matching
shares
awarded
in year(b)
(‘000)
Value of
Matching
shares vested
in year(c)
(‘000)
Value of Free
shares
awarded
in year(d)
(‘000)
Value of Free
shares vested
in year(d)
(‘000)
Grants in year
(‘000)
Vesting in year
(‘000)
Bold Baatar
Alfredo Barrios
Peter Cunningham
Sinead Kaufman
Arnaud Soirat
Jakob Stausholm
Peter Toth
Simon Trott
Ivan Vella
472.90
212.15
366.71
188.76
350.36
217.50
473.71
173.27
162.02
2
4
2
4
2
2
2
0
3
7
7
4
7
0
0
4
9
6
2
0
0
0
2
2
2
0
0
0
0
0
0
0
0
3
0
0
5
0
5
0
5
5
5
0
0
8
0
8
0
8
0
8
0
0
9
4
7
4
9
9
9
0
3
15
7
12
7
8
0
15
9
6
Plan
interests at
31 December
2021(a)
416.65
191.37
322.79
166.08
371.76
327.89
324.00
82.86
141.74
(a) All shares shown are Rio Tinto plc shares except in the cases of Sinead Kaufman and Ivan Vella which are Rio Tinto Limited shares. Simon Trott holds a combination of Rio Tinto plc and Rio Tinto
Limited shares.
(b) myShare and UK Share Plan Matching share awards are granted on a quarterly basis (January, April, July and October) throughout the year.
(c) The vesting of a Matching share is dependent on continued employment with Rio Tinto and the retention of the associated Investment share purchased by the participant for three years.
(d) UK Share Plan Free shares vest after three years.
(e) UK Share Plan awards shown above and the vested Matching shares under myShare are included, where relevant, in the executive’s share interests in table 2.
(f) All currency figures are shown in US$ and rounded.
Audited information
Under Schedule 8 of the Large- and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended), the following
information is auditable:
– The 2021 performance for the purposes of the STIP on pages 175-177.
– The single total figure of remuneration for each director, as set out on page 174 and table 1b on page 193.
– Details of the directors’ total pension entitlements, as set out on page 174.
– Details of taxable benefits on page 174.
– Details of scheme interests awarded to the directors during the financial year, as set out on page 182 and table 3 and 3a on pages 195-198.
– Details of payments to past directors as set out on page 185.
– Details of shareholding ownership policy and directors’ share ownership on pages 183 and 189.
– Statement of the directors’ shareholdings and share interests, as set out in tables 2, 3 and 3a on pages 194-198 of the Implementation report.
– STIP objectives and outcomes for 2021 as set out on pages 175-177 and LTIP outcome and award granted for 2021 as set out on pages 181-182.
The Australian Securities and Investments Commission issued an order dated 16 July 2021, under which the Remuneration report must be prepared
and audited in accordance with the requirements of the Australian Corporations Act 2001 applied on the basis of certain modifications set out in the
order (as detailed on page 321). The information provided in the Remuneration report has been audited as required by section 308 (3C) of the
Australian Corporations Act 2001.
Directors’ approval statement
This Directors’ Remuneration report is delivered in accordance with a resolution of the Board, and has been signed on behalf of the Board by:
Sam Laidlaw
Remuneration Committee Chair
23 February 2022
198
Annual Report 2021 | riotinto.com
Implementation report continued
Governance
Table 3a – Plan interests (award of shares under all-employee share arrangements)
myShare
UK Share Plan
Total activity in 2021
Plan
interests at
1 January
2021(a)
Value of
Matching
shares
awarded in
Value of
Matching
shares
year(b)
vested in year(c)
(‘000)
(‘000)
Value of
Matching
shares
Value of
Matching
Value of Free
awarded
shares vested
in year(b)
(‘000)
in year(c)
(‘000)
shares
awarded
Value of Free
shares vested
in year(d)
(‘000)
in year(d)
(‘000)
Grants in year
Vesting in year
31 December
(‘000)
(‘000)
2
4
2
4
2
2
2
0
3
7
7
4
7
0
0
4
9
6
2
0
0
0
2
2
2
0
0
0
0
0
0
0
0
3
0
0
5
0
5
0
5
5
5
0
0
8
0
8
0
8
0
8
0
0
9
4
7
4
9
9
9
0
3
Plan
interests at
2021(a)
416.65
191.37
322.79
166.08
371.76
327.89
324.00
82.86
141.74
15
7
12
7
8
0
9
6
15
(a) All shares shown are Rio Tinto plc shares except in the cases of Sinead Kaufman and Ivan Vella which are Rio Tinto Limited shares. Simon Trott holds a combination of Rio Tinto plc and Rio Tinto
(b) myShare and UK Share Plan Matching share awards are granted on a quarterly basis (January, April, July and October) throughout the year.
(c) The vesting of a Matching share is dependent on continued employment with Rio Tinto and the retention of the associated Investment share purchased by the participant for three years.
(e) UK Share Plan awards shown above and the vested Matching shares under myShare are included, where relevant, in the executive’s share interests in table 2.
472.90
212.15
366.71
188.76
350.36
217.50
473.71
173.27
162.02
Bold Baatar
Alfredo Barrios
Peter Cunningham
Sinead Kaufman
Arnaud Soirat
Jakob Stausholm
Peter Toth
Simon Trott
Ivan Vella
Limited shares.
(d) UK Share Plan Free shares vest after three years.
(f) All currency figures are shown in US$ and rounded.
Audited information
information is auditable:
Under Schedule 8 of the Large- and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended), the following
– The 2021 performance for the purposes of the STIP on pages 175-177.
– The single total figure of remuneration for each director, as set out on page 174 and table 1b on page 193.
– Details of the directors’ total pension entitlements, as set out on page 174.
– Details of taxable benefits on page 174.
– Details of scheme interests awarded to the directors during the financial year, as set out on page 182 and table 3 and 3a on pages 195-198.
– Details of payments to past directors as set out on page 185.
– Details of shareholding ownership policy and directors’ share ownership on pages 183 and 189.
– Statement of the directors’ shareholdings and share interests, as set out in tables 2, 3 and 3a on pages 194-198 of the Implementation report.
– STIP objectives and outcomes for 2021 as set out on pages 175-177 and LTIP outcome and award granted for 2021 as set out on pages 181-182.
The Australian Securities and Investments Commission issued an order dated 16 July 2021, under which the Remuneration report must be prepared
and audited in accordance with the requirements of the Australian Corporations Act 2001 applied on the basis of certain modifications set out in the
order (as detailed on page 321). The information provided in the Remuneration report has been audited as required by section 308 (3C) of the
Australian Corporations Act 2001.
Directors’ approval statement
This Directors’ Remuneration report is delivered in accordance with a resolution of the Board, and has been signed on behalf of the Board by:
Sam Laidlaw
Remuneration Committee Chair
23 February 2022
198
Annual Report 2021 | riotinto.com
Additional statutory disclosure
The Directors present their report and audited consolidated financial
statements for the year ended 31 December 2021.
– In January 2021, we unveiled a new Executive team.
– In February 2021, we announced the release of ‘Our Approach to
Scope of this report
For the purposes of UK company law and the Australian Corporations
Act 2001:
– the additional disclosures under the heading ‘Shareholder
information’ on pages 410-417 are hereby incorporated by reference
to, and form part of, this Directors’ report;
– the Strategic report on pages 3-131 provides a comprehensive
review of Rio Tinto’s operations, its financial position and its business
strategies and prospects, and is incorporated by reference into,
and forms part of this Directors’ report;
– certain items that would ordinarily need to be included in this
Directors’ report (including an indication of likely future
developments in the business of the company and the Group) have,
as permitted, instead been discussed in the Strategic report, while
details of the Group’s policy on addressing financial risks and details
about financial instruments are shown in note 29 to the Group
financial statements;
– taken together, the Strategic report and this Directors’ report are
intended to provide a fair, balanced and understandable assessment
of: the development and performance of the Group’s business
during the year and its position at the end of the year; its strategy;
likely developments; and any principal or emerging risks and
uncertainties associated with the Group’s business; and
– The Directors’ declaration on page 322 is also incorporated into this
Directors’ report.
For the purposes of compliance with DTR 4.1.5R(2) and DTR 4.1.8R,
the required content of the ‘Management report’ can be found in the
Strategic report or this Directors’ report, including the material
incorporated by reference.
A full report on Director and executive remuneration and shareholdings
can be found in the Remuneration report on pages 160-198, which, for
the purposes of the Australian Corporations Act 2001, forms part of this
Directors’ report.
Dual listed structure and constitutional documents
The dual listed companies (DLC) structure of Rio Tinto plc and Rio Tinto
Limited, and their constitutional provisions and voting arrangements –
including restrictions that may apply to the shares of either company
under specified circumstances – are described on pages 410-417.
Operating and financial review
Rio Tinto’s principal activities during 2021 were mining minerals and
metals throughout the lifecycle from exploration, development, mining
and processing, marketing and repurposing and renewing our assets
to create a positive legacy.
Subsidiary and associated undertakings, principally affecting the
profits or net assets of the Group in the year, are listed in notes 32-35
to the financial statements.
The following significant changes and events affected the Group
during 2021 and up to the date of this report:
– In January 2021, we announced that the Board had agreed a change
to the classification of executives designated as Key Management
Personnel (KMP) under the Australian corporations legislation.
– In January 2021, we announced that we had reached an agreement
on a new electricity agreement with Meridian Energy that allows
New Zealand’s Aluminium Smelter (NZAS) to continue operating the
Tiwai Point aluminium smelter until 31 December 2024.
Climate Change 2020’.
– In February 2021, we announced changes to the estimates of
Mineral Resources and Ore Reserves at our iron ore operations in
the Pilbara, our aluminium operations at Weipa and Gove and our
Kennecott Copper operation in Utah.
– In March 2021, we announced that The Australian Taxation Office
(ATO) had issued Rio Tinto Limited with amended assessments of
A$359.4million ($279.8million) primary tax and A$47.1million
($36.7million) of interest. The assessments relate to the denial of
interest deductions on an isolated borrowing used to pay an
intragroup dividend in 2015.
– In March 2021, we announced that Simon Thompson would not seek
re-election at the 2022 annual general meetings (AGMs) of Rio Tinto
plc and Rio Tinto Limited. In addition, it was announced that Michael
L’Estrange, a Non-Executive Director, would retire from the Board at
the conclusion of the 2021 AGMs.
– In March 2021, we announced how we were working in partnership
with Traditional Owners, host communities and independent groups
to strengthen and improve our approach to cultural heritage and
community relations.
– In April 2021, we announced that we had entered into a binding
Heads of Agreement (HoA) with Turquoise Hill Resources (TRQ) for
an updated funding plan for the completion of the Oyu Tolgoi (OT)
Underground Project in Mongolia.
– In April 2021, we announced that Barbara Levi, Chief Legal Officer &
External Affairs, had accepted the position of Group General
Counsel at UBS and would leave Rio Tinto by the end of
October 2021.
– In May 2021, we announced that we had published our report on
payments to governments made by Rio Tinto plc and its subsidiary
undertakings for the year ended 31 December 2020 as required
under the UK’s Report on Payments to Governments Regulations
2014 (as amended in December 2015). We paid $8.4 billion of taxes
and royalties and a further $1.4 billion on behalf of our employees
during 2020.
– In June 2021, we announced that we had appointed Ben Wyatt as a
Non-Executive Director. Mr Wyatt, an Australian citizen, joined the
Board on 1 September 2021.
– In June 2021, we announced that we had appointed Peter
Cunningham as Chief Financial Officer with immediate effect.
– In June 2021, we declared force majeure on customer contracts at
Richards Bay Minerals (RBM) in South Africa due to an escalation in
the security situation at the operations.
– In June 2021, we announced that we had appointed Isabelle
Deschamps to succeed Barbara Levi as Chief Legal Officer &
External Affairs.
– In July 2021, we announced that we had reached an agreement to
identify and assess legacy impacts of the former Panguna copper
mine in Bougainville with the Bougainville community members,
represented by the Human Rights Law Centre.
– In July 2021, we announced that the Richards Bay Minerals (RBM)
operation in South Africa would shut one of its four furnaces due to
the depletion of available feedstock at the plant. This was the result
of mining operations being halted following an escalation in the
security situation at the operations which significantly hampered the
mine’s ability to operate safely.
– In July 2021, we announced that we had committed $2.4 billion to
the Jadar lithium-borates project in Serbia, one of the world’s largest
greenfield lithium projects. This project remains subject to receiving
all relevant approvals, permits and licences.
– In August 2021, we announced that we had commenced the process of
restarting operations at Richards Bay Minerals (RBM) in South Africa.
Annual Report 2021 | riotinto.com
199
Additional statutory disclosure continued
– In September 2021, we announced that the Australian Taxation
Office (ATO) had issued further assessments in relation to the denial
of interest deductions on an isolated borrowing used to pay an
intragroup dividend in 2015, levying penalties of A$352 million
($257.9 million) and reducing the original interest assessment from
A$47 million to A$27 million ($19.8 million).
– In September 2021 we announced that we had published our
first report on progress in improving Communities and Social
Performance (CSP) practices, as the company works to rebuild trust
and relationships with Traditional Owners following the destruction
of the Juukan Gorge rock shelters in Western Australia.
– In October 2021 we announced that Peter Toth, Group executive,
Strategy and Development, had accepted a new position
outside Rio Tinto.
– In October 2021 we announced our new strategy to strengthen
performance, decarbonise and grow.
– In December 2021 we announced that the Board had selected
Dominic Barton to succeed Simon Thompson as the company’s
new Chair.
– In December 2021 we announced that we had entered into a binding
agreement to acquire the Rincon lithium project in Argentina from
Rincon mining, a company owned by funds managed by the private
equity group Sentient Equity Partners, for $825 million.
– In January 2022, the Government of Serbia cancelled the Spatial
Plan for the Jadar project and required all related permits to be
revoked. We remain committed to exploring all options and are
reviewing the legal basis of the decision and the implications for our
activities and people in Serbia.
– In January 2022 we announced that we had reached an agreement
with Turquoise Hill Resources and the Government of Mongolia that
would move the Oyu Tolgoi project forward, resetting the
relationship between the partners and increasing the value the
project delivers for Mongolia.
– In February 2022 we announced that we were reviewing the
preliminary findings that Energy Resources of Australia Ltd
released from its forecast of the cost and schedule for the
Ranger rehabilitation project in Australia’s Northern Territory,
which have been subject to independent review.
In 2021 and 2020, the Group did not receive any public takeover offers
by third parties in respect of Rio Tinto plc shares or Rio Tinto Limited
shares or make any public takeover offers in respect of other
companies’ shares. No significant trading suspensions have occurred
during the three years prior to 31 December 2021 and the subsequent
interim period through the date of this filing.
Details of certain restrictions on holding shares in Rio Tinto and certain
consequences triggered by a change of control are described on
page 412 under the heading ‘Limitations on ownership of shares and
merger obligations’. There are no other restrictions on the transfer of
ordinary Rio Tinto shares save for:
– restrictions that may from time to time be imposed by laws,
regulations or Rio Tinto policy (for example relating to market abuse,
insider dealing, share trading or an Australian foreign investment);
– restrictions on the transfer of shares that may be imposed following
a failure to supply information required to be disclosed, or where
registration of the transfer may breach a court order or a law,
or in relation to unmarketable parcels of shares; and
– restrictions on the transfer of shares held under certain employee
share plans while they remain subject to the plan.
At the AGMs held in 2021, shareholders authorised:
– the on-market purchase by Rio Tinto plc or Rio Tinto Limited or its
subsidiaries, of up to 124,768,190 Rio Tinto plc shares (representing
approximately 10% of Rio Tinto plc’s issued share capital, excluding
Rio Tinto plc shares held in Treasury at that time);
– the off-market purchase by Rio Tinto plc of up to 124,768,190
Rio Tinto plc shares acquired by Rio Tinto Limited or its subsidiaries
under the above authority; and
– the off-market and/or on-market buy-back by Rio Tinto Limited of up
to 55.6 million Rio Tinto Limited shares (representing approximately
15% of Rio Tinto Limited’s issued share capital at that time).
Substantial shareholders
Details of substantial shareholders are included on page 413.
Dividends
Details of dividends paid and declared for payment, together with the
company’s shareholder returns policy, can be found on page 38.
Directors and executives
The names of Directors and their periods of appointment are listed on
pages 134-135, together with details of each Director’s qualifications,
experience and responsibilities, and current directorships.
There are no family relationships between any of our Directors or
executives. None of our Directors or Executive Committee members
are elected or appointed under any arrangement or understanding
with any major shareholder, customer, supplier or otherwise.
Details of events that took place after the balance sheet date are
further described in note 45 to the financial statements.
A table of Directors’ attendance at Board and committee meetings
during 2021 is on page 147.
Risk identification, assessment and management
The Group’s principal risks and uncertainties are listed on pages
117-130. The Group’s approach to risk management is discussed on
pages 112-116.
Share capital
Details of the Group’s share capital as at 31 December 2021 are
described in notes 26 and 27 to the financial statements. Details of the
rights and obligations attached to each class of shares are covered on
page 411, under the heading ‘Voting arrangements’.
In situations where an employee share plan is operated by the
company and plan participants are the beneficial owners of shares
but not the registered owners, voting rights are normally exercised by
the registered owner at the direction of the participant.
Simon Thompson is the only Director who will not stand for re-election
at the 2022 AGMs.
Previous listed directorships
Details of each Director’s previous directorships of other listed
companies (where relevant) held in the past three years are set
out below:
– Simon Henry: Lloyds Banking Group plc (June 2014 to
September 2020).
Directors’ and executives’ beneficial interests
A table of Directors’ and executives’ beneficial interests in
Rio Tinto shares is on page 194.
200
Annual Report 2021 | riotinto.com
Additional statutory disclosure continued
Governance
– In September 2021, we announced that the Australian Taxation
Details of certain restrictions on holding shares in Rio Tinto and certain
Office (ATO) had issued further assessments in relation to the denial
consequences triggered by a change of control are described on
of interest deductions on an isolated borrowing used to pay an
page 412 under the heading ‘Limitations on ownership of shares and
intragroup dividend in 2015, levying penalties of A$352 million
merger obligations’. There are no other restrictions on the transfer of
($257.9 million) and reducing the original interest assessment from
ordinary Rio Tinto shares save for:
A$47 million to A$27 million ($19.8 million).
– In September 2021 we announced that we had published our
first report on progress in improving Communities and Social
Performance (CSP) practices, as the company works to rebuild trust
and relationships with Traditional Owners following the destruction
of the Juukan Gorge rock shelters in Western Australia.
– In October 2021 we announced that Peter Toth, Group executive,
Strategy and Development, had accepted a new position
outside Rio Tinto.
– In October 2021 we announced our new strategy to strengthen
performance, decarbonise and grow.
– In December 2021 we announced that the Board had selected
– restrictions that may from time to time be imposed by laws,
regulations or Rio Tinto policy (for example relating to market abuse,
insider dealing, share trading or an Australian foreign investment);
– restrictions on the transfer of shares that may be imposed following
a failure to supply information required to be disclosed, or where
registration of the transfer may breach a court order or a law,
or in relation to unmarketable parcels of shares; and
– restrictions on the transfer of shares held under certain employee
share plans while they remain subject to the plan.
At the AGMs held in 2021, shareholders authorised:
Dominic Barton to succeed Simon Thompson as the company’s
– the on-market purchase by Rio Tinto plc or Rio Tinto Limited or its
new Chair.
– In December 2021 we announced that we had entered into a binding
agreement to acquire the Rincon lithium project in Argentina from
subsidiaries, of up to 124,768,190 Rio Tinto plc shares (representing
approximately 10% of Rio Tinto plc’s issued share capital, excluding
Rio Tinto plc shares held in Treasury at that time);
Rincon mining, a company owned by funds managed by the private
– the off-market purchase by Rio Tinto plc of up to 124,768,190
equity group Sentient Equity Partners, for $825 million.
Rio Tinto plc shares acquired by Rio Tinto Limited or its subsidiaries
– In January 2022, the Government of Serbia cancelled the Spatial
under the above authority; and
Plan for the Jadar project and required all related permits to be
– the off-market and/or on-market buy-back by Rio Tinto Limited of up
revoked. We remain committed to exploring all options and are
to 55.6 million Rio Tinto Limited shares (representing approximately
reviewing the legal basis of the decision and the implications for our
15% of Rio Tinto Limited’s issued share capital at that time).
activities and people in Serbia.
– In January 2022 we announced that we had reached an agreement
with Turquoise Hill Resources and the Government of Mongolia that
would move the Oyu Tolgoi project forward, resetting the
relationship between the partners and increasing the value the
project delivers for Mongolia.
– In February 2022 we announced that we were reviewing the
preliminary findings that Energy Resources of Australia Ltd
released from its forecast of the cost and schedule for the
Ranger rehabilitation project in Australia’s Northern Territory,
which have been subject to independent review.
In 2021 and 2020, the Group did not receive any public takeover offers
by third parties in respect of Rio Tinto plc shares or Rio Tinto Limited
shares or make any public takeover offers in respect of other
companies’ shares. No significant trading suspensions have occurred
during the three years prior to 31 December 2021 and the subsequent
interim period through the date of this filing.
Substantial shareholders
Details of substantial shareholders are included on page 413.
Dividends
Details of dividends paid and declared for payment, together with the
company’s shareholder returns policy, can be found on page 38.
The names of Directors and their periods of appointment are listed on
pages 134-135, together with details of each Director’s qualifications,
experience and responsibilities, and current directorships.
There are no family relationships between any of our Directors or
executives. None of our Directors or Executive Committee members
are elected or appointed under any arrangement or understanding
with any major shareholder, customer, supplier or otherwise.
Details of events that took place after the balance sheet date are
further described in note 45 to the financial statements.
A table of Directors’ attendance at Board and committee meetings
during 2021 is on page 147.
Risk identification, assessment and management
Simon Thompson is the only Director who will not stand for re-election
The Group’s principal risks and uncertainties are listed on pages
117-130. The Group’s approach to risk management is discussed on
at the 2022 AGMs.
Previous listed directorships
pages 112-116.
Share capital
Details of the Group’s share capital as at 31 December 2021 are
described in notes 26 and 27 to the financial statements. Details of the
rights and obligations attached to each class of shares are covered on
page 411, under the heading ‘Voting arrangements’.
In situations where an employee share plan is operated by the
company and plan participants are the beneficial owners of shares
but not the registered owners, voting rights are normally exercised by
the registered owner at the direction of the participant.
Details of each Director’s previous directorships of other listed
companies (where relevant) held in the past three years are set
out below:
– Simon Henry: Lloyds Banking Group plc (June 2014 to
September 2020).
Directors’ and executives’ beneficial interests
A table of Directors’ and executives’ beneficial interests in
Rio Tinto shares is on page 194.
Secretaries
Employment of people with a disability
Steve Allen is Company Secretary of Rio Tinto plc and Joint Company
Secretary, together with Tim Paine, of Rio Tinto Limited. Steve’s and
Tim’s qualifications and experience are described on page 135.
Indemnities and insurance
The Articles of Association of Rio Tinto plc and the Constitution of
Rio Tinto Limited provide for them to indemnify, to the extent permitted
by law, Directors and officers of the companies, including officers of
certain subsidiaries, against liabilities arising from the conduct of the
Group’s business. The Directors, Group company secretary and joint
company secretary of Rio Tinto Limited, together with employees
serving as Directors of eligible subsidiaries at the Group’s request,
have also received similar direct indemnities. Former Directors also
received indemnities for the period in which they were Directors.
These are qualifying third-party indemnity provisions for the purposes
of the UK Companies Act 2006, in force during the financial year ended
31 December 2021 and up to the date of this report. During 2021,
Rio Tinto paid legal costs under the terms of those indemnities for
certain former Directors and officers totalling $9,032,915.
Qualifying pension scheme indemnity provisions (as defined by section
235 of the UK Companies Act 2006) were in force during the course of
the financial year ended 31 December 2021 and up to the date of this
Directors’ report, for the benefit of trustees of the Rio Tinto Group
pension and superannuation funds across various jurisdictions. No
amount has been paid under any of these indemnities during the year.
The Group purchased Directors’ and officers’ insurance during the
year. In broad terms, this cover indemnifies individual Directors and
officers against certain personal legal liability and legal defence costs
for claims arising out of actions connected with Group business. During
2021, the Group paid premiums totalling $39,819,792 net of statutory
taxes and other local charges for this Directors’ and officers’ insurance.
We acknowledge the systemic barriers facing people with disabilities
in attaining meaningful employment. We further acknowledge the
efforts necessary to fully support people who acquire a disability and
we seek to implement the accommodations they need to fulfil their role,
or an alternative role if required.
Our inclusion & diversity policy sets out our expectations around the
behaviours needed for an inclusive and diverse workplace, where we
embrace different perspectives, valuing diversity as a strength.
Our employment policy outlines how we are committed to preventing
discrimination and that we consider applications based on the job
requirements without discriminating on grounds of disability. It also
explains how we ensure our people are trained to perform their role.
More information can be found on our website riotinto.com.
In 2021, we joined the IncludeAbility Employer network, which was set
up by the Australian Human Rights Commission and aims to increase
access to meaningful employment opportunities for people with a
disability. We will continue to seek opportunities to improve how we
provide meaningful opportunities for people with a disability.
Engagement with UK employees
Our statement on engagement with UK employees is on page 140.
Engagement with suppliers, customers and others in a
business relationship with the company
Our statement on engagement with suppliers, customers and others in
a business relationship with the company is on page 142.
Statutory Audit Services Order
The Group has fully complied with the Statutory Audit Services Order.
Directors and executives
Purchases
Rio Tinto plc shares of 10p each and Rio Tinto plc American Depositary Receipts (ADRs)
Total number of shares
Average price per
purchased1
share $2
Total number of shares
purchased to satisfy
company dividend
reinvestment plans
Total number of shares
purchased to satisfy
employee share plans
Total number of shares
purchased as part of
publicly announced
plans or programmes3
Maximum number of shares
that may be purchased
under plans or programmes
2021
1 to 31 Jan
1 to 28 Feb
1 to 31 Mar
1 to 30 Apr
1 to 31 May
1 to 30 Jun
1 to 31 Jul
1 to 31 Aug
1 to 30 Sep
1 to 31 Oct
1 to 30 Nov
1 to 31 Dec
Total
2022
1 to 31 Jan
1 to 04 Feb
0
0
0
952,879
0
12,845
0
0
1,341,952
0
15,711
146,617
2,470,0044
0
0
0
0
0
83.58
0
85.37
0
0
66.57
0
62.63
65.84
73.16
0
0
0
0
0
675,423
0
0
0
0
891,934
0
0
0
1,567,357
0
0
0
0
0
277,456
0
12,845
0
0
450,018
0
15,711
146,617
902,647
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
124,667,6225
124,667,6225
124,667,6225
124,768,1906
124,768,1906
124,768,1906
124,768,1906
124,768,1906
124,768,1906
124,768,1906
124,768,1906
124,768,1906
–
124,768,1906
124,768,1906
200
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
201
Additional statutory disclosure continued
Rio Tinto Limited shares
Total number of
shares purchased1
Average price per
share $2
Total number of shares
purchased to satisfy
company dividend
reinvestment plans
Total number of shares
purchased to satisfy
employee share plans7
Total number of shares
purchased as part of
publicly announced
plans or programmes3
Maximum number of shares
that may be purchased under
plans or programmes
2021
1 to 31 Jan
1 to 28 Feb
1 to 31 Mar
1 to 30 Apr
1 to 31 May
1 to 30 Jun
1 to 31 Jul
1 to 31 Aug
1 to 30 Sep
1 to 31 Oct
1 to 30 Nov
1 to 31 Dec
Total
2022
1 to 31 Jan
1 to 04 Feb
0
0
0
1,626,660
0
87,000
0
0
2,853,399
0
14,417
896,338
5,477,814
0
0
0
0
0
92.19
0
93.71
0
0
71.50
0
67.97
72.92
78.22
0
0
0
0
0
1,398,026
0
0
0
0
2,341,500
0
0
0
0
0
0
228,634
0
87,000
0
0
511,899
0
14,417
896,338
3,739,526
1,738,288
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
55,600,0008
55,600,0008
55,600,0008
55,600,0008
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
–
55,600,0009
55,600,0009
1. Monthly totals of purchases are based on the settlement date.
2. The shares were purchased in the currency of the stock exchange on which the purchases took place and the sale price has been converted into US dollars at the exchange rate on the date
of settlement.
3. Shares purchased in connection with the dividend reinvestment plans and employee share plans are not deemed to form any part of any publicly announced plan or programme.
4. This figure represents 0.197% of Rio Tinto plc issued share capital at 31 December 2021.
5. At the Rio Tinto plc AGM held in 2020, shareholders authorised the on-market purchase by Rio Tinto plc, and Rio Tinto Limited and its subsidiaries of up to 124,667,622 Rio Tinto plc shares.
This authorisation expired at the 2021 AGM on 9 April 2021.
6. At the Rio Tinto plc AGM held in 2021, shareholders authorised the on-market purchase by Rio Tinto plc, and Rio Tinto Limited and its subsidiaries of up to 124,768,190 Rio Tinto plc shares.
This authorisation will expire on the later of 8 July 2022 or the date of the 2022 AGM.
7. The average price of shares purchased on-market by the trustee of Rio Tinto Limited’s employee share trust during 2021 was $75.86.
8. At the Rio Tinto Limited AGM held in 2020 shareholders authorised the off-market and/or on-market buy-back of up to 55.6 million Rio Tinto Limited shares.
9. At the Rio Tinto Limited AGM held in 2021 shareholders authorised the off-market and/or on-market buy-back of up to 55.6 million Rio Tinto Limited shares.
Political donations
Rio Tinto prohibits the use of its funds to support political candidates
or parties. No political donations were made by the Group for political
purposes during the year. In the US, in accordance with the United
States Federal Election Campaign Act, we provide administrative
support for the Rio Tinto America Political Action Committee (PAC),
which was created in 1990 and encourages voluntary employee
participation in the political process. All Rio Tinto America PAC
employee contributions are reviewed for compliance with federal
and state law and are publicly reported in accordance with US
election laws. The PAC is controlled by neither Rio Tinto nor any of
its subsidiaries, but instead by a governing board of five employee
members on a voluntary basis. In 2021, contributions to Rio Tinto
America PAC by 11 employees amounted to $8,310.60, and Rio Tinto
America PAC donated $37,000 in political contributions in 2021.
Government regulations
Our operations around the world are subject to extensive laws
and regulations imposed by local, state, provincial and federal
governments. These regulations govern many aspects of our
work – from how we explore, mine and process ore, to conditions
of land tenure and health, safety and environmental requirements.
They also govern how we operate as a company in relation to
securities, taxation, intellectual property, competition and foreign
investment, provisions to protect data privacy, conditions of trade
and export and infrastructure access. In addition to these laws,
several of our operations are governed by specific agreements
made with governments, some of which are enshrined in legislation.
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The geographic and product diversity of our operations reduces the
likelihood of any single law or government regulation having a material
effect on the Group’s business as a whole.
Environmental regulations
Rio Tinto is subject to various environmental laws and regulations in the
countries where it has operations. Rio Tinto measures its performance
against environmental regulation by tracking and rating incidents
according to their actual environmental and compliance impacts using
five severity categories (minor, medium, serious, major or catastrophic).
Incidents with a consequence rating of major or catastrophic are of a
severity that require notification to the relevant product group Chief
Executive and the Rio Tinto Chief Executive immediately after the
incident occurring. In 2021, there were three environmental incidents at
managed operations with a major impact. There were no environmental
incidents with catastrophic impact.
During 2021, three managed operations incurred fines amounting to
$7,414 (2020: $27,387). Details of these fines are reported in the
Sustainability section of this report on page 88.
Australian corporations that exceed specific greenhouse gas
emissions or energy use thresholds have obligations under the
Australian National Greenhouse and Energy Reporting Act 2007
(NGER). All Rio Tinto entities covered under this Act have submitted
their annual NGER reports by the required 31 October 2021 deadline.
Further information on the Group’s environmental performance is
included in the Sustainability section of this Annual Report, on pages
72-97, and at riotinto.com.
Additional statutory disclosure continued
Governance
Rio Tinto Limited shares
Total number of
shares purchased1
Average price per
share $2
Total number of shares
Total number of shares
purchased to satisfy
Total number of shares
purchased as part of
Maximum number of shares
company dividend
reinvestment plans
purchased to satisfy
employee share plans7
publicly announced
that may be purchased under
plans or programmes3
plans or programmes
2021
1 to 31 Jan
1 to 28 Feb
1 to 31 Mar
1 to 30 Apr
1 to 31 May
1 to 30 Jun
1 to 31 Jul
1 to 31 Aug
1 to 30 Sep
1 to 31 Oct
1 to 30 Nov
1 to 31 Dec
Total
2022
1 to 31 Jan
1 to 04 Feb
1,626,660
87,000
2,853,399
14,417
896,338
5,477,814
0
0
0
0
0
0
0
0
0
92.19
93.71
71.50
67.97
72.92
78.22
0
0
0
0
0
0
0
0
0
1,398,026
228,634
2,341,500
511,899
3,739,526
1,738,288
0
0
0
0
0
0
0
0
0
87,000
14,417
896,338
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
55,600,0008
55,600,0008
55,600,0008
55,600,0008
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
55,600,0009
–
55,600,0009
55,600,0009
1. Monthly totals of purchases are based on the settlement date.
of settlement.
2. The shares were purchased in the currency of the stock exchange on which the purchases took place and the sale price has been converted into US dollars at the exchange rate on the date
3. Shares purchased in connection with the dividend reinvestment plans and employee share plans are not deemed to form any part of any publicly announced plan or programme.
4. This figure represents 0.197% of Rio Tinto plc issued share capital at 31 December 2021.
5. At the Rio Tinto plc AGM held in 2020, shareholders authorised the on-market purchase by Rio Tinto plc, and Rio Tinto Limited and its subsidiaries of up to 124,667,622 Rio Tinto plc shares.
This authorisation expired at the 2021 AGM on 9 April 2021.
6. At the Rio Tinto plc AGM held in 2021, shareholders authorised the on-market purchase by Rio Tinto plc, and Rio Tinto Limited and its subsidiaries of up to 124,768,190 Rio Tinto plc shares.
This authorisation will expire on the later of 8 July 2022 or the date of the 2022 AGM.
7. The average price of shares purchased on-market by the trustee of Rio Tinto Limited’s employee share trust during 2021 was $75.86.
8. At the Rio Tinto Limited AGM held in 2020 shareholders authorised the off-market and/or on-market buy-back of up to 55.6 million Rio Tinto Limited shares.
9. At the Rio Tinto Limited AGM held in 2021 shareholders authorised the off-market and/or on-market buy-back of up to 55.6 million Rio Tinto Limited shares.
Political donations
Rio Tinto prohibits the use of its funds to support political candidates
or parties. No political donations were made by the Group for political
purposes during the year. In the US, in accordance with the United
States Federal Election Campaign Act, we provide administrative
The geographic and product diversity of our operations reduces the
likelihood of any single law or government regulation having a material
effect on the Group’s business as a whole.
Environmental regulations
support for the Rio Tinto America Political Action Committee (PAC),
Rio Tinto is subject to various environmental laws and regulations in the
which was created in 1990 and encourages voluntary employee
countries where it has operations. Rio Tinto measures its performance
participation in the political process. All Rio Tinto America PAC
against environmental regulation by tracking and rating incidents
employee contributions are reviewed for compliance with federal
according to their actual environmental and compliance impacts using
and state law and are publicly reported in accordance with US
five severity categories (minor, medium, serious, major or catastrophic).
election laws. The PAC is controlled by neither Rio Tinto nor any of
Incidents with a consequence rating of major or catastrophic are of a
its subsidiaries, but instead by a governing board of five employee
severity that require notification to the relevant product group Chief
members on a voluntary basis. In 2021, contributions to Rio Tinto
Executive and the Rio Tinto Chief Executive immediately after the
America PAC by 11 employees amounted to $8,310.60, and Rio Tinto
incident occurring. In 2021, there were three environmental incidents at
America PAC donated $37,000 in political contributions in 2021.
managed operations with a major impact. There were no environmental
Government regulations
incidents with catastrophic impact.
During 2021, three managed operations incurred fines amounting to
Our operations around the world are subject to extensive laws
$7,414 (2020: $27,387). Details of these fines are reported in the
and regulations imposed by local, state, provincial and federal
Sustainability section of this report on page 88.
governments. These regulations govern many aspects of our
work – from how we explore, mine and process ore, to conditions
of land tenure and health, safety and environmental requirements.
They also govern how we operate as a company in relation to
securities, taxation, intellectual property, competition and foreign
investment, provisions to protect data privacy, conditions of trade
and export and infrastructure access. In addition to these laws,
several of our operations are governed by specific agreements
made with governments, some of which are enshrined in legislation.
Australian corporations that exceed specific greenhouse gas
emissions or energy use thresholds have obligations under the
Australian National Greenhouse and Energy Reporting Act 2007
(NGER). All Rio Tinto entities covered under this Act have submitted
their annual NGER reports by the required 31 October 2021 deadline.
Further information on the Group’s environmental performance is
included in the Sustainability section of this Annual Report, on pages
72-97, and at riotinto.com.
Energy efficiency action
Dealing in Rio Tinto securities
Details of the measures taken to increase the company’s energy
efficiency are reported on pages 78, 80-81 and 119 of this report.
Energy consumption1, 2, 3
Energy consumption in GWh
2021
2020
From activities including the combustion of fuel
and the operation of facilities
From the purchase of electricity, heat,
steam or cooling
Total energy consumed4
80,016
86,389
22,121
102,137
22,778
111,667
Rio Tinto securities dealing policy restricts dealing in Rio Tinto
securities by Directors and employees who may be in possession of
inside information. These individuals must seek clearance before any
proposed dealing takes place.
Our policy also prohibits such persons from engaging in hedging or
other arrangements which limit the economic risk in connection to
Rio Tinto securities issued, or otherwise allocated, as remuneration that
are either unvested, or that have vested, but remain subject to a
holding period. We also impose restrictions on a broader group of
employees, requiring them to seek clearance before engaging in
similar arrangements over any Rio Tinto securities.
1. Rio Tinto does not report on the proportion of energy consumption associated with the UK
and offshore area since it has no producing assets in the UK, only offices, and consequently
falls below Rio Tinto’s threshold level of reporting.
2. Our approach and methodology used for the determination of measuring energy
Financial reporting
Financial statements
consumption is available at: riotinto.com.
3. Data reported is for all managed operations, without adjustment for equity interest.
4. Rio Tinto exports electricity and steam to others.
Greenhouse gas emissions (in million tCO2e)5, 6, 7
Scope 18
Scope 29
Net greenhouse gas emissions10
Ratios
Greenhouse gas emissions intensity
(tCO2e/t of product)
2021
16.9
9.3
25.9
2020
17.1
9.5
26.311
0.062
0.060
5. Rio Tinto’s greenhouse gas emissions for managed operations are reported in accordance
with the requirements under Part 7 of the UK Companies Act 2006 (Strategic report and
Directors’ report) Regulations 2013. Our approach and methodology used for the
determination of these emissions are available at riotinto.com.
6. Rio Tinto’s greenhouse gas emissions inventory is based on definitions provided by
The World Resource Institute/World Business Council for Sustainable Development
Greenhouse Gas Protocol: A Carbon Reporting and Accounting Standard, March 2004.
7. Rio Tinto does not report on the proportion of CO2 emissions associated with the UK and
offshore area since it has no producing assets in the UK, only offices, and consequently falls
below Rio Tinto’s threshold level of reporting.
8. Scope 1 emissions include emissions from combustion of fuel and operation of managed
facilities. These include emissions from land management and livestock management at
those facilities.
9. Scope 2 emissions include emissions from the purchase of electricity, heat, steam or cooling.
10. Total emissions is the sum of Scope 1 and Scope 2 emissions, minus emissions that are
associated with the generation of electricity, heat, steam or cooling supplied to others.
These emissions exclude indirect emissions associated with transportation and use of our
products reported at riotinto.com.
Exploration, research and development
The Group carries out exploration, research and development,
described in the Innovation section on pages 70-71. Exploration and
evaluation costs, net of any gains and losses on disposal, generated a
net loss before tax of $719 million (2020: $624 million). Research and
development costs were $65 million (2020: $45 million).
Financial instruments
Details of the Group’s financial risk management objectives
and policies, and exposure to risk, are described in note 29 to
the financial statements.
The Directors are required to prepare financial statements for each
financial period that give a true and fair view of the state of the Group at
the end of the financial period, together with profit or loss and cash
flows for that period. This includes preparing financial statements in
accordance with UK company law and preparing a Remuneration
report that includes the information required by Regulation 11,
Schedule 8 of the Large- and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended) and the
Australian Corporations Act 2001.
In addition, the UK Corporate Governance Code recommends that the
Board provides a fair, balanced and understandable assessment of the
company’s position and prospects in its external reporting.
Rio Tinto’s management conducts extensive review and challenge in
support of the Board’s obligations, aiming to strike a balance between
positive and negative statements and provide good linkages
throughout the Annual Report.
The Directors were responsible for the preparation and approval of the
Annual Report for the year ended 31 December 2021. They consider
the Annual Report, taken as a whole, to be fair, balanced and
understandable, and that it provides the information necessary for
shareholders to assess the Group’s position, performance, business
model and strategy.
The Directors are responsible for maintaining proper accounting
records, in accordance with UK and Australian legislation. They have a
general responsibility to safeguard the assets of the Group, and to
prevent and detect fraud and other irregularities. The Directors are also
responsible for ensuring that appropriate systems are in place to
maintain and preserve the integrity of the Group’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from current and future legislation in
other jurisdictions. The work carried out by the Group’s external
auditors does not take into account such legislation and, accordingly,
the external auditors accept no responsibility for any changes to the
financial statements after they are made available on the
Group’s website.
The Directors, senior executives, senior financial managers and other
members of staff who are required to exercise judgement while
preparing the Group’s financial statements, are required to conduct
themselves with integrity and honesty and in accordance with the
highest ethical standards, as are all Group employees.
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203
Management’s evaluation of the effectiveness of the company’s
internal controls over financial reporting was based on criteria
established in the Internal Control-Integrated Framework (2013), issued
by the Committee of Sponsoring Organisations of the Treadway
Commission. Following this evaluation, management concluded that
our internal controls over financial reporting were effective as at
31 December 2021.
Directors’ declaration
The Directors’ statement of responsibilities in relation to the Group’s
financial statements is set out on page 322.
Non-audit services and auditor independence
Details of the non-audit services and a statement of independence
regarding the provision of non-audit services undertaken by our
external auditor, including the amounts paid for non-audit services,
are set out on page 154 of the Directors’ report.
A copy of the Auditor’s Independence Declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 342.
Going concern
The Directors, having made appropriate enquiries, have satisfied
themselves that it is appropriate to adopt the going concern basis of
accounting in preparing the financial statements. Additionally, the
Directors have considered longer-term viability, as described in their
statement on pages 115-116.
2022 AGMs
The 2022 AGMs will be held on 8 April in London, UK and 5 May in
Melbourne, Australia. Separate notices of the 2022 AGMs will be
produced for the shareholders of each company.
Directors’ approval statement
The Directors’ report is delivered in accordance with a resolution of
the Board.
Simon Thompson
Chairman
23 February 2022
Additional statutory disclosure continued
The Directors consider that the 2021 Annual Report presents a true
and fair view and has been prepared in accordance with applicable
accounting standards, using the most appropriate accounting policies
for Rio Tinto’s business, and supported by reasonable judgements and
estimates. The accounting policies have been consistently applied as
described on pages 218-237, and Directors have received a written
statement from the Chief Executive and the Chief Financial Officer to
this effect. In accordance with the internal control requirements of the
Code and the ASX Principles, this written statement confirms that the
declarations in the statement are founded on a sound system of risk
management and internal controls, and that the system is operating
effectively in all material respects in relation to financial reporting risks.
Further information on Directors’ responsibilities is included on
page 322.
Disclosure controls and procedures
The Group maintains disclosure controls and procedures, as defined in
US Exchange Act Rule 13a-15(e). Management, with the participation
of the Chief Executive and Chief Financial Officer, has evaluated the
effectiveness of the Group’s disclosure controls and procedures in
relation to US Exchange Act Rule 13a-15(b), as of the end of the
period covered by this report, and has concluded that the Group’s
disclosure controls and procedures were effective at a reasonable
assurance level.
Management’s report on internal control over
financial reporting
Management is responsible for establishing and maintaining adequate
internal controls over financial reporting. These controls, designed
under the supervision of the Chief Executive and Chief Financial
Officer, provide reasonable assurance regarding the reliability of the
Group’s financial reporting and the preparation and presentation of
financial statements for external reporting purposes, in accordance
with International Financial Reporting Standards (IFRS) as defined
on page 218.
The Group’s internal controls over financial reporting include policies
and procedures designed to ensure the maintenance of records that:
– accurately and fairly reflect transactions and dispositions of assets;
– provide reasonable assurances that transactions are recorded as
necessary, enabling the preparation of financial statements in
accordance with IFRS, and that receipts and expenditures are made
with the authorisation of management and Directors of each of the
companies; and
– provide reasonable assurance regarding the prevention or
timely detection of unauthorised acquisition, use or disposition
of the Group’s assets that could have a material effect on its
financial statements.
Due to inherent limitations, internal controls over financial reporting
cannot provide absolute assurance. Similarly, these controls may not
prevent or detect all misstatements, whether caused by error or fraud,
within each of Rio Tinto plc and Rio Tinto Limited.
There were no changes to internal controls over financial reporting
during the relevant period that have materially affected, or were
reasonably likely to materially affect, the internal control over financial
reporting of Rio Tinto plc and Rio Tinto Limited.
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Additional statutory disclosure continued
Governance
Compliance with governance codes
and standards
Application of and compliance with
governance codes and standards
This section sets out our compliance with the applicable governance
codes and standards. As our shares are listed on both the Australian
Securities Exchange and the London Stock Exchange, we set out how
we have complied with the codes and standards of those bodies on the
following pages:
– London Stock Exchange – UK Corporate Governance Code
(2018 version) (the UK Code), see pages 205-207.
– Australian Securities Exchange – ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations
(4th edition) (the ASX Principles), see pages 208-210.
In addition, as explained below, as a foreign private issuer (FPI) with
American Depository Receipts (ADRs) listed on the New York Stock
Exchange (NYSE), we need to report any significant corporate
governance differences from the NYSE listing standards
(NYSE Standards) followed by US companies.
Statement of compliance with the Code and
ASX Principles
Throughout 2021 and as at the date of this report, the Group has
applied the Principles of the UK Code and the ASX Principles. The UK
Code is available at www.frc.org.uk, and the ASX Principles at www.
asx.com/au. For the purposes of ASX Listing Rule 4.10.3 and the ASX
Principles, pages 133-159 of this report form our ‘Corporate
Governance Statement’. This statement is current as at 23 February
2022, unless otherwise indicated, and has been approved by the
Board. Corporate governance documents and policies referenced can
be found at riotinto.com/invest/corporate-governance.
The Directors’ report is delivered in accordance with a resolution of
the Board.
We have complied with all relevant provisions of the UK Code
throughout 2021.
Difference from NYSE Standards
We have reviewed the NYSE Standards and consider that our practices
are broadly consistent with them, with the following exceptions where
the literal requirements of the NYSE Standards are not met due to
differences in corporate governance between the US, UK and Australia:
– The NYSE Standards state that US companies must have a
nominating/corporate governance committee which, in addition to
identifying individuals qualified to become board members,
develops and recommends to the board a set of corporate
governance principles applicable to the company. Our Nominations
Committee does not develop corporate governance principles for
the Board’s approval. The Board itself develops such principles.
– Under US securities law and the NYSE Standards, the company is
required to have an audit committee that is directly responsible for
the appointment, compensation, retention and oversight of the work
of external auditors. While our Audit Committee makes
recommendations to the Board on these matters, and is subject to
legal and regulatory requirements on oversight of audit tenders, the
ultimate responsibility for the appointment and retention of the
external auditors of Rio Tinto rests with the shareholders.
– Under US securities law and the NYSE Standards, an audit
committee is required to establish procedures for the receipt,
retention and treatment of complaints regarding accounting, internal
accounting controls and audit matters. The whistleblowing
programme (myVoice) enables employees to raise any concerns
confidentially or anonymously. The Board has responsibility to
ensure that the programme is in place and to review the reports
arising from its operations.
The UK Code
Board leadership and company purpose
A. Making the board effective
Our Board provides effective and entrepreneurial leadership. It is
collectively responsible for the stewardship and long-term success of
the Group. There is a framework of prudent and effective controls that
enable risk to be assessed and managed. The Sustainability section on
pages 72-111 sets out how we assess our impact on wider society.
See pages 143-144 for the key activities undertaken by the Board
during the year and the factors that were considered when making
decisions. In 2021, the Board undertook an internally facilitated
effectiveness review and details of this are provided on page 146
of the Governance section.
B. The company’s purpose, values and strategy and
alignment with culture
Through our The Way We Work framework, the Board sets the
company’s purpose, values, and standards for the Group’s employees.
In 2021, the Board approved a new set of values, set out on pages
18-19. The Board is committed to acting in accordance with these
values, championing and embedding these in the organisation.
The Board also seeks to ensure that the culture of the company is
aligned with these values and standards.
C. Company performance and risk management
The Board leads the development of long-term investment plans for
the company. It aims to make good quality decisions at the right time,
to achieve the company’s objectives, in alignment with our purpose,
values and strategy. The role of the Board in establishing and
monitoring the internal control environment is set out in the Audit
Committee report on pages 151-155. The way in which the company
manages risk is set out on pages 112-130. For information on the
delegation of business to management please refer to pages 136-137.
The formal schedule of matters reserved for the Board’s decision,
available at riotinto.com, covers areas including: setting the Group’s
purpose and strategic vision; monitoring performance of the delivery of
the approved strategy; approving major investments, acquisitions and
divestments; the oversight of risk and the setting of the Group’s risk
appetite; and reviewing the Group’s governance framework.
D. Stakeholder engagement
The Chairman undertakes regular engagement with our major
shareholders, in addition to that carried out by the Chief Executive, the
Chief Financial Officer and the investor relations team. The committee
chairs also engage with their relevant stakeholders and details of this
engagement is provided in each of the committee reports. We have
mapped our key stakeholders and continually work to understand their
views and we take account of our responsibilities to our stakeholders
when making business decisions. We explain more about this in our
section 172 (1) statement, set out on pages 140-142. We also discuss
stakeholders in the Strategic report on pages 20-22 and in the
Sustainability section.
Annual Report 2021 | riotinto.com
205
The Directors consider that the 2021 Annual Report presents a true
Management’s evaluation of the effectiveness of the company’s
and fair view and has been prepared in accordance with applicable
internal controls over financial reporting was based on criteria
accounting standards, using the most appropriate accounting policies
established in the Internal Control-Integrated Framework (2013), issued
for Rio Tinto’s business, and supported by reasonable judgements and
by the Committee of Sponsoring Organisations of the Treadway
estimates. The accounting policies have been consistently applied as
Commission. Following this evaluation, management concluded that
described on pages 218-237, and Directors have received a written
our internal controls over financial reporting were effective as at
statement from the Chief Executive and the Chief Financial Officer to
31 December 2021.
Management is responsible for establishing and maintaining adequate
statement on pages 115-116.
Directors’ declaration
The Directors’ statement of responsibilities in relation to the Group’s
financial statements is set out on page 322.
Non-audit services and auditor independence
Details of the non-audit services and a statement of independence
regarding the provision of non-audit services undertaken by our
external auditor, including the amounts paid for non-audit services,
are set out on page 154 of the Directors’ report.
A copy of the Auditor’s Independence Declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 342.
Going concern
The Directors, having made appropriate enquiries, have satisfied
themselves that it is appropriate to adopt the going concern basis of
accounting in preparing the financial statements. Additionally, the
Directors have considered longer-term viability, as described in their
2022 AGMs
The 2022 AGMs will be held on 8 April in London, UK and 5 May in
Melbourne, Australia. Separate notices of the 2022 AGMs will be
produced for the shareholders of each company.
Directors’ approval statement
Simon Thompson
Chairman
23 February 2022
this effect. In accordance with the internal control requirements of the
Code and the ASX Principles, this written statement confirms that the
declarations in the statement are founded on a sound system of risk
management and internal controls, and that the system is operating
effectively in all material respects in relation to financial reporting risks.
Further information on Directors’ responsibilities is included on
page 322.
Disclosure controls and procedures
The Group maintains disclosure controls and procedures, as defined in
US Exchange Act Rule 13a-15(e). Management, with the participation
of the Chief Executive and Chief Financial Officer, has evaluated the
effectiveness of the Group’s disclosure controls and procedures in
relation to US Exchange Act Rule 13a-15(b), as of the end of the
period covered by this report, and has concluded that the Group’s
disclosure controls and procedures were effective at a reasonable
assurance level.
Management’s report on internal control over
financial reporting
internal controls over financial reporting. These controls, designed
under the supervision of the Chief Executive and Chief Financial
Officer, provide reasonable assurance regarding the reliability of the
Group’s financial reporting and the preparation and presentation of
financial statements for external reporting purposes, in accordance
with International Financial Reporting Standards (IFRS) as defined
on page 218.
The Group’s internal controls over financial reporting include policies
and procedures designed to ensure the maintenance of records that:
– accurately and fairly reflect transactions and dispositions of assets;
– provide reasonable assurances that transactions are recorded as
necessary, enabling the preparation of financial statements in
accordance with IFRS, and that receipts and expenditures are made
with the authorisation of management and Directors of each of the
companies; and
– provide reasonable assurance regarding the prevention or
timely detection of unauthorised acquisition, use or disposition
of the Group’s assets that could have a material effect on its
financial statements.
Due to inherent limitations, internal controls over financial reporting
cannot provide absolute assurance. Similarly, these controls may not
prevent or detect all misstatements, whether caused by error or fraud,
within each of Rio Tinto plc and Rio Tinto Limited.
There were no changes to internal controls over financial reporting
during the relevant period that have materially affected, or were
reasonably likely to materially affect, the internal control over financial
reporting of Rio Tinto plc and Rio Tinto Limited.
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Compliance with governance codes and standards continued
In January 2021, the Board appointed Simon McKeon as the
designated Non-Executive Director for workforce engagement.
An overview of workforce engagement during 2021 is set out on
page 140.
At Rio Tinto plc’s AGM on 9 April 2021, Resolution 21 (‘Authority to
purchase Rio Tinto plc shares’) was passed with less than 80% of
votes in favour and Shining Prospect (a subsidiary of the Aluminium
Corporation of China (‘Chinalco’)) voted against. Chinalco has not
sold any Rio Tinto plc shares and now has a holding of over 14%
given its non-participation in Rio Tinto’s significant share buy-back
programmes over the last four years. This places Chinalco close to the
14.99% threshold agreed with the Australian Government at the time of
Chinalco’s original investment in 2008.
Following the AGMs of Rio Tinto plc and Rio Tinto Limited, on 9 April
2021 and 6 May 2021 respectively, the advisory vote on Resolution 3
(‘Approval of the Directors’ Remuneration report: Implementation
report’) and Resolution 4 (‘Approval of the Directors’ Remuneration
report’) were not passed as ordinary resolutions. Page 163 of the
Remuneration report set out the actions taken by the Remuneration
Committee to engage with shareholders on this matter during 2021.
Resolution 5 (‘Re-election of Dr Megan Clark AC’) was passed with less
than 80% of votes in favour. Rio Tinto acknowledges that the reduced
vote for Dr Clark’s re-election compared to previous years reflected
the fact that, as Chair of the Sustainability Committee at the time that
the rock shelters at Juukan Gorge were destroyed, Dr Clark shares
accountability for the failings in the areas of communities and social
performance that led to those events occurring. In light of the support
provided by almost 75% of shareholders, Dr Clark and the Board
carefully weighed the need for accountability for the events at Juukan
Gorge against the significant contribution, experience and continuity
that Dr Clark brings to the Board and the Group’s relationship with
Traditional Owners, and concluded that she should remain on the
Board in order to provide stability at this important time for Rio Tinto.
Dr Clark plays an active and important role on behalf of the Board in
engaging with the Traditional Owners of the lands where the company
operates in Western Australia, including attending engagements
with stakeholders.
E. Our workforce policies and practices
Group workforce policies are approved by the Board. All the policies
relating to our workforce take account of the global nature of our
company. Our whistleblowing process is overseen by the Board and
every member of the workforce has access to the whistleblower
programme (myVoice) and details of this programme are on page 107.
Division of responsibilities
F. The role of the Chairman
The Chairman leads the Board and is responsible for its overall
effectiveness. He was independent on the date of his appointment and
we consider he remains independent for the purposes of the Code.
This is also the case for the Chair-designate, Dominic Barton, who will
be appointed with effect from 5 May 2022. The Chairman recognises
the importance of creating a boardroom culture which encourages
openness and debate and ensures constructive relations between
executive and Non-Executive Directors.
The Chairman is responsible for: the management of the Board
and its committees; Director performance; induction; training and
development; succession planning; engagement with external
stakeholders; and attendance by the Board at shareholder meetings.
The Chairman is supported by the Senior Independent Directors, the
Group Company Secretary and the Chief Executive. In line with the UK
Code the Senior Independent Director, Rio Tinto plc is responsible for
acting as a sounding board for the Chairman and engages with
shareholders to develop a balanced understanding of their interests
and concerns. For further details, please see our Board Charter on
riotinto.com, which sets out the role, responsibilities, structure,
compositions and conduct of the Board, as well as the role of the
Chairman, the Senior Independent Director, Rio Tinto plc and the
Senior Independent Director, Rio Tinto Limited.
G. Composition of the board
As at the date of this report, the Board comprises 11 members:
8 independent Non-Executive Directors, the Chairman, the Chief
Executive, and the Chief Financial Officer.
As detailed in the Nominations Committee report, we engaged
Spencer Stuart to support the search for a new Chair and the
Committee is satisfied that Spencer Stuart does not have any
connections with the company or individual Directors that may impair
their independence. The recruitment of Ben Wyatt as a Non-Executive
Director was not supported by an external agency.
The Board is satisfied that it has the appropriate balance of skills,
experience, independence, and knowledge of the company to enable
its members to discharge their respective duties and responsibilities
effectively, and that no individual or group can dominate the Board’s
decision making.
There is a clear division of responsibilities between the leadership of
the Board and the executive leadership of our business. The Chief
Executive is responsible for the day-to-day management of the
business and, under a Group delegation of authority framework,
delegates to other members of the Executive Committee.
H. Role of Non-Executive Directors
We list all of the Non-Executive Directors that we consider to be
independent on pages 134-135 of this report. Over 50% of the Board
(excluding the Chairman) are Non-Executive Directors. The Non-
Executive Directors constructively challenge and help develop
proposals on strategy. They are also responsible for scrutinising
management performance and ensuring that financial information, risks
and controls, and systems of risk management are robust. In order to
enhance Board engagement in Australia, the role of Senior
Independent Director Rio Tinto Limited was established in 2021. Simon
McKeon was appointed to this position and the terms of this
appointment were agreed by the Board.
The Board held an internally facilitated Board evaluation this year and
as part of this process, the Board met without the Chairman present
and a full assessment of the Chairman’s capability was carried out.
Details of this review are on pages 146-147. Each Director has
undertaken to allocate sufficient time to the Group in order to
discharge their responsibilities effectively, and this is kept under review
by the Nominations Committee. The Directors’ other appointments are
listed on pages 134-135.
I. Board processes and role of the Company Secretary
The governance framework on page 145 explains the governance
structure of the Board and sets out the relationship with the Chief
Executive. The roles and responsibilities of each committee are
explained. The Board insights section provides some examples of
the decision-making process of the Board and the steps it takes to
function effectively, including how it considers stakeholders in
this process.
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Compliance with governance codes and standards continued
Governance
In January 2021, the Board appointed Simon McKeon as the
The Chairman is supported by the Senior Independent Directors, the
designated Non-Executive Director for workforce engagement.
Group Company Secretary and the Chief Executive. In line with the UK
An overview of workforce engagement during 2021 is set out on
Code the Senior Independent Director, Rio Tinto plc is responsible for
page 140.
At Rio Tinto plc’s AGM on 9 April 2021, Resolution 21 (‘Authority to
purchase Rio Tinto plc shares’) was passed with less than 80% of
votes in favour and Shining Prospect (a subsidiary of the Aluminium
Corporation of China (‘Chinalco’)) voted against. Chinalco has not
sold any Rio Tinto plc shares and now has a holding of over 14%
given its non-participation in Rio Tinto’s significant share buy-back
programmes over the last four years. This places Chinalco close to the
14.99% threshold agreed with the Australian Government at the time of
Chinalco’s original investment in 2008.
acting as a sounding board for the Chairman and engages with
shareholders to develop a balanced understanding of their interests
and concerns. For further details, please see our Board Charter on
riotinto.com, which sets out the role, responsibilities, structure,
compositions and conduct of the Board, as well as the role of the
Chairman, the Senior Independent Director, Rio Tinto plc and the
Senior Independent Director, Rio Tinto Limited.
G. Composition of the board
As at the date of this report, the Board comprises 11 members:
8 independent Non-Executive Directors, the Chairman, the Chief
Following the AGMs of Rio Tinto plc and Rio Tinto Limited, on 9 April
Executive, and the Chief Financial Officer.
2021 and 6 May 2021 respectively, the advisory vote on Resolution 3
(‘Approval of the Directors’ Remuneration report: Implementation
report’) and Resolution 4 (‘Approval of the Directors’ Remuneration
report’) were not passed as ordinary resolutions. Page 163 of the
Remuneration report set out the actions taken by the Remuneration
Committee to engage with shareholders on this matter during 2021.
Resolution 5 (‘Re-election of Dr Megan Clark AC’) was passed with less
than 80% of votes in favour. Rio Tinto acknowledges that the reduced
vote for Dr Clark’s re-election compared to previous years reflected
the fact that, as Chair of the Sustainability Committee at the time that
the rock shelters at Juukan Gorge were destroyed, Dr Clark shares
accountability for the failings in the areas of communities and social
performance that led to those events occurring. In light of the support
provided by almost 75% of shareholders, Dr Clark and the Board
carefully weighed the need for accountability for the events at Juukan
Gorge against the significant contribution, experience and continuity
that Dr Clark brings to the Board and the Group’s relationship with
Traditional Owners, and concluded that she should remain on the
Board in order to provide stability at this important time for Rio Tinto.
Dr Clark plays an active and important role on behalf of the Board in
engaging with the Traditional Owners of the lands where the company
operates in Western Australia, including attending engagements
with stakeholders.
E. Our workforce policies and practices
Group workforce policies are approved by the Board. All the policies
relating to our workforce take account of the global nature of our
company. Our whistleblowing process is overseen by the Board and
every member of the workforce has access to the whistleblower
programme (myVoice) and details of this programme are on page 107.
Division of responsibilities
F. The role of the Chairman
The Chairman leads the Board and is responsible for its overall
effectiveness. He was independent on the date of his appointment and
we consider he remains independent for the purposes of the Code.
This is also the case for the Chair-designate, Dominic Barton, who will
be appointed with effect from 5 May 2022. The Chairman recognises
the importance of creating a boardroom culture which encourages
openness and debate and ensures constructive relations between
executive and Non-Executive Directors.
The Chairman is responsible for: the management of the Board
and its committees; Director performance; induction; training and
development; succession planning; engagement with external
stakeholders; and attendance by the Board at shareholder meetings.
As detailed in the Nominations Committee report, we engaged
Spencer Stuart to support the search for a new Chair and the
Committee is satisfied that Spencer Stuart does not have any
connections with the company or individual Directors that may impair
their independence. The recruitment of Ben Wyatt as a Non-Executive
Director was not supported by an external agency.
The Board is satisfied that it has the appropriate balance of skills,
experience, independence, and knowledge of the company to enable
its members to discharge their respective duties and responsibilities
effectively, and that no individual or group can dominate the Board’s
decision making.
There is a clear division of responsibilities between the leadership of
the Board and the executive leadership of our business. The Chief
Executive is responsible for the day-to-day management of the
business and, under a Group delegation of authority framework,
delegates to other members of the Executive Committee.
H. Role of Non-Executive Directors
We list all of the Non-Executive Directors that we consider to be
independent on pages 134-135 of this report. Over 50% of the Board
(excluding the Chairman) are Non-Executive Directors. The Non-
Executive Directors constructively challenge and help develop
proposals on strategy. They are also responsible for scrutinising
management performance and ensuring that financial information, risks
and controls, and systems of risk management are robust. In order to
enhance Board engagement in Australia, the role of Senior
Independent Director Rio Tinto Limited was established in 2021. Simon
McKeon was appointed to this position and the terms of this
appointment were agreed by the Board.
The Board held an internally facilitated Board evaluation this year and
as part of this process, the Board met without the Chairman present
and a full assessment of the Chairman’s capability was carried out.
Details of this review are on pages 146-147. Each Director has
undertaken to allocate sufficient time to the Group in order to
discharge their responsibilities effectively, and this is kept under review
by the Nominations Committee. The Directors’ other appointments are
listed on pages 134-135.
I. Board processes and role of the Company Secretary
The governance framework on page 145 explains the governance
structure of the Board and sets out the relationship with the Chief
Executive. The roles and responsibilities of each committee are
explained. The Board insights section provides some examples of
the decision-making process of the Board and the steps it takes to
function effectively, including how it considers stakeholders in
this process.
The Group Company Secretary is the trusted interlocutor within the
Board and its committees, and between senior leadership and the
Non-Executive Directors. He is responsible for advising the Board,
through the Chairman, on all governance matters. He supports the
Chairman in ensuring that the information provided to the Board is
of sufficient quality and appropriate detail in order for the Board to
function effectively and efficiently. Composition, succession
and evaluation
J. Appointments to the board
The Nominations Committee ensures a formal, rigorous and
transparent procedure for the appointment of new Directors. It is also
responsible for Board succession planning, regularly assessing the
balance of skills, experience, diversity and capacity required to
oversee the delivery of Rio Tinto’s strategy. It reviews proposals for
appointments to the Executive Committee, and monitors executive
succession planning. This year the Nominations Committee oversaw
the succession of the Chairman and Chief Financial Officer and details
of this process are provided in the Nominations Committee report on
pages 148-150.
All Non-Executive Directors are members of the Nominations
Committee. The committee is chaired by the Chairman, apart from
when the committee is dealing with the appointment of his or her
successor. Only the Chairman and committee members have the right
to attend the meetings of the Nominations Committee; attendance by
all other individuals is by invitation only. The Nominations Committee
report sets out the Board’s approach to succession planning and how
this supports the development of a diverse pipeline, at all levels.
All Directors are subject to annual re-election at the AGMs.
Details of external search consultancies used for Board appointments
can be found in the Nominations Committee report.
K. Skills, experience and knowledge of the board and
its committees
In our succession planning, we aim to bring a diverse and
complementary range of skills, knowledge and experience to the
Board, so that we are equipped to navigate the operational, social,
regulatory and geopolitical complexity in which our business operates.
Achieving the right blend of skills and diversity to support effective
decision making is a continuing process. Further details on tenure and
experience of the Board are set out in the Nominations Committee
report on page 149. The Board biographies set out the specific
skills and experience which each Director brings to the Board
(pages 134-135).
L. Board evaluation
A Board and committee effectiveness evaluation is carried out each
year. The evaluation considers (but is not limited to): the balance of
Board members’ skills and experience; independence; diversity; the
running of the Board; and Directors’ knowledge of the company. Every
third year, the Board evaluation is externally facilitated. An internally
facilitated Board and committee evaluation was carried out in 2021.
The terms of reference for this review and the outcomes are discussed
on pages 146-147. An externally facilitated Board and committee
evaluation will be carried out in 2022.
Audit, risk and internal control
M. Internal and external audit
The Audit Committee monitors the independence and effectiveness of
the Internal Audit function and external auditors. The Audit Committee
is responsible for reviewing key judgments within the Group’s financial
statements and narrative reporting, with the aim of maintaining the
integrity of the Group’s financial reporting. For further detail, please
refer to the Audit Committee report on pages 151-155.
The appointment of KPMG as external auditor for the 2021 financial
year was approved by shareholders at our AGMs in 2021.
N. Fair, balanced and understandable assessment
The Board is responsible for the presentation of a fair, balanced and
understandable assessment of the company’s position and prospects,
not only in the Annual Report. We have a robust process in place
including through the Disclosure Committee, to ensure that this is
the case.
O. Risk management and internal control framework
The Board is ultimately responsible for aligning our long-term strategic
objectives with the risk appetite of the company, taking into account
the principal and emerging risks faced by the company. Please refer to
pages 112-130 for further details on our business planning cycle and
risk management framework and how these support our longer-term
viability statement. For further details on our approach to risk, please
refer to the risk section on page 112.
Remuneration
P. Remuneration policies and practices
The Remuneration Committee supports the Board by setting our
Remuneration Policy. Through long-term and short-term incentives,
our Remuneration Policy is designed to help drive a performance
culture which incentivises executives to deliver the Group’s long-term
strategy and create superior shareholder value over the short, medium
and long term. The overarching aim is to ensure our remuneration
structure and policies reward fairly and responsibly with a clear link to
corporate and individual performance, and to the company’s long-term
strategy and values. We have worked to ensure that we have a clear
policy that can be understood by shareholders and stakeholders.
Q. Procedure for developing remuneration policy
We have a formal and transparent procedure for developing our
Remuneration Policy, and no Director is involved in deciding their own
remuneration. Executive remuneration is set with regard to the wider
workforce and through market benchmarking. For further detail,
please refer to the Remuneration Committee report on pages 160-198.
The Remuneration Committee is supported by remuneration consultant
Deloitte. The Board received assurance from the Remuneration
Committee and from Deloitte that Deloitte did not have any
connections with Rio Tinto or the Board that would have impaired its
independence. Please refer to page 172 of this Annual Report for
further detail.
R. Exercising independent judgement
The Remuneration Committee comprises 6 Non-Executive Directors to
ensure independent judgment with regard to remuneration outcomes.
The Remuneration Committee considers remuneration on an annual
basis and determines outcomes by assessing executive performance
against performance criteria, details of which can be found in the
Remuneration Committee report on pages 160-198 of this Annual
Report. This states how our Remuneration Policy has been applied and
sets out details of any adjustments made or discretions exercised.
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207
Compliance with governance codes and standards continued
ASX Principles
Principle 1: Lay solid foundations for management
and oversight
Recommendation 1.1
Rio Tinto plc and Rio Tinto Limited have a common Board of Directors.
The principal role of the Board is to set the Group’s strategy and to
review its strategic direction regularly. The Board also has responsibility
for corporate governance. A Board Charter setting out the role of the
Board and management and matters reserved for the Board is available
at riotinto.com.
The Board delegates responsibility for day-to-day management of the
business to the Chief Executive and other members of the Executive
Committee. A number of management committees support the
Chief Executive and the Executive Committee. The structure of these
committees is set out on page 145.
Recommendation 1.2
The Nominations Committee, on behalf of the Board, ensures a formal,
rigorous and transparent procedure for the appointment of new
Directors. A similar process is followed with the Executive Committee
and senior executive appointments, including a formal and rigorous
process to source strong candidates from diverse backgrounds and
conducting appropriate background and reference checks on the
shortlisted candidates. This year the Nominations Committee oversaw
the succession of the Chairman and Chief Financial Officer and details
of these processes are provided in the Nominations Committee report
on pages 148-150.
The notice of annual general meeting provides all material information
in Rio Tinto’s possession relevant to decisions on election and
re-election of Directors, including a statement from the Board that it
considers all Directors continue to perform effectively and demonstrate
appropriate levels of commitment. It also provides reasons why each
Director is recommended for re-election, highlighting their relevant
skills and experience. Further information on the skills and experience
of each Director is set out on pages 134-135 of the Annual Report.
Recommendation 1.3
The company has written agreements setting out the terms of
appointment for each Director and senior executive. Non-Executive
Directors are appointed by letters of appointment. Executive Directors
and other senior executives are employed through employment
service contracts. Further information is set out on pages 187-188 in
the Remuneration report.
Recommendation 1.4
The Group Company Secretary is accountable to the Board and
advises the Chairman, and, through the Chairman, the Board on all
governance matters. The appointment and removal of the Group
Company Secretary is a matter reserved for the Board.
Recommendation 1.5
Rio Tinto has a Group-wide, Board-endorsed inclusion and diversity
policy. The policy is available at riotinto.com. The Board sets objectives
for achieving diversity for the Board, senior executives and the
workforce, and annually reviews the Group’s performance against
them. Page 78 of the Annual Report sets out the measurable objectives
and our performance against them. The respective proportions of men
and women on the Board, in senior executive positions and across the
whole organisation, are reported on pages 78 and 149 of the
Annual Report.
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Recommendation 1.6
The performance of the Board, and of each of its committees and
individual Directors, was reviewed in 2021, as it is each year. Detailed
information on the Board and committee evaluation and the evaluation
of the Chairman and the Non-Executive Directors is set out on page 146
of the Annual Report.
Recommendation 1.7
The performance of Executive Committee members, including
Directors, is continually evaluated as part of the Group’s performance
evaluation cycle. Further details are set out in the Remuneration report
on pages 160-198.
Principle 2: Structure the board to be effective and
add value
Recommendation 2.1
The Nominations Committee includes all Non-Executive Directors and
is chaired by the Chairman of the Board. The Board is satisfied that all
Non-Executive Directors, including the Chairman, continue to meet the
test for independence under the ASX Principles. The Nominations
Committee’s terms of reference are available at riotinto.com. The
Nominations Committee report on pages 148-150 provides further
details on its role and responsibilities. Details on membership, the
number of times the Committee met, and the attendance of members
are set out on page 147.
Recommendation 2.2
A Board skills matrix showing key attributes in terms of skills,
experience and diversity that are relevant to the Board is set out on
page 150 of the Annual Report.
Recommendations 2.3, 2.4, 2.5
The Nominations Committee is responsible for assessing the
independence of each Non-Executive Director against an
independence framework which combines the requirements of the
Code, the ASX Principles and the NYSE Standards. The Nominations
Committee reviews and approves this framework each year.
The Board is satisfied that all of its Non-Executive Directors are
independent in character and judgment and are free from any
relationships (material or otherwise) or circumstances that could create
a conflict of interest.
The Chairman was considered independent upon his appointment and,
in the Board’s view, he continues to satisfy the tests for independence
under the ASX Principles and the NYSE Standards.
The name, skills and experience of each Director, together with their
terms in office, are shown in the biographical details on pages 134-135.
Recommendation 2.6
On joining Rio Tinto, all Directors receive a full, formal induction
programme. It is delivered over a number of months, and tailored to
their specific requirements, taking into account their prospective
committee responsibilities. Details of the induction programme for the
Chair-designate are set out on page 150 of the Annual Report.
The annual Board evaluation process identifies training and
development needs for the Board and individual Directors. All Directors
are expected to commit to continuing their development during their
tenure. This is supported through a combination of: site visits,
teach-ins, deep dives and internal business and operational briefings
provided in or around scheduled Board and committee meetings. In
addition, the Group Company Secretary provides regular updates on
corporate governance developments in the UK, Australia and the US.
Further details are set out on pages 146-147 of the Annual Report.
Compliance with governance codes and standards continued
Governance
Principle 1: Lay solid foundations for management
ASX Principles
and oversight
Recommendation 1.1
Recommendation 1.6
The performance of the Board, and of each of its committees and
individual Directors, was reviewed in 2021, as it is each year. Detailed
information on the Board and committee evaluation and the evaluation
of the Chairman and the Non-Executive Directors is set out on page 146
Rio Tinto plc and Rio Tinto Limited have a common Board of Directors.
The principal role of the Board is to set the Group’s strategy and to
review its strategic direction regularly. The Board also has responsibility
of the Annual Report.
Recommendation 1.7
for corporate governance. A Board Charter setting out the role of the
The performance of Executive Committee members, including
Board and management and matters reserved for the Board is available
Directors, is continually evaluated as part of the Group’s performance
at riotinto.com.
The Board delegates responsibility for day-to-day management of the
business to the Chief Executive and other members of the Executive
Committee. A number of management committees support the
Chief Executive and the Executive Committee. The structure of these
committees is set out on page 145.
Recommendation 1.2
The Nominations Committee, on behalf of the Board, ensures a formal,
rigorous and transparent procedure for the appointment of new
Directors. A similar process is followed with the Executive Committee
and senior executive appointments, including a formal and rigorous
process to source strong candidates from diverse backgrounds and
conducting appropriate background and reference checks on the
shortlisted candidates. This year the Nominations Committee oversaw
the succession of the Chairman and Chief Financial Officer and details
of these processes are provided in the Nominations Committee report
on pages 148-150.
evaluation cycle. Further details are set out in the Remuneration report
on pages 160-198.
Principle 2: Structure the board to be effective and
add value
Recommendation 2.1
The Nominations Committee includes all Non-Executive Directors and
is chaired by the Chairman of the Board. The Board is satisfied that all
Non-Executive Directors, including the Chairman, continue to meet the
test for independence under the ASX Principles. The Nominations
Committee’s terms of reference are available at riotinto.com. The
Nominations Committee report on pages 148-150 provides further
details on its role and responsibilities. Details on membership, the
number of times the Committee met, and the attendance of members
are set out on page 147.
Recommendation 2.2
The notice of annual general meeting provides all material information
experience and diversity that are relevant to the Board is set out on
in Rio Tinto’s possession relevant to decisions on election and
page 150 of the Annual Report.
A Board skills matrix showing key attributes in terms of skills,
re-election of Directors, including a statement from the Board that it
considers all Directors continue to perform effectively and demonstrate
appropriate levels of commitment. It also provides reasons why each
Director is recommended for re-election, highlighting their relevant
skills and experience. Further information on the skills and experience
of each Director is set out on pages 134-135 of the Annual Report.
Recommendation 1.3
The company has written agreements setting out the terms of
appointment for each Director and senior executive. Non-Executive
Directors are appointed by letters of appointment. Executive Directors
and other senior executives are employed through employment
service contracts. Further information is set out on pages 187-188 in
the Remuneration report.
Recommendation 1.4
The Group Company Secretary is accountable to the Board and
advises the Chairman, and, through the Chairman, the Board on all
governance matters. The appointment and removal of the Group
Company Secretary is a matter reserved for the Board.
Recommendation 1.5
Rio Tinto has a Group-wide, Board-endorsed inclusion and diversity
policy. The policy is available at riotinto.com. The Board sets objectives
for achieving diversity for the Board, senior executives and the
workforce, and annually reviews the Group’s performance against
them. Page 78 of the Annual Report sets out the measurable objectives
and our performance against them. The respective proportions of men
and women on the Board, in senior executive positions and across the
whole organisation, are reported on pages 78 and 149 of the
Annual Report.
Recommendations 2.3, 2.4, 2.5
The Nominations Committee is responsible for assessing the
independence of each Non-Executive Director against an
independence framework which combines the requirements of the
Code, the ASX Principles and the NYSE Standards. The Nominations
Committee reviews and approves this framework each year.
The Board is satisfied that all of its Non-Executive Directors are
independent in character and judgment and are free from any
relationships (material or otherwise) or circumstances that could create
a conflict of interest.
The Chairman was considered independent upon his appointment and,
in the Board’s view, he continues to satisfy the tests for independence
under the ASX Principles and the NYSE Standards.
The name, skills and experience of each Director, together with their
terms in office, are shown in the biographical details on pages 134-135.
Recommendation 2.6
On joining Rio Tinto, all Directors receive a full, formal induction
programme. It is delivered over a number of months, and tailored to
their specific requirements, taking into account their prospective
committee responsibilities. Details of the induction programme for the
Chair-designate are set out on page 150 of the Annual Report.
The annual Board evaluation process identifies training and
development needs for the Board and individual Directors. All Directors
are expected to commit to continuing their development during their
tenure. This is supported through a combination of: site visits,
teach-ins, deep dives and internal business and operational briefings
provided in or around scheduled Board and committee meetings. In
addition, the Group Company Secretary provides regular updates on
corporate governance developments in the UK, Australia and the US.
Further details are set out on pages 146-147 of the Annual Report.
Principle 3: Instil a culture of acting lawfully, ethically
and responsibly
Recommendations 3.1, 3.2, 3.3, 3.4
Through our The Way We Work framework, the Board sets the
company’s purpose, values, and standards for the Group’s employees.
In 2021, the Board approved a new set of values as set out on page 18.
The Board is committed to acting in accordance with these values,
championing, and embedding these in the organisation. The Way We
Work is available at riotinto.com/ethics.
Rio Tinto’s confidential and independently operated whistleblowing
programme (myVoice) offers an avenue through which our employees,
contractors, suppliers and customers can report concerns anonymously,
subject to local law. These may include concerns about the business,
or behaviour of individuals, including suspicion of violations of financial
reporting, safety or environmental procedures or other business
integrity issues. The programme features telephone and web
submissions, a case management tool, and a reporting tool to allow for
improved analysis of case statistics.
The myVoice procedure explains how concerns regarding matters
relating to Rio Tinto, its business and its people can be raised, in
confidence and without fear of retaliation. The procedure also sets out
who can make a report and what they can expect from Rio Tinto if they
do report a concern. The procedure is available at riotinto.com.
Further details on myVoice are set out on page 107. Rio Tinto’s
business integrity standard sets out the Group’s position on issues
relating to bribery and corruption. This is available at riotinto.com.
Further information is set out on page 107.
Oversight of the Group’s ethics, integrity and compliance programme
now falls within the remit of the Board.
Principle 4: Safeguard integrity in corporate reports
Recommendation 4.1
The Audit Committee report on pages 151-155 provides details of the
role and responsibilities of the Committee. The Audit Committee’s
terms of reference are available at riotinto.com. Further details on
membership, the number of times the Committee met during 2021 and
the attendance of members are set out on pages 134-135 and 147.
Recommendation 4.2
Details on compliance with the financial reporting requirements
contemplated under this recommendation are set out on pages
203-204 of the Annual Report.
Recommendation 4.3
We have a thorough and rigorous review process in place to ensure
integrity of the periodic reports we release to the market. Rio Tinto
communicates with the market through accurate, clear, concise and
effective reporting, and contents of periodic reports are verified by the
subject matter experts and reviewed by the relevant Group functions.
Such reports are then reviewed and considered by the Group
Disclosure Committee for release to the market.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
Rio Tinto recognises the importance of effective and timely
communication with shareholders and the wider investment community.
It is our policy to make sure that all information disclosed or released by
the Group is accurate, complete and timely and complies with all
continuous and other disclosure obligations under applicable listing
rules and other relevant legislation.
To ensure that trading in our securities takes place in an informed and
orderly market, we have established a Disclosure Committee to
oversee compliance with our continuous disclosure obligations.
The Group disclosure and communications policy, and the terms of
reference of our Disclosure Committee, together with our adopted
procedures in relation to disclosure and management of relevant
information, support compliance with our disclosure obligations.
A copy of the Group disclosure and communications policy is available
at riotinto.com.
The Group’s Disclosure Committee is responsible for determining
whether information relating to Rio Tinto may require disclosure to
the markets under the continuous disclosure requirements in the
jurisdictions in which Rio Tinto is listed. In accordance with its terms
of reference, the specific focus of the Disclosure Committee is to
consider and determine on a timely basis whether information would,
to the extent that the information is not public and relates directly or
indirectly to Rio Tinto, be likely to have a material effect on the price of
Rio Tinto securities if that information was generally available.
The members of the Committee are the Chief Executive; the Chief
Financial Officer; the Group Company Secretary; the Chief Legal
Officer & External Affairs; the Head of Investor Relations; and the
Chief Executive Australia.
Recommendation 5.2
Consistent with the Group’s disclosure protocols, the Board is provided
with copies of all material market announcements promptly after their
being released to the market.
Recommendation 5.3
As a matter of practice, all our new or substantive investor
presentations are released to the market via ASX and LSE market
announcement platforms.
Principle 6: Respect the rights of security holders
Recommendation 6.1
Riotinto.com includes pages dedicated to corporate governance,
providing information on compliance with governance codes and
standards (the Code, the ASX Principles and the NYSE Standards); the
terms of reference of the committees; risk management and financial
reporting; and Board governance including selection, appointment and
re-election of Directors, Directors’ independence and Board
performance evaluation.
All information released to the markets is posted in the media section of
riotinto.com. Riotinto.com also provides general investor information.
Annual and half-year results, as well as any major presentations, are
webcast and the materials are available at riotinto.com, which also
contains presentation material from investor seminars.
208
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209
Compliance with governance codes and standards continued
Recommendation 6.2
Recommendation 7.3
Further information on Rio Tinto’s Group Internal Audit function is set
out on page 155 of the Annual Report.
Recommendation 7.4
A description of the principal risks and uncertainties that could affect
Rio Tinto (including economic, environmental and social sustainability
risks), and of the Group’s governance framework for risk management
and internal control, is set on pages 117-130 of the Annual Report.
Further information on sustainability is available on pages 72-111
of the Annual Report.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Remuneration report on pages 160-198 provides details on
the role and responsibilities of the Committee. The Remuneration
Committee’s terms of reference are available at riotinto.com.
Further details on membership, the number of times the Committee
met during 2021, and the attendance of members are set out on
pages 134-135 and 147.
Recommendation 8.2
Rio Tinto’s policies and practices regarding remuneration of
Non-Executive Directors, Directors and senior executives are set
out on pages 160-198 in the Remuneration report.
Recommendation 8.3
Rio Tinto’s approach on participating in equity-based remuneration
schemes is set out on page 203 of the Annual Report. This is also
addressed in the Rio Tinto securities dealing policy which is available
at riotinto.com.
Our main channels of communication with the investment community
are through the Chairman, Chief Executive and Chief Financial Officer,
who have regular meetings with the Group’s major shareholders.
The Senior Independent Director, Rio Tinto plc, and the Senior
Independent Director, Rio Tinto Limited, have a specific responsibility
under the UK Code and the Board Charter to be available to
shareholders who have concerns which have not been resolved
through contact with the Chairman, Chief Executive or Chief Financial
Officer, or for whom such contact is inappropriate. We have a number
of processes and initiatives to ensure that members of the Board
understand the views of major shareholders. The Chief Financial
Officer reports to the Board at each meeting, and provides regular
investor updates. In addition, the Head of Investor Relations reports
regularly to the Board, and an annual survey of major shareholders’
opinions is presented to the Board by the Group’s investor relations
advisers. Further information on engagement with shareholders and
investors during 2021 is set out on page 142 of the Annual Report.
Recommendations 6.3, 6.4
The AGMs present an opportunity to provide a summary business
presentation, to inform shareholders of recent developments, and to
give them the opportunity to ask questions. Generally, the chairs of all
Board committees are available to answer questions raised by
shareholders, and all Directors are expected to attend where possible.
The AGMs are generally webcast and transcripts of the Chairman’s
and Chief Executive’s speeches are made available at riotinto.com.
A summary of the proceedings at the meetings, and the results of
voting on resolutions, are made available as soon as practicable after
the meetings. At Rio Tinto AGMs, all resolutions are decided by poll
and not by show of hands.
In 2021, due to the pandemic, the Rio Tinto Limited AGM was held in
Perth as a hybrid meeting. With the use of technology, shareholders
who could not attend in person were offered the opportunity to virtually
participate at the AGM, ask questions and vote on the resolutions.
Recommendation 6.5
Shareholders can choose to communicate electronically with the
companies and the share registrars. The contact details for the
registrars is set out on page 419 and at riotinto.com.
Principle 7: Recognise and manage risk
Recommendations 7.1, 7.2
The Board is ultimately responsible for risk management and internal
controls and for ensuring that the systems in place are robust and
take into account the principal risks faced by the Group. The Board
delegates certain matters relating to the Group’s risk management
framework to the Audit Committee, and the Audit Committee
provides updates to the Board on matters discussed at each meeting.
The Sustainability Committee advises the Board on risk appetite
tolerance and strategy with respect to sustainable development risks.
Further information about the Sustainability Committee is set out on
pages 156-158 of the Annual Report. Terms of reference for the
Sustainability Committee are available at riotinto.com. Further details
on the Group’s governance framework for risk management and
internal control are set out on pages 112-116, 152 and 154-155 of the
Annual Report.
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Recommendation 6.2
Recommendation 7.3
Our main channels of communication with the investment community
Further information on Rio Tinto’s Group Internal Audit function is set
are through the Chairman, Chief Executive and Chief Financial Officer,
out on page 155 of the Annual Report.
Recommendation 7.4
A description of the principal risks and uncertainties that could affect
Rio Tinto (including economic, environmental and social sustainability
risks), and of the Group’s governance framework for risk management
and internal control, is set on pages 117-130 of the Annual Report.
Further information on sustainability is available on pages 72-111
of the Annual Report.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Remuneration report on pages 160-198 provides details on
the role and responsibilities of the Committee. The Remuneration
Committee’s terms of reference are available at riotinto.com.
Further details on membership, the number of times the Committee
met during 2021, and the attendance of members are set out on
Recommendation 8.2
Rio Tinto’s policies and practices regarding remuneration of
Non-Executive Directors, Directors and senior executives are set
out on pages 160-198 in the Remuneration report.
Recommendation 8.3
Rio Tinto’s approach on participating in equity-based remuneration
schemes is set out on page 203 of the Annual Report. This is also
addressed in the Rio Tinto securities dealing policy which is available
at riotinto.com.
The AGMs present an opportunity to provide a summary business
pages 134-135 and 147.
Compliance with governance codes and standards continued
who have regular meetings with the Group’s major shareholders.
The Senior Independent Director, Rio Tinto plc, and the Senior
Independent Director, Rio Tinto Limited, have a specific responsibility
under the UK Code and the Board Charter to be available to
shareholders who have concerns which have not been resolved
through contact with the Chairman, Chief Executive or Chief Financial
Officer, or for whom such contact is inappropriate. We have a number
of processes and initiatives to ensure that members of the Board
understand the views of major shareholders. The Chief Financial
Officer reports to the Board at each meeting, and provides regular
investor updates. In addition, the Head of Investor Relations reports
regularly to the Board, and an annual survey of major shareholders’
opinions is presented to the Board by the Group’s investor relations
advisers. Further information on engagement with shareholders and
investors during 2021 is set out on page 142 of the Annual Report.
Recommendations 6.3, 6.4
presentation, to inform shareholders of recent developments, and to
give them the opportunity to ask questions. Generally, the chairs of all
Board committees are available to answer questions raised by
shareholders, and all Directors are expected to attend where possible.
The AGMs are generally webcast and transcripts of the Chairman’s
and Chief Executive’s speeches are made available at riotinto.com.
A summary of the proceedings at the meetings, and the results of
voting on resolutions, are made available as soon as practicable after
the meetings. At Rio Tinto AGMs, all resolutions are decided by poll
and not by show of hands.
In 2021, due to the pandemic, the Rio Tinto Limited AGM was held in
Perth as a hybrid meeting. With the use of technology, shareholders
who could not attend in person were offered the opportunity to virtually
participate at the AGM, ask questions and vote on the resolutions.
Recommendation 6.5
Shareholders can choose to communicate electronically with the
companies and the share registrars. The contact details for the
registrars is set out on page 419 and at riotinto.com.
Principle 7: Recognise and manage risk
Recommendations 7.1, 7.2
The Board is ultimately responsible for risk management and internal
controls and for ensuring that the systems in place are robust and
take into account the principal risks faced by the Group. The Board
delegates certain matters relating to the Group’s risk management
framework to the Audit Committee, and the Audit Committee
provides updates to the Board on matters discussed at each meeting.
The Sustainability Committee advises the Board on risk appetite
tolerance and strategy with respect to sustainable development risks.
Further information about the Sustainability Committee is set out on
pages 156-158 of the Annual Report. Terms of reference for the
Sustainability Committee are available at riotinto.com. Further details
on the Group’s governance framework for risk management and
internal control are set out on pages 112-116, 152 and 154-155 of the
Annual Report.
2021 Financial Statements
Primary financial statements
Group Income Statement
Group Statement of Comprehensive Income
Group Cash Flow Statement
Group Balance Sheet
Group Statement of Changes in Equity
Reconciliation with Australian Accounting Standards
Outline of dual listed companies structure and basis of
financial statements
Notes to the 2021 Financial Statements
Group income statement and cash flow statement
Note 1 Principal accounting policies
Note 2 Operating segments
Note 3 Operating segments – additional information
Note 4 Net operating costs (excluding items shown separately)
Note 5 Employment costs
Note 6 Impairment charges net of reversals
Note 7 Share of profit after tax of
equity accounted units
Note 8 Finance income and finance costs
Note 9 Taxation
Note 10 Earnings per ordinary share
Note 11 Dividends
Group balance sheet
Note 12 Goodwill
Note 13 Intangible assets
Note 14 Property, plant and equipment
Note 15 Investments in equity accounted units
Note 16 Inventories
Note 17 Deferred taxation
Note 18 Receivables and other assets
Note 19 Other financial assets
Note 20 Cash and cash equivalents
Note 21 Borrowings and other financial liabilities
Note 22 Leases
Note 23 Consolidated net cash/(debt)
Note 24 Trade and other payables
Note 25 Provisions (including post-retirement benefits)
212
213
214
215
216
217
217
218
238
241
242
243
243
246
246
247
248
248
249
250
251
253
253
253
255
255
255
256
256
257
258
258
Capital and reserves
Note 26 Share capital – Rio Tinto plc
Note 27 Share capital – Rio Tinto Limited
Note 28 Other reserves and retained earnings
Additional disclosures
Note 29 Financial instruments and risk management
Note 30 Contingencies and commitments
Note 31 Average number of employees
Note 32 Principal subsidiaries
Note 33 Principal joint operations
Note 34 Principal joint ventures
Note 35 Principal associates
Note 36 Purchases and sales of subsidiaries, joint ventures,
associates and other interests in businesses
Note 37 Directors’ and key management remuneration
Note 38 Auditors’ remuneration
Note 39 Related-party transactions
Note 40 Exchange rates in US$
Note 41 Share-based payments
Note 42 Post-retirement benefits
Note 43 Rio Tinto Limited parent company disclosures
Note 44 Related undertakings
Note 45 Events after the balance sheet date
Rio Tinto plc Company Information
Rio Tinto Financial Information by Business Unit
Australian Corporations Act – Summary of ASIC Relief
Directors’ Declaration
Independent Auditors’ Reports of KPMG LLP to the
Members of Rio Tinto plc and of KPMG to the Members
of Rio Tinto Limited
Auditors’ Independence Declaration
Alternative Performance Measures
Financial Summary 2012-2021
Summary of Financial Data in Australian
Dollars, Sterling and US Dollars
260
260
261
262
272
275
276
278
279
280
281
281
282
282
283
283
286
291
292
311
312
318
321
322
323
342
343
348
349
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211
Financial Statements
Financial statements
Group Income Statement
Years ended 31 December
Group Income Statement
Years ended 31 December
Consolidated operations
Consolidated sales revenue
Net operating costs (excluding items shown separately)
Impairment charges net of reversals
Losses on disposal of interest in business
Exploration and evaluation costs
Profit relating to interests in undeveloped projects
Operating profit
Share of profit after tax of equity accounted units
Impairment of investments in equity accounted units
Profit before finance items and taxation
Finance items
Net exchange gains/(losses) on net external and intragroup debt balances
Net losses on derivatives not qualifying for hedge accounting
Finance income
Finance costs
Amortisation of discount on provisions
Profit before taxation
Taxation
Profit after tax for the year
– attributable to owners of Rio Tinto (net earnings)
– attributable to non-controlling interests
Basic earnings per share
Diluted earnings per share
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
Note
2,3
4
6
2,36
13
13
7
6
8
8
9
2021
US$m
2020
US$m
2019
US$m
63,495
(32,690)
(269)
—
(726)
7
29,817
1,042
—
30,859
802
(231)
64
(243)
(418)
(26)
30,833
(8,258)
22,575
21,094
1,481
44,611
(26,254)
(904)
—
(625)
1
16,829
652
(339)
17,142
(1,124)
(123)
141
(268)
(377)
(1,751)
15,391
(4,991)
10,400
9,769
631
43,165
(27,307)
(3,487)
(291)
(624)
10
11,466
301
—
11,767
58
(68)
300
(554)
(384)
(648)
11,119
(4,147)
6,972
8,010
(1,038)
10 1,303.4 c
10 1,295.0 c
604.0 c
599.8 c
491.4 c
487.8 c
212
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Financial Statements
Financial Statements
Financial statements
Group Income Statement
Group Income Statement
Years ended 31 December
Years ended 31 December
Group Income Statement
Years ended 31 December
Consolidated operations
Consolidated operations
Consolidated sales revenue
Consolidated sales revenue
Net operating costs (excluding items shown separately)
Net operating costs (excluding items shown separately)
Impairment charges net of reversals
Impairment charges net of reversals
Losses on disposal of interest in business
Losses on disposal of interest in business
Exploration and evaluation costs
Exploration and evaluation costs
Profit relating to interests in undeveloped projects
Profit relating to interests in undeveloped projects
Operating profit
Operating profit
Share of profit after tax of equity accounted units
Share of profit after tax of equity accounted units
Impairment of investments in equity accounted units
Impairment of investments in equity accounted units
Profit before finance items and taxation
Profit before finance items and taxation
Net exchange gains/(losses) on net external and intragroup debt balances
Net exchange gains/(losses) on net external and intragroup debt balances
Net losses on derivatives not qualifying for hedge accounting
Net losses on derivatives not qualifying for hedge accounting
Finance items
Finance items
Finance income
Finance income
Finance costs
Finance costs
Amortisation of discount on provisions
Amortisation of discount on provisions
Profit before taxation
Profit before taxation
Taxation
Taxation
Profit after tax for the year
Profit after tax for the year
– attributable to owners of Rio Tinto (net earnings)
– attributable to owners of Rio Tinto (net earnings)
– attributable to non-controlling interests
– attributable to non-controlling interests
Basic earnings per share
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
Note
Note
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
2,3
2,3
63,495
63,495
44,611
44,611
(32,690)
(32,690)
(26,254)
(26,254)
16,829
16,829
11,466
11,466
30,859
30,859
17,142
17,142
11,767
11,767
4
4
6
6
2,36
2,36
13
13
13
13
(269)
(269)
(726)
(726)
—
—
7
7
29,817
29,817
1,042
1,042
—
—
7
7
6
6
8
8
8
8
802
802
(231)
(231)
64
64
(243)
(243)
(418)
(418)
(26)
(26)
30,833
30,833
9
9
(8,258)
(8,258)
22,575
22,575
21,094
21,094
1,481
1,481
43,165
43,165
(27,307)
(27,307)
(3,487)
(3,487)
(291)
(291)
(624)
(624)
10
10
301
301
—
—
58
58
(68)
(68)
300
300
(554)
(554)
(384)
(384)
(648)
(648)
11,119
11,119
(4,147)
(4,147)
6,972
6,972
8,010
8,010
(1,038)
(1,038)
(904)
(904)
—
—
(625)
(625)
1
1
652
652
(339)
(339)
(1,124)
(1,124)
(123)
(123)
141
141
(268)
(268)
(377)
(377)
(1,751)
(1,751)
15,391
15,391
(4,991)
(4,991)
10,400
10,400
9,769
9,769
631
631
10 1,303.4 c
10 1,303.4 c
10 1,295.0 c
10 1,295.0 c
604.0 c
604.0 c
599.8 c
599.8 c
491.4 c
491.4 c
487.8 c
487.8 c
Group Statement of Comprehensive Income
Years ended 31 December
Group Statement of Comprehensive Income
Years ended 31 December
Financial statements
Profit after tax for the year
Other comprehensive (loss)/income
Items that will not be reclassified to the income statement:
Re-measurement gains/(losses) on pension and post-retirement healthcare plans
Changes in the fair value of equity investments held at fair value through other comprehensive income (FVOCI)
Tax relating to these components of other comprehensive income
Share of other comprehensive income/(losses) of equity accounted units, net of tax
Items that have been/may be subsequently reclassified to the income statement:
Currency translation adjustment(a)
Currency translation on companies disposed of, transferred to the income statement
Fair value movements:
– Cash flow hedge (losses)/gains
– Cash flow hedge losses/(gains) transferred to the income statement
Net change in costs of hedging reserve
Tax relating to these components of other comprehensive loss/(income)
Share of other comprehensive (losses)/income of equity accounted units, net of tax
Other comprehensive (loss)/income for the year, net of tax
Total comprehensive income for the year
– attributable to owners of Rio Tinto
– attributable to non-controlling interests
Note
2021
US$m
2020
US$m
22,575
10,400
2019
US$m
6,972
42
9
1,026
5
(305)
12
738
(474)
10
112
(6)
(358)
(262)
(5)
83
(6)
(190)
28
9
(1,843)
—
2,967
—
343
215
(211)
14
(18)
62
(12)
(1,270)
21,305
19,896
1,409
24
(63)
7
3
4
2,584
12,984
12,201
783
12
(41)
3
(6)
10
346
7,318
8,351
(1,033)
(a)
Excludes a currency translation charge of US$211 million (2020: gain of US$333 million; 2019: charge of US$29 million) arising on Rio Tinto Limited’s share capital for the year ended
31 December 2021, which is recognised in the Group statement of changes in equity. Refer to the Group statement of changes in equity on page 216.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
212
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213
213
Financial Statements
Financial statements continued
Group Cash Flow Statement
Years ended 31 December
Group Cash Flow Statement
Years ended 31 December
Cash flows from consolidated operations(a)
Dividends from equity accounted units
Cash flows from operations
Net interest paid
Dividends paid to holders of non-controlling interests in subsidiaries
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets
Disposals of subsidiaries, joint ventures, unincorporated joint operations and associates
Purchases of financial assets
Sales of financial assets(b)
Sales of property, plant and equipment and intangible assets
Net receipts/(funding) from/of equity accounted units
Other investing cash flows(c)
Net cash used in investing activities
Cash flows before financing activities
Cash flows from financing activities
Equity dividends paid to owners of Rio Tinto
Proceeds from additional borrowings(d)
Repayment of borrowings and associated derivatives(e)(f)
Lease principal payments
Proceeds from issue of equity to non-controlling interests
Own shares purchased from owners of Rio Tinto
Other financing cash flows
Net cash flows used in financing activities
Effects of exchange rates on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents less overdrafts
Closing cash and cash equivalents less overdrafts
(a) Cash flows from consolidated operations
Profit after tax for the year
Adjustments for:
– Taxation
– Finance items
– Share of profit after tax of equity accounted units
– Losses on disposal of interest in business
– Impairment charges of investments in equity accounted units after tax
– Impairment charges net of reversals
– Depreciation and amortisation
– Provisions (including exchange differences on provisions)
– Pension settlement
Utilisation of provisions
Utilisation of provision for post-retirement benefits
Change in inventories
Change in receivables and other assets(g)
Change in trade and other payables
Other items(h)
Note
2
36
11
21
21
22
20
36
6
6
25
25
2021
US$m
33,936
1,431
35,367
2020
US$m
21,822
594
22,416
(438)
(1,090)
(8,494)
25,345
(569)
(683)
(5,289)
15,875
(7,384)
4
(45)
114
61
6
85
(7,159)
(6,189)
10
(5)
63
45
(43)
(437)
(6,556)
2019
US$m
19,705
669
20,374
(537)
(376)
(4,549)
14,912
(5,488)
(80)
(43)
83
49
(33)
11
(5,501)
18,186
9,319
9,411
(15,357)
1,488
(1,707)
(358)
66
—
6
(15,862)
100
2,424
10,381
12,805
(6,132)
125
(721)
(324)
129
(208)
1
(7,130)
165
2,354
8,027
10,381
(10,334)
80
(203)
(315)
101
(1,552)
4
(12,219)
(54)
(2,862)
10,889
8,027
22,575
10,400
6,972
8,258
26
(1,042)
—
—
269
4,697
1,903
(291)
(771)
(129)
(1,397)
(367)
685
(480)
4,991
1,751
(652)
—
339
904
4,279
894
—
(582)
(192)
(281)
(562)
558
(25)
33,936
21,822
4,147
648
(301)
291
—
3,487
4,384
753
—
(539)
(205)
28
163
(191)
68
19,705
(b)
(c)
(d)
(e)
(f)
(g)
(h)
In 2021, the Group received net proceeds of US$107 million (2020: net proceeds of US$58 million and 2019: net purchase of US$28 million) from its sales and purchases of investments
within a separately managed portfolio of fixed income instruments. Purchases and sales of these securities are reported on a net cash flow basis within “Sales of financial assets” or
“Purchases of financial assets” depending on the overall net position at each reporting date.
In 2021 other investing cash flows includes inflows relating to net settlement upon completion of a transaction increasing the Group’s 60% share in the Diavik Diamond Mine to sole
ownership, refer to note 36. In 2020, other investing cash flows included US$299 million cash outflow relating to payments made by Energy Resources Australia into a trust fund controlled
by the Government of Australia. At 31 December 2021 the total amount held in the trust fund was US$388 million (31 December 2020: US$410 million).
On 28 October 2021, we issued US$1.25 billion 30-years fixed rate SEC-registered debt securities with a coupon of 2.75%. We received the funds net of issuance fees and discount.
During the last quarter of 2021, we completed a US$1.2 billion (nominal value) bond buy-back programme. The notes purchased and redeemed have been cancelled. The net cash outflow
of US$1.27 billion represents the repayment of the bond at a premium offset by the monetisation of the gain from the derivatives that hedged the bond.
During 2020, we repaid our €402 million (nominal value) Rio Tinto Finance plc Euro Bonds on their maturity. The total cash outflow of US$526 million included the cash outflow of the bond
and the realised loss from the derivatives that hedged the bonds.
In 2021, the Mongolian Tax Authority required payment by Oyu Tolgoi of US$356 million in relation to disputed tax matters. Oyu Tolgoi continues to dispute the matters and has classified
amounts subject to international arbitration as prepayments pending resolution.
At 31 December 2021, other items include US$336 million related to a gain on recognition of a new wharf at Kitimat, Canada with no associated cash flow.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
214
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Financial Statements
Financial Statements
Financial statements continued
Group Cash Flow Statement
Group Cash Flow Statement
Years ended 31 December
Years ended 31 December
Group Cash Flow Statement
Years ended 31 December
Cash flows from consolidated operations(a)
Cash flows from consolidated operations(a)
Dividends from equity accounted units
Dividends from equity accounted units
Cash flows from operations
Cash flows from operations
Dividends paid to holders of non-controlling interests in subsidiaries
Dividends paid to holders of non-controlling interests in subsidiaries
Net interest paid
Net interest paid
Tax paid
Tax paid
Net cash generated from operating activities
Net cash generated from operating activities
Cash flows from investing activities
Cash flows from investing activities
Purchases of property, plant and equipment and intangible assets
Purchases of property, plant and equipment and intangible assets
Disposals of subsidiaries, joint ventures, unincorporated joint operations and associates
Disposals of subsidiaries, joint ventures, unincorporated joint operations and associates
Purchases of financial assets
Purchases of financial assets
Sales of financial assets(b)
Sales of financial assets(b)
Sales of property, plant and equipment and intangible assets
Sales of property, plant and equipment and intangible assets
Net receipts/(funding) from/of equity accounted units
Net receipts/(funding) from/of equity accounted units
Other investing cash flows(c)
Other investing cash flows(c)
Net cash used in investing activities
Net cash used in investing activities
Cash flows before financing activities
Cash flows before financing activities
Cash flows from financing activities
Cash flows from financing activities
Equity dividends paid to owners of Rio Tinto
Equity dividends paid to owners of Rio Tinto
Proceeds from additional borrowings(d)
Proceeds from additional borrowings(d)
Repayment of borrowings and associated derivatives(e)(f)
Repayment of borrowings and associated derivatives(e)(f)
Lease principal payments
Lease principal payments
Proceeds from issue of equity to non-controlling interests
Proceeds from issue of equity to non-controlling interests
Own shares purchased from owners of Rio Tinto
Own shares purchased from owners of Rio Tinto
Other financing cash flows
Other financing cash flows
Net cash flows used in financing activities
Net cash flows used in financing activities
Effects of exchange rates on cash and cash equivalents
Effects of exchange rates on cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents less overdrafts
Opening cash and cash equivalents less overdrafts
Closing cash and cash equivalents less overdrafts
Closing cash and cash equivalents less overdrafts
(a) Cash flows from consolidated operations
(a) Cash flows from consolidated operations
Profit after tax for the year
Profit after tax for the year
Adjustments for:
Adjustments for:
– Taxation
– Taxation
– Finance items
– Finance items
– Share of profit after tax of equity accounted units
– Share of profit after tax of equity accounted units
– Losses on disposal of interest in business
– Losses on disposal of interest in business
– Impairment charges of investments in equity accounted units after tax
– Impairment charges of investments in equity accounted units after tax
– Impairment charges net of reversals
– Impairment charges net of reversals
– Depreciation and amortisation
– Depreciation and amortisation
– Provisions (including exchange differences on provisions)
– Provisions (including exchange differences on provisions)
– Pension settlement
– Pension settlement
Utilisation of provisions
Utilisation of provisions
Utilisation of provision for post-retirement benefits
Utilisation of provision for post-retirement benefits
Change in inventories
Change in inventories
Change in receivables and other assets(g)
Change in receivables and other assets(g)
Change in trade and other payables
Change in trade and other payables
Other items(h)
Other items(h)
Note
Note
2021
2021
US$m
US$m
33,936
33,936
1,431
1,431
35,367
35,367
2020
2020
US$m
US$m
21,822
21,822
594
594
22,416
22,416
(438)
(438)
(1,090)
(1,090)
(8,494)
(8,494)
25,345
25,345
(569)
(569)
(683)
(683)
(5,289)
(5,289)
15,875
15,875
2019
2019
US$m
US$m
19,705
19,705
669
669
20,374
20,374
(537)
(537)
(376)
(376)
(4,549)
(4,549)
14,912
14,912
2
2
36
36
(7,384)
(7,384)
(6,189)
(6,189)
(5,488)
(5,488)
4
4
(45)
(45)
114
114
61
61
6
6
85
85
10
10
(5)
(5)
63
63
45
45
(43)
(43)
(437)
(437)
(80)
(80)
(43)
(43)
83
83
49
49
(33)
(33)
11
11
(7,159)
(7,159)
(6,556)
(6,556)
(5,501)
(5,501)
18,186
18,186
9,319
9,319
9,411
9,411
(15,357)
(15,357)
(6,132)
(6,132)
(10,334)
(10,334)
11
11
21
21
21
21
22
22
20
20
36
36
6
6
6
6
25
25
25
25
(15,862)
(15,862)
(7,130)
(7,130)
(12,219)
(12,219)
1,488
1,488
(1,707)
(1,707)
(358)
(358)
66
66
—
—
6
6
100
100
2,424
2,424
10,381
10,381
12,805
12,805
8,258
8,258
26
26
—
—
—
—
269
269
4,697
4,697
1,903
1,903
(291)
(291)
(771)
(771)
(129)
(129)
(1,397)
(1,397)
(367)
(367)
685
685
(480)
(480)
125
125
(721)
(721)
(324)
(324)
129
129
80
80
(203)
(203)
(315)
(315)
101
101
(208)
(208)
(1,552)
(1,552)
1
1
4
4
165
165
2,354
2,354
8,027
8,027
10,381
10,381
(54)
(54)
(2,862)
(2,862)
10,889
10,889
8,027
8,027
4,991
4,991
1,751
1,751
—
—
339
339
904
904
4,279
4,279
894
894
—
—
(582)
(582)
(192)
(192)
(281)
(281)
(562)
(562)
558
558
(25)
(25)
4,147
4,147
648
648
(301)
(301)
291
291
—
—
3,487
3,487
4,384
4,384
753
753
—
—
(539)
(539)
(205)
(205)
28
28
163
163
(191)
(191)
68
68
22,575
22,575
10,400
10,400
6,972
6,972
(1,042)
(1,042)
(652)
(652)
33,936
33,936
21,822
21,822
19,705
19,705
(b)
(b)
In 2021, the Group received net proceeds of US$107 million (2020: net proceeds of US$58 million and 2019: net purchase of US$28 million) from its sales and purchases of investments
In 2021, the Group received net proceeds of US$107 million (2020: net proceeds of US$58 million and 2019: net purchase of US$28 million) from its sales and purchases of investments
within a separately managed portfolio of fixed income instruments. Purchases and sales of these securities are reported on a net cash flow basis within “Sales of financial assets” or
within a separately managed portfolio of fixed income instruments. Purchases and sales of these securities are reported on a net cash flow basis within “Sales of financial assets” or
“Purchases of financial assets” depending on the overall net position at each reporting date.
“Purchases of financial assets” depending on the overall net position at each reporting date.
(c)
(c)
In 2021 other investing cash flows includes inflows relating to net settlement upon completion of a transaction increasing the Group’s 60% share in the Diavik Diamond Mine to sole
In 2021 other investing cash flows includes inflows relating to net settlement upon completion of a transaction increasing the Group’s 60% share in the Diavik Diamond Mine to sole
ownership, refer to note 36. In 2020, other investing cash flows included US$299 million cash outflow relating to payments made by Energy Resources Australia into a trust fund controlled
ownership, refer to note 36. In 2020, other investing cash flows included US$299 million cash outflow relating to payments made by Energy Resources Australia into a trust fund controlled
by the Government of Australia. At 31 December 2021 the total amount held in the trust fund was US$388 million (31 December 2020: US$410 million).
by the Government of Australia. At 31 December 2021 the total amount held in the trust fund was US$388 million (31 December 2020: US$410 million).
(d)
(d)
(e)
(e)
On 28 October 2021, we issued US$1.25 billion 30-years fixed rate SEC-registered debt securities with a coupon of 2.75%. We received the funds net of issuance fees and discount.
On 28 October 2021, we issued US$1.25 billion 30-years fixed rate SEC-registered debt securities with a coupon of 2.75%. We received the funds net of issuance fees and discount.
During the last quarter of 2021, we completed a US$1.2 billion (nominal value) bond buy-back programme. The notes purchased and redeemed have been cancelled. The net cash outflow
During the last quarter of 2021, we completed a US$1.2 billion (nominal value) bond buy-back programme. The notes purchased and redeemed have been cancelled. The net cash outflow
of US$1.27 billion represents the repayment of the bond at a premium offset by the monetisation of the gain from the derivatives that hedged the bond.
of US$1.27 billion represents the repayment of the bond at a premium offset by the monetisation of the gain from the derivatives that hedged the bond.
(f)
(f)
During 2020, we repaid our €402 million (nominal value) Rio Tinto Finance plc Euro Bonds on their maturity. The total cash outflow of US$526 million included the cash outflow of the bond
During 2020, we repaid our €402 million (nominal value) Rio Tinto Finance plc Euro Bonds on their maturity. The total cash outflow of US$526 million included the cash outflow of the bond
and the realised loss from the derivatives that hedged the bonds.
and the realised loss from the derivatives that hedged the bonds.
(g)
(g)
In 2021, the Mongolian Tax Authority required payment by Oyu Tolgoi of US$356 million in relation to disputed tax matters. Oyu Tolgoi continues to dispute the matters and has classified
In 2021, the Mongolian Tax Authority required payment by Oyu Tolgoi of US$356 million in relation to disputed tax matters. Oyu Tolgoi continues to dispute the matters and has classified
amounts subject to international arbitration as prepayments pending resolution.
amounts subject to international arbitration as prepayments pending resolution.
(h)
(h)
At 31 December 2021, other items include US$336 million related to a gain on recognition of a new wharf at Kitimat, Canada with no associated cash flow.
At 31 December 2021, other items include US$336 million related to a gain on recognition of a new wharf at Kitimat, Canada with no associated cash flow.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
Group Balance Sheet
At 31 December
Group Balance Sheet
At 31 December
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Investments in equity accounted units
Inventories
Deferred tax assets
Receivables and other assets
Tax recoverable
Other financial assets
Current assets
Inventories
Receivables and other assets
Tax recoverable
Other financial assets
Cash and cash equivalents
Total assets
Current liabilities
Borrowings and other financial liabilities
Trade and other payables
Tax payable
Provisions including post-retirement benefits
Non-current liabilities
Borrowings and other financial liabilities
Trade and other payables
Tax payable
Deferred tax liabilities
Provisions including post-retirement benefits
Total liabilities
Net assets
Capital and reserves
Share capital
– Rio Tinto plc
– Rio Tinto Limited
Share premium account
Other reserves
Retained earnings
Equity attributable to owners of Rio Tinto
Attributable to non-controlling interests
Total equity
Financial statements
Note
2021
US$m
2020
US$m
12
13
14
15
16
17
18
19
16
18
19
20
21
24
25
21
24
17
25
26
27
28
28
879
2,832
64,927
3,504
196
3,375
2,194
29
528
78,464
5,436
3,574
72
2,543
12,807
24,432
102,896
(1,381)
(7,733)
(1,407)
(2,106)
(12,627)
(12,788)
(798)
(660)
(3,503)
(15,930)
(33,679)
(46,306)
56,590
207
3,570
4,320
9,998
33,337
51,432
5,158
56,590
946
2,755
62,882
3,764
174
3,385
1,796
4
829
76,535
3,917
3,644
62
2,851
10,381
20,855
97,390
(607)
(7,421)
(1,850)
(1,729)
(11,607)
(13,408)
(820)
(477)
(3,239)
(15,936)
(33,880)
(45,487)
51,903
207
3,781
4,314
11,960
26,792
47,054
4,849
51,903
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
The financial statements on pages 212 to 311 were approved by the directors on 23 February 2022 and signed on their behalf by
Simon Thompson
Chairman
Jakob Stausholm
Chief Executive
Peter Cunningham
Chief Financial Officer
214
214
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215
215
Financial Statements
Financial statements continued
Group Statement of Changes in Equity
Group Statement of Changes in Equity
..
Year ended 31 December 2021
Opening balance
Total comprehensive income for the year(a)
Currency translation arising on Rio Tinto Limited's share capital(b)
Dividends (note 11)
Own shares purchased from Rio Tinto shareholders to satisfy
share awards to employees(c)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Closing balance
Year ended 31 December 2020
Opening balance
Total comprehensive income for the year(a)
Currency translation arising on Rio Tinto Limited's share capital(b)
Dividends (note 11)
Share buy-back(e)
Own shares purchased from Rio Tinto shareholders to satisfy
share awards to employees(c)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Closing balance
Year ended 31 December 2019
Opening balance
Adjustment for transition to new accounting pronouncements(f)
Restated opening balance
Total comprehensive income for the year(a)
Currency translation arising on Rio Tinto Limited's share capital(b)
Dividends (note 11)
Share buy-back(e)
Companies no longer consolidated
Own shares purchased from Rio Tinto shareholders to satisfy
share options(c)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Closing balance
Attributable to owners of Rio Tinto
Share capital
(notes 26
and 27)
US$m
3,988
—
(211)
—
Share
premium
account
US$m
4,314
—
—
—
Other
reserves
(note 28)
US$m
11,960
(1,916)
—
—
Retained
earnings
(note 28)
US$m
26,792
21,812
—
(15,385)
Non-
controlling
interests
US$m
Total
equity
US$m
4,849
1,409
—
(1,090)
51,903
21,305
(211)
(16,475)
Total
US$m
47,054
19,896
(211)
(15,385)
—
—
—
—
—
—
—
6
—
—
(95)
(18)
(113)
—
—
—
49
76
—
—
60
76
6
—
109
—
(76)
—
66
—
(113)
—
6
66
109
3,777
4,320
9,998
33,337
51,432
5,158
56,590
Share capital
(notes 26
and 27)
US$m
3,655
—
333
—
—
—
—
—
—
—
Attributable to owners of Rio Tinto
Share
premium
account
US$m
4,313
—
—
—
—
—
—
1
—
—
Other
reserves
(note 28)
US$m
9,177
2,798
—
—
—
Retained
earnings
(note 28)
US$m
23,387
9,403
—
(6,132)
(1)
Total
US$m
40,532
12,201
333
(6,132)
(1)
(76)
(31)
(107)
—
—
—
61
84
—
—
82
84
1
—
143
Non-
controlling
interests
US$m
4,710
783
—
(689)
—
—
(84)
—
129
—
Total
equity
US$m
45,242
12,984
333
(6,821)
(1)
(107)
—
1
129
143
3,988
4,314
11,960
26,792
47,054
4,849
51,903
Attributable to owners of Rio Tinto
Share capital
(notes 26
and 27)
US$m
Share
premium
account
US$m
Other
reserves
(note 28)
US$m
Retained
earnings
(note 28)
US$m
27,025
Non-
controlling
interests
US$m
Total
US$m
43,686
6,137
(113)
(113)
26,912
7,832
—
(10,334)
(1,135)
—
43,573
8,351
(29)
(10,334)
(1,135)
—
(2)
6,135
(1,033)
—
(376)
—
(32)
Total
equity
US$m
49,823
(115)
49,708
7,318
(29)
(10,710)
(1,135)
(32)
8,661
—
8,661
519
—
—
4
—
(63)
(43)
(106)
—
(106)
—
—
—
56
9,177
85
—
—
70
23,387
85
1
—
126
40,532
(85)
—
101
—
4,710
—
1
101
126
45,242
3,688
—
3,688
—
(29)
—
(4)
—
—
—
—
—
—
3,655
4,312
—
4,312
—
—
—
—
—
—
—
1
—
—
4,313
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
(a) Refer to Group statement of comprehensive income for further details. Adjustments to other reserves include currency translation attributable to owners of Rio Tinto, other than that arising
on Rio Tinto Limited’s share capital.
(b) Refer to note 1(d).
(c) Net of contributions received from employees for share awards.
(d)
Includes accrual of interest on funding balances with holders of non-controlling interests in Oyu Tolgoi. Refer to note 1(xii) and note 32(l). On 25 January 2022, Turquoise Hill agreed to waive
the full amount of funding balances and interest; refer to note 45.
In 2021, we did not undertake a share buy-back programme. In 2020, the total amount of US$1 million related to own shares purchased that were previously not recognised as a financial
liability in the previous year. The total cash outflow in 2020 relating to own shares purchased was US$208 million. In 2019 US$1,135 million shown above relates to own shares purchased
from the owners of Rio Tinto as per the cash flow statement of US$1,552 million and a financial liability recognised in respect of an irrevocable contract in place at the reporting date to cover
the share buy-back programme, less amounts paid during the year in respect of a similar irrevocable contract in place at the beginning of the year.
Impact of the transition to new accounting pronouncements; IFRS 16 “Leases” and IFRIC 23 “Uncertainty over Income Tax Treatments” on 1 January 2019.
(e)
(f)
216
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Financial Statements
Financial Statements
Financial statements continued
Group Statement of Changes in Equity
Group Statement of Changes in Equity
Group Statement of Changes in Equity
Closing balance
Closing balance
3,777
3,777
4,320
4,320
9,998
9,998
33,337
33,337
51,432
51,432
5,158
5,158
56,590
56,590
Currency translation arising on Rio Tinto Limited's share capital(b)
Currency translation arising on Rio Tinto Limited's share capital(b)
(211)
(211)
—
—
(211)
(211)
(15,385)
(15,385)
(15,385)
(15,385)
(1,090)
(1,090)
(16,475)
(16,475)
Attributable to owners of Rio Tinto
Attributable to owners of Rio Tinto
Share capital
Share capital
(notes 26
(notes 26
and 27)
and 27)
US$m
US$m
3,655
3,655
—
—
333
333
Share
Share
premium
premium
account
account
US$m
US$m
4,313
4,313
Other
Other
reserves
reserves
(note 28)
(note 28)
US$m
US$m
9,177
9,177
2,798
2,798
Retained
Retained
earnings
earnings
(note 28)
(note 28)
US$m
US$m
23,387
23,387
9,403
9,403
—
—
Non-
Non-
controlling
controlling
interests
interests
US$m
US$m
4,710
4,710
783
783
—
—
Total
Total
US$m
US$m
40,532
40,532
12,201
12,201
333
333
(6,132)
(6,132)
(6,132)
(6,132)
(689)
(689)
(6,821)
(6,821)
(1)
(1)
(1)
(1)
..
..
Year ended 31 December 2021
Year ended 31 December 2021
Opening balance
Opening balance
Total comprehensive income for the year(a)
Total comprehensive income for the year(a)
Dividends (note 11)
Dividends (note 11)
Own shares purchased from Rio Tinto shareholders to satisfy
Own shares purchased from Rio Tinto shareholders to satisfy
share awards to employees(c)
share awards to employees(c)
Change in equity interest held by Rio Tinto(d)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Employee share awards charged to the income statement
Year ended 31 December 2020
Year ended 31 December 2020
Opening balance
Opening balance
Total comprehensive income for the year(a)
Total comprehensive income for the year(a)
Currency translation arising on Rio Tinto Limited's share capital(b)
Currency translation arising on Rio Tinto Limited's share capital(b)
Dividends (note 11)
Dividends (note 11)
Share buy-back(e)
Share buy-back(e)
Own shares purchased from Rio Tinto shareholders to satisfy
Own shares purchased from Rio Tinto shareholders to satisfy
share awards to employees(c)
share awards to employees(c)
Change in equity interest held by Rio Tinto(d)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Employee share awards charged to the income statement
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Year ended 31 December 2019
Year ended 31 December 2019
Opening balance
Opening balance
Restated opening balance
Restated opening balance
Total comprehensive income for the year(a)
Total comprehensive income for the year(a)
Currency translation arising on Rio Tinto Limited's share capital(b)
Currency translation arising on Rio Tinto Limited's share capital(b)
Dividends (note 11)
Dividends (note 11)
Share buy-back(e)
Share buy-back(e)
Companies no longer consolidated
Companies no longer consolidated
Own shares purchased from Rio Tinto shareholders to satisfy
Own shares purchased from Rio Tinto shareholders to satisfy
share options(c)
share options(c)
Change in equity interest held by Rio Tinto(d)
Change in equity interest held by Rio Tinto(d)
Treasury shares reissued and other movements
Treasury shares reissued and other movements
Equity issued to holders of non-controlling interests
Equity issued to holders of non-controlling interests
Employee share awards charged to the income statement
Employee share awards charged to the income statement
Share capital
Share capital
(notes 26
(notes 26
and 27)
and 27)
US$m
US$m
3,688
3,688
3,688
3,688
—
—
—
—
(29)
(29)
—
—
(4)
(4)
—
—
—
—
—
—
—
—
—
—
—
—
Attributable to owners of Rio Tinto
Attributable to owners of Rio Tinto
Share capital
Share capital
(notes 26
(notes 26
and 27)
and 27)
US$m
US$m
3,988
3,988
Share
Share
premium
premium
account
account
US$m
US$m
4,314
4,314
Other
Other
reserves
reserves
(note 28)
(note 28)
US$m
US$m
11,960
11,960
(1,916)
(1,916)
Retained
Retained
earnings
earnings
(note 28)
(note 28)
US$m
US$m
26,792
26,792
21,812
21,812
Total
Total
US$m
US$m
47,054
47,054
19,896
19,896
(95)
(95)
(18)
(18)
(113)
(113)
76
76
—
—
—
—
60
60
76
76
6
6
—
—
109
109
—
—
—
—
—
—
—
—
—
—
6
6
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
49
49
—
—
—
—
—
—
—
—
—
—
—
—
61
61
—
—
—
—
4
4
—
—
—
—
—
—
—
—
56
56
Attributable to owners of Rio Tinto
Attributable to owners of Rio Tinto
Share
Share
premium
premium
account
account
US$m
US$m
4,312
4,312
4,312
4,312
Other
Other
reserves
reserves
(note 28)
(note 28)
US$m
US$m
8,661
8,661
—
—
8,661
8,661
519
519
(76)
(76)
(31)
(31)
(107)
(107)
84
84
—
—
—
—
82
82
84
84
1
1
—
—
143
143
Retained
Retained
earnings
earnings
(note 28)
(note 28)
US$m
US$m
27,025
27,025
26,912
26,912
7,832
7,832
—
—
—
—
85
85
—
—
—
—
70
70
Total
Total
US$m
US$m
43,686
43,686
43,573
43,573
8,351
8,351
(29)
(29)
—
—
85
85
1
1
—
—
126
126
40,532
40,532
(63)
(63)
(43)
(43)
(106)
(106)
Adjustment for transition to new accounting pronouncements(f)
Adjustment for transition to new accounting pronouncements(f)
(113)
(113)
(113)
(113)
Non-
Non-
controlling
controlling
interests
interests
US$m
US$m
4,849
4,849
1,409
1,409
—
—
—
—
(76)
(76)
—
—
66
66
—
—
—
—
—
—
(84)
(84)
—
—
129
129
—
—
Non-
Non-
controlling
controlling
interests
interests
US$m
US$m
6,137
6,137
(2)
(2)
6,135
6,135
(1,033)
(1,033)
—
—
—
—
(32)
(32)
—
—
(85)
(85)
—
—
101
101
—
—
Total
Total
equity
equity
US$m
US$m
51,903
51,903
21,305
21,305
(211)
(211)
(113)
(113)
—
—
6
6
66
66
109
109
Total
Total
equity
equity
US$m
US$m
45,242
45,242
12,984
12,984
333
333
(1)
(1)
(107)
(107)
—
—
1
1
129
129
143
143
Total
Total
equity
equity
US$m
US$m
49,823
49,823
(115)
(115)
49,708
49,708
7,318
7,318
(29)
(29)
(1,135)
(1,135)
(32)
(32)
(106)
(106)
—
—
1
1
101
101
126
126
Closing balance
Closing balance
3,988
3,988
4,314
4,314
11,960
11,960
26,792
26,792
47,054
47,054
4,849
4,849
51,903
51,903
Closing balance
Closing balance
3,655
3,655
4,313
4,313
9,177
9,177
23,387
23,387
4,710
4,710
45,242
45,242
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
The notes on pages 218 to 311 are an integral part of these consolidated financial statements.
(a) Refer to Group statement of comprehensive income for further details. Adjustments to other reserves include currency translation attributable to owners of Rio Tinto, other than that arising
(a) Refer to Group statement of comprehensive income for further details. Adjustments to other reserves include currency translation attributable to owners of Rio Tinto, other than that arising
on Rio Tinto Limited’s share capital.
on Rio Tinto Limited’s share capital.
(b) Refer to note 1(d).
(b) Refer to note 1(d).
(c) Net of contributions received from employees for share awards.
(c) Net of contributions received from employees for share awards.
the full amount of funding balances and interest; refer to note 45.
the full amount of funding balances and interest; refer to note 45.
(d)
(d)
Includes accrual of interest on funding balances with holders of non-controlling interests in Oyu Tolgoi. Refer to note 1(xii) and note 32(l). On 25 January 2022, Turquoise Hill agreed to waive
Includes accrual of interest on funding balances with holders of non-controlling interests in Oyu Tolgoi. Refer to note 1(xii) and note 32(l). On 25 January 2022, Turquoise Hill agreed to waive
(e)
(e)
In 2021, we did not undertake a share buy-back programme. In 2020, the total amount of US$1 million related to own shares purchased that were previously not recognised as a financial
In 2021, we did not undertake a share buy-back programme. In 2020, the total amount of US$1 million related to own shares purchased that were previously not recognised as a financial
liability in the previous year. The total cash outflow in 2020 relating to own shares purchased was US$208 million. In 2019 US$1,135 million shown above relates to own shares purchased
liability in the previous year. The total cash outflow in 2020 relating to own shares purchased was US$208 million. In 2019 US$1,135 million shown above relates to own shares purchased
from the owners of Rio Tinto as per the cash flow statement of US$1,552 million and a financial liability recognised in respect of an irrevocable contract in place at the reporting date to cover
from the owners of Rio Tinto as per the cash flow statement of US$1,552 million and a financial liability recognised in respect of an irrevocable contract in place at the reporting date to cover
the share buy-back programme, less amounts paid during the year in respect of a similar irrevocable contract in place at the beginning of the year.
the share buy-back programme, less amounts paid during the year in respect of a similar irrevocable contract in place at the beginning of the year.
(f)
(f)
Impact of the transition to new accounting pronouncements; IFRS 16 “Leases” and IFRIC 23 “Uncertainty over Income Tax Treatments” on 1 January 2019.
Impact of the transition to new accounting pronouncements; IFRS 16 “Leases” and IFRIC 23 “Uncertainty over Income Tax Treatments” on 1 January 2019.
(10,334)
(10,334)
(10,334)
(10,334)
(376)
(376)
(10,710)
(10,710)
(1,135)
(1,135)
(1,135)
(1,135)
Financial statements
Reconciliation with Australian Accounting
Standards
The Group’s financial statements have been prepared in accordance
with IFRS, as defined in note 1, which differs in certain respects from
the version of International Financial Reporting Standards that is
applicable in Australia, referred to as Australian Accounting Standards
(AAS).
The Merger involved no change in the legal ownership of any assets of
Rio Tinto plc or Rio Tinto Limited, nor any change in the ownership of
any existing shares or securities of Rio Tinto plc or Rio Tinto Limited,
nor the issue of any shares, securities or payment by way of
consideration, save for the issue by each company of one special voting
share to a trustee company which facilitates the joint electoral
procedure for public shareholders. During 2002, each of the parent
companies issued a DLC Dividend Share to facilitate the efficient
management of funds within the DLC structure.
Accounting standards
The financial statements have been drawn up in accordance with IFRS
as defined in note 1. The Merger was accounted for as a merger under
UK GAAP. As permitted under the rules governing the transition to
IFRS, which are set out in IFRS 1, the Group did not restate business
combinations that occurred before the transition date of 1 January
2004. As a result, the DLC Merger of economic interests described
above continues to be accounted for as a merger under IFRS as defined
in note 1.
The main consequence of adopting merger rather than acquisition
accounting is that the balance sheet of the merged Group includes the
assets and liabilities of Rio Tinto plc and Rio Tinto Limited at their
carrying values prior to the Merger, subject to adjustments to achieve
uniformity of accounting policies, rather than at their fair values at the
date of the Merger. For accounting purposes Rio Tinto plc and Rio Tinto
Limited are viewed as a single public parent company (with their
respective public shareholders being the shareholders in that single
company). As a result, the amounts attributable to both Rio Tinto plc
and Rio Tinto Limited public shareholders are included in the amounts
attributed to owners of Rio Tinto on the balance sheet, income
statement and statement of comprehensive income.
Australian Corporations Act
The financial statements are drawn up in accordance with an order,
under section 340 of the Australian Corporations Act 2001, issued by
the Australian Securities and Investments Commission (ASIC) on 16
July 2021. The main effect of the order is that the financial statements
are prepared on the basis that Rio Tinto Limited, Rio Tinto plc and their
respective controlled entities are treated as a single economic entity,
and in accordance with the principles and requirements of International
Financial Reporting Standards which have been endorsed by the United
Kingdom as adopted by the European Union (EU) before 1 January
2021 and as adopted for use in the United Kingdom ('UK') thereafter
under the European Union (Withdrawal) Act 2018 and include a
reconciliation from UK IFRS to the Australian equivalent of IFRS (see
above).
For further details of the ASIC Class Order relief see page 321.
Prior to 1 January 2004, the Group’s financial statements were
prepared in accordance with UK GAAP. Under IFRS, as defined in
note 1, goodwill on acquisitions prior to 1998, which was eliminated
directly against equity in the Group’s UK GAAP financial statements,
has not been reinstated. This was permitted under the rules governing
the transition to IFRS set out in IFRS 1. The equivalent Australian
Standard, AASB 1, does not provide for the netting of goodwill against
equity. As a consequence, shareholders’ funds under AAS include the
residue of such goodwill, which amounted to US$377 million at
31 December 2021 (2020: US$374 million).
Save for the exception described above, the Group’s financial
statements drawn up in accordance with IFRS are consistent with the
requirements of AAS.
Outline of dual listed companies structure and
basis of financial statements
The Rio Tinto Group
These are the financial statements of the Group formed through the
merger of economic interests of Rio Tinto plc and Rio Tinto Limited
(Merger), and presented by both Rio Tinto plc and Rio Tinto Limited as
their consolidated financial statements in accordance with both UK and
Australian legislation and regulations.
Merger terms
On 21 December 1995, Rio Tinto plc and Rio Tinto Limited entered into
a dual listed companies (DLC) merger. Rio Tinto plc is incorporated in
the UK and listed on the London and New York Stock Exchanges and
Rio Tinto Limited is incorporated in Australia and listed on the
Australian Securities Exchange. The Merger was affected by
contractual arrangements between the companies and amendments to
Rio Tinto plc’s Memorandum and Articles of Association and Rio Tinto
Limited’s Constitution.
As a result, Rio Tinto plc and Rio Tinto Limited and their respective
groups operate together as a single economic enterprise, with neither
assuming a dominant role. In particular, the arrangements:
– Confer upon the shareholders of Rio Tinto plc and Rio Tinto Limited a
common economic interest in both groups;
– Provide for common boards of directors and a unified
management structure;
– Provide for equalised dividends and capital distributions; and
– Provide for the shareholders of Rio Tinto plc and Rio Tinto Limited to
take key decisions, including the election of directors, through an
electoral procedure in which the public shareholders of the two
companies in effect vote on a joint basis.
216
216
216
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217217
Financial statements
Financial statements continued
Notes to the 2021 financial statements
– International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB) and
interpretations issued from time to time by the IFRS Interpretations
Committee (IFRS IC) which are mandatory at 31 December 2021.
The above accounting standards and interpretations are collectively
referred to as “IFRS” in this report. The Group has not early adopted
any amendments, standards or interpretations that have been issued
but are not yet mandatory.
COVID-19 impact
The Group has demonstrated resilience in dealing with ongoing
COVID-19 challenges with continued prioritisation of the safety of our
people and communities. Rio Tinto continues to proactively manage
COVID-19 impacts and prioritises work across critical projects, as
challenges associated with interstate and international border access
continue, impacting the availability and movement of people, most
notably in Australia and Mongolia. Plans to mitigate labour shortages
are in place.
Despite this, we progressed a number of our projects, including the
Pilbara replacement mines. Mining and operational readiness activities
are progressing at the Gudai-Darri mine and the railway is operational.
Production from the new greenfield mine at Gudai-Darri and the Robe
Valley brownfield mine replacement project is delayed due to the tight
labour market in Western Australia. First production from the main
plant at Gudai-Darri is now expected in the second quarter of 2022,
subject to the continuing impacts of COVID-19. The Oyu Tolgoi
underground project in Mongolia was technically and operationally
ready for undercut, which commenced in January 2022, despite
continued COVID-19 constraints in Mongolia. The delay to the
commissioning of shafts 3 and 4 is still expected to be approximately
nine months based on known COVID-19 impacts to date, contributing
to delays in first sustainable production expected in the first half of
2023.
In addition, Escondida's mined copper production was lower than 2020
mostly as a result of the prolonged impact of COVID-19. The Group
continues to monitor government-imposed restrictions related to
COVID-19, and any other potential COVID-19 related disruptions, such
as shipment delays. Recognising the broad and complex impacts of the
pandemic on our markets, operations and financial performance, we
have chosen not to segregate COVID-19 related costs from our
underlying performance metrics.
1 Principal accounting policies
Corporate information
Rio Tinto’s business is finding, mining and processing mineral
resources. Major products are aluminium, copper, diamonds, gold,
industrial minerals (borates, titanium dioxide and salt) and iron ore.
Activities span the world and are strongly represented in Australia and
North America, with significant businesses also in Asia, Europe, Africa
and South America.
Rio Tinto plc is incorporated in the UK and listed on the London and
New York Stock Exchanges and Rio Tinto Limited is incorporated in
Australia and listed on the Australian Stock Exchange. Rio Tinto plc’s
registered office is at 6 St James’s Square, London SW1Y 4AD, UK. Rio
Tinto Limited’s registered office is at Level 7, 360 Collins Street,
Melbourne, Victoria 3000, Australia.
As described in the “Outline of dual listed companies structure and
basis of financial statements” on page 217, for the purposes of
preparing the IFRS compliant consolidated financial statements of the
Rio Tinto Group, both the DLC companies, Rio Tinto plc and Rio Tinto
Limited, are viewed as a single economic entity, and the interests of
shareholders of both companies are presented as the equity interests
of shareholders in the Rio Tinto Group.
These financial statements consolidate the accounts of Rio Tinto plc
and Rio Tinto Limited (together “the Companies”) and their respective
subsidiaries (together “the Group”) and include the Group’s share of
joint arrangements and associates as explained in note 1(b) below. The
Group’s financial statements for the year ended 31 December 2021
were authorised for issue in accordance with a directors’ resolution on
16 February 2022.
Notes 32 to 35 provide more information on the Group’s subsidiaries,
joint arrangements and associates and note 39 provides information on
the Group’s transactions with other related parties.
The 2021 Annual Report satisfies the obligations of Rio Tinto Limited to
prepare consolidated accounts under Australian company law, as
amended by an order issued by the Australian Securities and
Investments Commission on 16 July 2021. The 2021 financial
statements disclose on page 217 the effect of the adjustments to the
Group’s consolidated profit/(loss), consolidated total comprehensive
income/(loss) and consolidated shareholders’ funds as prepared under
IFRS as defined below that would be required under the version of IFRS
that is applicable in Australia, referred to as Australian Accounting
Standards (AAS).
The US dollar is the presentation currency used in these financial
statements, as it most reliably reflects the Group’s global
business performance.
Basis of preparation of the financial statements
The basis of preparation and the accounting policies used in preparing
the Group’s 2021 financial statements are set out below.
The financial statements have been prepared on a going concern basis
in accordance with UK-adopted international accounting standards,
applicable UK law, and applicable Australian law as amended by the
Australian Securities and Investments Commission Order dated 16 July
2021 and also with:
218
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Financial statements
Financial statements
Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies
1 Principal accounting policies
Corporate information
Corporate information
Rio Tinto’s business is finding, mining and processing mineral
Rio Tinto’s business is finding, mining and processing mineral
resources. Major products are aluminium, copper, diamonds, gold,
resources. Major products are aluminium, copper, diamonds, gold,
industrial minerals (borates, titanium dioxide and salt) and iron ore.
industrial minerals (borates, titanium dioxide and salt) and iron ore.
Activities span the world and are strongly represented in Australia and
Activities span the world and are strongly represented in Australia and
North America, with significant businesses also in Asia, Europe, Africa
North America, with significant businesses also in Asia, Europe, Africa
and South America.
and South America.
Rio Tinto plc is incorporated in the UK and listed on the London and
Rio Tinto plc is incorporated in the UK and listed on the London and
New York Stock Exchanges and Rio Tinto Limited is incorporated in
New York Stock Exchanges and Rio Tinto Limited is incorporated in
Australia and listed on the Australian Stock Exchange. Rio Tinto plc’s
Australia and listed on the Australian Stock Exchange. Rio Tinto plc’s
registered office is at 6 St James’s Square, London SW1Y 4AD, UK. Rio
registered office is at 6 St James’s Square, London SW1Y 4AD, UK. Rio
Tinto Limited’s registered office is at Level 7, 360 Collins Street,
Tinto Limited’s registered office is at Level 7, 360 Collins Street,
Melbourne, Victoria 3000, Australia.
Melbourne, Victoria 3000, Australia.
As described in the “Outline of dual listed companies structure and
As described in the “Outline of dual listed companies structure and
basis of financial statements” on page 217, for the purposes of
basis of financial statements” on page 217, for the purposes of
preparing the IFRS compliant consolidated financial statements of the
preparing the IFRS compliant consolidated financial statements of the
Rio Tinto Group, both the DLC companies, Rio Tinto plc and Rio Tinto
Rio Tinto Group, both the DLC companies, Rio Tinto plc and Rio Tinto
Limited, are viewed as a single economic entity, and the interests of
Limited, are viewed as a single economic entity, and the interests of
shareholders of both companies are presented as the equity interests
shareholders of both companies are presented as the equity interests
of shareholders in the Rio Tinto Group.
of shareholders in the Rio Tinto Group.
These financial statements consolidate the accounts of Rio Tinto plc
These financial statements consolidate the accounts of Rio Tinto plc
and Rio Tinto Limited (together “the Companies”) and their respective
and Rio Tinto Limited (together “the Companies”) and their respective
subsidiaries (together “the Group”) and include the Group’s share of
subsidiaries (together “the Group”) and include the Group’s share of
joint arrangements and associates as explained in note 1(b) below. The
joint arrangements and associates as explained in note 1(b) below. The
Group’s financial statements for the year ended 31 December 2021
Group’s financial statements for the year ended 31 December 2021
were authorised for issue in accordance with a directors’ resolution on
were authorised for issue in accordance with a directors’ resolution on
16 February 2022.
16 February 2022.
Notes 32 to 35 provide more information on the Group’s subsidiaries,
Notes 32 to 35 provide more information on the Group’s subsidiaries,
joint arrangements and associates and note 39 provides information on
joint arrangements and associates and note 39 provides information on
the Group’s transactions with other related parties.
the Group’s transactions with other related parties.
– International Financial Reporting Standards as issued by the
– International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB) and
International Accounting Standards Board (IASB) and
interpretations issued from time to time by the IFRS Interpretations
interpretations issued from time to time by the IFRS Interpretations
Committee (IFRS IC) which are mandatory at 31 December 2021.
Committee (IFRS IC) which are mandatory at 31 December 2021.
The above accounting standards and interpretations are collectively
The above accounting standards and interpretations are collectively
referred to as “IFRS” in this report. The Group has not early adopted
referred to as “IFRS” in this report. The Group has not early adopted
any amendments, standards or interpretations that have been issued
any amendments, standards or interpretations that have been issued
but are not yet mandatory.
but are not yet mandatory.
COVID-19 impact
COVID-19 impact
The Group has demonstrated resilience in dealing with ongoing
The Group has demonstrated resilience in dealing with ongoing
COVID-19 challenges with continued prioritisation of the safety of our
COVID-19 challenges with continued prioritisation of the safety of our
people and communities. Rio Tinto continues to proactively manage
people and communities. Rio Tinto continues to proactively manage
COVID-19 impacts and prioritises work across critical projects, as
COVID-19 impacts and prioritises work across critical projects, as
challenges associated with interstate and international border access
challenges associated with interstate and international border access
continue, impacting the availability and movement of people, most
continue, impacting the availability and movement of people, most
notably in Australia and Mongolia. Plans to mitigate labour shortages
notably in Australia and Mongolia. Plans to mitigate labour shortages
are in place.
are in place.
Despite this, we progressed a number of our projects, including the
Despite this, we progressed a number of our projects, including the
Pilbara replacement mines. Mining and operational readiness activities
Pilbara replacement mines. Mining and operational readiness activities
are progressing at the Gudai-Darri mine and the railway is operational.
are progressing at the Gudai-Darri mine and the railway is operational.
Production from the new greenfield mine at Gudai-Darri and the Robe
Production from the new greenfield mine at Gudai-Darri and the Robe
Valley brownfield mine replacement project is delayed due to the tight
Valley brownfield mine replacement project is delayed due to the tight
labour market in Western Australia. First production from the main
labour market in Western Australia. First production from the main
plant at Gudai-Darri is now expected in the second quarter of 2022,
plant at Gudai-Darri is now expected in the second quarter of 2022,
subject to the continuing impacts of COVID-19. The Oyu Tolgoi
subject to the continuing impacts of COVID-19. The Oyu Tolgoi
underground project in Mongolia was technically and operationally
underground project in Mongolia was technically and operationally
ready for undercut, which commenced in January 2022, despite
ready for undercut, which commenced in January 2022, despite
continued COVID-19 constraints in Mongolia. The delay to the
continued COVID-19 constraints in Mongolia. The delay to the
commissioning of shafts 3 and 4 is still expected to be approximately
commissioning of shafts 3 and 4 is still expected to be approximately
nine months based on known COVID-19 impacts to date, contributing
nine months based on known COVID-19 impacts to date, contributing
to delays in first sustainable production expected in the first half of
to delays in first sustainable production expected in the first half of
The 2021 Annual Report satisfies the obligations of Rio Tinto Limited to
The 2021 Annual Report satisfies the obligations of Rio Tinto Limited to
prepare consolidated accounts under Australian company law, as
prepare consolidated accounts under Australian company law, as
2023.
2023.
amended by an order issued by the Australian Securities and
amended by an order issued by the Australian Securities and
Investments Commission on 16 July 2021. The 2021 financial
Investments Commission on 16 July 2021. The 2021 financial
statements disclose on page 217 the effect of the adjustments to the
statements disclose on page 217 the effect of the adjustments to the
Group’s consolidated profit/(loss), consolidated total comprehensive
Group’s consolidated profit/(loss), consolidated total comprehensive
income/(loss) and consolidated shareholders’ funds as prepared under
income/(loss) and consolidated shareholders’ funds as prepared under
IFRS as defined below that would be required under the version of IFRS
IFRS as defined below that would be required under the version of IFRS
that is applicable in Australia, referred to as Australian Accounting
that is applicable in Australia, referred to as Australian Accounting
Standards (AAS).
Standards (AAS).
In addition, Escondida's mined copper production was lower than 2020
In addition, Escondida's mined copper production was lower than 2020
mostly as a result of the prolonged impact of COVID-19. The Group
mostly as a result of the prolonged impact of COVID-19. The Group
continues to monitor government-imposed restrictions related to
continues to monitor government-imposed restrictions related to
COVID-19, and any other potential COVID-19 related disruptions, such
COVID-19, and any other potential COVID-19 related disruptions, such
as shipment delays. Recognising the broad and complex impacts of the
as shipment delays. Recognising the broad and complex impacts of the
pandemic on our markets, operations and financial performance, we
pandemic on our markets, operations and financial performance, we
have chosen not to segregate COVID-19 related costs from our
have chosen not to segregate COVID-19 related costs from our
underlying performance metrics.
underlying performance metrics.
The US dollar is the presentation currency used in these financial
The US dollar is the presentation currency used in these financial
statements, as it most reliably reflects the Group’s global
statements, as it most reliably reflects the Group’s global
business performance.
business performance.
Basis of preparation of the financial statements
Basis of preparation of the financial statements
The basis of preparation and the accounting policies used in preparing
The basis of preparation and the accounting policies used in preparing
the Group’s 2021 financial statements are set out below.
the Group’s 2021 financial statements are set out below.
The financial statements have been prepared on a going concern basis
The financial statements have been prepared on a going concern basis
in accordance with UK-adopted international accounting standards,
in accordance with UK-adopted international accounting standards,
applicable UK law, and applicable Australian law as amended by the
applicable UK law, and applicable Australian law as amended by the
Australian Securities and Investments Commission Order dated 16 July
Australian Securities and Investments Commission Order dated 16 July
2021 and also with:
2021 and also with:
Going concern
Portfolio strategy
Management has prepared detailed cash flow forecasts for the next 12
months and has updated life-of-mine plan models with longer-term
cash flow projections. These forecasts demonstrate that the Group has
sufficient cash, other liquid resources and undrawn credit facilities to
enable it to meet its obligations as they fall due. As such, the directors
considered it appropriate to adopt the going concern basis of
accounting in preparing the full-year financial information. Further
detail on the going concern basis of accounting is included on page
204.
Climate change
We have put the net zero transition at the heart of our business
strategy: combining investments in commodities that enable the
energy transition with actions to decarbonise our operations and value
chains. As a result of this, our strategy and approach to climate change
are supported by strong governance, processes and capabilities. In
2021, we updated our Scope 1 and 2 emissions targets and now aim to
reduce emissions by 15% in 2025, by 50% in 2030 (relative to our
2018 equity baseline) and to achieve net zero emissions by 2050.
These targets are aligned with efforts to limit global warming to 1.5°C,
which is aligned with the stretch goal of the Paris Agreement. The
goals of the Paris Agreement are set out in Article 2, which includes
holding the increase in global average temperature to well below 2°C
above pre-industrial levels and pursuing efforts to limit the
temperature increase to 1.5°C.
We frame the strategic context for the Group through the lens of three
scenarios, developed by the Strategy and Economics teams, structured
around our analysis of the interplay of three global forces: geopolitics,
society and technology.
– In a geopolitics-led scenario, strong nationalistic tendencies hold
back global action on climate change, carbon prices remain low (in
the range US$0-30/t CO2e) and warming exceeds 3°C by 2100.
– In a society-led scenario, strong global co-ordination of climate
policies, supported by high and rising carbon prices (reaching
US$130/t CO2e in 2050), accelerates the energy transition and we
believe achieves the goal of the Paris Agreement by limiting warming
to well below 2°C by 2100.
– In a technology-led scenario, innovation boosts economic
productivity and decarbonisation efforts; however, carbon prices
remain modest (ranging US$10 to US$75/t CO2e by 2030) and action
to limit emissions is insufficient, so warming exceeds 2°C by 2100.
We recognise that the pace of decarbonisation across the global
economy is uncertain and that current climate policies in many
countries are not yet aligned with stated ambitions. These policy
uncertainties are captured in our scenario analysis, which in turn
informs the central case carbon price assumptions. We continue to
monitor alternative scenarios including ones that limit warming to
1.5°C. For example, the IEA NZE50 assumes higher carbon prices and a
much faster energy transition than our scenarios; they also require a
higher level of co-ordination in climate policies across sectors and
countries. The IEA’s scenario also assumes stronger demand for
commodities such as copper or battery minerals that are critical to the
accelerated deployment of solar and wind renewables or electric
vehicles.
Our scenarios above inform our portfolio strategy, the internal
commodity price setting process and strongly influence our critical
accounting judgements and estimates. Through our strategy process
we test the resilience of our portfolio against each of these three
scenarios and conclude that overall, our portfolio is expected to
perform more strongly in scenarios with proactive climate action,
particularly in relation to aluminium and copper. Our strategy to focus
our growth capital expenditure on materials that enable the energy
transition is informed by these scenarios. Our ambition is to increase
our growth capital expenditure to up to US$3 billion per year in 2023
and 2024, developing new options and finding innovative ways of
bringing projects on-stream faster. This includes investment in lithium
production at Rincon and Jadar, copper at Oyu Tolgoi and Winu, as well
as high-grade iron ore from Simandou.
Accounting judgements
The forecast commodity prices (including carbon prices) are informed
by a blend of our three scenarios and are used pervasively in our
financial processes from budgeting, forecasting, capital allocation and
project evaluation to the determination of ore reserves. In turn, these
prices are used to derive critical accounting estimates including as
inputs to impairment testing, estimation of remaining economic life for
units of production depreciation and discounting closure and
rehabilitation provisions. As only one of our scenarios represents the
Group’s view of the goals of the Paris Agreement, and because of the
policy uncertainties described above, our commodity price assumptions
are not consistent with the expectation of climate policies required to
accelerate the global transition to meet these goals.
In addition to prices, given the significant investment we are making to
abate our carbon emissions, we have also considered the potential for
asset obsolescence, with a particular focus on our Pilbara operations
where we are prioritising investment in renewables to switch away from
natural gas power generation, but no material changes to accounting
estimates have been necessary. The closure date and cost of closure is
also sensitive to climate assumptions but no material changes have
been made in the year specific to climate change.
The Group has identified impairment triggers during the year for cash-
generating units in the aluminium and copper segments. The Group
considers the long-term pricing outlook for aluminium and copper is
positive as these metals are critical to the global transition to a low-
carbon future. The outlook for iron ore pricing is less certain and
depends on the development of low-emissions steel technology.
However, considering the high return on capital generated by our
existing iron ore asset base, none of our three scenarios would give rise
to an impairment today. When measuring the recoverable amount for
these cash-generating units, a blend of the three strategic scenarios
has been used to forecast the cash flows. As only one of the strategic
scenarios represents the Group’s view of the goals of the Paris
Agreement, the impairment outcome cannot be described as Paris-
aligned. However, in these circumstances, we have also disclosed
sensitivity information based on cash flows flexed for sales prices and
carbon taxes in the society-led scenario, which has a well below 2°C
outcome. These sensitivities indicate that higher recoverable amounts
would have been determined if the accounting was aligned with the
society-led scenario.
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Financial statements continued
Notes to the 2021 financial statements
We expect the application of the Phase 2 reliefs to result in
continuation of the Group’s pre-existing hedge accounting upon
amendment of designated arrangements in response to the
replacement of IBOR with new benchmarks (refer to note 1 q (iv)).
In addition, the Group has a number of arrangements which reference
IBOR benchmarks and extend beyond 2021. These include third-party
borrowings relating to the Oyu Tolgoi LLC project finance (refer to note
21), other secured loans, a number of intragroup balances and certain
commercial contracts. Other arrangements, which currently reference
IBOR benchmarks include shareholder loan facilities. Phase 2
amendments will require the Group to account for a change in the
basis for determining the cash flows of a financial asset or a financial
liability measured at amortised cost, by updating their respective
effective interest rates as required by IBOR reform. As a result of the
Phase 2 relief the Group expects that no material gain or loss will arise
from these updates (refer to note 1 q (ii)). The accessible revolving
lines of credit have been replaced with a new facility, which now refers
to the SOFR and SONIA rates (refer to note 29 A (b)). Most intragroup
balances transitioned to alternative benchmarks by 31 December
2021.
Standards issued, but not yet effective
Proceeds before Intended Use (Amendments to IAS 16
“Property, Plant and Equipment”, mandatory in 2022 and not
yet endorsed by the UK)
The amendments prohibit the deduction, from the cost of major project
construction work in progress, of proceeds (net of additional
processing costs) from selling items before the related item of
property, plant and equipment is available for use. Under the
amendment such proceeds are recognised in the income statement
together with the costs of producing those items. The amendments will
result in higher reported revenue, operating costs, inventory and
property plant and equipment balances (capital works in progress)
relating to major development projects completed after 1 January
2020. IAS 2 “Inventories” will apply to the measurement of pre-
production inventory and identifying the related cost may require
significant estimation and judgment in the selection of an appropriate
method for allocating development expenditure to such inventory.
During 2021, the Group completed a review of the impact of these
amendments and concluded that adjustments to Group retained
earnings at 1 January 2020, and restatement of the 2020 and 2021
Group Income Statement and Balance Sheet upon adoption of the
amendments in 2022 in respect of such projects are not material.
Onerous Contracts – Cost of Fulfilling a Contract (Amendments
to IAS 37 “Provisions, Contingent Liabilities and Contingent
Assets”), mandatory in 2022 and not yet endorsed by the UK)
The amendments specify which costs an entity includes in determining
the cost of fulfilling a contract for the purpose of assessing whether the
contract is onerous. Under the amendment the cost of fulfilling a
contract comprises all directly related costs, including both
incremental amounts and an allocation of other directly related
expenditure. The Group currently makes provision for onerous
contracts when the assets dedicated to the contract are fully impaired
or the contract becomes stranded as a result of a business decision
(refer to note 1(i)). From 2022, the Group will record a provision if a
contract is found to be loss-making on a stand-alone basis following
allocation of all directly related costs as required by the amendments
to IAS 37. As required by the transition arrangements, the Group will
apply the amendments in its 2022 Financial Statements without
restatement. During 2021, the Group completed a review of the impact
of these amendments and concluded that adjustments to retained
earnings at 1 January 2022 are not material.
1 Principal accounting policies continued
Using a carbon price to accelerate our mitigation action
We are committed to align our future capital expenditure with our 2025
and 2030 Scope 1 and 2 emissions reduction targets. As noted above,
we conclude that our targets are aligned with efforts to limit warming
to 1.5°C and the stretch goal of the Paris Agreement. To deliver our
climate targets, the Group expects to make incremental capital
investment of US$7.5 billion over the period to 2030 (approximately
US$1.5 billion over the period 2022 to 2024). We also expect our
incremental operating expenditure to support the Climate Action Plan
to be in the order of US$200 million per year, including research and
development initiatives.
For internal approval purposes, a notional carbon price of US$75/t
CO2e is now used to drive improvements in energy efficiency across our
assets, help to identify new abatement projects as well as incentivise
and accelerate the delivery of capital investment in abatement projects
and operational improvements. The US$75/t CO2e price is derived from
our analysis of carbon mitigation options across our assets
(summarised in our Marginal Abatement Cost Curve) – it is unrelated
to the prices in our scenarios.
New standards issued
The Group’s financial statements have been prepared on the basis of
accounting policies consistent with those applied in the financial
statements for the year ended 31 December 2020, except for the
accounting requirements set out below, effective as at 1 January 2021,
which did not have a significant impact on the Group's financial
statements.
The Group adopted Interest Rate Benchmark Reform - Phase 2
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) at 1
January 2021. The amendments address the financial reporting impact
from reform of the London Interbank Offered Rate (LIBOR) and other
benchmark interest rates (collectively “IBOR reform”). The Group
applied the Phase 2 amendments retrospectively. However, in
accordance with the exceptions permitted in the Phase 2 amendments,
it has elected not to restate comparatives for the prior periods to
reflect the application of these amendments. Since the Group had no
transactions for which the benchmark rate had been replaced with an
alternative benchmark rate as at 31 December 2020, there is no
impact on opening equity balances as a result of retrospective
application.
On 5 March 2021 LIBOR's administrator, ICE Benchmarks
Administration (IBA) and its supervisor, the UK Financial Conduct
Authority (FCA), issued statements which provide the dates that all
LIBOR settings will either cease to be provided by any administrator or
will no longer be representative. This will occur: immediately after 31
December 2021, for all GBP, Euro, CHF and JPY LIBOR settings, and for
1-week and 2-month USD LIBOR settings; and immediately after 30
June 2023, for the remaining USD LIBOR settings. The Group has taken
relevant Phase 2 practical reliefs from certain requirements in IFRS 9,
IFRS 7, IFRS 4 and IFRS 16 relating to changes in the basis for
determining contractual cash flows of financial assets, financial
liabilities and hedge accounting.
Our hedging arrangements impacted by the reform of US LIBOR are
part of the International Swaps and Derivatives Association (ISDA)
Fallbacks Protocol, which provides a global standardised mechanism
for replacement of the current benchmark. At 31 December 2021, the
Group has interest rate risk exposure including US$6.1 billion nominal
values of fixed-rate borrowings swapped to US dollar rates in fair value
hedge relationships impacted by the reform, described further in note
29 A (b) (v).
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
The Group’s financial statements have been prepared on the basis of
The Group’s financial statements have been prepared on the basis of
“Property, Plant and Equipment”, mandatory in 2022 and not
“Property, Plant and Equipment”, mandatory in 2022 and not
1 Principal accounting policies continued
1 Principal accounting policies continued
Using a carbon price to accelerate our mitigation action
Using a carbon price to accelerate our mitigation action
We are committed to align our future capital expenditure with our 2025
We are committed to align our future capital expenditure with our 2025
and 2030 Scope 1 and 2 emissions reduction targets. As noted above,
and 2030 Scope 1 and 2 emissions reduction targets. As noted above,
we conclude that our targets are aligned with efforts to limit warming
we conclude that our targets are aligned with efforts to limit warming
to 1.5°C and the stretch goal of the Paris Agreement. To deliver our
to 1.5°C and the stretch goal of the Paris Agreement. To deliver our
climate targets, the Group expects to make incremental capital
climate targets, the Group expects to make incremental capital
investment of US$7.5 billion over the period to 2030 (approximately
investment of US$7.5 billion over the period to 2030 (approximately
US$1.5 billion over the period 2022 to 2024). We also expect our
US$1.5 billion over the period 2022 to 2024). We also expect our
incremental operating expenditure to support the Climate Action Plan
incremental operating expenditure to support the Climate Action Plan
to be in the order of US$200 million per year, including research and
to be in the order of US$200 million per year, including research and
development initiatives.
development initiatives.
For internal approval purposes, a notional carbon price of US$75/t
For internal approval purposes, a notional carbon price of US$75/t
CO2e is now used to drive improvements in energy efficiency across our
CO2e is now used to drive improvements in energy efficiency across our
assets, help to identify new abatement projects as well as incentivise
assets, help to identify new abatement projects as well as incentivise
and accelerate the delivery of capital investment in abatement projects
and accelerate the delivery of capital investment in abatement projects
and operational improvements. The US$75/t CO2e price is derived from
and operational improvements. The US$75/t CO2e price is derived from
our analysis of carbon mitigation options across our assets
our analysis of carbon mitigation options across our assets
(summarised in our Marginal Abatement Cost Curve) – it is unrelated
(summarised in our Marginal Abatement Cost Curve) – it is unrelated
2021.
2021.
to the prices in our scenarios.
to the prices in our scenarios.
New standards issued
New standards issued
accounting policies consistent with those applied in the financial
accounting policies consistent with those applied in the financial
statements for the year ended 31 December 2020, except for the
statements for the year ended 31 December 2020, except for the
accounting requirements set out below, effective as at 1 January 2021,
accounting requirements set out below, effective as at 1 January 2021,
which did not have a significant impact on the Group's financial
which did not have a significant impact on the Group's financial
statements.
statements.
The Group adopted Interest Rate Benchmark Reform - Phase 2
The Group adopted Interest Rate Benchmark Reform - Phase 2
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) at 1
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) at 1
January 2021. The amendments address the financial reporting impact
January 2021. The amendments address the financial reporting impact
from reform of the London Interbank Offered Rate (LIBOR) and other
from reform of the London Interbank Offered Rate (LIBOR) and other
benchmark interest rates (collectively “IBOR reform”). The Group
benchmark interest rates (collectively “IBOR reform”). The Group
applied the Phase 2 amendments retrospectively. However, in
applied the Phase 2 amendments retrospectively. However, in
accordance with the exceptions permitted in the Phase 2 amendments,
accordance with the exceptions permitted in the Phase 2 amendments,
it has elected not to restate comparatives for the prior periods to
it has elected not to restate comparatives for the prior periods to
reflect the application of these amendments. Since the Group had no
reflect the application of these amendments. Since the Group had no
transactions for which the benchmark rate had been replaced with an
transactions for which the benchmark rate had been replaced with an
alternative benchmark rate as at 31 December 2020, there is no
alternative benchmark rate as at 31 December 2020, there is no
impact on opening equity balances as a result of retrospective
impact on opening equity balances as a result of retrospective
application.
application.
On 5 March 2021 LIBOR's administrator, ICE Benchmarks
On 5 March 2021 LIBOR's administrator, ICE Benchmarks
Administration (IBA) and its supervisor, the UK Financial Conduct
Administration (IBA) and its supervisor, the UK Financial Conduct
Authority (FCA), issued statements which provide the dates that all
Authority (FCA), issued statements which provide the dates that all
LIBOR settings will either cease to be provided by any administrator or
LIBOR settings will either cease to be provided by any administrator or
will no longer be representative. This will occur: immediately after 31
will no longer be representative. This will occur: immediately after 31
December 2021, for all GBP, Euro, CHF and JPY LIBOR settings, and for
December 2021, for all GBP, Euro, CHF and JPY LIBOR settings, and for
1-week and 2-month USD LIBOR settings; and immediately after 30
1-week and 2-month USD LIBOR settings; and immediately after 30
June 2023, for the remaining USD LIBOR settings. The Group has taken
June 2023, for the remaining USD LIBOR settings. The Group has taken
relevant Phase 2 practical reliefs from certain requirements in IFRS 9,
relevant Phase 2 practical reliefs from certain requirements in IFRS 9,
IFRS 7, IFRS 4 and IFRS 16 relating to changes in the basis for
IFRS 7, IFRS 4 and IFRS 16 relating to changes in the basis for
determining contractual cash flows of financial assets, financial
determining contractual cash flows of financial assets, financial
liabilities and hedge accounting.
liabilities and hedge accounting.
Our hedging arrangements impacted by the reform of US LIBOR are
Our hedging arrangements impacted by the reform of US LIBOR are
part of the International Swaps and Derivatives Association (ISDA)
part of the International Swaps and Derivatives Association (ISDA)
Fallbacks Protocol, which provides a global standardised mechanism
Fallbacks Protocol, which provides a global standardised mechanism
Group has interest rate risk exposure including US$6.1 billion nominal
Group has interest rate risk exposure including US$6.1 billion nominal
values of fixed-rate borrowings swapped to US dollar rates in fair value
values of fixed-rate borrowings swapped to US dollar rates in fair value
hedge relationships impacted by the reform, described further in note
hedge relationships impacted by the reform, described further in note
29 A (b) (v).
29 A (b) (v).
We expect the application of the Phase 2 reliefs to result in
We expect the application of the Phase 2 reliefs to result in
continuation of the Group’s pre-existing hedge accounting upon
continuation of the Group’s pre-existing hedge accounting upon
amendment of designated arrangements in response to the
amendment of designated arrangements in response to the
replacement of IBOR with new benchmarks (refer to note 1 q (iv)).
replacement of IBOR with new benchmarks (refer to note 1 q (iv)).
In addition, the Group has a number of arrangements which reference
In addition, the Group has a number of arrangements which reference
IBOR benchmarks and extend beyond 2021. These include third-party
IBOR benchmarks and extend beyond 2021. These include third-party
borrowings relating to the Oyu Tolgoi LLC project finance (refer to note
borrowings relating to the Oyu Tolgoi LLC project finance (refer to note
21), other secured loans, a number of intragroup balances and certain
21), other secured loans, a number of intragroup balances and certain
commercial contracts. Other arrangements, which currently reference
commercial contracts. Other arrangements, which currently reference
IBOR benchmarks include shareholder loan facilities. Phase 2
IBOR benchmarks include shareholder loan facilities. Phase 2
amendments will require the Group to account for a change in the
amendments will require the Group to account for a change in the
basis for determining the cash flows of a financial asset or a financial
basis for determining the cash flows of a financial asset or a financial
liability measured at amortised cost, by updating their respective
liability measured at amortised cost, by updating their respective
effective interest rates as required by IBOR reform. As a result of the
effective interest rates as required by IBOR reform. As a result of the
Phase 2 relief the Group expects that no material gain or loss will arise
Phase 2 relief the Group expects that no material gain or loss will arise
from these updates (refer to note 1 q (ii)). The accessible revolving
from these updates (refer to note 1 q (ii)). The accessible revolving
lines of credit have been replaced with a new facility, which now refers
lines of credit have been replaced with a new facility, which now refers
to the SOFR and SONIA rates (refer to note 29 A (b)). Most intragroup
to the SOFR and SONIA rates (refer to note 29 A (b)). Most intragroup
balances transitioned to alternative benchmarks by 31 December
balances transitioned to alternative benchmarks by 31 December
Standards issued, but not yet effective
Standards issued, but not yet effective
Proceeds before Intended Use (Amendments to IAS 16
Proceeds before Intended Use (Amendments to IAS 16
yet endorsed by the UK)
yet endorsed by the UK)
The amendments prohibit the deduction, from the cost of major project
The amendments prohibit the deduction, from the cost of major project
construction work in progress, of proceeds (net of additional
construction work in progress, of proceeds (net of additional
processing costs) from selling items before the related item of
processing costs) from selling items before the related item of
property, plant and equipment is available for use. Under the
property, plant and equipment is available for use. Under the
amendment such proceeds are recognised in the income statement
amendment such proceeds are recognised in the income statement
together with the costs of producing those items. The amendments will
together with the costs of producing those items. The amendments will
result in higher reported revenue, operating costs, inventory and
result in higher reported revenue, operating costs, inventory and
property plant and equipment balances (capital works in progress)
property plant and equipment balances (capital works in progress)
relating to major development projects completed after 1 January
relating to major development projects completed after 1 January
2020. IAS 2 “Inventories” will apply to the measurement of pre-
2020. IAS 2 “Inventories” will apply to the measurement of pre-
production inventory and identifying the related cost may require
production inventory and identifying the related cost may require
significant estimation and judgment in the selection of an appropriate
significant estimation and judgment in the selection of an appropriate
method for allocating development expenditure to such inventory.
method for allocating development expenditure to such inventory.
During 2021, the Group completed a review of the impact of these
During 2021, the Group completed a review of the impact of these
amendments and concluded that adjustments to Group retained
amendments and concluded that adjustments to Group retained
earnings at 1 January 2020, and restatement of the 2020 and 2021
earnings at 1 January 2020, and restatement of the 2020 and 2021
Group Income Statement and Balance Sheet upon adoption of the
Group Income Statement and Balance Sheet upon adoption of the
amendments in 2022 in respect of such projects are not material.
amendments in 2022 in respect of such projects are not material.
Onerous Contracts – Cost of Fulfilling a Contract (Amendments
Onerous Contracts – Cost of Fulfilling a Contract (Amendments
to IAS 37 “Provisions, Contingent Liabilities and Contingent
to IAS 37 “Provisions, Contingent Liabilities and Contingent
Assets”), mandatory in 2022 and not yet endorsed by the UK)
Assets”), mandatory in 2022 and not yet endorsed by the UK)
The amendments specify which costs an entity includes in determining
The amendments specify which costs an entity includes in determining
the cost of fulfilling a contract for the purpose of assessing whether the
the cost of fulfilling a contract for the purpose of assessing whether the
contract is onerous. Under the amendment the cost of fulfilling a
contract is onerous. Under the amendment the cost of fulfilling a
contract comprises all directly related costs, including both
contract comprises all directly related costs, including both
incremental amounts and an allocation of other directly related
incremental amounts and an allocation of other directly related
expenditure. The Group currently makes provision for onerous
expenditure. The Group currently makes provision for onerous
contracts when the assets dedicated to the contract are fully impaired
contracts when the assets dedicated to the contract are fully impaired
or the contract becomes stranded as a result of a business decision
or the contract becomes stranded as a result of a business decision
(refer to note 1(i)). From 2022, the Group will record a provision if a
(refer to note 1(i)). From 2022, the Group will record a provision if a
contract is found to be loss-making on a stand-alone basis following
contract is found to be loss-making on a stand-alone basis following
allocation of all directly related costs as required by the amendments
allocation of all directly related costs as required by the amendments
to IAS 37. As required by the transition arrangements, the Group will
to IAS 37. As required by the transition arrangements, the Group will
apply the amendments in its 2022 Financial Statements without
apply the amendments in its 2022 Financial Statements without
restatement. During 2021, the Group completed a review of the impact
restatement. During 2021, the Group completed a review of the impact
of these amendments and concluded that adjustments to retained
of these amendments and concluded that adjustments to retained
for replacement of the current benchmark. At 31 December 2021, the
for replacement of the current benchmark. At 31 December 2021, the
earnings at 1 January 2022 are not material.
earnings at 1 January 2022 are not material.
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 “Income Taxes”,
mandatory in 2023 and not yet endorsed by the UK)
Narrow-scope amendments to IAS 12 introduce an exception to the
initial recognition exemption for transactions that give rise to equal
taxable and deductible temporary differences. The most significant
impact from implementing these amendments is expected to be from
temporary differences related to the Group's provisions for close-down,
restoration, environmental and lease obligations and corresponding
capitalised closure costs and right-of-use assets.
These judgments and estimates are based on management’s best
knowledge of the relevant facts and circumstances, having regard to
previous experience, but actual results may differ materially from the
amounts included in the financial statements. Areas of judgment in the
application of accounting policies that have the most significant effect
on the amounts recognised in the financial statements and key sources
of estimation uncertainty that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities
within the next financial year are noted below and further information
is contained in the accounting policies and/or the notes to the financial
statements.
Our existing accounting policy states that “where the recognition of an
asset and liability from a single transaction gives rise to equal and
offsetting temporary differences, Rio Tinto applies the Initial
Recognition Exemption allowed by IAS 12, and consequently
recognises neither a deferred tax asset nor a deferred tax liability in
respect of these temporary differences”.
These areas of judgment and estimation are discussed further in
critical accounting policies and estimates on pages 233 to 237. The
quantum of ore reserves and mineral resources impacts many of these
areas and the basis of calculation is explained below. Information on
less material judgments and sources of estimation uncertainty has
been incorporated into the relevant accounting policy notes.
Under the amendment, deferred tax assets and liabilities will be
required to be recognised in respect of such temporary differences.
Upon transition in 2023, the Group anticipates material adjustments
(prior to required offsetting within the same tax jurisdiction) as at 1
January 2021 to deferred tax assets and deferred tax liabilities with the
net difference recorded in reserves. Work is ongoing to quantify the
impact, including appropriate offsets against existing deferred tax
liabilities or assets in various jurisdictions. There will be no impact on
tax cash flows or balance sheet tax recoverable or payable as a result
of implementing these amendments and the unwind of the newly
recognised deferred tax is not expected to materially impact annual
profits and losses.
IFRS 17 Insurance Contracts and amendments to IFRS 17
Insurance Contracts (mandatory in 2023 and not yet endorsed
by the UK)
The standard provides consistent principles for all aspects of
accounting for insurance contracts. The Group continues to evaluate
the impact of this pronouncement and to monitor the evolving practice,
particularly for potential impact areas related to reinsurance contracts
with Equity Accounted Units and in-substance self-insurance
arrangements.
Amendments to IAS 1 “Presentation of Financial Statements”
on classification of liabilities” (mandatory in 2024 and not yet
endorsed by the UK)
These narrow-scope amendments to IAS 1 set out specific guidance for
determining the classification of liabilities as current or non-current,
based on whether an entity has a substantive right to payment deferral
at the reporting date. The Group continues to evaluate the impact of
this amendment, which has been tentatively deferred to no earlier than
1 January 2024.
Judgments in applying accounting policies and key
sources of estimation uncertainty
The preparation of the financial statements requires management to
use judgment in applying accounting policies and in making critical
accounting estimates.
Areas of judgment in the application of accounting policies that have
the most significant effect on the amounts recognised in the financial
statements in the current year are:
– Impairment of non-current assets – determination of cash-
generating units (CGUs) and assessment of indicators of impairment
– note 1(e) and (i), critical policy (i), note 6, note 12 and note 13.
– Close-down, restoration and environmental obligations –
determining when a closure study plan and cost estimate is
sufficiently advanced and reliable to form the basis for an update –
note 1(l) and critical policy (iii).
– Recoverability of potential deferred tax assets – recognition of
deferred tax assets for loss making operations – critical policy (vi)
and note 17.
– Uncertain tax positions – technical interpretation of tax law and
evaluation of outcomes in the determination of whether multiple or
binary scenarios are the appropriate basis for provision
measurement – note 1(n), critical policy (v), note 9 and note 30.
– Estimation of asset lives – determination of the life of the orebody
and mine reserves, including grade cut-off assumptions consistent
with the internal prices described in the Climate Change section –
note 1(i) and critical policy (ii).
– Deferral of stripping costs – judgment on components/strip ratios
and separate or integrated multiple pit mines – note 1(h) and critical
policy (iv).
Other areas of judgment impacting the financial statements are:
– Oyu Tolgoi funding balances - accounting for a transaction with a
non-controlling owner, critical policy (xii).
– Provision for onerous contracts – determination of assets dedicated
to a contract – note 1(i) and critical policy (vii).
– Identification of functional currencies – different companies may
make different judgments based on similar facts – note 1(d) and
critical policy (viii).
– Basis of consolidation – judgment as to when the Group has control,
joint control or significant influence – critical policy (ix) and notes
32-35.
– Contingencies – assessing the probability of any loss and whether it
is possible to quantify any loss – critical policy (x) and note 30.
– Exclusions from underlying earnings – judgment on items to be
excluded on grounds of nature or size – critical policy (xi) and note 2.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
Ore reserves and mineral resources
– Accounting for the Pilbara Iron Arrangements – treatment of
payments made over a contractually specified period for network
infrastructure capacity – critical policy (xiii) and note 33(c).
Key sources of estimation uncertainty that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are:
– Close-down, restoration and environmental cost obligations – the
Group has closure studies ongoing at over 15 sites; many of these
are multi-year projects but around five are expected to complete
major milestones during 2022. In particular, on 2 February 2022,
Energy Resources of Australia released preliminary findings from its
reforecast of the total undiscounted cost schedule for the Ranger
rehabilitation project giving a revised range, including spend since 1
January 2019, of approximately A$1.6 billion to A$2.2 billion in
nominal terms. Information available from this reforecast resulted
in the Group recording an increase to the closure provision of
US$510 million at 31 December 2021 based on a central case
within the given range. The central case is considered to represent
Rio Tinto’s best estimate of obligations at 31 December 2021,
however Rio Tinto continues to perform a technical review over this
reforecast and has advised Energy Resources of Australia that it is
committed to working with the company to ensure that
rehabilitation of the Ranger Project Area is successfully achieved.
We therefore expect to make further adjustments to the provision
during 2022 as confidence levels in the studies improve.
– Recoverability of potential deferred tax assets – the forecasts used
to support the recognition of deferred tax assets will be impacted by
changes to forecast commodity prices and the closure uncertainties
noted above.
Materiality
The Group considers information to be material if correcting a
misstatement, omission or obscuring could, in the light of surrounding
circumstances, reasonably be expected to change the judgment of a
reasonable person relying on the financial statements. The Group
considers both quantitative and qualitative factors in determining
whether information is material; the concept of materiality is therefore
not driven purely by numerical values.
When considering the potential materiality of information,
management makes an initial quantitative assessment using
thresholds based on estimates of profit before taxation; for the year
ended 31 December 2021 the quantitative threshold was US$700
million (year ended 31 December 2020: US$550 million). However,
other considerations can result in a determination that lower values
are material or, occasionally, that higher values are immaterial. These
considerations include whether a misstatement, omission or obscuring:
masks a change or trend in key performance indicators; causes
reported key metrics to change from a positive to negative values or
vice-versa; affects compliance with regulatory requirements or other
contractual requirements; could result in an increase to management’s
compensation; or might conceal an unlawful transaction.
In assessing materiality, management also applies judgment based on
its understanding of the business and its internal and external financial
statement users. The assessment will consider user expectations of
numerical and narrative reporting. Sources used in making this
assessment would include, for example: published analyst consensus
measures, experience gained in formal and informal dialogue with
users (including regulatory correspondence), and peer group
benchmarking.
Estimates of ore reserves and, in some cases, mineral resources can
impact: depreciation and amortisation rates; the carrying values of
intangible assets and property, plant and equipment; deferred
stripping costs; provisions for close-down and restoration costs; and
the recovery of deferred tax assets.
The Group estimates its ore reserves and mineral resources based on
information compiled by Competent Persons as defined in accordance
with the Joint Ore Reserves Committee (JORC) code (see note 1(j)).
The estimation of ore reserves and mineral resources requires
judgment to interpret available geological data and subsequently to
select an appropriate mining method and then to establish an
extraction schedule. Estimation requires assumptions about future
commodity prices and demand, exchange rates, production costs,
transport costs, close-down and restoration costs, recovery rates and
discount rates and, in some instances, the renewal of mining licences.
There are many uncertainties in the estimation process and
assumptions that are valid at the time of estimation may change
significantly when new information becomes available. New geological
or economic data, or unforeseen operational issues, may change
estimates of ore reserves and mineral resources.
The Group uses judgment as to when to include mineral resources in
accounting estimates, for example, the use of mineral resources in the
Group’s depreciation policy is described in note 1(i) below and in the
determination of the date of closure as described in note 1(l). The
unaudited statement of ore reserves is included on page 354 and of
mineral resources on page 366.
(a) Accounting convention
The financial information included in the financial statements for the
year ended 31 December 2021, and for the related comparative
periods, has been prepared under the historical cost convention, as
modified by the revaluation of certain derivative contracts and financial
assets, the impact of fair value hedge accounting on the hedged item
and the accounting for post-employment assets and obligations. The
Group’s policy in respect of these items is set out in the notes below.
All financial statement values are rounded to the nearest million
(US$m) unless otherwise stated.
Where applicable, comparatives have been adjusted to measure or
present them on the same basis as current period figures.
(b) Basis of consolidation (notes 32-35)
All intragroup transactions and balances have been eliminated
on consolidation.
Where necessary, adjustments are made to the locally reported assets,
liabilities, and results of subsidiaries, joint arrangements and
associates to bring their accounting policies in line with those used by
the Group.
Subsidiaries
Subsidiaries are entities controlled by either of the companies. Control
exists where either of the companies has: power over the entities, that
is, existing rights that give it the current ability to direct the relevant
activities of the entities (those that significantly affect the companies’
returns); exposure, or rights, to variable returns from its involvement
with the entities; and the ability to use its power to affect those
returns. Subsidiaries are fully consolidated from the date on which the
Group obtains control. They are de-consolidated from the date that
control ceases.
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Financial statements continued
Financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
Ore reserves and mineral resources
Ore reserves and mineral resources
Joint arrangements
Acquisitions (note 36)
A joint arrangement is an arrangement in which two or more parties
have joint control. Joint control is the contractually agreed sharing of
control such that decisions about the relevant activities of the
arrangement (those that significantly affect the companies’ returns)
require the unanimous consent of the parties sharing control. The
Group has two types of joint arrangements:
Joint operations (JO)
A JO is a joint arrangement in which the parties that share joint control
have rights to the assets, and obligations for the liabilities, relating to
the arrangement. This includes situations where the parties benefit
from the joint activity through a share of the output, rather than by
receiving a share of the results of trading. In relation to its interest in a
JO, the Group recognises: its share of assets and liabilities; revenue
from the sale of its share of the output and its share of any revenue
generated from the sale of the output by the JO; and its share of
expenses. All such amounts are measured in accordance with the
terms of the arrangement, which is usually in proportion to the Group’s
interest in the JO. These amounts are recorded in the Group’s financial
statements on the appropriate lines.
Joint ventures (JV)
A JV is a joint arrangement in which the parties that share joint control
have rights to the net assets of the arrangement. JVs are accounted for
using the equity accounting method.
Other unincorporated arrangements
In some cases, the Group participates in unincorporated arrangements
and has rights to its share of the assets and obligations for its share of
the liabilities of the arrangement rather than a right to a net return, but
does not share joint control. In such cases, the Group recognises: its
share of assets and liabilities; revenue from the sale of its share of the
output and its share of any revenue generated from the sale of the
output by the unincorporated arrangement; and its share of expenses.
All such amounts are measured in accordance with the terms of the
arrangement, which is usually in proportion to the Group’s interest in
the arrangement. These amounts are recorded in the Group’s financial
statements on the appropriate lines.
Associates
An associate is an entity that is neither a subsidiary nor a joint
arrangement, over which the Group has significant influence.
Significant influence is presumed to exist where there is neither control
nor joint control and the Group has over 20% of the voting rights,
unless it can be clearly demonstrated that this is not the case.
Significant influence can arise where the Group holds less than 20% of
the voting rights if it has the power to participate in the financial and
operating policy decisions affecting the entity. Investments in
associates are accounted for using the equity accounting method.
The Group uses the term “equity accounted units” (EAUs) to refer to
associates and JVs collectively. Under the equity accounting method
the investment is recorded initially at cost to the Group, including any
goodwill on acquisition. In subsequent periods the carrying amount of
the investment is adjusted to reflect the Group’s share of the EAUs’
retained post-acquisition profit or loss and other comprehensive
income. Long-term loans to EAUs that in substance form part of the
Group’s net investment (quasi equity loans) are financial assets but are
included in the line “Investments in equity accounted units” on the face
of the balance sheet. When the Group’s share of losses in an EAU
equals or exceeds its interest in the EAU, including such long-term
loans and any other unsecured receivables, the Group does not
recognise further losses, unless it has incurred legal or constructive
obligations to continue to make payments on behalf of the EAU.
Under the “acquisition” method of accounting for business
combinations, the purchase consideration is allocated to the
identifiable assets acquired and liabilities and contingent liabilities
assumed (the identifiable net assets) on the basis of their fair value at
the date of acquisition, which is the date on which control is obtained.
In determining whether a particular set of activities is a business, an
acquired arrangement has to have an input and substantive process
which together significantly contribute to the ability to create outputs.
The consideration transferred for the acquisition of a subsidiary
comprises the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree, the fair value of any
asset or liability resulting from a contingent consideration arrangement
and any equity interests issued by the Group. Costs related to the
acquisition of a subsidiary are expensed as incurred.
The excess of the consideration transferred, the amount of any non-
controlling interest in the acquiree and the acquisition-date fair value
of any previous equity interest in the acquiree over the fair value of the
identifiable net assets acquired is recorded as goodwill. Any shortfall is
immediately recognised in the income statement.
Non-controlling interests in the acquiree, that are present ownership
interests and entitle their holders to a proportionate share of the
entity’s net assets in the event of liquidation, are recognised by the
Group in one of two ways with the choice being available on an
acquisition-by-acquisition basis. They can be measured at either the
non-controlling interest’s proportionate share of the acquiree’s
identifiable net assets or at fair value. In some cases, non-controlling
interests may be treated as equity options and valued on that basis.
Goodwill (see note 1(e)) and amounts attributable to non-controlling
interests will differ depending on the basis used.
Where the Group previously held a non-controlling interest in the
acquiree, this is remeasured to fair value at the date control is obtained
with any gain or loss recognised in the income statement. The cash
cost of the share purchase that gives rise to control is included within
“investing activities” in the cash flow statement.
Where the Group increases its ownership interest in a subsidiary, the
difference between the purchase price and the carrying value of the
share of net assets acquired is recorded in equity. The cash cost of
such purchases is included within “financing activities” in the cash
flow statement.
Provisional fair values allocated at a reporting date are finalised within
12 months of the acquisition date.
The results of businesses acquired during the year are included in the
consolidated financial statements from the date on which control, joint
control or significant influence is obtained.
Disposals (note 36)
Individual non-current assets or “disposal groups” (that is, groups of
assets and liabilities) to be disposed of by sale or otherwise in a single
transaction are classified as “held for sale” if the following criteria are
met at the period end:
– The carrying amount will be recovered principally through a sale
transaction rather than through continuing use; and
– The disposal group is available for immediate sale in its present
condition subject only to terms that are usual and customary for
such sales; and
– The sale is highly probable.
Notes to the 2021 financial statements
– Accounting for the Pilbara Iron Arrangements – treatment of
– Accounting for the Pilbara Iron Arrangements – treatment of
payments made over a contractually specified period for network
payments made over a contractually specified period for network
infrastructure capacity – critical policy (xiii) and note 33(c).
infrastructure capacity – critical policy (xiii) and note 33(c).
Key sources of estimation uncertainty that have a significant risk of
Key sources of estimation uncertainty that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are:
liabilities within the next financial year are:
– Close-down, restoration and environmental cost obligations – the
– Close-down, restoration and environmental cost obligations – the
Group has closure studies ongoing at over 15 sites; many of these
Group has closure studies ongoing at over 15 sites; many of these
are multi-year projects but around five are expected to complete
are multi-year projects but around five are expected to complete
major milestones during 2022. In particular, on 2 February 2022,
major milestones during 2022. In particular, on 2 February 2022,
Energy Resources of Australia released preliminary findings from its
Energy Resources of Australia released preliminary findings from its
reforecast of the total undiscounted cost schedule for the Ranger
reforecast of the total undiscounted cost schedule for the Ranger
rehabilitation project giving a revised range, including spend since 1
rehabilitation project giving a revised range, including spend since 1
January 2019, of approximately A$1.6 billion to A$2.2 billion in
January 2019, of approximately A$1.6 billion to A$2.2 billion in
nominal terms. Information available from this reforecast resulted
nominal terms. Information available from this reforecast resulted
in the Group recording an increase to the closure provision of
in the Group recording an increase to the closure provision of
US$510 million at 31 December 2021 based on a central case
US$510 million at 31 December 2021 based on a central case
within the given range. The central case is considered to represent
within the given range. The central case is considered to represent
Rio Tinto’s best estimate of obligations at 31 December 2021,
Rio Tinto’s best estimate of obligations at 31 December 2021,
however Rio Tinto continues to perform a technical review over this
however Rio Tinto continues to perform a technical review over this
reforecast and has advised Energy Resources of Australia that it is
reforecast and has advised Energy Resources of Australia that it is
committed to working with the company to ensure that
committed to working with the company to ensure that
rehabilitation of the Ranger Project Area is successfully achieved.
rehabilitation of the Ranger Project Area is successfully achieved.
We therefore expect to make further adjustments to the provision
We therefore expect to make further adjustments to the provision
during 2022 as confidence levels in the studies improve.
during 2022 as confidence levels in the studies improve.
– Recoverability of potential deferred tax assets – the forecasts used
– Recoverability of potential deferred tax assets – the forecasts used
to support the recognition of deferred tax assets will be impacted by
to support the recognition of deferred tax assets will be impacted by
changes to forecast commodity prices and the closure uncertainties
changes to forecast commodity prices and the closure uncertainties
noted above.
noted above.
Materiality
Materiality
The Group considers information to be material if correcting a
The Group considers information to be material if correcting a
misstatement, omission or obscuring could, in the light of surrounding
misstatement, omission or obscuring could, in the light of surrounding
circumstances, reasonably be expected to change the judgment of a
circumstances, reasonably be expected to change the judgment of a
reasonable person relying on the financial statements. The Group
reasonable person relying on the financial statements. The Group
considers both quantitative and qualitative factors in determining
considers both quantitative and qualitative factors in determining
whether information is material; the concept of materiality is therefore
whether information is material; the concept of materiality is therefore
not driven purely by numerical values.
not driven purely by numerical values.
When considering the potential materiality of information,
When considering the potential materiality of information,
management makes an initial quantitative assessment using
management makes an initial quantitative assessment using
thresholds based on estimates of profit before taxation; for the year
thresholds based on estimates of profit before taxation; for the year
ended 31 December 2021 the quantitative threshold was US$700
ended 31 December 2021 the quantitative threshold was US$700
million (year ended 31 December 2020: US$550 million). However,
million (year ended 31 December 2020: US$550 million). However,
other considerations can result in a determination that lower values
other considerations can result in a determination that lower values
are material or, occasionally, that higher values are immaterial. These
are material or, occasionally, that higher values are immaterial. These
Estimates of ore reserves and, in some cases, mineral resources can
Estimates of ore reserves and, in some cases, mineral resources can
impact: depreciation and amortisation rates; the carrying values of
impact: depreciation and amortisation rates; the carrying values of
intangible assets and property, plant and equipment; deferred
intangible assets and property, plant and equipment; deferred
stripping costs; provisions for close-down and restoration costs; and
stripping costs; provisions for close-down and restoration costs; and
the recovery of deferred tax assets.
the recovery of deferred tax assets.
The Group estimates its ore reserves and mineral resources based on
The Group estimates its ore reserves and mineral resources based on
information compiled by Competent Persons as defined in accordance
information compiled by Competent Persons as defined in accordance
with the Joint Ore Reserves Committee (JORC) code (see note 1(j)).
with the Joint Ore Reserves Committee (JORC) code (see note 1(j)).
The estimation of ore reserves and mineral resources requires
The estimation of ore reserves and mineral resources requires
judgment to interpret available geological data and subsequently to
judgment to interpret available geological data and subsequently to
select an appropriate mining method and then to establish an
select an appropriate mining method and then to establish an
extraction schedule. Estimation requires assumptions about future
extraction schedule. Estimation requires assumptions about future
commodity prices and demand, exchange rates, production costs,
commodity prices and demand, exchange rates, production costs,
transport costs, close-down and restoration costs, recovery rates and
transport costs, close-down and restoration costs, recovery rates and
discount rates and, in some instances, the renewal of mining licences.
discount rates and, in some instances, the renewal of mining licences.
There are many uncertainties in the estimation process and
There are many uncertainties in the estimation process and
assumptions that are valid at the time of estimation may change
assumptions that are valid at the time of estimation may change
significantly when new information becomes available. New geological
significantly when new information becomes available. New geological
or economic data, or unforeseen operational issues, may change
or economic data, or unforeseen operational issues, may change
estimates of ore reserves and mineral resources.
estimates of ore reserves and mineral resources.
The Group uses judgment as to when to include mineral resources in
The Group uses judgment as to when to include mineral resources in
accounting estimates, for example, the use of mineral resources in the
accounting estimates, for example, the use of mineral resources in the
Group’s depreciation policy is described in note 1(i) below and in the
Group’s depreciation policy is described in note 1(i) below and in the
determination of the date of closure as described in note 1(l). The
determination of the date of closure as described in note 1(l). The
unaudited statement of ore reserves is included on page 354 and of
unaudited statement of ore reserves is included on page 354 and of
mineral resources on page 366.
mineral resources on page 366.
(a) Accounting convention
(a) Accounting convention
The financial information included in the financial statements for the
The financial information included in the financial statements for the
year ended 31 December 2021, and for the related comparative
year ended 31 December 2021, and for the related comparative
periods, has been prepared under the historical cost convention, as
periods, has been prepared under the historical cost convention, as
modified by the revaluation of certain derivative contracts and financial
modified by the revaluation of certain derivative contracts and financial
assets, the impact of fair value hedge accounting on the hedged item
assets, the impact of fair value hedge accounting on the hedged item
and the accounting for post-employment assets and obligations. The
and the accounting for post-employment assets and obligations. The
Group’s policy in respect of these items is set out in the notes below.
Group’s policy in respect of these items is set out in the notes below.
All financial statement values are rounded to the nearest million
All financial statement values are rounded to the nearest million
(US$m) unless otherwise stated.
(US$m) unless otherwise stated.
Where applicable, comparatives have been adjusted to measure or
Where applicable, comparatives have been adjusted to measure or
present them on the same basis as current period figures.
present them on the same basis as current period figures.
(b) Basis of consolidation (notes 32-35)
(b) Basis of consolidation (notes 32-35)
considerations include whether a misstatement, omission or obscuring:
considerations include whether a misstatement, omission or obscuring:
All intragroup transactions and balances have been eliminated
All intragroup transactions and balances have been eliminated
masks a change or trend in key performance indicators; causes
masks a change or trend in key performance indicators; causes
on consolidation.
on consolidation.
reported key metrics to change from a positive to negative values or
reported key metrics to change from a positive to negative values or
vice-versa; affects compliance with regulatory requirements or other
vice-versa; affects compliance with regulatory requirements or other
Where necessary, adjustments are made to the locally reported assets,
Where necessary, adjustments are made to the locally reported assets,
contractual requirements; could result in an increase to management’s
contractual requirements; could result in an increase to management’s
liabilities, and results of subsidiaries, joint arrangements and
liabilities, and results of subsidiaries, joint arrangements and
compensation; or might conceal an unlawful transaction.
compensation; or might conceal an unlawful transaction.
associates to bring their accounting policies in line with those used by
associates to bring their accounting policies in line with those used by
In assessing materiality, management also applies judgment based on
In assessing materiality, management also applies judgment based on
its understanding of the business and its internal and external financial
its understanding of the business and its internal and external financial
statement users. The assessment will consider user expectations of
statement users. The assessment will consider user expectations of
numerical and narrative reporting. Sources used in making this
numerical and narrative reporting. Sources used in making this
assessment would include, for example: published analyst consensus
assessment would include, for example: published analyst consensus
measures, experience gained in formal and informal dialogue with
measures, experience gained in formal and informal dialogue with
users (including regulatory correspondence), and peer group
users (including regulatory correspondence), and peer group
benchmarking.
benchmarking.
the Group.
the Group.
Subsidiaries
Subsidiaries
Subsidiaries are entities controlled by either of the companies. Control
Subsidiaries are entities controlled by either of the companies. Control
exists where either of the companies has: power over the entities, that
exists where either of the companies has: power over the entities, that
is, existing rights that give it the current ability to direct the relevant
is, existing rights that give it the current ability to direct the relevant
activities of the entities (those that significantly affect the companies’
activities of the entities (those that significantly affect the companies’
returns); exposure, or rights, to variable returns from its involvement
returns); exposure, or rights, to variable returns from its involvement
with the entities; and the ability to use its power to affect those
with the entities; and the ability to use its power to affect those
returns. Subsidiaries are fully consolidated from the date on which the
returns. Subsidiaries are fully consolidated from the date on which the
Group obtains control. They are de-consolidated from the date that
Group obtains control. They are de-consolidated from the date that
control ceases.
control ceases.
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Financial statements continued
Notes to the 2021 financial statements
The Group sells a significant proportion of its products on CFR or CIF
Incoterms. This means that the Group is responsible (acts as principal)
for providing shipping services and, in some instances, insurance after
the date at which control of goods passes to the customer at the
loading port.
The Group therefore has separate performance obligations for freight
and insurance services that are provided solely to facilitate sale of the
commodities it produces. Other Incoterms commonly used by the
Group are Free on Board (FOB), where the Group has no responsibility
for freight or insurance once control of the goods has passed at the
loading port, and Delivered at Place (DAP), where control of the goods
passes when the product is delivered to the agreed destination. For
these Incoterms there is only one performance obligation, being for
provision of product at the point where control passes.
The Group’s products are sold to customers under contracts which vary
in tenure and pricing mechanisms, including some volumes sold in the
spot market. Pricing for iron ore is on a range of terms, the majority
being either monthly or quarterly average pricing mechanisms, with a
smaller proportion of iron ore volumes being sold on the spot market.
Within each sales contract, each unit of product shipped is a separate
performance obligation. Revenue is generally recognised at the
contracted price as this reflects the stand-alone selling price. Sales
revenue excludes any applicable sales taxes. Mining royalties payable
are presented as an operating cost or, where they are in substance a
profit-based tax, within taxation.
Sales of copper concentrate are stated net of the treatment and
refining charges which will be required to convert it to an end product.
Certain of the Group’s products may be provisionally priced at the date
revenue is recognised and a provisional invoice issued; however,
substantially all iron ore and aluminium sales are reflected at final
prices in the results for the period. Provisionally priced receivables are
subsequently measured at fair value through the income statement
under IFRS 9 “Financial Instruments” as described in note (q). The final
selling price for all provisionally priced products is based on the price
for the quotational period stipulated in the contract. Final prices for
copper concentrate are normally determined between 30-120 days
after delivery to the customer. The change in value of the provisionally
priced receivable is based on relevant forward market prices and is
included in sales revenue; refer to note 3 on page 241 and note 29C(a)
on page 271.
Rio Tinto has a number of long-term contracts to supply product to
customers in future periods. Generally, revenues are recognised on an
as invoiced basis; hence, the right to consideration from a customer
corresponds directly with the entity’s performance completed to date.
A number of the Group’s businesses provide volume discounts in
certain circumstances. The impact of constraining such variable
consideration under IFRS 15 “Revenue from Contracts with Customers”
was immaterial at both 31 December 2021 and 31 December 2020.
The Group applies the practical expedient in paragraph 121 of IFRS 15
and does not disclose information on the transaction price allocated to
performance obligations that are unsatisfied.
1 Principal accounting policies continued
Disposal groups held for sale are carried at the lower of their carrying
amount and fair value less costs to sell. The comparative balance sheet
is not restated. Disposal groups acquired with a view to resale are held
at the fair value determined at the acquisition date. For these assets
acquired for resale no profits or losses are recognised between the
acquisition date and the disposal date, unless there is a subsequent
impairment.
On classification as held for sale, the assets are no longer depreciated
and, if applicable, equity accounting ceases.
If control is lost, any interest in the entity retained by the Group is
remeasured to its fair value and the change in carrying amount is
recognised in the income statement. The retained interest may be
subsequently accounted for as a joint venture, joint operation,
associate or financial asset depending on the facts. Certain amounts
previously recognised in other comprehensive income in respect of the
entity disposed of, or for which control, joint control or significant
influence has ceased, may be recycled to the income statement. The
cash proceeds of disposals are included within “Investing activities” in
the cash flow statement.
Changes in the Group’s interest in a subsidiary that do not result in a
loss of control are accounted for in equity. The cash proceeds of such
disposals are included within “Financing activities” in the cash flow
statement.
(c) Sales revenue
Recognition and measurement
The Group recognises sales revenue related to the transfer of promised
goods or services when control of the goods or services passes to the
customer. The amount of revenue recognised reflects the
consideration to which the Group is or expects to be entitled in
exchange for those goods or services.
Sales revenue is recognised on individual sales when control transfers
to the customer. In most instances, control passes and sales revenue is
recognised when the product is delivered to the vessel or vehicle on
which it will be transported once loaded, the destination port or the
customer’s premises. There may be circumstances when judgment is
required based on the five indicators of control below.
– The customer has the significant risks and rewards of ownership
and has the ability to direct the use of, and obtain substantially all
of the remaining benefits from, the good or service.
– The customer has a present obligation to pay in accordance with the
terms of the sales contract. For shipments under the Incoterms
Cost, Insurance and Freight (CIF)/Carriage Paid to (CPT)/Cost and
Freight (CFR) this is generally when the ship is loaded, at which
time the obligation for payment is for both product and freight.
– The customer has accepted the asset. Sales revenue may be
subject to adjustment if the product specification does not conform
to the terms specified in the sales contract but this does not impact
the passing of control. Assay and specification adjustments have
been immaterial historically.
– The customer has legal title to the asset. The Group usually retains
legal title until payment is received for credit risk purposes only.
– The customer has physical possession of the asset. This indicator
may be less important as the customer may obtain control of an
asset prior to obtaining physical possession, which may be the case
for goods in transit.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
Disposal groups held for sale are carried at the lower of their carrying
Disposal groups held for sale are carried at the lower of their carrying
The Group sells a significant proportion of its products on CFR or CIF
The Group sells a significant proportion of its products on CFR or CIF
amount and fair value less costs to sell. The comparative balance sheet
amount and fair value less costs to sell. The comparative balance sheet
Incoterms. This means that the Group is responsible (acts as principal)
Incoterms. This means that the Group is responsible (acts as principal)
is not restated. Disposal groups acquired with a view to resale are held
is not restated. Disposal groups acquired with a view to resale are held
for providing shipping services and, in some instances, insurance after
for providing shipping services and, in some instances, insurance after
at the fair value determined at the acquisition date. For these assets
at the fair value determined at the acquisition date. For these assets
the date at which control of goods passes to the customer at the
the date at which control of goods passes to the customer at the
acquired for resale no profits or losses are recognised between the
acquired for resale no profits or losses are recognised between the
loading port.
loading port.
acquisition date and the disposal date, unless there is a subsequent
acquisition date and the disposal date, unless there is a subsequent
impairment.
impairment.
On classification as held for sale, the assets are no longer depreciated
On classification as held for sale, the assets are no longer depreciated
commodities it produces. Other Incoterms commonly used by the
commodities it produces. Other Incoterms commonly used by the
The Group therefore has separate performance obligations for freight
The Group therefore has separate performance obligations for freight
and insurance services that are provided solely to facilitate sale of the
and insurance services that are provided solely to facilitate sale of the
Group are Free on Board (FOB), where the Group has no responsibility
Group are Free on Board (FOB), where the Group has no responsibility
for freight or insurance once control of the goods has passed at the
for freight or insurance once control of the goods has passed at the
loading port, and Delivered at Place (DAP), where control of the goods
loading port, and Delivered at Place (DAP), where control of the goods
passes when the product is delivered to the agreed destination. For
passes when the product is delivered to the agreed destination. For
these Incoterms there is only one performance obligation, being for
these Incoterms there is only one performance obligation, being for
provision of product at the point where control passes.
provision of product at the point where control passes.
and, if applicable, equity accounting ceases.
and, if applicable, equity accounting ceases.
If control is lost, any interest in the entity retained by the Group is
If control is lost, any interest in the entity retained by the Group is
remeasured to its fair value and the change in carrying amount is
remeasured to its fair value and the change in carrying amount is
recognised in the income statement. The retained interest may be
recognised in the income statement. The retained interest may be
subsequently accounted for as a joint venture, joint operation,
subsequently accounted for as a joint venture, joint operation,
associate or financial asset depending on the facts. Certain amounts
associate or financial asset depending on the facts. Certain amounts
previously recognised in other comprehensive income in respect of the
previously recognised in other comprehensive income in respect of the
The Group’s products are sold to customers under contracts which vary
The Group’s products are sold to customers under contracts which vary
entity disposed of, or for which control, joint control or significant
entity disposed of, or for which control, joint control or significant
in tenure and pricing mechanisms, including some volumes sold in the
in tenure and pricing mechanisms, including some volumes sold in the
influence has ceased, may be recycled to the income statement. The
influence has ceased, may be recycled to the income statement. The
spot market. Pricing for iron ore is on a range of terms, the majority
spot market. Pricing for iron ore is on a range of terms, the majority
cash proceeds of disposals are included within “Investing activities” in
cash proceeds of disposals are included within “Investing activities” in
being either monthly or quarterly average pricing mechanisms, with a
being either monthly or quarterly average pricing mechanisms, with a
the cash flow statement.
the cash flow statement.
smaller proportion of iron ore volumes being sold on the spot market.
smaller proportion of iron ore volumes being sold on the spot market.
Changes in the Group’s interest in a subsidiary that do not result in a
Changes in the Group’s interest in a subsidiary that do not result in a
Within each sales contract, each unit of product shipped is a separate
Within each sales contract, each unit of product shipped is a separate
loss of control are accounted for in equity. The cash proceeds of such
loss of control are accounted for in equity. The cash proceeds of such
performance obligation. Revenue is generally recognised at the
performance obligation. Revenue is generally recognised at the
disposals are included within “Financing activities” in the cash flow
disposals are included within “Financing activities” in the cash flow
contracted price as this reflects the stand-alone selling price. Sales
contracted price as this reflects the stand-alone selling price. Sales
statement.
statement.
(c) Sales revenue
(c) Sales revenue
Recognition and measurement
Recognition and measurement
The Group recognises sales revenue related to the transfer of promised
The Group recognises sales revenue related to the transfer of promised
goods or services when control of the goods or services passes to the
goods or services when control of the goods or services passes to the
customer. The amount of revenue recognised reflects the
customer. The amount of revenue recognised reflects the
consideration to which the Group is or expects to be entitled in
consideration to which the Group is or expects to be entitled in
exchange for those goods or services.
exchange for those goods or services.
Sales revenue is recognised on individual sales when control transfers
Sales revenue is recognised on individual sales when control transfers
to the customer. In most instances, control passes and sales revenue is
to the customer. In most instances, control passes and sales revenue is
recognised when the product is delivered to the vessel or vehicle on
recognised when the product is delivered to the vessel or vehicle on
which it will be transported once loaded, the destination port or the
which it will be transported once loaded, the destination port or the
customer’s premises. There may be circumstances when judgment is
customer’s premises. There may be circumstances when judgment is
required based on the five indicators of control below.
required based on the five indicators of control below.
– The customer has the significant risks and rewards of ownership
– The customer has the significant risks and rewards of ownership
and has the ability to direct the use of, and obtain substantially all
and has the ability to direct the use of, and obtain substantially all
on page 271.
on page 271.
of the remaining benefits from, the good or service.
of the remaining benefits from, the good or service.
– The customer has a present obligation to pay in accordance with the
– The customer has a present obligation to pay in accordance with the
terms of the sales contract. For shipments under the Incoterms
terms of the sales contract. For shipments under the Incoterms
Cost, Insurance and Freight (CIF)/Carriage Paid to (CPT)/Cost and
Cost, Insurance and Freight (CIF)/Carriage Paid to (CPT)/Cost and
Freight (CFR) this is generally when the ship is loaded, at which
Freight (CFR) this is generally when the ship is loaded, at which
time the obligation for payment is for both product and freight.
time the obligation for payment is for both product and freight.
– The customer has accepted the asset. Sales revenue may be
– The customer has accepted the asset. Sales revenue may be
subject to adjustment if the product specification does not conform
subject to adjustment if the product specification does not conform
to the terms specified in the sales contract but this does not impact
to the terms specified in the sales contract but this does not impact
the passing of control. Assay and specification adjustments have
the passing of control. Assay and specification adjustments have
been immaterial historically.
been immaterial historically.
– The customer has legal title to the asset. The Group usually retains
– The customer has legal title to the asset. The Group usually retains
legal title until payment is received for credit risk purposes only.
legal title until payment is received for credit risk purposes only.
– The customer has physical possession of the asset. This indicator
– The customer has physical possession of the asset. This indicator
may be less important as the customer may obtain control of an
may be less important as the customer may obtain control of an
asset prior to obtaining physical possession, which may be the case
asset prior to obtaining physical possession, which may be the case
for goods in transit.
for goods in transit.
revenue excludes any applicable sales taxes. Mining royalties payable
revenue excludes any applicable sales taxes. Mining royalties payable
are presented as an operating cost or, where they are in substance a
are presented as an operating cost or, where they are in substance a
profit-based tax, within taxation.
profit-based tax, within taxation.
Sales of copper concentrate are stated net of the treatment and
Sales of copper concentrate are stated net of the treatment and
refining charges which will be required to convert it to an end product.
refining charges which will be required to convert it to an end product.
Certain of the Group’s products may be provisionally priced at the date
Certain of the Group’s products may be provisionally priced at the date
revenue is recognised and a provisional invoice issued; however,
revenue is recognised and a provisional invoice issued; however,
substantially all iron ore and aluminium sales are reflected at final
substantially all iron ore and aluminium sales are reflected at final
prices in the results for the period. Provisionally priced receivables are
prices in the results for the period. Provisionally priced receivables are
subsequently measured at fair value through the income statement
subsequently measured at fair value through the income statement
under IFRS 9 “Financial Instruments” as described in note (q). The final
under IFRS 9 “Financial Instruments” as described in note (q). The final
selling price for all provisionally priced products is based on the price
selling price for all provisionally priced products is based on the price
for the quotational period stipulated in the contract. Final prices for
for the quotational period stipulated in the contract. Final prices for
copper concentrate are normally determined between 30-120 days
copper concentrate are normally determined between 30-120 days
after delivery to the customer. The change in value of the provisionally
after delivery to the customer. The change in value of the provisionally
priced receivable is based on relevant forward market prices and is
priced receivable is based on relevant forward market prices and is
included in sales revenue; refer to note 3 on page 241 and note 29C(a)
included in sales revenue; refer to note 3 on page 241 and note 29C(a)
Rio Tinto has a number of long-term contracts to supply product to
Rio Tinto has a number of long-term contracts to supply product to
customers in future periods. Generally, revenues are recognised on an
customers in future periods. Generally, revenues are recognised on an
as invoiced basis; hence, the right to consideration from a customer
as invoiced basis; hence, the right to consideration from a customer
corresponds directly with the entity’s performance completed to date.
corresponds directly with the entity’s performance completed to date.
A number of the Group’s businesses provide volume discounts in
A number of the Group’s businesses provide volume discounts in
certain circumstances. The impact of constraining such variable
certain circumstances. The impact of constraining such variable
consideration under IFRS 15 “Revenue from Contracts with Customers”
consideration under IFRS 15 “Revenue from Contracts with Customers”
was immaterial at both 31 December 2021 and 31 December 2020.
was immaterial at both 31 December 2021 and 31 December 2020.
The Group applies the practical expedient in paragraph 121 of IFRS 15
The Group applies the practical expedient in paragraph 121 of IFRS 15
and does not disclose information on the transaction price allocated to
and does not disclose information on the transaction price allocated to
performance obligations that are unsatisfied.
performance obligations that are unsatisfied.
Presentation and disclosures
Consolidated sales revenue as reported in the income statement
comprises sales to third parties. Certain of the Group’s products may
be provisionally priced at the date revenue is recognised. Sales
revenue includes revenue from contracts with customers, which is
accounted for under IFRS 15 and subsequent movements in
provisionally priced receivables which are accounted for under IFRS 9.
A breakdown of sales revenue between these two amounts is disclosed
in the product analysis in note 3 and further detail on provisional
pricing in note 3. Sales revenue includes revenue from movements in
provisionally priced receivables, consistent with the treatment in prior
periods.
The Group considers that the impact of economic factors on its sales
revenue, particularly pricing and volumes, is best understood by
reference to the disclosure of sales revenue by product group and
sales destination in note 3. The analysis of provisional pricing
adjustments by commodity in the product analysis in note 3 shows
which products are subject to price volatility post the transfer of
control. With the exception of Oyu Tolgoi, which sells copper
concentrate to China, this price uncertainty is largely resolved at the
period end.
Typically, the Group has a right to payment before or at the point that
control of the goods passes including a right, where applicable, to
payment for provisionally priced products and unperformed freight and
insurance services. Cash received before control passes is recognised
as a contract liability. The amount of consideration does not contain a
significant financing component as payment terms are less than one
year.
Revenues from the sale of significant by-products, such as gold, are
included in sales revenue. Sundry revenue (e.g. sales of surplus power)
incidental to the main revenue-generating activities of the operations is
treated as a credit to operating costs.
The Group does not disclose sales revenue from freight and insurance
services separately as it does not consider that this is necessary in
order to understand the impact of economic factors on the Group; the
Group’s Chief Executive, the chief operating decision maker, as defined
under IFRS 8 “Operating Segments”, does not review information
specifically relating to these sources of revenue in order to evaluate
the performance of business segments and Group information on these
sources of revenue is not provided externally.
The Group does provide information on freight revenue for the iron ore
and bauxite businesses on pages 45 and 51 to help stakeholders
understand FOB operating margins for those products.
Third-party commodity swap arrangements principally for delivery and
receipt of smelter-grade alumina are offset within operating costs.
(d) Currency translation
The functional currency for each entity in the Group, and for joint
arrangements and associates, is the currency of the primary economic
environment in which that entity operates. For many of these entities,
this is the currency of the country in which they are located.
Transactions denominated in other currencies are converted to the
functional currency at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at period-end exchange rates.
The Group’s financial statements are presented in US dollars, as that
presentation currency most reliably reflects the global business
performance of the Group as a whole. On consolidation, income
statement items for each entity are translated from the functional
currency into US dollars at average rates of exchange, except for
material one-off transactions, which are translated at the rate
prevailing on the transaction date. Balance sheet items are translated
into US dollars at period-end exchange rates.
Exchange differences arising on the translation of the net assets of
entities with functional currencies other than the US dollar are
recognised directly in the currency translation reserve. These
translation differences are shown in the statement of comprehensive
income, with the exception of translation adjustments relating to Rio
Tinto Limited’s share capital which are shown in the statement of
changes in equity.
Where an intragroup balance is, in substance, part of the Group’s net
investment in an entity, exchange gains and losses on that balance are
taken to the currency translation reserve.
Except as noted above, or in note 1(q) relating to derivative contracts,
all other exchange differences are charged or credited to the income
statement in the year in which they arise.
(e) Goodwill and intangible assets (excluding exploration
and evaluation expenditure) (notes 12 and 13)
Goodwill is not amortised; it is tested annually for impairment or more
frequently if events or changes in circumstances indicate a potential
impairment. Investments in EAUs, including any goodwill, are tested
for impairment as a single asset when a trigger for impairment has
been identified. The Group’s impairment policy is explained in note 1(i).
Purchased intangible assets are initially recorded at cost. Finite-life
intangible assets are amortised over their useful economic lives on a
straight line or units of production basis, as appropriate. Intangible
assets that are deemed to have indefinite lives and intangible assets
that are not yet ready for use are not amortised; they are reviewed
annually for impairment or more frequently if events or changes in
circumstances indicate a potential impairment in accordance with
accounting policy note 1(i).
The Group considers that intangible assets have indefinite lives when,
based on an analysis of all of the relevant factors, there is no
foreseeable limit to the period over which the asset is expected to
generate cash flows for the Group. The factors considered in making
this judgment include the existence of contractual rights for unlimited
terms or evidence that renewal of the contractual rights without
significant incremental cost can be expected for indefinite future
periods in view of the Group’s investment intentions. The life cycles of
the products and processes that depend on the asset are also
considered.
(f) Exploration and evaluation (note 13)
Exploration and evaluation expenditure comprises costs that are
directly attributable to:
– Researching and analysing existing exploration data;
– Conducting geological studies, exploratory drilling and sampling;
– Examining and testing extraction and treatment methods; and/or
– Compiling various studies (order of magnitude, pre-feasibility
and feasibility).
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
previously recorded impairment provisions are charged to the income
statement.
Exploration expenditure relates to the initial search for deposits with
economic potential. Expenditure on exploration activity undertaken by
the Group is not capitalised.
Evaluation expenditure relates to a detailed assessment of deposits or
other projects (including smelter and refinery projects) that have been
identified as having economic potential. Capitalisation of evaluation
expenditure commences when there is a high degree of confidence that
the Group will determine that a project is commercially viable, that is
the project will provide a satisfactory return relative to its perceived
risks, and therefore it is considered probable that future economic
benefits will flow to the Group. The Group’s view is that a high degree
of confidence is greater than “more likely than not” (that is, greater
than 50% certainty) and less than “virtually certain” (that is, less than
90% certainty).
Assessing whether there is a high degree of confidence that the Group
will ultimately determine that an evaluation project is commercially
viable requires judgment and consideration of all relevant factors such
as the nature and objective of the project; the project’s current stage;
project timeline; current estimates of the project’s net present value,
including sensitivity analyses for the key assumptions; and the main
risks of the project. Development expenditure incurred prior to the
decision to proceed is subject to the same criteria for capitalisation,
being a high degree of confidence that the Group will ultimately
determine that a project is commercially viable.
In some cases, undeveloped projects are regarded as successors to
orebodies, smelters or refineries currently in production. Where this is
the case, it is intended that these will be developed and go into
production when the current source of ore is exhausted or when
existing smelters or refineries are closed.
Ore reserves may be declared for an undeveloped mining project
before its commercial viability has been fully determined. Evaluation
costs may continue to be capitalised during the period between
declaration of ore reserves and approval to mine as further work is
undertaken in order to refine the development case to maximise the
project’s returns.
In accordance with IFRS 6 “Exploration for and Evaluation of Mineral
Resources”, the criteria for the capitalisation of evaluation costs are
applied consistently from period to period.
In the case of undeveloped mining projects which have arisen through
acquisition, the allocation of the purchase price consideration may
result in undeveloped properties being recognised at an earlier stage of
project evaluation compared with projects arising from the Group’s
exploration and evaluation programme. Subsequent expenditure on
acquired undeveloped projects is only capitalised if it meets the high
degree of confidence threshold discussed above.
The carrying values of capitalised evaluation expenditure for
undeveloped mining projects (projects for which the decision to mine
has not yet been approved at the appropriate authorisation level within
the Group) are reviewed at each reporting date for indicators of
impairment in accordance with IFRS 6, and when indicators are
identified are tested in accordance with IAS 36 “Impairment of Assets”.
Evaluation expenditure for non-mining projects is reviewed and tested
under IAS 36.
The impairment review is based on a status report summarising the
Group’s intentions to recover value through development, sale or other
partnering arrangements. If a project does not prove viable and is
cancelled, all irrecoverable costs associated with the project net of any
(g) Property, plant and equipment (note 14)
Once an undeveloped mining project has been determined as
commercially viable and approval to mine has been given, expenditure
other than that on land, buildings, plant, equipment and capital work in
progress is capitalised under “Mining properties and leases” together
with any amount transferred from “Exploration and evaluation”.
Costs which are necessarily incurred whilst commissioning new assets,
in the period before they are capable of operating in the manner
intended by management, are capitalised. Development costs incurred
after the commencement of production are capitalised to the extent
they are expected to give rise to a future economic benefit. Interest on
borrowings related to construction or development projects is
capitalised, at the rate payable on project-specific debt if applicable or
at the Group or subsidiary’s cost of borrowing if not, until the point
when substantially all the activities that are necessary to make the
asset ready for its intended use are complete. It may be appropriate to
use a subsidiary’s cost of borrowing when the debt was negotiated
based on the financing requirements of that subsidiary.
Property, plant and equipment is stated at cost, as defined in IAS 16,
less accumulated depreciation and accumulated impairment losses.
The cost of property, plant and equipment includes, where applicable,
the estimated close-down and restoration costs associated with the
asset.
Property, plant and equipment includes right of use assets (note 14)
arising from leasing arrangements, shown separately from owned and
leasehold assets.
(h) Deferred stripping (note 14)
In open pit mining operations, overburden and other waste materials
must be removed to access ore from which minerals can be extracted
economically. The process of removing overburden and waste
materials is referred to as stripping. During the development of a mine
(or, in some instances, pit; see below), before production commences,
stripping costs related to a component of an orebody are capitalised as
part of the cost of construction of the mine (or pit) and are
subsequently amortised over the life of the mine (or pit) on a units of
production basis.
Where a mine operates several open pits that are regarded as separate
operations for the purpose of mine planning, initial stripping costs are
accounted for separately by reference to the ore from each separate
pit. If, however, the pits are highly integrated for the purpose of mine
planning, the second and subsequent pits are regarded as extensions
of the first pit in accounting for stripping costs. In such cases, the initial
stripping (i.e. overburden and other waste removal) of the second and
subsequent pits is considered to be production phase stripping (see
below).
The Group’s judgment as to whether multiple pit mines are considered
separate or integrated operations depends on each mine’s specific
circumstances.
The following factors would point towards the initial stripping costs for
the individual pits being accounted for separately:
– If mining of the second and subsequent pits is conducted
consecutively following that of the first pit, rather than
concurrently;
– If separate investment decisions are made to develop each pit,
rather than a single investment decision being made at the outset;
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
previously recorded impairment provisions are charged to the income
previously recorded impairment provisions are charged to the income
statement.
statement.
Exploration expenditure relates to the initial search for deposits with
Exploration expenditure relates to the initial search for deposits with
economic potential. Expenditure on exploration activity undertaken by
economic potential. Expenditure on exploration activity undertaken by
the Group is not capitalised.
the Group is not capitalised.
Evaluation expenditure relates to a detailed assessment of deposits or
Evaluation expenditure relates to a detailed assessment of deposits or
other projects (including smelter and refinery projects) that have been
other projects (including smelter and refinery projects) that have been
identified as having economic potential. Capitalisation of evaluation
identified as having economic potential. Capitalisation of evaluation
expenditure commences when there is a high degree of confidence that
expenditure commences when there is a high degree of confidence that
the Group will determine that a project is commercially viable, that is
the Group will determine that a project is commercially viable, that is
the project will provide a satisfactory return relative to its perceived
the project will provide a satisfactory return relative to its perceived
risks, and therefore it is considered probable that future economic
risks, and therefore it is considered probable that future economic
benefits will flow to the Group. The Group’s view is that a high degree
benefits will flow to the Group. The Group’s view is that a high degree
of confidence is greater than “more likely than not” (that is, greater
of confidence is greater than “more likely than not” (that is, greater
than 50% certainty) and less than “virtually certain” (that is, less than
than 50% certainty) and less than “virtually certain” (that is, less than
90% certainty).
90% certainty).
Assessing whether there is a high degree of confidence that the Group
Assessing whether there is a high degree of confidence that the Group
will ultimately determine that an evaluation project is commercially
will ultimately determine that an evaluation project is commercially
viable requires judgment and consideration of all relevant factors such
viable requires judgment and consideration of all relevant factors such
as the nature and objective of the project; the project’s current stage;
as the nature and objective of the project; the project’s current stage;
project timeline; current estimates of the project’s net present value,
project timeline; current estimates of the project’s net present value,
including sensitivity analyses for the key assumptions; and the main
including sensitivity analyses for the key assumptions; and the main
risks of the project. Development expenditure incurred prior to the
risks of the project. Development expenditure incurred prior to the
decision to proceed is subject to the same criteria for capitalisation,
decision to proceed is subject to the same criteria for capitalisation,
being a high degree of confidence that the Group will ultimately
being a high degree of confidence that the Group will ultimately
determine that a project is commercially viable.
determine that a project is commercially viable.
In some cases, undeveloped projects are regarded as successors to
In some cases, undeveloped projects are regarded as successors to
orebodies, smelters or refineries currently in production. Where this is
orebodies, smelters or refineries currently in production. Where this is
the case, it is intended that these will be developed and go into
the case, it is intended that these will be developed and go into
production when the current source of ore is exhausted or when
production when the current source of ore is exhausted or when
existing smelters or refineries are closed.
existing smelters or refineries are closed.
Ore reserves may be declared for an undeveloped mining project
Ore reserves may be declared for an undeveloped mining project
before its commercial viability has been fully determined. Evaluation
before its commercial viability has been fully determined. Evaluation
costs may continue to be capitalised during the period between
costs may continue to be capitalised during the period between
declaration of ore reserves and approval to mine as further work is
declaration of ore reserves and approval to mine as further work is
undertaken in order to refine the development case to maximise the
undertaken in order to refine the development case to maximise the
project’s returns.
project’s returns.
(g) Property, plant and equipment (note 14)
(g) Property, plant and equipment (note 14)
Once an undeveloped mining project has been determined as
Once an undeveloped mining project has been determined as
commercially viable and approval to mine has been given, expenditure
commercially viable and approval to mine has been given, expenditure
other than that on land, buildings, plant, equipment and capital work in
other than that on land, buildings, plant, equipment and capital work in
progress is capitalised under “Mining properties and leases” together
progress is capitalised under “Mining properties and leases” together
with any amount transferred from “Exploration and evaluation”.
with any amount transferred from “Exploration and evaluation”.
Costs which are necessarily incurred whilst commissioning new assets,
Costs which are necessarily incurred whilst commissioning new assets,
in the period before they are capable of operating in the manner
in the period before they are capable of operating in the manner
intended by management, are capitalised. Development costs incurred
intended by management, are capitalised. Development costs incurred
after the commencement of production are capitalised to the extent
after the commencement of production are capitalised to the extent
they are expected to give rise to a future economic benefit. Interest on
they are expected to give rise to a future economic benefit. Interest on
borrowings related to construction or development projects is
borrowings related to construction or development projects is
capitalised, at the rate payable on project-specific debt if applicable or
capitalised, at the rate payable on project-specific debt if applicable or
at the Group or subsidiary’s cost of borrowing if not, until the point
at the Group or subsidiary’s cost of borrowing if not, until the point
when substantially all the activities that are necessary to make the
when substantially all the activities that are necessary to make the
asset ready for its intended use are complete. It may be appropriate to
asset ready for its intended use are complete. It may be appropriate to
use a subsidiary’s cost of borrowing when the debt was negotiated
use a subsidiary’s cost of borrowing when the debt was negotiated
based on the financing requirements of that subsidiary.
based on the financing requirements of that subsidiary.
Property, plant and equipment is stated at cost, as defined in IAS 16,
Property, plant and equipment is stated at cost, as defined in IAS 16,
less accumulated depreciation and accumulated impairment losses.
less accumulated depreciation and accumulated impairment losses.
The cost of property, plant and equipment includes, where applicable,
The cost of property, plant and equipment includes, where applicable,
the estimated close-down and restoration costs associated with the
the estimated close-down and restoration costs associated with the
asset.
asset.
Property, plant and equipment includes right of use assets (note 14)
Property, plant and equipment includes right of use assets (note 14)
arising from leasing arrangements, shown separately from owned and
arising from leasing arrangements, shown separately from owned and
leasehold assets.
leasehold assets.
(h) Deferred stripping (note 14)
(h) Deferred stripping (note 14)
In open pit mining operations, overburden and other waste materials
In open pit mining operations, overburden and other waste materials
must be removed to access ore from which minerals can be extracted
must be removed to access ore from which minerals can be extracted
economically. The process of removing overburden and waste
economically. The process of removing overburden and waste
materials is referred to as stripping. During the development of a mine
materials is referred to as stripping. During the development of a mine
(or, in some instances, pit; see below), before production commences,
(or, in some instances, pit; see below), before production commences,
stripping costs related to a component of an orebody are capitalised as
stripping costs related to a component of an orebody are capitalised as
part of the cost of construction of the mine (or pit) and are
part of the cost of construction of the mine (or pit) and are
subsequently amortised over the life of the mine (or pit) on a units of
subsequently amortised over the life of the mine (or pit) on a units of
In accordance with IFRS 6 “Exploration for and Evaluation of Mineral
In accordance with IFRS 6 “Exploration for and Evaluation of Mineral
Resources”, the criteria for the capitalisation of evaluation costs are
Resources”, the criteria for the capitalisation of evaluation costs are
production basis.
production basis.
applied consistently from period to period.
applied consistently from period to period.
In the case of undeveloped mining projects which have arisen through
In the case of undeveloped mining projects which have arisen through
acquisition, the allocation of the purchase price consideration may
acquisition, the allocation of the purchase price consideration may
result in undeveloped properties being recognised at an earlier stage of
result in undeveloped properties being recognised at an earlier stage of
project evaluation compared with projects arising from the Group’s
project evaluation compared with projects arising from the Group’s
exploration and evaluation programme. Subsequent expenditure on
exploration and evaluation programme. Subsequent expenditure on
acquired undeveloped projects is only capitalised if it meets the high
acquired undeveloped projects is only capitalised if it meets the high
degree of confidence threshold discussed above.
degree of confidence threshold discussed above.
The carrying values of capitalised evaluation expenditure for
The carrying values of capitalised evaluation expenditure for
undeveloped mining projects (projects for which the decision to mine
undeveloped mining projects (projects for which the decision to mine
has not yet been approved at the appropriate authorisation level within
has not yet been approved at the appropriate authorisation level within
the Group) are reviewed at each reporting date for indicators of
the Group) are reviewed at each reporting date for indicators of
impairment in accordance with IFRS 6, and when indicators are
impairment in accordance with IFRS 6, and when indicators are
identified are tested in accordance with IAS 36 “Impairment of Assets”.
identified are tested in accordance with IAS 36 “Impairment of Assets”.
Evaluation expenditure for non-mining projects is reviewed and tested
Evaluation expenditure for non-mining projects is reviewed and tested
under IAS 36.
under IAS 36.
The impairment review is based on a status report summarising the
The impairment review is based on a status report summarising the
Group’s intentions to recover value through development, sale or other
Group’s intentions to recover value through development, sale or other
partnering arrangements. If a project does not prove viable and is
partnering arrangements. If a project does not prove viable and is
cancelled, all irrecoverable costs associated with the project net of any
cancelled, all irrecoverable costs associated with the project net of any
Where a mine operates several open pits that are regarded as separate
Where a mine operates several open pits that are regarded as separate
operations for the purpose of mine planning, initial stripping costs are
operations for the purpose of mine planning, initial stripping costs are
accounted for separately by reference to the ore from each separate
accounted for separately by reference to the ore from each separate
pit. If, however, the pits are highly integrated for the purpose of mine
pit. If, however, the pits are highly integrated for the purpose of mine
planning, the second and subsequent pits are regarded as extensions
planning, the second and subsequent pits are regarded as extensions
of the first pit in accounting for stripping costs. In such cases, the initial
of the first pit in accounting for stripping costs. In such cases, the initial
stripping (i.e. overburden and other waste removal) of the second and
stripping (i.e. overburden and other waste removal) of the second and
subsequent pits is considered to be production phase stripping (see
subsequent pits is considered to be production phase stripping (see
below).
below).
circumstances.
circumstances.
The Group’s judgment as to whether multiple pit mines are considered
The Group’s judgment as to whether multiple pit mines are considered
separate or integrated operations depends on each mine’s specific
separate or integrated operations depends on each mine’s specific
The following factors would point towards the initial stripping costs for
The following factors would point towards the initial stripping costs for
the individual pits being accounted for separately:
the individual pits being accounted for separately:
– If mining of the second and subsequent pits is conducted
– If mining of the second and subsequent pits is conducted
consecutively following that of the first pit, rather than
consecutively following that of the first pit, rather than
concurrently;
concurrently;
– If separate investment decisions are made to develop each pit,
– If separate investment decisions are made to develop each pit,
rather than a single investment decision being made at the outset;
rather than a single investment decision being made at the outset;
– If the pits are operated as separate units in terms of mine planning
and the sequencing of overburden removal and ore mining, rather
than as an integrated unit;
– If expenditures for additional infrastructure to support the second
and subsequent pits are relatively large; and
– If the pits extract ore from separate and distinct orebodies, rather
than from a single orebody.
If the designs of the second and subsequent pits are significantly
influenced by opportunities to optimise output from several pits
combined, including the co-treatment or blending of the output from
the pits, then this would point to treatment as an integrated operation
for the purposes of accounting for initial stripping costs. The relative
importance of each of the above factors is considered in each case.
In order for production phase stripping costs to qualify for
capitalisation as a stripping activity asset, three criteria must be met:
– It must be probable that there will be an economic benefit in a
future accounting period because the stripping activity has
improved access to the orebody;
– It must be possible to identify the “component” of the orebody for
which access has been improved; and
– It must be possible to reliably measure the costs that relate to the
stripping activity.
A “component” is a specific section of the orebody that is made more
accessible by the stripping activity. It will typically be a subset of the
larger orebody that is distinguished by a separate useful economic life
(for example, a pushback).
Production phase stripping can give rise to two benefits: the extraction
of ore in the current period and improved access to ore which will be
extracted in future periods. When the cost of stripping which has a
future benefit is not distinguishable from the cost of producing current
inventories, the stripping cost is allocated to each of these activities
based on a relevant production measure using a life-of-component
strip ratio. The ratio divides the tonnage of waste mined for the
component for the period either by the quantity of ore mined for the
component or by the quantity of minerals contained in the ore mined
for the component. In some operations, the quantity of ore is a more
appropriate basis for allocating costs, particularly where there are
significant by-products. Stripping costs for the component are deferred
to the extent that the current period ratio exceeds the life of
component ratio. The stripping activity asset is depreciated on a “units
of production” basis based on expected production of either ore or
minerals contained in the ore over the life of the component unless
another method is more appropriate.
The life-of-component ratios are based on the ore reserves of the mine
(and for some mines, other mineral resources) and the annual mine
plan; they are a function of the mine design and, therefore, changes to
that design will generally result in changes to the ratios. Changes in
other technical or economic parameters that impact the ore reserves
(and for some mines, other mineral resources) may also have an
impact on the life-of-component ratios even if they do not affect the
mine design. Changes to the ratios are accounted for prospectively.
It may be the case that subsequent phases of stripping will access
additional ore and that these subsequent phases are only possible
after the first phase has taken place. Where applicable, the Group
considers this on a mine-by-mine basis. Generally, the only ore
attributed to the stripping activity asset for the purposes of calculating
a life-of-component ratio, and for the purposes of amortisation, is the
ore to be extracted from the originally identified component.
Deferred stripping costs are included in “Mining properties and leases”
within “Property, plant and equipment” or within “Investments in
equity accounted units”, as appropriate. Amortisation of deferred
stripping costs is included in “Depreciation of property, plant and
equipment” within “Net operating costs” or in “Share of profit after tax
of equity accounted units”, as appropriate.
(i) Depreciation and impairment (notes 13 and 14)
Depreciation of non-current assets
Property, plant and equipment is depreciated over its useful life, or
over the remaining life of the mine or smelter or refinery if that is
shorter and there is no reasonable alternative use for the asset by the
Group.
The useful lives of the major assets of a cash-generating unit are often
dependent on the life of the orebody to which they relate. Where this is
the case, the lives of mining properties, and their associated refineries,
concentrators and other long-lived processing equipment are generally
limited to the expected life of the orebody. The life of the orebody, in
turn, is estimated on the basis of the life-of-mine plan. Where the
major assets of a cash-generating unit are not dependent on the life of
a related orebody, management applies judgment in estimating the
remaining service potential of long-lived assets. Factors affecting the
remaining service potential of smelters include, for example, smelter
technology and electricity purchase contracts when power is not
sourced from the companies, or in some cases from local governments
permitting electricity generation from hydro-power stations.
The useful lives and residual values for material assets and categories
of assets are reviewed annually and changes are reflected
prospectively.
Depreciation commences when an asset is available for use. The major
categories of property, plant and equipment are depreciated on a units
of production and/or straight line basis as follows:
Units of production basis
For mining properties and leases and certain mining equipment,
consumption of the economic benefits of the asset is linked to
production. Except as noted below, these assets are depreciated on the
units of production basis.
In applying the units of production method, depreciation is normally
calculated based on production in the period as a percentage of total
expected production in current and future periods based on ore
reserves and, for some mines, other mineral resources. Other mineral
resources may be included in the calculations of total expected
production in limited circumstances where there are very large areas of
contiguous mineralisation, for which the economic viability is not
sensitive to likely variations in grade, as may be the case for certain
iron ore, bauxite and industrial mineral deposits, and where there is a
high degree of confidence that the other mineral resources can be
extracted economically. This would be the case when the other mineral
resources do not yet have the status of ore reserves merely because
the necessary detailed evaluation work has not yet been performed
and the responsible technical personnel agree that inclusion of a
proportion of measured and indicated resources in the calculation of
total expected production is appropriate based on historical reserve
conversion rates.
The required level of confidence is unlikely to exist for minerals that
are typically found in low-grade ore (as compared with the above), such
as copper or gold. In these cases, specific areas of mineralisation have
to be evaluated in detail before their economic status can be predicted
with confidence.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
Where measured and indicated resources are used in the calculation of
depreciation for infrastructure, primarily rail and port, which will benefit
current and future mines, then the measured and indicated resources
may relate to mines which are currently in production or to mines
where there is a high degree of confidence that they will be brought
into production in the future. The quantum of mineral resources is
determined taking into account future capital costs as required by the
JORC code. The depreciation calculation, however, applies to current
mines only and does not take into account future development costs
for mines which are not yet in production. Measured and indicated
resources are currently incorporated into depreciation calculations in
the Group’s Australian iron ore business.
Straight line basis
Assets within operations for which production is not expected to
fluctuate significantly from one year to another or which have a
physical life shorter than the related mine are depreciated on a straight
line basis.
Impairment charges/reversals of non-current assets
Impairment charges and reversals are assessed at the level of cash-
generating units which, in accordance with IAS 36, are identified as the
smallest identifiable asset or group of assets that generate cash
inflows which are largely independent of the cash inflows from other
assets. Separate cash-generating units are identified where an active
market exists for intermediate products, even if the majority of those
products are further processed internally. Impairment of financial
assets is evaluated in accordance with IFRS 9.
In some cases, individual business units consist of several operations
with independent cash-generating streams which constitute separate
cash- generating units.
Goodwill acquired through business combinations is allocated to the
cash-generating unit or groups of cash-generating units that are
expected to benefit from the related business combination, and tested
for impairment at the lowest level within the Group at which goodwill is
monitored for internal management purposes. All goodwill, intangible
assets that have an indefinite life and intangible assets that are not
ready for use are tested annually for impairment as at 30 September,
regardless of whether there has been an impairment trigger, or more
frequently if events or changes in circumstances indicate a potential
impairment.
Property, plant and equipment and intangible assets with finite lives
are reviewed for impairment if there is an indication that the carrying
amount may not be recoverable. Right of use assets recognised under
IFRS 16 “Leases” are included in the review. The Group conducts an
internal review of the asset values annually as at 30 September which
is used as a source of information to assess for indications of
impairment or reversal of previously recognised impairment losses.
External factors, such as changes in forecasted commodity prices,
costs and other market factors as well as internal factors such as
cancellation of a project or reduced project scope, are also monitored
to assess for indications of impairment or reversal of previously
recognised impairment losses. If any such indication exists then an
impairment review is undertaken; the recoverable amount is assessed
by reference to the higher of value in use (being the net present value
of expected future cash flows of the relevant cash-generating unit in its
current condition) and fair value less costs of disposal (FVLCD).
When the recoverable amount of the cash-generating unit is measured
by reference to FVLCD, this amount is further classified in accordance
with the fair value hierarchy for observable market data that is
consistent with the unit of account for the cash-generating unit being
tested. The Group considers that the best evidence of FVLCD is the
value obtained from an active market or binding sale agreement and, in
this case, the recoverable amount is classified in the fair value
hierarchy as level 1. When FVLCD is based on quoted prices for equity
instruments but adjusted to reflect factors such as a lack of liquidity in
the market, the recoverable amount is classified as level 2 in the fair
value hierarchy. No cash-generating units are currently assessed for
impairment by reference to a recoverable amount based on FVLCD
classified as level 1 or level 2.
Where unobservable inputs are material to the measurement of the
recoverable amount, FVLCD is based on the best information available
to reflect the amount the Group could receive for the cash-generating
unit in an orderly transaction between market participants at the
measurement date. This is often estimated using discounted cash flow
techniques and is classified as level 3 in the fair value hierarchy.
Where the recoverable amount is assessed using FVLCD based on
discounted cash flow techniques, the resulting estimates are based on
detailed life-of-mine and/or long-term production plans. These may
include anticipated expansions which are at the evaluation stage of
study.
The cash flow forecasts for FVLCD purposes are based on
management’s best estimates of expected future revenues and costs,
including the future cash costs of production, capital expenditure, and
closure, restoration and environmental costs. For the purposes of
determining FVLCD from a market participant’s perspective, the cash
flows incorporate management’s price and cost assumptions in the
short and medium term. In the longer term, operating margins are
assumed to remain constant where appropriate, as it is considered
unlikely that a market participant would prepare detailed forecasts
over a longer term. The cash flow forecasts may include net cash flows
expected to be realised from the extraction, processing and sale of
material that does not currently qualify for inclusion in ore reserves.
Such non-reserve material is only included when there is a high degree
of confidence in its economic extraction. This expectation is usually
based on preliminary drilling and sampling of areas of mineralisation
that are contiguous with existing ore reserves. Typically, the additional
evaluation required to achieve reserves status for such material has
not yet been done because this would involve incurring evaluation
costs earlier than is required for the efficient planning and operation of
the mine.
As noted above, cost levels incorporated in the cash flow forecasts for
FVLCD purposes are based on the current life-of-mine plan or long-
term production plan for the cash-generating unit. This differs from
value in use which requires future cash flows to be estimated for the
asset in its current condition and therefore does not include future
cash flows associated with improving or enhancing an asset’s
performance. Anticipated enhancements to assets may be included in
FVLCD calculations and, therefore, generally result in a higher value.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
Where measured and indicated resources are used in the calculation of
Where measured and indicated resources are used in the calculation of
When the recoverable amount of the cash-generating unit is measured
When the recoverable amount of the cash-generating unit is measured
depreciation for infrastructure, primarily rail and port, which will benefit
depreciation for infrastructure, primarily rail and port, which will benefit
by reference to FVLCD, this amount is further classified in accordance
by reference to FVLCD, this amount is further classified in accordance
current and future mines, then the measured and indicated resources
current and future mines, then the measured and indicated resources
with the fair value hierarchy for observable market data that is
with the fair value hierarchy for observable market data that is
may relate to mines which are currently in production or to mines
may relate to mines which are currently in production or to mines
consistent with the unit of account for the cash-generating unit being
consistent with the unit of account for the cash-generating unit being
where there is a high degree of confidence that they will be brought
where there is a high degree of confidence that they will be brought
tested. The Group considers that the best evidence of FVLCD is the
tested. The Group considers that the best evidence of FVLCD is the
into production in the future. The quantum of mineral resources is
into production in the future. The quantum of mineral resources is
value obtained from an active market or binding sale agreement and, in
value obtained from an active market or binding sale agreement and, in
determined taking into account future capital costs as required by the
determined taking into account future capital costs as required by the
this case, the recoverable amount is classified in the fair value
this case, the recoverable amount is classified in the fair value
JORC code. The depreciation calculation, however, applies to current
JORC code. The depreciation calculation, however, applies to current
hierarchy as level 1. When FVLCD is based on quoted prices for equity
hierarchy as level 1. When FVLCD is based on quoted prices for equity
mines only and does not take into account future development costs
mines only and does not take into account future development costs
instruments but adjusted to reflect factors such as a lack of liquidity in
instruments but adjusted to reflect factors such as a lack of liquidity in
for mines which are not yet in production. Measured and indicated
for mines which are not yet in production. Measured and indicated
the market, the recoverable amount is classified as level 2 in the fair
the market, the recoverable amount is classified as level 2 in the fair
resources are currently incorporated into depreciation calculations in
resources are currently incorporated into depreciation calculations in
value hierarchy. No cash-generating units are currently assessed for
value hierarchy. No cash-generating units are currently assessed for
the Group’s Australian iron ore business.
the Group’s Australian iron ore business.
impairment by reference to a recoverable amount based on FVLCD
impairment by reference to a recoverable amount based on FVLCD
classified as level 1 or level 2.
classified as level 1 or level 2.
Straight line basis
Straight line basis
Assets within operations for which production is not expected to
Assets within operations for which production is not expected to
fluctuate significantly from one year to another or which have a
fluctuate significantly from one year to another or which have a
physical life shorter than the related mine are depreciated on a straight
physical life shorter than the related mine are depreciated on a straight
line basis.
line basis.
Impairment charges/reversals of non-current assets
Impairment charges/reversals of non-current assets
Impairment charges and reversals are assessed at the level of cash-
Impairment charges and reversals are assessed at the level of cash-
generating units which, in accordance with IAS 36, are identified as the
generating units which, in accordance with IAS 36, are identified as the
smallest identifiable asset or group of assets that generate cash
smallest identifiable asset or group of assets that generate cash
inflows which are largely independent of the cash inflows from other
inflows which are largely independent of the cash inflows from other
assets. Separate cash-generating units are identified where an active
assets. Separate cash-generating units are identified where an active
market exists for intermediate products, even if the majority of those
market exists for intermediate products, even if the majority of those
products are further processed internally. Impairment of financial
products are further processed internally. Impairment of financial
assets is evaluated in accordance with IFRS 9.
assets is evaluated in accordance with IFRS 9.
In some cases, individual business units consist of several operations
In some cases, individual business units consist of several operations
with independent cash-generating streams which constitute separate
with independent cash-generating streams which constitute separate
cash- generating units.
cash- generating units.
Goodwill acquired through business combinations is allocated to the
Goodwill acquired through business combinations is allocated to the
cash-generating unit or groups of cash-generating units that are
cash-generating unit or groups of cash-generating units that are
expected to benefit from the related business combination, and tested
expected to benefit from the related business combination, and tested
for impairment at the lowest level within the Group at which goodwill is
for impairment at the lowest level within the Group at which goodwill is
monitored for internal management purposes. All goodwill, intangible
monitored for internal management purposes. All goodwill, intangible
assets that have an indefinite life and intangible assets that are not
assets that have an indefinite life and intangible assets that are not
ready for use are tested annually for impairment as at 30 September,
ready for use are tested annually for impairment as at 30 September,
regardless of whether there has been an impairment trigger, or more
regardless of whether there has been an impairment trigger, or more
frequently if events or changes in circumstances indicate a potential
frequently if events or changes in circumstances indicate a potential
impairment.
impairment.
Property, plant and equipment and intangible assets with finite lives
Property, plant and equipment and intangible assets with finite lives
are reviewed for impairment if there is an indication that the carrying
are reviewed for impairment if there is an indication that the carrying
amount may not be recoverable. Right of use assets recognised under
amount may not be recoverable. Right of use assets recognised under
IFRS 16 “Leases” are included in the review. The Group conducts an
IFRS 16 “Leases” are included in the review. The Group conducts an
internal review of the asset values annually as at 30 September which
internal review of the asset values annually as at 30 September which
is used as a source of information to assess for indications of
is used as a source of information to assess for indications of
impairment or reversal of previously recognised impairment losses.
impairment or reversal of previously recognised impairment losses.
External factors, such as changes in forecasted commodity prices,
External factors, such as changes in forecasted commodity prices,
costs and other market factors as well as internal factors such as
costs and other market factors as well as internal factors such as
cancellation of a project or reduced project scope, are also monitored
cancellation of a project or reduced project scope, are also monitored
to assess for indications of impairment or reversal of previously
to assess for indications of impairment or reversal of previously
recognised impairment losses. If any such indication exists then an
recognised impairment losses. If any such indication exists then an
impairment review is undertaken; the recoverable amount is assessed
impairment review is undertaken; the recoverable amount is assessed
by reference to the higher of value in use (being the net present value
by reference to the higher of value in use (being the net present value
of expected future cash flows of the relevant cash-generating unit in its
of expected future cash flows of the relevant cash-generating unit in its
current condition) and fair value less costs of disposal (FVLCD).
current condition) and fair value less costs of disposal (FVLCD).
Where unobservable inputs are material to the measurement of the
Where unobservable inputs are material to the measurement of the
recoverable amount, FVLCD is based on the best information available
recoverable amount, FVLCD is based on the best information available
to reflect the amount the Group could receive for the cash-generating
to reflect the amount the Group could receive for the cash-generating
unit in an orderly transaction between market participants at the
unit in an orderly transaction between market participants at the
measurement date. This is often estimated using discounted cash flow
measurement date. This is often estimated using discounted cash flow
techniques and is classified as level 3 in the fair value hierarchy.
techniques and is classified as level 3 in the fair value hierarchy.
Where the recoverable amount is assessed using FVLCD based on
Where the recoverable amount is assessed using FVLCD based on
discounted cash flow techniques, the resulting estimates are based on
discounted cash flow techniques, the resulting estimates are based on
detailed life-of-mine and/or long-term production plans. These may
detailed life-of-mine and/or long-term production plans. These may
include anticipated expansions which are at the evaluation stage of
include anticipated expansions which are at the evaluation stage of
study.
study.
The cash flow forecasts for FVLCD purposes are based on
The cash flow forecasts for FVLCD purposes are based on
management’s best estimates of expected future revenues and costs,
management’s best estimates of expected future revenues and costs,
including the future cash costs of production, capital expenditure, and
including the future cash costs of production, capital expenditure, and
closure, restoration and environmental costs. For the purposes of
closure, restoration and environmental costs. For the purposes of
determining FVLCD from a market participant’s perspective, the cash
determining FVLCD from a market participant’s perspective, the cash
flows incorporate management’s price and cost assumptions in the
flows incorporate management’s price and cost assumptions in the
short and medium term. In the longer term, operating margins are
short and medium term. In the longer term, operating margins are
assumed to remain constant where appropriate, as it is considered
assumed to remain constant where appropriate, as it is considered
unlikely that a market participant would prepare detailed forecasts
unlikely that a market participant would prepare detailed forecasts
over a longer term. The cash flow forecasts may include net cash flows
over a longer term. The cash flow forecasts may include net cash flows
expected to be realised from the extraction, processing and sale of
expected to be realised from the extraction, processing and sale of
material that does not currently qualify for inclusion in ore reserves.
material that does not currently qualify for inclusion in ore reserves.
Such non-reserve material is only included when there is a high degree
Such non-reserve material is only included when there is a high degree
of confidence in its economic extraction. This expectation is usually
of confidence in its economic extraction. This expectation is usually
based on preliminary drilling and sampling of areas of mineralisation
based on preliminary drilling and sampling of areas of mineralisation
that are contiguous with existing ore reserves. Typically, the additional
that are contiguous with existing ore reserves. Typically, the additional
evaluation required to achieve reserves status for such material has
evaluation required to achieve reserves status for such material has
not yet been done because this would involve incurring evaluation
not yet been done because this would involve incurring evaluation
costs earlier than is required for the efficient planning and operation of
costs earlier than is required for the efficient planning and operation of
the mine.
the mine.
As noted above, cost levels incorporated in the cash flow forecasts for
As noted above, cost levels incorporated in the cash flow forecasts for
FVLCD purposes are based on the current life-of-mine plan or long-
FVLCD purposes are based on the current life-of-mine plan or long-
term production plan for the cash-generating unit. This differs from
term production plan for the cash-generating unit. This differs from
value in use which requires future cash flows to be estimated for the
value in use which requires future cash flows to be estimated for the
asset in its current condition and therefore does not include future
asset in its current condition and therefore does not include future
cash flows associated with improving or enhancing an asset’s
cash flows associated with improving or enhancing an asset’s
performance. Anticipated enhancements to assets may be included in
performance. Anticipated enhancements to assets may be included in
FVLCD calculations and, therefore, generally result in a higher value.
FVLCD calculations and, therefore, generally result in a higher value.
Non-current assets (excluding goodwill) that have suffered impairment
are reviewed using the same basis for valuation as explained above
whenever events or changes in circumstances indicate that the
impairment loss may no longer exist, or may have decreased. If
appropriate, an impairment reversal will be recognised. The carrying
amount of the cash-generating unit after reversal must be the lower of
(a) the recoverable amount, as calculated above, and (b) the carrying
amount that would have been determined (net of amortisation or
depreciation) had no impairment loss been recognised for the cash-
generating unit in prior periods.
An onerous contract is defined under IAS 37 as a contract under which
the unavoidable costs of meeting the obligations under the contract
exceed the economic benefits expected to be received under it.
Provision is made when the assets dedicated to the contract are fully
impaired or the contract becomes stranded as a result of a business
decision.
(j) Determination of ore reserve and mineral resource
estimates
The Group estimates its ore reserves and mineral resources based on
information compiled by Competent Persons as defined in accordance
with the JORC code.
Ore reserves and, for certain mines, other mineral resources,
determined in this way are used in the calculation of depreciation,
amortisation and impairment charges and for forecasting the timing of
the payment of close-down and restoration costs and the recovery of
deferred tax assets. The depreciation and impairment policy above
notes instances in which mineral resources are taken into account for
accounting purposes. In addition, value may be attributed to mineral
resources in purchase price allocations undertaken for the purposes of
business combination accounting.
(k) Leases (notes 14, 21, 22)
IFRS 16 “Leases” applies to the recognition, measurement,
presentation and disclosure of leases. Certain leases are exempt from
the standard, including leases to explore for or use minerals, oil,
natural gas and similar non-regenerative resources. The Group applies
the scope exemptions in paragraphs 3(e) and 4 of IFRS 16 and does not
apply IFRS 16 to leases of any assets which would otherwise fall within
the scope of IAS 38 “Intangible Assets”.
A significant proportion by value of the Group’s lease arrangements
relate to dry bulk vessels and office properties. Other leases include
land and non-mining rights, warehouses, ports, equipment and
vehicles. The majority of lease terms are negotiated through the
Group’s procurement function, although agreements contain a wide
range of different terms and conditions.
Where the recoverable amount of a cash-generating unit is dependent
on the life of its associated orebody, expected future cash flows reflect
the current life of mine and/or long-term production plans, which are
based on detailed research, analysis and iterative modelling to
optimise the level of return from investment, output and sequence of
extraction. The mine plan takes account of all relevant characteristics
of the orebody, including waste-to-ore ratios, ore grades, haul
distances, chemical and metallurgical properties of the ore impacting
process recoveries and capacities of processing equipment that can be
used. The life-of-mine plan and/or long-term production plans are,
therefore, the basis for forecasting production output and production
costs in each future year.
Forecast cash flows for ore reserve estimation for JORC purposes are
generally based on Rio Tinto’s commodity price forecasts, which
assume short-term market prices will revert to the Group’s
assessment of the long-term price, generally over a period of three to
five years. For most commodities, these forecast commodity prices are
derived from a combination of analyses of the marginal costs of the
producers and of the incentive price of these commodities. These
assessments often differ from current price levels and are updated
periodically. The Group does not believe that published medium- and
long-term forward prices necessarily provide a good indication of future
levels because they tend to be strongly influenced by spot prices. The
price forecasts used for ore reserve estimation are generally consistent
with those used for impairment testing unless management deems
that in certain economic environments, a market participant would not
assume Rio Tinto’s view on prices, in which case in preparing FVLCD
impairment calculations management estimates the assumptions that
a market participant would be expected to use.
Forecast future cash flows of a cash-generating unit take into account
the sales prices under existing sales contracts.
The discount rates applied to the future cash flow forecasts represent
an estimate of the rate the market participant would apply having
regard to the time value of money and the risks specific to the asset for
which the future cash flow estimates have not been adjusted. The
Group’s weighted average cost of capital is generally used as a starting
point for determining the discount rates, with appropriate adjustments
for the risk profile of the countries in which the individual cash-
generating units operate. For final feasibility studies and ore reserve
estimation, internal hurdle rates, which are generally higher than the
Group’s weighted average cost of capital, are used. For developments
funded with project finance, the debt component of the weighted
average cost of capital may be calculated by reference to the specific
interest rate of the project finance and anticipated leverage of the
project.
For operations with a functional currency other than the US dollar, the
impairment review is undertaken in the relevant functional currency. In
estimating FVLCD, internal forecasts of exchange rates take into
account spot exchange rates, historical data and external forecasts,
and are kept constant in real terms after five years. The great majority
of the Group’s sales are based on prices denominated in US dollars. To
the extent that the currencies of countries in which the Group produces
commodities strengthen against the US dollar without an increase in
commodity prices, cash flows and, therefore, net present values are
reduced. Management considers that over the long term, there is a
tendency for movements in commodity prices to compensate to some
extent for movements in the value of the US dollar, particularly against
the Australian dollar and Canadian dollar, and vice versa. However,
such compensating changes are not synchronised and do not fully
offset each other. In estimating value in use, the present value of
future cash flows in foreign currencies is translated at the spot
exchange rate on the testing date.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
The Group recognises all lease liabilities and corresponding right of use
assets, with the exception of short-term (12 months or fewer) and low
value leases, on the balance sheet. Lease liabilities are recorded at the
present value of: fixed payments; variable lease payments that depend
on an index or rate; amounts payable under residual value guarantees;
and extension options expected to be exercised. Where a lease
contains an extension option which the Group can exercise without
negotiation, lease payments for the extension period are included in
the liability if the Group is reasonably certain that it will exercise the
option. Variable lease payments not dependent on an index or rate are
excluded from the calculation of lease liabilities. Payments are
discounted at the incremental borrowing rate of the lessee, unless the
interest rate implicit in the lease can be readily determined. For lease
agreements relating to vessels, ports and properties, non-lease
components are excluded from the projection of future lease payments
and recorded separately within operating costs on a straight line basis.
The lease liability is measured at amortised cost using the effective
interest method. The right of use asset arising from a lease
arrangement at initial recognition reflects the lease liability, initial
direct costs, lease payments made before the commencement date of
the lease, and capitalised provision for dismantling and restoration,
less any lease incentives.
The Group recognises depreciation of right of use assets and interest
on lease liabilities in the income statement over the lease term.
Repayments of lease liabilities are separated into a principal portion
(presented within financing activities) and interest portion (which the
Group presents in operating activities) in the cash flow statement.
Payments made before the commencement date are included within
financing activities unless they in substance represent investing cash
flows, for example where pre-commencement cash flows are
significant relative to aggregate cash flows of the leasing arrangement.
(l) Close-down, restoration and environmental
obligations (note 25)
The Group has provisions for close-down and restoration costs which
include the dismantling and demolition of infrastructure, the removal
of residual materials and the remediation of disturbed areas for mines
and certain refineries and smelters. These provisions are based on all
regulatory requirements and any other commitments made to
stakeholders.
Closure provisions are not made for those operations that have no
known restrictions on their lives as the closure dates cannot be reliably
estimated, instead a contingent liability is disclosed (refer to note 30).
This applies primarily to certain Canadian smelters which have
indefinite- lived water rights from local governments permitting
electricity generation from hydro-power stations.
Provisions for close-down and restoration costs do not include any
additional obligations which are expected to arise from future
disturbance.
The costs are estimated on the basis of a closure plan, and are
reviewed at each reporting period during the life of the operation to
reflect known developments. The estimates are also subject to formal
review, with appropriate external support, at regular intervals.
The initial close-down and restoration provision is capitalised within
“Property, plant and equipment”. Subsequent movements in the close-
down and restoration provisions for ongoing operations, including
those resulting from new disturbance related to expansions or other
activities qualifying for capitalisation, updated cost estimates, changes
to the estimated lives of operations, changes to the timing of closure
activities and revisions to discount rates are also capitalised within
“Property, plant and equipment”. These costs are then depreciated
over the lives of the assets to which they relate.
Changes in closure provisions relating to closed operations are
charged/credited to “Net operating costs” in the income statement.
Where rehabilitation is conducted systematically over the life of the
operation, rather than at the time of closure, provision is made for the
estimated outstanding continuous rehabilitation work at each balance
sheet date and the cost is charged to the income statement.
In determining the appropriate rate for discounting future cash flows
for close-down, restoration and environmental obligations, we have
considered recent years’ market volatility and uncertainty together
with the wide variety of timeframes to closure across our portfolio of
assets. The Group discount rate is based on a long-term view of low-
risk market yields which includes a review of historic trends plus risks
and opportunities for which future cash flows have not been adjusted,
namely potential improvements in closure practices between the
reporting date and the point at which rehabilitation spend takes place.
The Group applies a single discount rate when measuring these
liabilities since we expect to meet closure cash flows principally from
US dollar revenues and financing, with activities co-ordinated by the
Group's central closure team. The amortisation or “unwinding” of the
discount applied in establishing the provisions is charged to the income
statement in each accounting period. The amortisation of the discount
is shown within “Finance items” in the income statement.
In some cases, Group companies make a contribution to trust funds in
order to meet or reimburse future environmental and decommissioning
costs. Amounts due for reimbursement from trust funds are not offset
against the corresponding closure provision unless payments into the
fund have the effect of passing the closure obligation to the trust.
Close-down and restoration costs are a normal consequence of mining
or production, and the majority of close-down and restoration
expenditure is incurred in the years following closure of the mine,
refinery or smelter. Although the ultimate cost to be incurred is
uncertain, the Group’s businesses estimate their costs using current
restoration standards and techniques.
Environmental costs result from environmental damage that was not a
necessary consequence of operations, and may include remediation,
compensation and penalties. Provision is made for the estimated
present value of such costs at the balance sheet date. These costs are
charged to “Net operating costs”, except for the unwinding of the
discount which is shown within “Finance items”.
Close-down and restoration costs are provided for in the accounting
period when the obligation arising from the related disturbance occurs,
based on the net present value of the estimated future costs of
restoration to be incurred during the life of the operation and post
closure. Where appropriate, the provision is estimated using probability
weighting of the different remediation and closure scenarios. The
obligation may occur during development or during the production
phase of a facility.
Remediation procedures may commence soon after the time the
disturbance, remediation process and estimated remediation costs
become known, but can continue for many years depending on the
nature of the disturbance and the remediation techniques used.
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Financial statements continued
Financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
(m) Inventories (note 16)
(o) Post-employment benefits (note 42)
Inventories are valued at the lower of cost and net realisable value,
primarily on a weighted average cost basis. Third party production
purchased for our own use that is ordinarily interchangeable in
accordance with IAS 2 is valued on the same basis, jointly with our own
production. Average costs are calculated by reference to the cost
levels experienced in the relevant month together with those in
opening inventory. The cost of raw materials and consumable stores is
the purchase price. The cost of partly-processed and saleable products
is generally the cost of production, including:
– Labour costs, materials and contractor expenses which are directly
attributable to the extraction and processing of ore or the
production of alumina and aluminium;
– The depreciation of mining properties and leases and of property,
plant and equipment used in the extraction and processing of ore or
the production of alumina and aluminium, copper and other refined
products; and
– Production overheads.
Work in progress includes ore stockpiles and other partly processed
material. Stockpiles represent ore that has been extracted and is
available for further processing. If there is significant uncertainty as to
if and/or when the stockpiled ore will be processed, the ore is expensed
as mined. If the ore will not be processed within 12 months after the
balance sheet date, it is included within non-current assets and net
realisable value is calculated on a discounted cash flow basis.
Quantities of stockpiled ore are assessed primarily through surveys
and assays. Certain estimates, including expected metal recoveries, are
calculated using available industry, engineering and scientific data, and
are periodically reassessed taking into account technical analysis and
historical performance.
(n) Taxation (note 9 and note 17)
Current tax is the tax expected to be payable on the taxable income for
the year calculated using rates that have been enacted or
substantively enacted at the balance sheet date. It includes
adjustments for tax expected to be payable or recoverable in respect of
previous periods. Where the amount of tax payable or recoverable is
uncertain, Rio Tinto establishes provisions based on either: the Group’s
judgment of the most likely amount of the liability or recovery; or,
when there is a wide range of possible outcomes, a probability
weighted average approach.
Deferred tax is calculated in accordance with IAS 12. The Group
provides for deferred tax in respect of fair value adjustments on
acquisitions including mining rights that, in general, are not eligible for
income tax allowances. Provision for deferred tax is based on the
difference between the carrying value of the asset and its income tax
base (which may be nil). Even when there is no income tax base, the
existence of a tax base for capital gains tax purposes is not usually
taken into account in determining the deferred tax provision for the
assets, unless they are classified as held for sale or it is determined for
other reasons that the carrying amount is expected to be recovered
primarily through disposal and not through use of the assets. Where
the recognition of an asset and liability from a single transaction gives
rise to equal and off-setting temporary differences, Rio Tinto applies
the Initial Recognition Exemption allowed by IAS 12, and consequently
recognises neither a deferred tax asset nor a deferred tax liability in
respect of these temporary differences. Primarily this occurs with new
lease arrangements and changes in closure cost estimates for assets
in operation. Under the amendment to IAS 12, deferred tax assets and
liabilities will be required to be recognised in respect of such temporary
differences (Refer to note 1 Standards issued, but not yet effective on
page 221).
The Group operates a number of defined benefit plans which provide
lump sums, pensions, medical benefits and life insurance to retirees. In
accordance with IAS 19 “Employee Benefits”, for post-employment
defined benefit plans, the difference between the fair value of any plan
assets and the present value of the plan obligations is recognised as an
asset or liability in the balance sheet.
Where appropriate, the recognition of assets may be restricted to the
present value of any amounts the Group expects to recover by way of
refunds from the plan or reductions in future contributions. In
determining the extent to which a refund will be available the Group
considers whether any third party, such as a trustee or pension
committee, has the power to enhance benefits or to wind up a pension
plan without the Group’s consent.
The most significant assumptions used in accounting for pension plans
are the discount rate, the inflation rate and mortality rates. The
discount rate is used to determine the net present value of the
obligations, the interest cost on the obligations and the interest
income on plan assets. The discount rate used is the yield on high-
quality corporate bonds with maturities and terms that match those of
the post-employment obligations as closely as possible. Where there is
no developed corporate bond market in a currency, the rate on
government bonds is used. The inflation rate is used to project
increases in future benefit payments for those plans that have benefits
linked to inflation. The mortality rates are used to project the period
over which benefits will be paid, which is then discounted to arrive at
the net present value of the obligations.
The current service cost, any past service cost and the effect of any
curtailment or settlements are recognised in the income statement.
The interest cost less interest income on assets held in the plans is
also charged to the income statement. All amounts charged to the
income statement in respect of these plans are included within “Net
operating costs” or in “Share of profit after tax of equity accounted
units”, as appropriate.
The Group’s contributions to defined contribution plans are charged to
the income statement in the period to which the contributions relate.
These are included within “Net operating costs” or in “Share of profit
after tax of equity accounted units”, as appropriate.
(p) Cash and cash equivalents (note 20)
For the purpose of the balance sheet, cash and cash equivalents
comprise: cash on hand, deposits held with banks, and short-term,
highly liquid investments (mainly money market funds) that are readily
convertible into known amounts of cash and which are subject to
insignificant risk of changes in value. Bank overdrafts are shown as
current liabilities in the balance sheet.
Further detail on cash and cash equivalents, including restricted cash,
is shown in note 20.
For the purposes of the cash flow statement, cash and cash
equivalents are net of bank overdrafts that are repayable on demand.
(q) Financial instruments (note 29)
(i) Financial assets
Classification and measurement
The Group classifies its financial assets into the following categories:
those to be measured subsequently at fair value (either through other
comprehensive income (FVOCI) or through profit or loss (FVPL)) and
those to be held at amortised cost.
Notes to the 2021 financial statements
The Group recognises all lease liabilities and corresponding right of use
The Group recognises all lease liabilities and corresponding right of use
Provisions for close-down and restoration costs do not include any
Provisions for close-down and restoration costs do not include any
assets, with the exception of short-term (12 months or fewer) and low
assets, with the exception of short-term (12 months or fewer) and low
additional obligations which are expected to arise from future
additional obligations which are expected to arise from future
value leases, on the balance sheet. Lease liabilities are recorded at the
value leases, on the balance sheet. Lease liabilities are recorded at the
disturbance.
disturbance.
present value of: fixed payments; variable lease payments that depend
present value of: fixed payments; variable lease payments that depend
on an index or rate; amounts payable under residual value guarantees;
on an index or rate; amounts payable under residual value guarantees;
The costs are estimated on the basis of a closure plan, and are
The costs are estimated on the basis of a closure plan, and are
and extension options expected to be exercised. Where a lease
and extension options expected to be exercised. Where a lease
reviewed at each reporting period during the life of the operation to
reviewed at each reporting period during the life of the operation to
contains an extension option which the Group can exercise without
contains an extension option which the Group can exercise without
reflect known developments. The estimates are also subject to formal
reflect known developments. The estimates are also subject to formal
negotiation, lease payments for the extension period are included in
negotiation, lease payments for the extension period are included in
review, with appropriate external support, at regular intervals.
review, with appropriate external support, at regular intervals.
the liability if the Group is reasonably certain that it will exercise the
the liability if the Group is reasonably certain that it will exercise the
option. Variable lease payments not dependent on an index or rate are
option. Variable lease payments not dependent on an index or rate are
excluded from the calculation of lease liabilities. Payments are
excluded from the calculation of lease liabilities. Payments are
discounted at the incremental borrowing rate of the lessee, unless the
discounted at the incremental borrowing rate of the lessee, unless the
interest rate implicit in the lease can be readily determined. For lease
interest rate implicit in the lease can be readily determined. For lease
agreements relating to vessels, ports and properties, non-lease
agreements relating to vessels, ports and properties, non-lease
components are excluded from the projection of future lease payments
components are excluded from the projection of future lease payments
and recorded separately within operating costs on a straight line basis.
and recorded separately within operating costs on a straight line basis.
The lease liability is measured at amortised cost using the effective
The lease liability is measured at amortised cost using the effective
interest method. The right of use asset arising from a lease
interest method. The right of use asset arising from a lease
arrangement at initial recognition reflects the lease liability, initial
arrangement at initial recognition reflects the lease liability, initial
direct costs, lease payments made before the commencement date of
direct costs, lease payments made before the commencement date of
the lease, and capitalised provision for dismantling and restoration,
the lease, and capitalised provision for dismantling and restoration,
less any lease incentives.
less any lease incentives.
The Group recognises depreciation of right of use assets and interest
The Group recognises depreciation of right of use assets and interest
on lease liabilities in the income statement over the lease term.
on lease liabilities in the income statement over the lease term.
Repayments of lease liabilities are separated into a principal portion
Repayments of lease liabilities are separated into a principal portion
(presented within financing activities) and interest portion (which the
(presented within financing activities) and interest portion (which the
Group presents in operating activities) in the cash flow statement.
Group presents in operating activities) in the cash flow statement.
Payments made before the commencement date are included within
Payments made before the commencement date are included within
financing activities unless they in substance represent investing cash
financing activities unless they in substance represent investing cash
flows, for example where pre-commencement cash flows are
flows, for example where pre-commencement cash flows are
significant relative to aggregate cash flows of the leasing arrangement.
significant relative to aggregate cash flows of the leasing arrangement.
(l) Close-down, restoration and environmental
(l) Close-down, restoration and environmental
obligations (note 25)
obligations (note 25)
The Group has provisions for close-down and restoration costs which
The Group has provisions for close-down and restoration costs which
include the dismantling and demolition of infrastructure, the removal
include the dismantling and demolition of infrastructure, the removal
of residual materials and the remediation of disturbed areas for mines
of residual materials and the remediation of disturbed areas for mines
and certain refineries and smelters. These provisions are based on all
and certain refineries and smelters. These provisions are based on all
regulatory requirements and any other commitments made to
regulatory requirements and any other commitments made to
stakeholders.
stakeholders.
Closure provisions are not made for those operations that have no
Closure provisions are not made for those operations that have no
known restrictions on their lives as the closure dates cannot be reliably
known restrictions on their lives as the closure dates cannot be reliably
estimated, instead a contingent liability is disclosed (refer to note 30).
estimated, instead a contingent liability is disclosed (refer to note 30).
This applies primarily to certain Canadian smelters which have
This applies primarily to certain Canadian smelters which have
indefinite- lived water rights from local governments permitting
indefinite- lived water rights from local governments permitting
electricity generation from hydro-power stations.
electricity generation from hydro-power stations.
The initial close-down and restoration provision is capitalised within
The initial close-down and restoration provision is capitalised within
“Property, plant and equipment”. Subsequent movements in the close-
“Property, plant and equipment”. Subsequent movements in the close-
down and restoration provisions for ongoing operations, including
down and restoration provisions for ongoing operations, including
those resulting from new disturbance related to expansions or other
those resulting from new disturbance related to expansions or other
activities qualifying for capitalisation, updated cost estimates, changes
activities qualifying for capitalisation, updated cost estimates, changes
to the estimated lives of operations, changes to the timing of closure
to the estimated lives of operations, changes to the timing of closure
activities and revisions to discount rates are also capitalised within
activities and revisions to discount rates are also capitalised within
“Property, plant and equipment”. These costs are then depreciated
“Property, plant and equipment”. These costs are then depreciated
over the lives of the assets to which they relate.
over the lives of the assets to which they relate.
Changes in closure provisions relating to closed operations are
Changes in closure provisions relating to closed operations are
charged/credited to “Net operating costs” in the income statement.
charged/credited to “Net operating costs” in the income statement.
Where rehabilitation is conducted systematically over the life of the
Where rehabilitation is conducted systematically over the life of the
operation, rather than at the time of closure, provision is made for the
operation, rather than at the time of closure, provision is made for the
estimated outstanding continuous rehabilitation work at each balance
estimated outstanding continuous rehabilitation work at each balance
sheet date and the cost is charged to the income statement.
sheet date and the cost is charged to the income statement.
In determining the appropriate rate for discounting future cash flows
In determining the appropriate rate for discounting future cash flows
for close-down, restoration and environmental obligations, we have
for close-down, restoration and environmental obligations, we have
considered recent years’ market volatility and uncertainty together
considered recent years’ market volatility and uncertainty together
with the wide variety of timeframes to closure across our portfolio of
with the wide variety of timeframes to closure across our portfolio of
assets. The Group discount rate is based on a long-term view of low-
assets. The Group discount rate is based on a long-term view of low-
risk market yields which includes a review of historic trends plus risks
risk market yields which includes a review of historic trends plus risks
and opportunities for which future cash flows have not been adjusted,
and opportunities for which future cash flows have not been adjusted,
namely potential improvements in closure practices between the
namely potential improvements in closure practices between the
reporting date and the point at which rehabilitation spend takes place.
reporting date and the point at which rehabilitation spend takes place.
The Group applies a single discount rate when measuring these
The Group applies a single discount rate when measuring these
liabilities since we expect to meet closure cash flows principally from
liabilities since we expect to meet closure cash flows principally from
US dollar revenues and financing, with activities co-ordinated by the
US dollar revenues and financing, with activities co-ordinated by the
Group's central closure team. The amortisation or “unwinding” of the
Group's central closure team. The amortisation or “unwinding” of the
discount applied in establishing the provisions is charged to the income
discount applied in establishing the provisions is charged to the income
statement in each accounting period. The amortisation of the discount
statement in each accounting period. The amortisation of the discount
is shown within “Finance items” in the income statement.
is shown within “Finance items” in the income statement.
In some cases, Group companies make a contribution to trust funds in
In some cases, Group companies make a contribution to trust funds in
order to meet or reimburse future environmental and decommissioning
order to meet or reimburse future environmental and decommissioning
costs. Amounts due for reimbursement from trust funds are not offset
costs. Amounts due for reimbursement from trust funds are not offset
against the corresponding closure provision unless payments into the
against the corresponding closure provision unless payments into the
fund have the effect of passing the closure obligation to the trust.
fund have the effect of passing the closure obligation to the trust.
Close-down and restoration costs are a normal consequence of mining
Close-down and restoration costs are a normal consequence of mining
or production, and the majority of close-down and restoration
or production, and the majority of close-down and restoration
expenditure is incurred in the years following closure of the mine,
expenditure is incurred in the years following closure of the mine,
refinery or smelter. Although the ultimate cost to be incurred is
refinery or smelter. Although the ultimate cost to be incurred is
uncertain, the Group’s businesses estimate their costs using current
uncertain, the Group’s businesses estimate their costs using current
restoration standards and techniques.
restoration standards and techniques.
Environmental costs result from environmental damage that was not a
Environmental costs result from environmental damage that was not a
necessary consequence of operations, and may include remediation,
necessary consequence of operations, and may include remediation,
compensation and penalties. Provision is made for the estimated
compensation and penalties. Provision is made for the estimated
present value of such costs at the balance sheet date. These costs are
present value of such costs at the balance sheet date. These costs are
charged to “Net operating costs”, except for the unwinding of the
charged to “Net operating costs”, except for the unwinding of the
discount which is shown within “Finance items”.
discount which is shown within “Finance items”.
Close-down and restoration costs are provided for in the accounting
Close-down and restoration costs are provided for in the accounting
period when the obligation arising from the related disturbance occurs,
period when the obligation arising from the related disturbance occurs,
based on the net present value of the estimated future costs of
based on the net present value of the estimated future costs of
restoration to be incurred during the life of the operation and post
restoration to be incurred during the life of the operation and post
closure. Where appropriate, the provision is estimated using probability
closure. Where appropriate, the provision is estimated using probability
weighting of the different remediation and closure scenarios. The
weighting of the different remediation and closure scenarios. The
obligation may occur during development or during the production
obligation may occur during development or during the production
phase of a facility.
phase of a facility.
Remediation procedures may commence soon after the time the
Remediation procedures may commence soon after the time the
disturbance, remediation process and estimated remediation costs
disturbance, remediation process and estimated remediation costs
become known, but can continue for many years depending on the
become known, but can continue for many years depending on the
nature of the disturbance and the remediation techniques used.
nature of the disturbance and the remediation techniques used.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
Classification depends on the business model for managing the
financial assets and the contractual terms of the cash flows.
Management determines the classification of financial assets at initial
recognition. The Group’s policy with regard to financial risk
management is set out in note 29. Generally, the Group does not
acquire financial assets for the purpose of selling in the short term.
The Group’s business model is primarily that of “hold to
collect” (where assets are held in order to collect contractual cash
flows). When the Group enters into derivative contracts, these
transactions are designed to reduce exposures relating to assets and
liabilities, firm commitments or anticipated transactions.
(a) Financial assets held at amortised cost
This classification applies to debt instruments which are held under a
hold to collect business model and which have cash flows that meet
the solely payments of principal and interest (“SPPI”) criteria.
At initial recognition, trade receivables that do not have a significant
financing component are recognised at their transaction price. Other
financial assets are initially recognised at fair value plus related
transaction costs; they are subsequently measured at amortised cost
using the effective interest method. Any gain or loss on de-recognition
or modification of a financial asset held at amortised cost is recognised
in the income statement.
(b) Financial assets held at fair value through other comprehensive
income (FVOCI)
This classification applies to the following financial assets:
– Debt instruments that are held under a business model where they
are held for the collection of contractual cash flows and also for sale
(“collect and sell”) and which have cash flows that meet the SPPI
criteria. An example would be where trade receivable invoices for
certain customers were factored from time to time.
All movements in the fair value of these financial assets are taken
through other comprehensive income, except for the recognition of
impairment gains or losses, interest revenue (including transaction
costs by applying the effective interest method), gains or losses
arising on de-recognition and foreign exchange gains and losses
which are recognised in the income statement. When the financial
asset is derecognised, the cumulative fair value gain or loss
previously recognised in other comprehensive income is reclassified
to the income statement.
– Equity investments where the Group has irrevocably elected to
present fair value gains and losses on revaluation in other
comprehensive income. The election can be made for each
individual investment; however it is not applicable to equity
investments held for trading.
Fair value gains or losses on revaluation of such equity investments,
including any foreign exchange component, are recognised in other
comprehensive income. When the equity investment is
derecognised, there is no reclassification of fair value gains or
losses previously recognised in other comprehensive income to the
income statement. Dividends are recognised in the income
statement when the right to receive payment is established.
(c) Financial assets held at fair value through profit or loss (FVPL)
This classification applies to the following financial assets. In all cases,
transaction costs are immediately expensed to the income statement.
– Debt instruments that do not meet the criteria of amortised cost or
fair value through other comprehensive income. The Group has a
significant proportion of trade receivables with embedded
derivatives for provisional pricing. These receivables are generally
held to collect but do not meet the SPPI criteria and as a result
must be held at FVPL. Subsequent fair value gains or losses are
taken to the income statement. In addition, trade receivable
invoices for certain customers which are routinely factored, in order
to address credit risk and support value delivery through timelier
realisation, are held at FVPL.
– Equity investments which are held for trading or where the FVOCI
election has not been applied. All fair value gains or losses and
related dividend income are recognised in the income statement.
– Derivatives which are not designated as a hedging instrument. All
subsequent fair value gains or losses are recognised in the
income statement.
(ii) Financial liabilities
Borrowings and other financial liabilities (including trade payables but
excluding derivative liabilities) are recognised initially at fair value, net
of transaction costs incurred, and are subsequently measured at
amortised cost.
The Group participates in supply chain finance arrangements whereby
vendors may elect to receive early payment of their invoice from a
third-party bank by factoring their receivable from Rio Tinto. These
arrangements do not modify the terms of the original liability with
respect to either counterparty terms, settlement date or amount due.
Utilisation of the early settlement facility is voluntary and at the
vendors' discretion on an invoice-by-invoice basis. Financial liabilities
subject to supply chain finance therefore continue to be classified as
trade payables. At 31 December 2021, trade payables included
US$782 million (2020: US$551 million) subject to early settlement
election by vendors.
When the basis for determining the contractual cash flows of a
financial liability measured at amortised cost change as a result of
interest rate benchmark reform, the Group updates the effective
interest rate of the financial liability to reflect the change that is
required by the reform (refer to page 220). A change in the basis for
determining the contractual cash flows is required by interest rate
benchmark reform if the following conditions are met:
– the change is necessary as a direct consequence of the reform; and
– the new basis for determining the contractual cash flows is
economically equivalent to the previous basis – i.e. the basis
immediately before the change.
When changes are made to a financial liability in addition to changes to
the basis for determining the contractual cash flows required by
interest rate benchmark reform, the Group first updates the effective
interest rate of the financial liability to reflect the change that is
required by interest rate benchmark reform. After that, the Group
applies the policies on accounting for modifications to the additional
changes.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
Classification depends on the business model for managing the
Classification depends on the business model for managing the
(c) Financial assets held at fair value through profit or loss (FVPL)
(c) Financial assets held at fair value through profit or loss (FVPL)
financial assets and the contractual terms of the cash flows.
financial assets and the contractual terms of the cash flows.
This classification applies to the following financial assets. In all cases,
This classification applies to the following financial assets. In all cases,
transaction costs are immediately expensed to the income statement.
transaction costs are immediately expensed to the income statement.
Management determines the classification of financial assets at initial
Management determines the classification of financial assets at initial
recognition. The Group’s policy with regard to financial risk
recognition. The Group’s policy with regard to financial risk
management is set out in note 29. Generally, the Group does not
management is set out in note 29. Generally, the Group does not
acquire financial assets for the purpose of selling in the short term.
acquire financial assets for the purpose of selling in the short term.
The Group’s business model is primarily that of “hold to
The Group’s business model is primarily that of “hold to
collect” (where assets are held in order to collect contractual cash
collect” (where assets are held in order to collect contractual cash
flows). When the Group enters into derivative contracts, these
flows). When the Group enters into derivative contracts, these
transactions are designed to reduce exposures relating to assets and
transactions are designed to reduce exposures relating to assets and
liabilities, firm commitments or anticipated transactions.
liabilities, firm commitments or anticipated transactions.
(a) Financial assets held at amortised cost
(a) Financial assets held at amortised cost
This classification applies to debt instruments which are held under a
This classification applies to debt instruments which are held under a
hold to collect business model and which have cash flows that meet
hold to collect business model and which have cash flows that meet
the solely payments of principal and interest (“SPPI”) criteria.
the solely payments of principal and interest (“SPPI”) criteria.
At initial recognition, trade receivables that do not have a significant
At initial recognition, trade receivables that do not have a significant
financing component are recognised at their transaction price. Other
financing component are recognised at their transaction price. Other
financial assets are initially recognised at fair value plus related
financial assets are initially recognised at fair value plus related
transaction costs; they are subsequently measured at amortised cost
transaction costs; they are subsequently measured at amortised cost
using the effective interest method. Any gain or loss on de-recognition
using the effective interest method. Any gain or loss on de-recognition
or modification of a financial asset held at amortised cost is recognised
or modification of a financial asset held at amortised cost is recognised
in the income statement.
in the income statement.
(b) Financial assets held at fair value through other comprehensive
(b) Financial assets held at fair value through other comprehensive
income (FVOCI)
income (FVOCI)
This classification applies to the following financial assets:
This classification applies to the following financial assets:
– Debt instruments that are held under a business model where they
– Debt instruments that are held under a business model where they
are held for the collection of contractual cash flows and also for sale
are held for the collection of contractual cash flows and also for sale
(“collect and sell”) and which have cash flows that meet the SPPI
(“collect and sell”) and which have cash flows that meet the SPPI
criteria. An example would be where trade receivable invoices for
criteria. An example would be where trade receivable invoices for
certain customers were factored from time to time.
certain customers were factored from time to time.
All movements in the fair value of these financial assets are taken
All movements in the fair value of these financial assets are taken
through other comprehensive income, except for the recognition of
through other comprehensive income, except for the recognition of
impairment gains or losses, interest revenue (including transaction
impairment gains or losses, interest revenue (including transaction
costs by applying the effective interest method), gains or losses
costs by applying the effective interest method), gains or losses
arising on de-recognition and foreign exchange gains and losses
arising on de-recognition and foreign exchange gains and losses
which are recognised in the income statement. When the financial
which are recognised in the income statement. When the financial
asset is derecognised, the cumulative fair value gain or loss
asset is derecognised, the cumulative fair value gain or loss
previously recognised in other comprehensive income is reclassified
previously recognised in other comprehensive income is reclassified
to the income statement.
to the income statement.
present fair value gains and losses on revaluation in other
present fair value gains and losses on revaluation in other
comprehensive income. The election can be made for each
comprehensive income. The election can be made for each
individual investment; however it is not applicable to equity
individual investment; however it is not applicable to equity
investments held for trading.
investments held for trading.
Fair value gains or losses on revaluation of such equity investments,
Fair value gains or losses on revaluation of such equity investments,
including any foreign exchange component, are recognised in other
including any foreign exchange component, are recognised in other
comprehensive income. When the equity investment is
comprehensive income. When the equity investment is
derecognised, there is no reclassification of fair value gains or
derecognised, there is no reclassification of fair value gains or
losses previously recognised in other comprehensive income to the
losses previously recognised in other comprehensive income to the
income statement. Dividends are recognised in the income
income statement. Dividends are recognised in the income
statement when the right to receive payment is established.
statement when the right to receive payment is established.
– Debt instruments that do not meet the criteria of amortised cost or
– Debt instruments that do not meet the criteria of amortised cost or
fair value through other comprehensive income. The Group has a
fair value through other comprehensive income. The Group has a
significant proportion of trade receivables with embedded
significant proportion of trade receivables with embedded
derivatives for provisional pricing. These receivables are generally
derivatives for provisional pricing. These receivables are generally
held to collect but do not meet the SPPI criteria and as a result
held to collect but do not meet the SPPI criteria and as a result
must be held at FVPL. Subsequent fair value gains or losses are
must be held at FVPL. Subsequent fair value gains or losses are
taken to the income statement. In addition, trade receivable
taken to the income statement. In addition, trade receivable
invoices for certain customers which are routinely factored, in order
invoices for certain customers which are routinely factored, in order
to address credit risk and support value delivery through timelier
to address credit risk and support value delivery through timelier
realisation, are held at FVPL.
realisation, are held at FVPL.
– Equity investments which are held for trading or where the FVOCI
– Equity investments which are held for trading or where the FVOCI
election has not been applied. All fair value gains or losses and
election has not been applied. All fair value gains or losses and
related dividend income are recognised in the income statement.
related dividend income are recognised in the income statement.
– Derivatives which are not designated as a hedging instrument. All
– Derivatives which are not designated as a hedging instrument. All
subsequent fair value gains or losses are recognised in the
subsequent fair value gains or losses are recognised in the
income statement.
income statement.
(ii) Financial liabilities
(ii) Financial liabilities
Borrowings and other financial liabilities (including trade payables but
Borrowings and other financial liabilities (including trade payables but
excluding derivative liabilities) are recognised initially at fair value, net
excluding derivative liabilities) are recognised initially at fair value, net
of transaction costs incurred, and are subsequently measured at
of transaction costs incurred, and are subsequently measured at
amortised cost.
amortised cost.
The Group participates in supply chain finance arrangements whereby
The Group participates in supply chain finance arrangements whereby
vendors may elect to receive early payment of their invoice from a
vendors may elect to receive early payment of their invoice from a
third-party bank by factoring their receivable from Rio Tinto. These
third-party bank by factoring their receivable from Rio Tinto. These
arrangements do not modify the terms of the original liability with
arrangements do not modify the terms of the original liability with
respect to either counterparty terms, settlement date or amount due.
respect to either counterparty terms, settlement date or amount due.
Utilisation of the early settlement facility is voluntary and at the
Utilisation of the early settlement facility is voluntary and at the
vendors' discretion on an invoice-by-invoice basis. Financial liabilities
vendors' discretion on an invoice-by-invoice basis. Financial liabilities
subject to supply chain finance therefore continue to be classified as
subject to supply chain finance therefore continue to be classified as
trade payables. At 31 December 2021, trade payables included
trade payables. At 31 December 2021, trade payables included
US$782 million (2020: US$551 million) subject to early settlement
US$782 million (2020: US$551 million) subject to early settlement
election by vendors.
election by vendors.
When the basis for determining the contractual cash flows of a
When the basis for determining the contractual cash flows of a
financial liability measured at amortised cost change as a result of
financial liability measured at amortised cost change as a result of
interest rate benchmark reform, the Group updates the effective
interest rate benchmark reform, the Group updates the effective
interest rate of the financial liability to reflect the change that is
interest rate of the financial liability to reflect the change that is
required by the reform (refer to page 220). A change in the basis for
required by the reform (refer to page 220). A change in the basis for
determining the contractual cash flows is required by interest rate
determining the contractual cash flows is required by interest rate
– the change is necessary as a direct consequence of the reform; and
– the change is necessary as a direct consequence of the reform; and
– the new basis for determining the contractual cash flows is
– the new basis for determining the contractual cash flows is
economically equivalent to the previous basis – i.e. the basis
economically equivalent to the previous basis – i.e. the basis
immediately before the change.
immediately before the change.
When changes are made to a financial liability in addition to changes to
When changes are made to a financial liability in addition to changes to
the basis for determining the contractual cash flows required by
the basis for determining the contractual cash flows required by
interest rate benchmark reform, the Group first updates the effective
interest rate benchmark reform, the Group first updates the effective
interest rate of the financial liability to reflect the change that is
interest rate of the financial liability to reflect the change that is
required by interest rate benchmark reform. After that, the Group
required by interest rate benchmark reform. After that, the Group
applies the policies on accounting for modifications to the additional
applies the policies on accounting for modifications to the additional
changes.
changes.
– Equity investments where the Group has irrevocably elected to
– Equity investments where the Group has irrevocably elected to
benchmark reform if the following conditions are met:
benchmark reform if the following conditions are met:
(iii) Impairment of financial assets
A forward-looking expected credit loss (ECL) review is required for:
debt instruments measured at amortised cost or held at fair value
through other comprehensive income; loan commitments and financial
guarantees not measured at fair value through profit or loss; lease
receivables; and trade receivables that give rise to an unconditional
right to consideration.
As permitted by IFRS 9, the Group applies the “simplified approach” to
trade receivable balances and receivables relating to net investment in
finance leases and the “general approach” to all other financial assets.
The general approach incorporates a review for any significant increase
in counterparty credit risk since inception. The ECL reviews include
assumptions about the risk of default and expected loss rates. For
trade receivables and receivables relating to net investment in finance
leases, the assessment takes into account the use of credit
enhancements, for example, letters of credit. Impairments for undrawn
loan commitments are reflected as a provision.
(iv) Derivatives and hedge accounting
The Group applies the hedge accounting requirements under IFRS 9
and its hedging activities are discussed in note 29 with movements on
hedging reserves disclosed in note 28. Where applicable, the Group
may defer the costs of hedging including currency basis spreads,
forward points and the time value of options.
Phase 1 amendments related to IBOR reform adopted in prior periods
allowed temporary relief from applying specific hedge accounting
requirements to hedging arrangements directly impacted by the
reform. Application of the temporary reliefs mean that IBOR reform
does not result in termination of hedging relationships referencing an
IBOR during the anticipated period of IBOR-related uncertainty. The
principal relief which the Group has applied to its hedging portfolio is in
the assumption that US LIBOR remains a separately identifiable
component for the duration of the hedge; and the US LIBOR rates
referenced by fixed-to-floating rate swaps in fair value hedge
relationships do not change as the result of IBOR reform, preserving
the economic relationship and allowing the related hedges to remain
effective (refer to note 29 A (b) (v)). When the basis for determining
the contractual cash flows of the hedged item or hedging instrument
changes as a result of IBOR reform and therefore there is no longer
uncertainty arising about the cash flows of the hedged item or the
hedging instrument, the Group amends the hedge documentation of
that hedging relationship to reflect the change(s) required by IBOR
reform. These amendments in the formal hedge documentation do not
constitute the discontinuation of the hedging relationship or the
designation of a new hedging relationship, as prescribed by the reliefs
of Phase 2 of the reform (refer to page 220).
(r) Share-based payment (note 41)
The fair value of the Group’s share plans is recognised as an expense
over the expected vesting period with an offset to retained earnings for
Rio Tinto plc plans and to other reserves for Rio Tinto Limited plans.
The Group uses fair values provided by independent actuaries
calculated using either a lattice-based option valuation model or a
Monte Carlo simulation model.
The terms of each plan are considered at the balance sheet date to
determine whether the plan should be accounted for as equity-settled
or cash-settled. The Group does not operate any plans as cash-settled.
However, the Performance Share Plan can, at the discretion of the
directors, offer employees an equivalent amount in cash. This is not
standard practice. In some jurisdictions, employees are granted cash-
settled awards where equity-settled awards are prohibited by local
laws and regulations. The value of these awards is immaterial.
The Group’s equity-settled share plans are settled either by: the
issuance of shares by the relevant parent company; the purchase of
shares on market; or the use of shares held in treasury which were
previously acquired as part of a share buy-back. If the cost of shares
acquired to satisfy the plans differs from the expense charged, the
difference is taken to retained earnings or other reserves, as
appropriate.
(s) Share capital (notes 26 and 27)
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issuance of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
Where any Group company purchases the Group’s equity share capital
(treasury shares), the consideration paid, including any directly
attributable incremental costs (net of income taxes) is deducted from
equity attributable to owners of Rio Tinto. Where such shares are
subsequently reissued, any consideration received, net of any directly
attributable incremental costs and the related income tax effects, is
included in equity attributable to owners of Rio Tinto. If purchased Rio
Tinto plc shares are cancelled, an amount equal to the nominal value of
the cancelled share is credited to the capital redemption reserve.
(t) Segment reporting (notes 2 and 3)
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker
(CODM). The Group considers that Rio Tinto’s Chief Executive is the
CODM, who is responsible for allocating resources and assessing
performance of the operating segments.
Critical accounting policies and estimates
(i) Determination of CGUs, assessment of indicators of
impairment, review of asset carrying values, impairment
charges and reversals and the recoverability of goodwill (notes
6, 12 and 13)
Impairment is assessed at the cash-generating unit (CGU) level. A CGU
is the smallest identifiable asset or group of assets that generates
independent cash inflows. Judgment is applied to identify the Group’s
CGUs, particularly when assets belong to integrated operations, and
changes in CGUs could impact impairment charges and reversals. The
most significant examples of this judgment are: in 2021, the continued
grouping of Rio Tinto Fer et Titane in Quebec, Canada and QIT
Madagascar Minerals (QMM) into a single CGU on the basis that they
are vertically integrated operations with no active market for ilmenite;
and in 2019, disaggregation of the Weipa bauxite mine and the
downstream Gladstone alumina refineries (Yarwun and QAL) in
Queensland, Australia into three separate CGUs on the basis of the
ramp-up of the Amrun expansion at Weipa which increased bauxite
exports such that the mine is now considered to generate largely
independent cash inflows. Prior to 2019, the Weipa mine and Gladstone
refineries were grouped into a single CGU. Management reviews these
judgments on an annual basis as part of the annual internal review of
asset values as described in note (i) above.
External and internal factors are monitored for indicators of
impairment and include an annual internal review of asset values as
described in note (i) above. Judgment is required to determine whether
the impact of adverse spot commodity price movements is significant
and structural in nature. There were no material instances of this
judgment resulting in an indicator of impairment as at 31 December
2021.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
Generally, discounted cash flow models are used to determine the
recoverable amount of CGUs. In this case, significant judgment is
required to determine the appropriate estimates and assumptions used
and there is significant estimation uncertainty. In particular, for fair
value less costs of disposal valuations, judgment is required to
determine the estimates a market participant would use. The
discounted cash flow model is most sensitive to the following
estimates: the timing of project expansions; the cost to complete
assets under construction; long-term commodity prices; production
timing and recovery rates; exchange rates; operating costs; reserve and
resource estimates; closure costs; discount rates; allocation of long-
term contract revenues between CGUs; and, in some instances, the
renewal of mining licences. Some of these variables are unique to an
individual CGU. Future changes in these variables may differ from
management’s expectations and may materially alter the recoverable
amounts of the CGUs.
Note (i) above also describes the Group’s methodology for estimating
long-term commodity prices, exchange rates and discount rates for
impairment testing purposes. Note 6 outlines the significant
judgments, assumptions and sensitivities made for both measuring the
impairments recorded and for determining whether reversal of part or
all of a previous impairment was appropriate. Judgments, assumptions
and sensitivities in relation to the testing of CGUs containing goodwill
and indefinite-lived intangible assets are outlined in notes 12 and 13
respectively.
(ii) Estimation of asset lives
Intangible assets are considered to have indefinite lives (and therefore
no related depreciation or amortisation charge) if, in the Group’s
judgment, there is no foreseeable limit to the period over which the
asset is expected to generate cash flows. Factors that are considered in
making this judgment include the existence of contractual rights for
unlimited terms or evidence that renewal of the contractual rights
without significant incremental costs can be expected for indefinite
periods into the future in view of the Group’s investment intentions.
The most significant assessment of indefinite life applicable to
intangible assets relates to contract based water rights in Canada
acquired with Alcan, described further in note 13.
The useful lives of the major assets of a CGU are often dependent on
the life of the orebody to which they relate. The life of the orebody will
be determined on the basis of the life-of-mine plan which is based on
the estimates of ore reserves as described on page 353.
The Group expects to spend an estimated US$7.5 billion between 2022
and 2030 on projects to lower carbon emissions from the Group's
operations. This includes the replacement of diesel engines in heavy
mobile equipment with electric power and investment in renewable
power generating assets. The remaining useful economic life for fossil
fuel powered assets is monitored closely for indicators of technological
obsolescence, however in many instances the requirement for fossil
fuel powered back-up means that early retirement of the assets is not
practical (refer to note 14).
(iii) Close-down, restoration and environmental obligations
(note 25)
Provision is made for close-down, restoration and environmental costs
when the obligation occurs, based on the net present value of
estimated future costs required to satisfy the obligation. Management
uses its judgment and experience to determine the potential scope of
closure rehabilitation work required to meet the Group’s legal,
statutory and constructive obligations, and any other commitments
made to stakeholders, and the options and techniques available to
meet those obligations and estimate the associated costs and the
likely timing of those costs. Significant judgment is also required to
determine both the costs associated with that work and the other
assumptions used to calculate the provision. External experts support
the cost estimation process where appropriate but there remains
significant estimation uncertainty.
The key judgment in applying this accounting policy is determining
when an estimate is sufficiently reliable to make or adjust a closure
provision.
Closure provisions are not made for those operations that have no
known restrictions on their lives as the closure dates cannot be reliably
estimated. This applies primarily to certain Canadian smelters which
have indefinite-lived water rights or power agreements for renewable
power sources with local governments.
Cost estimates are updated throughout the life of the operation;
generally cost estimates must comply with the Group’s Capital Project
Framework once the operation is ten years from expected closure. This
means, for example, that where an Order of Magnitude (OoM) study is
required for closure it must be of the same standard as an OoM study
for a new mine, smelter or refinery. As at 31 December 2021, there are
13 operations with remaining lives of under ten years before taking into
account unapproved extensions. The largest reforecast currently
underway is at Energy Resources of Australia; preliminary information
available from this study resulted in an increase to closure liabilities for
the Ranger Uranium mine of US$510 million at 31 December 2021.
Adjustments are made to provisions when the range of possible
outcomes becomes sufficiently narrow to permit reliable estimation.
Depending on the materiality of the change, adjustments may require
review and endorsement by the Group’s Closure Steering Committee
before the provision is updated.
In some cases, the closure study may indicate that monitoring and,
potentially, remediation will be required indefinitely - for example
ground water treatment. In these cases the underlying cash flows for
the provision may be restricted to a period for which the costs can be
reliably estimated, which on average is around 30 years. Where an
alternative commercial arrangement to meet our obligations can be
predicted with confidence, this period may be shorter.
The most significant assumptions and estimates used in calculating
the provision are:
– Closure timeframes. The weighted average remaining lives of
operations is shown in note 25. Some expenditure may be incurred
before closure whilst the operation as a whole is in production.
– The length of any post-closure monitoring period. This will depend
on the specific site requirements and the availability of alternative
commercial arrangements; some expenditure can continue into
perpetuity. The Rio Tinto Kennecott closure and environmental
remediation provision includes an allowance for ongoing monitoring
and remediation costs, including ground water treatment, of
approximately US$0.6 billion.
– The probability weighting of possible closure scenarios. The most
significant impact of probability weighting is at the Pilbara
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
(iii) Close-down, restoration and environmental obligations
(iii) Close-down, restoration and environmental obligations
Generally, discounted cash flow models are used to determine the
Generally, discounted cash flow models are used to determine the
recoverable amount of CGUs. In this case, significant judgment is
recoverable amount of CGUs. In this case, significant judgment is
required to determine the appropriate estimates and assumptions used
required to determine the appropriate estimates and assumptions used
and there is significant estimation uncertainty. In particular, for fair
and there is significant estimation uncertainty. In particular, for fair
value less costs of disposal valuations, judgment is required to
value less costs of disposal valuations, judgment is required to
determine the estimates a market participant would use. The
determine the estimates a market participant would use. The
discounted cash flow model is most sensitive to the following
discounted cash flow model is most sensitive to the following
estimates: the timing of project expansions; the cost to complete
estimates: the timing of project expansions; the cost to complete
assets under construction; long-term commodity prices; production
assets under construction; long-term commodity prices; production
timing and recovery rates; exchange rates; operating costs; reserve and
timing and recovery rates; exchange rates; operating costs; reserve and
resource estimates; closure costs; discount rates; allocation of long-
resource estimates; closure costs; discount rates; allocation of long-
term contract revenues between CGUs; and, in some instances, the
term contract revenues between CGUs; and, in some instances, the
renewal of mining licences. Some of these variables are unique to an
renewal of mining licences. Some of these variables are unique to an
individual CGU. Future changes in these variables may differ from
individual CGU. Future changes in these variables may differ from
management’s expectations and may materially alter the recoverable
management’s expectations and may materially alter the recoverable
amounts of the CGUs.
amounts of the CGUs.
Note (i) above also describes the Group’s methodology for estimating
Note (i) above also describes the Group’s methodology for estimating
long-term commodity prices, exchange rates and discount rates for
long-term commodity prices, exchange rates and discount rates for
impairment testing purposes. Note 6 outlines the significant
impairment testing purposes. Note 6 outlines the significant
judgments, assumptions and sensitivities made for both measuring the
judgments, assumptions and sensitivities made for both measuring the
impairments recorded and for determining whether reversal of part or
impairments recorded and for determining whether reversal of part or
all of a previous impairment was appropriate. Judgments, assumptions
all of a previous impairment was appropriate. Judgments, assumptions
and sensitivities in relation to the testing of CGUs containing goodwill
and sensitivities in relation to the testing of CGUs containing goodwill
and indefinite-lived intangible assets are outlined in notes 12 and 13
and indefinite-lived intangible assets are outlined in notes 12 and 13
respectively.
respectively.
(ii) Estimation of asset lives
(ii) Estimation of asset lives
Intangible assets are considered to have indefinite lives (and therefore
Intangible assets are considered to have indefinite lives (and therefore
no related depreciation or amortisation charge) if, in the Group’s
no related depreciation or amortisation charge) if, in the Group’s
judgment, there is no foreseeable limit to the period over which the
judgment, there is no foreseeable limit to the period over which the
asset is expected to generate cash flows. Factors that are considered in
asset is expected to generate cash flows. Factors that are considered in
making this judgment include the existence of contractual rights for
making this judgment include the existence of contractual rights for
unlimited terms or evidence that renewal of the contractual rights
unlimited terms or evidence that renewal of the contractual rights
without significant incremental costs can be expected for indefinite
without significant incremental costs can be expected for indefinite
periods into the future in view of the Group’s investment intentions.
periods into the future in view of the Group’s investment intentions.
The most significant assessment of indefinite life applicable to
The most significant assessment of indefinite life applicable to
intangible assets relates to contract based water rights in Canada
intangible assets relates to contract based water rights in Canada
acquired with Alcan, described further in note 13.
acquired with Alcan, described further in note 13.
The useful lives of the major assets of a CGU are often dependent on
The useful lives of the major assets of a CGU are often dependent on
the life of the orebody to which they relate. The life of the orebody will
the life of the orebody to which they relate. The life of the orebody will
be determined on the basis of the life-of-mine plan which is based on
be determined on the basis of the life-of-mine plan which is based on
the estimates of ore reserves as described on page 353.
the estimates of ore reserves as described on page 353.
The Group expects to spend an estimated US$7.5 billion between 2022
The Group expects to spend an estimated US$7.5 billion between 2022
and 2030 on projects to lower carbon emissions from the Group's
and 2030 on projects to lower carbon emissions from the Group's
operations. This includes the replacement of diesel engines in heavy
operations. This includes the replacement of diesel engines in heavy
mobile equipment with electric power and investment in renewable
mobile equipment with electric power and investment in renewable
power generating assets. The remaining useful economic life for fossil
power generating assets. The remaining useful economic life for fossil
fuel powered assets is monitored closely for indicators of technological
fuel powered assets is monitored closely for indicators of technological
obsolescence, however in many instances the requirement for fossil
obsolescence, however in many instances the requirement for fossil
fuel powered back-up means that early retirement of the assets is not
fuel powered back-up means that early retirement of the assets is not
practical (refer to note 14).
practical (refer to note 14).
(note 25)
(note 25)
Provision is made for close-down, restoration and environmental costs
Provision is made for close-down, restoration and environmental costs
when the obligation occurs, based on the net present value of
when the obligation occurs, based on the net present value of
estimated future costs required to satisfy the obligation. Management
estimated future costs required to satisfy the obligation. Management
uses its judgment and experience to determine the potential scope of
uses its judgment and experience to determine the potential scope of
closure rehabilitation work required to meet the Group’s legal,
closure rehabilitation work required to meet the Group’s legal,
statutory and constructive obligations, and any other commitments
statutory and constructive obligations, and any other commitments
made to stakeholders, and the options and techniques available to
made to stakeholders, and the options and techniques available to
meet those obligations and estimate the associated costs and the
meet those obligations and estimate the associated costs and the
likely timing of those costs. Significant judgment is also required to
likely timing of those costs. Significant judgment is also required to
determine both the costs associated with that work and the other
determine both the costs associated with that work and the other
assumptions used to calculate the provision. External experts support
assumptions used to calculate the provision. External experts support
the cost estimation process where appropriate but there remains
the cost estimation process where appropriate but there remains
significant estimation uncertainty.
significant estimation uncertainty.
The key judgment in applying this accounting policy is determining
The key judgment in applying this accounting policy is determining
when an estimate is sufficiently reliable to make or adjust a closure
when an estimate is sufficiently reliable to make or adjust a closure
provision.
provision.
Closure provisions are not made for those operations that have no
Closure provisions are not made for those operations that have no
known restrictions on their lives as the closure dates cannot be reliably
known restrictions on their lives as the closure dates cannot be reliably
estimated. This applies primarily to certain Canadian smelters which
estimated. This applies primarily to certain Canadian smelters which
have indefinite-lived water rights or power agreements for renewable
have indefinite-lived water rights or power agreements for renewable
power sources with local governments.
power sources with local governments.
Cost estimates are updated throughout the life of the operation;
Cost estimates are updated throughout the life of the operation;
generally cost estimates must comply with the Group’s Capital Project
generally cost estimates must comply with the Group’s Capital Project
Framework once the operation is ten years from expected closure. This
Framework once the operation is ten years from expected closure. This
means, for example, that where an Order of Magnitude (OoM) study is
means, for example, that where an Order of Magnitude (OoM) study is
required for closure it must be of the same standard as an OoM study
required for closure it must be of the same standard as an OoM study
for a new mine, smelter or refinery. As at 31 December 2021, there are
for a new mine, smelter or refinery. As at 31 December 2021, there are
13 operations with remaining lives of under ten years before taking into
13 operations with remaining lives of under ten years before taking into
account unapproved extensions. The largest reforecast currently
account unapproved extensions. The largest reforecast currently
underway is at Energy Resources of Australia; preliminary information
underway is at Energy Resources of Australia; preliminary information
available from this study resulted in an increase to closure liabilities for
available from this study resulted in an increase to closure liabilities for
the Ranger Uranium mine of US$510 million at 31 December 2021.
the Ranger Uranium mine of US$510 million at 31 December 2021.
Adjustments are made to provisions when the range of possible
Adjustments are made to provisions when the range of possible
outcomes becomes sufficiently narrow to permit reliable estimation.
outcomes becomes sufficiently narrow to permit reliable estimation.
Depending on the materiality of the change, adjustments may require
Depending on the materiality of the change, adjustments may require
review and endorsement by the Group’s Closure Steering Committee
review and endorsement by the Group’s Closure Steering Committee
before the provision is updated.
before the provision is updated.
In some cases, the closure study may indicate that monitoring and,
In some cases, the closure study may indicate that monitoring and,
potentially, remediation will be required indefinitely - for example
potentially, remediation will be required indefinitely - for example
ground water treatment. In these cases the underlying cash flows for
ground water treatment. In these cases the underlying cash flows for
the provision may be restricted to a period for which the costs can be
the provision may be restricted to a period for which the costs can be
reliably estimated, which on average is around 30 years. Where an
reliably estimated, which on average is around 30 years. Where an
alternative commercial arrangement to meet our obligations can be
alternative commercial arrangement to meet our obligations can be
predicted with confidence, this period may be shorter.
predicted with confidence, this period may be shorter.
The most significant assumptions and estimates used in calculating
The most significant assumptions and estimates used in calculating
the provision are:
the provision are:
– Closure timeframes. The weighted average remaining lives of
– Closure timeframes. The weighted average remaining lives of
operations is shown in note 25. Some expenditure may be incurred
operations is shown in note 25. Some expenditure may be incurred
before closure whilst the operation as a whole is in production.
before closure whilst the operation as a whole is in production.
– The length of any post-closure monitoring period. This will depend
– The length of any post-closure monitoring period. This will depend
on the specific site requirements and the availability of alternative
on the specific site requirements and the availability of alternative
commercial arrangements; some expenditure can continue into
commercial arrangements; some expenditure can continue into
perpetuity. The Rio Tinto Kennecott closure and environmental
perpetuity. The Rio Tinto Kennecott closure and environmental
remediation provision includes an allowance for ongoing monitoring
remediation provision includes an allowance for ongoing monitoring
and remediation costs, including ground water treatment, of
and remediation costs, including ground water treatment, of
approximately US$0.6 billion.
approximately US$0.6 billion.
– The probability weighting of possible closure scenarios. The most
– The probability weighting of possible closure scenarios. The most
significant impact of probability weighting is at the Pilbara
significant impact of probability weighting is at the Pilbara
operations (Iron Ore) relating to infrastructure and incorporates the
expectation that some infrastructure will be retained by the
relevant State authorities post closure. The assignment of
probabilities to this scenario reduces the closure provision by
US$1.2 billion.
– Appropriate sources on which to base the calculation of the
discount rate. On 30 September 2020, management reviewed the
rate used for discounting provisions and reduced the discount rate
by 0.5% with no further changes required in 2021. The discount
rate by nature is subjective and therefore sensitivities are shown in
note 25 for how the provision balance, which at 31 December 2021
was US$14.5 billion, would change if discounted at alternative
discount rates were applied.
There is significant estimation uncertainty in the calculation of the
provision and cost estimates can vary in response to many factors
including:
– Changes to the relevant legal or local/national government
requirements and any other commitments made to stakeholders;
– Review of remediation and relinquishment options;
– Additional remediation requirements identified during the
rehabilitation;
– The emergence of new restoration techniques;
– Precipitation rates and climate change;
– Change in the expected closure date; and
– Change in the discount rate;
Project specific risks are embedded within the cash flows which are
based on a central case estimate of closure activities assuming that
the obligation is fulfilled by the Group. These cash flows are then
discounted using a discount rate specific to the class of obligations.
The selection of appropriate sources on which to base the calculation
of the discount rate requires judgment. The 1.5% real rate currently
used by the Group is based on a number of inputs including observable
historical yields on 30 year US Treasury Inflation Protected Securities
(TIPS), and consideration of findings by independent valuation experts.
(iv) Deferral of stripping costs (note 14)
Stripping of waste materials takes place throughout the production
phase of a surface mine or pit. The identification of components within
a mine and of the life of component strip ratios requires judgment and
is dependent on an individual mine’s design and the estimates inherent
within that. Changes to that design may introduce new components
and/or change the life of component strip ratios. Changes in other
technical or economic parameters that impact ore reserves may also
have an impact on the life of component strip ratios, even if they do not
affect the mine’s design. Changes to the life of component strip ratios
are accounted for prospectively.
The Group’s judgment as to whether multiple pit mines are considered
separate or integrated operations determines whether initial stripping
of a pit is deemed to be pre-production or production phase stripping
and, therefore, the amortisation base for those costs. The analysis
depends on each mine’s specific circumstances and requires judgment:
another mining company could make a different judgment even when
the fact pattern appears to be similar.
Experience gained at other mine or production sites may also change
expected methods or costs of closure, although elements of the
restoration and rehabilitation of each site are relatively unique to a site.
Generally, there is relatively limited restoration and rehabilitation
activity and historical precedent elsewhere in the Group, or in the
industry as a whole, against which to benchmark cost estimates.
(v) Uncertain tax positions
The Group operates across a large number of jurisdictions and is
subject to periodic challenges by local tax authorities on a range of tax
matters during the normal course of business, including transfer
pricing, indirect taxes and transaction related issues.
The expected timing of expenditure can also change for other reasons,
for example because of changes to expectations around ore reserves
and mineral resources, production rates, renewal of operating licences
or economic conditions.
As noted in note (l) above, changes in closure and restoration
provisions for ongoing operations are usually capitalised and therefore
will impact assets and liabilities but have no impact on profit or loss at
the time the change is made. However, these changes will impact
depreciation and the unwind of discount in future years. Changes in
closure estimates at the Group’s ongoing operations could result in a
material adjustment to assets and liabilities in the next 12 months.
Changes to closure cost estimates for closed operations, and changes
to environmental cost estimates at any operation, would impact profit
or loss; however, the Group does not consider that there is significant
risk of a change in estimates for these liabilities causing a material
adjustment to profit or loss in the next 12 months. Any new
environmental incidents may require a material provision but cannot be
predicted.
Uncertain tax provisions include the related interest and penalties for
all matters worldwide based on the Group’s judgment of the most
likely amount of the liability or recovery; or, when there is a wide range
of possible outcomes, a probability weighted average approach. The
most significant judgments are in relation to transfer pricing matters.
Whilst the potential outcomes are highly variable our current
expectation is that there will be no material change to the amounts
provided in the 12 months from 31 December 2021.
(vi) Recoverability of potential deferred tax assets (note 17)
The Group has tax losses and other deductible temporary differences,
mainly in Australian, Canadian, US and Mongolian taxable entities, that
have the potential to reduce tax payments in future years. Deferred tax
assets have been recognised to the extent that their recovery is
probable, having regard to the availability of sufficient taxable
temporary differences relating to the same taxation authority and the
same taxable entity, the estimates of projected future taxable income
of these taxable entities and after taking account of specific risk factors
that are expected to affect the recovery of these assets including the
risk of expiry of losses. Further information on deferred tax assets is
given in note 17.
In addition to the risk of expiry of losses, the projections on which
recovery of tax losses are based are subject to the same estimation
uncertainty as noted in (i) above in relation to impairment. The key
judgment in the application of this accounting policy is the recognition
of deferred tax assets for losses where the operation is not currently
profitable for tax purposes.
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Financial statements continued
Notes to the 2021 financial statements
1 Principal accounting policies continued
(x) Contingencies (note 30)
(vii) Provision for onerous contracts
Provision for an onerous contract is made only when the assets
dedicated to that contract are fully impaired or the contract becomes
stranded as a result of a business decision. Judgment is required in
determining which assets are considered dedicated to a contract when
there is optionality as to how the contract obligations can be settled.
Key estimates are the cash flows associated with the contract and the
discount rate assumption. The Group completed the disposal of its
remaining coking coal assets in 2018 and has retained the onerous
provisions made in past periods for rail infrastructure “take or pay”
contracts which were considered stranded. As at 31 December 2021,
the balance of the provision was US$172 million (2020: US$219
million). At 31 December 2021, the Group's investment in the
Escondida Joint Venture included US$118 million share of provision
relating to contractual payments under a power purchase agreement
which became stranded in 2019 and was judged to be onerous upon
early cancellation in favour of renewable energy sources.
(viii) Identification of functional currencies
The functional currency for each subsidiary, unincorporated
arrangement, joint operation and equity accounted unit, is the currency
of the primary economic environment in which it operates.
Determination of functional currency involves significant judgment and
other companies may make different judgments based on similar facts.
For many of Rio Tinto’s businesses, their functional currency is the
currency of the country in which they operate. The Group reconsiders
the functional currency of its businesses if there is a change in the
underlying transactions, events or conditions which determine their
primary economic environment.
The determination of functional currency is a key judgment which
affects the measurement of non-current assets included in the balance
sheet and, as a consequence, the depreciation and amortisation of
those assets included in the income statement. It also impacts
exchange gains and losses included in the income statement and in
equity. The Group applies judgment in determining whether settlement
of certain intragroup loans is neither planned nor likely in the
foreseeable future and therefore whether the associated exchange
gains and losses can be taken to equity. During 2021, A$14 billion of
intragroup loans continued to meet these criteria; associated exchange
gains and losses are taken to equity.
(ix) Basis of consolidation (notes 32-35)
Judgment is sometimes required to determine whether after
considering all relevant factors, the Group has control, joint control or
significant influence over an entity or arrangement. Significant
influence includes situations of collective control (see note 35 (a)).
Other companies may make different judgments regarding the same
entity or arrangement. The most significant instance of such a
judgment by the Group is in the determination that Escondida is a joint
venture, based on the nature of significant commercial decisions,
including capital expenditure, which require approval by both Rio Tinto
and its partner BHP. In contrast our partner has assessed Rio Tinto’s
rights as protective and concluded that it controls Escondida through
its rights to direct relevant activities. Adoption of the equivalent
judgment by the Group would result in reclassification of Escondida
from a joint venture to an associate, with no other financial reporting
consequence since accounting under the equity method would remain
in place.
Disclosure is made of material contingent liabilities unless the
possibility of any loss arising is considered remote based on the
Group’s judgment and legal advice. Contingent liabilities are quantified
unless, in the Group’s judgment, the amount cannot be reliably
estimated.
The unit of account for claims is the matter taken as a whole and
therefore when a provision has been recorded for the best estimate of
the cost to settle the obligation there is no further contingent liability
component. This means that when a provision is recognised for the
best estimate of the expenditure required to settle the present
obligation from a single past event, a further contingent liability is not
reported for the maximum potential exposure in excess of that already
provided. We also consider the requirements of IAS 1 and provide
disclosure when there is a significant risk the value of assets or
liabilities could materially change within the next 12 months.
(xi) Exclusions from underlying earnings (note 2)
As set out in note 2 on page 239, certain items are excluded from net
earnings/(loss) in arriving at underlying earnings in each period
irrespective of materiality. In addition, there is a final judgmental
category which includes, where applicable, other credits and charges
that, individually or in aggregate if of a similar type, are of a nature or
size to require exclusion in order to provide additional insight into
underlying business performance. The specific items for the years
ended 2021, 2020 and 2019 to which exclusions apply are presented in
note 2 on page 240.
The exclusion of closure estimates at Energy Resources of Australia
and Gove Refinery were due to the magnitude of the individual updates
and materiality when aggregated. This was the only application of the
judgemental category in 2021.
(xii) Funding of Oyu Tolgoi
As described in note 32(l), Turquoise Hill, a 50.8% subsidiary of Rio
Tinto, has funded common share investments in Oyu Tolgoi on behalf
of Erdenes Oyu Tolgoi LLC (“Erdenes”), a company controlled by the
Mongolian government, which owns the 34% non-controlling interest
in Oyu Tolgoi not owned by Turquoise Hill. Funded amounts earn
interest at an annual effective rate of LIBOR plus 6.5% and are
repayable via a pledge over Erdenes' share of future Oyu Tolgoi
common share dividends; Erdenes also has the right to reduce the
outstanding balance by making payments directly to Turquoise Hill.
These funding balances, including accrued interest, are expected to be
recovered through the pledge over Erdenes' share of dividends from or
sale by Erdenes of its interest in Oyu Tolgoi. The formal funding
arrangement is with the non-controlling shareholder (Erdenes) in a
partially owned subsidiary (Oyu Tolgoi). After considering these facts
together with Erdenes’ discretionary rights to repayment and the most
probable method of eventual settlement, being the pledge over
Erdenes dividends, we concluded that the funding balances and
interest owing from Erdenes do not result in assets or income in the
Group Financial Statements, representing instead a series of
transactions with a non-controlling shareholder in a subsidiary. This
results in an increase to the effective interest, in Oyu Tolgoi,
attributable to owners of Rio Tinto while the funding balances and
interest owing from Erdenes remain outstanding. Related amounts are
therefore recorded as a reduction to the net carrying value of non-
controlling interests with a change in equity interest between Rio Tinto
and non-controlling interests in the Group Statement of Changes in
Equity for the Group’s share of interest accrued on funding balances
owing from Erdenes to Turquoise Hill in the period.
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Financial statements continued
Financial statements
The following key assumptions are used to calculate the estimated
benefit: future pay increases to be received by members of final pay
plans, the level of inflation (for those benefits that are subject to some
form of inflation protection), current mortality rates and future
improvements in mortality rates. The assumption regarding future
inflation is based on market yields on inflation linked instruments,
where possible, combined with consensus views. The Group reviews
the actual mortality rates of retirees in its major pension plans on a
regular basis and uses these rates to set its current mortality
assumptions. It also uses its judgment with respect to allowances for
future improvements in longevity having regard to standard
improvement scales in each relevant country and after taking external
actuarial advice.
Most of the Group’s defined benefit pension plans are closed to new
entrants and the majority of the obligations relate to former
employees. The carrying value of the Group’s post-employment
obligations is therefore less sensitive to assumptions about future
salary increases than it is to assumptions regarding future inflation.
Details of the key assumptions, how they have moved since the
previous balance sheet date and the sensitivity of the carrying value to
changes in the assumptions are set out in note 42.
Notes to the 2021 financial statements
1 Principal accounting policies continued
1 Principal accounting policies continued
(x) Contingencies (note 30)
(x) Contingencies (note 30)
(vii) Provision for onerous contracts
(vii) Provision for onerous contracts
Disclosure is made of material contingent liabilities unless the
Disclosure is made of material contingent liabilities unless the
possibility of any loss arising is considered remote based on the
possibility of any loss arising is considered remote based on the
Provision for an onerous contract is made only when the assets
Provision for an onerous contract is made only when the assets
Group’s judgment and legal advice. Contingent liabilities are quantified
Group’s judgment and legal advice. Contingent liabilities are quantified
dedicated to that contract are fully impaired or the contract becomes
dedicated to that contract are fully impaired or the contract becomes
unless, in the Group’s judgment, the amount cannot be reliably
unless, in the Group’s judgment, the amount cannot be reliably
stranded as a result of a business decision. Judgment is required in
stranded as a result of a business decision. Judgment is required in
estimated.
estimated.
The determination of functional currency is a key judgment which
The determination of functional currency is a key judgment which
judgemental category in 2021.
judgemental category in 2021.
determining which assets are considered dedicated to a contract when
determining which assets are considered dedicated to a contract when
there is optionality as to how the contract obligations can be settled.
there is optionality as to how the contract obligations can be settled.
Key estimates are the cash flows associated with the contract and the
Key estimates are the cash flows associated with the contract and the
discount rate assumption. The Group completed the disposal of its
discount rate assumption. The Group completed the disposal of its
remaining coking coal assets in 2018 and has retained the onerous
remaining coking coal assets in 2018 and has retained the onerous
provisions made in past periods for rail infrastructure “take or pay”
provisions made in past periods for rail infrastructure “take or pay”
contracts which were considered stranded. As at 31 December 2021,
contracts which were considered stranded. As at 31 December 2021,
the balance of the provision was US$172 million (2020: US$219
the balance of the provision was US$172 million (2020: US$219
million). At 31 December 2021, the Group's investment in the
million). At 31 December 2021, the Group's investment in the
Escondida Joint Venture included US$118 million share of provision
Escondida Joint Venture included US$118 million share of provision
relating to contractual payments under a power purchase agreement
relating to contractual payments under a power purchase agreement
which became stranded in 2019 and was judged to be onerous upon
which became stranded in 2019 and was judged to be onerous upon
early cancellation in favour of renewable energy sources.
early cancellation in favour of renewable energy sources.
(viii) Identification of functional currencies
(viii) Identification of functional currencies
The functional currency for each subsidiary, unincorporated
The functional currency for each subsidiary, unincorporated
arrangement, joint operation and equity accounted unit, is the currency
arrangement, joint operation and equity accounted unit, is the currency
of the primary economic environment in which it operates.
of the primary economic environment in which it operates.
Determination of functional currency involves significant judgment and
Determination of functional currency involves significant judgment and
other companies may make different judgments based on similar facts.
other companies may make different judgments based on similar facts.
For many of Rio Tinto’s businesses, their functional currency is the
For many of Rio Tinto’s businesses, their functional currency is the
currency of the country in which they operate. The Group reconsiders
currency of the country in which they operate. The Group reconsiders
the functional currency of its businesses if there is a change in the
the functional currency of its businesses if there is a change in the
underlying transactions, events or conditions which determine their
underlying transactions, events or conditions which determine their
primary economic environment.
primary economic environment.
affects the measurement of non-current assets included in the balance
affects the measurement of non-current assets included in the balance
sheet and, as a consequence, the depreciation and amortisation of
sheet and, as a consequence, the depreciation and amortisation of
those assets included in the income statement. It also impacts
those assets included in the income statement. It also impacts
exchange gains and losses included in the income statement and in
exchange gains and losses included in the income statement and in
equity. The Group applies judgment in determining whether settlement
equity. The Group applies judgment in determining whether settlement
of certain intragroup loans is neither planned nor likely in the
of certain intragroup loans is neither planned nor likely in the
foreseeable future and therefore whether the associated exchange
foreseeable future and therefore whether the associated exchange
gains and losses can be taken to equity. During 2021, A$14 billion of
gains and losses can be taken to equity. During 2021, A$14 billion of
intragroup loans continued to meet these criteria; associated exchange
intragroup loans continued to meet these criteria; associated exchange
gains and losses are taken to equity.
gains and losses are taken to equity.
(ix) Basis of consolidation (notes 32-35)
(ix) Basis of consolidation (notes 32-35)
Judgment is sometimes required to determine whether after
Judgment is sometimes required to determine whether after
considering all relevant factors, the Group has control, joint control or
considering all relevant factors, the Group has control, joint control or
significant influence over an entity or arrangement. Significant
significant influence over an entity or arrangement. Significant
influence includes situations of collective control (see note 35 (a)).
influence includes situations of collective control (see note 35 (a)).
Other companies may make different judgments regarding the same
Other companies may make different judgments regarding the same
entity or arrangement. The most significant instance of such a
entity or arrangement. The most significant instance of such a
judgment by the Group is in the determination that Escondida is a joint
judgment by the Group is in the determination that Escondida is a joint
venture, based on the nature of significant commercial decisions,
venture, based on the nature of significant commercial decisions,
including capital expenditure, which require approval by both Rio Tinto
including capital expenditure, which require approval by both Rio Tinto
and its partner BHP. In contrast our partner has assessed Rio Tinto’s
and its partner BHP. In contrast our partner has assessed Rio Tinto’s
rights as protective and concluded that it controls Escondida through
rights as protective and concluded that it controls Escondida through
its rights to direct relevant activities. Adoption of the equivalent
its rights to direct relevant activities. Adoption of the equivalent
judgment by the Group would result in reclassification of Escondida
judgment by the Group would result in reclassification of Escondida
from a joint venture to an associate, with no other financial reporting
from a joint venture to an associate, with no other financial reporting
consequence since accounting under the equity method would remain
consequence since accounting under the equity method would remain
in place.
in place.
The unit of account for claims is the matter taken as a whole and
The unit of account for claims is the matter taken as a whole and
therefore when a provision has been recorded for the best estimate of
therefore when a provision has been recorded for the best estimate of
the cost to settle the obligation there is no further contingent liability
the cost to settle the obligation there is no further contingent liability
component. This means that when a provision is recognised for the
component. This means that when a provision is recognised for the
best estimate of the expenditure required to settle the present
best estimate of the expenditure required to settle the present
obligation from a single past event, a further contingent liability is not
obligation from a single past event, a further contingent liability is not
reported for the maximum potential exposure in excess of that already
reported for the maximum potential exposure in excess of that already
provided. We also consider the requirements of IAS 1 and provide
provided. We also consider the requirements of IAS 1 and provide
disclosure when there is a significant risk the value of assets or
disclosure when there is a significant risk the value of assets or
liabilities could materially change within the next 12 months.
liabilities could materially change within the next 12 months.
(xi) Exclusions from underlying earnings (note 2)
(xi) Exclusions from underlying earnings (note 2)
As set out in note 2 on page 239, certain items are excluded from net
As set out in note 2 on page 239, certain items are excluded from net
earnings/(loss) in arriving at underlying earnings in each period
earnings/(loss) in arriving at underlying earnings in each period
irrespective of materiality. In addition, there is a final judgmental
irrespective of materiality. In addition, there is a final judgmental
category which includes, where applicable, other credits and charges
category which includes, where applicable, other credits and charges
that, individually or in aggregate if of a similar type, are of a nature or
that, individually or in aggregate if of a similar type, are of a nature or
size to require exclusion in order to provide additional insight into
size to require exclusion in order to provide additional insight into
underlying business performance. The specific items for the years
underlying business performance. The specific items for the years
ended 2021, 2020 and 2019 to which exclusions apply are presented in
ended 2021, 2020 and 2019 to which exclusions apply are presented in
note 2 on page 240.
note 2 on page 240.
The exclusion of closure estimates at Energy Resources of Australia
The exclusion of closure estimates at Energy Resources of Australia
and Gove Refinery were due to the magnitude of the individual updates
and Gove Refinery were due to the magnitude of the individual updates
and materiality when aggregated. This was the only application of the
and materiality when aggregated. This was the only application of the
(xii) Funding of Oyu Tolgoi
(xii) Funding of Oyu Tolgoi
As described in note 32(l), Turquoise Hill, a 50.8% subsidiary of Rio
As described in note 32(l), Turquoise Hill, a 50.8% subsidiary of Rio
Tinto, has funded common share investments in Oyu Tolgoi on behalf
Tinto, has funded common share investments in Oyu Tolgoi on behalf
of Erdenes Oyu Tolgoi LLC (“Erdenes”), a company controlled by the
of Erdenes Oyu Tolgoi LLC (“Erdenes”), a company controlled by the
Mongolian government, which owns the 34% non-controlling interest
Mongolian government, which owns the 34% non-controlling interest
in Oyu Tolgoi not owned by Turquoise Hill. Funded amounts earn
in Oyu Tolgoi not owned by Turquoise Hill. Funded amounts earn
interest at an annual effective rate of LIBOR plus 6.5% and are
interest at an annual effective rate of LIBOR plus 6.5% and are
repayable via a pledge over Erdenes' share of future Oyu Tolgoi
repayable via a pledge over Erdenes' share of future Oyu Tolgoi
common share dividends; Erdenes also has the right to reduce the
common share dividends; Erdenes also has the right to reduce the
outstanding balance by making payments directly to Turquoise Hill.
outstanding balance by making payments directly to Turquoise Hill.
These funding balances, including accrued interest, are expected to be
These funding balances, including accrued interest, are expected to be
recovered through the pledge over Erdenes' share of dividends from or
recovered through the pledge over Erdenes' share of dividends from or
sale by Erdenes of its interest in Oyu Tolgoi. The formal funding
sale by Erdenes of its interest in Oyu Tolgoi. The formal funding
arrangement is with the non-controlling shareholder (Erdenes) in a
arrangement is with the non-controlling shareholder (Erdenes) in a
partially owned subsidiary (Oyu Tolgoi). After considering these facts
partially owned subsidiary (Oyu Tolgoi). After considering these facts
together with Erdenes’ discretionary rights to repayment and the most
together with Erdenes’ discretionary rights to repayment and the most
probable method of eventual settlement, being the pledge over
probable method of eventual settlement, being the pledge over
Erdenes dividends, we concluded that the funding balances and
Erdenes dividends, we concluded that the funding balances and
interest owing from Erdenes do not result in assets or income in the
interest owing from Erdenes do not result in assets or income in the
Group Financial Statements, representing instead a series of
Group Financial Statements, representing instead a series of
transactions with a non-controlling shareholder in a subsidiary. This
transactions with a non-controlling shareholder in a subsidiary. This
results in an increase to the effective interest, in Oyu Tolgoi,
results in an increase to the effective interest, in Oyu Tolgoi,
attributable to owners of Rio Tinto while the funding balances and
attributable to owners of Rio Tinto while the funding balances and
interest owing from Erdenes remain outstanding. Related amounts are
interest owing from Erdenes remain outstanding. Related amounts are
therefore recorded as a reduction to the net carrying value of non-
therefore recorded as a reduction to the net carrying value of non-
controlling interests with a change in equity interest between Rio Tinto
controlling interests with a change in equity interest between Rio Tinto
and non-controlling interests in the Group Statement of Changes in
and non-controlling interests in the Group Statement of Changes in
Equity for the Group’s share of interest accrued on funding balances
Equity for the Group’s share of interest accrued on funding balances
owing from Erdenes to Turquoise Hill in the period.
owing from Erdenes to Turquoise Hill in the period.
All cash flows relating to this funding take place between Group
companies and therefore eliminate upon consolidation. As such these
transactions, including the recording of interest within equity, do not
result in any changes to Group cash flows, or separate presentation of
cash inflows and outflows relating to common share investment in Oyu
Tolgoi by either Turquoise Hill or Erdenes in the Group Cash Flow
Statement
On 25 January 2022, the funding balances and interest owing from
Erdenes were waived in full; refer to note 45.
(xiii) Pilbara Iron Arrangements
The arrangements described in note 33 (c) to the accounts permit each
of the partners to the joint operation to request the other to construct
assets on their tenure to increase the capacity of the rail and port
infrastructure network. The requesting partner’s (Asset User’s) share
of the capacity of the network will increase by the capacity of the newly
constructed asset but, generally, that capacity may be provided from
any of the network assets. The Asset User will pay an annual charge
(Committed Use Charge – “CUC”) over a contractually specified period
irrespective of usage of the network. The constructing partner (Asset
Owner) has an ongoing obligation to make available capacity from
those assets and to maintain the assets in good working order as
required under relevant State Agreements and associated tenure.
The Group considered whether the CUC arrangements give rise to a
lease between the Asset Owner and the Asset User. The conclusion
that they do not is because there is no specified asset; rather the Asset
User has a first priority right to the capacity in the CUC asset. This
treatment was grandfathered on adoption of IFRS 16 on 1 January
2019, following assessment under the preceding standards IAS 17
“Leases” and IFRIC 4 “Determining whether an arrangement contains a
lease”, with no change to the conclusion under IFRS 16 for subsequent
expenditure subject to the existing CUC arrangements. Management
considers that these arrangements are unique and has used judgment
to apply the principles of IFRS to the accounting for the arrangements
as described above. The obligation of the Asset Owner to make
capacity available is fulfilled over time and not at a point in time. The
CUC arrangement is therefore an executory contract as defined under
IAS 37, whereby neither party has performed any of its obligations, or
both parties have partially performed their obligations to an equal
extent, and so the CUC payments are expensed as incurred. An
alternative interpretation of the fact pattern could have resulted in a
gross presentation in the Group’s balance sheet with an asset and a
corresponding liability to reflect the present value of the CUC
payments. The Asset User is a wholly owned subsidiary of Rio Tinto,
whereas the Asset Owner is a joint operation. This impact would be
some US$1.4 billion (calculated on the basis of grossing up the tax
written down value of the CUC assets). Other methods of calculating
the gross up might give rise to different numbers.
(xiv) Estimation of obligations for post-employment costs
(note 42)
The value of the Group’s obligations for post-employment benefits is
dependent on the amount of benefits that are expected to be paid out,
discounted to the balance sheet date. The discount rate is a key
assumption and is based upon the yields on high quality corporate
bonds in the relevant currency which have durations consistent with
the term of the obligations. The discount rate will vary from one period
to another in line with movements in corporate bond yields, but at any
given measurement date there is relatively little estimation
uncertainty. This rate is also used to calculate the interest cost on
obligations and interest income on plan assets.
236
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Financial statements continued
Notes to the 2021 financial statements
2 Operating segments
Rio Tinto’s management structure is based on the principal product groups (PG) together with global support functions whose leaders make up
the Executive Committee. The Executive Committee members each report directly to the Chief Executive of Rio Tinto who is the chief operating
decision maker (CODM) and is responsible for allocating resources and assessing performance of the operating segments. The CODM monitors
the performance of each product group based on a number of measures, including underlying earnings, underlying EBITDA, capital expenditure,
net cash generated from operating activities and Free cash flow. Our primary measure of profit is underlying EBITDA. Finance costs and net debt
are managed on a group-wide basis and are therefore excluded from the segmental results.
The Group's reportable segments are based on principal product groups and are consistent with the internal reporting structure as at 31
December 2021. Business units (BUs) are allocated to PGs based on management structure. The reportable segments are described as follows:
Reportable segment
Iron Ore
Aluminium
Copper
Minerals
Principal activities
Iron ore mining and salt and gypsum production in Western Australia.
Bauxite mining; alumina refining; aluminium smelting.
Mining and refining of copper, gold, silver, molybdenum and other by-products; exploration activities together with the Simandou
iron ore project, which is the responsibility of the Copper product group chief executive.
Includes businesses with products such as borates, titanium dioxide feedstock together with the Iron Ore Company of Canada (iron
ore mining and iron concentrate/pellet production). Also includes diamond mining, sorting and marketing.
The Group's reportable segments have been recast in accordance with the organisational restructure announced on 28 January 2021.The main
impacts are as follows: Simandou has moved from the previous Energy & Minerals product group to the Copper product group; Uranium has
moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved from the previous Copper & Diamonds
product group to the Minerals product group; the Minerals product group retains the Argyle Residual operations and from 1 January 2021, Argyle
Closure has moved to Other Operations. Argyle Residual operations includes activity relating to the sale of remaining diamond inventory and
property held. Argyle Closure includes activity relating to the management and execution of the Argyle mine closure obligations and management
of entities with interests in state and traditional owner agreements and licences. As a result of these changes, the Copper & Diamonds segment is
renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021. Other Operations, which also include our 100% interest in
the Gove alumina refinery (in closure), Rio Tinto Marine, and the remaining legacy liabilities of Rio Tinto Coal Australia are separately shown from
the above reportable segments as none of these operations met the quantitative thresholds to be reportable segments.
The financial information by business unit provided on pages 318 to 320 of these financial statements provides additional voluntary disclosure
which the Group considers useful to the users of the financial statements.
Year ended 31 December 2021
Iron Ore
Aluminium
Copper
Minerals
Reportable segments total
Other Operations
Inter-segment transactions
Product group total
Other items
Share of equity accounted units(a)
Proceeds from disposal of property, plant and equipment
Central pension costs, share-based payments & insurance &
derivatives
Restructuring, project and one-off costs
Central costs
Central exploration and evaluation
Net interest
Gross product
sales(b)
US$m
Underlying
EBITDA(c)
US$m
Underlying
earnings(d)
US$m
Capital
expenditure(e)
US$m
Depreciation and
amortisation(f)
US$m
39,582
12,695
7,827
6,481
66,585
251
(268)
66,568
(3,073)
27,592
4,382
3,969
2,603
38,546
(28)
42
38,560
110
(80)
(613)
(257)
17,323
2,468
1,579
888
22,258
(84)
19
22,193
133
(51)
(585)
(215)
(95)
3,947
1,372
1,548
644
7,511
(11)
7,500
117
(294)
61
2,023
1,289
1,103
474
4,889
199
5,088
106
(497)
Consolidated sales revenue/Capital expenditure/Depreciation
and amortisation(g)
63,495
7,384
4,697
Underlying EBITDA/Underlying earnings
37,720
21,380
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
2 Operating segments
2 Operating segments
Rio Tinto’s management structure is based on the principal product groups (PG) together with global support functions whose leaders make up
Rio Tinto’s management structure is based on the principal product groups (PG) together with global support functions whose leaders make up
the Executive Committee. The Executive Committee members each report directly to the Chief Executive of Rio Tinto who is the chief operating
the Executive Committee. The Executive Committee members each report directly to the Chief Executive of Rio Tinto who is the chief operating
decision maker (CODM) and is responsible for allocating resources and assessing performance of the operating segments. The CODM monitors
decision maker (CODM) and is responsible for allocating resources and assessing performance of the operating segments. The CODM monitors
the performance of each product group based on a number of measures, including underlying earnings, underlying EBITDA, capital expenditure,
the performance of each product group based on a number of measures, including underlying earnings, underlying EBITDA, capital expenditure,
net cash generated from operating activities and Free cash flow. Our primary measure of profit is underlying EBITDA. Finance costs and net debt
net cash generated from operating activities and Free cash flow. Our primary measure of profit is underlying EBITDA. Finance costs and net debt
are managed on a group-wide basis and are therefore excluded from the segmental results.
are managed on a group-wide basis and are therefore excluded from the segmental results.
The Group's reportable segments are based on principal product groups and are consistent with the internal reporting structure as at 31
The Group's reportable segments are based on principal product groups and are consistent with the internal reporting structure as at 31
December 2021. Business units (BUs) are allocated to PGs based on management structure. The reportable segments are described as follows:
December 2021. Business units (BUs) are allocated to PGs based on management structure. The reportable segments are described as follows:
Reportable segment
Reportable segment
Principal activities
Principal activities
Iron ore mining and salt and gypsum production in Western Australia.
Iron ore mining and salt and gypsum production in Western Australia.
Bauxite mining; alumina refining; aluminium smelting.
Bauxite mining; alumina refining; aluminium smelting.
Iron Ore
Iron Ore
Aluminium
Aluminium
Copper
Copper
Minerals
Minerals
Mining and refining of copper, gold, silver, molybdenum and other by-products; exploration activities together with the Simandou
Mining and refining of copper, gold, silver, molybdenum and other by-products; exploration activities together with the Simandou
iron ore project, which is the responsibility of the Copper product group chief executive.
iron ore project, which is the responsibility of the Copper product group chief executive.
Includes businesses with products such as borates, titanium dioxide feedstock together with the Iron Ore Company of Canada (iron
Includes businesses with products such as borates, titanium dioxide feedstock together with the Iron Ore Company of Canada (iron
ore mining and iron concentrate/pellet production). Also includes diamond mining, sorting and marketing.
ore mining and iron concentrate/pellet production). Also includes diamond mining, sorting and marketing.
The Group's reportable segments have been recast in accordance with the organisational restructure announced on 28 January 2021.The main
The Group's reportable segments have been recast in accordance with the organisational restructure announced on 28 January 2021.The main
impacts are as follows: Simandou has moved from the previous Energy & Minerals product group to the Copper product group; Uranium has
impacts are as follows: Simandou has moved from the previous Energy & Minerals product group to the Copper product group; Uranium has
moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved from the previous Copper & Diamonds
moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved from the previous Copper & Diamonds
product group to the Minerals product group; the Minerals product group retains the Argyle Residual operations and from 1 January 2021, Argyle
product group to the Minerals product group; the Minerals product group retains the Argyle Residual operations and from 1 January 2021, Argyle
Closure has moved to Other Operations. Argyle Residual operations includes activity relating to the sale of remaining diamond inventory and
Closure has moved to Other Operations. Argyle Residual operations includes activity relating to the sale of remaining diamond inventory and
property held. Argyle Closure includes activity relating to the management and execution of the Argyle mine closure obligations and management
property held. Argyle Closure includes activity relating to the management and execution of the Argyle mine closure obligations and management
of entities with interests in state and traditional owner agreements and licences. As a result of these changes, the Copper & Diamonds segment is
of entities with interests in state and traditional owner agreements and licences. As a result of these changes, the Copper & Diamonds segment is
renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021. Other Operations, which also include our 100% interest in
renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021. Other Operations, which also include our 100% interest in
the Gove alumina refinery (in closure), Rio Tinto Marine, and the remaining legacy liabilities of Rio Tinto Coal Australia are separately shown from
the Gove alumina refinery (in closure), Rio Tinto Marine, and the remaining legacy liabilities of Rio Tinto Coal Australia are separately shown from
the above reportable segments as none of these operations met the quantitative thresholds to be reportable segments.
the above reportable segments as none of these operations met the quantitative thresholds to be reportable segments.
The financial information by business unit provided on pages 318 to 320 of these financial statements provides additional voluntary disclosure
The financial information by business unit provided on pages 318 to 320 of these financial statements provides additional voluntary disclosure
which the Group considers useful to the users of the financial statements.
which the Group considers useful to the users of the financial statements.
Year ended 31 December 2021
Year ended 31 December 2021
Iron Ore
Iron Ore
Aluminium
Aluminium
Copper
Copper
Minerals
Minerals
Reportable segments total
Reportable segments total
Other Operations
Other Operations
Inter-segment transactions
Inter-segment transactions
Product group total
Product group total
Other items
Other items
Share of equity accounted units(a)
Share of equity accounted units(a)
Underlying
Underlying
EBITDA(c)
EBITDA(c)
US$m
US$m
27,592
27,592
4,382
4,382
3,969
3,969
2,603
2,603
38,546
38,546
Underlying
Underlying
earnings(d)
earnings(d)
US$m
US$m
17,323
17,323
2,468
2,468
1,579
1,579
888
888
22,258
22,258
(28)
(28)
42
42
(84)
(84)
19
19
66,568
66,568
38,560
38,560
22,193
22,193
Gross product
Gross product
sales(b)
sales(b)
US$m
US$m
39,582
39,582
12,695
12,695
7,827
7,827
6,481
6,481
66,585
66,585
251
251
(268)
(268)
(3,073)
(3,073)
Capital
Capital
Depreciation and
Depreciation and
expenditure(e)
expenditure(e)
amortisation(f)
amortisation(f)
US$m
US$m
3,947
3,947
1,372
1,372
1,548
1,548
644
644
7,511
7,511
(11)
(11)
7,500
7,500
117
117
(294)
(294)
61
61
US$m
US$m
2,023
2,023
1,289
1,289
1,103
1,103
474
474
4,889
4,889
199
199
5,088
5,088
106
106
(497)
(497)
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Central pension costs, share-based payments & insurance &
Central pension costs, share-based payments & insurance &
derivatives
derivatives
Central costs
Central costs
Net interest
Net interest
Restructuring, project and one-off costs
Restructuring, project and one-off costs
Central exploration and evaluation
Central exploration and evaluation
110
110
(80)
(80)
(613)
(613)
(257)
(257)
133
133
(51)
(51)
(585)
(585)
(215)
(215)
(95)
(95)
Consolidated sales revenue/Capital expenditure/Depreciation
Consolidated sales revenue/Capital expenditure/Depreciation
and amortisation(g)
and amortisation(g)
63,495
63,495
7,384
7,384
4,697
4,697
Underlying EBITDA/Underlying earnings
Underlying EBITDA/Underlying earnings
37,720
37,720
21,380
21,380
Year ended 31 December 2020
Iron Ore
Aluminium
Copper (adjusted)
Minerals (adjusted)
Reportable segments total
Other Operations (adjusted)
Inter-segment transactions
Product group total
Other items
Share of equity accounted units(a)
Proceeds from disposal of property, plant and equipment
Central pension costs, share-based payments & insurance &
derivatives
Restructuring, project and one-off costs
Central costs
Central exploration and evaluation
Net interest
Consolidated sales revenue/Capital expenditure/Depreciation and
amortisation(g)
Underlying EBITDA/Underlying earnings
Year ended 31 December 2019
Iron Ore
Aluminium
Copper (adjusted)
Minerals (adjusted)
Reportable segments total
Other Operations (adjusted)
Inter-segment transactions
Product group total
Other items
Share of equity accounted units(a)
Proceeds from disposal of property, plant and equipment
Central pension costs, share-based payments & insurance &
derivatives
Restructuring, project and one-off costs
Central costs
Central exploration and evaluation
Net interest
Consolidated sales revenue/Capital expenditure/Depreciation and
amortisation(g)
Underlying EBITDA/Underlying earnings
Gross product
sales(b)
US$m
Underlying
EBITDA(c)
US$m
Underlying
earnings(d)
US$m
Capital
expenditure(e)
US$m
Depreciation and
amortisation(f)
US$m
27,508
9,314
4,969
5,170
46,961
321
(264)
47,018
(2,407)
18,837
2,152
2,084
1,710
24,783
24
(94)
24,713
117
(133)
(545)
(250)
11,398
471
754
580
13,203
(48)
(32)
13,123
118
(108)
(455)
(216)
(14)
2,941
1,085
1,837
455
6,318
2
6,320
79
(255)
45
1,838
1,191
1,093
452
4,574
199
4,773
82
(576)
44,611
6,189
4,279
23,902
12,448
Gross product
sales(b)
US$m
Underlying
EBITDA(c)
US$m
Underlying
earnings(d)
US$m
Capital
expenditure(e)
US$m
Depreciation and
amortisation(f)
US$m
24,075
10,340
5,196
5,394
45,005
393
(31)
45,367
(2,202)
16,098
2,285
1,918
1,862
22,163
(22)
(9)
22,132
59
(183)
(496)
(315)
9,638
599
575
565
11,377
(64)
(3)
11,310
60
(94)
(550)
(231)
(122)
1,741
1,456
2,048
585
5,830
1
5,831
64
(456)
49
1,723
1,312
1,176
569
4,780
180
4,960
77
(653)
43,165
5,488
4,384
21,197
10,373
For Gross product sales - share of equity accounted units also includes adjustments for intra-subsidiary/equity accounted units sales.
(a)
(b) Gross product sales includes the Group’s proportionate share of product sales by equity accounted units (after adjusting for sales to subsidiaries) of US$3,117 million (2020: US$2,441
million; 2019: US$2,234 million) which are not included in consolidated sales revenue. Consolidated sales revenue includes subsidiary sales of US$44 million (2020: US$34 million; 2019:
US$32 million) to equity accounted units which are not included in gross product sales.
(c) Underlying EBITDA represents profit before tax, net finance items, depreciation and amortisation excluding the EBITDA impact of the same items that are excluded in arriving at underlying
earnings (as defined below). The reconciliation of underlying EBITDA to profit before taxation can be found on page 240.
(d) Underlying earnings represent net earnings attributable to the owners of Rio Tinto, adjusted to exclude items which do not reflect the underlying performance of the Groups operations.
Exclusions from underlying earnings are those gains and losses that individually, or in aggregate with similar items, are of a nature or size to require exclusion in order to provide additional
insight into underlying business performance.
The following items are excluded from net earnings in arriving at underlying earnings in each period irrespective of materiality:
– Net gains/(losses) on disposal of interests in businesses.
– Impairment charges and reversals.
– Profit/(loss) after tax from discontinued operations.
– Exchange and derivative gains and losses. This exclusion includes exchange gains/(losses) on external net debt and intragroup balances, unrealised gains/(losses) on currency and
interest rate derivatives not qualifying for hedge accounting, unrealised gains/(losses) on certain commodity derivatives not qualifying for hedge accounting, and unrealised gains/(losses)
on embedded derivatives not qualifying for hedge accounting.
– Adjustments to closure provisions where the adjustment is associated to an impairment charge, for legacy sites where the disturbance or environmental contamination relates to the pre-
acquisition period.
The reconciliation of underlying earnings to net earnings can be found on page 240.
(e) Capital expenditure for reportable segments comprises the net cash outflow on purchases less disposals of property, plant and equipment, capitalised evaluation costs and purchases less
(f)
disposals of other intangible assets. The details provided include 100% of subsidiaries’ capital expenditure and Rio Tinto’s share of the capital expenditure of joint operations and equity
accounted units.
Product group depreciation and amortisation for reportable segments include 100% of subsidiaries’ depreciation and amortisation and Rio Tinto’s share of the depreciation and amortisation
of equity accounted units. Rio Tinto’s share of the depreciation and amortisation charge of equity accounted units is deducted to arrive at depreciation and amortisation as shown in the cash
flow statement. These figures do not include impairment charges and reversals, which are excluded from underlying earnings.
(g) Capital expenditure and Depreciation and amortisation as reported in the cash flow statement.
238
238
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Financial statements continued
Notes to the 2021 financial statements
2 Operating segments continued
Reconciliation of underlying EBITDA to profit before taxation
Underlying EBITDA
Depreciation and amortisation in subsidiaries and equity accounted units(a)
Taxation and finance items in equity accounted units
Finance items
(Losses)/gains on embedded commodity derivatives not qualifying for hedge accounting (including exchange)
Impairment charges net of reversals
Gain on recognition of a new wharf at Kitimat, Canada
Change in closure estimates (non-operating and fully impaired sites)
Net losses on consolidation and disposal of interests in businesses
Other exclusions
Profit before taxation
2021
US$m
37,720
(5,022)
(759)
(26)
(51)
(269)
336
(1,096)
—
—
30,833
2020
US$m
23,902
(4,650)
(443)
(1,751)
6
(1,272)
—
(401)
—
—
15,391
2019
US$m
21,197
(4,925)
(296)
(648)
(260)
(3,487)
—
—
(291)
(171)
11,119
(a)
Depreciation and amortisation in subsidiaries and equity accounted units for the year ended 31 December 2021 is net of capitalised depreciation of US$54 million (31 December 2020:
US$205 million; 31 December 2019: US$112 million).
Reconciliation of underlying earnings to net earnings
Underlying earnings are reported by Rio Tinto to provide greater understanding of the underlying business performance of its operations.
Underlying earnings and net earnings both represent amounts attributable to owners of Rio Tinto. Exclusions from underlying earnings relating to
equity accounted units are stated after tax and included in the column “Pre-tax”. Items (a) to (g) below are excluded from net earnings in arriving
at underlying earnings.
Underlying earnings
Items excluded from underlying earnings
Impairment charges net of reversals (note 6)
Losses on disposal of interest in business(a)
Exchange and derivative gains/(losses):
– Exchange gains/(losses) on external net debt, intragroup balances and
derivatives(b)
– Losses on currency and interest rate derivatives not qualifying for hedge
accounting(c)
– (Losses)/gains on embedded commodity derivatives not qualifying for hedge
accounting(d)
Net losses from movements to closure estimates (non-operating and fully
impaired sites)(e)
Gain on recognition of a new wharf at Kitimat, Canada(f)
Other exclusions(g)
Total excluded from underlying earnings
Net earnings
Pre-tax
2021
US$m
Taxation
2021
US$m
Non-
controlling
interests
2021
US$m
Net amount
2021
US$m
Net amount
2020
US$m
Net amount
2019
US$m
31,341
(8,482)
(1,479)
21,380
12,448
10,373
(269)
—
72
—
800
(78)
—
—
4
(197)
—
(1,115)
—
(1,658)
(291)
726
(1,125)
51
88
17
125
—
—
(211)
(68)
(1,096)
336
—
(508)
30,833
(4)
(127)
(157)
(59)
(2)
(53)
18
(192)
—
—
—
(971)
336
—
(286)
21,094
(300)
—
—
(2,679)
9,769
—
—
(214)
(2,363)
8,010
224
(8,258)
(2)
(1,481)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
In 2019, the net loss mainly related to the disposal of our entire 68.62% stake in Rössing Uranium on 16 July 2019 for which we recorded a pre-tax loss of US$289 million (US$289 million
net of tax). Refer to note 36 for further details in respect of this transaction.
Exchange gains/(losses) on external net debt and intragroup balances comprise post-tax foreign exchange losses on net debt of US$187 million offset by post-tax gains of US$913 million
on intragroup balances, primarily as a result of the Australian dollar weakening against the US dollar. In 2020, exchange losses on external net debt and intragroup balances comprise post-
tax foreign exchange losses on intragroup balances of US$1,330 million partially offset by post-tax gains of US$205 million on external net debt, primarily as a result of a stronger
Australian dollar against the US dollar during the year. In 2019, exchange gains on external net debt and intragroup balances comprise post-tax foreign exchange gains on net debt of
US$60 million and post-tax losses of US$9 million on intragroup balances, primarily as a result of the Canadian dollar strengthening against the US dollar. From 1 January 2019, all foreign
exchange gains and losses relating to net debt are excluded from underlying earnings.
Valuation changes on currency and interest rate derivatives, which are ineligible for hedge accounting, other than those embedded in commercial contracts, and the currency revaluation of
embedded US dollar derivatives contained in contracts held by entities whose functional currency is not the US dollar.
Valuation changes on derivatives, embedded in commercial contracts, that are ineligible for hedge accounting, but for which there will be an offsetting change in future Group earnings.
Mark-to-market movements on commodity derivatives entered into with the commercial objective of achieving spot pricing for the underlying transaction at the date of settlement are
included in underlying earnings.
On 2 February 2022, Energy Resources of Australia released preliminary findings from its reforecast of the total undiscounted cost schedule for the Ranger rehabilitation project.
Information available from this study resulted in the Group recording an increase to the closure provision of US$510 million at 31 December 2021. Other increases to closure estimates
charged to the income statement in 2021 relate to Diavik, Gove refinery, and a number of the Group's legacy sites where the environmental damage preceded ownership by Rio Tinto. The
adjustments at Energy Resources Australia and Gove refinery have been recognised in the income statement as these are non-operating sites, and excluded from underlying earnings due
to the magnitude of the individual updates and materiality when aggregated. In 2020 we recognised an increase in the Diavik closure provision based on preliminary Pre-Feasibility Study
findings. On completion of the study in 2021 a true up was recorded in the income statement and excluded from underlying earnings in line with the treatment of the initial increase in
2020, which was excluded from underlying earnings as Diavik was fully impaired during the year. Other closure costs excluded in 2020 were the increase in the Gove refinery closure
provision offset by a decrease in the Argyle mine closure provision on completion of Pre-Feasibility Studies at each site. The 2020 comparative also included the net earnings impact
(US$138 million loss) in respect of increases to Closure provisions in legacy and non-operating sites following a reduction to the closure discount rate to 1.5%. When further funding is
required, no allocation is made to the non-controlling interests of partially owned legacy sites until the funding is received.
On 3 December 2021 we gained control over a new wharf at Kitimat, Canada that was built and paid for by LNG Canada. The gain on recognition has been excluded from underlying earnings
on the grounds of individual magnitude and consistency with the associated impairment charge, refer to note 6.
In 2019, other exclusions included provisions for obligations in respect of legacy operations of US$246 million (loss of US$233 million after tax), partially offset by the write-back of a net
realisable value provision in respect of low grade stockpile inventories at Oyu Tolgoi of US$75 million (gain of US$19 million after tax and non-controlling interests). As a result of increased
uncertainty over timing of production from the Oyu Tolgoi underground project (refer to note 6), we expected to utilise low grade stockpiles sooner than previously forecast. This was
excluded from underlying earnings, consistent with the related impairment charge recognised in 2019.
240
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
2 Operating segments continued
2 Operating segments continued
Reconciliation of underlying EBITDA to profit before taxation
Reconciliation of underlying EBITDA to profit before taxation
3 Operating segments – additional information
Consolidated sales revenue by destination(a)
(Losses)/gains on embedded commodity derivatives not qualifying for hedge accounting (including exchange)
(Losses)/gains on embedded commodity derivatives not qualifying for hedge accounting (including exchange)
Depreciation and amortisation in subsidiaries and equity accounted units(a)
Depreciation and amortisation in subsidiaries and equity accounted units(a)
Taxation and finance items in equity accounted units
Taxation and finance items in equity accounted units
Underlying EBITDA
Underlying EBITDA
Finance items
Finance items
Impairment charges net of reversals
Impairment charges net of reversals
Gain on recognition of a new wharf at Kitimat, Canada
Gain on recognition of a new wharf at Kitimat, Canada
Change in closure estimates (non-operating and fully impaired sites)
Change in closure estimates (non-operating and fully impaired sites)
Net losses on consolidation and disposal of interests in businesses
Net losses on consolidation and disposal of interests in businesses
Other exclusions
Other exclusions
Profit before taxation
Profit before taxation
2021
2021
US$m
US$m
2020
2020
US$m
US$m
37,720
37,720
23,902
23,902
(5,022)
(5,022)
(759)
(759)
(26)
(26)
(51)
(51)
(4,650)
(4,650)
(443)
(443)
(1,751)
(1,751)
(1,096)
(1,096)
(401)
(401)
336
336
—
—
—
—
6
6
—
—
—
—
—
—
2019
2019
US$m
US$m
21,197
21,197
(4,925)
(4,925)
(296)
(296)
(648)
(648)
(260)
(260)
—
—
—
—
(291)
(291)
(171)
(171)
(269)
(269)
(1,272)
(1,272)
(3,487)
(3,487)
30,833
30,833
15,391
15,391
11,119
11,119
(a)
(a)
Depreciation and amortisation in subsidiaries and equity accounted units for the year ended 31 December 2021 is net of capitalised depreciation of US$54 million (31 December 2020:
Depreciation and amortisation in subsidiaries and equity accounted units for the year ended 31 December 2021 is net of capitalised depreciation of US$54 million (31 December 2020:
US$205 million; 31 December 2019: US$112 million).
US$205 million; 31 December 2019: US$112 million).
Reconciliation of underlying earnings to net earnings
Reconciliation of underlying earnings to net earnings
Underlying earnings are reported by Rio Tinto to provide greater understanding of the underlying business performance of its operations.
Underlying earnings are reported by Rio Tinto to provide greater understanding of the underlying business performance of its operations.
Underlying earnings and net earnings both represent amounts attributable to owners of Rio Tinto. Exclusions from underlying earnings relating to
Underlying earnings and net earnings both represent amounts attributable to owners of Rio Tinto. Exclusions from underlying earnings relating to
equity accounted units are stated after tax and included in the column “Pre-tax”. Items (a) to (g) below are excluded from net earnings in arriving
equity accounted units are stated after tax and included in the column “Pre-tax”. Items (a) to (g) below are excluded from net earnings in arriving
at underlying earnings.
at underlying earnings.
Pre-tax
Pre-tax
2021
2021
US$m
US$m
Taxation
Taxation
2021
2021
US$m
US$m
Net amount
Net amount
Net amount
Net amount
Net amount
Net amount
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
31,341
31,341
(8,482)
(8,482)
(1,479)
(1,479)
21,380
21,380
12,448
12,448
10,373
10,373
Non-
Non-
controlling
controlling
interests
interests
2021
2021
US$m
US$m
(269)
(269)
—
—
72
72
—
—
(197)
(197)
(1,115)
(1,115)
—
—
—
—
(1,658)
(1,658)
(291)
(291)
Underlying earnings
Underlying earnings
Items excluded from underlying earnings
Items excluded from underlying earnings
Impairment charges net of reversals (note 6)
Impairment charges net of reversals (note 6)
Losses on disposal of interest in business(a)
Losses on disposal of interest in business(a)
Exchange and derivative gains/(losses):
Exchange and derivative gains/(losses):
—
—
—
—
4
4
—
—
—
—
—
—
– Exchange gains/(losses) on external net debt, intragroup balances and
– Exchange gains/(losses) on external net debt, intragroup balances and
– Losses on currency and interest rate derivatives not qualifying for hedge
– Losses on currency and interest rate derivatives not qualifying for hedge
– (Losses)/gains on embedded commodity derivatives not qualifying for hedge
– (Losses)/gains on embedded commodity derivatives not qualifying for hedge
Net losses from movements to closure estimates (non-operating and fully
Net losses from movements to closure estimates (non-operating and fully
Gain on recognition of a new wharf at Kitimat, Canada(f)
Gain on recognition of a new wharf at Kitimat, Canada(f)
Total excluded from underlying earnings
Total excluded from underlying earnings
derivatives(b)
derivatives(b)
accounting(c)
accounting(c)
accounting(d)
accounting(d)
impaired sites)(e)
impaired sites)(e)
Other exclusions(g)
Other exclusions(g)
Net earnings
Net earnings
800
800
(78)
(78)
726
726
(1,125)
(1,125)
51
51
(211)
(211)
(68)
(68)
(1,096)
(1,096)
336
336
—
—
(508)
(508)
88
88
17
17
125
125
—
—
—
—
224
224
(4)
(4)
(127)
(127)
(157)
(157)
(59)
(59)
(2)
(2)
(53)
(53)
18
18
(192)
(192)
(971)
(971)
(300)
(300)
336
336
—
—
—
—
—
—
(2)
(2)
(286)
(286)
(2,679)
(2,679)
—
—
—
—
(214)
(214)
(2,363)
(2,363)
8,010
8,010
30,833
30,833
(8,258)
(8,258)
(1,481)
(1,481)
21,094
21,094
9,769
9,769
(a)
(a)
In 2019, the net loss mainly related to the disposal of our entire 68.62% stake in Rössing Uranium on 16 July 2019 for which we recorded a pre-tax loss of US$289 million (US$289 million
In 2019, the net loss mainly related to the disposal of our entire 68.62% stake in Rössing Uranium on 16 July 2019 for which we recorded a pre-tax loss of US$289 million (US$289 million
net of tax). Refer to note 36 for further details in respect of this transaction.
net of tax). Refer to note 36 for further details in respect of this transaction.
(b)
(b)
Exchange gains/(losses) on external net debt and intragroup balances comprise post-tax foreign exchange losses on net debt of US$187 million offset by post-tax gains of US$913 million
Exchange gains/(losses) on external net debt and intragroup balances comprise post-tax foreign exchange losses on net debt of US$187 million offset by post-tax gains of US$913 million
on intragroup balances, primarily as a result of the Australian dollar weakening against the US dollar. In 2020, exchange losses on external net debt and intragroup balances comprise post-
on intragroup balances, primarily as a result of the Australian dollar weakening against the US dollar. In 2020, exchange losses on external net debt and intragroup balances comprise post-
tax foreign exchange losses on intragroup balances of US$1,330 million partially offset by post-tax gains of US$205 million on external net debt, primarily as a result of a stronger
tax foreign exchange losses on intragroup balances of US$1,330 million partially offset by post-tax gains of US$205 million on external net debt, primarily as a result of a stronger
Australian dollar against the US dollar during the year. In 2019, exchange gains on external net debt and intragroup balances comprise post-tax foreign exchange gains on net debt of
Australian dollar against the US dollar during the year. In 2019, exchange gains on external net debt and intragroup balances comprise post-tax foreign exchange gains on net debt of
US$60 million and post-tax losses of US$9 million on intragroup balances, primarily as a result of the Canadian dollar strengthening against the US dollar. From 1 January 2019, all foreign
US$60 million and post-tax losses of US$9 million on intragroup balances, primarily as a result of the Canadian dollar strengthening against the US dollar. From 1 January 2019, all foreign
exchange gains and losses relating to net debt are excluded from underlying earnings.
exchange gains and losses relating to net debt are excluded from underlying earnings.
(c)
(c)
Valuation changes on currency and interest rate derivatives, which are ineligible for hedge accounting, other than those embedded in commercial contracts, and the currency revaluation of
Valuation changes on currency and interest rate derivatives, which are ineligible for hedge accounting, other than those embedded in commercial contracts, and the currency revaluation of
embedded US dollar derivatives contained in contracts held by entities whose functional currency is not the US dollar.
embedded US dollar derivatives contained in contracts held by entities whose functional currency is not the US dollar.
(d)
(d)
Valuation changes on derivatives, embedded in commercial contracts, that are ineligible for hedge accounting, but for which there will be an offsetting change in future Group earnings.
Valuation changes on derivatives, embedded in commercial contracts, that are ineligible for hedge accounting, but for which there will be an offsetting change in future Group earnings.
Mark-to-market movements on commodity derivatives entered into with the commercial objective of achieving spot pricing for the underlying transaction at the date of settlement are
Mark-to-market movements on commodity derivatives entered into with the commercial objective of achieving spot pricing for the underlying transaction at the date of settlement are
included in underlying earnings.
included in underlying earnings.
(e)
(e)
On 2 February 2022, Energy Resources of Australia released preliminary findings from its reforecast of the total undiscounted cost schedule for the Ranger rehabilitation project.
On 2 February 2022, Energy Resources of Australia released preliminary findings from its reforecast of the total undiscounted cost schedule for the Ranger rehabilitation project.
Information available from this study resulted in the Group recording an increase to the closure provision of US$510 million at 31 December 2021. Other increases to closure estimates
Information available from this study resulted in the Group recording an increase to the closure provision of US$510 million at 31 December 2021. Other increases to closure estimates
charged to the income statement in 2021 relate to Diavik, Gove refinery, and a number of the Group's legacy sites where the environmental damage preceded ownership by Rio Tinto. The
charged to the income statement in 2021 relate to Diavik, Gove refinery, and a number of the Group's legacy sites where the environmental damage preceded ownership by Rio Tinto. The
adjustments at Energy Resources Australia and Gove refinery have been recognised in the income statement as these are non-operating sites, and excluded from underlying earnings due
adjustments at Energy Resources Australia and Gove refinery have been recognised in the income statement as these are non-operating sites, and excluded from underlying earnings due
to the magnitude of the individual updates and materiality when aggregated. In 2020 we recognised an increase in the Diavik closure provision based on preliminary Pre-Feasibility Study
to the magnitude of the individual updates and materiality when aggregated. In 2020 we recognised an increase in the Diavik closure provision based on preliminary Pre-Feasibility Study
findings. On completion of the study in 2021 a true up was recorded in the income statement and excluded from underlying earnings in line with the treatment of the initial increase in
findings. On completion of the study in 2021 a true up was recorded in the income statement and excluded from underlying earnings in line with the treatment of the initial increase in
2020, which was excluded from underlying earnings as Diavik was fully impaired during the year. Other closure costs excluded in 2020 were the increase in the Gove refinery closure
2020, which was excluded from underlying earnings as Diavik was fully impaired during the year. Other closure costs excluded in 2020 were the increase in the Gove refinery closure
provision offset by a decrease in the Argyle mine closure provision on completion of Pre-Feasibility Studies at each site. The 2020 comparative also included the net earnings impact
provision offset by a decrease in the Argyle mine closure provision on completion of Pre-Feasibility Studies at each site. The 2020 comparative also included the net earnings impact
(US$138 million loss) in respect of increases to Closure provisions in legacy and non-operating sites following a reduction to the closure discount rate to 1.5%. When further funding is
(US$138 million loss) in respect of increases to Closure provisions in legacy and non-operating sites following a reduction to the closure discount rate to 1.5%. When further funding is
required, no allocation is made to the non-controlling interests of partially owned legacy sites until the funding is received.
required, no allocation is made to the non-controlling interests of partially owned legacy sites until the funding is received.
(f)
(f)
On 3 December 2021 we gained control over a new wharf at Kitimat, Canada that was built and paid for by LNG Canada. The gain on recognition has been excluded from underlying earnings
On 3 December 2021 we gained control over a new wharf at Kitimat, Canada that was built and paid for by LNG Canada. The gain on recognition has been excluded from underlying earnings
on the grounds of individual magnitude and consistency with the associated impairment charge, refer to note 6.
on the grounds of individual magnitude and consistency with the associated impairment charge, refer to note 6.
(g)
(g)
In 2019, other exclusions included provisions for obligations in respect of legacy operations of US$246 million (loss of US$233 million after tax), partially offset by the write-back of a net
In 2019, other exclusions included provisions for obligations in respect of legacy operations of US$246 million (loss of US$233 million after tax), partially offset by the write-back of a net
realisable value provision in respect of low grade stockpile inventories at Oyu Tolgoi of US$75 million (gain of US$19 million after tax and non-controlling interests). As a result of increased
realisable value provision in respect of low grade stockpile inventories at Oyu Tolgoi of US$75 million (gain of US$19 million after tax and non-controlling interests). As a result of increased
uncertainty over timing of production from the Oyu Tolgoi underground project (refer to note 6), we expected to utilise low grade stockpiles sooner than previously forecast. This was
uncertainty over timing of production from the Oyu Tolgoi underground project (refer to note 6), we expected to utilise low grade stockpiles sooner than previously forecast. This was
excluded from underlying earnings, consistent with the related impairment charge recognised in 2019.
excluded from underlying earnings, consistent with the related impairment charge recognised in 2019.
China
United States of America
Asia (excluding China and Japan)
Japan
Europe (excluding UK)
Canada
Australia
UK
Other countries
Consolidated sales revenue
2021
%
57.2
12.6
9.4
7.9
5.2
2.6
1.8
0.4
2.9
100
2020
%
58.1
10.9
10.2
7.5
5.9
2.9
1.7
0.5
2.3
100
2019
%
51.3
14.2
10.6
8.9
6.0
3.3
1.7
0.6
3.4
100
2021
US$m
36,308
8,012
5,985
5,012
3,271
1,677
1,122
243
1,865
63,495
2020
US$m
25,940
4,867
4,536
3,354
2,623
1,289
745
242
1,015
44,611
2019
US$m
22,135
6,125
4,558
3,855
2,610
1,478
737
248
1,419
43,165
(a)
Consolidated sales revenue by geographical destination is based on the ultimate country of the product's destination, if known. Where the ultimate destination is not known, we have
defaulted to the shipping address of the customer. Rio Tinto is domiciled in both the UK and Australia.
Consolidated sales revenue by product
Consolidated sales revenues of the Group are derived from the following products sold to external customers:
Iron ore
Aluminium, alumina and bauxite
Copper
Industrial minerals (comprising titanium dioxide slag, borates and salt)
Gold
Diamonds
Other products(b)
Consolidated sales revenue
Iron ore
Aluminium, alumina and bauxite
Copper
Industrial minerals (comprising titanium dioxide slag, borates and salt)
Gold
Diamonds
Other products(b)
Consolidated sales revenue
Revenue from
contracts
with
customers
2020
US$m
28,202
9,092
1,721
2,054
471
459
1,493
43,492
Other
revenue(a)
2020
US$m
Consolidated
sales revenue
2020
US$m
1,000
54
64
(3)
6
—
(2)
1,119
29,202
9,146
1,785
2,051
477
459
1,491
44,611
Revenue from
contracts
with
customers
2021
US$m
42,992
12,336
3,229
2,114
1,075
501
1,837
64,084
Revenue from
contracts
with
customers
2019
US$m
25,516
10,207
2,030
2,251
667
619
1,697
42,987
Other
revenue(a)
2021
US$m
Consolidated
sales revenue
2021
US$m
(796)
103
96
3
2
—
3
(589)
42,196
12,439
3,325
2,117
1,077
501
1,840
63,495
Other
revenue(a)
2019
US$m
Consolidated
sales revenue
2019
US$m
229
(32)
(7)
(12)
2
—
(2)
178
25,745
10,175
2,023
2,239
669
619
1,695
43,165
(a)
(b)
Certain of the Group's products may be provisionally priced at the date revenue is recognised. The change in value of the provisionally priced receivables is based on relevant forward
market prices and is included in “Other revenue” above.
“Other products” includes metallic co-products, molybdenum, silver and other commodities. This category also now includes uranium sales of US$229 million (2020: US$299 million; 2019:
US$375 million) that were previously disclosed separately.
240
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241241
Financial statements continued
Notes to the 2021 financial statements
3 Operating segments – additional information continued
Non-current assets other than excluded items(a)
The total of non-current assets other than excluded items is shown by location below.
Australia
Canada
Mongolia
United States of America
Africa
South America
Europe (excluding UK)
UK
Other countries
Total non-current assets other than excluded items
Non-current assets excluded from analysis above:
Deferred tax assets
Other financial assets(b)
Quasi equity loans to equity accounted units(b)
Tax recoverable
Receivables and other assets
Total non-current assets per balance sheet
2021
US$m
32,807
15,139
11,653
6,141
3,080
2,451
246
111
1,197
72,825
3,375
528
97
29
1,610
78,464
2020
US$m
32,290
14,666
10,285
6,090
3,294
2,718
212
117
1,008
70,680
3,385
829
112
4
1,525
76,535
(a)
(b)
Allocation of non-current assets by country is based on the location of the business units holding the assets. It includes investments in equity accounted units totalling US$3,407 million
(2020: US$3,652 million) which represents the Group’s share of net assets excluding quasi equity loans shown separately above.
Loans to equity accounted units comprise quasi equity loans of US$97 million (2020: US$112 million) included in “Investments in equity accounted units” on the face of the balance sheet
and no non-current non-quasi equity loans (2020: US$1 million) shown within “Other financial assets”.
4 Net operating costs (excluding items shown separately)
Raw materials, consumables, repairs and maintenance
Amortisation of intangible assets
Depreciation of property, plant and equipment
Employment costs
Shipping and other freight costs
Decrease/(increase) in finished goods and work in progress(a)
Royalties
Amounts charged by equity accounted units(b)
Net foreign exchange losses/(gains)
Other external costs(c)
Loss on sale of property, plant and equipment
Gain on recognition of new wharf at Kitimat, Canada(d)
Provisions (including exchange differences on provisions)
Research and development
Costs included above capitalised or shown separately as exploration and evaluation costs(e)
Other operating income
Net operating costs (excluding items shown separately)
Note
13
14
5
25
2021
US$m
9,957
178
4,519
5,513
3,275
29
3,878
1,160
14
4,018
53
(336)
1,906
65
(646)
(893)
2020
US$m
8,490
161
4,118
4,770
2,088
(47)
2,763
958
300
3,083
50
—
894
45
(708)
(711)
32,690
26,254
2019
US$m
9,485
133
4,251
4,522
2,257
42
2,501
1,136
(52)
3,627
31
—
753
45
(651)
(773)
27,307
(a)
(b)
(c)
(d)
(e)
Includes purchases of third party material to satisfy sales contracts.
Amounts charged by equity accounted units relate to toll processing and also include purchases from equity accounted units of bauxite and aluminium which are then processed by the
product group or sold to third parties. Generally, purchases are in proportion to the Group’s share of the equity accounted unit but in 2021, US$121 million (2020: US$129 million; 2019:
US$291 million) related to purchases of the other investors’ share of production.
In 2021, other external costs include US$502 million (2020: US$314 million, 2019: US$327 million) of short-term lease costs and US$34 million (2020: US$30 million, 2019 US$15 million)
of variable lease costs recognised in the income statement in accordance with IFRS 16 “Leases”. Refer to note 22.
On 3 December 2021 we recognised a new wharf at Kitimat, Canada within Property, plant and equipment that was built and paid for by LNG Canada. The gain on recognition has been
excluded from underlying earnings, refer to note 2 and note 6.
In 2021, US$445 million (2020: US$537 million; 2019: US$469 million) of operating costs were capitalised and US$201 million (2020: US$171 million; 2019: US$182 million) of costs were
shown separately within “Exploration and evaluation costs” in the Group income statement.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
3 Operating segments – additional information continued
3 Operating segments – additional information continued
Non-current assets other than excluded items(a)
Non-current assets other than excluded items(a)
The total of non-current assets other than excluded items is shown by location below.
The total of non-current assets other than excluded items is shown by location below.
Australia
Australia
Canada
Canada
Mongolia
Mongolia
United States of America
United States of America
Africa
Africa
South America
South America
Europe (excluding UK)
Europe (excluding UK)
UK
UK
Other countries
Other countries
Total non-current assets other than excluded items
Total non-current assets other than excluded items
Non-current assets excluded from analysis above:
Non-current assets excluded from analysis above:
Deferred tax assets
Deferred tax assets
Other financial assets(b)
Other financial assets(b)
Quasi equity loans to equity accounted units(b)
Quasi equity loans to equity accounted units(b)
Tax recoverable
Tax recoverable
Receivables and other assets
Receivables and other assets
Total non-current assets per balance sheet
Total non-current assets per balance sheet
Raw materials, consumables, repairs and maintenance
Raw materials, consumables, repairs and maintenance
Amortisation of intangible assets
Amortisation of intangible assets
Depreciation of property, plant and equipment
Depreciation of property, plant and equipment
Employment costs
Employment costs
Shipping and other freight costs
Shipping and other freight costs
Decrease/(increase) in finished goods and work in progress(a)
Decrease/(increase) in finished goods and work in progress(a)
Royalties
Royalties
Amounts charged by equity accounted units(b)
Amounts charged by equity accounted units(b)
Net foreign exchange losses/(gains)
Net foreign exchange losses/(gains)
Other external costs(c)
Other external costs(c)
Loss on sale of property, plant and equipment
Loss on sale of property, plant and equipment
Gain on recognition of new wharf at Kitimat, Canada(d)
Gain on recognition of new wharf at Kitimat, Canada(d)
Provisions (including exchange differences on provisions)
Provisions (including exchange differences on provisions)
(a)
(a)
Allocation of non-current assets by country is based on the location of the business units holding the assets. It includes investments in equity accounted units totalling US$3,407 million
Allocation of non-current assets by country is based on the location of the business units holding the assets. It includes investments in equity accounted units totalling US$3,407 million
(2020: US$3,652 million) which represents the Group’s share of net assets excluding quasi equity loans shown separately above.
(2020: US$3,652 million) which represents the Group’s share of net assets excluding quasi equity loans shown separately above.
(b)
(b)
Loans to equity accounted units comprise quasi equity loans of US$97 million (2020: US$112 million) included in “Investments in equity accounted units” on the face of the balance sheet
Loans to equity accounted units comprise quasi equity loans of US$97 million (2020: US$112 million) included in “Investments in equity accounted units” on the face of the balance sheet
and no non-current non-quasi equity loans (2020: US$1 million) shown within “Other financial assets”.
and no non-current non-quasi equity loans (2020: US$1 million) shown within “Other financial assets”.
4 Net operating costs (excluding items shown separately)
4 Net operating costs (excluding items shown separately)
Costs included above capitalised or shown separately as exploration and evaluation costs(e)
Costs included above capitalised or shown separately as exploration and evaluation costs(e)
Research and development
Research and development
Other operating income
Other operating income
Net operating costs (excluding items shown separately)
Net operating costs (excluding items shown separately)
Includes purchases of third party material to satisfy sales contracts.
Includes purchases of third party material to satisfy sales contracts.
(a)
(a)
(b)
(b)
Amounts charged by equity accounted units relate to toll processing and also include purchases from equity accounted units of bauxite and aluminium which are then processed by the
Amounts charged by equity accounted units relate to toll processing and also include purchases from equity accounted units of bauxite and aluminium which are then processed by the
product group or sold to third parties. Generally, purchases are in proportion to the Group’s share of the equity accounted unit but in 2021, US$121 million (2020: US$129 million; 2019:
product group or sold to third parties. Generally, purchases are in proportion to the Group’s share of the equity accounted unit but in 2021, US$121 million (2020: US$129 million; 2019:
US$291 million) related to purchases of the other investors’ share of production.
US$291 million) related to purchases of the other investors’ share of production.
(c)
(c)
In 2021, other external costs include US$502 million (2020: US$314 million, 2019: US$327 million) of short-term lease costs and US$34 million (2020: US$30 million, 2019 US$15 million)
In 2021, other external costs include US$502 million (2020: US$314 million, 2019: US$327 million) of short-term lease costs and US$34 million (2020: US$30 million, 2019 US$15 million)
of variable lease costs recognised in the income statement in accordance with IFRS 16 “Leases”. Refer to note 22.
of variable lease costs recognised in the income statement in accordance with IFRS 16 “Leases”. Refer to note 22.
(d)
(d)
On 3 December 2021 we recognised a new wharf at Kitimat, Canada within Property, plant and equipment that was built and paid for by LNG Canada. The gain on recognition has been
On 3 December 2021 we recognised a new wharf at Kitimat, Canada within Property, plant and equipment that was built and paid for by LNG Canada. The gain on recognition has been
excluded from underlying earnings, refer to note 2 and note 6.
excluded from underlying earnings, refer to note 2 and note 6.
(e)
(e)
In 2021, US$445 million (2020: US$537 million; 2019: US$469 million) of operating costs were capitalised and US$201 million (2020: US$171 million; 2019: US$182 million) of costs were
In 2021, US$445 million (2020: US$537 million; 2019: US$469 million) of operating costs were capitalised and US$201 million (2020: US$171 million; 2019: US$182 million) of costs were
shown separately within “Exploration and evaluation costs” in the Group income statement.
shown separately within “Exploration and evaluation costs” in the Group income statement.
2021
2021
US$m
US$m
32,807
32,807
15,139
15,139
11,653
11,653
6,141
6,141
3,080
3,080
2,451
2,451
246
246
111
111
1,197
1,197
72,825
72,825
3,375
3,375
528
528
97
97
29
29
1,610
1,610
78,464
78,464
2020
2020
US$m
US$m
32,290
32,290
14,666
14,666
10,285
10,285
6,090
6,090
3,294
3,294
2,718
2,718
212
212
117
117
1,008
1,008
70,680
70,680
3,385
3,385
829
829
112
112
4
4
1,525
1,525
76,535
76,535
2019
2019
US$m
US$m
9,485
9,485
133
133
4,251
4,251
4,522
4,522
2,257
2,257
42
42
2,501
2,501
1,136
1,136
(52)
(52)
3,627
3,627
31
31
—
—
753
753
45
45
(651)
(651)
(773)
(773)
Note
Note
13
13
14
14
5
5
2021
2021
US$m
US$m
9,957
9,957
178
178
4,519
4,519
5,513
5,513
3,275
3,275
29
29
3,878
3,878
1,160
1,160
4,018
4,018
14
14
53
53
(336)
(336)
65
65
(646)
(646)
(893)
(893)
(47)
(47)
2020
2020
US$m
US$m
8,490
8,490
161
161
4,118
4,118
4,770
4,770
2,088
2,088
2,763
2,763
958
958
300
300
3,083
3,083
50
50
—
—
894
894
45
45
(708)
(708)
(711)
(711)
25
25
1,906
1,906
32,690
32,690
26,254
26,254
27,307
27,307
5 Employment costs
Total employment costs
– Wages and salaries
– Social security costs
– Net post-retirement charge
– Share-based payment charge
Less: charged within provisions(a)
Total employment costs
Note
2021
US$m
2020
US$m
2019
US$m
4,699
386
554
126
5,765
(252)
5,513
4,141
330
469
138
5,078
(308)
4,770
3,923
328
384
123
4,758
(236)
4,522
42
41
25
4
(a)
Amounts included above relate to provisions for pensions, post-retirement healthcare, long service leave and other employee entitlements. These are included in “Provisions (including
exchange differences on provisions)” in note 4.
6 Impairment charges net of reversals
Non-
controlling
interest
2021
US$m
Taxation
2021
US$m
72
—
—
—
—
—
—
72
—
—
—
—
—
—
—
—
Net
amount
2021
US$m
(197)
—
—
—
—
—
—
(197)
Note
13
14
Pre-tax
amount
2021
US$m
(269)
—
—
—
—
—
—
(269)
—
(269)
—
(269)
Pre-tax
amount
2020
US$m
—
(489)
(220)
(93)
(441)
—
—
(1,243)
(4)
(900)
(339)
(1,243)
Pre-tax
amount
2019
US$m
—
—
—
(109)
—
(2,240)
(1,138)
(3,487)
(1)
(3,486)
—
(3,487)
(269)
—
(904)
(368)
(3,487)
—
(269)
(1,272)
(3,487)
72
—
157
—
323
1,506
(197)
(1,115)
(1,658)
Aluminium – Kitimat
Aluminium – Pacific Aluminium
Aluminium – Sohar
Aluminium – ISAL
Minerals – Diavik
Copper – Oyu Tolgoi
Aluminium - Yarwun alumina refinery
Total impairment charges net of reversals
Allocated as:
Intangible assets
Property, plant and equipment
Investment in equity accounted units (“EAUs”)
Total impairment charges net of reversals
Comprising:
Impairment charges of consolidated balances
Impairment charges related to EAUs (pre-tax)
Total impairment charges net of reversals in the financial
information by business unit (page 318)
Taxation (including related to EAUs)
Non-controlling interests
Total impairment charges net of reversals in the income
statement
2021
Aluminium – Kitimat, Canada
On 3 December 2021, we announced completion of the newly-constructed wharf at Kitimat. Construction spend was incurred by LNG Canada and
therefore a gain of US$336 million representing the estimated fair value of the cost of construction has been recorded and the carrying value of
the Kitimat cash-generating unit (CGU) increased accordingly. Output from the smelter was reduced to 25% as a result of a workforce strike in
mid-2021 and ramp-up to full capacity will extend through 2022. As a previously impaired CGU, and therefore carrying limited headroom, these
factors were identified as conditions that could indicate that the uplifted carrying value may not be supportable and therefore the CGU was tested
for impairment.
The recoverable amount for the Kitimat CGU has been calculated based on the IAS 36 “Impairment” fair value less cost of disposal (FVLCD)
methodology by reference to the net present value of post-tax cash flows, expressed in real-terms and discounted at 6.6%. The recoverable
amount of US$3,126 million is less than the carrying value of US$3,323 million resulting in a post-tax impairment charge of US$197 million,
equivalent to US$269 million pre-tax. The overall adjustment to the carrying value of the property, plant and equipment at Kitimat from the gain
on recognition of the wharf less the impairment charge is an increase of US$67 million.
The pricing data used to calculate net present value of cash flows is based on a blend of the three strategic pricing scenarios described in the
climate change section of note 1. While keeping all other inputs constant, we have flexed the cash flows to reflect the carbon and commodity
prices generated by the one scenario that we believe is consistent with the goals of the Paris Agreement. The net present value of post-tax cash
flows would have been US$58 million greater under this interpretation of Paris-aligned accounting (see note 1).
To illustrate the sensitivity of the recoverable amount, an increase in the discount rate by 50 basis points to 7.1% (post-tax real terms rate) would
reduce the recoverable amount by US$180 million with all other valuation inputs remaining constant.
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Financial statements continued
Notes to the 2021 financial statements
6 Impairment charges net of reversals continued
Copper – Oyu Tolgoi, Mongolia
Development of the Oyu Tolgoi underground progressed through 2021 at a slower pace than anticipated due to COVID-19 affecting staffing levels.
Initiation of the caving process, known as the undercut, was expected to occur during 2021, however at 31 December 2021 the non-technical
criteria for approval, including negotiations with the Government of Mongolia, remained ongoing and therefore this aspect of the construction was
paused. On 30 December 2021 the Mongolian parliament approved Resolution 103 which indicated support for concessions offered by Rio Tinto
during these negotiations, but introduced new funding constraints on the shareholders of Oyu Tolgoi LLC until first sustainable production. As a
critical milestone in the development of the mine, we identified the delay to the undercut and consequential delay to production from the
underground operations as being an impairment trigger and therefore assessed the recoverable amount of the project as at 31 December 2021.
The recoverable amount of the Oyu Tolgoi CGU has been prepared in accordance with the FVLCD methodology. It is based on forecast post-tax
future cash flows over the life of mine of the open pit and underground reserves of Hugo North Lift 1 (HNL1) together with an estimate of future
expansion potential to extract mineral resources from further underground developments and enlarged open pit. Mining of these mineral
resources is subject to future investment decisions and comprises approximately 20% of the total value. These cash flows, expressed in real
terms, have been discounted to present value using a project specific post-tax discount rate of 8%.
The development of HNL1 underground comprises three continuous sections. The initial development in 'Panel 0' is in the central section of the
orebody with Panel 1 to the north and Panel 2 located to the south. Evaluation of mine plans for Panels 1 and 2 remain under study and are linked
to the lateral development of project. To reflect the risk inherent in these aspects of the mine plan that are currently at the pre-feasibility study
level of confidence, a risk adjustment factor of 10% has been applied to the net cash flows associated with years of the development of those
sections of the underground mine.
At 31 December 2021, the non-technical criteria for the undercut had not been satisfied and therefore, an adjustment to the underlying cash
flows of the valuation model was made to weight the timing of the undercut between an immediate approval and the potential for a six-month
delay.
In finalising the determination of a recoverable amount for the cash-generating unit, we considered the likely impact of elevated uncertainty on a
market participant’s perspective at the balance sheet date, in particular that arising from the incomplete status of negotiations and financing
arrangements. Considerations included immediate funding requirements and the restrictions placed thereon in Resolution 103. To represent this
uncertainty, a further judgmental reduction has been applied to the total net present value of cash flows from mining operations. After taking all
of the above adjustments into account, the resulting recoverable amount almost equals the carrying value for the cash-generating unit of US$11.8
billion. Accordingly, management has determined that neither an impairment charge nor an impairment reversal is required.
As described in note 45, on 25 January 2022, Rio Tinto, Turquoise Hill Resources and the Government of Mongolia reached agreement to
unanimously approve the commencement of underground operations. Through this agreement, the non-technical criteria for the undercut have
been satisfied, including agreement over the pathway to funding the project to sustainable production. Underground mining operations have
subsequently commenced. No hindsight has been applied in determining the appropriate valuation assumptions at 31 December 2021, however
the timing and substance of the agreement reached was within the range of plausible outcomes considered in making this determination.
The pricing data used to calculate the net present value of cash flows is based on a blend of the three strategic pricing scenarios described in the
climate change section of note 1. While keeping all other inputs constant, we have flexed the cash flows to reflect carbon and commodity prices
under this one scenario that we believe is consistent with achieving the goals of the Paris Agreement. The net present value of post-tax cash flows
would have been US$1.9 billion greater under this interpretation of Paris-aligned accounting (see note 1), assuming no changes to the ore mined
(ie alternative economic grade cut-off is impractical to estimate, but higher prices could potentially result in more ore being mined and sold).
To further illustrate the sensitivity of the recoverable amount, an increase in the discount rate by 50 basis points to 8.5% (post-tax real terms
rate) would reduce the recoverable amount by US$0.8 billion with all other valuation inputs remaining constant.
The funding of equity contributions to the project on behalf of Erdenes Oyu Tolgoi (Erdenes) by way of a carry account loan has been accounted
for in accordance with the accounting policy in note 1 (xii). Additional information regarding these funding balances owing from Erdenes to
Turquoise Hill and the impact on non-controlling interests is provided in note 32. On 25 January 2022, as part of a comprehensive package
negotiated with the Government of Mongolia in order to approve commencement of underground operations, Turquoise Hill agreed to waive the
full amount of funding balances and interest owing from Erdenes to Turquoise Hill. The waiver does not have an impact on the Group's
assessment of impairment for either 2021 or 2022; refer to note 45.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
6 Impairment charges net of reversals continued
6 Impairment charges net of reversals continued
Copper – Oyu Tolgoi, Mongolia
Copper – Oyu Tolgoi, Mongolia
Development of the Oyu Tolgoi underground progressed through 2021 at a slower pace than anticipated due to COVID-19 affecting staffing levels.
Development of the Oyu Tolgoi underground progressed through 2021 at a slower pace than anticipated due to COVID-19 affecting staffing levels.
Initiation of the caving process, known as the undercut, was expected to occur during 2021, however at 31 December 2021 the non-technical
Initiation of the caving process, known as the undercut, was expected to occur during 2021, however at 31 December 2021 the non-technical
criteria for approval, including negotiations with the Government of Mongolia, remained ongoing and therefore this aspect of the construction was
criteria for approval, including negotiations with the Government of Mongolia, remained ongoing and therefore this aspect of the construction was
paused. On 30 December 2021 the Mongolian parliament approved Resolution 103 which indicated support for concessions offered by Rio Tinto
paused. On 30 December 2021 the Mongolian parliament approved Resolution 103 which indicated support for concessions offered by Rio Tinto
during these negotiations, but introduced new funding constraints on the shareholders of Oyu Tolgoi LLC until first sustainable production. As a
during these negotiations, but introduced new funding constraints on the shareholders of Oyu Tolgoi LLC until first sustainable production. As a
critical milestone in the development of the mine, we identified the delay to the undercut and consequential delay to production from the
critical milestone in the development of the mine, we identified the delay to the undercut and consequential delay to production from the
underground operations as being an impairment trigger and therefore assessed the recoverable amount of the project as at 31 December 2021.
underground operations as being an impairment trigger and therefore assessed the recoverable amount of the project as at 31 December 2021.
The recoverable amount of the Oyu Tolgoi CGU has been prepared in accordance with the FVLCD methodology. It is based on forecast post-tax
The recoverable amount of the Oyu Tolgoi CGU has been prepared in accordance with the FVLCD methodology. It is based on forecast post-tax
future cash flows over the life of mine of the open pit and underground reserves of Hugo North Lift 1 (HNL1) together with an estimate of future
future cash flows over the life of mine of the open pit and underground reserves of Hugo North Lift 1 (HNL1) together with an estimate of future
expansion potential to extract mineral resources from further underground developments and enlarged open pit. Mining of these mineral
expansion potential to extract mineral resources from further underground developments and enlarged open pit. Mining of these mineral
resources is subject to future investment decisions and comprises approximately 20% of the total value. These cash flows, expressed in real
resources is subject to future investment decisions and comprises approximately 20% of the total value. These cash flows, expressed in real
terms, have been discounted to present value using a project specific post-tax discount rate of 8%.
terms, have been discounted to present value using a project specific post-tax discount rate of 8%.
The development of HNL1 underground comprises three continuous sections. The initial development in 'Panel 0' is in the central section of the
The development of HNL1 underground comprises three continuous sections. The initial development in 'Panel 0' is in the central section of the
orebody with Panel 1 to the north and Panel 2 located to the south. Evaluation of mine plans for Panels 1 and 2 remain under study and are linked
orebody with Panel 1 to the north and Panel 2 located to the south. Evaluation of mine plans for Panels 1 and 2 remain under study and are linked
to the lateral development of project. To reflect the risk inherent in these aspects of the mine plan that are currently at the pre-feasibility study
to the lateral development of project. To reflect the risk inherent in these aspects of the mine plan that are currently at the pre-feasibility study
level of confidence, a risk adjustment factor of 10% has been applied to the net cash flows associated with years of the development of those
level of confidence, a risk adjustment factor of 10% has been applied to the net cash flows associated with years of the development of those
sections of the underground mine.
sections of the underground mine.
At 31 December 2021, the non-technical criteria for the undercut had not been satisfied and therefore, an adjustment to the underlying cash
At 31 December 2021, the non-technical criteria for the undercut had not been satisfied and therefore, an adjustment to the underlying cash
flows of the valuation model was made to weight the timing of the undercut between an immediate approval and the potential for a six-month
flows of the valuation model was made to weight the timing of the undercut between an immediate approval and the potential for a six-month
delay.
delay.
In finalising the determination of a recoverable amount for the cash-generating unit, we considered the likely impact of elevated uncertainty on a
In finalising the determination of a recoverable amount for the cash-generating unit, we considered the likely impact of elevated uncertainty on a
market participant’s perspective at the balance sheet date, in particular that arising from the incomplete status of negotiations and financing
market participant’s perspective at the balance sheet date, in particular that arising from the incomplete status of negotiations and financing
arrangements. Considerations included immediate funding requirements and the restrictions placed thereon in Resolution 103. To represent this
arrangements. Considerations included immediate funding requirements and the restrictions placed thereon in Resolution 103. To represent this
uncertainty, a further judgmental reduction has been applied to the total net present value of cash flows from mining operations. After taking all
uncertainty, a further judgmental reduction has been applied to the total net present value of cash flows from mining operations. After taking all
of the above adjustments into account, the resulting recoverable amount almost equals the carrying value for the cash-generating unit of US$11.8
of the above adjustments into account, the resulting recoverable amount almost equals the carrying value for the cash-generating unit of US$11.8
billion. Accordingly, management has determined that neither an impairment charge nor an impairment reversal is required.
billion. Accordingly, management has determined that neither an impairment charge nor an impairment reversal is required.
As described in note 45, on 25 January 2022, Rio Tinto, Turquoise Hill Resources and the Government of Mongolia reached agreement to
As described in note 45, on 25 January 2022, Rio Tinto, Turquoise Hill Resources and the Government of Mongolia reached agreement to
unanimously approve the commencement of underground operations. Through this agreement, the non-technical criteria for the undercut have
unanimously approve the commencement of underground operations. Through this agreement, the non-technical criteria for the undercut have
been satisfied, including agreement over the pathway to funding the project to sustainable production. Underground mining operations have
been satisfied, including agreement over the pathway to funding the project to sustainable production. Underground mining operations have
subsequently commenced. No hindsight has been applied in determining the appropriate valuation assumptions at 31 December 2021, however
subsequently commenced. No hindsight has been applied in determining the appropriate valuation assumptions at 31 December 2021, however
the timing and substance of the agreement reached was within the range of plausible outcomes considered in making this determination.
the timing and substance of the agreement reached was within the range of plausible outcomes considered in making this determination.
The pricing data used to calculate the net present value of cash flows is based on a blend of the three strategic pricing scenarios described in the
The pricing data used to calculate the net present value of cash flows is based on a blend of the three strategic pricing scenarios described in the
climate change section of note 1. While keeping all other inputs constant, we have flexed the cash flows to reflect carbon and commodity prices
climate change section of note 1. While keeping all other inputs constant, we have flexed the cash flows to reflect carbon and commodity prices
under this one scenario that we believe is consistent with achieving the goals of the Paris Agreement. The net present value of post-tax cash flows
under this one scenario that we believe is consistent with achieving the goals of the Paris Agreement. The net present value of post-tax cash flows
would have been US$1.9 billion greater under this interpretation of Paris-aligned accounting (see note 1), assuming no changes to the ore mined
would have been US$1.9 billion greater under this interpretation of Paris-aligned accounting (see note 1), assuming no changes to the ore mined
(ie alternative economic grade cut-off is impractical to estimate, but higher prices could potentially result in more ore being mined and sold).
(ie alternative economic grade cut-off is impractical to estimate, but higher prices could potentially result in more ore being mined and sold).
To further illustrate the sensitivity of the recoverable amount, an increase in the discount rate by 50 basis points to 8.5% (post-tax real terms
To further illustrate the sensitivity of the recoverable amount, an increase in the discount rate by 50 basis points to 8.5% (post-tax real terms
rate) would reduce the recoverable amount by US$0.8 billion with all other valuation inputs remaining constant.
rate) would reduce the recoverable amount by US$0.8 billion with all other valuation inputs remaining constant.
The funding of equity contributions to the project on behalf of Erdenes Oyu Tolgoi (Erdenes) by way of a carry account loan has been accounted
The funding of equity contributions to the project on behalf of Erdenes Oyu Tolgoi (Erdenes) by way of a carry account loan has been accounted
for in accordance with the accounting policy in note 1 (xii). Additional information regarding these funding balances owing from Erdenes to
for in accordance with the accounting policy in note 1 (xii). Additional information regarding these funding balances owing from Erdenes to
Turquoise Hill and the impact on non-controlling interests is provided in note 32. On 25 January 2022, as part of a comprehensive package
Turquoise Hill and the impact on non-controlling interests is provided in note 32. On 25 January 2022, as part of a comprehensive package
negotiated with the Government of Mongolia in order to approve commencement of underground operations, Turquoise Hill agreed to waive the
negotiated with the Government of Mongolia in order to approve commencement of underground operations, Turquoise Hill agreed to waive the
full amount of funding balances and interest owing from Erdenes to Turquoise Hill. The waiver does not have an impact on the Group's
full amount of funding balances and interest owing from Erdenes to Turquoise Hill. The waiver does not have an impact on the Group's
assessment of impairment for either 2021 or 2022; refer to note 45.
assessment of impairment for either 2021 or 2022; refer to note 45.
2020 and 2019
Aluminium – Pacific Aluminium, Australia and New Zealand
On 9 July 2020, we announced the conclusion of the NZAS strategic review and gave Meridian Energy 14 months' notice for the termination of the
power contract. As a result of the decision to wind-down operations an impairment trigger was identified. The net present value of post-tax cash
flows over the remaining life for this CGU was negative and therefore the non-current assets of the smelter were fully impaired.
High operating costs and challenging outlook for the aluminium industry also resulted in impairment triggers being identified at the Bell Bay
aluminium smelter in Tasmania, Australia and at Boyne Smelter in Queensland, Australia at 30 June 2020. The forecast net present value of cash
flows over the period to anticipated expiry in 2025 of a power contract with Hydro Tasmania was negative taking into account market conditions at
the time. The property, plant and equipment of the Bell Bay smelter was therefore fully impaired. We determined the recoverable amount for our
share of the Boyne Smelter CGU. which also includes the Gladstone Power Station. as US$273 million based on post-tax cash flows expressed in
real terms and discounted at 6.6%. Accordingly our share of impairment after tax in the equity accounted unit was US$119 million (US$148
million pre-tax) related to the smelter and US$26 million (US$36 million pre-tax) related to the power station.
Aluminium – Sohar
In 2020, the challenging outlook for the Middle Eastern aluminium industry was identified as an impairment trigger at the Sohar aluminium
smelter in Oman, an equity accounted unit of the Group.
At 30 September 2020, we determined the recoverable amount for our share of the Sohar CGU to be US$258 million based on post-tax cash flows
expressed in real terms and discounted at 7.6%. Accordingly, our share of impairment after tax in the equity accounted unit was US$220 million.
Aluminium – ISAL smelter, Iceland
Our announcement in February 2020 of a strategic review of the ISAL smelter in Iceland, combined with challenging market conditions, was
identified as an impairment trigger at 30 June 2020. Subsequent restoration of smelter competitiveness resulting from improved power delivery
terms represented an indicator of partial impairment reversal at 31 December 2020. We calculated a post-tax recoverable amount for the CGU of
US$139 million at 31 December 2020 based on FVLCD, discounted using a post-tax rate of 6.6%. As a consequence, with full impairment of the
CGU and a pre-tax impairment charge of US$204 million in the first half of 2020 followed by reversal of US$111 million to previously recorded
pre-tax impairment in the second half of 2020, the full year results for the year ended 31 December 2020 included a net pre-tax impairment
charge of US$93 million (2019: pre-tax impairment charge of US$109 million upon reclassification from assets held for sale).
Minerals (previously under Copper & Diamonds) – Diavik, Canada
The COVID-19 pandemic significantly disrupted global demand for diamonds, and in April 2020 our then joint venture partner in the Diavik
‘Diamond Mine’ filed for creditor protection and defaulted on cash calls. These circumstances were identified as an impairment trigger. The net
present value of post-tax cash flows projected over the remaining life of the Diavik ‘Diamond Mine’ to 2025 did not support retaining any carrying
value, resulting in the Group's 60% interest in plant and equipment and intangible assets of the CGU being fully impaired at 30 June 2020.
Copper (previously under Copper & Diamonds) – Oyu Tolgoi, Mongolia
On 16 July 2019 we announced that the first sustainable production from the Oyu Tolgoi underground project could be delayed by 16 to 30
months compared with the original feasibility study guidance in 2016. We also announced that development capital spend for the project could
increase materially. We identified these matters as an impairment trigger and prepared an assessment of the recoverable amount for the CGU at
30 June 2019 using a FVLCD model, as prescribed by IAS 36.
At 30 June 2019 we determined the post-tax recoverable amount to be US$8.3 billion using a real terms discount rate of 8.3%, this resulted in a
pre-tax impairment charge of US$2.2 billion (100% basis). The net adjustment to tax represented an increase to deferred tax assets of US$320
million for the temporary difference corresponding to the impairment and a decrease in deferred tax assets of US$359 million for tax losses that
were expected to expire without utilisation.
On 16 December 2020 we confirmed completion of the Definitive Estimate detailing how Oyu Tolgoi underground would achieve sustainable
production and selection of a preferred development option for the Oyu Tolgoi underground project. Development capital assumptions of US$6.75
billion and forecast sustainable production by October 2022 incorporated the impacts of COVID-19. This information was within the range of
assumptions used to calculate the CGU's recoverable amount in the 2019 impairment test, and not indicative of an impairment loss in 2020.
Aluminium - Yarwun alumina refinery
In 2019, our annual impairment assessment of the Yarwun CGU resulted in a pre-tax impairment charge of US$1,138 million to property, plant
and equipment as a result of this CGU being assessed on a stand-alone basis for the first time and a 30% year-on-year reduction in the spot price
of alumina to US$275/t at 31 December 2019.
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Financial statements continued
Notes to the 2021 financial statements
7 Share of profit after tax of equity accounted units
Rio Tinto share
Sales revenue(a)
Operating costs
Profit before finance items and taxation
Finance items
Share of profit after tax of equity accounted units
Profit before taxation
Taxation
Profit for the year
2021
US$m
3,181
(1,435)
1,746
(58)
13
1,701
(659)
1,042
2020
US$m
2,490
(1,439)
1,051
(59)
23
1,015
(363)
652
2019
US$m
2,358
(1,812)
546
(65)
10
491
(190)
301
(a) Sales revenue of equity accounted units includes sales by equity accounted units to Group subsidiaries.
Further information relating to the Group’s interests in joint ventures and associates is given in notes 34 and 35.
8 Finance income and finance costs
Finance income from equity accounted units
Other finance income (including bank deposits, net investment in leases, and other financial assets)
Total finance income
Interest on:
– Financial liabilities at amortised cost (excluding lease liabilities) and associated derivatives
– Lease liabilities
Fair value movements:
– Bonds designated as hedged items in fair value hedges
– Derivatives designated as hedging instruments in fair value hedges
Loss on early redemption of bonds(a)
Amounts capitalised
Total finance costs
Note
14
2021
US$m
2
62
64
(489)
(47)
246
(242)
(69)
358
(243)
2020
US$m
4
137
141
(561)
(50)
(284)
287
—
340
(268)
2019
US$m
4
296
300
(816)
(55)
(185)
181
—
321
(554)
(a)
In 2021 we completed a bond buy-back programme of US$1.2 billion (nominal value). The loss on the early redemption of the bond includes a premium charge of US$115 million;
unamortised debt issuance costs and fees of US$5 million offset by a fair value credit of US$51 million. We did not undertake a bond buy-back programme in 2020 or 2019.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
7 Share of profit after tax of equity accounted units
7 Share of profit after tax of equity accounted units
Rio Tinto share
Rio Tinto share
Sales revenue(a)
Sales revenue(a)
Operating costs
Operating costs
Finance items
Finance items
Profit before taxation
Profit before taxation
Taxation
Taxation
Profit for the year
Profit for the year
Profit before finance items and taxation
Profit before finance items and taxation
Share of profit after tax of equity accounted units
Share of profit after tax of equity accounted units
(a) Sales revenue of equity accounted units includes sales by equity accounted units to Group subsidiaries.
(a) Sales revenue of equity accounted units includes sales by equity accounted units to Group subsidiaries.
Further information relating to the Group’s interests in joint ventures and associates is given in notes 34 and 35.
Further information relating to the Group’s interests in joint ventures and associates is given in notes 34 and 35.
8 Finance income and finance costs
8 Finance income and finance costs
Finance income from equity accounted units
Finance income from equity accounted units
Other finance income (including bank deposits, net investment in leases, and other financial assets)
Other finance income (including bank deposits, net investment in leases, and other financial assets)
– Financial liabilities at amortised cost (excluding lease liabilities) and associated derivatives
– Financial liabilities at amortised cost (excluding lease liabilities) and associated derivatives
Total finance income
Total finance income
Interest on:
Interest on:
– Lease liabilities
– Lease liabilities
Fair value movements:
Fair value movements:
– Bonds designated as hedged items in fair value hedges
– Bonds designated as hedged items in fair value hedges
– Derivatives designated as hedging instruments in fair value hedges
– Derivatives designated as hedging instruments in fair value hedges
Loss on early redemption of bonds(a)
Loss on early redemption of bonds(a)
Amounts capitalised
Amounts capitalised
Total finance costs
Total finance costs
(a)
(a)
In 2021 we completed a bond buy-back programme of US$1.2 billion (nominal value). The loss on the early redemption of the bond includes a premium charge of US$115 million;
In 2021 we completed a bond buy-back programme of US$1.2 billion (nominal value). The loss on the early redemption of the bond includes a premium charge of US$115 million;
unamortised debt issuance costs and fees of US$5 million offset by a fair value credit of US$51 million. We did not undertake a bond buy-back programme in 2020 or 2019.
unamortised debt issuance costs and fees of US$5 million offset by a fair value credit of US$51 million. We did not undertake a bond buy-back programme in 2020 or 2019.
2021
2021
US$m
US$m
3,181
3,181
2020
2020
US$m
US$m
2,490
2,490
(1,435)
(1,435)
(1,439)
(1,439)
1,746
1,746
1,051
1,051
(58)
(58)
13
13
1,701
1,701
(659)
(659)
1,042
1,042
(59)
(59)
23
23
1,015
1,015
(363)
(363)
652
652
2019
2019
US$m
US$m
2,358
2,358
(1,812)
(1,812)
546
546
(65)
(65)
10
10
491
491
(190)
(190)
301
301
Note
Note
14
14
2021
2021
US$m
US$m
2
2
62
62
64
64
(489)
(489)
(47)
(47)
246
246
(242)
(242)
(69)
(69)
358
358
(243)
(243)
2020
2020
US$m
US$m
4
4
137
137
141
141
2019
2019
US$m
US$m
4
4
296
296
300
300
(561)
(561)
(50)
(50)
(816)
(816)
(55)
(55)
(284)
(284)
(185)
(185)
287
287
—
—
340
340
181
181
—
—
321
321
(268)
(268)
(554)
(554)
9 Taxation
Taxation charge
– Current
– Deferred
Total taxation charge
Prima facie tax reconciliation
Profit before taxation
Deduct: share of profit after tax of equity accounted units(a)
Add: impairment after tax of investments in equity accounted units (a)
Parent companies' and subsidiaries' profit before tax
Prima facie tax payable at UK rate of 19% (2020: 19%; 2019: 19%)(b)
Higher rate of taxation of 30% on Australian underlying earnings (2020: 30%; 2019: 30%)
Other tax rates applicable outside the UK and Australia on underlying earnings
Impact of items excluded in arriving at underlying earnings(c):
– Impairment charges(d)
– Net gains and losses on consolidation and disposal of interests in businesses
– Exchange and gains/losses on derivatives
– Losses from increases to closure estimates (non-operating and fully impaired sites)
– Utilisation of capital losses on the gain from the recognition of the wharf at Kitimat, Canada
– Other exclusions
Impact of changes in tax rates and laws
Resource depletion and other depreciation allowances
Recognition of previously unrecognised deferred tax assets(e)
Write-down of previously recognised deferred tax assets(f)
Amounts under/(over) provided in prior years
Other items(g)
Total taxation charge(a)
Note
17
2021
US$m
8,144
114
8,258
2020
US$m
5,169
(178)
4,991
2019
US$m
4,436
(289)
4,147
2021
US$m
30,833
(1,042)
—
29,791
2020
US$m
15,391
(652)
339
15,078
2019
US$m
11,119
(301)
—
10,818
5,660
2,693
110
(21)
—
(126)
84
(64)
—
—
(52)
(212)
—
63
123
8,258
2,865
1,779
(80)
44
—
260
(24)
—
—
—
(34)
(182)
173
9
181
4,991
2,055
1,495
(110)
340
55
(22)
—
—
38
1
(57)
—
42
83
227
4,147
(a)
(b)
(c)
(d)
(e)
(f)
(g)
This tax reconciliation relates to the Group's parent companies, subsidiaries and joint operations, and excludes equity accounted units. The Group's share of profit of equity accounted units
is net of tax charges of US$659 million (2020: US$363 million; 2019: US$190 million). Impairment after tax of investments in equity accounted units is net of tax credits of US$nil (2020:
US$29 million; 2019: US$nil).
As a UK headquartered and listed Group, the reconciliation of expected tax on accounting profit to tax charge uses the UK corporation tax rate to calculate the prima facie tax payable. Rio
Tinto is also listed in Australia, and the reconciliation includes the impact of the higher tax rate in Australia where a significant proportion of the Group's profits are currently earned. The
impact of other tax rates applicable outside the UK and Australia is also included. The weighted average statutory corporation tax rate on profit before tax is approximately 29% (2020: 30%
2019: 31%).
The impact for each item includes the effect of tax rates applicable outside the UK.
The tax impact of impairments relates to a tax rate differential between the Canadian and UK rates on the Kitimat impairment. In the comparative period to 31 December 2020 the tax
impact of impairments includes the write-down of deferred tax assets at ISAL and NZAS and non-recognition of deferred tax on those impairments. The tax impact also includes recognition
at local tax rates of deferred tax assets arising on the impairments of Bell Bay, Gladstone Power Station and Diavik. In the comparative period to 31 December 2019, the tax impact of
impairment includes the write down of deferred tax assets in respect of prior year tax losses in Mongolia and recognition of deferred tax on impaired assets. Refer to note 6.
The recognition of previously unrecognised deferred tax assets relates to the recognition of prior year deferred tax assets at Oyu Tolgoi and in our Australian Aluminium business due to
improved deferred tax asset recovery expectations. In the comparative period to 31 December 2020 the recognition of previously unrecognised deferred tax assets relates to the
recognition of prior year deferred tax assets on losses and on impaired assets at Oyu Tolgoi due to improved deferred tax asset recovery expectations.
In the comparative period to 31 December 2020 the write down of previously recognised deferred tax assets relates primarily to the partial de-recognition of deferred tax assets in our
Australian Aluminium business.
Other items include non-deductible costs and withholding taxes, and various adjustments to provisions for taxation, the most significant of which relate to transfer pricing matters,
including issues under discussion with the Australian Tax Office.
Tax on fair value movements:
– Cash flow hedge fair value gains
Tax (charge)/credit on re-measurement gains/(losses) on pension and post-retirement healthcare plans
Tax relating to components of other comprehensive income/(loss) for the year(a)
2021
US$m
62
(305)
(243)
2020
US$m
3
112
115
2019
US$m
(6)
83
77
(a)
This comprises a deferred tax charge of US$243 million (2020: credit of US$115 million; 2019: credit of US$77 million) and a current tax charge of US$nil (2020: US$nil; 2019: US$nil), see
note 17.
Future tax developments
We are closely monitoring the Organisation for Economic Co-operation and Development’s Two Pillar Solution to Address the Tax Challenges
Arising from the Digitalisation of the Economy, which are expected to be enacted in 2022 with application from 1 January 2023. The accounting
implications under IAS12 will be determined when the relevant legislation is available.
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Financial statements continued
Notes to the 2021 financial statements
10 Earnings per ordinary share
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
2021
Weighted
average
number of
shares
(millions)
1,618.4
1,628.9
2021
Per share
amount
(cents)
1,303.4
1,295.0
2021
Earnings
US$m
21,094
21,094
2020
Weighted
average
number of
shares
(millions)
1,617.4
1,628.6
2019
Weighted
average
number of
shares
(millions)
1,630.1
1,642.1
2020
Earnings
US$m
9,769
9,769
2019
Earnings
US$m
8,010
8,010
2020
Per share
amount
(cents)
604.0
599.8
2019
Per share
amount
(cents)
491.4
487.8
(a)
(b)
The weighted average number of shares is calculated as the average number of Rio Tinto plc shares outstanding not held as treasury shares of 1,247.4 million (2020: 1,246.5 million; 2019:
1,259.4 million) plus the average number of Rio Tinto Limited shares outstanding of 371.0 million (2020: 370.9 million; 2019: 370.7 million) over the relevant period. There were no cross
holdings of shares between Rio Tinto Limited and Rio Tinto plc at 31 December 2021 (31 December 2020: nil).
For the purposes of calculating diluted earnings per share, the effect of dilutive securities of 10.5 million shares in 2021 (2020: 11.2 million; 2019: 12.0 million) is added to the weighted
average number of shares described in (a) above. This effect is calculated under the treasury stock method, in accordance with IAS 33 “Earnings per Share”. The Group’s only potential
dilutive ordinary shares are share awards for which terms and conditions are described in note 41.
11 Dividends
Rio Tinto plc previous year final dividend payable
Rio Tinto plc previous year special dividend payable
Rio Tinto plc interim dividend payable
Rio Tinto plc interim special dividend payable
Rio Tinto Limited previous year final dividend payable
Rio Tinto Limited previous year special dividend payable
Rio Tinto Limited interim dividend payable
Rio Tinto Limited interim special dividend payable
Dividends payable during the year
Amount of unclaimed dividends during the year
Dividends paid during the year
Dividends per share: Ordinary - paid during the year
Dividends per share: Special - paid during the year
Ordinary dividends per share: proposed in the announcement of the results for the year
Special dividends per share: proposed in the announcement of the results for the year
Rio Tinto plc previous year final (pence)
Rio Tinto plc previous year special (pence)
Rio Tinto plc interim (pence)
Rio Tinto plc interim special (pence)
Rio Tinto Limited previous year final – fully franked at 30% (Australian cents)
Rio Tinto Limited previous year special – fully franked at 30% (Australian cents)
Rio Tinto Limited interim – fully franked at 30% (Australian cents)
Rio Tinto Limited interim special – fully franked at 30% (Australian cents)
Rio Tinto plc previous year final and special when paid
Rio Tinto plc interim final and special when paid
Rio Tinto Limited previous year final and special when paid
Rio Tinto Limited interim and special when paid
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2021
US$m
3,809
1,146
4,627
2,276
1,138
343
1,372
674
15,385
(28)
15,357
685.0 c
278.0 c
417.0 c
62.0 c
Dividends
per share
2021
221.86 p
66.77 p
270.84 p
133.26 p
397.48 c
119.63 c
509.42 c
250.64 c
Number of
shares
2021
(millions)
1,247.6
1,247.8
371.2
371.2
2020
US$m
2,783
—
1,937
—
857
—
555
—
6,132
—
6,132
386.0 c
—
309.0 c
93.0 c
Dividends
per share
2020
177.47 p
—
119.74 p
—
349.74 c
—
216.47 c
—
Number of
shares
2020
(millions)
1,246.4
1,246.5
371.2
371.2
2019
US$m
2,245
3,032
1,930
780
666
900
556
225
10,334
—
10,334
331.0 c
304.0 c
231.0 c
—
Dividends
per share
2019
135.96 p
183.55 p
123.32 p
49.82 p
250.89 c
338.70 c
219.08 c
88.50 c
Number of
shares
2019
(millions)
1,265.0
1,256.4
371.2
371.2
Financial statements continued
Financial statements
Notes to the 2021 financial statements
10 Earnings per ordinary share
10 Earnings per ordinary share
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
2021
2021
Weighted
Weighted
average
average
number of
number of
shares
shares
(millions)
(millions)
1,618.4
1,618.4
1,628.9
1,628.9
2021
2021
Per share
Per share
amount
amount
(cents)
(cents)
1,303.4
1,303.4
1,295.0
1,295.0
2021
2021
Earnings
Earnings
US$m
US$m
21,094
21,094
21,094
21,094
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Basic earnings per share attributable to ordinary shareholders of Rio Tinto(a)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
Diluted earnings per share attributable to ordinary shareholders of Rio Tinto(b)
(a)
(a)
The weighted average number of shares is calculated as the average number of Rio Tinto plc shares outstanding not held as treasury shares of 1,247.4 million (2020: 1,246.5 million; 2019:
The weighted average number of shares is calculated as the average number of Rio Tinto plc shares outstanding not held as treasury shares of 1,247.4 million (2020: 1,246.5 million; 2019:
1,259.4 million) plus the average number of Rio Tinto Limited shares outstanding of 371.0 million (2020: 370.9 million; 2019: 370.7 million) over the relevant period. There were no cross
1,259.4 million) plus the average number of Rio Tinto Limited shares outstanding of 371.0 million (2020: 370.9 million; 2019: 370.7 million) over the relevant period. There were no cross
holdings of shares between Rio Tinto Limited and Rio Tinto plc at 31 December 2021 (31 December 2020: nil).
holdings of shares between Rio Tinto Limited and Rio Tinto plc at 31 December 2021 (31 December 2020: nil).
(b)
(b)
For the purposes of calculating diluted earnings per share, the effect of dilutive securities of 10.5 million shares in 2021 (2020: 11.2 million; 2019: 12.0 million) is added to the weighted
For the purposes of calculating diluted earnings per share, the effect of dilutive securities of 10.5 million shares in 2021 (2020: 11.2 million; 2019: 12.0 million) is added to the weighted
average number of shares described in (a) above. This effect is calculated under the treasury stock method, in accordance with IAS 33 “Earnings per Share”. The Group’s only potential
average number of shares described in (a) above. This effect is calculated under the treasury stock method, in accordance with IAS 33 “Earnings per Share”. The Group’s only potential
dilutive ordinary shares are share awards for which terms and conditions are described in note 41.
dilutive ordinary shares are share awards for which terms and conditions are described in note 41.
11 Dividends
11 Dividends
Rio Tinto plc previous year final dividend payable
Rio Tinto plc previous year final dividend payable
Rio Tinto plc previous year special dividend payable
Rio Tinto plc previous year special dividend payable
Rio Tinto plc interim dividend payable
Rio Tinto plc interim dividend payable
Rio Tinto plc interim special dividend payable
Rio Tinto plc interim special dividend payable
Rio Tinto Limited previous year final dividend payable
Rio Tinto Limited previous year final dividend payable
Rio Tinto Limited previous year special dividend payable
Rio Tinto Limited previous year special dividend payable
Rio Tinto Limited interim dividend payable
Rio Tinto Limited interim dividend payable
Rio Tinto Limited interim special dividend payable
Rio Tinto Limited interim special dividend payable
Dividends payable during the year
Dividends payable during the year
Amount of unclaimed dividends during the year
Amount of unclaimed dividends during the year
Dividends paid during the year
Dividends paid during the year
Dividends per share: Ordinary - paid during the year
Dividends per share: Ordinary - paid during the year
Dividends per share: Special - paid during the year
Dividends per share: Special - paid during the year
Ordinary dividends per share: proposed in the announcement of the results for the year
Ordinary dividends per share: proposed in the announcement of the results for the year
Special dividends per share: proposed in the announcement of the results for the year
Special dividends per share: proposed in the announcement of the results for the year
Rio Tinto plc previous year final (pence)
Rio Tinto plc previous year final (pence)
Rio Tinto plc previous year special (pence)
Rio Tinto plc previous year special (pence)
Rio Tinto plc interim (pence)
Rio Tinto plc interim (pence)
Rio Tinto plc interim special (pence)
Rio Tinto plc interim special (pence)
Rio Tinto Limited previous year final – fully franked at 30% (Australian cents)
Rio Tinto Limited previous year final – fully franked at 30% (Australian cents)
Rio Tinto Limited previous year special – fully franked at 30% (Australian cents)
Rio Tinto Limited previous year special – fully franked at 30% (Australian cents)
Rio Tinto Limited interim – fully franked at 30% (Australian cents)
Rio Tinto Limited interim – fully franked at 30% (Australian cents)
Rio Tinto Limited interim special – fully franked at 30% (Australian cents)
Rio Tinto Limited interim special – fully franked at 30% (Australian cents)
Rio Tinto plc previous year final and special when paid
Rio Tinto plc previous year final and special when paid
Rio Tinto plc interim final and special when paid
Rio Tinto plc interim final and special when paid
Rio Tinto Limited previous year final and special when paid
Rio Tinto Limited previous year final and special when paid
Rio Tinto Limited interim and special when paid
Rio Tinto Limited interim and special when paid
2020
2020
Weighted
Weighted
average
average
number of
number of
shares
shares
(millions)
(millions)
1,617.4
1,617.4
1,628.6
1,628.6
2019
2019
Weighted
Weighted
average
average
number of
number of
shares
shares
(millions)
(millions)
1,630.1
1,630.1
1,642.1
1,642.1
2020
2020
Earnings
Earnings
US$m
US$m
9,769
9,769
9,769
9,769
2019
2019
Earnings
Earnings
US$m
US$m
8,010
8,010
8,010
8,010
2021
2021
US$m
US$m
3,809
3,809
1,146
1,146
4,627
4,627
2,276
2,276
1,138
1,138
343
343
1,372
1,372
674
674
15,385
15,385
(28)
(28)
15,357
15,357
2020
2020
US$m
US$m
2,783
2,783
—
—
1,937
1,937
—
—
857
857
—
—
555
555
—
—
6,132
6,132
—
—
6,132
6,132
685.0 c
685.0 c
278.0 c
278.0 c
417.0 c
417.0 c
62.0 c
62.0 c
386.0 c
386.0 c
—
—
309.0 c
309.0 c
93.0 c
93.0 c
Dividends
Dividends
per share
per share
2021
2021
Dividends
Dividends
per share
per share
2020
2020
221.86 p
221.86 p
177.47 p
177.47 p
270.84 p
270.84 p
119.74 p
119.74 p
397.48 c
397.48 c
349.74 c
349.74 c
66.77 p
66.77 p
133.26 p
133.26 p
119.63 c
119.63 c
250.64 c
250.64 c
—
—
—
—
—
—
—
—
509.42 c
509.42 c
216.47 c
216.47 c
2020
2020
Per share
Per share
amount
amount
(cents)
(cents)
604.0
604.0
599.8
599.8
2019
2019
Per share
Per share
amount
amount
(cents)
(cents)
491.4
491.4
487.8
487.8
2019
2019
US$m
US$m
2,245
2,245
3,032
3,032
1,930
1,930
780
780
666
666
900
900
556
556
225
225
10,334
10,334
—
—
10,334
10,334
331.0 c
331.0 c
304.0 c
304.0 c
231.0 c
231.0 c
—
—
Dividends
Dividends
per share
per share
2019
2019
135.96 p
135.96 p
183.55 p
183.55 p
123.32 p
123.32 p
49.82 p
49.82 p
250.89 c
250.89 c
338.70 c
338.70 c
219.08 c
219.08 c
88.50 c
88.50 c
Number of
Number of
Number of
Number of
Number of
Number of
shares
shares
2021
2021
shares
shares
2020
2020
shares
shares
2019
2019
(millions)
(millions)
(millions)
(millions)
(millions)
(millions)
1,247.6
1,247.6
1,247.8
1,247.8
371.2
371.2
371.2
371.2
1,246.4
1,246.4
1,246.5
1,246.5
371.2
371.2
371.2
371.2
1,265.0
1,265.0
1,256.4
1,256.4
371.2
371.2
371.2
371.2
The dividends paid in 2021 are based on the following US cents per share amounts: 2020 final – 309.0 cents, 2020 final special - 93.0 cents, 2021
interim – 376.0 cents, 2021 interim special - 185.0 cents (2020 dividends paid: 2019 final – 231.0 cents, 2020 interim – 155.0 cents; 2019
dividends paid: 2018 final – 180.0 cents, 2018 final special - 243.0 cents, 2019 interim – 151.0 cents; 2019 interim special - 61.0 cents).
The number of shares on which Rio Tinto plc dividends are based, excludes those held as treasury shares and those held by employee share trusts
which waived the right to dividends. Employee share trusts waived dividends on 101,752 Rio Tinto plc ordinary shares and 27,873 American
Depository Receipts (ADRs) for the 2020 final dividend and on 91,008 Rio Tinto plc ordinary shares and 27,501 ADRs for the 2021 interim dividend
(2020: on 258,779 Rio Tinto plc ordinary shares and 28,743 ADRs for the 2019 final dividend and on 171,213 Rio Tinto plc ordinary shares and
29,634 ADRs for the 2020 interim dividend; 2019: on 852,283 Rio Tinto plc ordinary shares and 37,678 ADRs for the 2018 final dividend and on
564,099 Rio Tinto plc ordinary shares and 47,674 ADRs for the 2019 interim dividend). In 2021, 2020 and 2019, no Rio Tinto Limited shares were
held by Rio Tinto plc.
The number of shares on which Rio Tinto Limited dividends are based, excludes those held by shareholders who have waived the rights to
dividends. Employee share trusts waived dividends on 45,250 Rio Tinto Limited ordinary shares for the 2020 final dividend and on 33,531 shares
for the 2021 interim dividend (2020: on 98,065 shares for the 2019 final dividend and 84,377 shares for the 2020 interim dividend; 2019: on
628,566 shares for the 2018 final dividend and 342,062 shares for the 2019 interim dividend).
In addition, the directors of Rio Tinto announced a final dividend of 417.0 cents per share and a special dividend of 62.0 cents per share on 23
February 2022. This is expected to result in payments of US$7.7 billion. The dividend will be paid on 21 April 2022 to Rio Tinto plc and Rio Tinto
Limited shareholders on the register at the close of business on 11 March 2022.
The proposed Rio Tinto Limited dividends will be franked out of existing franking credits or out of franking credits arising from the payment of
income tax during 2022.
The approximate amount of the Rio Tinto Limited consolidated tax group’s retained profits and reserves that could be distributed as dividends and
franked out of available credits that arose from net payments of income tax in respect of periods up to 31 December 2021 (after deducting
franking credits expected to be utilised on the 2021 final and special dividends declared) is US$11,006 million (2020: US$11,014 million; 2019:
US$8,599 million).
12 Goodwill
Net book value
At 1 January
Adjustment on currency translation
At 31 December
– cost
– accumulated impairment
At 1 January
– cost
– accumulated impairment
At 31 December, goodwill has been allocated as follows:
Net book value
Richards Bay Minerals
Pilbara
Dampier Salt
Impairment tests for goodwill
Richards Bay Minerals
2021
US$m
2020
US$m
946
(67)
879
16,987
(16,108)
922
24
946
17,341
(16,395)
17,341
(16,395)
16,926
(16,004)
2021
US$m
2020
US$m
428
362
89
879
468
383
95
946
Richards Bay Minerals’ annual impairment review resulted in no impairment charge for 2021 (2020: no impairment charge). The recoverable
amount has been assessed by reference to FVLCD, in line with the policy set out in note 1(i) and classified as level 3 under the fair value hierarchy.
FVLCD was determined by estimating cash flows until the end of the life-of-mine plan including anticipated expansions. In arriving at FVLCD, a
post-tax discount rate of 8.6% (2020: 8.6%) has been applied to the post-tax cash flows expressed in real terms.
The key assumptions to which the calculation of FVLCD for Richards Bay Minerals is most sensitive and the corresponding decrease in FVLCD are
set out below:
5% decrease in the titanium slag price
1% increase in the discount rate applied to post-tax cash flows
10% strengthening of the South African rand
US$m
207
160
380
248
248
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Financial statements continued
Notes to the 2021 financial statements
12 Goodwill continued
Other assumptions include the long-term pig iron and zircon prices and operating costs. Future selling prices and operating costs have been
estimated in line with the policy set out in note 1(i). The recoverable amount of the cash-generating unit (CGU) exceeds the carrying value
when each of these sensitivities are applied whilst keeping all other assumptions constant.
Pilbara
The annual impairment review of the Pilbara CGU has been assessed by reference to FVLCD using discounted cash flows, which is in line
with the policy set out in note 1(i) and is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, a post-tax discount rate
of 6.6% (2020: 6.6%) has been applied to the post-tax cash flows expressed in real terms. The recoverable amount was determined to be
significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the
remaining goodwill to be impaired.
13 Intangible assets
Year ended 31 December 2021
Net book value
At 1 January 2021
Adjustment on currency translation
Expenditure during the year
Amortisation for the year(c)
Disposals, transfers and other movements
At 31 December 2021
– cost
– accumulated amortisation and impairment
Year ended 31 December 2020
Net book value
At 1 January 2020
Adjustment on currency translation
Expenditure during the year
Amortisation for the year(c)
Impairment charges
Disposals, transfers and other movements
At 31 December 2020
– cost
– accumulated amortisation and impairment
Exploration
and
evaluation(a)
US$m
Trademarks,
patented and
non-patented
technology
US$m
Contract
based
intangible
assets(b)
US$m
Other
intangible
assets
US$m
271
(14)
110
—
(4)
363
2,513
(2,150)
33
(2)
5
(14)
—
22
220
(198)
1,994
(11)
—
(10)
35
2,008
3,089
(1,081)
457
(21)
110
(154)
47
439
1,725
(1,286)
Exploration
and
evaluation(a)
US$m
Trademarks,
patented and
non-patented
technology
US$m
Contract
based
intangible
assets(b)
US$m
Other
intangible
assets
US$m
173
17
87
—
—
(6)
271
2,415
(2,144)
44
3
—
(14)
—
—
33
232
(199)
1,947
56
—
(8)
—
(1)
1,994
3,070
(1,076)
473
35
69
(139)
(4)
23
457
1,710
(1,253)
Total
US$m
2,755
(48)
225
(178)
78
2,832
7,547
(4,715)
Total
US$m
2,637
111
156
(161)
(4)
16
2,755
7,427
(4,672)
At 31 December 2021, a total of US$272 million of capitalised exploration and evaluation spend within intangible assets relates to brownfield
expansion of existing sites (31 December 2020: US$180 million).
(a) Exploration and evaluation assets’ useful economic lives are not determined until transferred to property, plant and equipment.
(b) The Group benefits from certain intangible assets acquired with Alcan, including power supply contracts, customer contracts and water rights. The water rights are expected to contribute to
the efficiency and cost effectiveness of operations for the foreseeable future; accordingly, these rights are considered to have indefinite lives and are not subject to amortisation but are
tested annually for impairment. These water rights constitute the majority of the amounts in “Contract based intangible assets”.
The remaining carrying value of the water rights of US$1,796 million as at 31 December 2021 (31 December 2020: US$1,798 million) relates wholly to the Quebec smelters cash-generating
unit (CGU). The Quebec smelters CGU was tested for impairment by reference to FVLCD using discounted cash flows, which is in line with the policy set out in note 1(i). The recoverable
amount of the Quebec smelters is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, post-tax cash flows expressed in real terms have been estimated over the expected
useful economic lives of the underlying smelting assets and discounted using a real post-tax discount rate of 6.6% (2020: 6.6%).
The recoverable amounts were determined to be significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the remaining
water rights to be impaired.
Finite life intangible assets are amortised over their useful economic lives on a straight line or units of production basis, as appropriate. Where amortisation is calculated on a straight line
basis, the following useful lives have been determined:
Trademarks, patented and non-patented technology:
(c)
– Trademarks: 14 to 20 years
– Patented and non-patented technology: ten to 20 years
Contract-based intangible assets:
– Power contracts/water rights: two to 45 years
– Other purchase and customer contracts: five to 15 years
Other intangible assets:
– Internally generated intangible assets and computer software: two to five years
– Other intangible assets: two to 20 years
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Financial statements continued
Financial statements
Exploration and evaluation expenditure
The charge for the year and the net amount of intangible assets capitalised during the year are as follows:
Net expenditure in the year (net of cash proceeds of US$7 million (2020: US$1 million; 2019: US$10 million) on disposal
of undeveloped projects)
Non-cash movements and non-cash proceeds on disposal of undeveloped projects
Amount capitalised during the year
Net charge for the year
Reconciliation to income statement:
Exploration and evaluation costs
Profit relating to interests in undeveloped projects
Net charge for the year
14 Property, plant and equipment
Property, plant and equipment comprises owned and leased assets.
Property, plant and equipment – owned
Right of use assets – leased
Net book value
Property, plant and equipment – Owned
2021
US$m
(852)
23
110
(719)
(726)
7
(719)
2020
US$m
(711)
—
87
(624)
(625)
1
(624)
2019
US$m
(671)
—
57
(614)
(624)
10
(614)
2021
US$m
63,793
1,134
64,927
2020
US$m
62,007
875
62,882
Year ended 31 December 2021
Net book value
At 1 January 2021
Adjustment on currency translation(b)
Adjustments to capitalised closure costs
Interest capitalised(c)
Additions
Depreciation for the year(a)(d)
Impairment charges(e)
Disposals
Transfers and other movements(f)
At 31 December 2021
– cost
– accumulated depreciation and impairment
Non-current assets pledged as security(g)
Year ended 31 December 2020
Net book value
At 1 January 2020
Adjustment on currency translation(b)
Adjustments to capitalised closure costs
Interest capitalised(c)
Additions
Depreciation for the year(a)(d)
Impairment charges(e)
Disposals
Transfers and other movements(f)
At 31 December 2020
– cost
– accumulated depreciation and impairment
Non-current assets pledged as security(g)
Mining
properties
and leases(a)
US$m
Land
and
buildings
US$m
Plant
and
equipment
US$m
Capital
works in
progress
US$m
Note
25
8
11,173
(385)
518
—
227
(736)
(2)
(2)
24
10,817
25,114
(14,297)
1,637
Mining
properties
and leases(a)
US$m
Note
25
8
10,402
457
946
—
329
(666)
(327)
(2)
34
11,173
25,052
(13,879)
1,712
6,369
(194)
—
—
70
(390)
(66)
(18)
224
5,995
12,031
(6,036)
457
Land
and
buildings
US$m
6,403
307
—
—
45
(354)
(85)
(13)
66
6,369
12,178
(5,809)
494
32,754
(1,097)
—
—
1,841
(3,061)
(195)
(90)
3,301
33,453
73,415
(39,962)
5,196
Plant
and
equipment
US$m
31,491
1,758
—
—
726
(2,776)
(369)
(64)
1,988
32,754
71,603
(38,849)
5,065
11,711
(259)
—
358
5,337
—
(6)
(7)
(3,606)
13,528
14,661
(1,133)
7,621
Capital
works in
progress
US$m
8,011
366
—
340
5,211
—
(82)
(16)
(2,119)
11,711
12,906
(1,195)
6,974
Total
US$m
62,007
(1,935)
518
358
7,475
(4,187)
(269)
(117)
(57)
63,793
125,221
(61,428)
14,911
Total
US$m
56,307
2,888
946
340
6,311
(3,796)
(863)
(95)
(31)
62,007
121,739
(59,732)
14,245
Notes to the 2021 financial statements
Other assumptions include the long-term pig iron and zircon prices and operating costs. Future selling prices and operating costs have been
Other assumptions include the long-term pig iron and zircon prices and operating costs. Future selling prices and operating costs have been
estimated in line with the policy set out in note 1(i). The recoverable amount of the cash-generating unit (CGU) exceeds the carrying value
estimated in line with the policy set out in note 1(i). The recoverable amount of the cash-generating unit (CGU) exceeds the carrying value
when each of these sensitivities are applied whilst keeping all other assumptions constant.
when each of these sensitivities are applied whilst keeping all other assumptions constant.
The annual impairment review of the Pilbara CGU has been assessed by reference to FVLCD using discounted cash flows, which is in line
The annual impairment review of the Pilbara CGU has been assessed by reference to FVLCD using discounted cash flows, which is in line
with the policy set out in note 1(i) and is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, a post-tax discount rate
with the policy set out in note 1(i) and is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, a post-tax discount rate
of 6.6% (2020: 6.6%) has been applied to the post-tax cash flows expressed in real terms. The recoverable amount was determined to be
of 6.6% (2020: 6.6%) has been applied to the post-tax cash flows expressed in real terms. The recoverable amount was determined to be
significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the
significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the
12 Goodwill continued
12 Goodwill continued
Pilbara
Pilbara
remaining goodwill to be impaired.
remaining goodwill to be impaired.
13 Intangible assets
13 Intangible assets
Year ended 31 December 2021
Year ended 31 December 2021
Net book value
Net book value
At 1 January 2021
At 1 January 2021
Adjustment on currency translation
Adjustment on currency translation
Expenditure during the year
Expenditure during the year
Amortisation for the year(c)
Amortisation for the year(c)
Disposals, transfers and other movements
Disposals, transfers and other movements
At 31 December 2021
At 31 December 2021
– cost
– cost
Year ended 31 December 2020
Year ended 31 December 2020
Net book value
Net book value
At 1 January 2020
At 1 January 2020
Adjustment on currency translation
Adjustment on currency translation
Expenditure during the year
Expenditure during the year
Amortisation for the year(c)
Amortisation for the year(c)
Impairment charges
Impairment charges
Disposals, transfers and other movements
Disposals, transfers and other movements
At 31 December 2020
At 31 December 2020
– cost
– cost
Trademarks,
Trademarks,
Exploration
Exploration
patented and
patented and
and
and
non-patented
non-patented
evaluation(a)
evaluation(a)
technology
technology
US$m
US$m
US$m
US$m
Contract
Contract
based
based
intangible
intangible
assets(b)
assets(b)
US$m
US$m
Other
Other
intangible
intangible
assets
assets
US$m
US$m
Exploration
Exploration
Trademarks,
Trademarks,
patented and
patented and
and
and
non-patented
non-patented
evaluation(a)
evaluation(a)
US$m
US$m
technology
technology
US$m
US$m
271
271
(14)
(14)
110
110
—
—
(4)
(4)
363
363
2,513
2,513
173
173
17
17
87
87
—
—
—
—
(6)
(6)
271
271
2,415
2,415
33
33
(2)
(2)
5
5
(14)
(14)
—
—
22
22
220
220
(14)
(14)
44
44
3
3
—
—
—
—
—
—
33
33
232
232
1,994
1,994
(11)
(11)
—
—
(10)
(10)
35
35
2,008
2,008
3,089
3,089
Contract
Contract
based
based
intangible
intangible
assets(b)
assets(b)
US$m
US$m
1,947
1,947
56
56
—
—
(8)
(8)
—
—
(1)
(1)
1,994
1,994
3,070
3,070
457
457
(21)
(21)
110
110
(154)
(154)
47
47
439
439
1,725
1,725
Other
Other
intangible
intangible
assets
assets
US$m
US$m
473
473
35
35
69
69
(139)
(139)
(4)
(4)
23
23
457
457
1,710
1,710
Total
Total
US$m
US$m
2,755
2,755
(48)
(48)
225
225
(178)
(178)
78
78
2,832
2,832
7,547
7,547
Total
Total
US$m
US$m
2,637
2,637
111
111
156
156
(161)
(161)
(4)
(4)
16
16
2,755
2,755
7,427
7,427
– accumulated amortisation and impairment
– accumulated amortisation and impairment
(2,150)
(2,150)
(198)
(198)
(1,081)
(1,081)
(1,286)
(1,286)
(4,715)
(4,715)
– accumulated amortisation and impairment
– accumulated amortisation and impairment
(2,144)
(2,144)
(199)
(199)
(1,076)
(1,076)
(1,253)
(1,253)
(4,672)
(4,672)
At 31 December 2021, a total of US$272 million of capitalised exploration and evaluation spend within intangible assets relates to brownfield
At 31 December 2021, a total of US$272 million of capitalised exploration and evaluation spend within intangible assets relates to brownfield
expansion of existing sites (31 December 2020: US$180 million).
expansion of existing sites (31 December 2020: US$180 million).
(a) Exploration and evaluation assets’ useful economic lives are not determined until transferred to property, plant and equipment.
(a) Exploration and evaluation assets’ useful economic lives are not determined until transferred to property, plant and equipment.
(b) The Group benefits from certain intangible assets acquired with Alcan, including power supply contracts, customer contracts and water rights. The water rights are expected to contribute to
(b) The Group benefits from certain intangible assets acquired with Alcan, including power supply contracts, customer contracts and water rights. The water rights are expected to contribute to
the efficiency and cost effectiveness of operations for the foreseeable future; accordingly, these rights are considered to have indefinite lives and are not subject to amortisation but are
the efficiency and cost effectiveness of operations for the foreseeable future; accordingly, these rights are considered to have indefinite lives and are not subject to amortisation but are
tested annually for impairment. These water rights constitute the majority of the amounts in “Contract based intangible assets”.
tested annually for impairment. These water rights constitute the majority of the amounts in “Contract based intangible assets”.
The remaining carrying value of the water rights of US$1,796 million as at 31 December 2021 (31 December 2020: US$1,798 million) relates wholly to the Quebec smelters cash-generating
The remaining carrying value of the water rights of US$1,796 million as at 31 December 2021 (31 December 2020: US$1,798 million) relates wholly to the Quebec smelters cash-generating
unit (CGU). The Quebec smelters CGU was tested for impairment by reference to FVLCD using discounted cash flows, which is in line with the policy set out in note 1(i). The recoverable
unit (CGU). The Quebec smelters CGU was tested for impairment by reference to FVLCD using discounted cash flows, which is in line with the policy set out in note 1(i). The recoverable
amount of the Quebec smelters is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, post-tax cash flows expressed in real terms have been estimated over the expected
amount of the Quebec smelters is classified as level 3 under the fair value hierarchy. In arriving at FVLCD, post-tax cash flows expressed in real terms have been estimated over the expected
useful economic lives of the underlying smelting assets and discounted using a real post-tax discount rate of 6.6% (2020: 6.6%).
useful economic lives of the underlying smelting assets and discounted using a real post-tax discount rate of 6.6% (2020: 6.6%).
The recoverable amounts were determined to be significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the remaining
The recoverable amounts were determined to be significantly in excess of carrying value, and there are no reasonably possible changes in key assumptions that would cause the remaining
(c)
(c)
Finite life intangible assets are amortised over their useful economic lives on a straight line or units of production basis, as appropriate. Where amortisation is calculated on a straight line
Finite life intangible assets are amortised over their useful economic lives on a straight line or units of production basis, as appropriate. Where amortisation is calculated on a straight line
water rights to be impaired.
water rights to be impaired.
basis, the following useful lives have been determined:
basis, the following useful lives have been determined:
Trademarks, patented and non-patented technology:
Trademarks, patented and non-patented technology:
– Trademarks: 14 to 20 years
– Trademarks: 14 to 20 years
– Patented and non-patented technology: ten to 20 years
– Patented and non-patented technology: ten to 20 years
Contract-based intangible assets:
Contract-based intangible assets:
– Power contracts/water rights: two to 45 years
– Power contracts/water rights: two to 45 years
– Other purchase and customer contracts: five to 15 years
– Other purchase and customer contracts: five to 15 years
Other intangible assets:
Other intangible assets:
– Internally generated intangible assets and computer software: two to five years
– Internally generated intangible assets and computer software: two to five years
– Other intangible assets: two to 20 years
– Other intangible assets: two to 20 years
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Financial statements continued
Notes to the 2021 financial statements
14 Property, plant and equipment continued
(a) At 31 December 2021, the net book value of capitalised production phase stripping costs totalled US$2,432 million, with US$2,017 million within “Property, plant and equipment” and a
further US$415 million within “Investments in equity accounted units” (2020: total of US$2,398 million, with US$2,019 million in “Property, plant and equipment” and a further US$379
million within “Investments in equity accounted units”). During the year, capitalisation of US$319 million was partly offset by depreciation of US$282 million (including amounts recorded
within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$201 million (2020: US$145 million; 2019: US$139 million) is included within
“Depreciation for the year”.
(b) Adjustment on currency translation represents the impact of exchange differences arising on the translation of the assets of entities with functional currencies other than the US dollar,
(c)
recognised directly in the currency translation reserve. The adjustment in 2021 arose from the weakening of the Australian dollar against the US dollar.
Interest is capitalised at a rate based on the Group or relevant subsidiary’s cost of borrowing or at the rate on project specific debt, where applicable. The Group’s average borrowing rate
used for capitalisation of interest is 3.40% (2020: 4.20%).
(d) Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on
a straight line basis as follows:
Land and buildings:
– Land: not depreciated
– Buildings: five to 50 years
Plant and equipment:
– Other plant and equipment: three to 50 years
– Power assets: refer to the table below
Capital work in progress: not depreciated
(e) During 2021, the impairment charge related to our Aluminium smelter at Kitimat, Canada. In 2020, impairment charges related to Pacific Aluminium smelters, the ISAL smelter in Iceland
and our interest in the Diavik diamond mine (see note 6).
“Transfers and other movements” includes reclassifications between categories.
(f)
(g) Excludes assets held under capitalised lease arrangements. Non-current assets pledged as security represent amounts pledged as collateral against US$4,403 million (2020: US$4,518
million) of loans, which are included in note 21.
Useful economic lives of power generation assets
The group has committed to reducing scope 1 and 2 carbon emissions by 50% relative to our 2018 baseline by 2030 and achieving net zero
emissions across our operations by 2050. Transitioning electricity from principally fossil fuel based power generating assets to principally
renewables is critical to achieving that goal. The carrying value of power generating assets is set out in the table below. The weighted average
remaining useful economic life of plant and equipment for fossil fuel based power generating assets is 14 years (2020:16 years). Given the
technical limitations of intermittent renewable energy generation and energy storage systems, and our need for reliable baseload electricity, we
expect our current generation assets will be required as an integral part of the total portfolio of generation assets for the foreseeable future. We
are investing in research and development and evaluating new market options that can overcome these technical challenges. Should pathways for
eliminating fossil fuel power generating assets be identified we may need to accelerate depreciation.
Net book value
Fossil fuels
Renewables
Right-of-use assets – Leased
Net book value
31 December 2021
31 December 2020
Additions for the year
31 December 2021
31 December 2020
Depreciation for the year (included within operating costs)
31 December 2021
31 December 2020
Impairment charges(a)
31 December 2021
31 December 2020
2021
2020
Land
and
buildings
US$m
26
195
Plant
and
equipment
US$m
952
1,541
Land
and
buildings
US$m
28
202
Plant
and
equipment
US$m
1,048
1,588
Land
and
buildings
US$m
Plant
and
equipment
US$m
549
475
135
30
585
400
407
75
Total
US$m
1,134
875
542
105
(81)
(93)
(251)
(229)
(332)
(322)
—
(6)
—
(31)
—
(37)
(a)
Impairment charges in 2020 relate to Pacific Aluminium smelters, the ISAL smelter in Iceland and our interest in the Diavik diamond mine (see note 6).
The leased assets of the Group comprise land and buildings (mainly office buildings) and plant and equipment, the majority of which are marine
vessels. Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. Right of use assets are depreciated
on a straight line basis over the life of the lease, taking into account any extensions that are likely to be enacted.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
14 Property, plant and equipment continued
14 Property, plant and equipment continued
(a) At 31 December 2021, the net book value of capitalised production phase stripping costs totalled US$2,432 million, with US$2,017 million within “Property, plant and equipment” and a
(a) At 31 December 2021, the net book value of capitalised production phase stripping costs totalled US$2,432 million, with US$2,017 million within “Property, plant and equipment” and a
further US$415 million within “Investments in equity accounted units” (2020: total of US$2,398 million, with US$2,019 million in “Property, plant and equipment” and a further US$379
further US$415 million within “Investments in equity accounted units” (2020: total of US$2,398 million, with US$2,019 million in “Property, plant and equipment” and a further US$379
million within “Investments in equity accounted units”). During the year, capitalisation of US$319 million was partly offset by depreciation of US$282 million (including amounts recorded
million within “Investments in equity accounted units”). During the year, capitalisation of US$319 million was partly offset by depreciation of US$282 million (including amounts recorded
within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$201 million (2020: US$145 million; 2019: US$139 million) is included within
within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$201 million (2020: US$145 million; 2019: US$139 million) is included within
“Depreciation for the year”.
“Depreciation for the year”.
(b) Adjustment on currency translation represents the impact of exchange differences arising on the translation of the assets of entities with functional currencies other than the US dollar,
(b) Adjustment on currency translation represents the impact of exchange differences arising on the translation of the assets of entities with functional currencies other than the US dollar,
recognised directly in the currency translation reserve. The adjustment in 2021 arose from the weakening of the Australian dollar against the US dollar.
recognised directly in the currency translation reserve. The adjustment in 2021 arose from the weakening of the Australian dollar against the US dollar.
(c)
(c)
Interest is capitalised at a rate based on the Group or relevant subsidiary’s cost of borrowing or at the rate on project specific debt, where applicable. The Group’s average borrowing rate
Interest is capitalised at a rate based on the Group or relevant subsidiary’s cost of borrowing or at the rate on project specific debt, where applicable. The Group’s average borrowing rate
(d) Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on
(d) Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on
used for capitalisation of interest is 3.40% (2020: 4.20%).
used for capitalisation of interest is 3.40% (2020: 4.20%).
a straight line basis as follows:
a straight line basis as follows:
Land and buildings:
Land and buildings:
– Land: not depreciated
– Land: not depreciated
– Buildings: five to 50 years
– Buildings: five to 50 years
Plant and equipment:
Plant and equipment:
– Other plant and equipment: three to 50 years
– Other plant and equipment: three to 50 years
– Power assets: refer to the table below
– Power assets: refer to the table below
Capital work in progress: not depreciated
Capital work in progress: not depreciated
and our interest in the Diavik diamond mine (see note 6).
and our interest in the Diavik diamond mine (see note 6).
(f)
(f)
“Transfers and other movements” includes reclassifications between categories.
“Transfers and other movements” includes reclassifications between categories.
million) of loans, which are included in note 21.
million) of loans, which are included in note 21.
Useful economic lives of power generation assets
Useful economic lives of power generation assets
(e) During 2021, the impairment charge related to our Aluminium smelter at Kitimat, Canada. In 2020, impairment charges related to Pacific Aluminium smelters, the ISAL smelter in Iceland
(e) During 2021, the impairment charge related to our Aluminium smelter at Kitimat, Canada. In 2020, impairment charges related to Pacific Aluminium smelters, the ISAL smelter in Iceland
(g) Excludes assets held under capitalised lease arrangements. Non-current assets pledged as security represent amounts pledged as collateral against US$4,403 million (2020: US$4,518
(g) Excludes assets held under capitalised lease arrangements. Non-current assets pledged as security represent amounts pledged as collateral against US$4,403 million (2020: US$4,518
The group has committed to reducing scope 1 and 2 carbon emissions by 50% relative to our 2018 baseline by 2030 and achieving net zero
The group has committed to reducing scope 1 and 2 carbon emissions by 50% relative to our 2018 baseline by 2030 and achieving net zero
emissions across our operations by 2050. Transitioning electricity from principally fossil fuel based power generating assets to principally
emissions across our operations by 2050. Transitioning electricity from principally fossil fuel based power generating assets to principally
renewables is critical to achieving that goal. The carrying value of power generating assets is set out in the table below. The weighted average
renewables is critical to achieving that goal. The carrying value of power generating assets is set out in the table below. The weighted average
remaining useful economic life of plant and equipment for fossil fuel based power generating assets is 14 years (2020:16 years). Given the
remaining useful economic life of plant and equipment for fossil fuel based power generating assets is 14 years (2020:16 years). Given the
technical limitations of intermittent renewable energy generation and energy storage systems, and our need for reliable baseload electricity, we
technical limitations of intermittent renewable energy generation and energy storage systems, and our need for reliable baseload electricity, we
expect our current generation assets will be required as an integral part of the total portfolio of generation assets for the foreseeable future. We
expect our current generation assets will be required as an integral part of the total portfolio of generation assets for the foreseeable future. We
are investing in research and development and evaluating new market options that can overcome these technical challenges. Should pathways for
are investing in research and development and evaluating new market options that can overcome these technical challenges. Should pathways for
eliminating fossil fuel power generating assets be identified we may need to accelerate depreciation.
eliminating fossil fuel power generating assets be identified we may need to accelerate depreciation.
Net book value
Net book value
Fossil fuels
Fossil fuels
Renewables
Renewables
Right-of-use assets – Leased
Right-of-use assets – Leased
Net book value
Net book value
31 December 2021
31 December 2021
31 December 2020
31 December 2020
Additions for the year
Additions for the year
31 December 2021
31 December 2021
31 December 2020
31 December 2020
31 December 2021
31 December 2021
31 December 2020
31 December 2020
Impairment charges(a)
Impairment charges(a)
31 December 2021
31 December 2021
31 December 2020
31 December 2020
Depreciation for the year (included within operating costs)
Depreciation for the year (included within operating costs)
2021
2021
2020
2020
Land
Land
and
and
buildings
buildings
US$m
US$m
26
26
195
195
Plant
Plant
and
and
equipment
equipment
US$m
US$m
952
952
1,541
1,541
Land
Land
and
and
buildings
buildings
US$m
US$m
28
28
202
202
Plant
Plant
and
and
equipment
equipment
US$m
US$m
1,048
1,048
1,588
1,588
Land
Land
and
and
buildings
buildings
US$m
US$m
Plant
Plant
and
and
equipment
equipment
US$m
US$m
549
549
475
475
135
135
30
30
585
585
400
400
407
407
75
75
Total
Total
US$m
US$m
1,134
1,134
875
875
542
542
105
105
(81)
(81)
(93)
(93)
(251)
(251)
(229)
(229)
(332)
(332)
(322)
(322)
—
—
(6)
(6)
—
—
(31)
(31)
—
—
(37)
(37)
(a)
(a)
Impairment charges in 2020 relate to Pacific Aluminium smelters, the ISAL smelter in Iceland and our interest in the Diavik diamond mine (see note 6).
Impairment charges in 2020 relate to Pacific Aluminium smelters, the ISAL smelter in Iceland and our interest in the Diavik diamond mine (see note 6).
The leased assets of the Group comprise land and buildings (mainly office buildings) and plant and equipment, the majority of which are marine
The leased assets of the Group comprise land and buildings (mainly office buildings) and plant and equipment, the majority of which are marine
vessels. Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. Right of use assets are depreciated
vessels. Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. Right of use assets are depreciated
on a straight line basis over the life of the lease, taking into account any extensions that are likely to be enacted.
on a straight line basis over the life of the lease, taking into account any extensions that are likely to be enacted.
15 Investments in equity accounted units
Summary balance sheet (Rio Tinto share)
Rio Tinto's share of assets
– Non-current assets
– Current assets
Rio Tinto's share of liabilities
– Current liabilities
– Non-current liabilities
Rio Tinto's share of net assets
2021
US$m
5,139
1,063
6,202
(788)
(1,910)
(2,698)
3,504
2020
US$m
5,307
1,077
6,384
(785)
(1,835)
(2,620)
3,764
Further details of investments in equity accounted units are set out in notes 34 and 35.
At 31 December 2021 and 2020, the Group had no investments in equity accounted units with shares listed on recognised stock exchanges.
At 31 December 2021, net debt of equity accounted units, excluding amounts due to Rio Tinto, was US$978 million (2020: US$931 million).
16 Inventories
Raw materials and purchased components
Consumable stores
Work in progress
Finished goods and goods for resale
Total inventories
Comprising:
Expected to be used within one year
Expected to be used after more than one year
Total inventories
2021
US$m
870
1,142
1,736
1,884
5,632
5,436
196
5,632
2020
US$m
640
1,050
1,288
1,113
4,091
3,917
174
4,091
During 2021, the Group recognised a net inventory write back of US$7 million (2020:US$15 million write back.) This comprised inventory write-
offs of US$18 million (2020: US$35 million) offset by write-back of previously written down inventory due to an increase in realisable values
amounting to US$25 million (2020: US$50 million).
At 31 December 2021, US$754 million (2020: US$621 million) of inventories were pledged as security for liabilities.
17 Deferred taxation
At 1 January – deferred tax asset/(liability)
Adjustment on currency translation
(Charged)/credited to the income statement
(Charged)/credited to statement of comprehensive income(a)
Other movements(b)
At 31 December – deferred tax (liability)/asset
Comprising:
– deferred tax assets(c)(d)
– deferred tax liabilities(e)
2021
US$m
146
61
(114)
(243)
22
(128)
2020
US$m
(118)
(43)
178
115
14
146
3,375
(3,503)
3,385
(3,239)
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Financial statements continued
Notes to the 2021 financial statements
17 Deferred taxation continued
Deferred tax balances for which there is a right of offset within the same tax jurisdiction are presented net on the face of the balance sheet as
permitted by IAS 12. The closing deferred tax assets and liabilities, prior to this offsetting of balances, are shown below.
Analysis of deferred tax
Deferred tax assets arising from:
Tax losses(c)
Provisions
Capital allowances
Post-retirement benefits
Unrealised exchange losses
Other temporary differences
Total
Deferred tax liabilities arising from:
Capital allowances
Unremitted earnings(e)
Capitalised interest
Post-retirement benefits
Unrealised exchange gains
Other temporary differences
Total
(Charged)/credited to the income statement
Unrealised exchange losses
Tax losses
Provisions
Capital allowances
Tax on unremitted earnings
Post-retirement benefits
Other temporary differences
Total
Total
2021
US$m
1,492
2,165
784
521
188
1,356
6,506
(5,019)
(366)
(342)
(327)
(3)
(577)
(6,634)
—
(375)
216
(42)
(1)
21
67
(114)
Total
2020
US$m
1,867
2,121
529
698
204
1,046
6,465
(4,966)
(402)
(351)
(224)
(7)
(369)
(6,319)
25
12
188
(82)
1
9
25
178
(a)
(b)
(c)
(d)
(e)
The amounts (charged)/credited directly to the statement of comprehensive income include provisions for tax on cash flow hedges and on re-measurement gains/(losses) on pension
schemes and on post-retirement healthcare plans.
“Other movements” include deferred tax relating to tax payable recognised by subsidiary holding companies on the profits of the equity accounted units to which it relates.
US$1,152 million (2020: US$1,617 million) of recognised deferred tax assets are subject to expiry if not recovered within certain time limits as specified in local tax legislation and
investment agreements. None (2020: US$65 million) of those recognised assets would expire within one year if not used, US$71 million (2020: US$85 million) would expire within one to
five years, and US$1,081 million (2020: US$1,467 million) would expire in more than five years.
Recognised and unrecognised deferred tax assets are shown in the table below and totalled US$7,024 million at 31 December 2021 (2020: US$7,226 million). Of this total, US$3,375
million has been recognised as deferred tax assets (2020: US$3,385 million), leaving US$3,649 million (2020: US$3,841 million) unrecognised, as recovery is not considered probable.
Deferred tax liabilities are not recognised on the unremitted earnings of subsidiaries and joint ventures totalling US$2,081 million (2020: US$2,895 million) where the Group is able to
control the timing of the remittance and it is probable that there will be no remittance in the foreseeable future. If these earnings were remitted, tax of US$103 million (2020: US$112
million) would be payable.
The recognised amounts in the table below do not include deferred tax assets that have been netted off against deferred tax liabilities.
Analysis of deferred tax assets
At 31 December
France
Canada
US
Australia
Mongolia(a)
Other
Total(b)
Recognised
Unrecognised
2021
US$m
—
545
851
787
954
238
3,375
2020
US$m
—
617
938
649
974
207
3,385
2021
US$m
1,222
538
67
506
406
910
3,649
2020
US$m
1,284
574
84
528
540
831
3,841
(a)
(b)
Deferred tax assets in Mongolia include US$108 million (2020: US$292 million) from tax losses that expire if not recovered against taxable profits within eight years. Tax losses have been
calculated in accordance with the tax stability provisions of the Oyu Tolgoi Investment Agreement and Mongolian laws. The interpretation of the stabilised tax laws by the Mongolian Tax
Authority has been, and is expected to continue to be, subject to dispute. Changes to agreements or their interpretation could have a material impact on the amount and period of recovery
of deferred tax assets.
US$705 million (2020: US$720 million) of the unrecognised assets relate to realised or unrealised capital losses, the recovery of which depends on the existence of capital gains in future
years. There are time limits, the shortest of which is one year, for the recovery of US$356 million of the unrecognised assets (2020: US$551 million).
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
17 Deferred taxation continued
17 Deferred taxation continued
18 Receivables and other assets
Deferred tax balances for which there is a right of offset within the same tax jurisdiction are presented net on the face of the balance sheet as
Deferred tax balances for which there is a right of offset within the same tax jurisdiction are presented net on the face of the balance sheet as
permitted by IAS 12. The closing deferred tax assets and liabilities, prior to this offsetting of balances, are shown below.
permitted by IAS 12. The closing deferred tax assets and liabilities, prior to this offsetting of balances, are shown below.
Trade receivables(a)
Other financial receivables(a)
Receivables relating to net investment in finance leases(a)
Amounts due from equity accounted units(a)
Other receivables(b)
Prepayment of tolling charges to jointly controlled entities(c)
Pension surpluses (note 42)
Other prepayments
Total
Non-current
2021
US$m
—
133
2
—
392
183
1,070
414
2,194
Current
2021
US$m
2,241
305
13
68
418
—
—
529
3,574
Total
2021
US$m
2,241
438
15
68
810
183
1,070
943
5,768
Non-current
2020
US$m
1
339
29
—
369
218
782
58
1,796
Current
2020
US$m
2,543
332
9
33
422
—
—
305
3,644
Total
2020
US$m
2,544
671
38
33
791
218
782
363
5,440
(a)
(b)
(c)
At 31 December 2021, trade and other financial receivables, receivables relating to net investment in finance leases and amounts due from equity accounted units are stated net of
allowances for expected credit losses of US$57 million (2020: US$59 million).
At 31 December 2021, other receivables include US$388 million (2020: US$410 million) related to Energy Resources of Australia Ltd (ERA's) deposit held in a trust fund which is controlled
by the Government of Australia. ERA are entitled to reimbursement from the fund once specific phases of rehabilitation relating to the Ranger Project are completed. The fund is outside of
the scope of IFRS 9 - “Financial Instruments”.
These prepayments will be charged to Group operating costs as tolling services are rendered and product processing occurs.
There is no material element of receivables and other assets that is interest-bearing or financing in nature.
The fair value of current trade and other receivables and the majority of amounts classified as non-current trade and other receivables
approximates to their carrying value.
19 Other financial assets
Derivative financial instruments
Equity shares and quoted funds
Other investments, including loans(a)
Loans to equity accounted units
Total
Non-current
2021
US$m
210
98
220
—
528
Current
2021
US$m
62
19
2,462
—
2,543
Total
2021
US$m
272
117
2,682
—
3,071
Non-current
2020
US$m
531
66
231
1
829
Current
2020
US$m
134
9
2,668
40
2,851
Total
2020
US$m
665
75
2,899
41
3,680
(a)
Current “Other investments, including loans” includes US$2,401 million (2020: US$2,538 million) of highly liquid financial assets held in managed investment funds classified as held for
trading.
Detailed information relating to other financial assets is given in note 29.
20 Cash and cash equivalents
Cash at bank and in hand
Money market funds, reverse repurchase agreements and other cash equivalents(a)
Balance per Group balance sheet
Bank overdrafts repayable on demand (unsecured)
Balance per Group cash flow statement
2021
US$m
1,344
11,463
12,807
(2)
12,805
2020
US$m
1,150
9,231
10,381
—
10,381
21
Recognised
Recognised
Unrecognised
Unrecognised
2021
2021
US$m
US$m
—
—
545
545
851
851
787
787
954
954
238
238
2020
2020
US$m
US$m
—
—
617
617
938
938
649
649
974
974
207
207
2021
2021
US$m
US$m
1,222
1,222
538
538
67
67
506
506
406
406
910
910
2020
2020
US$m
US$m
1,284
1,284
574
574
84
84
528
528
540
540
831
831
3,375
3,375
3,385
3,385
3,649
3,649
3,841
3,841
(a)
We continue to purchase securities under resale agreements (“reverse repurchase agreements”). At 31 December 2021 we held US$4,520 million (2020: US$1,200 million) of reverse
repurchase agreements, measured at amortised cost and reported within cash and cash equivalents as they are highly liquid products maturing within three months. We accepted collateral
of investment grade quality in respect of these reverse repurchase agreements, with a fair value of US$4,638 million as at 31 December 2021 (2020: US$1,260 million). Collateral is not
recognised on our balance sheet and in the event of the counterparty's default we would be able to sell it.
Restricted cash and cash equivalent analysis
Cash and cash equivalents of US$235 million (2020: US$295 million) are held in countries where there are restrictions on remittances. Of this
balance, US$165 million (2020: US$238 million) could be used to repay subsidiaries’ third-party borrowings.
There are also restrictions on a further US$981 million (2020: US$1,422 million) of cash and cash equivalents, the majority of which is held by
partially owned subsidiaries and is not available for use in the wider Group due to legal and contractual restrictions currently in place. Of this
balance US$752 million (2020: US$1,215 million) could be used to repay these subsidiaries’ third-party borrowings.
(a)
(a)
Deferred tax assets in Mongolia include US$108 million (2020: US$292 million) from tax losses that expire if not recovered against taxable profits within eight years. Tax losses have been
Deferred tax assets in Mongolia include US$108 million (2020: US$292 million) from tax losses that expire if not recovered against taxable profits within eight years. Tax losses have been
calculated in accordance with the tax stability provisions of the Oyu Tolgoi Investment Agreement and Mongolian laws. The interpretation of the stabilised tax laws by the Mongolian Tax
calculated in accordance with the tax stability provisions of the Oyu Tolgoi Investment Agreement and Mongolian laws. The interpretation of the stabilised tax laws by the Mongolian Tax
Authority has been, and is expected to continue to be, subject to dispute. Changes to agreements or their interpretation could have a material impact on the amount and period of recovery
Authority has been, and is expected to continue to be, subject to dispute. Changes to agreements or their interpretation could have a material impact on the amount and period of recovery
of deferred tax assets.
of deferred tax assets.
(b)
(b)
US$705 million (2020: US$720 million) of the unrecognised assets relate to realised or unrealised capital losses, the recovery of which depends on the existence of capital gains in future
US$705 million (2020: US$720 million) of the unrecognised assets relate to realised or unrealised capital losses, the recovery of which depends on the existence of capital gains in future
years. There are time limits, the shortest of which is one year, for the recovery of US$356 million of the unrecognised assets (2020: US$551 million).
years. There are time limits, the shortest of which is one year, for the recovery of US$356 million of the unrecognised assets (2020: US$551 million).
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Total
Total
2021
2021
US$m
US$m
1,492
1,492
2,165
2,165
784
784
521
521
188
188
1,356
1,356
6,506
6,506
(366)
(366)
(342)
(342)
(327)
(327)
(3)
(3)
(577)
(577)
—
—
(375)
(375)
216
216
(42)
(42)
(1)
(1)
21
21
67
67
(114)
(114)
Total
Total
2020
2020
US$m
US$m
1,867
1,867
2,121
2,121
529
529
698
698
204
204
1,046
1,046
6,465
6,465
(402)
(402)
(351)
(351)
(224)
(224)
(7)
(7)
(369)
(369)
25
25
12
12
188
188
(82)
(82)
1
1
9
9
25
25
178
178
(5,019)
(5,019)
(4,966)
(4,966)
(6,634)
(6,634)
(6,319)
(6,319)
(a)
(a)
The amounts (charged)/credited directly to the statement of comprehensive income include provisions for tax on cash flow hedges and on re-measurement gains/(losses) on pension
The amounts (charged)/credited directly to the statement of comprehensive income include provisions for tax on cash flow hedges and on re-measurement gains/(losses) on pension
schemes and on post-retirement healthcare plans.
schemes and on post-retirement healthcare plans.
“Other movements” include deferred tax relating to tax payable recognised by subsidiary holding companies on the profits of the equity accounted units to which it relates.
“Other movements” include deferred tax relating to tax payable recognised by subsidiary holding companies on the profits of the equity accounted units to which it relates.
US$1,152 million (2020: US$1,617 million) of recognised deferred tax assets are subject to expiry if not recovered within certain time limits as specified in local tax legislation and
US$1,152 million (2020: US$1,617 million) of recognised deferred tax assets are subject to expiry if not recovered within certain time limits as specified in local tax legislation and
investment agreements. None (2020: US$65 million) of those recognised assets would expire within one year if not used, US$71 million (2020: US$85 million) would expire within one to
investment agreements. None (2020: US$65 million) of those recognised assets would expire within one year if not used, US$71 million (2020: US$85 million) would expire within one to
five years, and US$1,081 million (2020: US$1,467 million) would expire in more than five years.
five years, and US$1,081 million (2020: US$1,467 million) would expire in more than five years.
(d)
(d)
Recognised and unrecognised deferred tax assets are shown in the table below and totalled US$7,024 million at 31 December 2021 (2020: US$7,226 million). Of this total, US$3,375
Recognised and unrecognised deferred tax assets are shown in the table below and totalled US$7,024 million at 31 December 2021 (2020: US$7,226 million). Of this total, US$3,375
million has been recognised as deferred tax assets (2020: US$3,385 million), leaving US$3,649 million (2020: US$3,841 million) unrecognised, as recovery is not considered probable.
million has been recognised as deferred tax assets (2020: US$3,385 million), leaving US$3,649 million (2020: US$3,841 million) unrecognised, as recovery is not considered probable.
(e)
(e)
Deferred tax liabilities are not recognised on the unremitted earnings of subsidiaries and joint ventures totalling US$2,081 million (2020: US$2,895 million) where the Group is able to
Deferred tax liabilities are not recognised on the unremitted earnings of subsidiaries and joint ventures totalling US$2,081 million (2020: US$2,895 million) where the Group is able to
control the timing of the remittance and it is probable that there will be no remittance in the foreseeable future. If these earnings were remitted, tax of US$103 million (2020: US$112
control the timing of the remittance and it is probable that there will be no remittance in the foreseeable future. If these earnings were remitted, tax of US$103 million (2020: US$112
million) would be payable.
million) would be payable.
The recognised amounts in the table below do not include deferred tax assets that have been netted off against deferred tax liabilities.
The recognised amounts in the table below do not include deferred tax assets that have been netted off against deferred tax liabilities.
Analysis of deferred tax assets
Analysis of deferred tax assets
Analysis of deferred tax
Analysis of deferred tax
Deferred tax assets arising from:
Deferred tax assets arising from:
Tax losses(c)
Tax losses(c)
Provisions
Provisions
Capital allowances
Capital allowances
Post-retirement benefits
Post-retirement benefits
Unrealised exchange losses
Unrealised exchange losses
Other temporary differences
Other temporary differences
Total
Total
Capital allowances
Capital allowances
Unremitted earnings(e)
Unremitted earnings(e)
Capitalised interest
Capitalised interest
Post-retirement benefits
Post-retirement benefits
Unrealised exchange gains
Unrealised exchange gains
Other temporary differences
Other temporary differences
Total
Total
Deferred tax liabilities arising from:
Deferred tax liabilities arising from:
(Charged)/credited to the income statement
(Charged)/credited to the income statement
Unrealised exchange losses
Unrealised exchange losses
Tax losses
Tax losses
Provisions
Provisions
Capital allowances
Capital allowances
Tax on unremitted earnings
Tax on unremitted earnings
Post-retirement benefits
Post-retirement benefits
Other temporary differences
Other temporary differences
Total
Total
(b)
(b)
(c)
(c)
At 31 December
At 31 December
France
France
Canada
Canada
US
US
Australia
Australia
Mongolia(a)
Mongolia(a)
Other
Other
Total(b)
Total(b)
Financial statements continued
Notes to the 2021 financial statements
21 Borrowings and other financial liabilities
Borrowings at 31 December
Rio Tinto Finance plc Euro Bonds 2.875% due 2024(a)(b)
Rio Tinto Finance (USA) Limited Bonds 3.75% 2025(a)(c)
Rio Tinto Finance (USA) Limited Bonds 7.125% 2028(a)
Alcan Inc. Debentures 7.25% due 2028(a)
Rio Tinto Finance plc Sterling Bonds 4.0% due 2029(a)(b)
Alcan Inc. Debentures 7.25% due 2031(a)
Alcan Inc. Global Notes 6.125% due 2033(a)
Alcan Inc. Global Notes 5.75% due 2035(a)
Rio Tinto Finance (USA) Limited Bonds 5.2% 2040(a)
Rio Tinto Finance (USA) plc Bonds 4.75% 2042(a)
Rio Tinto Finance (USA) plc Bonds 4.125% 2042(a)
Rio Tinto Finance (USA) Limited Bonds 2.75% 2051(a)(c)
Oyu Tolgoi LLC MIGA Insured Loan LIBOR plus 2.65% due 2027(d)
Oyu Tolgoi LLC Commercial Banks “B Loan” LIBOR plus 3.4% due
2027(d)
Oyu Tolgoi LLC Export Credit Agencies Loan 2.3% due 2028(d)
Oyu Tolgoi LLC Export Credit Agencies Loan LIBOR plus 3.65% due
2029(d)
Oyu Tolgoi LLC International Financial Institutions “A Loan” LIBOR plus
3.78% due 2030(d)
Other secured loans
Other unsecured loans
Lease liabilities
Bank overdrafts
Total borrowings including overdrafts(e)
Note
22
20
Non-current
2021
US$m
497
—
934
105
682
420
722
283
1,156
495
735
1,225
597
1,387
237
805
744
—
332
1,039
—
12,395
Current
2021
US$m
—
—
—
—
—
—
—
—
—
—
—
—
76
178
41
61
32
246
176
324
2
1,136
Total
2021
US$m
497
—
934
105
682
420
722
283
1,156
495
735
1,225
673
1,565
278
Non-current
2020
US$m
555
1,299
1,005
109
717
438
744
292
1,173
501
743
—
674
1,571
275
866
867
776
246
508
1,363
2
13,531
771
246
322
945
—
13,247
Current
2020
US$m
—
—
—
—
—
—
—
—
—
—
—
—
4
10
2
5
6
68
256
233
—
584
Total
2020
US$m
555
1,299
1,005
109
717
438
744
292
1,173
501
743
—
678
1,581
277
872
777
314
578
1,178
—
13,831
(a)
(b)
(c)
(d)
(e)
These borrowings are subject to hedging arrangements and are summarised in the interest rate risk section of note 29.
Rio Tinto has a US$10 billion (2020: US$10 billion) European Debt Issuance Programme against which the cumulative amount utilised was US$1.1 billion equivalent at 31 December 2021
(2020: US$1.2 billion). The carrying value of these bonds after hedge accounting adjustments amounted to US$1.2 billion (2020: US$1.3 billion) in aggregate.
On 28 October 2021, the Group issued US$1.25 billion of 30-year fixed rate debt with a coupon of 2.75%. We used the proceeds to complete a US$1.2 billion (nominal value) bond buy-back
programme. The notes purchased and redeemed have been cancelled.
These borrowings relate to the Oyu Tolgoi LLC project finance facility. The project finance facility provides for interest-only payments for the first five years from 2016 followed by minimum
repayments according to a stepped amortisation schedule for the remaining life of the facility. The due dates stated represent the final repayment date. The interest rates stated are pre-
completion and will increase by 1% post-completion.
The Group’s borrowings of US$13.5 billion (2020: US$13.8 billion) include US$4.4 billion (2020: US$4.5 billion) of subsidiary entity borrowings that are subject to various financial and
general covenants with which the respective borrowers were in compliance as at 31 December 2021.
Other financial liabilities
Derivative financial instruments
Other financial liabilities
Total other financial liabilities
Total borrowings including overdrafts (as above)
Total borrowings and other financial liabilities
22 Leases
Lessee arrangements
We have made the following payments associated with leases:
Description of payment
Principal lease payments
Interest payments on leases
Payments for short-term leases
Payments for variable lease components
Payments for low value leases (>12 months in duration)
Total lease payments
256
256
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Non-current
2021
US$m
393
—
393
12,395
12,788
Current
2021
US$m
225
20
245
1,136
1,381
Total
2021
US$m
Non-current
2020
US$m
618
20
638
13,531
14,169
161
—
161
13,247
13,408
Current
2020
US$m
23
—
23
584
607
Total
2020
US$m
184
—
184
13,831
14,015
2021
US$m
358
48
502
34
2
944
2020
US$m Included within
324 Cash flows from financing activities
50 Cash flows from operating activities
314 Net operating costs
30 Net operating costs
1 Net operating costs
719
Financial statements continued
Financial statements
Notes to the 2021 financial statements
Non-current
Non-current
Non-current
Non-current
Note
Note
Current
Current
2021
2021
US$m
US$m
Current
Current
2020
2020
US$m
US$m
21 Borrowings and other financial liabilities
21 Borrowings and other financial liabilities
Borrowings at 31 December
Borrowings at 31 December
Rio Tinto Finance plc Euro Bonds 2.875% due 2024(a)(b)
Rio Tinto Finance plc Euro Bonds 2.875% due 2024(a)(b)
Rio Tinto Finance (USA) Limited Bonds 3.75% 2025(a)(c)
Rio Tinto Finance (USA) Limited Bonds 3.75% 2025(a)(c)
Rio Tinto Finance (USA) Limited Bonds 7.125% 2028(a)
Rio Tinto Finance (USA) Limited Bonds 7.125% 2028(a)
Alcan Inc. Debentures 7.25% due 2028(a)
Alcan Inc. Debentures 7.25% due 2028(a)
Rio Tinto Finance plc Sterling Bonds 4.0% due 2029(a)(b)
Rio Tinto Finance plc Sterling Bonds 4.0% due 2029(a)(b)
Alcan Inc. Debentures 7.25% due 2031(a)
Alcan Inc. Debentures 7.25% due 2031(a)
Alcan Inc. Global Notes 6.125% due 2033(a)
Alcan Inc. Global Notes 6.125% due 2033(a)
Alcan Inc. Global Notes 5.75% due 2035(a)
Alcan Inc. Global Notes 5.75% due 2035(a)
Rio Tinto Finance (USA) Limited Bonds 5.2% 2040(a)
Rio Tinto Finance (USA) Limited Bonds 5.2% 2040(a)
Rio Tinto Finance (USA) plc Bonds 4.75% 2042(a)
Rio Tinto Finance (USA) plc Bonds 4.75% 2042(a)
Rio Tinto Finance (USA) plc Bonds 4.125% 2042(a)
Rio Tinto Finance (USA) plc Bonds 4.125% 2042(a)
Rio Tinto Finance (USA) Limited Bonds 2.75% 2051(a)(c)
Rio Tinto Finance (USA) Limited Bonds 2.75% 2051(a)(c)
Oyu Tolgoi LLC MIGA Insured Loan LIBOR plus 2.65% due 2027(d)
Oyu Tolgoi LLC MIGA Insured Loan LIBOR plus 2.65% due 2027(d)
Oyu Tolgoi LLC Commercial Banks “B Loan” LIBOR plus 3.4% due
Oyu Tolgoi LLC Commercial Banks “B Loan” LIBOR plus 3.4% due
Oyu Tolgoi LLC Export Credit Agencies Loan 2.3% due 2028(d)
Oyu Tolgoi LLC Export Credit Agencies Loan 2.3% due 2028(d)
Oyu Tolgoi LLC Export Credit Agencies Loan LIBOR plus 3.65% due
Oyu Tolgoi LLC Export Credit Agencies Loan LIBOR plus 3.65% due
2027(d)
2027(d)
2029(d)
2029(d)
Oyu Tolgoi LLC International Financial Institutions “A Loan” LIBOR plus
Oyu Tolgoi LLC International Financial Institutions “A Loan” LIBOR plus
3.78% due 2030(d)
3.78% due 2030(d)
Other secured loans
Other secured loans
Other unsecured loans
Other unsecured loans
Lease liabilities
Lease liabilities
Bank overdrafts
Bank overdrafts
2021
2021
US$m
US$m
497
497
—
—
934
934
105
105
682
682
420
420
722
722
283
283
1,156
1,156
495
495
735
735
1,225
1,225
597
597
1,387
1,387
237
237
805
805
744
744
—
—
332
332
22
22
20
20
1,039
1,039
—
—
12,395
12,395
Total
Total
2021
2021
US$m
US$m
497
497
—
—
934
934
105
105
682
682
420
420
722
722
283
283
1,156
1,156
495
495
735
735
1,225
1,225
673
673
1,565
1,565
278
278
866
866
776
776
246
246
508
508
1,363
1,363
2
2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
76
76
178
178
41
41
61
61
32
32
246
246
176
176
324
324
2
2
2020
2020
US$m
US$m
555
555
1,299
1,299
1,005
1,005
109
109
717
717
438
438
744
744
292
292
501
501
743
743
—
—
674
674
1,173
1,173
1,571
1,571
275
275
867
867
771
771
246
246
322
322
945
945
—
—
Total
Total
2020
2020
US$m
US$m
555
555
1,299
1,299
1,005
1,005
109
109
717
717
438
438
744
744
292
292
501
501
743
743
—
—
678
678
1,173
1,173
1,581
1,581
277
277
872
872
777
777
314
314
578
578
1,178
1,178
—
—
13,831
13,831
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
4
4
10
10
2
2
5
5
6
6
68
68
256
256
233
233
—
—
584
584
Total borrowings including overdrafts(e)
Total borrowings including overdrafts(e)
1,136
1,136
13,531
13,531
13,247
13,247
(a)
(a)
(b)
(b)
These borrowings are subject to hedging arrangements and are summarised in the interest rate risk section of note 29.
These borrowings are subject to hedging arrangements and are summarised in the interest rate risk section of note 29.
Rio Tinto has a US$10 billion (2020: US$10 billion) European Debt Issuance Programme against which the cumulative amount utilised was US$1.1 billion equivalent at 31 December 2021
Rio Tinto has a US$10 billion (2020: US$10 billion) European Debt Issuance Programme against which the cumulative amount utilised was US$1.1 billion equivalent at 31 December 2021
(2020: US$1.2 billion). The carrying value of these bonds after hedge accounting adjustments amounted to US$1.2 billion (2020: US$1.3 billion) in aggregate.
(2020: US$1.2 billion). The carrying value of these bonds after hedge accounting adjustments amounted to US$1.2 billion (2020: US$1.3 billion) in aggregate.
(c)
(c)
On 28 October 2021, the Group issued US$1.25 billion of 30-year fixed rate debt with a coupon of 2.75%. We used the proceeds to complete a US$1.2 billion (nominal value) bond buy-back
On 28 October 2021, the Group issued US$1.25 billion of 30-year fixed rate debt with a coupon of 2.75%. We used the proceeds to complete a US$1.2 billion (nominal value) bond buy-back
programme. The notes purchased and redeemed have been cancelled.
programme. The notes purchased and redeemed have been cancelled.
(d)
(d)
These borrowings relate to the Oyu Tolgoi LLC project finance facility. The project finance facility provides for interest-only payments for the first five years from 2016 followed by minimum
These borrowings relate to the Oyu Tolgoi LLC project finance facility. The project finance facility provides for interest-only payments for the first five years from 2016 followed by minimum
repayments according to a stepped amortisation schedule for the remaining life of the facility. The due dates stated represent the final repayment date. The interest rates stated are pre-
repayments according to a stepped amortisation schedule for the remaining life of the facility. The due dates stated represent the final repayment date. The interest rates stated are pre-
completion and will increase by 1% post-completion.
completion and will increase by 1% post-completion.
(e)
(e)
The Group’s borrowings of US$13.5 billion (2020: US$13.8 billion) include US$4.4 billion (2020: US$4.5 billion) of subsidiary entity borrowings that are subject to various financial and
The Group’s borrowings of US$13.5 billion (2020: US$13.8 billion) include US$4.4 billion (2020: US$4.5 billion) of subsidiary entity borrowings that are subject to various financial and
general covenants with which the respective borrowers were in compliance as at 31 December 2021.
general covenants with which the respective borrowers were in compliance as at 31 December 2021.
Other financial liabilities
Other financial liabilities
Derivative financial instruments
Derivative financial instruments
Other financial liabilities
Other financial liabilities
Total other financial liabilities
Total other financial liabilities
Total borrowings including overdrafts (as above)
Total borrowings including overdrafts (as above)
Total borrowings and other financial liabilities
Total borrowings and other financial liabilities
22 Leases
22 Leases
Lessee arrangements
Lessee arrangements
We have made the following payments associated with leases:
We have made the following payments associated with leases:
Description of payment
Description of payment
Principal lease payments
Principal lease payments
Interest payments on leases
Interest payments on leases
Payments for short-term leases
Payments for short-term leases
Payments for variable lease components
Payments for variable lease components
Payments for low value leases (>12 months in duration)
Payments for low value leases (>12 months in duration)
Total lease payments
Total lease payments
Non-current
Non-current
Non-current
Non-current
2021
2021
US$m
US$m
393
393
—
—
393
393
12,395
12,395
12,788
12,788
Current
Current
2021
2021
US$m
US$m
225
225
20
20
245
245
1,136
1,136
1,381
1,381
Total
Total
2021
2021
US$m
US$m
618
618
20
20
638
638
13,531
13,531
14,169
14,169
2020
2020
US$m
US$m
161
161
—
—
161
161
13,247
13,247
13,408
13,408
Current
Current
2020
2020
US$m
US$m
23
23
—
—
23
23
584
584
607
607
Total
Total
2020
2020
US$m
US$m
184
184
—
—
184
184
13,831
13,831
14,015
14,015
2021
2021
US$m
US$m
358
358
48
48
502
502
34
34
2
2
944
944
2020
2020
US$m Included within
US$m Included within
324 Cash flows from financing activities
324 Cash flows from financing activities
50 Cash flows from operating activities
50 Cash flows from operating activities
314 Net operating costs
314 Net operating costs
30 Net operating costs
30 Net operating costs
1 Net operating costs
1 Net operating costs
719
719
Lease liabilities
The maturity profile of lease liabilities recognised at the balance sheet date is:
Lease liabilities
Due within 1 year
Between 1 and 3 years
Between 3 and 5 years
More than 5 years
Total undiscounted cash payments expected to be made
Effect of discounting
Present value of minimum lease payments
Note
2021
US$m
2020
US$m
361
440
226
704
1,731
(368)
1,363
271
386
185
724
1,566
(388)
1,178
21
At 31 December 2021, commitments for leases not yet commenced were US$476 million (2020: US$125 million); commitments relating to short-
term leases which had already commenced at 31 December 2021 were US$165 million (2020: US$155 million). Short-term and low value leases
are not recognised on the balance sheet as a lease liability and are expensed as incurred.
23 Consolidated net cash/(debt)
Year ended 31 December 2021
Analysis of changes in consolidated net cash/(debt)
Opening balance
Foreign exchange adjustment
Cash movements excluding exchange movements
Other non-cash movements
Closing balance
Year ended 31 December 2020
Analysis of changes in consolidated net debt
Opening balance
Foreign exchange adjustment
Cash movements excluding exchange movements
Other non-cash movements
Closing balance
Financing liabilities
Other assets
Borrowings
excluding
overdrafts(a)
US$m
Lease
liabilities(b)
US$m
Net-debt
related
derivatives
(included in
Other financial
assets/
liabilities)(c)
US$m
Cash and cash
equivalents
including
overdrafts
US$m
Other
investments(d)
US$m
Net cash/
(debt)
US$m
(12,653)
67
270
150
(12,166)
(1,178)
30
358
(573)
(1,363)
248
(45)
(51)
(253)
(101)
10,381
100
2,324
—
12,805
2,538
—
(107)
(30)
2,401
(664)
152
2,794
(706)
1,576
Financing liabilities
Other assets
Borrowings
excluding
overdrafts(a)
US$m
Lease
liabilities(b)
US$m
Net-Debt
related
derivatives
(included in
Other financial
assets/
liabilities)(c)
US$m
Cash and cash
equivalents
including
overdrafts
US$m
Other
investments(d)
US$m
(12,806)
(83)
505
(269)
(12,653)
(1,309)
(47)
324
(146)
(1,178)
(147)
39
91
265
248
8,027
165
2,189
—
10,381
2,584
—
(58)
12
2,538
Net debt
US$m
(3,651)
74
3,051
(138)
(664)
(a)
(b)
(c)
(d)
Borrowings excluding overdrafts and including lease liabilities at 31 December 2021 of US$13,529 million (2020: US$13,831 million) differ from total borrowings and other financial
liabilities of US$14,169 million (2020: US$14,015 million) on the balance sheet as they exclude other current financial liabilities of US$245 million (2020: US$23 million), other non-current
financial liabilities of US$393 million (2020: US$161 million) and bank overdraft of US$2 million (2020: US$nil).
Other movements in lease liabilities include the net impact of additions, modifications and terminations during the year.
Included within “Net debt-related derivatives” are interest rate and cross currency interest rate swaps that are in hedge relationships with the Group's debt. In 2021, we have also included
currency forwards that we use to mitigate the foreign exchange exposure on our non-US dollar separately managed funds. These forwards are not in a hedge relationship but are included
within the Group's net debt definition.
Other investments comprise US$2,401 million (2020: US$2,538 million) of highly liquid financial assets held in managed investment funds classified as held for trading. During the year we
entered into non-US dollar denominated managed investment funds.
Further information relating to the currency and interest rate exposures arising from net debt and related derivatives is given in note 29.
256
256
256
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Annual Report 2021 | riotinto.com
257257
Financial statements continued
Notes to the 2021 financial statements
24 Trade and other payables
Trade payables
Other financial payables
Other payables
Deferred income(a)
Accruals
Employee entitlements
Royalties and mining taxes
Amounts owed to equity accounted units
Government grants deferred
Total
Non-current
2021
US$m
—
254
82
141
42
—
2
213
64
798
Current
2021
US$m
3,410
909
110
399
1,488
798
574
40
5
7,733
Total
2021
US$m
3,410
1,163
192
540
1,530
798
576
253
69
8,531
Non-current
2020
US$m
1
298
97
133
27
—
3
190
71
820
Current
2020
US$m
3,124
862
115
344
1,294
762
863
51
6
7,421
Total
2020
US$m
3,125
1,160
212
477
1,321
762
866
241
77
8,241
(a)
Deferred income includes contract liabilities of US$383 million (2020: US$338 million).
The fair value of trade payables and financial instruments within other payables approximates their carrying value.
25 Provisions (including post-retirement benefits)
At 1 January
Adjustment on currency translation
Adjustments to mining properties/right of use assets:
– increases to existing and new provisions
– change in discount rate
Charged/(credited) to profit:
– increases to existing and new provisions
– change in discount rate
– unused amounts reversed
– exchange losses on provisions
– amortisation of discount
Utilised in year
Re-measurement (gains)/losses recognised in other comprehensive
income
Transfers and other movements(a)
At 31 December
Balance sheet analysis:
Current
Non-current
Total
Pensions
and
post-
retirement
healthcare(b)
US$m
Other
employee
entitlements(c)
US$m
Close-down
and
restoration/
environmental(d)
US$m
Other
US$m
Total
2021
US$m
Total
2020
US$m
3,055
(11)
419
(23)
13,335
(483)
856
(29)
17,665
(546)
15,103
890
Note
14
—
—
161
—
—
—
—
(129)
(687)
(291)
2,098
66
2,032
2,098
—
—
112
—
(21)
—
—
(102)
—
9
394
317
77
394
518
—
1,475
—
(192)
23
415
(541)
3
—
521
—
382
—
(37)
—
3
(128)
2,130
—
(250)
23
418
(900)
141
816
1,074
140
(299)
(22)
377
(774)
—
—
(687)
250
(8)
(48)
(338)
14,542
1,002
18,036
1,023
13,519
14,542
700
302
1,002
2,106
15,930
18,036
(31)
17,665
1,729
15,936
17,665
Projected cash spend for the undiscounted close-down and restoration/environmental clean-up provision
Undiscounted close-down and environmental restoration cash flows
At 31 December 2021
At 31 December 2020
<1yr
US$m
1,023
776
1-3 yrs
US$m
1,652
1,203
3-5 yrs
US$m
1,680
1,433
> 5 yrs
US$m
14,420
13,988
Total
US$m
18,775
17,400
(a)
(b)
(c)
(d)
During the year ended 31 December 2021, the Group entered into an agreement to transfer its partially funded pension obligations in France to an external insurer. The insurance premium
was paid by the transfer of the existing pension assets valued at US$89 million plus an additional cash payment of €247 million (US$294 million), of which US$3 million was taken to the
income statement. The Group has no further legal or constructive obligation relating to the insured pensions and has reflected this transaction as a settlement.
The main assumptions used to determine the provision for pensions and post-retirement healthcare, and other information, including the expected level of future funding payments in
respect of those arrangements, are given in note 42.
The provision for other employee entitlements includes a provision for long service leave of US$272 million (2020: US$283 million), based on the relevant entitlements in certain Group
operations and includes US$60 million (2020: US$62 million) of provision for redundancy and severance payments.
The Group’s policy on close-down and restoration costs is described in note 1(l) and in paragraph (iii) under “Critical accounting policies and estimates” on page 230. Close-down and
restoration costs are a normal consequence of mining, and the majority of close-down and restoration expenditure is incurred in the years following closure of the mine, refinery or smelter.
Non-current provisions for close-down, restoration and environmental expenditure include amounts relating to environmental clean-up of US$645 million (2020: US$468 million) expected
to take place between one and five years from the balance sheet date, and US$1,059 million (2020: US$937 million) expected to take place later than five years after the balance sheet
date.
Close-down, restoration and environmental liabilities at 31 December 2021 have not been adjusted for closure related receivables amounting to US$410 million (2020: US$574 million) due
from the ERA trust fund and other financial assets held for the purposes of meeting closure obligations. These are included within “Receivables and other assets” on the balance sheet.
258
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Financial statements continued
Financial statements
24 Trade and other payables
24 Trade and other payables
Analysis of close-down and restoration/environmental clean-up provisions
As at 31 December
Undiscounted close-down and environmental restoration obligations
Impact of discounting
Present closure obligation
Attributable to:
Operating sites
Non-operating sites
Total
2021
US$m
18,775
(4,233)
14,542
10,727
3,815
14,542
2020
US$m
17,400
(4,065)
13,335
10,736
2,599
13,335
Remaining lives of operations and infrastructure range from one to over 50 years with an average for all sites, weighted by present closure
obligation, of around 16 years (2020: 17 years). Although the ultimate cost to be incurred is uncertain, the Group’s businesses estimate their
respective costs based on current restoration standards, techniques and expected climate conditions.
Provisions of US$14,542 million (2020: US$13,335 million) for close-down and restoration costs and environmental clean-up obligations are
based on risk-adjusted cash flows. The Group re-assessed the closure discount rate in the current year and continues to consider that real rate of
1.5%, applied prospectively since 30 September 2020, is the most appropriate rate to use. This assumption is based on the currency in which we
plan to fund the closures and our expectation of long-term interest rate and exchange rate parity at the locations of our operations. Prior to 30
September 2020 and in recent years, the close-down and restoration costs and environmental clean-up obligations were discounted at a real rate
of 2.0%. To illustrate the sensitivity of the provision to discounting, if the discount rate at 31 December 2021 were decreased to 1.0% then the
provision would be US$1.3 billion higher, of which approximately US$1.2 billion would be capitalised within “Property, plant and equipment” at
operating sites and US$0.1 billion would be charged to the income statement for non-operating and fully impaired sites. If the discount rate were
increased to 3.0% then the provision would be US$2.8 billion lower, of which approximately US$2.5 billion would result in a decrease within
“Property, plant and equipment” at operating sites and US$0.3 billion would be credited to the income statement for non-operating and fully
impaired sites.
Closure cost composition as at 31 December
Decommissioning, decontamination and demolition
Closure and rehabilitation earthworks (a)
Long-term water management costs (b)
Post closure monitoring and maintenance
Indirect costs, owners' costs and contingency (c)
Total
2021
US$m
3,343
4,125
967
1,676
4,431
14,542
2020
US$m
3,131
4,223
966
1,318
3,697
13,335
The underlying costs for closure have been estimated with varying degrees of accuracy based on a function of the age of the underlying asset and
proximity to closure. For assets within ten years of closure, closure plans and cost estimates are supported by detailed studies which are refined
as the closure date approaches. These closure studies consider climate change and plan for resilience to expected climate conditions with a
particular focus on precipitation rates. For new developments, consideration of climate change and ultimate closure conditions are an important
part of the approval process. For longer-lived assets, closure provisions are typically based on conceptual level studies that are refreshed at least
every five years; these are evolving to incorporate greater consideration of forecast climate conditions at closure.
(a)
(b)
A key component of earthworks rehabilitation involves re-landscaping the area disturbed by mining activities utilising the largely diesel powered heavy mobile equipment. In developing
low-carbon solutions for our mobile fleet, this may include electrification of the vehicles during the mine life. The forecast cash flows for the heavy mobile equipment in the closure cost
estimate are based on existing fuel sources. The cost incurred during closure could reduce if these activities are powered by renewable energy.
Long-term water management relates to the post-closure treatment of water due to acid rock drainage and other environmental commitments and is an area of research and development
focus for our Closure team. The cost of this water processing can continue for many years after the bulk earthworks and demolition activities have completed and are therefore exposed to
long-term climate change. This could materially affect rates of precipitation and therefore change the volume of water requiring processing. It is not currently possible to forecast
accurately the impact this could have on the closure provision as some of our locations could experience drier conditions whereas others could experience greater rainfall. A further
consideration relates to the alternative commercial use for the processed water, which could support ultimate transfer of these costs to a third party.
(c)
Indirect costs, owners' costs and contingency include adjustments to the underlying cash flows to align the closure provision with a central-case estimate. This excludes allowances for
quantitative estimation uncertainties, which are allocated to the underlying cost driver and presented within the respective cost categories above.
Geographic composition as at 31 December
Australia
USA
Canada
Rest of World
Total
2021
US$m
7,605
4,057
1,662
1,218
14,542
2020
US$m
7,076
3,819
1,482
958
13,335
The geographic composition of the closure provision shows that our closure obligations are largely in countries with established levels of
regulation in respect of mine and site closure.
Notes to the 2021 financial statements
Trade payables
Trade payables
Other financial payables
Other financial payables
Other payables
Other payables
Deferred income(a)
Deferred income(a)
Accruals
Accruals
Employee entitlements
Employee entitlements
Royalties and mining taxes
Royalties and mining taxes
Amounts owed to equity accounted units
Amounts owed to equity accounted units
Government grants deferred
Government grants deferred
Total
Total
Non-current
Non-current
2021
2021
US$m
US$m
—
—
254
254
82
82
141
141
42
42
—
—
2
2
213
213
64
64
798
798
Current
Current
2021
2021
US$m
US$m
3,410
3,410
1,488
1,488
909
909
110
110
399
399
798
798
574
574
40
40
5
5
Total
Total
2021
2021
US$m
US$m
3,410
3,410
1,163
1,163
192
192
540
540
1,530
1,530
798
798
576
576
253
253
69
69
Non-current
Non-current
2020
2020
US$m
US$m
1
1
298
298
97
97
133
133
27
27
—
—
3
3
190
190
71
71
820
820
Current
Current
2020
2020
US$m
US$m
3,124
3,124
1,294
1,294
862
862
115
115
344
344
762
762
863
863
51
51
6
6
Total
Total
2020
2020
US$m
US$m
3,125
3,125
1,160
1,160
212
212
477
477
1,321
1,321
762
762
866
866
241
241
77
77
7,733
7,733
8,531
8,531
7,421
7,421
8,241
8,241
(a)
(a)
Deferred income includes contract liabilities of US$383 million (2020: US$338 million).
Deferred income includes contract liabilities of US$383 million (2020: US$338 million).
The fair value of trade payables and financial instruments within other payables approximates their carrying value.
The fair value of trade payables and financial instruments within other payables approximates their carrying value.
25 Provisions (including post-retirement benefits)
25 Provisions (including post-retirement benefits)
At 1 January
At 1 January
Adjustment on currency translation
Adjustment on currency translation
Adjustments to mining properties/right of use assets:
Adjustments to mining properties/right of use assets:
– increases to existing and new provisions
– increases to existing and new provisions
– change in discount rate
– change in discount rate
Charged/(credited) to profit:
Charged/(credited) to profit:
– increases to existing and new provisions
– increases to existing and new provisions
– change in discount rate
– change in discount rate
– unused amounts reversed
– unused amounts reversed
– exchange losses on provisions
– exchange losses on provisions
– amortisation of discount
– amortisation of discount
Utilised in year
Utilised in year
income
income
Transfers and other movements(a)
Transfers and other movements(a)
At 31 December
At 31 December
Balance sheet analysis:
Balance sheet analysis:
Current
Current
Non-current
Non-current
Total
Total
Re-measurement (gains)/losses recognised in other comprehensive
Re-measurement (gains)/losses recognised in other comprehensive
Pensions
Pensions
and
and
post-
post-
US$m
US$m
3,055
3,055
retirement
retirement
employee
employee
restoration/
restoration/
healthcare(b)
healthcare(b)
entitlements(c)
entitlements(c)
environmental(d)
environmental(d)
Other
Other
US$m
US$m
419
419
Close-down
Close-down
and
and
US$m
US$m
13,335
13,335
Other
Other
US$m
US$m
856
856
Total
Total
2021
2021
US$m
US$m
Total
Total
2020
2020
US$m
US$m
17,665
17,665
15,103
15,103
(11)
(11)
(23)
(23)
(483)
(483)
(29)
(29)
(546)
(546)
890
890
Note
Note
14
14
(129)
(129)
(102)
(102)
(541)
(541)
(128)
(128)
(900)
(900)
161
161
—
—
—
—
—
—
—
—
—
—
—
—
(687)
(687)
(291)
(291)
2,098
2,098
66
66
2,032
2,032
2,098
2,098
112
112
—
—
(21)
(21)
—
—
—
—
—
—
—
—
—
—
9
9
394
394
317
317
77
77
394
394
518
518
—
—
1,475
1,475
—
—
23
23
415
415
—
—
3
3
—
—
382
382
—
—
—
—
3
3
—
—
521
521
—
—
2,130
2,130
—
—
23
23
418
418
141
141
816
816
1,074
1,074
140
140
(299)
(299)
(22)
(22)
377
377
(774)
(774)
(192)
(192)
(37)
(37)
(250)
(250)
(687)
(687)
250
250
(8)
(8)
(48)
(48)
(338)
(338)
(31)
(31)
14,542
14,542
1,002
1,002
18,036
18,036
17,665
17,665
1,023
1,023
13,519
13,519
14,542
14,542
700
700
302
302
1,002
1,002
2,106
2,106
15,930
15,930
18,036
18,036
1,729
1,729
15,936
15,936
17,665
17,665
Projected cash spend for the undiscounted close-down and restoration/environmental clean-up provision
Projected cash spend for the undiscounted close-down and restoration/environmental clean-up provision
Undiscounted close-down and environmental restoration cash flows
Undiscounted close-down and environmental restoration cash flows
At 31 December 2021
At 31 December 2021
At 31 December 2020
At 31 December 2020
<1yr
<1yr
US$m
US$m
1,023
1,023
776
776
1-3 yrs
1-3 yrs
US$m
US$m
1,652
1,652
1,203
1,203
3-5 yrs
3-5 yrs
US$m
US$m
1,680
1,680
1,433
1,433
> 5 yrs
> 5 yrs
US$m
US$m
14,420
14,420
13,988
13,988
Total
Total
US$m
US$m
18,775
18,775
17,400
17,400
(a)
(a)
During the year ended 31 December 2021, the Group entered into an agreement to transfer its partially funded pension obligations in France to an external insurer. The insurance premium
During the year ended 31 December 2021, the Group entered into an agreement to transfer its partially funded pension obligations in France to an external insurer. The insurance premium
was paid by the transfer of the existing pension assets valued at US$89 million plus an additional cash payment of €247 million (US$294 million), of which US$3 million was taken to the
was paid by the transfer of the existing pension assets valued at US$89 million plus an additional cash payment of €247 million (US$294 million), of which US$3 million was taken to the
income statement. The Group has no further legal or constructive obligation relating to the insured pensions and has reflected this transaction as a settlement.
income statement. The Group has no further legal or constructive obligation relating to the insured pensions and has reflected this transaction as a settlement.
(b)
(b)
The main assumptions used to determine the provision for pensions and post-retirement healthcare, and other information, including the expected level of future funding payments in
The main assumptions used to determine the provision for pensions and post-retirement healthcare, and other information, including the expected level of future funding payments in
respect of those arrangements, are given in note 42.
respect of those arrangements, are given in note 42.
(c)
(c)
The provision for other employee entitlements includes a provision for long service leave of US$272 million (2020: US$283 million), based on the relevant entitlements in certain Group
The provision for other employee entitlements includes a provision for long service leave of US$272 million (2020: US$283 million), based on the relevant entitlements in certain Group
operations and includes US$60 million (2020: US$62 million) of provision for redundancy and severance payments.
operations and includes US$60 million (2020: US$62 million) of provision for redundancy and severance payments.
(d)
(d)
The Group’s policy on close-down and restoration costs is described in note 1(l) and in paragraph (iii) under “Critical accounting policies and estimates” on page 230. Close-down and
The Group’s policy on close-down and restoration costs is described in note 1(l) and in paragraph (iii) under “Critical accounting policies and estimates” on page 230. Close-down and
restoration costs are a normal consequence of mining, and the majority of close-down and restoration expenditure is incurred in the years following closure of the mine, refinery or smelter.
restoration costs are a normal consequence of mining, and the majority of close-down and restoration expenditure is incurred in the years following closure of the mine, refinery or smelter.
Non-current provisions for close-down, restoration and environmental expenditure include amounts relating to environmental clean-up of US$645 million (2020: US$468 million) expected
Non-current provisions for close-down, restoration and environmental expenditure include amounts relating to environmental clean-up of US$645 million (2020: US$468 million) expected
to take place between one and five years from the balance sheet date, and US$1,059 million (2020: US$937 million) expected to take place later than five years after the balance sheet
to take place between one and five years from the balance sheet date, and US$1,059 million (2020: US$937 million) expected to take place later than five years after the balance sheet
date.
date.
Close-down, restoration and environmental liabilities at 31 December 2021 have not been adjusted for closure related receivables amounting to US$410 million (2020: US$574 million) due
Close-down, restoration and environmental liabilities at 31 December 2021 have not been adjusted for closure related receivables amounting to US$410 million (2020: US$574 million) due
from the ERA trust fund and other financial assets held for the purposes of meeting closure obligations. These are included within “Receivables and other assets” on the balance sheet.
from the ERA trust fund and other financial assets held for the purposes of meeting closure obligations. These are included within “Receivables and other assets” on the balance sheet.
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259259
Financial statements continued
Notes to the 2021 financial statements
26 Share capital – Rio Tinto plc
Issued and fully paid up share capital of 10p each
At 1 January
Ordinary shares issued(a)(c)
Shares purchased and cancelled(b)
At 31 December
Shares held by public
At 1 January
Shares reissued from treasury(a)
Ordinary shares issued(a)(c)
Shares purchased and cancelled(b)
At 31 December
Shares held in treasury
Shares held by public
Total share capital
Other share classes
Special Voting Share of 10p each(d)
DLC Dividend Share of 10p each(d)
2021
Number
(million)
2020
Number
(million)
2019
Number
(million)
2021
US$m
2020
US$m
2019
US$m
1,255.756
0.039
—
1,255.795
1,259.345
0.039
(3.628)
1,287.660
0.041
(28.356)
1,255.756
1,259.345
207
—
—
207
207
—
—
207
211
—
(4)
207
1,246.904
1.198
0.039
—
1,248.141
7.654
1,248.141
1,255.795
1,249.924
0.569
0.039
(3.628)
1,246.904
8.852
1,246.904
1,255.756
1,278.215
0.024
0.041
(28.356)
1,249.924
9.421
1,249.924
1,259.345
1 only
1 only
1 only
1 only
1 only
1 only
(a)
(b)
(c)
(d)
38,581 ordinary shares were issued in 2021 under the Global Employee Share Plan (GESP). 1,197,858 ordinary shares were reissued from treasury during the year resulting from the
vesting of awards under Rio Tinto plc employee share-based payment plans, with market values between £44.61 and £64.80 per share (2020: 39,273 ordinary shares were issued under the
GESP and 568,863 ordinary shares were reissued from treasury with exercise prices and market values between £32.74 and £56.32 per share; 2019: 40,974 ordinary shares were issued
under the GESP and 23,659 ordinary shares reissued from treasury with exercise prices and market values between £36.33 and £49.74 per share).
The authority for the company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares were bought back and cancelled in 2021 under the on-market
buy-back programme. 3,627,568 shares were bought back and cancelled in 2020 under the on-market buy-back programme. 28,356,034 shares were bought back in 2019 under the on-
market buy-back programme.
The aggregate consideration for new shares issued under the GESP was US$1.8 million (2020: US$1.3 million; 2019: US$1.1 million). The difference between the nominal value and the
issue price of the shares issued was credited to the share premium account. The aggregate consideration received for treasury shares reissued was US$0.2 million (2020: US$1 million;
2019: US$1 million). No new shares were issued as a result of the exercise of options under Rio Tinto plc employee share-based payment plans in 2021, 2020 and 2019.
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
and is governed by the terms of the DLC Merger Sharing Agreement.
During 2021, US$18 million of shares and ADRs (2020: US$31 million; 2019: US$43 million) were purchased by employee share ownership trusts
on behalf of Rio Tinto plc to satisfy employee share awards on vesting. At 31 December 2021, 259,583 shares and 46,977 ADRs were held in the
employee share ownership trusts on behalf of Rio Tinto plc.
Information relating to share-based incentive schemes is given in note 41.
27 Share capital – Rio Tinto Limited
Issued and fully paid up share capital
At 1 January
Adjustment on currency translation
At 31 December
– Special Voting Share(a)
– DLC Dividend Share(a)
Total share capital
2021
Number
(million)
2020
Number
(million)
2019
Number
(million)
371.21
371.21
371.21
371.21
1 only
1 only
371.21
371.21
1 only
1 only
371.21
371.21
1 only
1 only
371.21
2021
US$m
3,781
(211)
3,570
2020
US$m
3,448
333
3,781
2019
US$m
3,477
(29)
3,448
(a)
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto Limited and Rio Tinto plc on Joint Decisions following the DLC Merger. The “DLC Dividend
Share” was issued to facilitate the efficient management of funds within the DLC structure. Directors have the ability to issue an Equalisation Share if that is required under the terms of the
DLC Merger Sharing Agreement.
During 2021, US$95 million of shares (2020: US$76 million; 2019: US$63 million) were purchased by employee share ownership trusts on behalf
of Rio Tinto Limited to satisfy employee share awards on vesting. At 31 December 2021, 995,173 shares were held in the employee share
ownership trusts on behalf of Rio Tinto Limited.
Information relating to share-based incentive schemes is given in note 41.
260
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
26 Share capital – Rio Tinto plc
26 Share capital – Rio Tinto plc
Issued and fully paid up share capital of 10p each
Issued and fully paid up share capital of 10p each
At 1 January
At 1 January
Ordinary shares issued(a)(c)
Ordinary shares issued(a)(c)
Shares purchased and cancelled(b)
Shares purchased and cancelled(b)
At 31 December
At 31 December
Shares held by public
Shares held by public
At 1 January
At 1 January
Shares reissued from treasury(a)
Shares reissued from treasury(a)
Ordinary shares issued(a)(c)
Ordinary shares issued(a)(c)
Shares purchased and cancelled(b)
Shares purchased and cancelled(b)
At 31 December
At 31 December
Shares held in treasury
Shares held in treasury
Shares held by public
Shares held by public
Total share capital
Total share capital
Other share classes
Other share classes
Special Voting Share of 10p each(d)
Special Voting Share of 10p each(d)
DLC Dividend Share of 10p each(d)
DLC Dividend Share of 10p each(d)
2021
2021
Number
Number
(million)
(million)
2020
2020
Number
Number
(million)
(million)
2019
2019
Number
Number
(million)
(million)
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
1,255.756
1,255.756
1,259.345
1,259.345
1,287.660
1,287.660
0.039
0.039
—
—
0.039
0.039
0.041
0.041
(3.628)
(3.628)
(28.356)
(28.356)
1,255.795
1,255.795
1,255.756
1,255.756
1,259.345
1,259.345
207
207
—
—
—
—
207
207
207
207
—
—
—
—
207
207
211
211
—
—
(4)
(4)
207
207
1,246.904
1,246.904
1,249.924
1,249.924
1,278.215
1,278.215
1.198
1.198
0.039
0.039
—
—
0.569
0.569
0.039
0.039
0.024
0.024
0.041
0.041
(3.628)
(3.628)
(28.356)
(28.356)
1,248.141
1,248.141
1,246.904
1,246.904
1,249.924
1,249.924
7.654
7.654
8.852
8.852
9.421
9.421
1,248.141
1,248.141
1,246.904
1,246.904
1,249.924
1,249.924
1,255.795
1,255.795
1,255.756
1,255.756
1,259.345
1,259.345
1 only
1 only
1 only
1 only
1 only
1 only
1 only
1 only
1 only
1 only
1 only
1 only
(a)
(a)
38,581 ordinary shares were issued in 2021 under the Global Employee Share Plan (GESP). 1,197,858 ordinary shares were reissued from treasury during the year resulting from the
38,581 ordinary shares were issued in 2021 under the Global Employee Share Plan (GESP). 1,197,858 ordinary shares were reissued from treasury during the year resulting from the
vesting of awards under Rio Tinto plc employee share-based payment plans, with market values between £44.61 and £64.80 per share (2020: 39,273 ordinary shares were issued under the
vesting of awards under Rio Tinto plc employee share-based payment plans, with market values between £44.61 and £64.80 per share (2020: 39,273 ordinary shares were issued under the
GESP and 568,863 ordinary shares were reissued from treasury with exercise prices and market values between £32.74 and £56.32 per share; 2019: 40,974 ordinary shares were issued
GESP and 568,863 ordinary shares were reissued from treasury with exercise prices and market values between £32.74 and £56.32 per share; 2019: 40,974 ordinary shares were issued
under the GESP and 23,659 ordinary shares reissued from treasury with exercise prices and market values between £36.33 and £49.74 per share).
under the GESP and 23,659 ordinary shares reissued from treasury with exercise prices and market values between £36.33 and £49.74 per share).
(b)
(b)
The authority for the company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares were bought back and cancelled in 2021 under the on-market
The authority for the company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares were bought back and cancelled in 2021 under the on-market
buy-back programme. 3,627,568 shares were bought back and cancelled in 2020 under the on-market buy-back programme. 28,356,034 shares were bought back in 2019 under the on-
buy-back programme. 3,627,568 shares were bought back and cancelled in 2020 under the on-market buy-back programme. 28,356,034 shares were bought back in 2019 under the on-
market buy-back programme.
market buy-back programme.
(c)
(c)
The aggregate consideration for new shares issued under the GESP was US$1.8 million (2020: US$1.3 million; 2019: US$1.1 million). The difference between the nominal value and the
The aggregate consideration for new shares issued under the GESP was US$1.8 million (2020: US$1.3 million; 2019: US$1.1 million). The difference between the nominal value and the
issue price of the shares issued was credited to the share premium account. The aggregate consideration received for treasury shares reissued was US$0.2 million (2020: US$1 million;
issue price of the shares issued was credited to the share premium account. The aggregate consideration received for treasury shares reissued was US$0.2 million (2020: US$1 million;
2019: US$1 million). No new shares were issued as a result of the exercise of options under Rio Tinto plc employee share-based payment plans in 2021, 2020 and 2019.
2019: US$1 million). No new shares were issued as a result of the exercise of options under Rio Tinto plc employee share-based payment plans in 2021, 2020 and 2019.
(d)
(d)
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
and is governed by the terms of the DLC Merger Sharing Agreement.
and is governed by the terms of the DLC Merger Sharing Agreement.
During 2021, US$18 million of shares and ADRs (2020: US$31 million; 2019: US$43 million) were purchased by employee share ownership trusts
During 2021, US$18 million of shares and ADRs (2020: US$31 million; 2019: US$43 million) were purchased by employee share ownership trusts
on behalf of Rio Tinto plc to satisfy employee share awards on vesting. At 31 December 2021, 259,583 shares and 46,977 ADRs were held in the
on behalf of Rio Tinto plc to satisfy employee share awards on vesting. At 31 December 2021, 259,583 shares and 46,977 ADRs were held in the
employee share ownership trusts on behalf of Rio Tinto plc.
employee share ownership trusts on behalf of Rio Tinto plc.
Information relating to share-based incentive schemes is given in note 41.
Information relating to share-based incentive schemes is given in note 41.
27 Share capital – Rio Tinto Limited
27 Share capital – Rio Tinto Limited
2021
2021
Number
Number
(million)
(million)
2020
2020
Number
Number
(million)
(million)
2019
2019
Number
Number
(million)
(million)
2021
2021
US$m
US$m
371.21
371.21
371.21
371.21
371.21
371.21
3,781
3,781
(211)
(211)
371.21
371.21
3,570
3,570
371.21
371.21
1 only
1 only
1 only
1 only
371.21
371.21
371.21
371.21
1 only
1 only
1 only
1 only
371.21
371.21
1 only
1 only
1 only
1 only
371.21
371.21
2020
2020
US$m
US$m
3,448
3,448
333
333
3,781
3,781
2019
2019
US$m
US$m
3,477
3,477
(29)
(29)
3,448
3,448
Issued and fully paid up share capital
Issued and fully paid up share capital
At 1 January
At 1 January
Adjustment on currency translation
Adjustment on currency translation
At 31 December
At 31 December
– Special Voting Share(a)
– Special Voting Share(a)
– DLC Dividend Share(a)
– DLC Dividend Share(a)
Total share capital
Total share capital
DLC Merger Sharing Agreement.
DLC Merger Sharing Agreement.
(a)
(a)
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto Limited and Rio Tinto plc on Joint Decisions following the DLC Merger. The “DLC Dividend
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto Limited and Rio Tinto plc on Joint Decisions following the DLC Merger. The “DLC Dividend
Share” was issued to facilitate the efficient management of funds within the DLC structure. Directors have the ability to issue an Equalisation Share if that is required under the terms of the
Share” was issued to facilitate the efficient management of funds within the DLC structure. Directors have the ability to issue an Equalisation Share if that is required under the terms of the
During 2021, US$95 million of shares (2020: US$76 million; 2019: US$63 million) were purchased by employee share ownership trusts on behalf
During 2021, US$95 million of shares (2020: US$76 million; 2019: US$63 million) were purchased by employee share ownership trusts on behalf
of Rio Tinto Limited to satisfy employee share awards on vesting. At 31 December 2021, 995,173 shares were held in the employee share
of Rio Tinto Limited to satisfy employee share awards on vesting. At 31 December 2021, 995,173 shares were held in the employee share
ownership trusts on behalf of Rio Tinto Limited.
ownership trusts on behalf of Rio Tinto Limited.
Information relating to share-based incentive schemes is given in note 41.
Information relating to share-based incentive schemes is given in note 41.
28 Other reserves and retained earnings
Capital redemption reserve(a)
At 1 January
Own shares purchased and cancelled
At 31 December
Cash flow hedge reserve
At 1 January
Cash flow hedge (losses)/gains
Cash flow hedge losses/(gains) transferred to the income statement
Tax on the above
At 31 December
Fair value through other comprehensive income reserve
At 1 January
Gains/(losses) on equity investments
At 31 December
Cost of hedging reserve
At 1 January
Cost of hedging deferred to reserves during the year
At 31 December
Other reserves(b)
At 1 January
Own shares purchased from Rio Tinto Limited shareholders to satisfy share options
Employee share options: value of services
Deferred tax on share options
At 31 December
Foreign currency translation reserve(c)
At 1 January
Parent and subsidiaries' currency translation and exchange adjustments
Equity accounted units currency translation adjustments
Currency translation reclassified on disposal
At 31 December
Total other reserves per balance sheet
Retained earnings(d)
At 1 January
Adjustment for transition to new accounting pronouncements(e)
Parent and subsidiaries' profit for the year
Equity accounted units' profit after tax for the year
Re-measurement gains/(losses) on pension and post-retirement healthcare plans(f)
Tax relating to components of other comprehensive income
Total comprehensive income for the year
Share buy-back programme
Dividends paid
Change in equity interest held by Rio Tinto
Own shares purchased/treasury shares reissued for share options and other movements
Employee share options and other IFRS 2 charges taken to the income statement
At 31 December
2021
US$m
2020
US$m
2019
US$m
51
—
51
124
(211)
14
62
(11)
(2)
4
2
(3)
(18)
(21)
51
—
51
160
24
(63)
3
124
(11)
9
(2)
(10)
7
(3)
47
4
51
195
12
(41)
(6)
160
(6)
(5)
(11)
(13)
3
(10)
11,628
(95)
55
(6)
11,582
162
(1,755)
(12)
—
(1,605)
11,643
(76)
60
1
11,628
(2,656)
2,814
4
—
162
11,650
(63)
52
4
11,643
(3,212)
331
10
215
(2,656)
9,998
11,960
9,177
2021
US$m
2020
US$m
2019
US$m
26,792
—
20,052
1,042
1,015
(297)
21,812
—
(15,385)
76
(18)
60
33,337
23,387
—
9,456
313
(482)
116
9,403
(1)
(6,132)
84
(31)
82
26,792
27,025
(113)
7,709
301
(259)
81
7,832
(1,135)
(10,334)
85
(43)
70
23,387
(a) The capital redemption reserve was set up to comply with section 733 of the UK Companies Act 2006 (previously section 170 of the UK Companies Act 1985) when shares of a company are
redeemed or purchased wholly out of the company’s profits. Balances reflect the amount by which the company’s issued share capital is diminished in accordance with this section.
(b) Other reserves includes US$11,936 million which represents the difference between the nominal value and issue price of the shares issued arising from Rio Tinto plc’s rights issue completed
in July 2009. No share premium was recorded in the Rio Tinto plc financial statements through the operation of the merger relief provisions of the UK Companies Act 1985.
Other reserves also include the cumulative amount recognised under IFRS 2 “Share Based Payment” in respect of options granted but not exercised to acquire shares in Rio Tinto Limited,
less, where applicable, the cost of shares purchased to satisfy share options exercised. The cumulative amount recognised under IFRS 2 in respect of options granted but not exercised to
acquire shares in Rio Tinto plc is recorded in retained earnings.
Exchange differences arising on the translation of the Group’s net investment in foreign controlled companies are taken to the foreign currency translation reserve, as described in note 1(d).
The cumulative differences relating to an investment are transferred to the income statement when the investment is disposed of.
(c)
(d) Retained earnings and movements in reserves of subsidiaries include those arising from the Group’s share of joint operations.
(e) The impact of the transition to new accounting pronouncements; IFRS 16 “Leases” and IFRIC 23 "Uncertainty over income tax treatments" on 1 January 2019.
(f)
There were US$12 million re-measurement gains relating to equity accounted units in 2021 (31 December 2020: US$11 million losses, 31 December 2019: US$7 million losses).
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Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management
In this note, except where stated, the information relates to the financial instruments of the parent companies and their subsidiaries and joint
operations, and excludes those of equity accounted units. We have grouped the information in the following sections:
A – Financial assets and liabilities by categories
B – Derivative financial instruments
C – Fair values
A (a) Financial assets and liabilities by categories
At 31 December 2021
Financial assets
Cash and cash equivalents
Trade and other financial receivables(a)(b)
Equity shares and quoted funds
Other investments, including loans(c)
Derivatives related to net debt: designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Loans to equity accounted units including quasi equity loans
Total financial assets
Financial liabilities
Trade and other financial payables(e)
Short-term borrowings and bank overdrafts
Medium-term and long-term borrowings
Derivatives related to net debt: designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Other financial liabilities
Total financial liabilities
At 31 December 2020
Financial assets
Cash and cash equivalents
Trade and other financial receivables(a)(b)
Equity shares and quoted funds
Other investments, including loans(c)
Derivatives related to net debt: designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Loans to equity accounted units including quasi equity loans
Total financial assets
Financial liabilities
Trade and other financial payables(e)
Short-term borrowings and bank overdrafts
Medium-term and long-term borrowings
Derivatives related to net debt: designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Other financial liabilities
Total financial liabilities
Note
20
18
19
19
19, 23
19
19
24
21
21
21, 23
21
21
21
Total
US$m
Amortised
cost
US$m
Fair value
through other
comprehensive
income
US$m
Fair value
through
profit and
loss
US$m
Note
20
18
19
19
19, 23
19
12,807
2,762
117
2,682
139
133
96
18,736
8,669
1,598
—
22
—
—
96
10,385
—
—
98
—
—
—
—
98
24
21
21
21, 23
21
21
21
(6,356)
(1,136)
(12,395)
(240)
(255)
(123)
(20)
(20,525)
(6,289)
(1,136)
(12,395)
—
—
—
(20)
(19,840)
Fair value
through other
comprehensive
income
US$m
Fair value
through
profit and
loss
US$m
Amortised
cost
US$m
Total
US$m
10,381
3,286
75
2,899
388
204
73
153
17,459
3,970
1,479
—
138
—
—
—
153
5,740
—
—
64
—
—
—
—
—
64
(5,847)
(584)
(13,247)
(140)
(24)
(20)
—
(19,862)
(5,817)
(584)
(13,247)
—
—
—
—
(19,648)
4,138
1,164
19
2,660
139
133
—
8,253
(67)
—
—
(240)
(255)
(123)
—
(685)
6,411
1,807
11
2,761
388
204
73
—
11,655
(30)
—
—
(140)
(24)
(20)
—
(214)
(a)
(b)
(c)
(d)
(e)
Trade and other financial receivables comprise trade receivables, other financial receivables, receivables relating to net investments in finance leases and amounts due from equity
accounted units within note 18.
Provisionally priced receivables are fair valued.
Other investments, including loans, include US$2,401 million (2020: US$2,538 million) of highly liquid financial assets in managed investment funds classified as held for trading.
These financial assets and liabilities in aggregate agree to the total derivative financial instruments disclosed in notes 19 and 21.
Trade and other financial payables comprise trade payables, other financial payables, accruals and amounts due to equity accounted units within note 24. The trade and other payables held
at fair value are valued using Level 2 inputs.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
29 Financial instruments and risk management
29 Financial instruments and risk management
In this note, except where stated, the information relates to the financial instruments of the parent companies and their subsidiaries and joint
In this note, except where stated, the information relates to the financial instruments of the parent companies and their subsidiaries and joint
operations, and excludes those of equity accounted units. We have grouped the information in the following sections:
operations, and excludes those of equity accounted units. We have grouped the information in the following sections:
A (b) Financial risk management
Objectives and policy
Our financial risk management objectives are:
A – Financial assets and liabilities by categories
A – Financial assets and liabilities by categories
B – Derivative financial instruments
B – Derivative financial instruments
C – Fair values
C – Fair values
A (a) Financial assets and liabilities by categories
A (a) Financial assets and liabilities by categories
– to have in place a robust capital structure to manage the organisation through the commodity cycle; and
– to allow our financial exposures to float with the market.
Any exceptions to these require formal approval by the Board.
Amortised
Amortised
comprehensive
comprehensive
Fair value
Fair value
through other
through other
income
income
US$m
US$m
Fair value
Fair value
through
through
profit and
profit and
loss
loss
US$m
US$m
The Group operates a floating prices and rates policy for the management of our key economic exposure to commodity price, foreign exchange
and interest rates risks. We do not seek to hedge this floating exposure and will re-float, where possible, any material price or rates that are fixed.
Where this is impossible (or sub-optimal) any non-floating price risks are managed within defined market risk tolerances. Derivatives are used as
and when required in order to manage our exposure in accordance with this underlying financial risk management principle.
In the paragraphs below, we summarise the risks that we are exposed to, and outline how our Treasury and Commercial teams manage these risks
in accordance with agreed policies. These teams operate under a strong control environment, within approved limits. Our Board reviews and
approves limits at least annually.
(i) Capital and liquidity risk
Our overriding objective when managing capital and liquidity is to safeguard the business as a going concern. Capital is allocated in a consistent
and disciplined manner, prioritising sustaining capital expenditure, followed by the ordinary dividend and then an iterative allocation between
investing in compelling growth opportunities, maintaining balance sheet strength and delivering further returns to shareholders.
Our Board and senior management regularly review the capital structure and liquidity of the Group. They take into account our strategic priorities,
the economic and business conditions, and any identified investment opportunities, along with the expected returns to shareholders. We expect
total cash returns to shareholders over the longer term to be in a range of 40–60% of underlying earnings in aggregate through the commodity
cycle.
We consider various financial metrics when managing our risk, including net debt, gearing, the overall level of borrowings and their maturity
profile, liquidity levels, total capital, future cash flows, underlying EBITDA and interest cover ratios.
Amortised
Amortised
comprehensive
comprehensive
Fair value
Fair value
through other
through other
income
income
US$m
US$m
Fair value
Fair value
through
through
profit and
profit and
loss
loss
US$m
US$m
Our total capital as at 31 December was:
Total capital
Equity attributable to owners of Rio Tinto (see Group balance sheet)
Equity attributable to non-controlling interests (see Group balance sheet)
Net (cash)/debt
Total capital
Note
23
2021
US$m
51,432
5,158
(1,576)
55,014
2020
US$m
47,054
4,849
664
52,567
Our net cash increased by US$2.2 billion to US$1.6 billion at 31 December 2021 from net debt of US$0.7 billion at 31 December 2020. This was
driven by operating cash inflows, partially offset by capital expenditure and cash returns to shareholders during the year. At 31 December 2021
net gearing was (3)% (2020: 1%) and interest cover was 59 times (2020: 39 times).
We have access to various forms of financing including our US Shelf Programme, European Debt Issuance Programme, Commercial Paper and
credit facilities. On 28 October 2021, we issued US$1.25 billion 30-year fixed rate SEC-registered bonds with a coupon of 2.75%. The proceeds of
the new issuance were used to fund the early redemption and extinguishment of the company’s US$1.20 billion 3.75% bonds due to mature in
June 2025.
On 16 November 2021, Rio Tinto Finance plc and Rio Tinto Finance Limited completed the renewal of our US$7.5 billion multi-currency revolving
credit facility with a syndicate of banks. The facility is guaranteed by Rio Tinto plc and Rio Tinto Limited and has a five-year term, that now
matures in November 2026. Other features include: two consecutive one-year extension options and a US$6.2 billion denominated same day
access swing-line facility. The new facility replaced the US$7.5 billion dual tranche revolving credit facility dated 15 November 2013, last
amended in November 2020. The facility remained undrawn throughout the year.
Our credit ratings, as provided by Standard & Poor’s and Moody’s investor services, as at 31 December were:
Trade and other financial receivables comprise trade receivables, other financial receivables, receivables relating to net investments in finance leases and amounts due from equity
Trade and other financial receivables comprise trade receivables, other financial receivables, receivables relating to net investments in finance leases and amounts due from equity
Other investments, including loans, include US$2,401 million (2020: US$2,538 million) of highly liquid financial assets in managed investment funds classified as held for trading.
Other investments, including loans, include US$2,401 million (2020: US$2,538 million) of highly liquid financial assets in managed investment funds classified as held for trading.
These financial assets and liabilities in aggregate agree to the total derivative financial instruments disclosed in notes 19 and 21.
These financial assets and liabilities in aggregate agree to the total derivative financial instruments disclosed in notes 19 and 21.
Trade and other financial payables comprise trade payables, other financial payables, accruals and amounts due to equity accounted units within note 24. The trade and other payables held
Trade and other financial payables comprise trade payables, other financial payables, accruals and amounts due to equity accounted units within note 24. The trade and other payables held
at fair value are valued using Level 2 inputs.
at fair value are valued using Level 2 inputs.
Long-term rating
Short-term rating
Outlook
2021
2020
A/A2
A-1/P-1
Stable/Stable
A/A2
A-1/P-1
Stable/Stable
Our unified credit status is maintained through cross guarantees, which mean the contractual obligations of Rio Tinto plc and Rio Tinto Limited are
automatically guaranteed by the other.
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Derivatives related to net debt: designated as hedges(d)
Derivatives related to net debt: designated as hedges(d)
19, 23
19, 23
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Loans to equity accounted units including quasi equity loans
Loans to equity accounted units including quasi equity loans
Total financial assets
Total financial assets
Derivatives related to net debt: designated as hedges(d)
Derivatives related to net debt: designated as hedges(d)
21, 23
21, 23
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Other financial liabilities
Other financial liabilities
Total financial liabilities
Total financial liabilities
Derivatives related to net debt: designated as hedges(d)
Derivatives related to net debt: designated as hedges(d)
19, 23
19, 23
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Loans to equity accounted units including quasi equity loans
Loans to equity accounted units including quasi equity loans
Total financial assets
Total financial assets
Derivatives related to net debt: designated as hedges(d)
Derivatives related to net debt: designated as hedges(d)
21, 23
21, 23
(140)
(140)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Derivatives and embedded derivatives not related to net debt: not designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
Embedded derivatives not related to net debt: designated as hedges(d)
At 31 December 2021
At 31 December 2021
Financial assets
Financial assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other financial receivables(a)(b)
Trade and other financial receivables(a)(b)
Equity shares and quoted funds
Equity shares and quoted funds
Other investments, including loans(c)
Other investments, including loans(c)
Financial liabilities
Financial liabilities
Trade and other financial payables(e)
Trade and other financial payables(e)
Short-term borrowings and bank overdrafts
Short-term borrowings and bank overdrafts
Medium-term and long-term borrowings
Medium-term and long-term borrowings
At 31 December 2020
At 31 December 2020
Financial assets
Financial assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other financial receivables(a)(b)
Trade and other financial receivables(a)(b)
Equity shares and quoted funds
Equity shares and quoted funds
Other investments, including loans(c)
Other investments, including loans(c)
Financial liabilities
Financial liabilities
Trade and other financial payables(e)
Trade and other financial payables(e)
Short-term borrowings and bank overdrafts
Short-term borrowings and bank overdrafts
Medium-term and long-term borrowings
Medium-term and long-term borrowings
Other financial liabilities
Other financial liabilities
Total financial liabilities
Total financial liabilities
accounted units within note 18.
accounted units within note 18.
Provisionally priced receivables are fair valued.
Provisionally priced receivables are fair valued.
(a)
(a)
(b)
(b)
(c)
(c)
(d)
(d)
(e)
(e)
Note
Note
20
20
18
18
19
19
19
19
19
19
24
24
21
21
21
21
21
21
21
21
21
21
Note
Note
20
20
18
18
19
19
19
19
19
19
19
19
24
24
21
21
21
21
21
21
21
21
21
21
Total
Total
US$m
US$m
12,807
12,807
2,762
2,762
117
117
2,682
2,682
139
139
133
133
96
96
cost
cost
US$m
US$m
8,669
8,669
1,598
1,598
—
—
22
22
—
—
—
—
96
96
18,736
18,736
10,385
10,385
(6,356)
(6,356)
(1,136)
(1,136)
(6,289)
(6,289)
(1,136)
(1,136)
(12,395)
(12,395)
(12,395)
(12,395)
(240)
(240)
(255)
(255)
(123)
(123)
(20)
(20)
—
—
—
—
—
—
(20)
(20)
(20,525)
(20,525)
(19,840)
(19,840)
Total
Total
US$m
US$m
10,381
10,381
3,286
3,286
75
75
2,899
2,899
388
388
204
204
73
73
153
153
17,459
17,459
cost
cost
US$m
US$m
3,970
3,970
1,479
1,479
—
—
138
138
—
—
—
—
—
—
153
153
5,740
5,740
(5,847)
(5,847)
(584)
(584)
(5,817)
(5,817)
(584)
(584)
(13,247)
(13,247)
(13,247)
(13,247)
(24)
(24)
(20)
(20)
—
—
—
—
—
—
—
—
—
—
(19,862)
(19,862)
(19,648)
(19,648)
—
—
—
—
98
98
—
—
—
—
—
—
—
—
98
98
—
—
—
—
64
64
—
—
—
—
—
—
—
—
—
—
64
64
4,138
4,138
1,164
1,164
19
19
2,660
2,660
139
139
133
133
—
—
8,253
8,253
(67)
(67)
—
—
—
—
(240)
(240)
(255)
(255)
(123)
(123)
—
—
(685)
(685)
6,411
6,411
1,807
1,807
11
11
2,761
2,761
388
388
204
204
73
73
—
—
11,655
11,655
(30)
(30)
—
—
—
—
(140)
(140)
(24)
(24)
(20)
(20)
—
—
(214)
(214)
Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
In the table below, we summarise the maturity profile of our financial liabilities on our balance sheet based on contractual undiscounted
payments. When the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the end of the
reporting period. This will therefore not necessarily agree with the amounts disclosed as the carrying value.
Financial liability analysis
At 31 December 2021
(Outflows)/Inflows
Non-derivative financial liabilities
Trade and other financial payables(a)
Expected lease liability payments
Borrowings before swaps
Expected future interest payments(a)
Other financial liabilities
Derivative financial liabilities(b)
Derivatives related to net debt – gross settled(a):
– gross inflows
– gross outflows
Derivatives not related to net debt – net settled
Derivatives not related to net debt – gross settled:
– gross inflows
– gross outflows
Total
At 31 December 2020
(Outflows)/Inflows
Non-derivative financial liabilities
Trade and other financial payables(a)
Expected lease liability payments
Borrowings before swaps
Expected future interest payments(a)
Other financial liabilities
Derivative financial liabilities(b)
Derivatives related to net debt – gross settled(a):
– gross inflows
– gross outflows
Derivatives not related to net debt – net settled
Derivatives not related to net debt – gross settled:
– gross inflows
– gross outflows
Total
Within 1
year or on
demand
US$m
Between
1 and 2
years
US$m
Between
2 and 3
years
US$m
Between
3 and 4
years
US$m
Between
4 and 5
years
US$m
After
5 years
US$m
Total
US$m
(20)
(93)
(597)
(414)
—
(406)
(704)
(8,112)
(3,485)
(6,275)
(1,731)
(12,204)
(5,795)
—
(20)
(31)
(266)
(746)
(486)
—
(34)
(174)
(1,318)
(460)
—
41
(44)
(77)
—
—
506
(590)
(40)
—
—
(18)
(133)
(604)
(439)
—
27
(34)
(10)
—
—
27
(34)
(3)
—
—
(1,609)
(2,110)
(1,211)
(1,134)
(12,897)
Within 1
year or on
demand
US$m
Between
1 and 2
years
US$m
Between
2 and 3
years
US$m
Between
3 and 4
years
US$m
Between
4 and 5
years
US$m
(53)
(231)
(667)
(522)
—
27
(34)
(7)
—
—
(15)
(155)
(743)
(495)
—
27
(34)
(2)
—
—
(34)
(101)
(1,256)
(469)
—
(19)
(84)
(1,892)
(427)
—
27
(34)
(2)
—
—
27
(34)
(2)
—
—
756
(909)
(37)
1,398
(1,655)
(353)
—
—
After
5 years
US$m
(394)
(724)
(7,477)
(2,999)
—
1,302
(1,340)
(26,673)
Total
US$m
(5,766)
(1,566)
(12,386)
(5,437)
—
790
(943)
(9)
925
(1,113)
(42)
—
—
290
(291)
(25,386)
(5,766)
(361)
(827)
(511)
(20)
41
(44)
(186)
1,302
(1,340)
(7,712)
(5,251)
(271)
(351)
(525)
—
27
(34)
(20)
290
(291)
(6,426)
(1,487)
(1,417)
(1,869)
(2,431)
(11,756)
(a)
(b)
The interest payable at year end was removed from trade and other financial payables and is shown within expected future interest payments. Interest payments have been projected using
interest rates applicable at the end of the applicable financial year. Where debt is subject to variable interest rates, future interest payments are subject to change in line with market rates.
The maturity grouping is based on the earliest payment date.
Offsetting and enforceable master netting agreements
When we have a legally enforceable right to offset our financial assets and liabilities and an intention to settle on a net basis, or realise the asset
and settle the liability simultaneously, we report the net amount in the consolidated balance sheet. Agreements with derivative counterparties are
based on the International Swaps and Derivatives Association master netting agreements that do not meet the criteria for offsetting, but allow for
the related amounts to be set-off in certain circumstances. During the year, there were no material amounts offset in the balance sheet.
(ii) Commodity price risk
Our broad commodity base means our exposure to commodity prices is diversified. Our normal policy is to sell our products at prevailing market
prices. Exceptions to this rule are subject to strict limits laid down by the Board, and to defined market risk tolerances and internal controls.
We sell our products to customers under contracts which vary in tenure and pricing mechanisms, including some volumes sold in the spot market.
Sales revenue may be subject to adjustment if product specifications do not conform to the terms specified in a sales contract.
Pricing for iron ore is on a range of terms, the majority being either monthly or quarterly average pricing mechanisms. We sell a smaller proportion
of iron ore volumes on the spot market.
264
264
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Financial statements continued
Financial statements
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
29 Financial instruments and risk management continued
In the table below, we summarise the maturity profile of our financial liabilities on our balance sheet based on contractual undiscounted
In the table below, we summarise the maturity profile of our financial liabilities on our balance sheet based on contractual undiscounted
payments. When the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the end of the
payments. When the amount payable is not fixed, the amount disclosed is determined by reference to the conditions existing at the end of the
reporting period. This will therefore not necessarily agree with the amounts disclosed as the carrying value.
reporting period. This will therefore not necessarily agree with the amounts disclosed as the carrying value.
Financial liability analysis
Financial liability analysis
At 31 December 2021
At 31 December 2021
(Outflows)/Inflows
(Outflows)/Inflows
Non-derivative financial liabilities
Non-derivative financial liabilities
Trade and other financial payables(a)
Trade and other financial payables(a)
Expected lease liability payments
Expected lease liability payments
Borrowings before swaps
Borrowings before swaps
Expected future interest payments(a)
Expected future interest payments(a)
Other financial liabilities
Other financial liabilities
Derivative financial liabilities(b)
Derivative financial liabilities(b)
Derivatives related to net debt – gross settled(a):
Derivatives related to net debt – gross settled(a):
Derivatives not related to net debt – net settled
Derivatives not related to net debt – net settled
Derivatives not related to net debt – gross settled:
Derivatives not related to net debt – gross settled:
– gross inflows
– gross inflows
– gross outflows
– gross outflows
– gross inflows
– gross inflows
– gross outflows
– gross outflows
Total
Total
At 31 December 2020
At 31 December 2020
(Outflows)/Inflows
(Outflows)/Inflows
Non-derivative financial liabilities
Non-derivative financial liabilities
Trade and other financial payables(a)
Trade and other financial payables(a)
Expected lease liability payments
Expected lease liability payments
Borrowings before swaps
Borrowings before swaps
Expected future interest payments(a)
Expected future interest payments(a)
Other financial liabilities
Other financial liabilities
Derivative financial liabilities(b)
Derivative financial liabilities(b)
Derivatives related to net debt – gross settled(a):
Derivatives related to net debt – gross settled(a):
Derivatives not related to net debt – net settled
Derivatives not related to net debt – net settled
Derivatives not related to net debt – gross settled:
Derivatives not related to net debt – gross settled:
– gross inflows
– gross inflows
– gross outflows
– gross outflows
– gross inflows
– gross inflows
– gross outflows
– gross outflows
Total
Total
Within 1
Within 1
year or on
year or on
demand
demand
US$m
US$m
Between
Between
1 and 2
1 and 2
years
years
US$m
US$m
Between
Between
2 and 3
2 and 3
years
years
US$m
US$m
Between
Between
3 and 4
3 and 4
years
years
US$m
US$m
Between
Between
4 and 5
4 and 5
years
years
US$m
US$m
After
After
5 years
5 years
US$m
US$m
Total
Total
US$m
US$m
(1,609)
(1,609)
(2,110)
(2,110)
(1,211)
(1,211)
(1,134)
(1,134)
(12,897)
(12,897)
(26,673)
(26,673)
Within 1
Within 1
year or on
year or on
demand
demand
US$m
US$m
Between
Between
1 and 2
1 and 2
years
years
US$m
US$m
Between
Between
2 and 3
2 and 3
years
years
US$m
US$m
Between
Between
3 and 4
3 and 4
years
years
US$m
US$m
Between
Between
4 and 5
4 and 5
years
years
US$m
US$m
(5,766)
(5,766)
(361)
(361)
(827)
(827)
(511)
(511)
(20)
(20)
41
41
(44)
(44)
(186)
(186)
1,302
1,302
(1,340)
(1,340)
(7,712)
(7,712)
(5,251)
(5,251)
(271)
(271)
(351)
(351)
(525)
(525)
—
—
27
27
(34)
(34)
(20)
(20)
290
290
(291)
(291)
(31)
(31)
(266)
(266)
(746)
(746)
(486)
(486)
—
—
(34)
(34)
(174)
(174)
(1,318)
(1,318)
(460)
(460)
—
—
41
41
(44)
(44)
(77)
(77)
—
—
—
—
506
506
(590)
(590)
(40)
(40)
—
—
—
—
(53)
(53)
(231)
(231)
(667)
(667)
(522)
(522)
—
—
27
27
(34)
(34)
(7)
(7)
—
—
—
—
(15)
(15)
(155)
(155)
(743)
(743)
(495)
(495)
—
—
27
27
(34)
(34)
(2)
(2)
—
—
—
—
(18)
(18)
(133)
(133)
(604)
(604)
(439)
(439)
—
—
27
27
(34)
(34)
(10)
(10)
—
—
—
—
(34)
(34)
(101)
(101)
(469)
(469)
—
—
27
27
(34)
(34)
(2)
(2)
—
—
—
—
(20)
(20)
(93)
(93)
(597)
(597)
(414)
(414)
—
—
(406)
(406)
(704)
(704)
(8,112)
(8,112)
(3,485)
(3,485)
(6,275)
(6,275)
(1,731)
(1,731)
(12,204)
(12,204)
(5,795)
(5,795)
—
—
(20)
(20)
27
27
(34)
(34)
(3)
(3)
—
—
—
—
756
756
(909)
(909)
(37)
(37)
—
—
—
—
1,398
1,398
(1,655)
(1,655)
(353)
(353)
1,302
1,302
(1,340)
(1,340)
After
After
5 years
5 years
US$m
US$m
(394)
(394)
(724)
(724)
(7,477)
(7,477)
(2,999)
(2,999)
—
—
790
790
(943)
(943)
(9)
(9)
—
—
—
—
Total
Total
US$m
US$m
(5,766)
(5,766)
(1,566)
(1,566)
(12,386)
(12,386)
(5,437)
(5,437)
—
—
925
925
(1,113)
(1,113)
(42)
(42)
290
290
(291)
(291)
(19)
(19)
(84)
(84)
(427)
(427)
—
—
27
27
(34)
(34)
(2)
(2)
—
—
—
—
(1,256)
(1,256)
(1,892)
(1,892)
(a)
(a)
The interest payable at year end was removed from trade and other financial payables and is shown within expected future interest payments. Interest payments have been projected using
The interest payable at year end was removed from trade and other financial payables and is shown within expected future interest payments. Interest payments have been projected using
interest rates applicable at the end of the applicable financial year. Where debt is subject to variable interest rates, future interest payments are subject to change in line with market rates.
interest rates applicable at the end of the applicable financial year. Where debt is subject to variable interest rates, future interest payments are subject to change in line with market rates.
(b)
(b)
The maturity grouping is based on the earliest payment date.
The maturity grouping is based on the earliest payment date.
(6,426)
(6,426)
(1,487)
(1,487)
(1,417)
(1,417)
(1,869)
(1,869)
(2,431)
(2,431)
(11,756)
(11,756)
(25,386)
(25,386)
Offsetting and enforceable master netting agreements
Offsetting and enforceable master netting agreements
When we have a legally enforceable right to offset our financial assets and liabilities and an intention to settle on a net basis, or realise the asset
When we have a legally enforceable right to offset our financial assets and liabilities and an intention to settle on a net basis, or realise the asset
and settle the liability simultaneously, we report the net amount in the consolidated balance sheet. Agreements with derivative counterparties are
and settle the liability simultaneously, we report the net amount in the consolidated balance sheet. Agreements with derivative counterparties are
based on the International Swaps and Derivatives Association master netting agreements that do not meet the criteria for offsetting, but allow for
based on the International Swaps and Derivatives Association master netting agreements that do not meet the criteria for offsetting, but allow for
the related amounts to be set-off in certain circumstances. During the year, there were no material amounts offset in the balance sheet.
the related amounts to be set-off in certain circumstances. During the year, there were no material amounts offset in the balance sheet.
(ii) Commodity price risk
(ii) Commodity price risk
Our broad commodity base means our exposure to commodity prices is diversified. Our normal policy is to sell our products at prevailing market
Our broad commodity base means our exposure to commodity prices is diversified. Our normal policy is to sell our products at prevailing market
prices. Exceptions to this rule are subject to strict limits laid down by the Board, and to defined market risk tolerances and internal controls.
prices. Exceptions to this rule are subject to strict limits laid down by the Board, and to defined market risk tolerances and internal controls.
We sell our products to customers under contracts which vary in tenure and pricing mechanisms, including some volumes sold in the spot market.
We sell our products to customers under contracts which vary in tenure and pricing mechanisms, including some volumes sold in the spot market.
Sales revenue may be subject to adjustment if product specifications do not conform to the terms specified in a sales contract.
Sales revenue may be subject to adjustment if product specifications do not conform to the terms specified in a sales contract.
Pricing for iron ore is on a range of terms, the majority being either monthly or quarterly average pricing mechanisms. We sell a smaller proportion
Pricing for iron ore is on a range of terms, the majority being either monthly or quarterly average pricing mechanisms. We sell a smaller proportion
of iron ore volumes on the spot market.
of iron ore volumes on the spot market.
We generally sell copper and aluminium under contracts which vary in tenure and pricing mechanisms, with some volumes sold in the spot
market. The prices are determined by reference to prevailing market prices on terminal markets, such as the London Metal Exchange (LME) and
the Commodities Exchange (COMEX) in New York. Prices fluctuate widely in response to changing levels of supply and demand but, in the long
run, prices are related to the marginal cost of supply. Gold is also priced in an active market in which prices respond to daily changes in quantities
offered and sought. Newly mined gold is only one source of supply; investment and disinvestment can be important elements of supply and
demand.
At the date revenue is recognised, certain of our products are provisionally priced, based on the amount we expect to receive in the future. After
initial recognition of revenue, we record any change in revenue relating to market prices separately in “Other revenue” (refer to note 3).
Substantially all iron ore and aluminium sales are reflected at final prices at each reporting period. Final prices for copper concentrate, however,
are normally determined between 30 and 180 days after delivery to our customer.
At 31 December 2021, we had 201 million pounds of copper sales, including share of equity accounted unit (31 December 2020: 261 million
pounds), that were provisionally priced at US 436 cents per pound (2020: US 336 cents per pound). The final price of these sales will be
determined during the first half of 2022. A 10% change in the price of copper realised on the provisionally priced sales, all other factors held
constant, would increase or reduce net earnings by US$54 million (2020: US$58 million).
For some products, particularly aluminium, we are also exposed to fluctuations in power prices.
Hedging strategy
We do not generally consider that using derivatives to fix commodity prices would provide a long-term benefit to our shareholders. However, for
certain physical commodity transactions for which the price was fixed at the contract date, we enter into derivatives to achieve the prevailing
market prices at the point of revenue recognition.
To mitigate our exposure to changes in the relationship between aluminium prices and power prices, we have a number of electricity purchase
contracts which are directly linked to the daily official LME cash ask price for high grade aluminium (“LME price”) and to the US Midwest
Transaction Premium (“Midwest premium”).
In accordance with IFRS 9, we apply hedge accounting to two embedded derivatives within our power contracts. The embedded derivatives
(notional aluminium forward sales) have been designated as the hedging instrument. The forecasted aluminium sales, priced using the LME price
and the Midwest premium, represent the hedged item.
The hedging ratio is 1:1, as the quantity of sales designated as being hedged matches the notional amount of the hedging instrument. The
hedging instrument’s notional amount, expressed in equivalent metric tonnes of aluminium, is derived from our expected electricity consumption
under the power contracts as well as other relevant contract parameters.
When we designate such embedded derivatives as the hedging instrument in a cash flow hedge, we recognise the effective portion of the change
in the fair value of the hedging instrument in other comprehensive income, and it is accumulated in the cash flow hedge reserve. The amount that
is recognised in other comprehensive income is limited to the lesser of the cumulative change in the fair value of the hedging instrument and the
cumulative change in the fair value of the hedged item, in absolute terms. On realisation of the hedges, realised amounts are reclassified from
reserves to consolidated sales revenue in the income statement.
We recognise any ineffectiveness relating to the hedging relationship immediately in the income statement.
Sources of ineffectiveness include: differences in the timing of the cash flows between the hedged item and the hedging instrument, non-zero
initial fair value of the hedging instrument, the existence of a cap on the Midwest premium in the hedging instrument and counterparty credit risk.
We held the following notional aluminium forward sales contracts embedded in the power contracts:
At 31 December 2021
Notional amount (in tonnes)
Notional amount (in US$ millions)
Average hedged rate (in US$ per tonne)
At 31 December 2020
Notional amount (in tonnes)
Notional amount (in US$ millions)
Average hedged rate (in US$ per tonne)
Total Within 1 year
573,653
1,377
2,401
72,555
162
2,234
Between 1
and 5 years
289,867
683
2,355
Between 5
and 10 years After 10 years
211,231
532
2,520
—
—
—
Total
Within 1 year
Between 1
and 5 years
Between 5
and 10 years
After 10 years
640,963
1,522
2,375
72,548
159
2,189
287,587
663
2,305
280,828
700
2,495
—
—
—
264
264
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Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
265265
Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
The impact on our financial statements of these hedging instruments and hedging items are:
Aluminium embedded derivatives separated
from the power contract
(Hedging instrument)(a)
Highly probable forecast aluminium sales (Hedged item)
Carrying
amount
US$m
Change in fair
value in the
period
US$m
Cash flow
hedge
reserve(b)
US$m
Change in fair
value in
the period
US$m
Total hedging
(losses)/
gains
recognised
in reserves
US$m
Hedge
ineffective-
ness in the
period gains/
(losses)(c)
US$m
Losses/
(gains)
reclassified
from reserves
to income
statement(d)
US$m
(124)
46
(201)
23
(11)
184
300
(49)
(211)
27
10
(4)
17
(40)
Nominal
US$m
1,377
1,522
2021
2020
(a)
(b)
(c)
(d)
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts.2021: nil (2020: US$66 million) of the
carrying value is shown within “Other financial assets” and US$124 million (2020: US$20 million) shown within “Other financial liabilities”.
The difference between this amount and the total cash flow hedge reserve of the Group (shown in note 28) relates to our cash flow hedge on the sterling bond (refer to interest rate risk
section).
Hedge ineffectiveness is included in net operating costs (raw materials, consumables, repairs and maintenance) in the income statement.
On realisation of the hedge, realised amounts are reclassified from reserves to consolidated sales revenue in the income statement.
There was no cost of hedging recognised in 2021 or 2020 relating to this hedge relationship.
We set out details of our commodity derivatives that are not designated as hedges in section B.
Sensitivities
Our commodity derivatives are impacted by changes in market prices. The table below summarises the impact that changes in aluminium market
prices have on aluminium forward and option contracts embedded in power supply agreements outstanding at 31 December 2021. Any change in
price will result in an offsetting change in our future earnings.
Effect on net earnings
Effect on equity
Change in
market prices
+10 %
(10) %
+10 %
(10) %
2021
US$m
(78)
73
(98)
95
2020
US$m
(19)
19
(98)
100
We exclude our “own use contracts” from this sensitivity analysis as they are outside the scope of IFRS 9. Our business units continue to hold
these types of contracts to satisfy their expected purchase, sale or usage requirements.
(iii) Credit risk
We are exposed to credit risk in our operating activities (primarily from customer trade receivables); and from our investing activities that
primarily include government securities (primarily US Government), corporate and asset-backed securities, reverse re-purchase agreements,
money market funds, and balances with banks and financial institutions. We are also exposed to credit risk arising from our interest rate and
currency derivative contracts.
Credit risks related to receivables
Our Commercial team manages customer credit risk subject to our established policy, procedures and controls. The team establishes credit
limits for all of our customers. Where customers are rated by an independent credit rating agency, these ratings are used as a guide to set
credit limits. Where there are no independent credit ratings available, we assess the credit quality of the customer through a credit rating
model and assign appropriate credit limit. The Commercial team monitors outstanding customer receivables regularly and highlights any
credit concerns to senior management. Receivables to high risk customers are often secured by letters of credit or other forms of credit
enhancement.
The expected credit loss on our trade receivable portfolio is insignificant (see note 18).
Credit risk related to financial instruments and cash deposits
Our Treasury team manages credit risk from our investing activities in accordance with a Board-approved credit risk framework which sets the
risk appetite. Our Board reviews this annually. We make investments of surplus funds only with approved investment grade (BBB- and above)
counterparties who have been assigned specific credit limits. The limits are set to minimise the concentration of credit risk and therefore
mitigate the potential for financial loss through counterparty failure.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
29 Financial instruments and risk management continued
The impact on our financial statements of these hedging instruments and hedging items are:
The impact on our financial statements of these hedging instruments and hedging items are:
Aluminium embedded derivatives separated
Aluminium embedded derivatives separated
from the power contract
from the power contract
(Hedging instrument)(a)
(Hedging instrument)(a)
Highly probable forecast aluminium sales (Hedged item)
Highly probable forecast aluminium sales (Hedged item)
Total hedging
Total hedging
Hedge
Hedge
(losses)/
(losses)/
ineffective-
ineffective-
reclassified
reclassified
Losses/
Losses/
(gains)
(gains)
Nominal
Nominal
US$m
US$m
1,377
1,377
1,522
1,522
Change in fair
Change in fair
Cash flow
Cash flow
Change in fair
Change in fair
gains
gains
ness in the
ness in the
from reserves
from reserves
Carrying
Carrying
value in the
value in the
amount
amount
US$m
US$m
period
period
US$m
US$m
hedge
hedge
reserve(b)
reserve(b)
US$m
US$m
(124)
(124)
(201)
(201)
46
46
23
23
(11)
(11)
184
184
value in
value in
the period
the period
recognised
recognised
in reserves
in reserves
period gains/
period gains/
(losses)(c)
(losses)(c)
to income
to income
statement(d)
statement(d)
US$m
US$m
300
300
(49)
(49)
US$m
US$m
(211)
(211)
27
27
US$m
US$m
US$m
US$m
10
10
(4)
(4)
17
17
(40)
(40)
(a)
(a)
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts.2021: nil (2020: US$66 million) of the
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts.2021: nil (2020: US$66 million) of the
carrying value is shown within “Other financial assets” and US$124 million (2020: US$20 million) shown within “Other financial liabilities”.
carrying value is shown within “Other financial assets” and US$124 million (2020: US$20 million) shown within “Other financial liabilities”.
(b)
(b)
The difference between this amount and the total cash flow hedge reserve of the Group (shown in note 28) relates to our cash flow hedge on the sterling bond (refer to interest rate risk
The difference between this amount and the total cash flow hedge reserve of the Group (shown in note 28) relates to our cash flow hedge on the sterling bond (refer to interest rate risk
(c)
(c)
(d)
(d)
Hedge ineffectiveness is included in net operating costs (raw materials, consumables, repairs and maintenance) in the income statement.
Hedge ineffectiveness is included in net operating costs (raw materials, consumables, repairs and maintenance) in the income statement.
On realisation of the hedge, realised amounts are reclassified from reserves to consolidated sales revenue in the income statement.
On realisation of the hedge, realised amounts are reclassified from reserves to consolidated sales revenue in the income statement.
There was no cost of hedging recognised in 2021 or 2020 relating to this hedge relationship.
There was no cost of hedging recognised in 2021 or 2020 relating to this hedge relationship.
We set out details of our commodity derivatives that are not designated as hedges in section B.
We set out details of our commodity derivatives that are not designated as hedges in section B.
Our commodity derivatives are impacted by changes in market prices. The table below summarises the impact that changes in aluminium market
Our commodity derivatives are impacted by changes in market prices. The table below summarises the impact that changes in aluminium market
prices have on aluminium forward and option contracts embedded in power supply agreements outstanding at 31 December 2021. Any change in
prices have on aluminium forward and option contracts embedded in power supply agreements outstanding at 31 December 2021. Any change in
price will result in an offsetting change in our future earnings.
price will result in an offsetting change in our future earnings.
Change in
Change in
market prices
market prices
+10 %
+10 %
(10) %
(10) %
+10 %
+10 %
(10) %
(10) %
2021
2021
US$m
US$m
(78)
(78)
73
73
(98)
(98)
95
95
2020
2020
US$m
US$m
(19)
(19)
19
19
(98)
(98)
100
100
2021
2021
2020
2020
section).
section).
Sensitivities
Sensitivities
Effect on net earnings
Effect on net earnings
Effect on equity
Effect on equity
(iii) Credit risk
(iii) Credit risk
We exclude our “own use contracts” from this sensitivity analysis as they are outside the scope of IFRS 9. Our business units continue to hold
We exclude our “own use contracts” from this sensitivity analysis as they are outside the scope of IFRS 9. Our business units continue to hold
these types of contracts to satisfy their expected purchase, sale or usage requirements.
these types of contracts to satisfy their expected purchase, sale or usage requirements.
We are exposed to credit risk in our operating activities (primarily from customer trade receivables); and from our investing activities that
We are exposed to credit risk in our operating activities (primarily from customer trade receivables); and from our investing activities that
primarily include government securities (primarily US Government), corporate and asset-backed securities, reverse re-purchase agreements,
primarily include government securities (primarily US Government), corporate and asset-backed securities, reverse re-purchase agreements,
money market funds, and balances with banks and financial institutions. We are also exposed to credit risk arising from our interest rate and
money market funds, and balances with banks and financial institutions. We are also exposed to credit risk arising from our interest rate and
currency derivative contracts.
currency derivative contracts.
Credit risks related to receivables
Credit risks related to receivables
Our Commercial team manages customer credit risk subject to our established policy, procedures and controls. The team establishes credit
Our Commercial team manages customer credit risk subject to our established policy, procedures and controls. The team establishes credit
limits for all of our customers. Where customers are rated by an independent credit rating agency, these ratings are used as a guide to set
limits for all of our customers. Where customers are rated by an independent credit rating agency, these ratings are used as a guide to set
credit limits. Where there are no independent credit ratings available, we assess the credit quality of the customer through a credit rating
credit limits. Where there are no independent credit ratings available, we assess the credit quality of the customer through a credit rating
model and assign appropriate credit limit. The Commercial team monitors outstanding customer receivables regularly and highlights any
model and assign appropriate credit limit. The Commercial team monitors outstanding customer receivables regularly and highlights any
credit concerns to senior management. Receivables to high risk customers are often secured by letters of credit or other forms of credit
credit concerns to senior management. Receivables to high risk customers are often secured by letters of credit or other forms of credit
enhancement.
enhancement.
The expected credit loss on our trade receivable portfolio is insignificant (see note 18).
The expected credit loss on our trade receivable portfolio is insignificant (see note 18).
Credit risk related to financial instruments and cash deposits
Credit risk related to financial instruments and cash deposits
Our Treasury team manages credit risk from our investing activities in accordance with a Board-approved credit risk framework which sets the
Our Treasury team manages credit risk from our investing activities in accordance with a Board-approved credit risk framework which sets the
risk appetite. Our Board reviews this annually. We make investments of surplus funds only with approved investment grade (BBB- and above)
risk appetite. Our Board reviews this annually. We make investments of surplus funds only with approved investment grade (BBB- and above)
counterparties who have been assigned specific credit limits. The limits are set to minimise the concentration of credit risk and therefore
counterparties who have been assigned specific credit limits. The limits are set to minimise the concentration of credit risk and therefore
mitigate the potential for financial loss through counterparty failure.
mitigate the potential for financial loss through counterparty failure.
The maximum credit risk exposure arising on our financial assets at the balance sheet date is as follows:
Cash and cash equivalents
Trade and other financial receivables
Investments
Derivative assets
Loans to equity accounted units
Total
(iv) Foreign exchange risk
Note
20
18
19
19
2021
US$m
12,807
2,762
2,682
272
—
18,523
2020
US$m
10,381
3,286
2,899
665
41
17,272
The broad geographic spread of our sales and operations means that our earnings, cash flows and shareholders’ equity are influenced by a wide
variety of currencies.
The majority of our sales are denominated in the US dollar.
Our operating costs are influenced by the currencies of those countries where our mines and processing plants are located, and by those
currencies in which we buy imported equipment and services. The US dollar, the Australian dollar and the Canadian dollar are the most important
currencies influencing our costs. In any particular year, currency fluctuations may have a significant impact on our financial results. A
strengthening of the US dollar against the currencies in which our costs are partly denominated has a positive effect on our underlying earnings.
However, a strengthening of the US dollar reduces the value of non-US dollar denominated net assets, and therefore total equity.
Our external borrowings and cash are mainly denominated in US dollars, either directly or through the use of derivatives, as we consider the US
dollar the most appropriate currency for financing our operations.
In most cases our debt and other financial assets and liabilities, including intragroup balances, is held in the functional currency of the relevant
subsidiary. There are instances where these balances are held in currencies other than the functional currency of the relevant subsidiary. This
means we recognise exchange gains and losses in our income statement (except where they can be taken to equity) as these balances are
translated into the functional currency of the relevant subsidiary. Our income statement also includes exchange gains and losses arising on US
dollar net debt and intragroup balances. On consolidation, these balances are retranslated to our US dollar presentation currency and there is a
corresponding and offsetting exchange difference recognised directly in the currency translation reserve. There is no impact on total equity.
The table below summarises, by currency, our net cash/(debt), after taking into account relevant cross currency interest rate swaps and foreign
exchange contracts:
Net cash/(debt) by currency
US dollar
Australian dollar
Canadian dollar
South African rand
Other
Total
Hedging strategy
Total
borrowings
excluding
overdrafts
US$m
(11,707)
(282)
(172)
—
(5)
(12,166)
Lease
liabilities
US$m
Derivatives
related to net
debt
US$m
Cash and
cash
equivalents
US$m
Other
investments
US$m
Net cash/
(debt)
2021
US$m
Net cash/
(debt)
2020
US$m
(410)
(493)
(192)
(3)
(265)
(1,363)
(101)
—
—
—
—
(101)
12,018
276
44
118
349
12,805
2,401
—
—
—
—
2,401
2,201
(499)
(320)
115
79
1,576
(141)
(286)
(333)
140
(44)
(664)
Under normal market conditions, we do not consider that active currency hedging of transactions would provide long-term benefits to
shareholders. We review our exposure on a regular basis and will undertake hedging if deemed appropriate. We may deem currency protection
measures appropriate in specific commercial circumstances. Capital expenditures and other significant financial items such as acquisitions,
disposals, tax and dividend cash flows may be economically hedged subject to strict limits laid down by the Board. Details of the cross-currency
interest rate swaps and the currency forward contracts used to manage our currency risk exposures at 31 December 2021 are in section B.
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267267
Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
Sensitivities
The table below shows the estimated retranslation effect on financial assets and financial liabilities, including intragroup balances, of a 10%
strengthening in the closing exchange rate of the US dollar against significant currencies. We deem 10% to be the annual exchange rate
movement that is reasonably probable (on an annual basis over the long run) for any of our significant currencies and therefore an appropriate
representation.
We calculate sensitivities in relation to the functional currencies of our individual entities. We translate the impact of these on net earnings and
underlying earnings into US dollars at the exchange rates on which the sensitivities are based. The impact to net earnings associated with a
10% weakening of a particular currency, shown below, is broadly offset within equity through movements in the currency translation reserve
and therefore generally has no impact on our net assets. The offsetting currency translation movement is not shown in the table below. The
impact is expressed in terms of the effect on net earnings, underlying earnings, and equity, assuming that each exchange rate moves in
isolation. The sensitivities are based on financial assets and financial liabilities held at 31 December 2021, where balances are not denominated
in the functional currency of the subsidiary or joint operation, and exclude financial assets and liabilities held by equity accounted units. These
balances will not remain constant throughout 2021, and therefore the following information should be used with care.
At 31 December 2021
Gains/(losses) associated with 10% strengthening of the US dollar
Currency exposure
Australian dollar
Canadian dollar
At 31 December 2020
Gains/(losses) associated with 10% strengthening of the US dollar
Currency exposure
Australian dollar
Canadian dollar
(v) Interest rate risk
Closing
exchange
rate
US cents
73
78
Closing
exchange
rate
US cents
77
78
Of which
amount
impacting
underlying
earnings
US$m
Effect on
net
earnings
US$m
379
(111)
(18)
(3)
Impact
directly
on equity
US$m
(1,044)
—
Of which
amount
impacting
underlying
earnings
US$m
Effect on
net
earnings
US$m
625
(167)
(11)
6
Impact
directly
on equity
US$m
(1,105)
—
Our interest rate management policy is generally to borrow and invest at floating interest rates. The approach to floating rate borrowing is based
upon; i) the lower cost of borrowing historically observed from maintaining a floating rate exposure and ii) the historical correlation between
interest rates and commodity prices. In certain circumstances, we may elect to maintain a higher proportion of fixed-rate funding.
Hedging strategy
We enter into interest rate swaps to hedge the interest rate exposure from our fixed rate borrowings, and review these positions on a regular
basis. The tenor of the interest rate swaps is sometimes shorter than the tenor of the bond which means, we remain exposed to long term fixed
rate funding. In 2020 we entered into US$1.5 billion of interest rate swaps with a tenor of five years to hedge the Alcan bonds which had been
historically held at fixed rates. In 2021, we issued a 30-year US$1.25 billion bond which was swapped to floating rates for a tenor of seven years.
As interest rate swaps mature, new medium dated swaps are generally transacted to maintain this floating rate exposure. The economic
characteristics of the interest rate swaps are shown in the table below.
The interest rates swaps transacted in 2020 and 2021, were designated into fair value hedge relationships with the respective tranches of debt.
For the fair value movements, in relation to all of our fair value hedged items and instruments, refer to note 8.
At 31 December 2021, US$6.0 billion (2020: US$5.9 billion) US dollar notional fixed-rate US dollar borrowings continue to be swapped to floating
US dollar rates and €417 million (2020: €417 million) euro notional fixed-rate borrowings continue to be fully swapped to floating US dollar
interest rates at an effective exchange rate of 1.3105. These swaps are designated in fair value hedge relationships.
Since 2012, we have also held cross-currency interest rate swaps to convert the principal and annual fixed interest coupons of the Rio Tinto
Finance plc £500 million Sterling Bond to a US dollar notional with fixed US dollar annual interest coupons. We applied cash flow hedge
accounting to this relationship to limit our US dollar cash flow exposure on the principal and interest payments. The hedge was fully effective in
the 2021 and 2020 financial years as the notional amount, maturity, payment and reset dates match.
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Financial statements continued
Financial statements
29 Financial instruments and risk management continued
29 Financial instruments and risk management continued
2021
2020
Nominal amount
of the bond
Nominal amount
of the hedging
instrument
Maturity
Effective
exchange rate
Loss in fair value of
the hedged item
US$m
Gain in fair value of
the hedging
instrument
US$m
Gain in fair value of
the hedged item
US$m
Loss in fair value of
the hedging
instrument
US$m
£500 million
US$807 million
November 2029
1.6132
(1)
1
7
(7)
In 2019, we swapped the resulting fixed US dollar annual interest coupon payments to floating rates. Fair value hedge accounting has been
applied to this relationship in addition to the pre-existing cash flow hedge.
The effective interest rates of our borrowings, impacted by swaps, are summarised below. All nominal values are fully hedged unless otherwise
stated:
Borrowings in a hedge relationship
Rio Tinto Finance plc Euro Bonds 2.875% due 2024
Rio Tinto Finance (USA) Limited Bonds 3.75% 2025(a)
Rio Tinto Finance (USA) Limited Bonds 7.125% 2028
Alcan Inc. Debentures 7.25% due 2028
Rio Tinto Finance plc Sterling Bonds 4.0% due 2029
Alcan Inc. Debentures 7.25% due 2031(b)
Alcan Inc. Global Notes 6.125% due 2033(b)
Alcan Inc. Global Notes 5.75% due 2035(b)
Rio Tinto Finance (USA) Limited Bonds 5.2% 2040
Rio Tinto Finance (USA) plc Bonds 4.75% 2042
Rio Tinto Finance (USA) plc Bonds 4.125% 2042
Rio Tinto Finance (USA) Limited Bonds 2.75% 2051(a)
Nominal
value
2021
US$m
Nominal
value
2020
US$m
Weighted average
interest rate
after swaps
Swap
maturity
Carrying
value
2021
US$m
Carrying
value
2020
US$m
546
—
750
100
807
400
750
300
1,150
500
750
1,250
546
1,200
750
100
807
400
750
300
1,150
500
750
—
3 month LIBOR +1.64%
3 month LIBOR +1.39%
3 month LIBOR +3.27%
3 month LIBOR +5.43%
3 month LIBOR +2.65%
3 month LIBOR +5.72%
3 month LIBOR +5.67%
3 month LIBOR +5.18%
3 month LIBOR +3.79%
3 month LIBOR +3.42%
3 month LIBOR +2.83%
6 month SOFR + 1.57%
2024
2025
2028
2024
2024
2025
2025
2025
2022
2023
2023
2028
497
—
934
105
682
420
722
283
1,156
495
735
1,225
555
1,299
1,005
109
717
438
744
292
1,173
501
743
—
(a)
(b)
On 28 October 2021, the Group issued US$1.25 billion of 30-year fixed rate debt with a coupon of 2.75%. On settlement of the bond, we entered into interest rate swaps to convert the
interest payable on these bonds from fixed to floating rates rate for the next seven years. The bond and the swaps are in a fair value hedge relationship. The proceeds of the new issuance
were used to fund the early redemption and extinguishment of the company’s US$1.20 billion 3.75% bonds due to mature in June 2025.
In 2020 we entered into new swaps to convert the interest payable in relation to these bonds from fixed to floating rates.
The fair value of interest rate and cross currency interest rate swaps at 31 December 2021 was US$139 million (2020: US$388 million) asset and
US$240 million (2020: US$140 million) liability, respectively. These are included within “Other financial assets” and “Other financial liabilities” in
the balance sheet.
The main sources of ineffectiveness of the fair value hedges include changes in the timing of the cash flows of the hedging instrument compared
to the underlying hedged item, and changes in the credit risk of parties to the hedging relationships. Refer to note 8 for the changes in fair value of
the bonds and the swaps as well as the ineffectiveness recognised in the period. Refer to note 1 “New standards Issued not yet effective” for the
impacts of IBOR reform.
Taking into account the interest and currency interest rate swaps, at 31 December 2021, US$11.6 billion (2020: US$11.7 billion) of our adjusted
gross borrowings were at floating rates. This has resulted in a floating to fixed debt ratio of 85% floating to 15% fixed (2020: 86% floating to 14%
fixed). Our weighted average debt maturity was approximately 11 years (2020: nine years) based on current interest rates and the carrying value
of gross borrowings at the year end.
Sensitivities
Based on our floating rate financial instruments outstanding at 31 December 2021, the effect on our net earnings of a 100 basis point increase in
US dollar LIBOR or SOFR (where applicable) interest rates, with all other variables held constant, would be an income of US$13 million (2020:
expense of US$7 million), reflecting the net cash position in 2021 compared to a net debt position in prior year. We have an exposure to interest
rate volatility within shareholders’ equity arising from fair value movements on derivatives in the cash flow hedge reserve. These derivatives have
an underlying exposure to sterling and US dollars. With all factors remaining constant, and based on the composition of derivatives impacting the
cash flow reserve at 31 December 2021, the sensitivity of a 100 basis point increase in interest rates in each of the currencies in isolation would
impact equity, before tax, by a charge of US$55 million (2020: US$68 million charge) for sterling and a credit of US$65 million (2020: US$78
million credit) for US dollars. A 100 basis point decrease would have broadly the same impact in the opposite direction.
Notes to the 2021 financial statements
Sensitivities
Sensitivities
representation.
representation.
The table below shows the estimated retranslation effect on financial assets and financial liabilities, including intragroup balances, of a 10%
The table below shows the estimated retranslation effect on financial assets and financial liabilities, including intragroup balances, of a 10%
strengthening in the closing exchange rate of the US dollar against significant currencies. We deem 10% to be the annual exchange rate
strengthening in the closing exchange rate of the US dollar against significant currencies. We deem 10% to be the annual exchange rate
movement that is reasonably probable (on an annual basis over the long run) for any of our significant currencies and therefore an appropriate
movement that is reasonably probable (on an annual basis over the long run) for any of our significant currencies and therefore an appropriate
We calculate sensitivities in relation to the functional currencies of our individual entities. We translate the impact of these on net earnings and
We calculate sensitivities in relation to the functional currencies of our individual entities. We translate the impact of these on net earnings and
underlying earnings into US dollars at the exchange rates on which the sensitivities are based. The impact to net earnings associated with a
underlying earnings into US dollars at the exchange rates on which the sensitivities are based. The impact to net earnings associated with a
10% weakening of a particular currency, shown below, is broadly offset within equity through movements in the currency translation reserve
10% weakening of a particular currency, shown below, is broadly offset within equity through movements in the currency translation reserve
and therefore generally has no impact on our net assets. The offsetting currency translation movement is not shown in the table below. The
and therefore generally has no impact on our net assets. The offsetting currency translation movement is not shown in the table below. The
impact is expressed in terms of the effect on net earnings, underlying earnings, and equity, assuming that each exchange rate moves in
impact is expressed in terms of the effect on net earnings, underlying earnings, and equity, assuming that each exchange rate moves in
isolation. The sensitivities are based on financial assets and financial liabilities held at 31 December 2021, where balances are not denominated
isolation. The sensitivities are based on financial assets and financial liabilities held at 31 December 2021, where balances are not denominated
in the functional currency of the subsidiary or joint operation, and exclude financial assets and liabilities held by equity accounted units. These
in the functional currency of the subsidiary or joint operation, and exclude financial assets and liabilities held by equity accounted units. These
balances will not remain constant throughout 2021, and therefore the following information should be used with care.
balances will not remain constant throughout 2021, and therefore the following information should be used with care.
At 31 December 2021
At 31 December 2021
Gains/(losses) associated with 10% strengthening of the US dollar
Gains/(losses) associated with 10% strengthening of the US dollar
Closing
Closing
exchange
exchange
rate
rate
US cents
US cents
73
73
78
78
Closing
Closing
exchange
exchange
rate
rate
US cents
US cents
77
77
78
78
Of which
Of which
amount
amount
impacting
impacting
underlying
underlying
earnings
earnings
US$m
US$m
Effect on
Effect on
net
net
earnings
earnings
US$m
US$m
379
379
(111)
(111)
(18)
(18)
(3)
(3)
Impact
Impact
directly
directly
on equity
on equity
US$m
US$m
(1,044)
(1,044)
—
—
Of which
Of which
amount
amount
impacting
impacting
underlying
underlying
earnings
earnings
US$m
US$m
Effect on
Effect on
net
net
earnings
earnings
US$m
US$m
Impact
Impact
directly
directly
on equity
on equity
US$m
US$m
625
625
(167)
(167)
(11)
(11)
(1,105)
(1,105)
6
6
—
—
At 31 December 2020
At 31 December 2020
Gains/(losses) associated with 10% strengthening of the US dollar
Gains/(losses) associated with 10% strengthening of the US dollar
Currency exposure
Currency exposure
Australian dollar
Australian dollar
Canadian dollar
Canadian dollar
Currency exposure
Currency exposure
Australian dollar
Australian dollar
Canadian dollar
Canadian dollar
(v) Interest rate risk
(v) Interest rate risk
Hedging strategy
Hedging strategy
Our interest rate management policy is generally to borrow and invest at floating interest rates. The approach to floating rate borrowing is based
Our interest rate management policy is generally to borrow and invest at floating interest rates. The approach to floating rate borrowing is based
upon; i) the lower cost of borrowing historically observed from maintaining a floating rate exposure and ii) the historical correlation between
upon; i) the lower cost of borrowing historically observed from maintaining a floating rate exposure and ii) the historical correlation between
interest rates and commodity prices. In certain circumstances, we may elect to maintain a higher proportion of fixed-rate funding.
interest rates and commodity prices. In certain circumstances, we may elect to maintain a higher proportion of fixed-rate funding.
We enter into interest rate swaps to hedge the interest rate exposure from our fixed rate borrowings, and review these positions on a regular
We enter into interest rate swaps to hedge the interest rate exposure from our fixed rate borrowings, and review these positions on a regular
basis. The tenor of the interest rate swaps is sometimes shorter than the tenor of the bond which means, we remain exposed to long term fixed
basis. The tenor of the interest rate swaps is sometimes shorter than the tenor of the bond which means, we remain exposed to long term fixed
rate funding. In 2020 we entered into US$1.5 billion of interest rate swaps with a tenor of five years to hedge the Alcan bonds which had been
rate funding. In 2020 we entered into US$1.5 billion of interest rate swaps with a tenor of five years to hedge the Alcan bonds which had been
historically held at fixed rates. In 2021, we issued a 30-year US$1.25 billion bond which was swapped to floating rates for a tenor of seven years.
historically held at fixed rates. In 2021, we issued a 30-year US$1.25 billion bond which was swapped to floating rates for a tenor of seven years.
As interest rate swaps mature, new medium dated swaps are generally transacted to maintain this floating rate exposure. The economic
As interest rate swaps mature, new medium dated swaps are generally transacted to maintain this floating rate exposure. The economic
characteristics of the interest rate swaps are shown in the table below.
characteristics of the interest rate swaps are shown in the table below.
The interest rates swaps transacted in 2020 and 2021, were designated into fair value hedge relationships with the respective tranches of debt.
The interest rates swaps transacted in 2020 and 2021, were designated into fair value hedge relationships with the respective tranches of debt.
For the fair value movements, in relation to all of our fair value hedged items and instruments, refer to note 8.
For the fair value movements, in relation to all of our fair value hedged items and instruments, refer to note 8.
At 31 December 2021, US$6.0 billion (2020: US$5.9 billion) US dollar notional fixed-rate US dollar borrowings continue to be swapped to floating
At 31 December 2021, US$6.0 billion (2020: US$5.9 billion) US dollar notional fixed-rate US dollar borrowings continue to be swapped to floating
US dollar rates and €417 million (2020: €417 million) euro notional fixed-rate borrowings continue to be fully swapped to floating US dollar
US dollar rates and €417 million (2020: €417 million) euro notional fixed-rate borrowings continue to be fully swapped to floating US dollar
interest rates at an effective exchange rate of 1.3105. These swaps are designated in fair value hedge relationships.
interest rates at an effective exchange rate of 1.3105. These swaps are designated in fair value hedge relationships.
Since 2012, we have also held cross-currency interest rate swaps to convert the principal and annual fixed interest coupons of the Rio Tinto
Since 2012, we have also held cross-currency interest rate swaps to convert the principal and annual fixed interest coupons of the Rio Tinto
Finance plc £500 million Sterling Bond to a US dollar notional with fixed US dollar annual interest coupons. We applied cash flow hedge
Finance plc £500 million Sterling Bond to a US dollar notional with fixed US dollar annual interest coupons. We applied cash flow hedge
accounting to this relationship to limit our US dollar cash flow exposure on the principal and interest payments. The hedge was fully effective in
accounting to this relationship to limit our US dollar cash flow exposure on the principal and interest payments. The hedge was fully effective in
the 2021 and 2020 financial years as the notional amount, maturity, payment and reset dates match.
the 2021 and 2020 financial years as the notional amount, maturity, payment and reset dates match.
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Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
B Derivative financial instruments
In the table below we summarise our derivatives, including embedded derivatives, as at 31 December.
Derivatives designated as hedges
Interest rate swaps(a)
Cross-currency interest rate swaps(b)
Aluminium embedded derivatives(c)
Currency forward contracts
Total derivatives designated as hedges
Derivatives not designated as hedges
Currency forward contracts and swaps
Aluminium embedded derivatives(c)
Other embedded derivatives
Other commodity contracts(d)
Total derivatives not designated as hedges
Total derivative instruments
Analysed by maturity:
Less than 1 year
Between 1 and 5 years
More than 5 years
Total
Total net derivative instruments
Reconciliation to balance sheet
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Total net derivative instruments
Total fair value
2021
Asset
US$m
Liability
US$m
2020
Asset
US$m
Liability
US$m
139
—
—
—
139
1
53
39
40
133
272
62
60
150
272
(34)
(206)
(125)
—
(365)
(39)
(121)
(1)
(92)
(253)
(618)
(225)
(211)
(182)
(618)
(346)
Note
19
19
21
21
386
2
66
7
461
63
80
28
33
204
665
134
330
201
665
481
2021
US$m
210
62
(225)
(393)
(346)
(1)
(139)
(20)
—
(160)
(1)
—
(16)
(7)
(24)
(184)
(23)
(14)
(147)
(184)
2020
US$m
531
134
(23)
(161)
481
(a)
(b)
(c)
(d)
The interest rate swaps are used to convert certain fixed rate borrowings to a floating rate.
The cross-currency interest rate swaps are used to convert non-US dollar denominated borrowings to either fixed or floating US dollar borrowings.
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts. These contracts reduce our margin
exposure to movements in the aluminium price.
Other commodity derivatives mainly relate to forward contracts which we have entered into to swap some of our fixed priced product sales to prevailing market prices at the point of
revenue recognition. None of these derivatives is in a hedge relationship.
C Fair values
The following table shows the carrying amounts and fair values of our borrowings including those which are not carried at an amount which
approximates their fair value at 31 December 2021 and 31 December 2020. The fair values of our cash equivalents, loans to equity accounted
units and other financial liabilities approximate their carrying values because of their short maturity, or because they carry floating rates of
interest.
Borrowings (including overdrafts)
2021
Carrying
value
US$m
Fair
value
US$m
Note
21
12,168
13,904
2020
Carrying
value
US$m
12,653
Fair
value
US$m
15,076
Total borrowings with a carrying value of US$7.3 billion (2020: US$7.6 billion) relate to listed bonds with a fair value of US$8.7 billion (2020:
US$9.5 billion) and are categorised as level 1 in the fair value hierarchy.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
29 Financial instruments and risk management continued
B Derivative financial instruments
B Derivative financial instruments
In the table below we summarise our derivatives, including embedded derivatives, as at 31 December.
In the table below we summarise our derivatives, including embedded derivatives, as at 31 December.
Total fair value
Total fair value
2021
2021
Asset
Asset
US$m
US$m
Liability
Liability
US$m
US$m
2020
2020
Asset
Asset
US$m
US$m
Liability
Liability
US$m
US$m
139
139
—
—
—
—
—
—
139
139
1
1
53
53
39
39
40
40
133
133
272
272
62
62
60
60
150
150
272
272
(34)
(34)
(206)
(206)
(125)
(125)
—
—
(365)
(365)
(39)
(39)
(121)
(121)
(1)
(1)
(92)
(92)
(253)
(253)
(618)
(618)
(225)
(225)
(211)
(211)
(182)
(182)
(618)
(618)
(346)
(346)
Note
Note
19
19
19
19
21
21
21
21
386
386
2
2
66
66
7
7
461
461
63
63
80
80
28
28
33
33
204
204
665
665
134
134
330
330
201
201
665
665
481
481
2021
2021
US$m
US$m
210
210
62
62
(225)
(225)
(393)
(393)
(346)
(346)
(1)
(1)
(139)
(139)
(20)
(20)
—
—
(160)
(160)
(1)
(1)
—
—
(16)
(16)
(7)
(7)
(24)
(24)
(184)
(184)
(23)
(23)
(14)
(14)
(147)
(147)
(184)
(184)
2020
2020
US$m
US$m
531
531
134
134
(23)
(23)
(161)
(161)
481
481
Derivatives designated as hedges
Derivatives designated as hedges
Interest rate swaps(a)
Interest rate swaps(a)
Cross-currency interest rate swaps(b)
Cross-currency interest rate swaps(b)
Aluminium embedded derivatives(c)
Aluminium embedded derivatives(c)
Currency forward contracts
Currency forward contracts
Total derivatives designated as hedges
Total derivatives designated as hedges
Derivatives not designated as hedges
Derivatives not designated as hedges
Currency forward contracts and swaps
Currency forward contracts and swaps
Aluminium embedded derivatives(c)
Aluminium embedded derivatives(c)
Other embedded derivatives
Other embedded derivatives
Other commodity contracts(d)
Other commodity contracts(d)
Total derivatives not designated as hedges
Total derivatives not designated as hedges
Total derivative instruments
Total derivative instruments
Analysed by maturity:
Analysed by maturity:
Less than 1 year
Less than 1 year
Between 1 and 5 years
Between 1 and 5 years
More than 5 years
More than 5 years
Total
Total
Total net derivative instruments
Total net derivative instruments
Reconciliation to balance sheet
Reconciliation to balance sheet
Non-current assets
Non-current assets
Current assets
Current assets
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Total net derivative instruments
Total net derivative instruments
C Fair values
C Fair values
interest.
interest.
Borrowings (including overdrafts)
Borrowings (including overdrafts)
Borrowings with a carrying value of US$4.2 billion (2020: US$4.2 billion) relate to project finance drawn down by Oyu Tolgoi, with a fair value of
US$4.4 billion (2020: US$4.7 billion) and are categorised as level 3 in the fair value hierarchy. We use different valuation inputs for the pre-and
post-completion phases to reflect Rio Tinto’s completion support guarantee during the pre-completion phase. To measure the fair value of the
project finance pre-completion our valuation input includes market yield over the pre-completion period, the variability of which we consider a
reasonable indicator of fair value movements on amounts outstanding under the project finance facility. Post-completion, we estimate the fair
value with reference to the annual interest rate on each tranche of the facility, and after considering factors that could indicate a change in the
credit assessment of Oyu Tolgoi LLC as a counterparty to project finance. These factors include in-country risk relating to the Oyu Tolgoi project,
and the assumed date of transition from pre-completion to post-completion. These valuation inputs are considered to be level 3. Transition from
pre-completion to post-completion is determined by a set of tests for both completion of physical infrastructure and the ability to extract and
process ore of defined grades over a defined period.
Our remaining borrowings have a fair value measured by discounting estimated cash flows with an applicable market quoted yield, and are
categorised as level 2 in the fair value hierarchy.
C (a) Valuation hierarchy
The tables below show the financial instruments by fair value measurement method in accordance with IFRS 13 at 31 December 2021 and
31 December 2020.
At 31 December 2021
Assets
Cash and cash equivalents(d)
Investments in equity shares and funds
Other investments, including loans(e)
Trade and other financial receivables(f)
Held at fair value
Note
Total
US$m
Level 1(a)
US$m
Level 2(b)
US$m
Level 3(c)
US$m
12,807
117
2,682
2,762
4,138
64
2,422
1
—
—
—
1,163
19
18
—
53
238
—
Held at
amortised
cost
US$m
8,669
—
22
1,598
Derivatives (net)
Forward contracts and option contracts: designated as hedges(g) (Section B)
Forward contracts and option contracts, not designated as hedges(g) (Section B)
Derivatives related to net debt(h) (Section B)
(125)
(120)
(101)
—
—
—
—
(131)
(101)
(125)
11
—
—
—
—
(a)
(a)
(b)
(b)
(c)
(c)
The interest rate swaps are used to convert certain fixed rate borrowings to a floating rate.
The interest rate swaps are used to convert certain fixed rate borrowings to a floating rate.
The cross-currency interest rate swaps are used to convert non-US dollar denominated borrowings to either fixed or floating US dollar borrowings.
The cross-currency interest rate swaps are used to convert non-US dollar denominated borrowings to either fixed or floating US dollar borrowings.
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts. These contracts reduce our margin
Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts. These contracts reduce our margin
(d)
(d)
Other commodity derivatives mainly relate to forward contracts which we have entered into to swap some of our fixed priced product sales to prevailing market prices at the point of
Other commodity derivatives mainly relate to forward contracts which we have entered into to swap some of our fixed priced product sales to prevailing market prices at the point of
exposure to movements in the aluminium price.
exposure to movements in the aluminium price.
revenue recognition. None of these derivatives is in a hedge relationship.
revenue recognition. None of these derivatives is in a hedge relationship.
The following table shows the carrying amounts and fair values of our borrowings including those which are not carried at an amount which
The following table shows the carrying amounts and fair values of our borrowings including those which are not carried at an amount which
approximates their fair value at 31 December 2021 and 31 December 2020. The fair values of our cash equivalents, loans to equity accounted
approximates their fair value at 31 December 2021 and 31 December 2020. The fair values of our cash equivalents, loans to equity accounted
units and other financial liabilities approximate their carrying values because of their short maturity, or because they carry floating rates of
units and other financial liabilities approximate their carrying values because of their short maturity, or because they carry floating rates of
Liabilities
Trade and other financial payables
Total
At 31 December 2020
Assets
Cash and cash equivalents(d)
Investments in equity shares and funds
Other investments, including loans(e)
Trade and other financial receivables(f)
2021
2021
Carrying
Carrying
value
value
US$m
US$m
Fair
Fair
value
value
US$m
US$m
Note
Note
21
21
12,168
12,168
13,904
13,904
2020
2020
Carrying
Carrying
value
value
US$m
US$m
12,653
12,653
Fair
Fair
value
value
US$m
US$m
15,076
15,076
Derivatives (net)
Forward contracts and option contracts: designated as hedges(g) (Section B)
Forward contracts and option contracts, not designated as hedges(g) (Section B)
Derivatives related to net debt(h) (Section B)
Liabilities
Trade and other financial payables
Total
24
(6,356)
11,666
—
6,625
(67)
864
—
177
(6,289)
4,000
Held at fair value
Note
Total
US$m
Level 1(a)
US$m
Level 2(b)
US$m
Level 3(c)
US$m
19
18
10,381
75
2,899
3,286
53
180
248
6,411
35
2,563
5
—
—
—
—
—
—
1,802
7
69
248
24
(5,847)
11,275
—
9,014
(30)
2,096
—
40
198
—
46
111
—
—
395
Held at
amortised
costs
US$m
3,970
—
138
1,479
—
—
—
(5,817)
(230)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Valuation is based on unadjusted quoted prices in active markets for identical financial instruments. This category includes listed equity shares and other quoted funds.
Valuation is based on inputs that are observable for the financial instruments, which include quoted prices for similar instruments or identical instruments in markets which are not
considered to be active, or inputs, either directly or indirectly based on observable market data.
Valuation is based on inputs that are not based on observable market data (unobservable inputs).
Cash and cash equivalents include money market funds which are treated as fair value through profit or loss (FVPL) under IFRS 9 with the fair value movements going into finance income.
Other investments, including loans, comprise: cash deposits in rehabilitation funds, government bonds, managed investment funds and royalty receivables. The royalty receivables are
valued based on future expected output as well as forward commodity prices.
Trade receivables include provisionally priced invoices. The related revenue is initially based on forward market selling prices for the quotation periods stipulated in the contracts with
changes between the provisional price and the final price recorded separately within “Other revenue”. The selling price can be measured reliably for the Group's products, as it operates in
active and freely traded commodity markets. At 31 December 2021, US$1,114 million (31 December 2020: US$1,671 million) of provisionally priced receivables were recognised.
Level 3 derivatives consist of derivatives embedded in electricity purchase contracts linked to the LME with terms expiring between 2025 and 2036 (2020: 2025 and 2029). The embedded
derivatives are measured using discounted cash flows and option model valuation techniques.
Interest rate and currency interest rate swaps are valued using applicable market quoted swap yield curves adjusted for relevant basis and credit default spreads. Currency interest rate
swap valuations also use market quoted foreign exchange rates. A discounted cash flow approach is used to derive fair value from these inputs to the underlying cash flows.
Total borrowings with a carrying value of US$7.3 billion (2020: US$7.6 billion) relate to listed bonds with a fair value of US$8.7 billion (2020:
Total borrowings with a carrying value of US$7.3 billion (2020: US$7.6 billion) relate to listed bonds with a fair value of US$8.7 billion (2020:
US$9.5 billion) and are categorised as level 1 in the fair value hierarchy.
US$9.5 billion) and are categorised as level 1 in the fair value hierarchy.
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Financial statements continued
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
There were no material transfers between level 1 and level 2, or between level 2 and level 3 in the year ended 31 December 2021 or in the year
ended 31 December 2020.
C (b) Level 3 financial assets and financial liabilities
The table below shows the summary of changes in the fair value of the Group's level 3 financial assets and financial liabilities.
Opening balance
Currency translation adjustments
Total realised gains/(losses) included in:
– consolidated sales revenue
– net operating costs
Total unrealised gains included in:
– net operating costs
Total unrealised (losses)/gains transferred into other comprehensive income through cash flow hedges
Additions to (financial liabilities)/assets
Disposals/maturity of financial instruments
Transfers
Closing balance
Net gains for the year included in the income statement for assets and liabilities held at year end(a)
2021
Level 3
financial assets
and financial
liabilities
US$m
2020
Level 3
financial assets
and financial
liabilities
US$m
395
(6)
27
(50)
68
(212)
(21)
(6)
(18)
177
20
383
16
11
(39)
24
26
1
(27)
—
395
—
(a)
In 2020 gains and losses included in the income statement offset each other to the extent that the net result is less than US$1 million.
Sensitivity analysis in respect of level 3 derivatives
Forward contracts and options whose fair value is determined using unobservable inputs are calculated using appropriate discounted cash flow
and option model valuation techniques.
To value the long-term aluminium embedded derivatives, we use unobservable inputs when the term of the derivative extends beyond observable
market prices. In 2021 and 2020, changing the level 3 inputs to reasonably possible alternative assumptions does not change the fair value
significantly, taking into account the expected remaining term of contracts. The fair value of our level 3 aluminium embedded derivatives is
US$146 million at 31 December 2021 (2020: US$126 million).
We also have receivables, with a carrying value of US$136 million (2020: US$113 million), that relate to royalties arising from the sale of coal from
our previously divested businesses. These are classified as “Other investments”, including loans within “Other financial assets”. The fair values
are determined using level 3 unobservable inputs. This royalty receivable includes US$53 million from forecast production beyond 2030. This has
not been adjusted for potential changes in production rates that could occur due to climate change targets impacting the operator.
The main unobservable input is the long-term coal price used over the life of the royalty receivable. A 15% increase in the coal spot price would
result in a US$63 million increase (2020: US$198 million increase) in the carrying value. A 15% decrease in the coal spot price would result in a
US$53 million decrease (2020: US$46 million decrease) in the carrying value. We have used a 15% assumption to calculate our exposure as it
represents the annual coal price movement that we deem to be reasonably probable (on an annual basis over the long run).
30 Contingencies and commitments
Capital commitments excluding the Group's share of joint venture capital commitments
Within 1 year
Between 1 and 3 years
Between 3 and 5 years
After 5 years
Total
Group's share of joint venture capital commitments
Within 1 year
Between 1 and 3 years
Total
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2021
US$m
2,324
116
38
73
2,551
11
—
11
2020
US$m
3,021
97
—
34
3,152
9
—
9
Financial statements continued
Financial statements
Notes to the 2021 financial statements
29 Financial instruments and risk management continued
29 Financial instruments and risk management continued
There were no material transfers between level 1 and level 2, or between level 2 and level 3 in the year ended 31 December 2021 or in the year
There were no material transfers between level 1 and level 2, or between level 2 and level 3 in the year ended 31 December 2021 or in the year
ended 31 December 2020.
ended 31 December 2020.
C (b) Level 3 financial assets and financial liabilities
C (b) Level 3 financial assets and financial liabilities
The table below shows the summary of changes in the fair value of the Group's level 3 financial assets and financial liabilities.
The table below shows the summary of changes in the fair value of the Group's level 3 financial assets and financial liabilities.
2021
2021
Level 3
Level 3
2020
2020
Level 3
Level 3
financial assets
financial assets
financial assets
financial assets
and financial
and financial
and financial
and financial
liabilities
liabilities
US$m
US$m
liabilities
liabilities
US$m
US$m
395
395
(6)
(6)
27
27
(50)
(50)
68
68
(212)
(212)
(21)
(21)
(6)
(6)
(18)
(18)
177
177
20
20
383
383
16
16
11
11
(39)
(39)
24
24
26
26
1
1
(27)
(27)
—
—
395
395
—
—
Opening balance
Opening balance
Currency translation adjustments
Currency translation adjustments
Total realised gains/(losses) included in:
Total realised gains/(losses) included in:
– consolidated sales revenue
– consolidated sales revenue
– net operating costs
– net operating costs
Total unrealised gains included in:
Total unrealised gains included in:
– net operating costs
– net operating costs
Additions to (financial liabilities)/assets
Additions to (financial liabilities)/assets
Disposals/maturity of financial instruments
Disposals/maturity of financial instruments
Transfers
Transfers
Closing balance
Closing balance
Total unrealised (losses)/gains transferred into other comprehensive income through cash flow hedges
Total unrealised (losses)/gains transferred into other comprehensive income through cash flow hedges
Net gains for the year included in the income statement for assets and liabilities held at year end(a)
Net gains for the year included in the income statement for assets and liabilities held at year end(a)
(a)
(a)
In 2020 gains and losses included in the income statement offset each other to the extent that the net result is less than US$1 million.
In 2020 gains and losses included in the income statement offset each other to the extent that the net result is less than US$1 million.
Sensitivity analysis in respect of level 3 derivatives
Sensitivity analysis in respect of level 3 derivatives
and option model valuation techniques.
and option model valuation techniques.
Forward contracts and options whose fair value is determined using unobservable inputs are calculated using appropriate discounted cash flow
Forward contracts and options whose fair value is determined using unobservable inputs are calculated using appropriate discounted cash flow
To value the long-term aluminium embedded derivatives, we use unobservable inputs when the term of the derivative extends beyond observable
To value the long-term aluminium embedded derivatives, we use unobservable inputs when the term of the derivative extends beyond observable
market prices. In 2021 and 2020, changing the level 3 inputs to reasonably possible alternative assumptions does not change the fair value
market prices. In 2021 and 2020, changing the level 3 inputs to reasonably possible alternative assumptions does not change the fair value
significantly, taking into account the expected remaining term of contracts. The fair value of our level 3 aluminium embedded derivatives is
significantly, taking into account the expected remaining term of contracts. The fair value of our level 3 aluminium embedded derivatives is
US$146 million at 31 December 2021 (2020: US$126 million).
US$146 million at 31 December 2021 (2020: US$126 million).
We also have receivables, with a carrying value of US$136 million (2020: US$113 million), that relate to royalties arising from the sale of coal from
We also have receivables, with a carrying value of US$136 million (2020: US$113 million), that relate to royalties arising from the sale of coal from
our previously divested businesses. These are classified as “Other investments”, including loans within “Other financial assets”. The fair values
our previously divested businesses. These are classified as “Other investments”, including loans within “Other financial assets”. The fair values
are determined using level 3 unobservable inputs. This royalty receivable includes US$53 million from forecast production beyond 2030. This has
are determined using level 3 unobservable inputs. This royalty receivable includes US$53 million from forecast production beyond 2030. This has
not been adjusted for potential changes in production rates that could occur due to climate change targets impacting the operator.
not been adjusted for potential changes in production rates that could occur due to climate change targets impacting the operator.
The main unobservable input is the long-term coal price used over the life of the royalty receivable. A 15% increase in the coal spot price would
The main unobservable input is the long-term coal price used over the life of the royalty receivable. A 15% increase in the coal spot price would
result in a US$63 million increase (2020: US$198 million increase) in the carrying value. A 15% decrease in the coal spot price would result in a
result in a US$63 million increase (2020: US$198 million increase) in the carrying value. A 15% decrease in the coal spot price would result in a
US$53 million decrease (2020: US$46 million decrease) in the carrying value. We have used a 15% assumption to calculate our exposure as it
US$53 million decrease (2020: US$46 million decrease) in the carrying value. We have used a 15% assumption to calculate our exposure as it
represents the annual coal price movement that we deem to be reasonably probable (on an annual basis over the long run).
represents the annual coal price movement that we deem to be reasonably probable (on an annual basis over the long run).
30 Contingencies and commitments
30 Contingencies and commitments
Capital commitments excluding the Group's share of joint venture capital commitments
Capital commitments excluding the Group's share of joint venture capital commitments
Within 1 year
Within 1 year
Between 1 and 3 years
Between 1 and 3 years
Between 3 and 5 years
Between 3 and 5 years
After 5 years
After 5 years
Total
Total
Within 1 year
Within 1 year
Between 1 and 3 years
Between 1 and 3 years
Total
Total
Group's share of joint venture capital commitments
Group's share of joint venture capital commitments
2021
2021
US$m
US$m
2,324
2,324
116
116
38
38
73
73
11
11
—
—
11
11
2020
2020
US$m
US$m
3,021
3,021
97
97
—
—
34
34
9
9
—
—
9
9
2,551
2,551
3,152
3,152
Our capital commitments include open purchase orders for managed operations and expenditure on major projects already authorised by our
Investment Committee for non-managed operations. It does not include the estimated incremental capital expenditure relating to decarbonisation
projects referred to in the climate section earlier. On a legally enforceable basis, capital commitments would be approximately US$1.1 billion
(2020: US$1.5 billion) as many of the contracts relating to the Group’s projects have various cancellation clauses.
Other Commitments
On 21 December 2021, the Group entered into a binding agreement to acquire the Rincon lithium project in Argentina for US$825 million. The
transaction will be treated as an asset purchase. Completion, expected in 2022, is subject to regulatory approval in Australia.
Unrecognised commitments to contribute funding or resources to joint ventures
We have a commitment to purchase and market a portion (in excess of the Group’s ownership interest) of the output of Sohar Aluminium
Company L.L.C., an aluminium smelter in which the Group is a joint venture partner. The Group immediately sells the purchased products to third
parties.
Along with the other joint venture partners, we have commitments to provide emergency funding (ie funding required to preserve the life or
assets of the company or to comply with applicable laws) if required by Sohar Aluminium Company L.L.C., subject to approved thresholds.
At 31 December 2021, Minera Escondida Ltda held an undrawn shareholder line of credit for US$225 million (Rio Tinto share) (31 December 2020:
US$225 million). The current facility will mature in September 2022.
Purchase obligations
The aggregate amount of future payment commitments under purchase obligations outstanding at 31 December was:
Within 1 year
Between 1 and 2 years
Between 2 and 3 years
Between 3 and 4 years
Between 4 and 5 years
After 5 years
Total
2021
US$m
3,483
1,660
1,345
1,080
1,020
7,125
15,713
2020
US$m
3,100
1,715
1,291
1,242
848
8,437
16,633
Purchase obligations are enforceable and legally binding agreements to buy goods or services. They specify all significant terms, including: fixed
or minimum quantities to be purchased or consumed; fixed, minimum or variable price provisions; and the approximate timing of the transactions.
Purchase obligations for goods mainly relate to purchases of raw materials and consumables and purchase obligations for services mainly relate
to charges for the use of infrastructure, commitments to purchase power and freight contracts. These goods and services are expected to be used
in the business. To the extent that this changes, a provision for onerous obligations may be made as described in note 1- critical policy (vii).
Purchases from joint arrangements or associates are included if the quantity purchased is in excess of our ownership interest in the entity.
However, purchase obligations exclude contracted purchases of bauxite, alumina and aluminium from joint arrangements and associates and
contracted purchases of alumina from third parties. This is because these purchases are made for commercial reasons and the Group is, overall, a
net seller of these commodities.
As described above, we also have a commitment to buy and market a portion (in excess of our ownership interest) of the output of Sohar
Aluminium Company L.L.C.
Contingent liabilities (subsidiaries and joint operations)
Contingent liabilities, Indemnities and other performance guarantees(a)(b)
2021
US$m
441
2020
US$m
146
(a)
(b)
Contingent liabilities, indemnities and other performance guarantees represent the potential outflow of funds from the Group for the satisfaction of obligations including those under
contractual arrangements (for example undertakings related to supplier agreements) not provided for in the balance sheet, where the likelihood of the contingent liabilities, guarantees or
indemnities being called is assessed as possible rather than probable or remote.
There were no material contingent liabilities arising in relation to the Group’s joint ventures and associates.
The Group has not established provisions for certain additional legal claims in cases where we have assessed that a payment is either not
probable or cannot be reliably estimated. A number of Group companies are, and will likely continue to be, subject to various legal proceedings
and investigations that arise from time to time. As a result, the Group may become subject to substantial liabilities that could affect our business,
financial position and reputation. Litigation is inherently unpredictable and large judgments may at times occur. The Group may incur, in the
future, judgments or enter into settlements of claims that could lead to material cash outflows. We do not believe that any of these proceedings
will have a materially adverse effect on our financial position.
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273273
Financial statements continued
Notes to the 2021 financial statements
30 Contingencies and commitments continued
Contingent liabilities - not quantifiable
The current status of the following contingent liabilities means it is not practicable to provide a reliable estimate of possible financial exposure:
Litigation disputes
In October 2017, Rio Tinto announced that it had been notified by the U.S. Securities and Exchange Commission (SEC) that the SEC had filed a
complaint in relation to Rio Tinto’s disclosures and timing of the impairment of Rio Tinto Coal Mozambique (RTCM). The impairment was reflected
in Rio Tinto’s 2012 year-end accounts. The SEC alleges that Rio Tinto, a former chief executive, Tom Albanese, and a former chief financial officer,
Guy Elliott, committed violations of the antifraud, reporting, books and records and internal control provisions of the federal securities law by not
accurately disclosing the value of RTCM and not impairing it when Rio Tinto published its 2011 year-end accounts in February 2012 or its 2012
interim results in August 2012. In June 2019, the trial court dismissed an associated US class action on behalf of securities holders. In August
2020, the appeals court partially overturned the court’s dismissal and the case is with the trial court for further consideration.
In March 2018, the Australian Securities and Investments Commission (ASIC) filed civil proceedings in the NSW District Registry of the Federal
Court of Australia against Rio Tinto Limited, Albanese, and Elliott. On 1 May 2018, ASIC expanded its proceedings. ASIC alleges that Rio Tinto
committed violations of the disclosure, accounting, and misleading or deceptive conduct provisions of the Corporations Act by making misleading
or deceptive statements related to RTCM in its 2011 Annual Report and its 2012 interim financial statements, not complying with accounting
standards in respect of its 2012 interim financial statements, and not disclosing an impairment of RTCM in its 2012 interim financial statements.
ASIC further alleges Albanese and Elliott breached their duties as directors or officers, and failed to take all reasonable steps to comply with
relevant accounting requirements.
Rio Tinto believes that the SEC case and the ASIC proceedings are unwarranted and will defend the allegations vigorously. Hence, no provisions
have been recognised for these cases.
Rio Tinto continues to co-operate fully with relevant authorities in connection with their investigations in relation to contractual payments
totalling US$10.5 million made to a consultant who had provided advisory services in 2011 on the Simandou project in Guinea. In August 2018,
the court dismissed a related US class action commenced on behalf of securities holders. No provision has been recognised for this case.
At 31 December 2021, the outcomes of these matters remained uncertain, but they could ultimately expose the Group to material financial cost.
The Board is giving these matters its full and proper attention and a dedicated Board committee continues to monitor the progress of these
matters, as appropriate.
Other contingent liabilities
The Group is in the process of modernising agreements with Traditional Owner groups as outlined in our response to the Juukan Gorge incident.
We have provided for our best estimate of historical claims; however, the process is incomplete and it is possible that further claims could arise
relating to past events.
As described in note 1(l), close-down and restoration provisions are not recognised for those operations that have no known restrictions on their
lives as the date of closure cannot be reliably estimated. This applies primarily to Canadian aluminium smelters which are not dependent upon a
specific orebody and have access to indefinite-lived power from owned hydro-power stations with water rights permitted by local governments. In
these instances a closure obligation may exist at the reporting date; however, due to the indefinite nature of asset lives it is not possible to arrive
at a sufficiently reliable estimate for the purposes of recognising a provision. Close-down and restoration provisions are recognised at these
operations for separately identifiable closure activities which can be reasonably estimated, such as the demolition and removal of fixed structures
after a pre-determined period. Any contingent liability for these assets will crystallise into a closure provision if and when a decision is taken to
cease operations.
Guarantees by parent companies
Rio Tinto plc and Rio Tinto Limited have, jointly and severally, fully and unconditionally guaranteed the following securities issued by the following
100% owned finance subsidiaries: US$4.4 billion (31 December 2020: US$4.4 billion) Rio Tinto Finance (USA) Limited and Rio Tinto Finance (USA)
plc bonds with maturity dates up to 2051; and US$1.1 billion (31 December 2020: US$1.2 billion) on the European Debt Issuance Programme. In
addition, Rio Tinto Finance plc and Rio Tinto Finance Limited have entered into facility arrangements for an aggregate amount of US$7.5 billion
(31 December 2020: US$7.5 billion). The facilities are guaranteed by Rio Tinto plc and Rio Tinto Limited.
Rio Tinto plc has provided a guarantee, known as the completion support undertaking (CSU), in favour of the Oyu Tolgoi LLC project finance
lenders. At 31 December 2021, US$4.3 billion of project finance debt was outstanding under this facility (2020: US$4.3 billion). Oyu Tolgoi LLC is
jointly owned by Erdenes Oyu Tolgoi LLC (34%), which is controlled by the Government of Mongolia, and Turquoise Hill Resources Ltd (66%, of
which Rio Tinto owns 51%). The project finance has been raised for development of the underground mine and the CSU will terminate on the
completion of the underground mine according to a set of completion tests set out in the project finance facility.
The Rio Tinto guarantee applies to the extent that Turquoise Hill Resources Ltd cannot satisfy Oyu Tolgoi LLC’s project finance debt servicing
obligations under its own guarantee to the lenders, called the sponsor debt service undertaking (DSU). Both the CSU and DSU contain a carve-out
for certain political risk events.
Contingent assets
The Group has, from time to time, various insurance claims outstanding with reinsurers.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
30 Contingencies and commitments continued
30 Contingencies and commitments continued
Contingent liabilities - not quantifiable
Contingent liabilities - not quantifiable
The current status of the following contingent liabilities means it is not practicable to provide a reliable estimate of possible financial exposure:
The current status of the following contingent liabilities means it is not practicable to provide a reliable estimate of possible financial exposure:
Litigation disputes
Litigation disputes
In October 2017, Rio Tinto announced that it had been notified by the U.S. Securities and Exchange Commission (SEC) that the SEC had filed a
In October 2017, Rio Tinto announced that it had been notified by the U.S. Securities and Exchange Commission (SEC) that the SEC had filed a
complaint in relation to Rio Tinto’s disclosures and timing of the impairment of Rio Tinto Coal Mozambique (RTCM). The impairment was reflected
complaint in relation to Rio Tinto’s disclosures and timing of the impairment of Rio Tinto Coal Mozambique (RTCM). The impairment was reflected
in Rio Tinto’s 2012 year-end accounts. The SEC alleges that Rio Tinto, a former chief executive, Tom Albanese, and a former chief financial officer,
in Rio Tinto’s 2012 year-end accounts. The SEC alleges that Rio Tinto, a former chief executive, Tom Albanese, and a former chief financial officer,
Guy Elliott, committed violations of the antifraud, reporting, books and records and internal control provisions of the federal securities law by not
Guy Elliott, committed violations of the antifraud, reporting, books and records and internal control provisions of the federal securities law by not
accurately disclosing the value of RTCM and not impairing it when Rio Tinto published its 2011 year-end accounts in February 2012 or its 2012
accurately disclosing the value of RTCM and not impairing it when Rio Tinto published its 2011 year-end accounts in February 2012 or its 2012
interim results in August 2012. In June 2019, the trial court dismissed an associated US class action on behalf of securities holders. In August
interim results in August 2012. In June 2019, the trial court dismissed an associated US class action on behalf of securities holders. In August
2020, the appeals court partially overturned the court’s dismissal and the case is with the trial court for further consideration.
2020, the appeals court partially overturned the court’s dismissal and the case is with the trial court for further consideration.
In March 2018, the Australian Securities and Investments Commission (ASIC) filed civil proceedings in the NSW District Registry of the Federal
In March 2018, the Australian Securities and Investments Commission (ASIC) filed civil proceedings in the NSW District Registry of the Federal
Court of Australia against Rio Tinto Limited, Albanese, and Elliott. On 1 May 2018, ASIC expanded its proceedings. ASIC alleges that Rio Tinto
Court of Australia against Rio Tinto Limited, Albanese, and Elliott. On 1 May 2018, ASIC expanded its proceedings. ASIC alleges that Rio Tinto
committed violations of the disclosure, accounting, and misleading or deceptive conduct provisions of the Corporations Act by making misleading
committed violations of the disclosure, accounting, and misleading or deceptive conduct provisions of the Corporations Act by making misleading
or deceptive statements related to RTCM in its 2011 Annual Report and its 2012 interim financial statements, not complying with accounting
or deceptive statements related to RTCM in its 2011 Annual Report and its 2012 interim financial statements, not complying with accounting
standards in respect of its 2012 interim financial statements, and not disclosing an impairment of RTCM in its 2012 interim financial statements.
standards in respect of its 2012 interim financial statements, and not disclosing an impairment of RTCM in its 2012 interim financial statements.
ASIC further alleges Albanese and Elliott breached their duties as directors or officers, and failed to take all reasonable steps to comply with
ASIC further alleges Albanese and Elliott breached their duties as directors or officers, and failed to take all reasonable steps to comply with
relevant accounting requirements.
relevant accounting requirements.
have been recognised for these cases.
have been recognised for these cases.
Rio Tinto believes that the SEC case and the ASIC proceedings are unwarranted and will defend the allegations vigorously. Hence, no provisions
Rio Tinto believes that the SEC case and the ASIC proceedings are unwarranted and will defend the allegations vigorously. Hence, no provisions
Rio Tinto continues to co-operate fully with relevant authorities in connection with their investigations in relation to contractual payments
Rio Tinto continues to co-operate fully with relevant authorities in connection with their investigations in relation to contractual payments
totalling US$10.5 million made to a consultant who had provided advisory services in 2011 on the Simandou project in Guinea. In August 2018,
totalling US$10.5 million made to a consultant who had provided advisory services in 2011 on the Simandou project in Guinea. In August 2018,
the court dismissed a related US class action commenced on behalf of securities holders. No provision has been recognised for this case.
the court dismissed a related US class action commenced on behalf of securities holders. No provision has been recognised for this case.
At 31 December 2021, the outcomes of these matters remained uncertain, but they could ultimately expose the Group to material financial cost.
At 31 December 2021, the outcomes of these matters remained uncertain, but they could ultimately expose the Group to material financial cost.
The Board is giving these matters its full and proper attention and a dedicated Board committee continues to monitor the progress of these
The Board is giving these matters its full and proper attention and a dedicated Board committee continues to monitor the progress of these
matters, as appropriate.
matters, as appropriate.
Other contingent liabilities
Other contingent liabilities
relating to past events.
relating to past events.
The Group is in the process of modernising agreements with Traditional Owner groups as outlined in our response to the Juukan Gorge incident.
The Group is in the process of modernising agreements with Traditional Owner groups as outlined in our response to the Juukan Gorge incident.
We have provided for our best estimate of historical claims; however, the process is incomplete and it is possible that further claims could arise
We have provided for our best estimate of historical claims; however, the process is incomplete and it is possible that further claims could arise
As described in note 1(l), close-down and restoration provisions are not recognised for those operations that have no known restrictions on their
As described in note 1(l), close-down and restoration provisions are not recognised for those operations that have no known restrictions on their
lives as the date of closure cannot be reliably estimated. This applies primarily to Canadian aluminium smelters which are not dependent upon a
lives as the date of closure cannot be reliably estimated. This applies primarily to Canadian aluminium smelters which are not dependent upon a
specific orebody and have access to indefinite-lived power from owned hydro-power stations with water rights permitted by local governments. In
specific orebody and have access to indefinite-lived power from owned hydro-power stations with water rights permitted by local governments. In
these instances a closure obligation may exist at the reporting date; however, due to the indefinite nature of asset lives it is not possible to arrive
these instances a closure obligation may exist at the reporting date; however, due to the indefinite nature of asset lives it is not possible to arrive
at a sufficiently reliable estimate for the purposes of recognising a provision. Close-down and restoration provisions are recognised at these
at a sufficiently reliable estimate for the purposes of recognising a provision. Close-down and restoration provisions are recognised at these
operations for separately identifiable closure activities which can be reasonably estimated, such as the demolition and removal of fixed structures
operations for separately identifiable closure activities which can be reasonably estimated, such as the demolition and removal of fixed structures
after a pre-determined period. Any contingent liability for these assets will crystallise into a closure provision if and when a decision is taken to
after a pre-determined period. Any contingent liability for these assets will crystallise into a closure provision if and when a decision is taken to
cease operations.
cease operations.
Guarantees by parent companies
Guarantees by parent companies
Rio Tinto plc and Rio Tinto Limited have, jointly and severally, fully and unconditionally guaranteed the following securities issued by the following
Rio Tinto plc and Rio Tinto Limited have, jointly and severally, fully and unconditionally guaranteed the following securities issued by the following
100% owned finance subsidiaries: US$4.4 billion (31 December 2020: US$4.4 billion) Rio Tinto Finance (USA) Limited and Rio Tinto Finance (USA)
100% owned finance subsidiaries: US$4.4 billion (31 December 2020: US$4.4 billion) Rio Tinto Finance (USA) Limited and Rio Tinto Finance (USA)
plc bonds with maturity dates up to 2051; and US$1.1 billion (31 December 2020: US$1.2 billion) on the European Debt Issuance Programme. In
plc bonds with maturity dates up to 2051; and US$1.1 billion (31 December 2020: US$1.2 billion) on the European Debt Issuance Programme. In
addition, Rio Tinto Finance plc and Rio Tinto Finance Limited have entered into facility arrangements for an aggregate amount of US$7.5 billion
addition, Rio Tinto Finance plc and Rio Tinto Finance Limited have entered into facility arrangements for an aggregate amount of US$7.5 billion
(31 December 2020: US$7.5 billion). The facilities are guaranteed by Rio Tinto plc and Rio Tinto Limited.
(31 December 2020: US$7.5 billion). The facilities are guaranteed by Rio Tinto plc and Rio Tinto Limited.
Rio Tinto plc has provided a guarantee, known as the completion support undertaking (CSU), in favour of the Oyu Tolgoi LLC project finance
Rio Tinto plc has provided a guarantee, known as the completion support undertaking (CSU), in favour of the Oyu Tolgoi LLC project finance
lenders. At 31 December 2021, US$4.3 billion of project finance debt was outstanding under this facility (2020: US$4.3 billion). Oyu Tolgoi LLC is
lenders. At 31 December 2021, US$4.3 billion of project finance debt was outstanding under this facility (2020: US$4.3 billion). Oyu Tolgoi LLC is
jointly owned by Erdenes Oyu Tolgoi LLC (34%), which is controlled by the Government of Mongolia, and Turquoise Hill Resources Ltd (66%, of
jointly owned by Erdenes Oyu Tolgoi LLC (34%), which is controlled by the Government of Mongolia, and Turquoise Hill Resources Ltd (66%, of
which Rio Tinto owns 51%). The project finance has been raised for development of the underground mine and the CSU will terminate on the
which Rio Tinto owns 51%). The project finance has been raised for development of the underground mine and the CSU will terminate on the
completion of the underground mine according to a set of completion tests set out in the project finance facility.
completion of the underground mine according to a set of completion tests set out in the project finance facility.
The Rio Tinto guarantee applies to the extent that Turquoise Hill Resources Ltd cannot satisfy Oyu Tolgoi LLC’s project finance debt servicing
The Rio Tinto guarantee applies to the extent that Turquoise Hill Resources Ltd cannot satisfy Oyu Tolgoi LLC’s project finance debt servicing
obligations under its own guarantee to the lenders, called the sponsor debt service undertaking (DSU). Both the CSU and DSU contain a carve-out
obligations under its own guarantee to the lenders, called the sponsor debt service undertaking (DSU). Both the CSU and DSU contain a carve-out
The Group has, from time to time, various insurance claims outstanding with reinsurers.
The Group has, from time to time, various insurance claims outstanding with reinsurers.
for certain political risk events.
for certain political risk events.
Contingent assets
Contingent assets
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31 Average number of employees
Principal locations of employment:
Australia and New Zealand
Canada
UK
Europe
Africa
US
Mongolia
South America
India
Singapore
Other countries(a)
Total
Subsidiaries and joint operations
Equity accounted units
(Rio Tinto share)
Group total
2021
2020
2019
2021
2020
2019
2021
2020
2019
21,861
12,270
189
1,003
2,484
3,471
3,513
213
354
450
283
46,091
20,482
11,814
172
1,020
2,559
3,543
3,465
220
324
456
278
44,333
19,195
11,576
190
959
3,121
3,400
3,215
243
272
430
267
42,868
648
—
—
—
1,253
—
—
1,353
—
—
—
3,254
634
—
—
—
1,214
—
—
1,293
—
—
—
3,141
619
—
—
—
1,250
—
—
1,270
—
—
—
3,139
22,509
12,270
189
1,003
3,737
3,471
3,513
1,566
354
450
283
49,345
21,116
11,814
172
1,020
3,773
3,543
3,465
1,513
324
456
278
47,474
19,814
11,576
190
959
4,371
3,400
3,215
1,513
272
430
267
46,007
(a)
“Other countries” primarily includes employees in the Middle East (excluding Oman which is included in Africa), and other countries in Asia which are not shown separately in the table
above.
Employee numbers, which represent the average for the year, include 100% of employees of subsidiary companies. Employee numbers for joint
operations and equity accounted units are proportional to the Group’s interest under contractual agreements. Average employee numbers include
a part-year effect for companies acquired or disposed of during the year.
Part-time employees are included on a full-time-equivalent basis. Temporary employees are included in employee numbers.
People employed by contractors are not included.
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275275
Financial statements continued
Notes to the 2021 financial statements
32 Principal subsidiaries
At 31 December 2021
Company and country of incorporation/operation
Principal activities
Class of shares
held
Proportion
of class
held (%)
Group
interest
(%)
Non-
controlling
interest (%)
Australia
Argyle Diamonds Limited
Dampier Salt Limited
Energy Resources of Australia Ltd
Hamersley Iron Pty Limited
North Mining Limited(a)
Rio Tinto Aluminium (Holdings) Limited
Mining and processing of diamonds
(until November 2020)
Salt and gypsum production
Uranium processing (until January
2021)
Iron ore mining
Iron ore mining
Bauxite mining; alumina production;
primary aluminium smelting
Robe River Mining Co Pty Ltd(a)
Iron ore mining
Ordinary
100
Ordinary
68.36
Ordinary
86.33
Ordinary
Ordinary
Ordinary
100
100
100
Class A
Class B
40
76.36
100
68.36
86.33
100
100
100
60
Alumina production and bauxite mining
Quota
100
100
—
31.64
13.67
—
—
—
40
—
Brazil
Alcan Alumina Ltda.(b)
Canada
Iron Ore Company of Canada(c)
Rio Tinto Fer et Titane Inc.
Rio Tinto Alcan Inc.
Diavik Diamond Mines (2012) Inc.(d)
Guinea
Simfer Jersey Limited(e)
Madagascar
Iron ore mining; iron ore pellets
production
Titanium dioxide feedstock; high purity
iron and steel production
Bauxite mining; alumina refining;
aluminium smelting
Diamond mining and processing
Iron ore project
Common
58.72
58.72
41.28
Common
Class B preference
CAD 0.01 preferred
Common
100
100
100
100
Common
100
Ordinary
53
Common
Investment
certificates
Voting certificates
80
100
80
100
100
100
100
100
53
80
100
80
—
—
—
—
—
47
15
20
QIT Madagascar Minerals SA(f)
Ilmenite mining
Mongolia
Turquoise Hill Resources Ltd
(including Oyu Tolgoi LLC)(g)
South Africa
Copper and gold mining
Common
50.79
50.79
49.21
Richards Bay Titanium (Proprietary) Limited(h)
Titanium dioxide; high purity iron
production
Richards Bay Mining (Proprietary) Limited(h)
Ilmenite, rutile and zircon mining
B Ordinary
B preference
Parent Preference
B Ordinary
B preference
Parent Preference
100
100
100
100
100
100
US
Kennecott Holdings Corporation (including
Kennecott Utah Copper and Kennecott
Exploration)
U.S. Borax Inc.
Copper and gold mining, smelting and
refining and exploration activities
Mining, refining and marketing of
borates
Common US$0.01
100
Common US$0.10
100
74
74
100
100
26
26
—
—
This list includes only those companies that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
list of related undertakings.
The Group’s principal subsidiaries are mostly held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(b)
(c)
Robe River Mining Co Pty Ltd (which is 60% owned by the Group) holds a 30% interest in Robe River Iron Associates (Robe River). North Mining Ltd (which is wholly owned by the Group)
holds a 35% interest in Robe River. Through these companies the Group recognises a 65% share of the assets, liabilities, revenues and expenses of Robe River, with a 12% non-controlling
interest. The Group therefore has a 53% beneficial interest in Robe River.
Alcan Alumina Ltda holds the Group’s 10% interest in Consórcio De Alumínio Do Maranhão, a joint operation in which the Group participates but is not a joint operator. The Group
recognises its share of assets, liabilities, revenues and expenses relating to this arrangement.
Iron Ore Company of Canada is incorporated in the US, but operates in Canada.
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Financial statements continued
Financial statements
(d)
(e)
(f)
(g)
(h)
On 18 November 2021, Diavik Diamond Mines (2012) Inc. (DDMI) purchased the 40% share in the Diavik Diamond Mine, an unincorporated arrangement, held by Dominion Diamond Mines,
becoming sole owner as a result; refer to note 36. Prior to purchase the Group held a 60% interest in Diavik and recognised its share of assets, revenue and expenses relating to this
arrangement. Liabilities were recognised according to DDMI’s contractual obligations, with a corresponding 40% receivable or contingent asset representing the co-owner’s share where
applicable.
Simfer Jersey Limited, a company incorporated in Jersey in which the Group has a 53% interest, has an 85% interest in Simfer S.A., the company that operates the Simandou mining project
in Guinea. The Group therefore has a 45.05% indirect interest in Simfer S.A. These entities are consolidated as subsidiaries and together referred to as the Simandou iron ore project.
The Group’s shareholding in QIT Madagascar Minerals SA carries an 80% economic interest and 80% of the total voting rights; a further 5% economic interest is held through non-voting
investment certificates to give an economic interest of 85%. The non-controlling interests have a 15% economic interest and 20% of the total voting rights.
The Group has a 50.79% interest in Turquoise Hill Resources Ltd, which holds a 66% interest in Oyu Tolgoi LLC (OT) which is a subsidiary of Turquoise Hill Resources Ltd. The Group
therefore has a 33.5% indirect interest in OT. Turquoise Hill Resources Ltd is incorporated in Canada but operates principally in Mongolia.
Additional classes of shares issued by Richards Bay Titanium (Proprietary) Limited and Richards Bay Mining (Proprietary) Limited representing non-controlling interests are not shown. The
Group’s total legal and beneficial interest in Richards Bay Titanium (Proprietary) Limited and Richards Bay Mining (Proprietary) Limited is 74%.
Summary financial information for subsidiaries that have non-controlling interests that are material to the Group
This summarised financial information is shown on a 100% basis. It represents the amounts shown in the subsidiaries’ financial statements
prepared in accordance with IFRS under Group accounting policies, including fair value adjustments, and before intercompany eliminations.
Robe River Mining Co Pty Ltd(a)
Robe River Mining Co Pty Ltd(a)
Iron ore mining
Iron ore mining
Income statement summary for the year ended 31 December
Revenue
Profit after tax
– attributable to non-controlling interests
– attributable to Rio Tinto
Other comprehensive income
Total comprehensive income
Balance sheet summary as at 31 December
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
– attributable to non-controlling interests
– attributable to Rio Tinto
Cash flow statement summary for the year ended 31 December
Cash flow from operations
Dividends paid to non-controlling interests
Iron Ore
Company of
Canada
2021
US$m
Iron Ore
Company of
Canada
2020
US$m
Turquoise
Hill(i)(j)(k)
2021
US$m
Turquoise
Hill(i)(j)(k)
2020
US$m
3,308
1,193
493
700
39
1,232
2021
US$m
2,974
599
(581)
(1,020)
1,972
818
1,154
2021
US$m
2,119
(495)
2,269
611
252
359
56
667
2020
US$m
2,733
670
(462)
(993)
1,948
804
1,144
2020
US$m
1,027
(180)
1,971
893
496
397
3
896
2021
US$m
12,250
1,129
(954)
(4,085)
8,340
2,846
5,494
2021
US$m
825
—
1,078
357
130
227
2
359
2020
US$m
10,930
1,496
(540)
(4,404)
7,482
2,424
5,058
2020
US$m
380
—
(i)
(j)
(k)
Turquoise Hill Resources Ltd holds a controlling interest in Oyu Tolgoi LLC.
Under the terms of the project finance facility held by Oyu Tolgoi LLC, there are certain restrictions on the ability of Oyu Tolgoi LLC to make shareholder distributions.
Since 2011, Turquoise Hill has funded common share investments in Oyu Tolgoi LLC on behalf of Erdenes Oyu Tolgoi LLC (“Erdenes”). In accordance with the Amended and Restated
Shareholders Agreement dated 8 June 2011, such funded amounts earn interest at an effective annual rate of LIBOR plus 6.5% and are repayable to them via a pledge over Erdenes’ share
of future OT common share dividends. Erdenes also has the right to reduce the outstanding balance by making payments directly to Turquoise Hill. Common share investments funded on
behalf of Erdenes, including accrued interest, are recorded as a reduction to the net carrying value of their component of non-controlling interests. As at 31 December 2021, the cumulative
amount of such funding was US$1,399 million (31 December 2020: US$1,378 million), excluding accrued interest of US$953 million (31 December 2020: US$804 million) relating to this
funding. On 25 January 2022, Turquoise Hill agreed to waive the full amount of funding balances and interest; refer to note 45.
Income statement summary for the year ended 31 December
Revenue
Profit after tax
– attributable to non-controlling interests
– attributable to Rio Tinto
Other comprehensive (loss)/income
Total comprehensive income
Balance sheet summary as at 31 December
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
– attributable to non-controlling interests
– attributable to Rio Tinto
Robe River
Mining Co Pty
2021
US$m
Robe River
Mining Co Pty
2020
US$m
Other
companies
and
eliminations(l)
2021
US$m
Other
companies and
eliminations(l)
2020
US$m
Robe River
2021
US$m
Robe River
2020
US$m
2,454
1,352
541
811
(183)
1,169
2021
US$m
3,472
495
(371)
(421)
3,175
1,268
1,907
1,738
939
376
563
294
1,233
2020
US$m
3,452
865
(380)
(255)
3,682
1,397
2,285
2,863
1,518
—
1,518
(97)
1,421
2021
US$m
4,166
2,118
(329)
(4,378)
1,577
—
1,577
2,028
1,019
—
1,019
136
1,155
2020
US$m
4,247
2,239
(414)
(4,752)
1,320
—
1,320
5,317
2,870
541
2,329
(280)
2,590
2021
US$m
7,638
2,613
(700)
(4,799)
4,752
1,268
3,484
3,766
1,958
376
1,582
430
2,388
2020
US$m
7,699
3,104
(794)
(5,007)
5,002
1,397
3,605
Alumina production and bauxite mining
Alumina production and bauxite mining
Quota
Quota
100
100
100
100
Common
Common
58.72
58.72
58.72
58.72
41.28
41.28
Notes to the 2021 financial statements
Company and country of incorporation/operation
Company and country of incorporation/operation
Principal activities
Principal activities
Class of shares
Class of shares
held
held
Proportion
Proportion
of class
of class
held (%)
held (%)
Group
Group
interest
interest
(%)
(%)
Non-
Non-
controlling
controlling
interest (%)
interest (%)
32 Principal subsidiaries
32 Principal subsidiaries
At 31 December 2021
At 31 December 2021
Australia
Australia
Argyle Diamonds Limited
Argyle Diamonds Limited
Dampier Salt Limited
Dampier Salt Limited
Energy Resources of Australia Ltd
Energy Resources of Australia Ltd
Hamersley Iron Pty Limited
Hamersley Iron Pty Limited
North Mining Limited(a)
North Mining Limited(a)
Rio Tinto Aluminium (Holdings) Limited
Rio Tinto Aluminium (Holdings) Limited
Alcan Alumina Ltda.(b)
Alcan Alumina Ltda.(b)
Brazil
Brazil
Canada
Canada
Iron Ore Company of Canada(c)
Iron Ore Company of Canada(c)
Rio Tinto Fer et Titane Inc.
Rio Tinto Fer et Titane Inc.
Rio Tinto Alcan Inc.
Rio Tinto Alcan Inc.
Diavik Diamond Mines (2012) Inc.(d)
Diavik Diamond Mines (2012) Inc.(d)
Guinea
Guinea
Simfer Jersey Limited(e)
Simfer Jersey Limited(e)
Madagascar
Madagascar
Mongolia
Mongolia
Turquoise Hill Resources Ltd
Turquoise Hill Resources Ltd
(including Oyu Tolgoi LLC)(g)
(including Oyu Tolgoi LLC)(g)
South Africa
South Africa
Mining and processing of diamonds
Mining and processing of diamonds
(until November 2020)
(until November 2020)
Salt and gypsum production
Salt and gypsum production
Uranium processing (until January
Uranium processing (until January
2021)
2021)
Iron ore mining
Iron ore mining
Iron ore mining
Iron ore mining
Bauxite mining; alumina production;
Bauxite mining; alumina production;
primary aluminium smelting
primary aluminium smelting
Iron ore mining; iron ore pellets
Iron ore mining; iron ore pellets
production
production
Titanium dioxide feedstock; high purity
Titanium dioxide feedstock; high purity
iron and steel production
iron and steel production
Bauxite mining; alumina refining;
Bauxite mining; alumina refining;
aluminium smelting
aluminium smelting
Diamond mining and processing
Diamond mining and processing
Iron ore project
Iron ore project
Ordinary
Ordinary
100
100
Ordinary
Ordinary
68.36
68.36
Ordinary
Ordinary
86.33
86.33
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
100
Class A
Class A
Class B
Class B
40
40
76.36
76.36
Common
Common
Class B preference
Class B preference
CAD 0.01 preferred
CAD 0.01 preferred
Common
Common
100
100
100
100
100
100
100
100
Common
Common
100
100
Ordinary
Ordinary
53
53
Common
Common
Investment
Investment
certificates
certificates
80
80
100
100
Voting certificates
Voting certificates
80
80
B Ordinary
B Ordinary
B preference
B preference
Parent Preference
Parent Preference
B Ordinary
B Ordinary
B preference
B preference
Parent Preference
Parent Preference
100
100
100
100
100
100
100
100
100
100
100
100
100
100
68.36
68.36
86.33
86.33
100
100
100
100
100
100
60
60
100
100
100
100
100
100
100
100
100
100
53
53
80
80
100
100
80
80
74
74
74
74
100
100
100
100
—
—
31.64
31.64
13.67
13.67
—
—
—
—
—
—
40
40
—
—
—
—
—
—
—
—
—
—
—
—
47
47
15
15
20
20
26
26
26
26
—
—
—
—
QIT Madagascar Minerals SA(f)
QIT Madagascar Minerals SA(f)
Ilmenite mining
Ilmenite mining
Copper and gold mining
Copper and gold mining
Common
Common
50.79
50.79
50.79
50.79
49.21
49.21
Richards Bay Titanium (Proprietary) Limited(h)
Richards Bay Titanium (Proprietary) Limited(h)
Titanium dioxide; high purity iron
Titanium dioxide; high purity iron
production
production
Richards Bay Mining (Proprietary) Limited(h)
Richards Bay Mining (Proprietary) Limited(h)
Ilmenite, rutile and zircon mining
Ilmenite, rutile and zircon mining
Kennecott Holdings Corporation (including
Kennecott Holdings Corporation (including
Kennecott Utah Copper and Kennecott
Kennecott Utah Copper and Kennecott
US
US
Exploration)
Exploration)
U.S. Borax Inc.
U.S. Borax Inc.
Copper and gold mining, smelting and
Copper and gold mining, smelting and
refining and exploration activities
refining and exploration activities
Mining, refining and marketing of
Mining, refining and marketing of
borates
borates
Common US$0.01
Common US$0.01
100
100
Common US$0.10
Common US$0.10
100
100
This list includes only those companies that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
This list includes only those companies that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
list of related undertakings.
list of related undertakings.
The Group’s principal subsidiaries are mostly held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
The Group’s principal subsidiaries are mostly held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(a)
Robe River Mining Co Pty Ltd (which is 60% owned by the Group) holds a 30% interest in Robe River Iron Associates (Robe River). North Mining Ltd (which is wholly owned by the Group)
Robe River Mining Co Pty Ltd (which is 60% owned by the Group) holds a 30% interest in Robe River Iron Associates (Robe River). North Mining Ltd (which is wholly owned by the Group)
holds a 35% interest in Robe River. Through these companies the Group recognises a 65% share of the assets, liabilities, revenues and expenses of Robe River, with a 12% non-controlling
holds a 35% interest in Robe River. Through these companies the Group recognises a 65% share of the assets, liabilities, revenues and expenses of Robe River, with a 12% non-controlling
interest. The Group therefore has a 53% beneficial interest in Robe River.
interest. The Group therefore has a 53% beneficial interest in Robe River.
(b)
(b)
Alcan Alumina Ltda holds the Group’s 10% interest in Consórcio De Alumínio Do Maranhão, a joint operation in which the Group participates but is not a joint operator. The Group
Alcan Alumina Ltda holds the Group’s 10% interest in Consórcio De Alumínio Do Maranhão, a joint operation in which the Group participates but is not a joint operator. The Group
recognises its share of assets, liabilities, revenues and expenses relating to this arrangement.
recognises its share of assets, liabilities, revenues and expenses relating to this arrangement.
(c)
(c)
Iron Ore Company of Canada is incorporated in the US, but operates in Canada.
Iron Ore Company of Canada is incorporated in the US, but operates in Canada.
276
276
276
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277277
Financial statements continued
Notes to the 2021 financial statements
32 Principal subsidiaries continued
Cash flow statement summary for the year ended 31 December
Cash flow from operations
Dividends paid to non-controlling interests
2021
US$m
2,130
(589)
2020
US$m
1,491
(332)
2021
US$m
2,512
—
2020
US$m
1,771
(165)
2021
US$m
4,642
(589)
2020
US$m
3,262
(497)
(l)
“Other companies and eliminations” includes North Mining Limited (a wholly-owned subsidiary of the Group which accounts for its interest in Robe River) and goodwill of US$362 million
(2020: US$383 million) that arose on the Group’s acquisition of its interest in Robe River.
33 Principal joint operations
At 31 December 2021
Company and country of incorporation/operation
Australia
Tomago Aluminium Joint Venture
Gladstone Power Station
Hope Downs Joint Venture
Queensland Alumina Limited(a)(b)
Pilbara Iron Arrangements
New Zealand
New Zealand Aluminium Smelters Limited(a)(b)
Canada
Aluminerie Alouette Inc.
US
Pechiney Reynolds Quebec Inc(b)(d)
Principal activities
Group interest (%)
Aluminium smelting
Power generation
Iron ore mining
Alumina production
Infrastructure, corporate and mining services
Aluminium smelting
Aluminium production
Aluminium smelting
51.6
42.1
50
80
(c)
79.4
40
50.2
This list includes only those joint operations that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for
a list of related undertakings.
The Group’s joint operations are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(b)
(c)
(d)
Although the Group has a 79.4% interest in New Zealand Aluminium Smelters Limited and an 80% interest in Queensland Alumina Limited, decisions about activities that significantly
affect the returns that are generated require agreement of both parties to the arrangements, giving rise to joint control.
Queensland Alumina Limited, New Zealand Aluminium Smelters Limited and Pechiney Reynolds Quebec Inc. are joint arrangements that are primarily designed for the provision of output
to the parties sharing joint control; this indicates that the parties have rights to substantially all the economic benefits of the assets. The liabilities of the arrangements are in substance
satisfied by cash flows received from the parties; this dependence indicates that the parties in effect have obligations for the liabilities. It is these facts and circumstances that give rise to
the classification of these entities as joint operations.
A number of arrangements are in place between the Australian Iron Ore operations managed by Rio Tinto which allow their respective assets to be operated as a single integrated network
across the Pilbara region. The arrangements are managed through two wholly owned subsidiaries: Pilbara Iron (Company) Services Pty Ltd and Pilbara Iron Pty Ltd. In assessing the Pilbara
Iron Arrangements, it has been concluded that they collectively constitute a joint operation on the basis that decisions about relevant activities require unanimous consent. The resulting
efficiencies are shared between Rio Tinto and Robe River Iron Associates (Robe River), and the parties fund all of the cash flow requirements of Pilbara Iron (Company) Services Pty Ltd and
Pilbara Iron Pty Ltd.
Pechiney Reynolds Quebec Inc. has a 50.1% interest in the Aluminerie de Bécancour, Inc. aluminium smelter, which is located in Canada. As Rio Tinto owns 50.2% of Pechiney Reynolds
Quebec Inc our effective ownership of the Becancour smelter is 25.1%.
278
278
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Notes to the 2021 financial statements
32 Principal subsidiaries continued
32 Principal subsidiaries continued
Cash flow statement summary for the year ended 31 December
Cash flow statement summary for the year ended 31 December
Cash flow from operations
Cash flow from operations
Dividends paid to non-controlling interests
Dividends paid to non-controlling interests
2021
2021
US$m
US$m
2,130
2,130
2020
2020
US$m
US$m
1,491
1,491
2021
2021
US$m
US$m
2,512
2,512
—
—
2020
2020
US$m
US$m
1,771
1,771
2021
2021
US$m
US$m
4,642
4,642
2020
2020
US$m
US$m
3,262
3,262
(497)
(497)
(l)
(l)
“Other companies and eliminations” includes North Mining Limited (a wholly-owned subsidiary of the Group which accounts for its interest in Robe River) and goodwill of US$362 million
“Other companies and eliminations” includes North Mining Limited (a wholly-owned subsidiary of the Group which accounts for its interest in Robe River) and goodwill of US$362 million
(2020: US$383 million) that arose on the Group’s acquisition of its interest in Robe River.
(2020: US$383 million) that arose on the Group’s acquisition of its interest in Robe River.
Company and country of incorporation/operation
Company and country of incorporation/operation
Principal activities
Principal activities
Group interest (%)
Group interest (%)
33 Principal joint operations
33 Principal joint operations
At 31 December 2021
At 31 December 2021
Australia
Australia
Tomago Aluminium Joint Venture
Tomago Aluminium Joint Venture
Gladstone Power Station
Gladstone Power Station
Hope Downs Joint Venture
Hope Downs Joint Venture
Queensland Alumina Limited(a)(b)
Queensland Alumina Limited(a)(b)
Pilbara Iron Arrangements
Pilbara Iron Arrangements
New Zealand
New Zealand
Aluminerie Alouette Inc.
Aluminerie Alouette Inc.
Canada
Canada
US
US
Pechiney Reynolds Quebec Inc(b)(d)
Pechiney Reynolds Quebec Inc(b)(d)
a list of related undertakings.
a list of related undertakings.
New Zealand Aluminium Smelters Limited(a)(b)
New Zealand Aluminium Smelters Limited(a)(b)
Aluminium smelting
Aluminium smelting
Infrastructure, corporate and mining services
Infrastructure, corporate and mining services
Aluminium smelting
Aluminium smelting
Power generation
Power generation
Iron ore mining
Iron ore mining
Alumina production
Alumina production
Aluminium production
Aluminium production
Aluminium smelting
Aluminium smelting
51.6
51.6
42.1
42.1
50
50
80
80
(c)
(c)
79.4
79.4
40
40
50.2
50.2
This list includes only those joint operations that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for
This list includes only those joint operations that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for
The Group’s joint operations are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
The Group’s joint operations are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(a)
Although the Group has a 79.4% interest in New Zealand Aluminium Smelters Limited and an 80% interest in Queensland Alumina Limited, decisions about activities that significantly
Although the Group has a 79.4% interest in New Zealand Aluminium Smelters Limited and an 80% interest in Queensland Alumina Limited, decisions about activities that significantly
affect the returns that are generated require agreement of both parties to the arrangements, giving rise to joint control.
affect the returns that are generated require agreement of both parties to the arrangements, giving rise to joint control.
(b)
(b)
Queensland Alumina Limited, New Zealand Aluminium Smelters Limited and Pechiney Reynolds Quebec Inc. are joint arrangements that are primarily designed for the provision of output
Queensland Alumina Limited, New Zealand Aluminium Smelters Limited and Pechiney Reynolds Quebec Inc. are joint arrangements that are primarily designed for the provision of output
to the parties sharing joint control; this indicates that the parties have rights to substantially all the economic benefits of the assets. The liabilities of the arrangements are in substance
to the parties sharing joint control; this indicates that the parties have rights to substantially all the economic benefits of the assets. The liabilities of the arrangements are in substance
satisfied by cash flows received from the parties; this dependence indicates that the parties in effect have obligations for the liabilities. It is these facts and circumstances that give rise to
satisfied by cash flows received from the parties; this dependence indicates that the parties in effect have obligations for the liabilities. It is these facts and circumstances that give rise to
the classification of these entities as joint operations.
the classification of these entities as joint operations.
(c)
(c)
A number of arrangements are in place between the Australian Iron Ore operations managed by Rio Tinto which allow their respective assets to be operated as a single integrated network
A number of arrangements are in place between the Australian Iron Ore operations managed by Rio Tinto which allow their respective assets to be operated as a single integrated network
across the Pilbara region. The arrangements are managed through two wholly owned subsidiaries: Pilbara Iron (Company) Services Pty Ltd and Pilbara Iron Pty Ltd. In assessing the Pilbara
across the Pilbara region. The arrangements are managed through two wholly owned subsidiaries: Pilbara Iron (Company) Services Pty Ltd and Pilbara Iron Pty Ltd. In assessing the Pilbara
Iron Arrangements, it has been concluded that they collectively constitute a joint operation on the basis that decisions about relevant activities require unanimous consent. The resulting
Iron Arrangements, it has been concluded that they collectively constitute a joint operation on the basis that decisions about relevant activities require unanimous consent. The resulting
efficiencies are shared between Rio Tinto and Robe River Iron Associates (Robe River), and the parties fund all of the cash flow requirements of Pilbara Iron (Company) Services Pty Ltd and
efficiencies are shared between Rio Tinto and Robe River Iron Associates (Robe River), and the parties fund all of the cash flow requirements of Pilbara Iron (Company) Services Pty Ltd and
(d)
(d)
Pechiney Reynolds Quebec Inc. has a 50.1% interest in the Aluminerie de Bécancour, Inc. aluminium smelter, which is located in Canada. As Rio Tinto owns 50.2% of Pechiney Reynolds
Pechiney Reynolds Quebec Inc. has a 50.1% interest in the Aluminerie de Bécancour, Inc. aluminium smelter, which is located in Canada. As Rio Tinto owns 50.2% of Pechiney Reynolds
Pilbara Iron Pty Ltd.
Pilbara Iron Pty Ltd.
Quebec Inc our effective ownership of the Becancour smelter is 25.1%.
Quebec Inc our effective ownership of the Becancour smelter is 25.1%.
Financial statements continued
Financial statements
(589)
(589)
(332)
(332)
(165)
(165)
(589)
(589)
Company and country of incorporation/operation
Principal activities
Number of
shares held
Class of
shares
held
Proportion
of class
held (%)
Group
interest
(%)
34 Principal joint ventures
At 31 December 2021
Chile
Minera Escondida Ltda(a)
Oman
Sohar Aluminium Co. L.L.C.(b)
Copper mining and refining
—
—
Aluminium smelting; power generation
37,500
Ordinary
—
20
30
20
This list includes only those joint ventures that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
list of related undertakings.
The Group’s principal joint ventures are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(b)
Although the Group has a 30% interest in Minera Escondida Ltda, participant and management agreements provide for an Owners’ Council whereby significant commercial and operational
decisions about the relevant activities that significantly affect the returns that are generated in effect require the joint approval of both Rio Tinto and BHP (holders of a 57.5% interest). It is
therefore determined that Rio Tinto has joint control.
The year-end of Minera Escondida Ltda is 30 June. The amounts included in the consolidated financial statements of Rio Tinto are, however, based on financial statements of Minera
Escondida Limitada that are coterminous with those of the Group.
Although the Group holds a 20% interest in Sohar Aluminium Co. L.L.C, decisions about relevant activities that significantly affect the returns that are generated require agreement of all
parties to the arrangement. It is therefore determined that Rio Tinto has joint control.
Summary information for joint ventures that are material to the Group
This summarised financial information is shown on a 100% basis. It represents the amounts shown in the joint ventures’ financial statements
prepared in accordance with IFRS under Group accounting policies, including fair value adjustments and amounts due to and from Rio Tinto.
Revenue
Depreciation and amortisation
Impairment charges (note 6)
Other operating costs
Operating profit/(loss)
Finance expense
Income tax
Profit/(loss) after tax
Other comprehensive profit/(loss)
Total comprehensive income/(loss)
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Assets and liabilities above include:
– cash and cash equivalents
– current financial liabilities
– non-current financial liabilities
Dividends received from joint venture (Rio Tinto share)
Minera
Escondida
Ltda(c)
2021
US$m
Minera
Escondida
Ltda(c)
2020
US$m
Sohar
Aluminum
Co.L.L.C.(d)
2021
US$m
Sohar
Aluminum
Co.L.L.C.(d)
2020
US$m
9,783
(1,160)
—
(3,066)
5,557
(134)
(2,133)
3,290
40
3,330
11,490
2,857
(2,017)
(4,633)
7,697
857
(550)
(2,660)
1,374
7,650
(1,427)
—
(2,756)
3,467
(137)
(1,197)
2,133
(40)
2,093
11,833
3,107
(1,813)
(4,560)
8,567
1,103
(790)
(2,560)
585
900
(115)
—
(510)
275
(30)
(35)
210
—
210
1,765
360
(175)
(730)
1,220
45
(40)
(560)
47
640
(115)
(1,100)
(430)
(1,005)
(20)
(15)
(1,040)
—
(1,040)
1,850
270
(675)
(200)
1,245
30
(565)
(30)
—
Reconciliation of the above amounts to the investment recognised in the Group balance sheet
Group interest
Net assets
Group’s ownership interest
Carrying value of Group’s interest
30 %
30 %
20 %
20 %
7,697
2,309
2,309
8,567
2,570
2,570
1,220
244
244
1,245
249
249
(c)
(d)
In addition to its “Investment in equity accounted units”, the Group recognises deferred tax liabilities of US$322 million (2020: US$358 million) relating to tax on unremitted earnings of
equity accounted units.
As part of the project financing agreements, there are certain restrictions on the ability of Sohar Aluminium Co. L.L.C to make shareholder distributions.
278
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Financial statements continued
Notes to the 2021 financial statements
35 Principal associates
At 31 December 2021
Company and country of incorporation/operation Principal activities
Number of
shares held
Class of
shares held
Proportion
of class
held (%)
Group
interest
(%)
Australia
Boyne Smelters Limited(a)
Brazil
Aluminium smelting
153,679,560
Ordinary
59.4
59.4
Mineração Rio do Norte S.A.(b)
Bauxite mining
25,000,000,000
47,000,000,000
Ordinary
Preferred
12.5
11.75
US
Halco (Mining) Inc.(c)
Bauxite mining
4,500
Common
45
12
45
This list includes only those associates that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
list of related undertakings.
The Group’s principal associates are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(b)
(c)
The parties that collectively control Boyne Smelters Limited do so through decisions that are determined on an aggregate voting interest that can be achieved by several combinations of
the parties. Although each combination requires Rio Tinto’s approval, this is not joint control as defined under IFRS 11 “Joint Arrangements”. Rio Tinto is therefore determined to have
significant influence over this company.
Although the Group holds only 12% of Mineração Rio do Norte S.A., it has representation on its board of directors and a consequent ability to participate in the financial and operating policy
decisions. It is therefore determined that Rio Tinto has significant influence.
Halco (Mining) Inc. has a 51% indirect interest in Compagnie des Bauxites de Guinée, a bauxite mine, the core assets of which are located in Guinea.
Summary information for associates that are material to the Group
This summarised financial information is shown on a 100% basis. It represents the amounts shown in the associate’s financial statements
prepared in accordance with IFRS under Group accounting policies, including fair value adjustments and amounts due to and from Rio Tinto.
Revenue
Profit/(loss) after tax(b)
Other comprehensive (loss)/income(c)
Total comprehensive income/(loss)
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Reconciliation of the above amount to the investment recognised in the Group balance sheet
Group interest
Net assets
Group's ownership interest
Loans to equity accounted units
Carrying value of Group's interest
Boyne
Smelters
Limited(a)
2021
US$m
Boyne
Smelters
Limited(a)
2020
US$m
—
61
(24)
37
993
135
(195)
(675)
258
—
(198)
30
(168)
1,037
98
(146)
(779)
210
59.4 %
59.4 %
258
153
97
250
210
125
112
237
(a)
(b)
(c)
Boyne Smelters Limited is a tolling operation; as such it is dependent on its participants for funding which is provided through cash calls. Rio Tinto has made certain prepayments to Boyne
for toll processing of alumina. These are charged to Group operating costs as processing takes place.
In 2020, includes US$200 million of impairment charges. Refer to note 6.
“Other comprehensive (loss)/income” is net of amounts recognised by subsidiaries in relation to quasi equity loans.
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35 Principal associates
35 Principal associates
At 31 December 2021
At 31 December 2021
Australia
Australia
Brazil
Brazil
US
US
Halco (Mining) Inc.(c)
Halco (Mining) Inc.(c)
Revenue
Revenue
Profit/(loss) after tax(b)
Profit/(loss) after tax(b)
Other comprehensive (loss)/income(c)
Other comprehensive (loss)/income(c)
Total comprehensive income/(loss)
Total comprehensive income/(loss)
Non-current assets
Non-current assets
Current assets
Current assets
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Net assets
Net assets
Group interest
Group interest
Net assets
Net assets
Group's ownership interest
Group's ownership interest
Loans to equity accounted units
Loans to equity accounted units
Carrying value of Group's interest
Carrying value of Group's interest
This list includes only those associates that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
This list includes only those associates that have a more significant impact on the profit or operating assets of the Group. Refer to note 44 for a
list of related undertakings.
list of related undertakings.
The Group’s principal associates are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
The Group’s principal associates are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.
(a)
(a)
The parties that collectively control Boyne Smelters Limited do so through decisions that are determined on an aggregate voting interest that can be achieved by several combinations of
The parties that collectively control Boyne Smelters Limited do so through decisions that are determined on an aggregate voting interest that can be achieved by several combinations of
the parties. Although each combination requires Rio Tinto’s approval, this is not joint control as defined under IFRS 11 “Joint Arrangements”. Rio Tinto is therefore determined to have
the parties. Although each combination requires Rio Tinto’s approval, this is not joint control as defined under IFRS 11 “Joint Arrangements”. Rio Tinto is therefore determined to have
significant influence over this company.
significant influence over this company.
(b)
(b)
Although the Group holds only 12% of Mineração Rio do Norte S.A., it has representation on its board of directors and a consequent ability to participate in the financial and operating policy
Although the Group holds only 12% of Mineração Rio do Norte S.A., it has representation on its board of directors and a consequent ability to participate in the financial and operating policy
decisions. It is therefore determined that Rio Tinto has significant influence.
decisions. It is therefore determined that Rio Tinto has significant influence.
(c)
(c)
Halco (Mining) Inc. has a 51% indirect interest in Compagnie des Bauxites de Guinée, a bauxite mine, the core assets of which are located in Guinea.
Halco (Mining) Inc. has a 51% indirect interest in Compagnie des Bauxites de Guinée, a bauxite mine, the core assets of which are located in Guinea.
Summary information for associates that are material to the Group
Summary information for associates that are material to the Group
This summarised financial information is shown on a 100% basis. It represents the amounts shown in the associate’s financial statements
This summarised financial information is shown on a 100% basis. It represents the amounts shown in the associate’s financial statements
prepared in accordance with IFRS under Group accounting policies, including fair value adjustments and amounts due to and from Rio Tinto.
prepared in accordance with IFRS under Group accounting policies, including fair value adjustments and amounts due to and from Rio Tinto.
Boyne
Boyne
Smelters
Smelters
Limited(a)
Limited(a)
2021
2021
US$m
US$m
Boyne
Boyne
Smelters
Smelters
Limited(a)
Limited(a)
2020
2020
US$m
US$m
—
—
61
61
(24)
(24)
37
37
993
993
135
135
(195)
(195)
(675)
(675)
258
258
—
—
(198)
(198)
30
30
(168)
(168)
1,037
1,037
98
98
(146)
(146)
(779)
(779)
210
210
59.4 %
59.4 %
59.4 %
59.4 %
258
258
153
153
97
97
250
250
210
210
125
125
112
112
237
237
Reconciliation of the above amount to the investment recognised in the Group balance sheet
Reconciliation of the above amount to the investment recognised in the Group balance sheet
(a)
(a)
Boyne Smelters Limited is a tolling operation; as such it is dependent on its participants for funding which is provided through cash calls. Rio Tinto has made certain prepayments to Boyne
Boyne Smelters Limited is a tolling operation; as such it is dependent on its participants for funding which is provided through cash calls. Rio Tinto has made certain prepayments to Boyne
for toll processing of alumina. These are charged to Group operating costs as processing takes place.
for toll processing of alumina. These are charged to Group operating costs as processing takes place.
In 2020, includes US$200 million of impairment charges. Refer to note 6.
In 2020, includes US$200 million of impairment charges. Refer to note 6.
“Other comprehensive (loss)/income” is net of amounts recognised by subsidiaries in relation to quasi equity loans.
“Other comprehensive (loss)/income” is net of amounts recognised by subsidiaries in relation to quasi equity loans.
(b)
(b)
(c)
(c)
Financial statements continued
Financial statements
Notes to the 2021 financial statements
Company and country of incorporation/operation Principal activities
Company and country of incorporation/operation Principal activities
Number of
Number of
Class of
Class of
shares held
shares held
shares held
shares held
Proportion
Proportion
of class
of class
held (%)
held (%)
Group
Group
interest
interest
(%)
(%)
Boyne Smelters Limited(a)
Boyne Smelters Limited(a)
Aluminium smelting
Aluminium smelting
153,679,560
153,679,560
Ordinary
Ordinary
59.4
59.4
59.4
59.4
Carrying value of Group's interest
Profit after tax
Other comprehensive income
Total comprehensive income
Associates
2021
US$m
Associates
2020
US$m
700
708
(22)
(5)
(27)
—
(5)
(5)
Mineração Rio do Norte S.A.(b)
Mineração Rio do Norte S.A.(b)
Bauxite mining
Bauxite mining
25,000,000,000
25,000,000,000
Ordinary
Ordinary
47,000,000,000
47,000,000,000
Preferred
Preferred
12.5
12.5
11.75
11.75
Bauxite mining
Bauxite mining
4,500
4,500
Common
Common
45
45
12
12
45
45
36 Purchases and sales of subsidiaries, joint ventures, associates and other interests in
businesses
Summary information for joint ventures and associates that are not individually material to the Group
Acquisitions
We have made no material acquisitions over the last three years.
On 18 November 2021, we announced completion of a transaction to acquire the 40% share in the Diavik Diamond Mine in the Northwest
Territories of Canada held by Dominion Diamond Mines, becoming sole owner as a result. The transaction did not meet the definition of a business
combination and therefore the incremental assets and liabilities were treated as an asset purchase. Prior to purchase the Group recognised its
existing 60% share of assets, revenues and expenses, with liabilities recognised according to its contractual obligations, and a corresponding 40%
receivable or contingent asset representing the co-owner’s share where applicable. Receivables relating to the co-owner’s share were de-
recognised and treated as part of the net purchase consideration on completion.
On 21 December 2021, the Group entered into a binding agreement to acquire the Rincon lithium project in Argentina for US$825 million. The
Rincon lithium project does not meet the definition of a business as defined by IFRS 3 “Business Combinations” and the transaction will be treated
as an asset purchase; completion is subject to regulatory approval in Australia.
Disposals
We have made no material disposals in 2021 or 2020.
On 16 July 2019 we disposed of our entire 68.62% interest in Rössing Uranium to China National Uranium Corporation Limited for gross cash
proceeds of US$6.5 million. After adjusting for cash held on Rössing's balance sheet at the date of disposal and included in the sale, we reported a
net cash outflow of US$118 million and recognised a loss on disposal of US$289 million. This includes cumulative currency translation losses of
US$212 million recycled from the currency translation reserve on sale of the business.
37 Directors’ and key management remuneration
Aggregate remuneration, calculated in accordance with the UK Companies Act 2006, of the directors of the parent companies was as follows:
Emoluments
Long-term incentive plans
Pension contributions: defined contribution plans
Gains made on exercise of share options
2021
US$'000
6,568
1,587
8,155
9
—
2020
US$'000
6,686
8,974
15,660
29
—
2019
US$'000
7,524
4,748
12,272
42
—
The Group defines key management personnel as the directors and certain members of the Executive Committee, as described on page 171. The
Executive Committee comprises the executive directors, product group chief executive officers and Group executives. Details of the directors and
members of the Executive Committee identified as key management are shown in the Directors' Report on pages 134 to 137.
The aggregate remuneration including pension contributions incurred by Rio Tinto plc in respect of its directors was US$7,522,000 (2020:
US$14,983,000; 2019: US$11,565,000). The aggregate pension contribution to defined contribution plans was US$9,000 (2020: US$29,000; 2019:
US$42,000). The aggregate remuneration, including pension contributions and other retirement benefits, incurred by Rio Tinto Limited in respect
of its directors was US$642,000 (2020: US$707,000; 2019: US$749,000). The aggregate pension contribution to defined contribution plans was
US$nil (2020: US$nil; 2019: US$nil).
During 2021, no director (2020:nil; 2019:nil) accrued retirement benefits under defined benefit arrangements, and two directors (2020: two; 2019:
two) accrued retirement benefits under defined contribution arrangements.
Emoluments included in the table above have been translated from local currency at the average exchange rate for the year with the exception of
bonus payments, which have been translated at the year-end rate.
Detailed information concerning directors’ remuneration, shareholdings and options is shown in the Remuneration Report, including tables 1 to 3,
on pages 160 to 198.
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Financial statements continued
Notes to the 2021 financial statements
37 Directors’ and key management remuneration continued
Aggregate compensation, representing the expense recognised under IFRS, as defined in note 1, of the Group’s key management, including
directors, was as follows:
Short-term employee benefits and costs
Post-employment benefits
Employment termination benefits
Share-based payments
Total
2021
US$'000
18,184
300
—
10,303
28,787
2020
US$'000
21,685
369
2,789
34,954
59,797
2019
US$'000
22,075
477
310
17,632
40,494
The figures shown above include employment costs which comprise social security and accident premiums in Canada, the UK and payroll taxes in
Australia paid by the employer as a direct additional cost of hire. In total, they amount to US$1,511,000 (2020: US$2,130,000; 2019:
US$2,066,000) and, although disclosed here, are not included in table 1 of the Remuneration Report.
More detailed information concerning the remuneration of key management is shown in the Remuneration Report, including tables 1 to 3 on
pages 160 to 198.
38 Auditors’ remuneration
Group auditors’ remuneration(a)
Audit of the Group
Audit of subsidiaries
Total audit
Audit-related assurance service
Other assurance services(b)
Total assurance services
Tax compliance
Other non-audit services not covered above
Total non-audit services
Total Group auditors’ remuneration
Audit fees payable to other accounting firms
Audit of the financial statements of the Group’s subsidiaries(c)
Fees in respect of pension scheme audits
Total audit fees payable to other accounting firms
2021
US$m
13.7
7.5
21.2
1.0
2.7
3.7
—
0.2
3.9
2020
US$m
11.0
6.3
17.3
0.8
1.4
2.2
—
0.1
2.3
2019
US$m
9.6
6.8
16.4
0.8
1.9
2.7
0.1
0.0
2.8
25.1
19.6
19.2
0.3
0.1
0.4
0.6
0.1
0.7
1.4
0.1
1.5
(a)
(b)
(c)
In 2021 and 2020, all amounts were paid to member firms of KPMG. In 2019, all amounts were paid to member firms of PwC, being the Group's auditors for these financial years. The
remuneration payable to KPMG, the Group auditors, is approved by the Audit Committee. The Committee sets the policy for the award of non-audit work to the auditors and approves the
nature and extent of such work, and the amount of the related fees, to ensure that independence is maintained. The fees disclosed above consolidate all payments made to member firms of
KPMG by the companies and their subsidiaries, along with fees in respect of joint operations paid for by the Group and in 2021 includes incremental overruns subsequently paid to KPMG in
respect of the 2020 audit. Non-audit services arise largely from assurance and/or regulation related work.
Other assurance services relates to the review of non-statutory financial information including sustainability reporting.
In 2019 these amounts include fees payable to KPMG in respect of subsidiaries whose statutory auditor was KPMG prior to their appointment as the Group's auditor.
39 Related-party transactions
Information about material related-party transactions of the Rio Tinto Group is set out below.
Subsidiary companies and joint operations
Details of investments in principal subsidiary companies are disclosed in note 32. Information relating to joint operations can be found in note 33.
Equity accounted units
Transactions and balances with equity accounted units are summarised below. Purchases, trade and other receivables, and trade and other
payables relate largely to amounts charged by equity accounted units for toll processing of alumina and purchasing of bauxite and aluminium.
Sales relate largely to sales of alumina to equity accounted units for smelting into aluminium.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
37 Directors’ and key management remuneration continued
37 Directors’ and key management remuneration continued
Aggregate compensation, representing the expense recognised under IFRS, as defined in note 1, of the Group’s key management, including
Aggregate compensation, representing the expense recognised under IFRS, as defined in note 1, of the Group’s key management, including
directors, was as follows:
directors, was as follows:
The figures shown above include employment costs which comprise social security and accident premiums in Canada, the UK and payroll taxes in
The figures shown above include employment costs which comprise social security and accident premiums in Canada, the UK and payroll taxes in
Australia paid by the employer as a direct additional cost of hire. In total, they amount to US$1,511,000 (2020: US$2,130,000; 2019:
Australia paid by the employer as a direct additional cost of hire. In total, they amount to US$1,511,000 (2020: US$2,130,000; 2019:
US$2,066,000) and, although disclosed here, are not included in table 1 of the Remuneration Report.
US$2,066,000) and, although disclosed here, are not included in table 1 of the Remuneration Report.
More detailed information concerning the remuneration of key management is shown in the Remuneration Report, including tables 1 to 3 on
More detailed information concerning the remuneration of key management is shown in the Remuneration Report, including tables 1 to 3 on
Short-term employee benefits and costs
Short-term employee benefits and costs
Post-employment benefits
Post-employment benefits
Employment termination benefits
Employment termination benefits
Share-based payments
Share-based payments
Total
Total
pages 160 to 198.
pages 160 to 198.
38 Auditors’ remuneration
38 Auditors’ remuneration
Group auditors’ remuneration(a)
Group auditors’ remuneration(a)
Audit of the Group
Audit of the Group
Audit of subsidiaries
Audit of subsidiaries
Total audit
Total audit
Audit-related assurance service
Audit-related assurance service
Other assurance services(b)
Other assurance services(b)
Total assurance services
Total assurance services
Tax compliance
Tax compliance
Other non-audit services not covered above
Other non-audit services not covered above
Total non-audit services
Total non-audit services
Total Group auditors’ remuneration
Total Group auditors’ remuneration
2021
2021
US$'000
US$'000
18,184
18,184
300
300
—
—
10,303
10,303
28,787
28,787
2020
2020
US$'000
US$'000
21,685
21,685
369
369
2,789
2,789
34,954
34,954
59,797
59,797
2019
2019
US$'000
US$'000
22,075
22,075
477
477
310
310
17,632
17,632
40,494
40,494
2021
2021
US$m
US$m
13.7
13.7
7.5
7.5
21.2
21.2
1.0
1.0
2.7
2.7
3.7
3.7
—
—
0.2
0.2
3.9
3.9
0.3
0.3
0.1
0.1
0.4
0.4
2020
2020
US$m
US$m
11.0
11.0
6.3
6.3
17.3
17.3
0.8
0.8
1.4
1.4
2.2
2.2
—
—
0.1
0.1
2.3
2.3
0.6
0.6
0.1
0.1
0.7
0.7
2019
2019
US$m
US$m
9.6
9.6
6.8
6.8
16.4
16.4
0.8
0.8
1.9
1.9
2.7
2.7
0.1
0.1
0.0
0.0
2.8
2.8
1.4
1.4
0.1
0.1
1.5
1.5
25.1
25.1
19.6
19.6
19.2
19.2
Audit fees payable to other accounting firms
Audit fees payable to other accounting firms
Audit of the financial statements of the Group’s subsidiaries(c)
Audit of the financial statements of the Group’s subsidiaries(c)
Fees in respect of pension scheme audits
Fees in respect of pension scheme audits
Total audit fees payable to other accounting firms
Total audit fees payable to other accounting firms
(a)
(a)
In 2021 and 2020, all amounts were paid to member firms of KPMG. In 2019, all amounts were paid to member firms of PwC, being the Group's auditors for these financial years. The
In 2021 and 2020, all amounts were paid to member firms of KPMG. In 2019, all amounts were paid to member firms of PwC, being the Group's auditors for these financial years. The
remuneration payable to KPMG, the Group auditors, is approved by the Audit Committee. The Committee sets the policy for the award of non-audit work to the auditors and approves the
remuneration payable to KPMG, the Group auditors, is approved by the Audit Committee. The Committee sets the policy for the award of non-audit work to the auditors and approves the
nature and extent of such work, and the amount of the related fees, to ensure that independence is maintained. The fees disclosed above consolidate all payments made to member firms of
nature and extent of such work, and the amount of the related fees, to ensure that independence is maintained. The fees disclosed above consolidate all payments made to member firms of
KPMG by the companies and their subsidiaries, along with fees in respect of joint operations paid for by the Group and in 2021 includes incremental overruns subsequently paid to KPMG in
KPMG by the companies and their subsidiaries, along with fees in respect of joint operations paid for by the Group and in 2021 includes incremental overruns subsequently paid to KPMG in
respect of the 2020 audit. Non-audit services arise largely from assurance and/or regulation related work.
respect of the 2020 audit. Non-audit services arise largely from assurance and/or regulation related work.
Other assurance services relates to the review of non-statutory financial information including sustainability reporting.
Other assurance services relates to the review of non-statutory financial information including sustainability reporting.
In 2019 these amounts include fees payable to KPMG in respect of subsidiaries whose statutory auditor was KPMG prior to their appointment as the Group's auditor.
In 2019 these amounts include fees payable to KPMG in respect of subsidiaries whose statutory auditor was KPMG prior to their appointment as the Group's auditor.
(b)
(b)
(c)
(c)
39 Related-party transactions
39 Related-party transactions
Information about material related-party transactions of the Rio Tinto Group is set out below.
Information about material related-party transactions of the Rio Tinto Group is set out below.
Subsidiary companies and joint operations
Subsidiary companies and joint operations
Equity accounted units
Equity accounted units
Transactions and balances with equity accounted units are summarised below. Purchases, trade and other receivables, and trade and other
Transactions and balances with equity accounted units are summarised below. Purchases, trade and other receivables, and trade and other
payables relate largely to amounts charged by equity accounted units for toll processing of alumina and purchasing of bauxite and aluminium.
payables relate largely to amounts charged by equity accounted units for toll processing of alumina and purchasing of bauxite and aluminium.
Sales relate largely to sales of alumina to equity accounted units for smelting into aluminium.
Sales relate largely to sales of alumina to equity accounted units for smelting into aluminium.
Income statement items
Purchases from equity accounted units
Sales to equity accounted units
Cash flow statement items
Dividends from equity accounted units
Net receipts/(funding) from/of equity accounted units
Balance sheet items
Investments in equity accounted units(a)
Loans to equity accounted units
Trade and other receivables: amounts due from equity accounted units(b)
Trade and other payables: amounts due to equity accounted units
Note
2021
US$m
2020
US$m
2019
US$m
(1,167)
432
(960)
271
(1,155)
268
1,431
6
594
(43)
669
(33)
15
19
18
24
3,504
—
251
(253)
3,764
41
251
(241)
3,971
39
259
(271)
(a)
(b)
Investments in equity accounted units include quasi equity loans. Further information about investments in equity accounted units is set out in notes 34 and 35.
This includes prepayments of tolling charges.
Pension funds
Information relating to pension fund arrangements is set out in note 42.
Directors and key management
Details of directors’ and key management’s remuneration are set out in note 37 and in the Remuneration Report on pages 160 to 198.
40 Exchange rates in US$
The principal exchange rates used in the preparation of the 2021 financial statements were:
Pound sterling
Australian dollar
Canadian dollar
Euro
South African rand
41 Share-based payments
Full-year average
Year-end
2021
1.38
0.75
0.80
1.18
0.068
2020
1.28
0.69
0.75
1.14
0.061
2019
1.28
0.70
0.75
1.12
0.069
2021
1.35
0.73
0.78
1.13
0.063
2020
1.36
0.77
0.78
1.23
0.068
2019
1.31
0.70
0.77
1.12
0.071
Rio Tinto plc and Rio Tinto Limited have a number of share-based incentive plans, which are described in detail in the Remuneration Report. These
plans have been accounted for in accordance with the fair value recognition provisions of IFRS 2 “Share-based Payment”.
The charge that has been recognised in the income statement for Rio Tinto’s share-based incentive plans, and the related liability (for cash-
settled awards), is set out in the table below.
Equity-settled awards
Cash-settled awards
Total
The main Rio Tinto plc and Rio Tinto Limited share-based incentive plans are as follows:
Charge recognised for the year
Liability at the end of the year
2021
US$m
122
4
126
2020
US$m
131
7
138
2019
US$m
118
5
123
2021
US$m
—
6
6
2020
US$m
—
7
7
Details of investments in principal subsidiary companies are disclosed in note 32. Information relating to joint operations can be found in note 33.
Details of investments in principal subsidiary companies are disclosed in note 32. Information relating to joint operations can be found in note 33.
UK Share Plan
The fair values of Matching and Free Shares made by Rio Tinto plc are taken to be the market value of the shares on the date of purchase. These
awards are settled in equity.
Equity Incentive Plan
In 2018, shareholders approved the introduction of the Rio Tinto 2018 Equity Incentive Plan (the “EIP”). From 2018, all long-term incentive
awards have been granted under this umbrella plan which allows for awards in the form of Performance Share Awards (PSA), Management Share
Awards (MSA) and Bonus Deferral Awards (BDA) to be granted.
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Financial statements continued
Notes to the 2021 financial statements
41 Share-based payments continued
Performance Share Awards (Performance Share Plans prior to 2018)
Participants are generally assigned shares in settlement of their PSA on vesting and therefore the awards are accounted for in accordance with
the requirements applying to equity-settled share-based payment transactions, including the dividends accumulated from date of award to
vesting.
For the parts of awards with Total Shareholder Return (TSR) performance conditions, the fair value of the awards is calculated using a Monte Carlo
simulation model taking into account the TSR performance conditions. One third of the awards granted up to 2017 (inclusive) are subject to an
earnings margin performance target relative to ten global mining comparators. As this is a non-market related performance condition, under IFRS
2, the fair value recognised is reviewed at each accounting date based on the directors’ expectations for the proportion vesting. Forfeitures prior to
vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
For grants made from 2018, the earnings margin performance target applying to the PSA was removed and instead all of the awards are subject
to the TSR performance conditions set out in the Remuneration Report.
Management Share Awards (Management Share Plans prior to 2018)
The vesting of these awards is dependent on service conditions being met; no performance conditions apply. In general, the awards will be settled
in equity, including the dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the
requirements applying to equity-settled share-based payment transactions.
The fair value of each award on the day of grant is equal to the share price on the day of grant. Forfeitures prior to vesting are assumed at 7% per
annum of outstanding awards (2020: 7% per annum).
Bonus Deferral Awards (Bonus Deferral Plans prior to 2018)
Bonus Deferral Awards (BDA) provide for the mandatory deferral of 50% of the bonuses for executive directors and Executive Committee
members and 25% of the bonuses for other executives.
The vesting of these awards is dependent only on service conditions being met. In general, the awards will be settled in equity including the
dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the requirements applying to
equity-settled share-based payment transactions. The fair value of each award on the day of grant is equal to the share price on the day of grant.
Forfeitures prior to vesting are assumed at 3% per annum of outstanding awards (2020: 3% per annum).
Global Employee Share Plans
The Global Employee Share Plans were introduced in 2012 and re-approved by shareholders in 2021. Under these Plans, the companies provide a
matching share award for each investment share purchased by a participant. The vesting of these matching awards is dependent on service
conditions being met and the continued holding of investment shares by the participant until vesting. These awards are settled in equity including
the dividends accumulated from date of award to vesting. The fair value of each matching share on the day of grant is equal to the share price on
the date of purchase less a deduction of 15% for estimated cancellations (caused by employees electing to withdraw their investment shares
before vesting of their matching shares). Forfeitures prior to vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
The Management Share Awards, Performance Share Awards, Bonus Deferral Awards, Equity Incentive Plan, Global Employee Share Plans and UK
Share Plan together represent 100% (2020: 100%) of the total IFRS 2 charge for Rio Tinto plc and Rio Tinto Limited plans in 2021.
Performance Share Awards (granted under either the Performance Share Plans or the Equity Incentive Plans)
Rio Tinto plc awards
Rio Tinto Limited awards
Weighted
average fair
value at grant
date
2021
£
2021
number
Weighted
average fair
value at grant
date
2020
£
2020
number
Weighted
average fair
value at grant
date
2021
A$
2021
number
Weighted
average fair
value at grant
date
2020
A$
2020
number
3,778,041
676,296
(474,878)
(189,799)
(413,588)
3,376,072
21.01
29.63
20.85
19.43
9.48
24.26
3,803,394
716,111
(136,030)
(145,661)
(459,773)
3,778,041
22.20
13.55
21.13
16.64
20.55
21.01
1,391,373
217,178
(59,291)
(89,448)
(183,118)
1,276,694
44.40
60.67
46.42
44.07
20.96
50.46
1,636,517
198,863
(178,921)
(63,852)
(201,234)
1,391,373
45.11
33.56
46.37
33.38
41.21
44.40
Unvested awards at 1 January
Awarded
Forfeited
Failed performance conditions
Vested
Unvested awards at 31 December
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
41 Share-based payments continued
41 Share-based payments continued
Performance Share Awards (Performance Share Plans prior to 2018)
Performance Share Awards (Performance Share Plans prior to 2018)
Participants are generally assigned shares in settlement of their PSA on vesting and therefore the awards are accounted for in accordance with
Participants are generally assigned shares in settlement of their PSA on vesting and therefore the awards are accounted for in accordance with
the requirements applying to equity-settled share-based payment transactions, including the dividends accumulated from date of award to
the requirements applying to equity-settled share-based payment transactions, including the dividends accumulated from date of award to
vesting.
vesting.
For the parts of awards with Total Shareholder Return (TSR) performance conditions, the fair value of the awards is calculated using a Monte Carlo
For the parts of awards with Total Shareholder Return (TSR) performance conditions, the fair value of the awards is calculated using a Monte Carlo
simulation model taking into account the TSR performance conditions. One third of the awards granted up to 2017 (inclusive) are subject to an
simulation model taking into account the TSR performance conditions. One third of the awards granted up to 2017 (inclusive) are subject to an
earnings margin performance target relative to ten global mining comparators. As this is a non-market related performance condition, under IFRS
earnings margin performance target relative to ten global mining comparators. As this is a non-market related performance condition, under IFRS
2, the fair value recognised is reviewed at each accounting date based on the directors’ expectations for the proportion vesting. Forfeitures prior to
2, the fair value recognised is reviewed at each accounting date based on the directors’ expectations for the proportion vesting. Forfeitures prior to
vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
For grants made from 2018, the earnings margin performance target applying to the PSA was removed and instead all of the awards are subject
For grants made from 2018, the earnings margin performance target applying to the PSA was removed and instead all of the awards are subject
to the TSR performance conditions set out in the Remuneration Report.
to the TSR performance conditions set out in the Remuneration Report.
Management Share Awards (Management Share Plans prior to 2018)
Management Share Awards (Management Share Plans prior to 2018)
The vesting of these awards is dependent on service conditions being met; no performance conditions apply. In general, the awards will be settled
The vesting of these awards is dependent on service conditions being met; no performance conditions apply. In general, the awards will be settled
in equity, including the dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the
in equity, including the dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the
requirements applying to equity-settled share-based payment transactions.
requirements applying to equity-settled share-based payment transactions.
The fair value of each award on the day of grant is equal to the share price on the day of grant. Forfeitures prior to vesting are assumed at 7% per
The fair value of each award on the day of grant is equal to the share price on the day of grant. Forfeitures prior to vesting are assumed at 7% per
annum of outstanding awards (2020: 7% per annum).
annum of outstanding awards (2020: 7% per annum).
Bonus Deferral Awards (Bonus Deferral Plans prior to 2018)
Bonus Deferral Awards (Bonus Deferral Plans prior to 2018)
Bonus Deferral Awards (BDA) provide for the mandatory deferral of 50% of the bonuses for executive directors and Executive Committee
Bonus Deferral Awards (BDA) provide for the mandatory deferral of 50% of the bonuses for executive directors and Executive Committee
members and 25% of the bonuses for other executives.
members and 25% of the bonuses for other executives.
The vesting of these awards is dependent only on service conditions being met. In general, the awards will be settled in equity including the
The vesting of these awards is dependent only on service conditions being met. In general, the awards will be settled in equity including the
dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the requirements applying to
dividends accumulated from date of award to vesting and therefore the awards are accounted for in accordance with the requirements applying to
equity-settled share-based payment transactions. The fair value of each award on the day of grant is equal to the share price on the day of grant.
equity-settled share-based payment transactions. The fair value of each award on the day of grant is equal to the share price on the day of grant.
Forfeitures prior to vesting are assumed at 3% per annum of outstanding awards (2020: 3% per annum).
Forfeitures prior to vesting are assumed at 3% per annum of outstanding awards (2020: 3% per annum).
Global Employee Share Plans
Global Employee Share Plans
The Global Employee Share Plans were introduced in 2012 and re-approved by shareholders in 2021. Under these Plans, the companies provide a
The Global Employee Share Plans were introduced in 2012 and re-approved by shareholders in 2021. Under these Plans, the companies provide a
matching share award for each investment share purchased by a participant. The vesting of these matching awards is dependent on service
matching share award for each investment share purchased by a participant. The vesting of these matching awards is dependent on service
conditions being met and the continued holding of investment shares by the participant until vesting. These awards are settled in equity including
conditions being met and the continued holding of investment shares by the participant until vesting. These awards are settled in equity including
the dividends accumulated from date of award to vesting. The fair value of each matching share on the day of grant is equal to the share price on
the dividends accumulated from date of award to vesting. The fair value of each matching share on the day of grant is equal to the share price on
the date of purchase less a deduction of 15% for estimated cancellations (caused by employees electing to withdraw their investment shares
the date of purchase less a deduction of 15% for estimated cancellations (caused by employees electing to withdraw their investment shares
before vesting of their matching shares). Forfeitures prior to vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
before vesting of their matching shares). Forfeitures prior to vesting are assumed at 5% per annum of outstanding awards (2020: 5% per annum).
The Management Share Awards, Performance Share Awards, Bonus Deferral Awards, Equity Incentive Plan, Global Employee Share Plans and UK
The Management Share Awards, Performance Share Awards, Bonus Deferral Awards, Equity Incentive Plan, Global Employee Share Plans and UK
Share Plan together represent 100% (2020: 100%) of the total IFRS 2 charge for Rio Tinto plc and Rio Tinto Limited plans in 2021.
Share Plan together represent 100% (2020: 100%) of the total IFRS 2 charge for Rio Tinto plc and Rio Tinto Limited plans in 2021.
Performance Share Awards (granted under either the Performance Share Plans or the Equity Incentive Plans)
Performance Share Awards (granted under either the Performance Share Plans or the Equity Incentive Plans)
Unvested awards at 1 January
Unvested awards at 1 January
3,778,041
3,778,041
21.01
21.01
3,803,394
3,803,394
22.20
22.20
1,391,373
1,391,373
44.40
44.40
1,636,517
1,636,517
Awarded
Awarded
Forfeited
Forfeited
Vested
Vested
Failed performance conditions
Failed performance conditions
Rio Tinto plc awards
Rio Tinto plc awards
Rio Tinto Limited awards
Rio Tinto Limited awards
Weighted
Weighted
average fair
average fair
value at grant
value at grant
Weighted
Weighted
average fair
average fair
value at grant
value at grant
Weighted
Weighted
average fair
average fair
value at grant
value at grant
Weighted
Weighted
average fair
average fair
value at grant
value at grant
2021
2021
number
number
676,296
676,296
(474,878)
(474,878)
(189,799)
(189,799)
(413,588)
(413,588)
date
date
2021
2021
£
£
29.63
29.63
20.85
20.85
19.43
19.43
9.48
9.48
2020
2020
number
number
716,111
716,111
(136,030)
(136,030)
(145,661)
(145,661)
(459,773)
(459,773)
date
date
2020
2020
£
£
13.55
13.55
21.13
21.13
16.64
16.64
20.55
20.55
2021
2021
number
number
217,178
217,178
(59,291)
(59,291)
(89,448)
(89,448)
(183,118)
(183,118)
date
date
2021
2021
A$
A$
60.67
60.67
46.42
46.42
44.07
44.07
20.96
20.96
2020
2020
number
number
198,863
198,863
(178,921)
(178,921)
(63,852)
(63,852)
(201,234)
(201,234)
date
date
2020
2020
A$
A$
45.11
45.11
33.56
33.56
46.37
46.37
33.38
33.38
41.21
41.21
44.40
44.40
Unvested awards at 31 December
Unvested awards at 31 December
3,376,072
3,376,072
24.26
24.26
3,778,041
3,778,041
21.01
21.01
1,276,694
1,276,694
50.46
50.46
1,391,373
1,391,373
Rio Tinto plc awards
Rio Tinto Limited awards
Weighted
average share
price at
vesting
2021
£
2021
number
Weighted
average share
price at
vesting
2020
£
2020
number
Weighted
average share
price at
vesting
2021
A$
2021
number
Weighted
average share
price at
vesting
2020
A$
2020
number
431,682
62.63
476,602
43.13
184,876
127.37
217,287
93.48
Vested awards settled in shares during the year
(including dividend shares applied on vesting)
Vested awards settled in cash during the year
(including dividend shares applied on vesting)
63,144
62.35
108,887
43.13
29,737
127.5
28,208
93.82
In addition to the equity-settled awards shown above, there were 20,548 Rio Tinto plc and 27,476 Rio Tinto Limited cash-settled awards
outstanding at 31 December 2021 (2020: 48,191 Rio Tinto plc and 15,164 Rio Tinto Limited cash-settled awards outstanding). The total liability
for these awards at 31 December 2021 was US$2 million (2020: US$3 million).
Management Share Awards, Bonus Deferral Awards (granted under the Management Share Plans or Equity Incentive
Plans), Global Employee Share Plans and UK Share Plan (combined)
Rio Tinto plc awards(a)
Rio Tinto Limited awards
Weighted
average fair
value at grant
date
2021
£
2021
number
Weighted
average fair
value at grant
date
2020
£
2020
number
Weighted
average fair
value at grant
date
2021
A$
2021
number
Weighted
average fair
value at grant
date
2020
A$
2020
number
2,650,861
987,665
(202,248)
(42,812)
(899,640)
2,493,826
1,241,695
158,572
1,060,394
33,165
37.50
52.07
23.84
45.09
39.44
43.55
2,613,013
1,190,528
(99,038)
(33,955)
(1,019,687)
2,650,861
37.14
36.27
44.42
37.72
34.46
37.50
2,216,734
887,022
(130,990)
(46,624)
(761,574)
2,164,568
82.52
105.47
90.01
87.08
79.86
92.31
2,273,669
921,070
(60,935)
(50,354)
(866,716)
2,216,734
43.63
42.31
43.49
47.94
1,352,759
211,905
1,050,608
35,589
38.73
36.14
36.06
41.54
1,178,538
46,660
939,370
—
95.70
96.08
87.86
—
1,291,203
53,324
872,207
—
75.46
83.20
85.01
71.45
65.19
82.52
85.80
85.53
77.47
—
Unvested awards at 1 January(b)
Awarded
Forfeited
Cancelled
Vested
Unvested awards at 31 December(b)
Comprising:
– Management Share Awards
– Bonus Deferral Awards
– Global Employee Share Plan
– UK Share Plan
Vested awards settled in shares during the year
(including dividend shares applied on vesting):
– Management Share Awards
– Bonus Deferral Awards
– Global Employee Share Plan
– UK Share Plan
Vested awards settled in cash during the year
(including dividend shares applied on vesting):
2021
number
547,487
100,368
407,314
20,111
Weighted
average share
price at
vesting
2021
£
Weighted
average share
price at
vesting
2020
£
2020
number
Weighted
average share
price at
vesting
2021
A$
2021
number
Weighted
average share
price at
vesting
2020
A$
2020
number
60.74
47.96
54.61
57.15
707,133
111,233
401,169
2,392
42.26
49.71
43.82
45.73
550,161
34,279
312,109
—
122.89
105.55
112.33
—
640,948
63,404
299,381
—
97.74
101.96
98.60
—
– Bonus Deferral Awards
23,371
46.12
19,617
48.34
19,607
93.5
—
—
(a)
(b)
Awards of Rio Tinto American Depository Receipts (ADRs) under the Global Employee Share Plan are included within the totals for Rio Tinto plc awards for the purpose of these tables.
These numbers are presented and calculated in accordance with IFRS 2 and represent awards for which an IFRS 2 charge continues to be accrued for.
In addition to the equity-settled awards shown above, there were 89,239 Rio Tinto plc and 12,217 Rio Tinto Limited cash-settled awards
outstanding at 31 December 2021 (2020: 89,253 Rio Tinto plc and 14,878 Rio Tinto Limited cash-settled awards outstanding). The total liability
for these awards at 31 December 2021 was US$4 million (2020: US$4 million).
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Financial statements continued
Notes to the 2021 financial statements
42 Post-retirement benefits
Description of plans
The Group operates a number of pension and post-retirement healthcare plans around the world. Some of these plans are defined contribution
and some are defined benefit, with assets held in separate trusts, foundations and similar entities.
Defined benefit pension and post-retirement healthcare plans expose the Group to a number of risks:
Uncertainty in benefit payments
The value of the Group’s liabilities for post-retirement benefits will ultimately depend on the amount of benefits paid out.
This in turn will depend on the level of future pay increases, the level of inflation (for those benefits that are subject to some
form of inflation protection) and how long individuals live.
Volatility in asset values
The Group is exposed to future movements in the values of assets held in pension plans to meet future benefit payments.
Uncertainty in cash funding
Movements in the values of the obligations or assets may result in the Group being required to provide higher levels of cash
funding, although changes in the level of cash required can often be spread over a number of years. In some countries control
over the rate of cash funding or over the investment policy for pension assets might rest to some extent with a trustee body or
other body that is not under the Group’s direct control. In addition the Group is also exposed to adverse changes in pension
regulation.
For these reasons the Group has a policy of moving away from defined
benefit pension provisions and towards defined contribution
arrangements instead. The defined benefit pension plans for salaried
employees are closed to new entrants in almost all countries. For
unionised employees, some plans remain open.
The Swiss plan provides benefits linked to final average pay. The Swiss
plan is overseen by a foundation board which is responsible for
ensuring that the plan complies with Swiss regulations. Foundation
board members are appointed by the plan sponsor, by employees and
by retirees.
The Group does not usually participate in multi-employer plans in
which the risks are shared with other companies using those plans. The
Group’s participation in such plans is immaterial and consequently no
detailed disclosures are provided in this note.
Pension plans
The majority of the Group’s defined benefit pension obligations are in
Canada, the UK, the US and Switzerland.
In Canada the benefits for salaried staff are generally linked to final
average pay and the plans are generally closed to new entrants.
Benefits for bargaining employees are reviewed in negotiation with
unions and are typically linked either to final average pay or to a flat
monetary amount per year of service. New employees join
arrangements which are defined contribution from the Group’s
perspective, with any required additional funding being provided by
employees. The plans are subject to the regulatory requirements that
apply to Canadian pension plans in the relevant provinces and
territories (predominantly Quebec). Pension Committees are
responsible for ensuring that the plans operate in a manner that is
compliant with the relevant regulations. The Pension Committees
generally have a number of members appointed by the sponsor and a
number appointed by the plan participants. In some cases, there is also
an independent Committee member.
The defined benefit sections of the UK arrangements are linked to final
pay. New employees are admitted to defined contribution sections. The
plans are subject to the regulatory requirements that apply to UK
pension plans. Trustees are responsible for ensuring that the plans
operate in a manner that is compliant with UK regulations. The trustee
board governing the main UK plans has a number of directors
appointed by the sponsor, a number appointed by the plan participants
and an independent trustee director.
A number of defined benefit pension plans are sponsored by the US
entities. Benefits for salaried staff are generally linked to final average
pay. Benefits for bargaining employees are reviewed in negotiation with
unions and are typically a flat monetary amount per year of service.
New employees are admitted to defined contribution plans. A Benefits
Governance Committee is responsible for ensuring that the plans are
compliant with US regulations. Members of that Committee are
appointed by the sponsor.
In Australia, the main arrangements are principally defined
contribution in nature but there are sections providing defined benefits
linked to final pay, typically paid in lump sum form. These
arrangements are managed by an independent financial institution. Rio
Tinto may nominate candidates to be considered for appointment to
the governing board, as may other employers. One third of the board
positions are nominated by employers, with the remaining positions
being filled by independent directors and directors nominated by
participants.
The Group also operates a number of unfunded defined benefit plans,
which are included in the figures below.
Post-retirement healthcare plans
Certain subsidiaries of the Group, mainly in the US and Canada, provide
health and life insurance benefits to retired employees and in some
cases to their beneficiaries and covered dependants. Eligibility for
cover is dependent upon certain age and service criteria. These
arrangements are generally unfunded, and are included in the figures
below.
Plan assets
The assets of the pension plans are invested predominantly in a
diversified range of equities, bonds and property. Consequently, the
funding level of the pension plans is affected by movements in the
level of equity markets and also by movements in interest rates. The
Group monitors its exposure to changes in interest rates and equity
markets and also measures its balance sheet pension risk using a value
at risk approach. These measures are considered when deciding
whether significant changes in investment strategy are required.
Investment strategy reviews are conducted on a periodic basis for the
main pension plans to determine the optimal investment mix bearing in
mind the Group’s tolerance for risk, the risk tolerance of the local
sponsor companies and the views of the Pension Committees and
trustee boards who are legally responsible for the investments of the
plans. The assets of the pension plans may also be invested in
Qualifying Insurance Policies which provide a stream of payments to
match the benefits being paid out by the plans, thereby removing
investment, inflation and longevity risks.
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
42 Post-retirement benefits
42 Post-retirement benefits
Description of plans
Description of plans
The Group operates a number of pension and post-retirement healthcare plans around the world. Some of these plans are defined contribution
The Group operates a number of pension and post-retirement healthcare plans around the world. Some of these plans are defined contribution
and some are defined benefit, with assets held in separate trusts, foundations and similar entities.
and some are defined benefit, with assets held in separate trusts, foundations and similar entities.
Defined benefit pension and post-retirement healthcare plans expose the Group to a number of risks:
Defined benefit pension and post-retirement healthcare plans expose the Group to a number of risks:
Uncertainty in benefit payments
Uncertainty in benefit payments
The value of the Group’s liabilities for post-retirement benefits will ultimately depend on the amount of benefits paid out.
The value of the Group’s liabilities for post-retirement benefits will ultimately depend on the amount of benefits paid out.
This in turn will depend on the level of future pay increases, the level of inflation (for those benefits that are subject to some
This in turn will depend on the level of future pay increases, the level of inflation (for those benefits that are subject to some
form of inflation protection) and how long individuals live.
form of inflation protection) and how long individuals live.
Volatility in asset values
Volatility in asset values
The Group is exposed to future movements in the values of assets held in pension plans to meet future benefit payments.
The Group is exposed to future movements in the values of assets held in pension plans to meet future benefit payments.
Uncertainty in cash funding
Uncertainty in cash funding
Movements in the values of the obligations or assets may result in the Group being required to provide higher levels of cash
Movements in the values of the obligations or assets may result in the Group being required to provide higher levels of cash
funding, although changes in the level of cash required can often be spread over a number of years. In some countries control
funding, although changes in the level of cash required can often be spread over a number of years. In some countries control
over the rate of cash funding or over the investment policy for pension assets might rest to some extent with a trustee body or
over the rate of cash funding or over the investment policy for pension assets might rest to some extent with a trustee body or
other body that is not under the Group’s direct control. In addition the Group is also exposed to adverse changes in pension
other body that is not under the Group’s direct control. In addition the Group is also exposed to adverse changes in pension
regulation.
regulation.
For these reasons the Group has a policy of moving away from defined
For these reasons the Group has a policy of moving away from defined
The Swiss plan provides benefits linked to final average pay. The Swiss
The Swiss plan provides benefits linked to final average pay. The Swiss
benefit pension provisions and towards defined contribution
benefit pension provisions and towards defined contribution
plan is overseen by a foundation board which is responsible for
plan is overseen by a foundation board which is responsible for
arrangements instead. The defined benefit pension plans for salaried
arrangements instead. The defined benefit pension plans for salaried
ensuring that the plan complies with Swiss regulations. Foundation
ensuring that the plan complies with Swiss regulations. Foundation
employees are closed to new entrants in almost all countries. For
employees are closed to new entrants in almost all countries. For
board members are appointed by the plan sponsor, by employees and
board members are appointed by the plan sponsor, by employees and
unionised employees, some plans remain open.
unionised employees, some plans remain open.
by retirees.
by retirees.
The Group does not usually participate in multi-employer plans in
The Group does not usually participate in multi-employer plans in
In Australia, the main arrangements are principally defined
In Australia, the main arrangements are principally defined
which the risks are shared with other companies using those plans. The
which the risks are shared with other companies using those plans. The
contribution in nature but there are sections providing defined benefits
contribution in nature but there are sections providing defined benefits
Group’s participation in such plans is immaterial and consequently no
Group’s participation in such plans is immaterial and consequently no
linked to final pay, typically paid in lump sum form. These
linked to final pay, typically paid in lump sum form. These
detailed disclosures are provided in this note.
detailed disclosures are provided in this note.
Pension plans
Pension plans
The majority of the Group’s defined benefit pension obligations are in
The majority of the Group’s defined benefit pension obligations are in
Canada, the UK, the US and Switzerland.
Canada, the UK, the US and Switzerland.
participants.
participants.
arrangements are managed by an independent financial institution. Rio
arrangements are managed by an independent financial institution. Rio
Tinto may nominate candidates to be considered for appointment to
Tinto may nominate candidates to be considered for appointment to
the governing board, as may other employers. One third of the board
the governing board, as may other employers. One third of the board
positions are nominated by employers, with the remaining positions
positions are nominated by employers, with the remaining positions
being filled by independent directors and directors nominated by
being filled by independent directors and directors nominated by
In Canada the benefits for salaried staff are generally linked to final
In Canada the benefits for salaried staff are generally linked to final
average pay and the plans are generally closed to new entrants.
average pay and the plans are generally closed to new entrants.
Benefits for bargaining employees are reviewed in negotiation with
Benefits for bargaining employees are reviewed in negotiation with
unions and are typically linked either to final average pay or to a flat
unions and are typically linked either to final average pay or to a flat
monetary amount per year of service. New employees join
monetary amount per year of service. New employees join
The Group also operates a number of unfunded defined benefit plans,
The Group also operates a number of unfunded defined benefit plans,
which are included in the figures below.
which are included in the figures below.
Post-retirement healthcare plans
Post-retirement healthcare plans
arrangements which are defined contribution from the Group’s
arrangements which are defined contribution from the Group’s
Certain subsidiaries of the Group, mainly in the US and Canada, provide
Certain subsidiaries of the Group, mainly in the US and Canada, provide
perspective, with any required additional funding being provided by
perspective, with any required additional funding being provided by
health and life insurance benefits to retired employees and in some
health and life insurance benefits to retired employees and in some
employees. The plans are subject to the regulatory requirements that
employees. The plans are subject to the regulatory requirements that
cases to their beneficiaries and covered dependants. Eligibility for
cases to their beneficiaries and covered dependants. Eligibility for
apply to Canadian pension plans in the relevant provinces and
apply to Canadian pension plans in the relevant provinces and
cover is dependent upon certain age and service criteria. These
cover is dependent upon certain age and service criteria. These
territories (predominantly Quebec). Pension Committees are
territories (predominantly Quebec). Pension Committees are
arrangements are generally unfunded, and are included in the figures
arrangements are generally unfunded, and are included in the figures
responsible for ensuring that the plans operate in a manner that is
responsible for ensuring that the plans operate in a manner that is
below.
below.
compliant with the relevant regulations. The Pension Committees
compliant with the relevant regulations. The Pension Committees
generally have a number of members appointed by the sponsor and a
generally have a number of members appointed by the sponsor and a
number appointed by the plan participants. In some cases, there is also
number appointed by the plan participants. In some cases, there is also
Plan assets
Plan assets
an independent Committee member.
an independent Committee member.
The defined benefit sections of the UK arrangements are linked to final
The defined benefit sections of the UK arrangements are linked to final
pay. New employees are admitted to defined contribution sections. The
pay. New employees are admitted to defined contribution sections. The
plans are subject to the regulatory requirements that apply to UK
plans are subject to the regulatory requirements that apply to UK
pension plans. Trustees are responsible for ensuring that the plans
pension plans. Trustees are responsible for ensuring that the plans
operate in a manner that is compliant with UK regulations. The trustee
operate in a manner that is compliant with UK regulations. The trustee
board governing the main UK plans has a number of directors
board governing the main UK plans has a number of directors
appointed by the sponsor, a number appointed by the plan participants
appointed by the sponsor, a number appointed by the plan participants
and an independent trustee director.
and an independent trustee director.
The assets of the pension plans are invested predominantly in a
The assets of the pension plans are invested predominantly in a
diversified range of equities, bonds and property. Consequently, the
diversified range of equities, bonds and property. Consequently, the
funding level of the pension plans is affected by movements in the
funding level of the pension plans is affected by movements in the
level of equity markets and also by movements in interest rates. The
level of equity markets and also by movements in interest rates. The
Group monitors its exposure to changes in interest rates and equity
Group monitors its exposure to changes in interest rates and equity
markets and also measures its balance sheet pension risk using a value
markets and also measures its balance sheet pension risk using a value
at risk approach. These measures are considered when deciding
at risk approach. These measures are considered when deciding
whether significant changes in investment strategy are required.
whether significant changes in investment strategy are required.
Investment strategy reviews are conducted on a periodic basis for the
Investment strategy reviews are conducted on a periodic basis for the
main pension plans to determine the optimal investment mix bearing in
main pension plans to determine the optimal investment mix bearing in
mind the Group’s tolerance for risk, the risk tolerance of the local
mind the Group’s tolerance for risk, the risk tolerance of the local
sponsor companies and the views of the Pension Committees and
sponsor companies and the views of the Pension Committees and
trustee boards who are legally responsible for the investments of the
trustee boards who are legally responsible for the investments of the
A number of defined benefit pension plans are sponsored by the US
A number of defined benefit pension plans are sponsored by the US
entities. Benefits for salaried staff are generally linked to final average
entities. Benefits for salaried staff are generally linked to final average
plans. The assets of the pension plans may also be invested in
plans. The assets of the pension plans may also be invested in
pay. Benefits for bargaining employees are reviewed in negotiation with
pay. Benefits for bargaining employees are reviewed in negotiation with
Qualifying Insurance Policies which provide a stream of payments to
Qualifying Insurance Policies which provide a stream of payments to
unions and are typically a flat monetary amount per year of service.
unions and are typically a flat monetary amount per year of service.
match the benefits being paid out by the plans, thereby removing
match the benefits being paid out by the plans, thereby removing
New employees are admitted to defined contribution plans. A Benefits
New employees are admitted to defined contribution plans. A Benefits
investment, inflation and longevity risks.
investment, inflation and longevity risks.
Governance Committee is responsible for ensuring that the plans are
Governance Committee is responsible for ensuring that the plans are
compliant with US regulations. Members of that Committee are
compliant with US regulations. Members of that Committee are
appointed by the sponsor.
appointed by the sponsor.
In Canada, the UK and Switzerland, the Group works with the governing bodies to ensure that the investment policy adopted is consistent with the
Group’s tolerance for risk. In the US the Group has direct control over the investment policy, subject to local investment regulations.
The proportions of the total fair value of assets in the pension plans for each asset class at the balance sheet date were:
Equities
– Quoted
– Private
Bonds
– Government fixed income
– Government inflation-linked
– Corporate and other publicly quoted
– Private
Property
– Quoted property funds
– Unquoted property funds
Qualifying insurance policies
Cash & other
Total
2021
17.6%
60.2%
7.9%
10.5%
3.8%
100.0%
13.4%
4.2%
23.2%
9.5%
20.6%
6.9%
3.4%
4.5%
2020
21.1%
55.8%
7.5%
11.3%
4.3%
100.0%
17.9%
3.2%
17.7%
9.6%
22.6%
5.9%
3.1%
4.4%
The assets of the plans are managed on a day-to-day basis by external specialist fund managers. These managers may invest in the Group’s
securities subject to limits imposed by the relevant fiduciary committees and local legislation. The approximate total holding of Group securities
within the plans is US$2 million (2020: US$4 million).
The holdings of quoted equities are invested either in pooled funds or segregated accounts held in the name of the relevant pension funds. These
equity portfolios are well diversified in terms of the geographic distribution and market sectors.
The holdings of government bonds are generally invested in the debt of the country in which a pension plan is situated. Corporate and other
quoted bonds are usually of investment grade. Private debt is mainly held in the North American and UK pension funds and is invested in North
American and European companies.
The property funds are invested in a diversified range of properties.
The holdings of cash & other are predominantly cash and short-term money market instruments.
Investments in private equity, private debt and property are less liquid than the other investment classes listed above and therefore the Group’s
investment in those asset classes is restricted to a level that does not endanger the liquidity of the pension plans.
Qualifying insurance policies are held with insurance companies that are regulated by the relevant local authorities. The value of those policies is
calculated by the local actuaries using assumptions consistent with those adopted for valuing the insured obligations.
The Group makes limited use of futures, repurchase agreements and other instruments to manage the interest rate risk in some of its plans. Fund
managers may also use derivatives to hedge currency movements within their portfolios and, in the case of bond managers, to take positions that
could be taken using direct holdings of bonds but more efficiently.
Maturity of defined benefit obligations
An approximate analysis of the maturity of the obligations is given in the table below:
Proportion relating to current employees
Proportion relating to former employees not yet retired
Proportion relating to retirees
Total
Average duration of obligations (years)
Pension
benefits
20 %
12 %
68 %
100 %
13.8
Other
benefits
17 %
0 %
83 %
100 %
13.1
2021
Total
20 %
11 %
69 %
100 %
13.8
2020
Total
21 %
11 %
68 %
100 %
14.3
2019
Total
20 %
12 %
68 %
100 %
14.4
286
286
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287287
Financial statements continued
Notes to the 2021 financial statements
42 Post-retirement benefits continued
Geographical distribution of defined benefit obligations
An approximate analysis of the geographic distribution of the obligations is given in the table below:
Canada
UK
US
Switzerland
Other
Total
Total expense recognised in the income statement
Current employer service cost for defined benefit plans
Past service cost
Settlement (losses)/gains
Net interest on net defined benefit liability
Non-investment expenses paid from the plans
Total defined benefit expense
Current employer service cost for defined contribution and industry-wide plans
Total expense recognised in the income statement
Pension
benefits
Other
benefits
56 %
29 %
8 %
5 %
2 %
100 %
48 %
2 %
47 %
0 %
3 %
100 %
2021
Total
55 %
28 %
10 %
5 %
2 %
100 %
Pension
benefits
US$m
Other
benefits
US$m
(159)
—
(3)
(28)
(15)
(205)
(313)
(518)
(8)
(2)
—
(24)
—
(34)
(2)
(36)
2021
Total
US$m
(167)
(2)
(3)
(52)
(15)
(239)
(315)
(554)
2020
Total
53 %
28 %
10 %
5 %
4 %
100 %
2020
Total
US$m
(137)
(2)
(1)
(49)
(16)
(205)
(264)
(469)
2019
Total
53 %
28 %
10 %
5 %
4 %
100 %
2019
Total
US$m
(125)
—
51
(58)
(14)
(146)
(238)
(384)
The above expense amounts are included as an employee cost within net operating costs. No amounts have been excluded from underlying
earnings in 2021, 2020 or 2019.
The settlement loss in 2021 resulted from pension obligations in France being transferred to an external insurance company. The settlement
gains in 2019 were the result of certain US obligations being transferred to external insurance companies and of certain US obligations being
settled through a lump sum window exercise being offered to members with a deferred pension. A past service cost of US$1 million was
recognised in 2020 in relation to the Lloyds Banking Group court judgment addressing the need to equalise historical transfer values in relation to
Guaranteed Minimum Pensions.
Total amount recognised in other comprehensive income before tax
Actuarial gains/(losses)
Return on assets, net of interest on assets
Re-measurement gains/(losses) on pension and post-retirement healthcare plans
Amounts recognised in the balance sheet
The following amounts were measured in accordance with IAS 19 at 31 December:
Total fair value of plan assets
Present value of obligations – funded
Present value of obligations – unfunded
Present value of obligations – total
Net deficit to be shown in the balance sheet
Comprising:
– Deficits
– Surpluses
Net deficits on pension plans
Unfunded post-retirement healthcare obligation
2021
US$m
655
371
1,026
2020
US$m
(1,242)
768
(474)
2019
US$m
(1,295)
1,033
(262)
Pension
benefits
US$m
14,700
(14,462)
(432)
(14,894)
(194)
(1,264)
1,070
(194)
—
Other
benefits
US$m
—
—
(834)
(834)
(834)
(834)
—
—
(834)
2021
Total
US$m
14,700
(14,462)
(1,266)
(15,728)
(1,028)
(2,098)
1,070
(194)
(834)
2020
Total
US$m
14,905
(15,731)
(1,447)
(17,178)
(2,273)
(3,055)
782
(1,305)
(968)
The surplus amounts shown above are included in the balance sheet as “Receivables and other assets”. See note 18.
Deficits are shown in the balance sheet within “Provisions (including post-retirement benefits)”. See note 25.
288
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Financial statements continued
Financial statements
Funding policy and contributions to plans
The Group reviews the funding position of its major pension plans on a regular basis and considers whether to provide funding above the minimum
level required in each country. In Canada and the US the minimum level is prescribed by legislation. In the UK and Switzerland the minimum level
is negotiated with the local trustee or foundation in accordance with the funding guidance issued by the local regulators. In deciding whether to
provide funding above the minimum level the Group takes into account other possible uses of cash within the Group, the tax situation of the local
sponsoring entity and any strategic advantage that the Group might obtain by accelerating contributions. The Group does not generally pre-fund
post-retirement healthcare arrangements.
Contributions to defined benefit plans
Contributions to defined contribution plans
Total
Pension
benefits
US$m
425
309
734
Other
benefits
US$m
39
2
41
2021
Total
US$m
464
311
775
2020
Total
US$m
201
261
462
2019
Total
US$m
257
235
492
The level of surplus in the Rio Tinto Pension Fund in the UK is such that it may be used to pay for the employer contributions to the defined
contribution section of that Fund, in accordance with the funding arrangements agreed with the Trustee of that Fund. Consequently, the cash paid
to defined contribution plans is lower than the defined contribution service cost by US$4 million. Contributions to defined benefit pension plans
are kept under regular review and actual contributions will be determined in line with the Group’s wider financing strategy, taking into account
relevant minimum funding requirements. In 2021 additional cash of US$294 million was paid in order to settle pension obligations in France. This
amount was paid to an external insurer, along with the transfer of existing pension assets in order to transfer the obligations to that insurer. As
contributions to many plans are reviewed on at least an annual basis, the contributions for 2022 and subsequent years cannot be determined
precisely in advance. Most of the Group’s largest pension funds are fully funded on their local funding basis and do not require long-term funding
commitments at present. Contributions to defined benefit pension plans for 2022 are estimated to be around US$180 million but may be higher or
lower than this depending on the evolution of financial markets and voluntary funding decisions taken by the Group. Contributions for subsequent
years are expected to be at similar levels. Healthcare plans are generally unfunded and contributions for future years will be equal to benefit
payments net of participant contributions. The Group’s contributions in 2022 are expected to be similar to the amounts paid in 2021.
The above expense amounts are included as an employee cost within net operating costs. No amounts have been excluded from underlying
The above expense amounts are included as an employee cost within net operating costs. No amounts have been excluded from underlying
Movements in the net defined benefit liability
A summary of the movement in the net defined benefit liability is shown in the first table below. The subsequent tables provide a more detailed
analysis of the movements in the present value of the obligations and the fair value of assets.
Change in the net defined benefit liability
Net defined benefit liability at the start of the year
Amounts recognised in income statement
Amounts recognised in other comprehensive income
Employer contributions
Assets transferred to defined contribution section
Currency exchange rate (loss)/gain
Net defined benefit liability at the end of the year
Change in present value of obligation
Present value of obligation at the start of the year
Current employer service costs
Past service cost
Settlements
Interest on obligation
Contributions by plan participants
Benefits paid
Experience gains
Changes in financial assumptions gain/(loss)
Changes in demographic assumptions gain/(loss)
Currency exchange rate gain/(loss)
Present value of obligation at the end of the year
Pension
benefits
US$m
Other
benefits
US$m
2021
Total
US$m
(1,305)
(205)
898
425
(4)
(3)
(194)
(968)
(34)
128
39
—
1
(834)
(2,273)
(239)
1,026
464
(4)
(2)
(1,028)
2020
Total
US$m
(1,730)
(205)
(474)
201
(3)
(62)
(2,273)
Pension
benefits
US$m
Other
benefits
US$m
2021
Total
US$m
2020
Total
US$m
(16,210)
(159)
—
380
(304)
(22)
798
27
454
46
96
(14,894)
(968)
(8)
(2)
—
(24)
—
39
62
67
(1)
1
(834)
(17,178)
(167)
(2)
380
(328)
(22)
837
89
521
45
97
(15,728)
(15,653)
(137)
(2)
6
(384)
(22)
778
61
(1,442)
139
(522)
(17,178)
Notes to the 2021 financial statements
42 Post-retirement benefits continued
42 Post-retirement benefits continued
Geographical distribution of defined benefit obligations
Geographical distribution of defined benefit obligations
An approximate analysis of the geographic distribution of the obligations is given in the table below:
An approximate analysis of the geographic distribution of the obligations is given in the table below:
Canada
Canada
UK
UK
US
US
Other
Other
Total
Total
Switzerland
Switzerland
Total expense recognised in the income statement
Total expense recognised in the income statement
Past service cost
Past service cost
Settlement (losses)/gains
Settlement (losses)/gains
Net interest on net defined benefit liability
Net interest on net defined benefit liability
Non-investment expenses paid from the plans
Non-investment expenses paid from the plans
Total defined benefit expense
Total defined benefit expense
Current employer service cost for defined contribution and industry-wide plans
Current employer service cost for defined contribution and industry-wide plans
Total expense recognised in the income statement
Total expense recognised in the income statement
earnings in 2021, 2020 or 2019.
earnings in 2021, 2020 or 2019.
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
100 %
Pension
Pension
benefits
benefits
Other
Other
benefits
benefits
56 %
56 %
29 %
29 %
8 %
8 %
5 %
5 %
2 %
2 %
48 %
48 %
2 %
2 %
47 %
47 %
0 %
0 %
3 %
3 %
Pension
Pension
benefits
benefits
US$m
US$m
Other
Other
benefits
benefits
US$m
US$m
(159)
(159)
—
—
(3)
(3)
(28)
(28)
(15)
(15)
(205)
(205)
(313)
(313)
(518)
(518)
(8)
(8)
(2)
(2)
—
—
(24)
(24)
—
—
(34)
(34)
(2)
(2)
(36)
(36)
2021
2021
Total
Total
55 %
55 %
28 %
28 %
10 %
10 %
5 %
5 %
2 %
2 %
2021
2021
Total
Total
US$m
US$m
(2)
(2)
(3)
(3)
(52)
(52)
(15)
(15)
(239)
(239)
(315)
(315)
(554)
(554)
2020
2020
Total
Total
53 %
53 %
28 %
28 %
10 %
10 %
5 %
5 %
4 %
4 %
2020
2020
Total
Total
US$m
US$m
(2)
(2)
(1)
(1)
(49)
(49)
(16)
(16)
(205)
(205)
(264)
(264)
(469)
(469)
2019
2019
Total
Total
53 %
53 %
28 %
28 %
10 %
10 %
5 %
5 %
4 %
4 %
2019
2019
Total
Total
US$m
US$m
—
—
51
51
(58)
(58)
(14)
(14)
(146)
(146)
(238)
(238)
(384)
(384)
Current employer service cost for defined benefit plans
Current employer service cost for defined benefit plans
(167)
(167)
(137)
(137)
(125)
(125)
The settlement loss in 2021 resulted from pension obligations in France being transferred to an external insurance company. The settlement
The settlement loss in 2021 resulted from pension obligations in France being transferred to an external insurance company. The settlement
gains in 2019 were the result of certain US obligations being transferred to external insurance companies and of certain US obligations being
gains in 2019 were the result of certain US obligations being transferred to external insurance companies and of certain US obligations being
settled through a lump sum window exercise being offered to members with a deferred pension. A past service cost of US$1 million was
settled through a lump sum window exercise being offered to members with a deferred pension. A past service cost of US$1 million was
recognised in 2020 in relation to the Lloyds Banking Group court judgment addressing the need to equalise historical transfer values in relation to
recognised in 2020 in relation to the Lloyds Banking Group court judgment addressing the need to equalise historical transfer values in relation to
Guaranteed Minimum Pensions.
Guaranteed Minimum Pensions.
Total amount recognised in other comprehensive income before tax
Total amount recognised in other comprehensive income before tax
Actuarial gains/(losses)
Actuarial gains/(losses)
Return on assets, net of interest on assets
Return on assets, net of interest on assets
Re-measurement gains/(losses) on pension and post-retirement healthcare plans
Re-measurement gains/(losses) on pension and post-retirement healthcare plans
Amounts recognised in the balance sheet
Amounts recognised in the balance sheet
The following amounts were measured in accordance with IAS 19 at 31 December:
The following amounts were measured in accordance with IAS 19 at 31 December:
Total fair value of plan assets
Total fair value of plan assets
Present value of obligations – funded
Present value of obligations – funded
Present value of obligations – unfunded
Present value of obligations – unfunded
Present value of obligations – total
Present value of obligations – total
Net deficit to be shown in the balance sheet
Net deficit to be shown in the balance sheet
Comprising:
Comprising:
– Deficits
– Deficits
– Surpluses
– Surpluses
Net deficits on pension plans
Net deficits on pension plans
Unfunded post-retirement healthcare obligation
Unfunded post-retirement healthcare obligation
2021
2021
US$m
US$m
655
655
371
371
1,026
1,026
2020
2020
US$m
US$m
(1,242)
(1,242)
768
768
(474)
(474)
2019
2019
US$m
US$m
(1,295)
(1,295)
1,033
1,033
(262)
(262)
Pension
Pension
benefits
benefits
US$m
US$m
14,700
14,700
(14,462)
(14,462)
(432)
(432)
(14,894)
(14,894)
(194)
(194)
(1,264)
(1,264)
1,070
1,070
(194)
(194)
Other
Other
benefits
benefits
US$m
US$m
2021
2021
Total
Total
US$m
US$m
2020
2020
Total
Total
US$m
US$m
—
—
—
—
(834)
(834)
(834)
(834)
(834)
(834)
14,700
14,700
14,905
14,905
(14,462)
(14,462)
(15,731)
(15,731)
(1,266)
(1,266)
(1,447)
(1,447)
(15,728)
(15,728)
(17,178)
(17,178)
(1,028)
(1,028)
(2,273)
(2,273)
(834)
(834)
(2,098)
(2,098)
(3,055)
(3,055)
—
—
—
—
1,070
1,070
(194)
(194)
(834)
(834)
782
782
(1,305)
(1,305)
(968)
(968)
—
—
(834)
(834)
The surplus amounts shown above are included in the balance sheet as “Receivables and other assets”. See note 18.
The surplus amounts shown above are included in the balance sheet as “Receivables and other assets”. See note 18.
Deficits are shown in the balance sheet within “Provisions (including post-retirement benefits)”. See note 25.
Deficits are shown in the balance sheet within “Provisions (including post-retirement benefits)”. See note 25.
288
288
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289289
Financial statements continued
Notes to the 2021 financial statements
42 Post-retirement benefits continued
Change in plan assets
Fair value of plan assets at the start of the year
Settlements
Interest on assets
Contributions by plan participants
Contributions by employer
Benefits paid
Non-investment expenses
Return on plan assets, net of interest on assets
Assets transferred to defined contribution section
Currency exchange rate (loss)/ gain
Fair value of plan assets at the end of the year
Pension
benefits
US$m
14,905
(383)
276
22
425
(798)
(15)
371
(4)
(99)
14,700
Other
benefits
US$m
—
—
—
—
39
(39)
—
—
—
—
—
2021
Total
US$m
14,905
(383)
276
22
464
(837)
(15)
371
(4)
(99)
14,700
2020
Total
US$m
13,923
(7)
335
22
201
(778)
(16)
768
(3)
460
14,905
The settlement amounts shown above for 2021 relate to France, where assets and obligations for pensions in payment were transferred to an
insurance company.
The asset ceiling had no effect during the year. In determining the extent to which the asset ceiling has an effect, the Group considers the funding
legislation in each country and the rules specific to each pension plan. The calculation takes into account any minimum funding requirements that
may be applicable to the plan, whether any reduction in future Group contributions is available, and whether a refund of surplus may be available.
In considering whether any refund of surplus is available the Group considers the powers of trustee boards and similar bodies to augment benefits
or wind up a plan. Where such powers are unilateral, the Group does not consider a refund to be available at the end of the life of a plan. Where
the plan rules and legislation both permit the employer to take a refund of surplus, the asset ceiling may have no effect, although it may be the
case that a refund will only be available many years in the future.
Main assumptions (rates per annum)
The main assumptions for the valuations of the plans under IAS 19 are set out below. Where there are multiple plans in a country the rates below
are weighted-average figures.
At 31 December 2021
Discount rate
Inflation(a)
Rate of increase in pensions
Rate of increase in salaries
At 31 December 2020
Discount rate
Inflation(a)
Rate of increase in pensions
Rate of increase in salaries
Canada
UK
US
Switzerland
2.9%
1.9%
0.3%
3.1%
2.5%
1.6%
0.1%
2.8%
1.9%
3.4%
2.9%
4.2%
1.2%
2.9%
2.5%
3.6%
2.8%
2.4%
—%
3.9%
2.2%
2.1%
—%
3.6%
0.3%
0.9%
1.8%
1.9%
0.1%
0.9%
0.5%
1.9%
(a)
The inflation assumption shown for the UK is for the Retail Price Index. The assumption for the Consumer Price Index at 31 December 2021 was 2.7% (2020: 2.1%).
The main financial assumptions used for the healthcare plans, which are predominantly in the US and Canada, were: discount rate: 3.1% (2020:
2.5%); medical trend rate: 6.3% reducing to 4.7% by the year 2031 broadly on a straight line basis (2020: 6.3%, reducing to 4.6% by the year
2031); claims costs based on individual company experience.
For both the pension and healthcare arrangements the post-retirement mortality assumptions allow for future improvements in longevity. The
mortality tables used imply that a man aged 60 at the balance sheet date has a weighted average expected future lifetime of 27 years (2020: 27
years) and that a man aged 60 in 2041 would have a weighted average expected future lifetime of 28 years (2020: 28 years). The mortality tables
are generally based upon the latest standard tables published in each country, adjusted appropriately to reflect the actual mortality experience of
the plan participants where credible data is available. No adjustment has been made for the potential future impact of the Covid-19 pandemic; this
will be kept under review.
Sensitivity
The values reported for the defined benefit obligations are sensitive to the actuarial assumptions used for projecting future benefit payments and
discounting those payments. In order to estimate the sensitivity of the obligations to changes in assumptions, we calculate what the obligations
would be if we were to make changes to each of the key assumptions in isolation. The difference between this figure and the figure calculated
using our stated assumptions is an indication of the sensitivity to changes in each assumption. The results of this sensitivity analysis are
summarised in the table below. Note that this approach is valid for small changes in the assumptions but will be less accurate for larger changes
in the assumptions. The sensitivity to inflation includes the impact on pension increases, which are generally linked to inflation where they are
granted.
290
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
42 Post-retirement benefits continued
42 Post-retirement benefits continued
Change in plan assets
Change in plan assets
Fair value of plan assets at the start of the year
Fair value of plan assets at the start of the year
Settlements
Settlements
Interest on assets
Interest on assets
Contributions by plan participants
Contributions by plan participants
Contributions by employer
Contributions by employer
Benefits paid
Benefits paid
Non-investment expenses
Non-investment expenses
Return on plan assets, net of interest on assets
Return on plan assets, net of interest on assets
Assets transferred to defined contribution section
Assets transferred to defined contribution section
Currency exchange rate (loss)/ gain
Currency exchange rate (loss)/ gain
Fair value of plan assets at the end of the year
Fair value of plan assets at the end of the year
The settlement amounts shown above for 2021 relate to France, where assets and obligations for pensions in payment were transferred to an
The settlement amounts shown above for 2021 relate to France, where assets and obligations for pensions in payment were transferred to an
insurance company.
insurance company.
The asset ceiling had no effect during the year. In determining the extent to which the asset ceiling has an effect, the Group considers the funding
The asset ceiling had no effect during the year. In determining the extent to which the asset ceiling has an effect, the Group considers the funding
legislation in each country and the rules specific to each pension plan. The calculation takes into account any minimum funding requirements that
legislation in each country and the rules specific to each pension plan. The calculation takes into account any minimum funding requirements that
may be applicable to the plan, whether any reduction in future Group contributions is available, and whether a refund of surplus may be available.
may be applicable to the plan, whether any reduction in future Group contributions is available, and whether a refund of surplus may be available.
In considering whether any refund of surplus is available the Group considers the powers of trustee boards and similar bodies to augment benefits
In considering whether any refund of surplus is available the Group considers the powers of trustee boards and similar bodies to augment benefits
or wind up a plan. Where such powers are unilateral, the Group does not consider a refund to be available at the end of the life of a plan. Where
or wind up a plan. Where such powers are unilateral, the Group does not consider a refund to be available at the end of the life of a plan. Where
the plan rules and legislation both permit the employer to take a refund of surplus, the asset ceiling may have no effect, although it may be the
the plan rules and legislation both permit the employer to take a refund of surplus, the asset ceiling may have no effect, although it may be the
case that a refund will only be available many years in the future.
case that a refund will only be available many years in the future.
Main assumptions (rates per annum)
Main assumptions (rates per annum)
are weighted-average figures.
are weighted-average figures.
The main assumptions for the valuations of the plans under IAS 19 are set out below. Where there are multiple plans in a country the rates below
The main assumptions for the valuations of the plans under IAS 19 are set out below. Where there are multiple plans in a country the rates below
Pension
Pension
benefits
benefits
US$m
US$m
Other
Other
benefits
benefits
US$m
US$m
2021
2021
Total
Total
US$m
US$m
2020
2020
Total
Total
US$m
US$m
14,905
14,905
(383)
(383)
276
276
22
22
425
425
(798)
(798)
(15)
(15)
371
371
(4)
(4)
(99)
(99)
(39)
(39)
—
—
—
—
—
—
—
—
39
39
—
—
—
—
—
—
—
—
—
—
14,905
14,905
13,923
13,923
(383)
(383)
276
276
22
22
464
464
(837)
(837)
(15)
(15)
371
371
(4)
(4)
(99)
(99)
(7)
(7)
335
335
22
22
201
201
(778)
(778)
(16)
(16)
768
768
(3)
(3)
460
460
14,700
14,700
14,700
14,700
14,905
14,905
Canada
Canada
UK
UK
US
US
Switzerland
Switzerland
2.9%
2.9%
1.9%
1.9%
0.3%
0.3%
3.1%
3.1%
2.5%
2.5%
1.6%
1.6%
0.1%
0.1%
2.8%
2.8%
1.9%
1.9%
3.4%
3.4%
2.9%
2.9%
4.2%
4.2%
1.2%
1.2%
2.9%
2.9%
2.5%
2.5%
3.6%
3.6%
2.8%
2.8%
2.4%
2.4%
—%
—%
3.9%
3.9%
2.2%
2.2%
2.1%
2.1%
—%
—%
3.6%
3.6%
0.3%
0.3%
0.9%
0.9%
1.8%
1.8%
1.9%
1.9%
0.1%
0.1%
0.9%
0.9%
0.5%
0.5%
1.9%
1.9%
At 31 December 2021
At 31 December 2021
Discount rate
Discount rate
Inflation(a)
Inflation(a)
Rate of increase in pensions
Rate of increase in pensions
Rate of increase in salaries
Rate of increase in salaries
At 31 December 2020
At 31 December 2020
Discount rate
Discount rate
Inflation(a)
Inflation(a)
Rate of increase in pensions
Rate of increase in pensions
Rate of increase in salaries
Rate of increase in salaries
will be kept under review.
will be kept under review.
Sensitivity
Sensitivity
Assumption
Discount rate
Inflation
Salary increases
Change in assumption
Increase of 0.5 percentage points
Decrease of 0.5 percentage points
Increase of 0.5 percentage points
Decrease of 0.5 percentage points
Increase of 0.5 percentage points
Decrease of 0.5 percentage points
Demographic – allowance for future improvements
in longevity
Participants assumed to have the mortality rates of
individuals who are one year older
2021
2020
Approximate
(increase)/
decrease in obligations
Approximate
(increase)/
decrease in obligations
Pensions
US$m
Other
US$m
Pensions
US$m
Other
US$m
854
(915)
(393)
374
(55)
54
51
(55)
(14)
13
(1)
1
988
(1,186)
(484)
450
(81)
72
441
15
520
62
(66)
(19)
17
(1)
1
19
Participants assumed to have the mortality rates of
individuals who are one year younger
(441)
(15)
(562)
(19)
43 Rio Tinto Limited parent company disclosures
As at 31 December
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Other reserves
Retained earnings
Total equity
Profit of the parent company
Total comprehensive income of the parent company
2021
A$m
2020
A$m
13,935
3,413
17,348
12,024
3,167
15,191
(2,296)
(806)
(3,102)
14,246
(2,665)
(541)
(3,206)
11,985
3,504
309
10,433
14,246
3,504
345
8,136
11,985
24,037
11,890
24,037
11,890
(a)
(a)
The inflation assumption shown for the UK is for the Retail Price Index. The assumption for the Consumer Price Index at 31 December 2021 was 2.7% (2020: 2.1%).
The inflation assumption shown for the UK is for the Retail Price Index. The assumption for the Consumer Price Index at 31 December 2021 was 2.7% (2020: 2.1%).
Prepared under Australian Accounting Standards (AAS) and in accordance with Australian Corporations Act (see page 321). In relation to Rio Tinto
Limited there are no significant measurement differences between AAS and IFRS as defined in note 1.
The main financial assumptions used for the healthcare plans, which are predominantly in the US and Canada, were: discount rate: 3.1% (2020:
The main financial assumptions used for the healthcare plans, which are predominantly in the US and Canada, were: discount rate: 3.1% (2020:
2.5%); medical trend rate: 6.3% reducing to 4.7% by the year 2031 broadly on a straight line basis (2020: 6.3%, reducing to 4.6% by the year
2.5%); medical trend rate: 6.3% reducing to 4.7% by the year 2031 broadly on a straight line basis (2020: 6.3%, reducing to 4.6% by the year
Rio Tinto Limited guarantees
2031); claims costs based on individual company experience.
2031); claims costs based on individual company experience.
Rio Tinto Limited provides a number of guarantees in respect of Group companies.
For both the pension and healthcare arrangements the post-retirement mortality assumptions allow for future improvements in longevity. The
For both the pension and healthcare arrangements the post-retirement mortality assumptions allow for future improvements in longevity. The
mortality tables used imply that a man aged 60 at the balance sheet date has a weighted average expected future lifetime of 27 years (2020: 27
mortality tables used imply that a man aged 60 at the balance sheet date has a weighted average expected future lifetime of 27 years (2020: 27
years) and that a man aged 60 in 2041 would have a weighted average expected future lifetime of 28 years (2020: 28 years). The mortality tables
years) and that a man aged 60 in 2041 would have a weighted average expected future lifetime of 28 years (2020: 28 years). The mortality tables
are generally based upon the latest standard tables published in each country, adjusted appropriately to reflect the actual mortality experience of
are generally based upon the latest standard tables published in each country, adjusted appropriately to reflect the actual mortality experience of
the plan participants where credible data is available. No adjustment has been made for the potential future impact of the Covid-19 pandemic; this
the plan participants where credible data is available. No adjustment has been made for the potential future impact of the Covid-19 pandemic; this
The values reported for the defined benefit obligations are sensitive to the actuarial assumptions used for projecting future benefit payments and
The values reported for the defined benefit obligations are sensitive to the actuarial assumptions used for projecting future benefit payments and
discounting those payments. In order to estimate the sensitivity of the obligations to changes in assumptions, we calculate what the obligations
discounting those payments. In order to estimate the sensitivity of the obligations to changes in assumptions, we calculate what the obligations
would be if we were to make changes to each of the key assumptions in isolation. The difference between this figure and the figure calculated
would be if we were to make changes to each of the key assumptions in isolation. The difference between this figure and the figure calculated
using our stated assumptions is an indication of the sensitivity to changes in each assumption. The results of this sensitivity analysis are
using our stated assumptions is an indication of the sensitivity to changes in each assumption. The results of this sensitivity analysis are
summarised in the table below. Note that this approach is valid for small changes in the assumptions but will be less accurate for larger changes
summarised in the table below. Note that this approach is valid for small changes in the assumptions but will be less accurate for larger changes
in the assumptions. The sensitivity to inflation includes the impact on pension increases, which are generally linked to inflation where they are
in the assumptions. The sensitivity to inflation includes the impact on pension increases, which are generally linked to inflation where they are
granted.
granted.
Rio Tinto plc and Rio Tinto Limited have jointly guaranteed the Group’s external listed debt under the US Shelf Programme, European Debt
Issuance Programme and Commercial Paper Programme which totalled A$7.6 billion at 31 December 2021 (31 December 2020: A$7.2 billion); in
addition these entities also jointly guarantee the Group’s undrawn credit facility which was A$10.3 billion at 31 December 2021 (31 December
2020: A$9.8 billion).
Rio Tinto Limited has guaranteed other external debt held by Rio Tinto Group entities which totalled A$0.1 billion at 31 December 2021
(31 December 2020: A$0.1 billion).
In addition, Rio Tinto Limited has provided a guarantee of all third-party obligations, including contingent obligations, of Rio Tinto Finance Limited,
a wholly owned subsidiary.
Pursuant to the DLC Merger, both Rio Tinto plc and Rio Tinto Limited issued deed poll guarantees by which each company guaranteed contractual
obligations incurred by the other or guaranteed by the other.
290
290
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291291
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings
In accordance with section 409 of the UK Companies Act 2006, disclosed below is a full list of related undertakings of the Group. Related
undertakings include “subsidiaries”, “associated undertakings”, and “significant holdings in undertakings other than subsidiary companies”. The
registered office address, country of incorporation, classes of shares and the effective percentage of equity owned by the Group calculated by
reference to voting rights, is disclosed as at 31 December 2021.
The definition of a subsidiary undertaking in accordance with the UK Companies Act 2006 is different from the definition under IFRS. As a result,
the related undertakings included within this list may not be the same as the related undertakings consolidated in the Group IFRS financial
statements. Unless otherwise disclosed, all undertakings with an effective equity holding of greater than 50% are considered subsidiary
undertakings for the purpose of this note.
Refer to notes 32-35 for further information on accounting policies, basis of consolidation, principal subsidiaries, joint operations, joint ventures
and associates.
An explanation of the dual listed companies structure of Rio Tinto plc and Rio Tinto Limited can be found on pages 410 to 412. For completeness,
the effective ownership by the Group relates to effective holdings by both entities either together or individually.
Wholly owned subsidiary undertakings
Name of undertaking and country
of incorporation
1043802 Ontario Ltd; Canada
10676276 Canada Inc.; Canada
1109723 B.C. Ltd.; Canada
46106 YUKON INC.; Canada
46117 YUKON INC.; Canada
535630 YUKON INC.; Canada
7999674 CANADA INC.; Canada
Alcan Alumina Ltda.; Brazil
Alcan Asia Limited; Hong Kong
Share class
CAD Ordinary
shares
CAD Common
shares
CAD Common
shares
CAD Common
shares
CAD Common
shares
CAD Common
shares
CAD Common
shares
BRL1.00 Quota
shares
HKD Ordinary
shares
Alcan Betriebs- und Verwaltungsgesellschaft
GmbH; Germany
€51.13 Ordinary
shares
Alcan Chemicals Limited; United Kingdom
Alcan Composites Brasil Ltda; Brazil
Alcan Corporation; United States
£1.00 Ordinary
shares
BRL0.01 Ordinary
shares
US$0.01 Ordinary
shares
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
5300-66 Wellington Street West, Toronto ON M5K 1E6, Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
1800-510 West Georgia Street, Vancouver BC V6B 0M3, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Avenida Engenheiro Emiliano Macieira, 1 - km 18, Pedrinhas, Sao Luis,
MA, 65095-603, Brazil
6/F, Luk Kwok Centre, 72 Gloucester Road, Wan Chai, Hong Kong
Alusingenplatz 1, D-78221, Singen, Germany
6 St James's Square, London, SW1Y 4AD, United Kingdom
Avenida das Nações Unidas, 12.551 - 19th floor - Suite 1.911, São Paulo,
SP, 04578-00, Brazil
211 East 7th Street, Suite 620, Austin TX 78701-3218, United States
292
292
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Financial statements continued
Financial statements
Notes to the 2021 financial statements
44 Related undertakings
44 Related undertakings
In accordance with section 409 of the UK Companies Act 2006, disclosed below is a full list of related undertakings of the Group. Related
In accordance with section 409 of the UK Companies Act 2006, disclosed below is a full list of related undertakings of the Group. Related
undertakings include “subsidiaries”, “associated undertakings”, and “significant holdings in undertakings other than subsidiary companies”. The
undertakings include “subsidiaries”, “associated undertakings”, and “significant holdings in undertakings other than subsidiary companies”. The
registered office address, country of incorporation, classes of shares and the effective percentage of equity owned by the Group calculated by
registered office address, country of incorporation, classes of shares and the effective percentage of equity owned by the Group calculated by
reference to voting rights, is disclosed as at 31 December 2021.
reference to voting rights, is disclosed as at 31 December 2021.
The definition of a subsidiary undertaking in accordance with the UK Companies Act 2006 is different from the definition under IFRS. As a result,
The definition of a subsidiary undertaking in accordance with the UK Companies Act 2006 is different from the definition under IFRS. As a result,
the related undertakings included within this list may not be the same as the related undertakings consolidated in the Group IFRS financial
the related undertakings included within this list may not be the same as the related undertakings consolidated in the Group IFRS financial
statements. Unless otherwise disclosed, all undertakings with an effective equity holding of greater than 50% are considered subsidiary
statements. Unless otherwise disclosed, all undertakings with an effective equity holding of greater than 50% are considered subsidiary
undertakings for the purpose of this note.
undertakings for the purpose of this note.
Refer to notes 32-35 for further information on accounting policies, basis of consolidation, principal subsidiaries, joint operations, joint ventures
Refer to notes 32-35 for further information on accounting policies, basis of consolidation, principal subsidiaries, joint operations, joint ventures
and associates.
and associates.
An explanation of the dual listed companies structure of Rio Tinto plc and Rio Tinto Limited can be found on pages 410 to 412. For completeness,
An explanation of the dual listed companies structure of Rio Tinto plc and Rio Tinto Limited can be found on pages 410 to 412. For completeness,
the effective ownership by the Group relates to effective holdings by both entities either together or individually.
the effective ownership by the Group relates to effective holdings by both entities either together or individually.
Wholly owned subsidiary undertakings
Wholly owned subsidiary undertakings
10676276 Canada Inc.; Canada
10676276 Canada Inc.; Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
ownership
ownership
Registered office address
Registered office address
5300-66 Wellington Street West, Toronto ON M5K 1E6, Canada
5300-66 Wellington Street West, Toronto ON M5K 1E6, Canada
Canada
Canada
1800-510 West Georgia Street, Vancouver BC V6B 0M3, Canada
1800-510 West Georgia Street, Vancouver BC V6B 0M3, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
200-204 Lambert Street, Whitehorse YT Y1A 3T2, Canada
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
1043802 Ontario Ltd; Canada
1043802 Ontario Ltd; Canada
1109723 B.C. Ltd.; Canada
1109723 B.C. Ltd.; Canada
46106 YUKON INC.; Canada
46106 YUKON INC.; Canada
46117 YUKON INC.; Canada
46117 YUKON INC.; Canada
535630 YUKON INC.; Canada
535630 YUKON INC.; Canada
Alcan Alumina Ltda.; Brazil
Alcan Alumina Ltda.; Brazil
Alcan Asia Limited; Hong Kong
Alcan Asia Limited; Hong Kong
Share class
Share class
CAD Ordinary
CAD Ordinary
shares
shares
CAD Common
CAD Common
shares
shares
CAD Common
CAD Common
shares
shares
CAD Common
CAD Common
shares
shares
CAD Common
CAD Common
shares
shares
CAD Common
CAD Common
shares
shares
CAD Common
CAD Common
shares
shares
BRL1.00 Quota
BRL1.00 Quota
shares
shares
HKD Ordinary
HKD Ordinary
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
7999674 CANADA INC.; Canada
7999674 CANADA INC.; Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Alcan Primary Products Company LLC;
United States
US$ Unit shares
100
Alcan Betriebs- und Verwaltungsgesellschaft
Alcan Betriebs- und Verwaltungsgesellschaft
€51.13 Ordinary
€51.13 Ordinary
GmbH; Germany
GmbH; Germany
Alcan Chemicals Limited; United Kingdom
Alcan Chemicals Limited; United Kingdom
£1.00 Ordinary
£1.00 Ordinary
Alcan Composites Brasil Ltda; Brazil
Alcan Composites Brasil Ltda; Brazil
BRL0.01 Ordinary
BRL0.01 Ordinary
Avenida das Nações Unidas, 12.551 - 19th floor - Suite 1.911, São Paulo,
Avenida das Nações Unidas, 12.551 - 19th floor - Suite 1.911, São Paulo,
SP, 04578-00, Brazil
SP, 04578-00, Brazil
Alcan Corporation; United States
Alcan Corporation; United States
US$0.01 Ordinary
US$0.01 Ordinary
Canada
Canada
MA, 65095-603, Brazil
MA, 65095-603, Brazil
Avenida Engenheiro Emiliano Macieira, 1 - km 18, Pedrinhas, Sao Luis,
Avenida Engenheiro Emiliano Macieira, 1 - km 18, Pedrinhas, Sao Luis,
Alcan Primary Products Corporation; United
States
US$0.01 Ordinary
shares
Alcan Realty Limited / Societe Immobiliere
Alcan Limitee; Canada
CAD Ordinary
shares
6/F, Luk Kwok Centre, 72 Gloucester Road, Wan Chai, Hong Kong
6/F, Luk Kwok Centre, 72 Gloucester Road, Wan Chai, Hong Kong
Alcan South Pacific Pty Ltd; Australia
Alusingenplatz 1, D-78221, Singen, Germany
Alusingenplatz 1, D-78221, Singen, Germany
Alcan Trading AG (SA/Ltd.); Switzerland
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
AML Properties Pty Ltd; Australia
AUD Ordinary
shares
CHF1,000.00
Registered shares
AUD Ordinary
shares
211 East 7th Street, Suite 620, Austin TX 78701-3218, United States
211 East 7th Street, Suite 620, Austin TX 78701-3218, United States
AP Service; France
€15.00 Ordinary
shares
Argyle Diamond Mines Pty Limited; Australia AUD Ordinary
Anglesey Aluminium Metal Limited; United
Kingdom
£1.00 Ordinary
shares
Argyle Diamonds Limited; Australia(a)
shares
AUD Class A
shares
AUD
Class B shares
100
100
100
100
100
100
100
100
100
100
Name of undertaking and country
of incorporation
Alcan Farms Limited; United Kingdom
Alcan Gove Development Pty Limited;
Australia
Alcan Holdings Australia Pty Limited;
Australia
Alcan Holdings Europe B.V.; Netherlands
Alcan Holdings Nederland B.V.; Netherlands
Share class
£1.00 Ordinary
shares
AUD Ordinary
shares
AUD Class A
shares
AUD Ordinary
shares
€4,570,000,000.00
Common shares
€4,555.00
Ordinary shares
Alcan Holdings Switzerland AG (SA/Ltd.);
Switzerland
CHF0.01
Registered shares
Alcan International Network U.S.A. Inc.;
United States
US$ Ordinary
shares
Alcan Lebensmittelverpackungen GmbH;
Germany
€51.12918
Ordinary shares
Alcan Management Services (Shanghai) Co.,
Ltd.; China(d)
US$1.00 Ordinary
shares
Alcan Management Services Canada
Limited / Societe de Services de Gestion
Alcan Canada Limitee; Canada
Alcan Northern Territory Alumina Pty
Limited; Australia
CAD Ordinary
shares
AUD Ordinary
shares
Alcan Packaging Mühltal Gmbh & Co. KG;
Germany
€51.129188
Ordinary shares
Alcan Primary Metal Australia Pty Ltd;
Australia
AUD Ordinary
shares
100
100
100
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
155 Charlotte Street, Brisbane QLD 4000, Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
Badenerstrasse 549, CH-8048, Zürich, Switzerland
80 State Street, Albany NY 12207-2543, United States
Alusingenplatz 1, D-78221, Singen, Germany
Unit E, 40F Wheelock Square, No. 1717 West Nanjing Road, Jing'an
District, Shanghai, 200040, China
100
100
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
100
100
100
100
100
100
100
100
100
100
100
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
Alusingenplatz 1, D-78221, Singen, Germany
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
211 East 7th Street, Suite 620, Austin TX 78701-3218, United States
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
155 Charlotte Street, Brisbane QLD 4000, Australia
Badenerstrasse 549, CH-8048, Zürich, Switzerland
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
725 rue Aristide Bergès, 38340, Voreppe, France
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
292
292
292
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Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
CN 340, Km 954, 12520 NULES, Castellon, Spain
6 St James's Square, London, SW1Y 4AD, United Kingdom
89 Route de Bourbourg, 59210, Coudekerque-Branche, France
Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara,
Damansara Heights 50490 Kuala Lumpur, Malaysia
Welplaatweg 104, 3197 KS , Harbour 4130, Botlek Rotterdam,
Netherlands
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
Name of undertaking and country
of incorporation
Ashton Mining Pty Ltd; Australia
Ashton Nominees Pty Limited; Australia
Australian Coal Holdings Pty. Limited;
Australia(a)
Australian Mining & Smelting Pty Ltd;
Australia(a)
Borax España, S.A.; Spain
Borax Europe Limited; United Kingdom
Borax Francais; France
Borax Malaysia Sdn Bhd; Malaysia
Borax Rotterdam N.V.; Netherlands
Share class
AUD Ordinary
shares
AUD Ordinary
shares
AUD A shares
AUD
Ordinary shares
AUD Ordinary
shares
€150.00 Ordinary
shares
£0.25 Ordinary
shares
€2.75 Ordinary
shares
RM1.00 Ordinary
shares
€453.78 Ordinary
shares
British Alcan Aluminium Limited; United
Kingdom
£1.00 Ordinary
shares
Canning Resources Pty Limited; Australia(a)
Capricorn Diamonds Investments Pty
Limited; Australia
Cathjoh Holdings Pty Limited; Australia
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
Channar Management Services Pty Limited;
Australia
AUD Ordinary
shares
Channar Mining Pty Ltd; Australia
CIA. Inmobiliaria e Inversiones Cosmos
S.A.C.; Peru
Compania de Transmision Sierraoriente
S.A.C.; Peru
CRA Investments Pty. Limited; Australia(a)
CRA Pty Ltd; Australia(a)
Daybreak Development LLC; United States
AUD Ordinary
shares
PEN1,000.00
Ordinary shares
PEN1,000.00
Ordinary shares
AUD Ordinary
shares
AUD Ordinary
shares
US$0.01 Common
shares
Daybreak Property Holdings LLC; United
States(c)
-
Daybreak Secondary Water Distribution
Company; United States
Daybreak Water Holding LLC; United States
US$0.01 Common
shares
US$0.01 Common
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
DB Medical I LLC; United States
US$ Unit shares
100
294
294
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Financial statements continued
Financial statements
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
300-5201 50th Avenue, Yellowknife NT X1A 2P8, Canada
251 Little Falls Drive, Wilmington DE 19808, United States
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
CAD10.00
Ordinary shares
100
100
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Name of undertaking and country
of incorporation
DBVC1 LLC; United States(a)
Diavik Diamond Mines (2012) Inc.; Canada
Eastland Management Inc.; United States
Electric Power Generation Limited; New
Zealand(a)
Share class
-
CAD Common
shares
US$1.00 Common
shares
NZD1.00 Ordinary
shares
-
100
100
100
Element North 21 Limited Partnership /
Elément Nord 21 Société en Commandite;
Canada
Empresa de Mineracao Finesa Ltda.; Brazil
Flambeau Mining Company; United States
BRL Quotas shares 100
US$0.01 Common
shares
100
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Element North 21 GP Inc. / Element Nord 21
GP Inc.; Canada
CAD1.00 Common
shares
100
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Ashton Mining Pty Ltd; Australia
Ashton Mining Pty Ltd; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
ownership
ownership
Registered office address
Registered office address
Australia
Australia
Australia
Australia
Share class
Share class
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
AUD
AUD
Ordinary shares
Ordinary shares
Ashton Nominees Pty Limited; Australia
Ashton Nominees Pty Limited; Australia
AUD Ordinary
AUD Ordinary
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australian Coal Holdings Pty. Limited;
Australian Coal Holdings Pty. Limited;
AUD A shares
AUD A shares
Australia(a)
Australia(a)
Australia(a)
Australia(a)
Australian Mining & Smelting Pty Ltd;
Australian Mining & Smelting Pty Ltd;
AUD Ordinary
AUD Ordinary
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Borax España, S.A.; Spain
Borax España, S.A.; Spain
€150.00 Ordinary
€150.00 Ordinary
CN 340, Km 954, 12520 NULES, Castellon, Spain
CN 340, Km 954, 12520 NULES, Castellon, Spain
Borax Europe Limited; United Kingdom
Borax Europe Limited; United Kingdom
£0.25 Ordinary
£0.25 Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Borax Francais; France
Borax Francais; France
€2.75 Ordinary
€2.75 Ordinary
shares
shares
Borax Malaysia Sdn Bhd; Malaysia
Borax Malaysia Sdn Bhd; Malaysia
RM1.00 Ordinary
RM1.00 Ordinary
Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara,
Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara,
Borax Rotterdam N.V.; Netherlands
Borax Rotterdam N.V.; Netherlands
€453.78 Ordinary
€453.78 Ordinary
Welplaatweg 104, 3197 KS , Harbour 4130, Botlek Rotterdam,
Welplaatweg 104, 3197 KS , Harbour 4130, Botlek Rotterdam,
Capricorn Diamonds Investments Pty
Capricorn Diamonds Investments Pty
AUD Ordinary
AUD Ordinary
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Channar Management Services Pty Limited;
Channar Management Services Pty Limited;
AUD Ordinary
AUD Ordinary
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
-
-
shares
shares
shares
shares
British Alcan Aluminium Limited; United
British Alcan Aluminium Limited; United
£1.00 Ordinary
£1.00 Ordinary
Kingdom
Kingdom
Canning Resources Pty Limited; Australia(a)
Canning Resources Pty Limited; Australia(a)
AUD Ordinary
AUD Ordinary
Limited; Australia
Limited; Australia
Cathjoh Holdings Pty Limited; Australia
Cathjoh Holdings Pty Limited; Australia
AUD Ordinary
AUD Ordinary
AUD Ordinary
AUD Ordinary
shares
shares
PEN1,000.00
PEN1,000.00
Ordinary shares
Ordinary shares
PEN1,000.00
PEN1,000.00
Ordinary shares
Ordinary shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
Australia
Australia
Channar Mining Pty Ltd; Australia
Channar Mining Pty Ltd; Australia
CIA. Inmobiliaria e Inversiones Cosmos
CIA. Inmobiliaria e Inversiones Cosmos
S.A.C.; Peru
S.A.C.; Peru
S.A.C.; Peru
S.A.C.; Peru
Compania de Transmision Sierraoriente
Compania de Transmision Sierraoriente
CRA Investments Pty. Limited; Australia(a)
CRA Investments Pty. Limited; Australia(a)
AUD Ordinary
AUD Ordinary
CRA Pty Ltd; Australia(a)
CRA Pty Ltd; Australia(a)
Daybreak Development LLC; United States
Daybreak Development LLC; United States
US$0.01 Common
US$0.01 Common
Daybreak Property Holdings LLC; United
Daybreak Property Holdings LLC; United
States(c)
States(c)
Daybreak Secondary Water Distribution
Daybreak Secondary Water Distribution
US$0.01 Common
US$0.01 Common
Company; United States
Company; United States
Daybreak Water Holding LLC; United States
Daybreak Water Holding LLC; United States
US$0.01 Common
US$0.01 Common
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Damansara Heights 50490 Kuala Lumpur, Malaysia
Damansara Heights 50490 Kuala Lumpur, Malaysia
Netherlands
Netherlands
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Australia
Australia
Australia
Australia
Australia
Australia
States
States
States
States
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Calle Santa Maria No. 110 Urb., Miraflores, Lima, Peru
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
DB Medical I LLC; United States
DB Medical I LLC; United States
US$ Unit shares
US$ Unit shares
100
100
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
89 Route de Bourbourg, 59210, Coudekerque-Branche, France
89 Route de Bourbourg, 59210, Coudekerque-Branche, France
Fondation Rio Tinto; Guinea(c)
-
Fundsprops Pty. Limited; Australia(a)
Gladstone Infrastructure Pty Ltd; Australia
Gove Aluminium Ltd; Australia
GPS Energy Pty Limited; Australia
GPS Nominee Pty Limited; Australia
GPS Power Pty. Limited; Australia
AUD Ordinary
shares
AUD Class G
redeemable
preference shares
AUD
Ordinary shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
Hamersley Exploration Pty Limited; Australia AUD Ordinary
Hamersley HMS Pty Ltd; Australia
Hamersley Holdings Limited; Australia(a)
Hamersley Iron - Yandi Pty Limited;
Australia(a)
Hamersley Iron Pty. Limited; Australia
Hamersley Resources Limited; Australia
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Class B
shares
AUD Class C
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Z Class
Ordinary shares
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
SIG, QUADRA 04, Lote 75, Sala 109 Parte C, Edificio Capital Financial
Center, Brasilia DF, CEP, 71.610-440, Brazil
251 Little Falls Drive, Wilmington DE 19808, United States
Manquépas - Commune de Kaloum, République de Guinée, Guinea
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
294
294
294
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Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
80 State Street, Albany NY 12207-2543, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
International Centre for Sustainable Carbon, 27 Old Gloucester Street,
London, England, WC1N 3AX, United Kingdom
Pure Offices Cheltenham Office Park, Hatherley Lane, Cheltenham, GL51
6SH, United Kingdom
Calle Tuset 10, 08006, Barcelona, Catalogna, Spain
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
Bulevar Milutina Milankovica 1i, 5th Floor, Novi Beograd, 11070, Serbia
155 Charlotte Street, Brisbane QLD 4000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Felix Berenguer 125 - 4, Col. Lomas Virreyes, Distrito Federal, 11000,
Mexico
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Name of undertaking and country
of incorporation
Hamersley WA Pty Ltd; Australia
Share class
AUD Ordinary
shares
Henlopen Manufacturing Co., Inc.; United
States
US$100.00
Ordinary shares
High Purity Iron Inc.; United States
US$1.00 Common
shares
HIsmelt Corporation Pty Limited; Australia(a) AUD A Class
Hunter Valley Resources Pty Ltd; Australia
shares
AUD Class A
shares
AUD
Class B shares
IEA Coal Research Limited; United Kingdom £1.00 Ordinary
shares
IEA Environmental Projects Limited; United
Kingdom
£1.00 Ordinary
shares
Industrias Metalicas Castello S.A.; Spain
€6.01 Ordinary
shares
100
100
100
100
100
100
100
100
100
Integrity Land and Cattle LLC; United States US$ Unit shares
100
IOC Sales Limited; United Kingdom
£1.00 Ordinary
shares
Jadar Free Zone Management Company DOO
Beograd - Novi Beograd; Serbia
RSD1.00 Ordinary
shares
Johcath Holdings Pty Limited; Australia
Juna Station Pty Ltd; Australia
Kalimantan Gold Pty Limited; Australia
Kelian Pty. Limited; Australia(a)
Kembla Coal & Coke Pty. Limited; Australia
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
Kennecott Barneys Canyon Mining Company;
United States
US$0.01 Common
shares
Kennecott Exploration Company; United
States
US$0.01 Common
shares
Kennecott Exploration Mexico, S.A. de C.V.;
Mexico(d)
MXN1,000.00
Ordinary shares
Kennecott Holdings Corporation; United
States
Kennecott Land Company; United States
US$0.01 Common
shares
US$0.01 Common
shares
Kennecott Land Investment Company LLC;
United States(c)
-
Kennecott Molybdenum Company; United
States
US$0.01 Common
shares
Kennecott Nevada Copper Company; United
States
US$0.01 Common
shares
Kennecott Ridgeway Mining Company;
United States
US$1.00 Common
shares
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
296
296
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Financial statements continued
Financial statements
Name of undertaking and country
of incorporation
Kennecott Royalty Company; United States
Share class
US$100.00
Common shares
Kennecott Services Company; United States US$0.01 Common
shares
Kennecott Uranium Company; United States US$0.01 Common
shares
Kennecott Utah Copper LLC; United States
US$ Unit shares
Kennecott Water Distribution LLC; United
States
Kutaibar Holdings Pty Ltd; Australia(a)
US$ Ordinary
shares
AUD Ordinary
shares
Lawson Mardon Flexible Limited; United
Kingdom
£1.00 Ordinary
shares
Lawson Mardon Smith Brothers Ltd.; United
Kingdom
£1.00 Ordinary
shares
Metallwerke Refonda AG; Switzerland
CHF125.00 Bearer
shares
Metals & Minerals Insurance Pte. Limited;
Singapore
SGD Ordinary
shares
Minera Kennecott, S.A. de C.V.; Mexico(d)
SGD Redeemable
preference shares
MXN1.00 Series
"B" shares
100
100
100
100
100
100
100
100
100
100
100
100
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Hamersley WA Pty Ltd; Australia
Hamersley WA Pty Ltd; Australia
Henlopen Manufacturing Co., Inc.; United
Henlopen Manufacturing Co., Inc.; United
US$100.00
US$100.00
States
States
High Purity Iron Inc.; United States
High Purity Iron Inc.; United States
US$1.00 Common
US$1.00 Common
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
ownership
ownership
Registered office address
Registered office address
Australia
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
80 State Street, Albany NY 12207-2543, United States
80 State Street, Albany NY 12207-2543, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
HIsmelt Corporation Pty Limited; Australia(a) AUD A Class
HIsmelt Corporation Pty Limited; Australia(a) AUD A Class
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Australia
Hunter Valley Resources Pty Ltd; Australia
Hunter Valley Resources Pty Ltd; Australia
AUD Class A
AUD Class A
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
IEA Coal Research Limited; United Kingdom £1.00 Ordinary
IEA Coal Research Limited; United Kingdom £1.00 Ordinary
International Centre for Sustainable Carbon, 27 Old Gloucester Street,
International Centre for Sustainable Carbon, 27 Old Gloucester Street,
London, England, WC1N 3AX, United Kingdom
London, England, WC1N 3AX, United Kingdom
IEA Environmental Projects Limited; United
IEA Environmental Projects Limited; United
£1.00 Ordinary
£1.00 Ordinary
Pure Offices Cheltenham Office Park, Hatherley Lane, Cheltenham, GL51
Pure Offices Cheltenham Office Park, Hatherley Lane, Cheltenham, GL51
Kingdom
Kingdom
6SH, United Kingdom
6SH, United Kingdom
Industrias Metalicas Castello S.A.; Spain
Industrias Metalicas Castello S.A.; Spain
€6.01 Ordinary
€6.01 Ordinary
Calle Tuset 10, 08006, Barcelona, Catalogna, Spain
Calle Tuset 10, 08006, Barcelona, Catalogna, Spain
Integrity Land and Cattle LLC; United States US$ Unit shares
Integrity Land and Cattle LLC; United States US$ Unit shares
100
100
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
IOC Sales Limited; United Kingdom
IOC Sales Limited; United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Share class
Share class
AUD Ordinary
AUD Ordinary
shares
shares
Ordinary shares
Ordinary shares
shares
shares
shares
shares
shares
shares
AUD
AUD
shares
shares
shares
shares
shares
shares
Class B shares
Class B shares
£1.00 Ordinary
£1.00 Ordinary
shares
shares
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Jadar Free Zone Management Company DOO
Jadar Free Zone Management Company DOO
RSD1.00 Ordinary
RSD1.00 Ordinary
Beograd - Novi Beograd; Serbia
Beograd - Novi Beograd; Serbia
Johcath Holdings Pty Limited; Australia
Johcath Holdings Pty Limited; Australia
AUD Ordinary
AUD Ordinary
Kalimantan Gold Pty Limited; Australia
Kalimantan Gold Pty Limited; Australia
AUD Ordinary
AUD Ordinary
Kelian Pty. Limited; Australia(a)
Kelian Pty. Limited; Australia(a)
United States
United States
States
States
Mexico(d)
Mexico(d)
States
States
States
States
States
States
United States
United States
Kennecott Holdings Corporation; United
Kennecott Holdings Corporation; United
US$0.01 Common
US$0.01 Common
Kennecott Land Company; United States
Kennecott Land Company; United States
US$0.01 Common
US$0.01 Common
Kennecott Land Investment Company LLC;
Kennecott Land Investment Company LLC;
United States(c)
United States(c)
Kennecott Molybdenum Company; United
Kennecott Molybdenum Company; United
US$0.01 Common
US$0.01 Common
Kennecott Nevada Copper Company; United
Kennecott Nevada Copper Company; United
US$0.01 Common
US$0.01 Common
Kennecott Ridgeway Mining Company;
Kennecott Ridgeway Mining Company;
US$1.00 Common
US$1.00 Common
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
-
-
shares
shares
shares
shares
shares
shares
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Australia
Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Kembla Coal & Coke Pty. Limited; Australia
Kembla Coal & Coke Pty. Limited; Australia
AUD Ordinary
AUD Ordinary
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Kennecott Barneys Canyon Mining Company;
Kennecott Barneys Canyon Mining Company;
US$0.01 Common
US$0.01 Common
Kennecott Exploration Company; United
Kennecott Exploration Company; United
US$0.01 Common
US$0.01 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Kennecott Exploration Mexico, S.A. de C.V.;
Kennecott Exploration Mexico, S.A. de C.V.;
Felix Berenguer 125 - 4, Col. Lomas Virreyes, Distrito Federal, 11000,
Felix Berenguer 125 - 4, Col. Lomas Virreyes, Distrito Federal, 11000,
MXN1,000.00
MXN1,000.00
Ordinary shares
Ordinary shares
Mexico
Mexico
Juna Station Pty Ltd; Australia
Juna Station Pty Ltd; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Bulevar Milutina Milankovica 1i, 5th Floor, Novi Beograd, 11070, Serbia
Bulevar Milutina Milankovica 1i, 5th Floor, Novi Beograd, 11070, Serbia
Mineracao Tabuleiro Ltda; Brazil
BRL Quotas shares 100
Mitchell Plateau Bauxite Co. Pty. Limited;
Australia
Mount Bruce Mining Pty Limited; Australia
Mount Pleasant Pty Ltd; Australia
Mutamba Mineral Sands S.A.; Mozambique
NBH Pty Ltd; Australia
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
MZN100.00
Ordinary shares
AUD Ordinary
shares
Nhulunbuy Corporation Limited; Australia(c)
-
Norgold Pty Limited; Australia
North Gold (W.A.) Pty Ltd; Australia
North Insurances Pty. Ltd.; Australia
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
North IOC (Bermuda) Holdings Limited;
Bermuda
US$1.00 Ordinary
shares
North IOC (Bermuda) Limited; Bermuda
North IOC Holdings Pty Ltd; Australia
North Limited; Australia
US$143.64 Class A
ordinary shares
US$100,000.00
Preference shares
US$1.00
Ordinary shares
AUD Ordinary
shares
AUD Ordinary
shares
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
251 Little Falls Drive, Wilmington DE 19808, United States
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Badenerstrasse 549, CH-8048, Zürich, Switzerland
100
50 Raffles Place, #19-00 Singapore Land Tower, 048623, Singapore
100
100
100
100
100
100
100
100
100
100
100
100
Florencia 57, Piso 3, Col. Juarez, Delegacion Cuauhtemoc, Mexico, D.F.,
06600, Mexico
SIG, QUADRA 04, Lote 75, Sala 109 Parte D, Edificio Capital Financial
Center, Brasilia DF, CEP, 71.610-440, Brazil
155 Charlotte Street, Brisbane QLD 4000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Av. da Marginal Nº 4985, 1º andar – Prédio ZEN, Maputo, Mozambique
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
19 Westal Street, Nhulunbuy NT 0880, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Park Place, 55 Par La Ville Road, Third Floor, Hamilton, HM11, Bermuda
100
Park Place, 55 Par La Ville Road, Third Floor, Hamilton, HM11, Bermuda
100
100
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
296
296
296
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
297297
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
of incorporation
North Mining Limited; Australia
Pacific Aluminium (New Zealand) Limited;
New Zealand
Pacific Aluminium Pty. Limited; Australia(a)
Pacific Coast Mines, Inc.; United States
Share class
AUD Ordinary
shares
NZD1.00 Ordinary
shares
NZD2.00
Ordinary shares
AUD Ordinary
shares
US$1.00 Common
shares
Pechiney Aviatube Limited; United Kingdom £1.00 Ordinary
Pechiney Bâtiment; France
Pechiney Bécancour, Inc.; United States
Pechiney Cast Plate, Inc.; United States
Pechiney Consolidated Australia Pty Limited;
Australia
Pechiney Holdings, Inc.; United States
shares
€15.00 Ordinary
shares
US$1.00 Ordinary
shares
US$1.00 Ordinary
shares
US$1.00 Ordinary
shares
US$1.00
Preference shares
US$1.00 Ordinary
shares
Pechiney Metals LLC; United States(c)
-
Pechiney Philippines Inc.; Philippines
Pechiney Plastic Packaging, Inc.; United
States
Pechiney Sales Corporation; United States
Peko Exploration Pty Ltd.; Australia
Peko-Wallsend Pty Ltd; Australia
Pilbara Iron Company (Services) Pty Ltd;
Australia
Pilbara Iron Pty Ltd; Australia
PHP10.00 Ordinary
shares
US$ Ordinary
shares
US$1.00 Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
Project Generation Group Pty Ltd; Australia(a) AUD Ordinary
QIT Madagascar Minerals Ltd; Bermuda
Queensland Coal Pty. Limited; Australia
Química e Metalúrgica Mequital Ltda.; Brazil
Ranges Management Company Pty Ltd;
Australia
Ranges Mining Pty Ltd; Australia
Resolution Copper Company; United States
Richards Bay Mining Holdings (Proprietary)
Limited; South Africa
shares
US$1.00 Ordinary
shares
AUD Ordinary
shares
BRL Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
US$0.01 Common
shares
ZAR1.00 A
Ordinary shares
ZAR1.00 B
Ordinary shares
% of share
class held
by Group
companies
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Effective
Group %
ownership
100
Registered office address
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
100
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
100
100
100
100
100
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Room 306, ITC Building, 337 Sen Gil Puyat Avenue, Markati, Metro
Manila, Philippines
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
37 Belmont Avenue, Belmont WA 6104, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton, 10, Bermuda
155 Charlotte Street, Brisbane QLD 4000, Australia
Av. das Nacoes Unida, 12551 19o, andar, CJ 1911, 04578-000, Sao
Paulo, SP, Brazil
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
251 Little Falls Drive, Wilmington DE 19808, United States
100
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
298
298
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Financial statements continued
Financial statements
Notes to the 2021 financial statements
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
100
100
ownership
ownership
Registered office address
Registered office address
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Australia
100
100
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
North Mining Limited; Australia
North Mining Limited; Australia
Share class
Share class
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
NZD2.00
NZD2.00
Ordinary shares
Ordinary shares
Pacific Aluminium (New Zealand) Limited;
Pacific Aluminium (New Zealand) Limited;
NZD1.00 Ordinary
NZD1.00 Ordinary
New Zealand
New Zealand
Pacific Aluminium Pty. Limited; Australia(a)
Pacific Aluminium Pty. Limited; Australia(a)
AUD Ordinary
AUD Ordinary
Pacific Coast Mines, Inc.; United States
Pacific Coast Mines, Inc.; United States
US$1.00 Common
US$1.00 Common
Pechiney Aviatube Limited; United Kingdom £1.00 Ordinary
Pechiney Aviatube Limited; United Kingdom £1.00 Ordinary
Pechiney Bâtiment; France
Pechiney Bâtiment; France
€15.00 Ordinary
€15.00 Ordinary
Pechiney Bécancour, Inc.; United States
Pechiney Bécancour, Inc.; United States
US$1.00 Ordinary
US$1.00 Ordinary
Pechiney Cast Plate, Inc.; United States
Pechiney Cast Plate, Inc.; United States
US$1.00 Ordinary
US$1.00 Ordinary
Pechiney Consolidated Australia Pty Limited;
Pechiney Consolidated Australia Pty Limited;
US$1.00 Ordinary
US$1.00 Ordinary
Australia
Australia
shares
shares
US$1.00
US$1.00
Preference shares
Preference shares
Pechiney Holdings, Inc.; United States
Pechiney Holdings, Inc.; United States
US$1.00 Ordinary
US$1.00 Ordinary
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
-
-
Pechiney Plastic Packaging, Inc.; United
Pechiney Plastic Packaging, Inc.; United
States
States
Pechiney Sales Corporation; United States
Pechiney Sales Corporation; United States
US$1.00 Ordinary
US$1.00 Ordinary
Peko Exploration Pty Ltd.; Australia
Peko Exploration Pty Ltd.; Australia
Peko-Wallsend Pty Ltd; Australia
Peko-Wallsend Pty Ltd; Australia
Pilbara Iron Company (Services) Pty Ltd;
Pilbara Iron Company (Services) Pty Ltd;
Australia
Australia
Pilbara Iron Pty Ltd; Australia
Pilbara Iron Pty Ltd; Australia
Project Generation Group Pty Ltd; Australia(a) AUD Ordinary
Project Generation Group Pty Ltd; Australia(a) AUD Ordinary
QIT Madagascar Minerals Ltd; Bermuda
QIT Madagascar Minerals Ltd; Bermuda
US$1.00 Ordinary
US$1.00 Ordinary
shares
shares
US$ Ordinary
US$ Ordinary
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
BRL Ordinary
BRL Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
ZAR1.00 A
ZAR1.00 A
Ordinary shares
Ordinary shares
ZAR1.00 B
ZAR1.00 B
Ordinary shares
Ordinary shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Pechiney Metals LLC; United States(c)
Pechiney Metals LLC; United States(c)
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Pechiney Philippines Inc.; Philippines
Pechiney Philippines Inc.; Philippines
PHP10.00 Ordinary
PHP10.00 Ordinary
Room 306, ITC Building, 337 Sen Gil Puyat Avenue, Markati, Metro
Room 306, ITC Building, 337 Sen Gil Puyat Avenue, Markati, Metro
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Manila, Philippines
Manila, Philippines
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
37 Belmont Avenue, Belmont WA 6104, Australia
37 Belmont Avenue, Belmont WA 6104, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Australia
Australia
Australia
Australia
Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton, 10, Bermuda
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton, 10, Bermuda
Paulo, SP, Brazil
Paulo, SP, Brazil
Australia
Australia
Australia
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Queensland Coal Pty. Limited; Australia
Queensland Coal Pty. Limited; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Química e Metalúrgica Mequital Ltda.; Brazil
Química e Metalúrgica Mequital Ltda.; Brazil
Av. das Nacoes Unida, 12551 19o, andar, CJ 1911, 04578-000, Sao
Av. das Nacoes Unida, 12551 19o, andar, CJ 1911, 04578-000, Sao
Ranges Management Company Pty Ltd;
Ranges Management Company Pty Ltd;
Australia
Australia
Ranges Mining Pty Ltd; Australia
Ranges Mining Pty Ltd; Australia
Richards Bay Mining Holdings (Proprietary)
Richards Bay Mining Holdings (Proprietary)
Limited; South Africa
Limited; South Africa
Resolution Copper Company; United States
Resolution Copper Company; United States
US$0.01 Common
US$0.01 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
100
100
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
Name of undertaking and country
of incorporation
Richards Bay Titanium Holdings
(Proprietary) Limited; South Africa
Share class
ZAR1.00 A Ordinary
shares
ZAR1.00 B
Ordinary shares
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
Rio de Contas Desenvolvimentos Minerais
Ltda; Brazil
BRL Quota shares
100
Rio Santa Rita Empreenimentos e-
Particiacoes Ltda; Brazil
Rio Sava Exploration DOO; Serbia
Rio Tinto (Commercial Paper) Limited;
Australia(a)
Rio Tinto Advisory Services Pty Limited;
Australia
Rio Tinto Alcan Fund Inc.; Canada
BRL Quota shares
100
US$ Founder's
shares
100
AUD Ordinary shares 100
AUD Ordinary shares 100
CAD Ordinary shares 100
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Rio Tinto Alcan Inc.; Canada
CAD Common
shares
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Rio Tinto Alcan International Ltd. / Rio Tinto
Alcan International Ltee; Canada
CAD Common
shares
100
100
Rio Tinto Alcan Technology Pty Ltd; Australia AUD Ordinary shares 100
Rio Tinto Aluminium (Bell Bay) Limited;
Australia
Rio Tinto Aluminium (Holdings) Limited;
Australia
Rio Tinto Aluminium Bell Bay Sales Pty
Limited; Australia
AUD Ordinary shares 100
AUD Ordinary shares 100
AUD Ordinary shares 100
Rio Tinto Aluminium Limited; Australia
AUD Ordinary shares 100
Rio Tinto Aluminium Pechiney; France
Rio Tinto Aluminium Services Pty Limited;
Australia
€10.00 Ordinary
shares
100
AUD Ordinary shares 100
Rio Tinto America Holdings Inc.; United
States
US$0.01 Class A
Common shares
Rio Tinto America Inc.; United States
Rio Tinto Angola (SU), LDA.; Angola
US$100.00 Series A
Preferred stock
US$100.00 Common
shares
AOK Common
shares
100
100
100
100
Rio Tinto Asia Ltd; Hong Kong
HKD Ordinary shares 100
Rio Tinto Asia Pty. Limited; Australia(a)
AUD Class A shares
100
AUD Ordinary shares 100
Rio Tinto AuM Company; United States
US$0.01 Common
shares
Rio Tinto Australian Holdings Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto Bahia Holdings Limited; United
Kingdom
US$1.00 Ordinary
shares
US$0.32
Ordinary shares
100
100
100
100
Rio Tinto Base Metals Pty Limited;
Australia(a)
AUD Ordinary shares 100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Rua Coronel Durval Matos, S/N Centro, Municipio de Jaguaquara,
Estado da Bahia, CEP, 45345-000, Brazil
SIG, QUADRA 04, Lote 75, Sala 109 Parte E, Edificio Capital Financial
Center, Brasilia DF, CEP, 71.610-440, Brazil
Bulevar Milutina Milankovića 1i, 11070 Novi Beograd, Serbia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
725 rue Aristide Bergès, 38340, Voreppe, France
155 Charlotte Street, Brisbane QLD 4000, Australia
100
251 Little Falls Drive, Wilmington DE 19808, United States
100
100
100
100
251 Little Falls Drive, Wilmington DE 19808, United States
Edificio Kilamba, 20. andar, Avenida 4 de Fevereiro, Marginal de
Luanda, Luanda, Angola
6/F, Luk Kwok Centre, 72 Gloucester Road, Wan Chai, Hong Kong
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
100
251 Little Falls Drive, Wilmington DE 19808, United States
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
298
298
298
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299299
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
of incorporation
Share class
Rio Tinto Brazilian Holdings Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto Brazilian Investments Limited;
United Kingdom
US$1.00
Ordinary shares
£1.00 Ordinary
shares
US$1.00
Ordinary shares
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Canada Finance Limited; United
Kingdom
US$1.00 Ordinary
shares
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Canada Inc; Canada
CAD Class B shares 100
CAD Class C shares 100
CAD Class D shares 100
CAD Class J shares 100
Rio Tinto Canada Management Inc./ Rio Tinto
Gestion Canada Inc.; Canada
CAD Common
shares
Rio Tinto Chile SpA; Chile
Rio Tinto Coal (Clermont) Pty Ltd; Australia
Rio Tinto Coal Australia Pty Limited;
Australia
Rio Tinto Coal Investments Pty Limited;
Australia
Rio Tinto Coal NSW Holdings Limited;
Australia(a)
US$1.00 Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
Rio Tinto Commercial Americas Inc.; United
States
US$0.01 Common
shares
Rio Tinto Commercial GmbH; Germany
Rio Tinto Commercial Pte. Ltd.; Singapore
Rio Tinto Desenvolvimentos Minerais Ltda.;
Brazil
€1.00 Common
shares
US$1.00 Ordinary
shares
BRL Quotas shares
Rio Tinto Diamonds Limited; United Kingdom US$1.00 Ordinary
shares
Rio Tinto Diamonds Netherlands B.V.;
Netherlands
€500.00 Ordinary
shares
100
100
100
100
100
100
100
100
100
100
100
100
Rio Tinto Diamonds NV; Belgium
€ Ordinary shares
100
Rio Tinto Eastern Investments B.V.;
Netherlands
US$12,510,234,21
7.00 Ordinary
shares
Rio Tinto Energy America Inc.; United States US$0.01 Common
Rio Tinto Energy Limited; United Kingdom
Rio Tinto Escondida Limited; Bermuda
shares
US$1.00 Ordinary
shares
US$1.00 Common
shares
Rio Tinto European Holdings Limited; United
Kingdom(b)
£1.00 Ordinary
shares
Rio Tinto Exploration (Asia) Holdings Pte.
Ltd.; Singapore
US$1.00 Ordinary
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Av. Presidente Riesco 5435, Of. 1302, Las Condes, Santiago, Chile
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
SIG Quadra 04, Lote 175, Torre A, Salas 106 a 109, Edificio Capital
Financial Center, Brasilia, CEP 70610-440, Brazil
6 St James's Square, London, SW1Y 4AD, United Kingdom
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
Hoveniersstraat 53, 2018 Antwerp, Belgium, Belgium
6 St James's Square, London, SW1Y 4AD, United Kingdom
251 Little Falls Drive, Wilmington DE 19808, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
22 Canon’s Court, Victoria Street, Hamilton, HM 12, Bermuda
6 St James's Square, London, SW1Y 4AD, United Kingdom
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
300
300
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
-
100
INR10.00 Ordinary
shares
Rio Tinto Exploration Dunav d.o.o. Beograd -
Novi Beograd; Serbia(c)
Rio Tinto Exploration Finland OY; Finland
CAD Class D shares 100
-
-
€ Ordinary shares
100
Rio Tinto Exploration India Private Limited;
India(d)
Rio Tinto Exploration Kazakhstan LLP;
Kazakhstan(c)
Rio Tinto Exploration Pty Limited; Australia(a) AUD Class B shares 100
100
100
100
100
1i Bulevar Milutina Milankovica, Belgrade, 11000, Serbia
PL 18, Helsinki, 00271, Finland
21st Floor, DLF Building No. 5, Tower A, DLF Cyber City Phase III,
Gurgaon, Haryana, 122002, India
Dostyk 310/G, Almaty, 050020, Kazakhstan
Financial statements continued
Financial statements
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
CAD Class C shares 100
100
300-815 West Hastings Street, Vancouver BC V6C 1B4, Canada
Name of undertaking and country
of incorporation
Share class
% of share
class held
by Group
companies
Effective
Group %
ownership
Rio Tinto Exploration (PNG) Limited; Papua
New Guinea(a)
Rio Tinto Exploration and Mining (India)
Private Limited; India(d)
Rio Tinto Exploration Canada Inc.; Canada
PGK1.00 Ordinary
shares
100
INR10.00 Ordinary
shares
CAD Class B shares 100
100
100
100
Registered office address
Section 15, Lot 15, Bernal Street, National Capital District, Port
Moresby, Papua New Guinea
21st Floor, DLF Building No. 5, Tower A, DLF Cyber City Phase III,
Gurgaon, Haryana, 122002, India
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Share class
Share class
ownership
ownership
Registered office address
Registered office address
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
Rio Tinto Brazilian Holdings Limited; United
Rio Tinto Brazilian Holdings Limited; United
£1.00 Ordinary
£1.00 Ordinary
Kingdom
Kingdom
Rio Tinto Brazilian Investments Limited;
Rio Tinto Brazilian Investments Limited;
£1.00 Ordinary
£1.00 Ordinary
United Kingdom
United Kingdom
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Canada Finance Limited; United
Rio Tinto Canada Finance Limited; United
US$1.00 Ordinary
US$1.00 Ordinary
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Kingdom
Kingdom
Rio Tinto Canada Inc; Canada
Rio Tinto Canada Inc; Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Rio Tinto Canada Management Inc./ Rio Tinto
Rio Tinto Canada Management Inc./ Rio Tinto
CAD Common
CAD Common
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
shares
shares
CAD Class B shares 100
CAD Class B shares 100
CAD Class C shares 100
CAD Class C shares 100
CAD Class D shares 100
CAD Class D shares 100
CAD Class J shares 100
CAD Class J shares 100
Gestion Canada Inc.; Canada
Gestion Canada Inc.; Canada
Rio Tinto Chile SpA; Chile
Rio Tinto Chile SpA; Chile
Rio Tinto Coal (Clermont) Pty Ltd; Australia
Rio Tinto Coal (Clermont) Pty Ltd; Australia
AUD Ordinary
AUD Ordinary
Rio Tinto Coal Australia Pty Limited;
Rio Tinto Coal Australia Pty Limited;
Rio Tinto Coal Investments Pty Limited;
Rio Tinto Coal Investments Pty Limited;
AUD Ordinary
AUD Ordinary
Rio Tinto Coal NSW Holdings Limited;
Rio Tinto Coal NSW Holdings Limited;
US$1.00 Ordinary
US$1.00 Ordinary
shares
shares
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
Australia
Australia
Australia
Australia
Australia(a)
Australia(a)
States
States
Rio Tinto Commercial GmbH; Germany
Rio Tinto Commercial GmbH; Germany
€1.00 Common
€1.00 Common
Rio Tinto Commercial Pte. Ltd.; Singapore
Rio Tinto Commercial Pte. Ltd.; Singapore
US$1.00 Ordinary
US$1.00 Ordinary
Rio Tinto Desenvolvimentos Minerais Ltda.;
Rio Tinto Desenvolvimentos Minerais Ltda.;
BRL Quotas shares
BRL Quotas shares
Brazil
Brazil
Rio Tinto Diamonds Limited; United Kingdom US$1.00 Ordinary
Rio Tinto Diamonds Limited; United Kingdom US$1.00 Ordinary
Rio Tinto Diamonds Netherlands B.V.;
Rio Tinto Diamonds Netherlands B.V.;
€500.00 Ordinary
€500.00 Ordinary
Netherlands
Netherlands
Rio Tinto Eastern Investments B.V.;
Rio Tinto Eastern Investments B.V.;
Netherlands
Netherlands
US$12,510,234,21
US$12,510,234,21
7.00 Ordinary
7.00 Ordinary
Rio Tinto Energy America Inc.; United States US$0.01 Common
Rio Tinto Energy America Inc.; United States US$0.01 Common
Rio Tinto Energy Limited; United Kingdom
Rio Tinto Energy Limited; United Kingdom
US$1.00 Ordinary
US$1.00 Ordinary
Rio Tinto Escondida Limited; Bermuda
Rio Tinto Escondida Limited; Bermuda
US$1.00 Common
US$1.00 Common
Rio Tinto European Holdings Limited; United
Rio Tinto European Holdings Limited; United
£1.00 Ordinary
£1.00 Ordinary
Rio Tinto Exploration (Asia) Holdings Pte.
Rio Tinto Exploration (Asia) Holdings Pte.
US$1.00 Ordinary
US$1.00 Ordinary
Kingdom(b)
Kingdom(b)
Ltd.; Singapore
Ltd.; Singapore
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Canada
Canada
Canada
Canada
Av. Presidente Riesco 5435, Of. 1302, Las Condes, Santiago, Chile
Av. Presidente Riesco 5435, Of. 1302, Las Condes, Santiago, Chile
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
SIG Quadra 04, Lote 175, Torre A, Salas 106 a 109, Edificio Capital
SIG Quadra 04, Lote 175, Torre A, Salas 106 a 109, Edificio Capital
Financial Center, Brasilia, CEP 70610-440, Brazil
Financial Center, Brasilia, CEP 70610-440, Brazil
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
22 Canon’s Court, Victoria Street, Hamilton, HM 12, Bermuda
22 Canon’s Court, Victoria Street, Hamilton, HM 12, Bermuda
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Rio Tinto Diamonds NV; Belgium
Rio Tinto Diamonds NV; Belgium
€ Ordinary shares
€ Ordinary shares
100
100
Hoveniersstraat 53, 2018 Antwerp, Belgium, Belgium
Hoveniersstraat 53, 2018 Antwerp, Belgium, Belgium
AUD Class C shares 100
100
37 Belmont Avenue, Belmont WA 6104, Australia
Rio Tinto Exploration Zambia Limited;
Zambia
Rio Tinto FalCon Diamonds Inc.; Canada
Rio Tinto Fer et Titane inc.; Canada
Rio Tinto Finance (USA) Inc.; United States
Rio Tinto Finance (USA) Limited; Australia(a)
AUD Ordinary
shares
ZMW1.00 Ordinary
shares
CAD1,000.00
Common shares
CAD Common
shares
US$1.00 Common
shares
AUD Ordinary
shares
Rio Tinto Finance (USA) plc; United Kingdom £1.00 Ordinary
Shares
Rio Tinto Commercial Americas Inc.; United
Rio Tinto Commercial Americas Inc.; United
US$0.01 Common
US$0.01 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Rio Tinto Finance Limited; Australia(a)
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Rio Tinto Finance plc; United Kingdom
Rio Tinto France S.A.S.; France
Rio Tinto Global Employment Company Pte.
Ltd.; Singapore
Rio Tinto Guinée S.A.; Guinea
Rio Tinto Holdings LLC; Mongolia
Rio Tinto Hydrogen Energy LLC; United
States(c)
Rio Tinto Iceland Ltd.; Iceland
Rio Tinto India Private Limited; India
Rio Tinto Indonesian Holdings Limited;
United Kingdom
Rio Tinto International Holdings Limited;
United Kingdom(b)
Rio Tinto Investments One Pty Limited;
Australia
Rio Tinto Investments Two Pty Limited;
Australia
AUD Ordinary
shares
£1.00 Ordinary
shares
US$1.00
Ordinary shares
€10.00 Ordinary
shares
US$1.00 Ordinary
shares
GNF100,000.00
Ordinary shares
MNT20,000.00
Ordinary shares
-
ISK1.00 Registered
shares
INR10.00 Ordinary
shares
£1.00 Ordinary
shares
US$1.00
Ordinary shares
£1.00 Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Suit FF08, No.4 Bishops Road, Kabulonga, Lusaka, Zambia
300-815 West Hastings Street, Vancouver BC V6C 1B4, Canada
1625 Route Marie-Victorin, Sorel-Tracy QC J3R 1M6, Canada
251 Little Falls Drive, Wilmington DE 19808, United States
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
100
100
100
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
Manquépas - Commune de Kaloum, République de Guinée, Guinea
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
251 Little Falls Drive, Wilmington DE 19808, United States
P.O. Box 244, IS-222, Hafnarfjördur, Iceland
21st Floor, DLF Building No. 5, Tower A, DLF Cyber City, Phase-III,
Gurugram, Haryana, 122022, India
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
300
300
300
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
301301
-
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
of incorporation
Share class
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
Rio Tinto Iron & Titanium (Suzhou) Co., Ltd;
China
US$1.00 Ordinary
shares
100
Rio Tinto Iron & Titanium GmbH; Germany(c)
Rio Tinto Iron & Titanium Holdings GmbH;
Germany(c)
-
-
Rio Tinto Iron & Titanium Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto Iron and Titanium Canada Inc. / Rio
Tinto Fer et Titane Canada Inc.; Canada
CAD Common
shares
Rio Tinto Iron Ore Atlantic Limited; United
Kingdom
US$1.00 Ordinary
shares
Rio Tinto Iron Ore Europe S.A.S.; France
€100.00 Ordinary
shares
Rio Tinto Iron Ore Trading China Limited;
United Kingdom
US$1.00 Ordinary
shares
Rio Tinto Japan Ltd; Japan
JPY500.00
Ordinary shares
Rio Tinto Jersey Holdings 2010 Limited;
Jersey
US$ Ordinary
shares
Rio Tinto Korea Ltd; Korea, Republic of
Rio Tinto London Limited; United Kingdom
KRW10,000.00
Ordinary shares
£1.00 Ordinary
shares
Rio Tinto Management Services South Africa
(Proprietary) Ltd; South Africa
ZAR2.00 Ordinary
shares
Rio Tinto Marketing Pte. Ltd.; Singapore
SGD1.00 Ordinary
shares
US$1.00
Ordinary share
Rio Tinto Marketing Services Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto Medical Plan Trustees Limited;
United Kingdom
Rio Tinto Metals Limited; United Kingdom
Rio Tinto Minera Peru Limitada SAC; Peru
Rio Tinto Mineracao do Brasil Ltda; Brazil
Rio Tinto Minerals Asia Pte Ltd; Singapore
Rio Tinto Minerals Development Limited;
United Kingdom
£1.00 Ordinary
shares
£1.00 Ordinary
shares
US$1.00
Ordinary share
PEN100.00
Ordinary shares
BRL1.00 Quotas
shares
SGD1.00 Ordinary
shares
US$1.00
Ordinary shares
£0.25 Ordinary
shares
US$1.00
Ordinary shares
Rio Tinto Minerals Exploration (Beijing) Co.,
Ltd; China
US$1.00 Ordinary
shares
Rio Tinto Minerals Inc.; United States
US$0.01 Common
shares
Rio Tinto Minerals Limited; United Kingdom £1.00 Ordinary
shares
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
302
302
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
100
100
100
100
100
100
100
100
100
100
100
100
100
418 Nanshi Street, Suzhou Industrial Park, Suzhou, 215021, China
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
6 St James's Square, London, SW1Y 4AD, United Kingdom
1625 Route Marie-Victorin, Sorel-Tracy QC J3R 1M6, Canada
6 St James's Square, London, SW1Y 4AD, United Kingdom
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
6 St James's Square, London, SW1Y 4AD, United Kingdom
8th Floor, Kojimachi Diamond Building, 1 Kojimachi 4-chome, Chiyoda-
ku, Tokyo 102-0083, Japan
22 Grenville Street, St Helier, Channel Islands, JE4 8PX, Jersey
2nd Floor, JS Tower, 6 Teheran-ro 79-gil, Gangnam-Gu, Seoul, 135-877,
Korea
6 St James's Square, London, SW1Y 4AD, United Kingdom
1 Harries Road, Illovo, Sandton, 2196, South Africa
100
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
Av. La Paz 1049, Oficina 503, Miraflores, Lima, 18, Peru
SIG Quadra 04, Lote 75, Torre A Sala, 109 Parte B, Edificio Capital
Financial Center, , Brasilia, CEP, 70610-440, Brazil
100
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
Units 15 - 16, 18/F, China World Office Building 2, No. 1 Jianguomenwai
Dajie, Chaoyang District, Beijing, China
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
6 St James's Square, London, SW1Y 4AD, United Kingdom
Financial statements continued
Financial statements
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Share class
Share class
ownership
ownership
Registered office address
Registered office address
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
Rio Tinto Iron & Titanium (Suzhou) Co., Ltd;
Rio Tinto Iron & Titanium (Suzhou) Co., Ltd;
US$1.00 Ordinary
US$1.00 Ordinary
418 Nanshi Street, Suzhou Industrial Park, Suzhou, 215021, China
418 Nanshi Street, Suzhou Industrial Park, Suzhou, 215021, China
China
China
Germany(c)
Germany(c)
Kingdom
Kingdom
Kingdom
Kingdom
Rio Tinto Iron & Titanium GmbH; Germany(c)
Rio Tinto Iron & Titanium GmbH; Germany(c)
Rio Tinto Iron & Titanium Holdings GmbH;
Rio Tinto Iron & Titanium Holdings GmbH;
Rio Tinto Iron & Titanium Limited; United
Rio Tinto Iron & Titanium Limited; United
£1.00 Ordinary
£1.00 Ordinary
Rio Tinto Iron and Titanium Canada Inc. / Rio
Rio Tinto Iron and Titanium Canada Inc. / Rio
CAD Common
CAD Common
Tinto Fer et Titane Canada Inc.; Canada
Tinto Fer et Titane Canada Inc.; Canada
shares
shares
Rio Tinto Iron Ore Atlantic Limited; United
Rio Tinto Iron Ore Atlantic Limited; United
US$1.00 Ordinary
US$1.00 Ordinary
Rio Tinto Iron Ore Trading China Limited;
Rio Tinto Iron Ore Trading China Limited;
US$1.00 Ordinary
US$1.00 Ordinary
United Kingdom
United Kingdom
Rio Tinto Japan Ltd; Japan
Rio Tinto Japan Ltd; Japan
Rio Tinto Jersey Holdings 2010 Limited;
Rio Tinto Jersey Holdings 2010 Limited;
US$ Ordinary
US$ Ordinary
Jersey
Jersey
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
Alfred-Herrhausen-Allee 3-5, 65760, Eschborn, Germany
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
1625 Route Marie-Victorin, Sorel-Tracy QC J3R 1M6, Canada
1625 Route Marie-Victorin, Sorel-Tracy QC J3R 1M6, Canada
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
8th Floor, Kojimachi Diamond Building, 1 Kojimachi 4-chome, Chiyoda-
8th Floor, Kojimachi Diamond Building, 1 Kojimachi 4-chome, Chiyoda-
ku, Tokyo 102-0083, Japan
ku, Tokyo 102-0083, Japan
22 Grenville Street, St Helier, Channel Islands, JE4 8PX, Jersey
22 Grenville Street, St Helier, Channel Islands, JE4 8PX, Jersey
Rio Tinto Iron Ore Europe S.A.S.; France
Rio Tinto Iron Ore Europe S.A.S.; France
€100.00 Ordinary
€100.00 Ordinary
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
Rio Tinto Korea Ltd; Korea, Republic of
Rio Tinto Korea Ltd; Korea, Republic of
2nd Floor, JS Tower, 6 Teheran-ro 79-gil, Gangnam-Gu, Seoul, 135-877,
2nd Floor, JS Tower, 6 Teheran-ro 79-gil, Gangnam-Gu, Seoul, 135-877,
Korea
Korea
Rio Tinto London Limited; United Kingdom
Rio Tinto London Limited; United Kingdom
£1.00 Ordinary
£1.00 Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Management Services South Africa
Rio Tinto Management Services South Africa
ZAR2.00 Ordinary
ZAR2.00 Ordinary
(Proprietary) Ltd; South Africa
(Proprietary) Ltd; South Africa
Rio Tinto Marketing Pte. Ltd.; Singapore
Rio Tinto Marketing Pte. Ltd.; Singapore
SGD1.00 Ordinary
SGD1.00 Ordinary
1 Harries Road, Illovo, Sandton, 2196, South Africa
1 Harries Road, Illovo, Sandton, 2196, South Africa
Rio Tinto Marketing Services Limited; United
Rio Tinto Marketing Services Limited; United
£1.00 Ordinary
£1.00 Ordinary
Kingdom
Kingdom
United Kingdom
United Kingdom
Rio Tinto Medical Plan Trustees Limited;
Rio Tinto Medical Plan Trustees Limited;
£1.00 Ordinary
£1.00 Ordinary
Rio Tinto Metals Limited; United Kingdom
Rio Tinto Metals Limited; United Kingdom
£1.00 Ordinary
£1.00 Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Minera Peru Limitada SAC; Peru
Rio Tinto Minera Peru Limitada SAC; Peru
PEN100.00
PEN100.00
Rio Tinto Mineracao do Brasil Ltda; Brazil
Rio Tinto Mineracao do Brasil Ltda; Brazil
BRL1.00 Quotas
BRL1.00 Quotas
Rio Tinto Minerals Asia Pte Ltd; Singapore
Rio Tinto Minerals Asia Pte Ltd; Singapore
SGD1.00 Ordinary
SGD1.00 Ordinary
Rio Tinto Minerals Development Limited;
Rio Tinto Minerals Development Limited;
£0.25 Ordinary
£0.25 Ordinary
United Kingdom
United Kingdom
Av. La Paz 1049, Oficina 503, Miraflores, Lima, 18, Peru
Av. La Paz 1049, Oficina 503, Miraflores, Lima, 18, Peru
SIG Quadra 04, Lote 75, Torre A Sala, 109 Parte B, Edificio Capital
SIG Quadra 04, Lote 75, Torre A Sala, 109 Parte B, Edificio Capital
Financial Center, , Brasilia, CEP, 70610-440, Brazil
Financial Center, , Brasilia, CEP, 70610-440, Brazil
shares
shares
-
-
-
-
shares
shares
shares
shares
shares
shares
shares
shares
JPY500.00
JPY500.00
Ordinary shares
Ordinary shares
shares
shares
KRW10,000.00
KRW10,000.00
Ordinary shares
Ordinary shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
US$1.00
US$1.00
Ordinary share
Ordinary share
shares
shares
US$1.00
US$1.00
Ordinary share
Ordinary share
Ordinary shares
Ordinary shares
shares
shares
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
shares
shares
shares
shares
shares
shares
100
100
-
-
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Name of undertaking and country
of incorporation
Share class
Rio Tinto Mining and Exploration Inc.; United
States
US$1.00 Common
shares
Rio Tinto Mining and Exploration Limited;
United Kingdom
£1.00 Ordinary
shares
US$1.00
Ordinary shares
Rio Tinto Mining and Exploration S.A.C.; Peru PEN0.50 Ordinary
shares
Rio Tinto Mining Commercial (Shanghai) Co.,
Ltd.; China
CNY1.00 Ordinary
shares
Rio Tinto Mongolia LLC; Mongolia
MNT1,240.00
Common shares
Rio Tinto Nominees Limited; United Kingdom £1.00 Ordinary
shares
Rio Tinto OT Management Limited; United
Kingdom
US$1.00 Ordinary
shares
Rio Tinto Overseas Holdings Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto PACE Australia Pty Limited;
Australia(a)
Rio Tinto PACE Canada Inc. / Gestion Rio
Tinto PACE Canada Inc.; Canada
Rio Tinto Peru Limited; United Kingdom
US$1.00
Ordinary shares
AUD Ordinary
shares
CAD Ordinary
shares
US$1.00 Ordinary
shares
Rio Tinto Potash Management Inc. / Rio Tinto
Potasse Management Inc.; Canada
CAD Common
shares
Rio Tinto Procurement (Singapore) Pte Ltd;
Singapore
US$1.00 Ordinary
shares
100
100
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
Rio Tinto Pte Ltd; Singapore
Rio Tinto Saskatchewan Management Inc.;
Canada
Rio Tinto Saskatchewan Potash Holdings
General Partner Inc.; Canada
SGD1.00 Ordinary
shares
CAD Common
shares
CAD Common
shares
Rio Tinto Saskatchewan Potash Holdings
Limited Partnership; Canada(c)
-
Rio Tinto Secretariat Limited; United
Kingdom
Rio Tinto Services Inc.; United States
Rio Tinto Services Limited; Australia(a)
Rio Tinto Shared Services Pty Limited;
Australia
£1.00 Ordinary
shares
US$0.01 Common
shares
AUD Ordinary
shares
AUD Ordinary
shares
100
100
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
Rio Tinto Shipping (Asia) Pte. Ltd.; Singapore US$1.00 Ordinary
Rio Tinto Shipping Pty. Limited.; Australia(a)
shares
AUD Ordinary
shares
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Simfer UK Limited; United Kingdom US$1.00 Ordinary
Rio Tinto Singapore Holdings Pte Ltd;
Singapore
shares
SGD1.00 Ordinary
shares
US$
Ordinary shares
Rio Tinto Minerals Exploration (Beijing) Co.,
Rio Tinto Minerals Exploration (Beijing) Co.,
US$1.00 Ordinary
US$1.00 Ordinary
Units 15 - 16, 18/F, China World Office Building 2, No. 1 Jianguomenwai
Units 15 - 16, 18/F, China World Office Building 2, No. 1 Jianguomenwai
Ltd; China
Ltd; China
Dajie, Chaoyang District, Beijing, China
Dajie, Chaoyang District, Beijing, China
Rio Tinto Minerals Inc.; United States
Rio Tinto Minerals Inc.; United States
US$0.01 Common
US$0.01 Common
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
15 West South Temple, Suite 600, Salt Lake City UT 84101, United
States
States
Rio Tinto Minerals Limited; United Kingdom £1.00 Ordinary
Rio Tinto Minerals Limited; United Kingdom £1.00 Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
251 Little Falls Drive, Wilmington DE 19808, United States
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
100
Av. La Paz 1049, Oficina 503, Miraflores, Lima, 18, Peru
Room 328, 3rd Floor, Unit 2, 231 Shibocun Road, Shanghai, Pilot Free
Trade Zone, 200125 , China
Level 17, Shangri-La Center , Olympic Street 19A, Sukhbaatar District,
Ulaanbaatar, 14214, Mongolia
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
6 St James's Square, London, SW1Y 4AD, United Kingdom
300-815 West Hastings Street, Vancouver BC V6C 1B4, Canada
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
300-815 West Hastings Street, Vancouver BC V6C 1B4, Canada
5300-66 Wellington Street West, Toronto ON M5K 1E6, Canada
5300-66 Wellington Street West, Toronto ON M5K 1E6, Canada
6 St James's Square, London, SW1Y 4AD, United Kingdom
251 Little Falls Drive, Wilmington DE 19808, United States
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
302
302
302
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
303303
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
of incorporation
Rio Tinto South East Asia Limited; United
Kingdom
Share class
£1.00 Ordinary
shares
US$1.00
Ordinary shares
Rio Tinto Staff Fund (Retired) Pty Limited;
Australia(a)
AUD Ordinary
shares
Rio Tinto Sulawesi Holdings Limited; United
Kingdom
US$1.00 Ordinary
shares
Rio Tinto Technological Resources Inc.;
United States
Rio Tinto Technological Resources UK
Limited; United Kingdom
US$0.01 Common
shares
US$1.00 Ordinary
shares
Rio Tinto Trading (Shanghai) Co., Ltd.; China US$1.00 Ordinary
shares
Rio Tinto Uranium Limited; United Kingdom US$1.00 Ordinary
shares
Rio Tinto Western Holdings Limited; United
Kingdom
£1.00 Ordinary
shares
Rio Tinto Winu Pty Limited; Australia(a)
US$1.00
Ordinary shares
AUD Ordinary
shares
Riversdale Connections (Proprietary) Ltd;
South Africa
ZAR1.00 Ordinary
shares
Robe River Limited; Australia
Rocklea Station Pty Ltd; Australia
RTA AAL Australia Limited; Australia
RTA Boyne Limited; Australia
RTA Gove Pty Limited; Australia
RTA Holdco 1 Limited; United Kingdom
RTA Holdco 4 Limited; United Kingdom
RTA Holdco 7 Limited; United Kingdom
RTA Holdco 8 Limited; United Kingdom
RTA Holdco Australia 1 Pty Ltd; Australia
RTA Holdco Australia 3 Pty Ltd; Australia
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Class A
shares
AUD1.00 Class B
shares
US$0.0001
Ordinary shares
US$1.00 Ordinary
shares
US$0.732815
Ordinary shares
US$1.00 Ordinary
shares
US$1.00 Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
100
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
251 Little Falls Drive, Wilmington DE 19808, United States
6 St James's Square, London, SW1Y 4AD, United Kingdom
41/F Wheelock Square, No. 1717 West Nanjing Road, Jing’ an District,
Shanghai, 200040, China
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
100
100
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Ground Floor-Cypress Place North, Woodmead Business Park, 140/142
Western Service Road, Woodmead, 2191, South Africa
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
304
304
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Financial statements continued
Financial statements
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Share class
Share class
ownership
ownership
Registered office address
Registered office address
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
Rio Tinto South East Asia Limited; United
Rio Tinto South East Asia Limited; United
£1.00 Ordinary
£1.00 Ordinary
Kingdom
Kingdom
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
100
100
Rio Tinto Staff Fund (Retired) Pty Limited;
Rio Tinto Staff Fund (Retired) Pty Limited;
AUD Ordinary
AUD Ordinary
Rio Tinto Sulawesi Holdings Limited; United
Rio Tinto Sulawesi Holdings Limited; United
US$1.00 Ordinary
US$1.00 Ordinary
Australia(a)
Australia(a)
Kingdom
Kingdom
United States
United States
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Technological Resources Inc.;
Rio Tinto Technological Resources Inc.;
US$0.01 Common
US$0.01 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Rio Tinto Technological Resources UK
Rio Tinto Technological Resources UK
US$1.00 Ordinary
US$1.00 Ordinary
Limited; United Kingdom
Limited; United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Trading (Shanghai) Co., Ltd.; China US$1.00 Ordinary
Rio Tinto Trading (Shanghai) Co., Ltd.; China US$1.00 Ordinary
41/F Wheelock Square, No. 1717 West Nanjing Road, Jing’ an District,
41/F Wheelock Square, No. 1717 West Nanjing Road, Jing’ an District,
Rio Tinto Uranium Limited; United Kingdom US$1.00 Ordinary
Rio Tinto Uranium Limited; United Kingdom US$1.00 Ordinary
Rio Tinto Western Holdings Limited; United
Rio Tinto Western Holdings Limited; United
£1.00 Ordinary
£1.00 Ordinary
Kingdom
Kingdom
Shanghai, 200040, China
Shanghai, 200040, China
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
Rio Tinto Winu Pty Limited; Australia(a)
Rio Tinto Winu Pty Limited; Australia(a)
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Riversdale Connections (Proprietary) Ltd;
Riversdale Connections (Proprietary) Ltd;
ZAR1.00 Ordinary
ZAR1.00 Ordinary
Ground Floor-Cypress Place North, Woodmead Business Park, 140/142
Ground Floor-Cypress Place North, Woodmead Business Park, 140/142
South Africa
South Africa
Robe River Limited; Australia
Robe River Limited; Australia
Western Service Road, Woodmead, 2191, South Africa
Western Service Road, Woodmead, 2191, South Africa
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Rocklea Station Pty Ltd; Australia
Rocklea Station Pty Ltd; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Australia
Australia
Australia
Australia
Australia
RTA AAL Australia Limited; Australia
RTA AAL Australia Limited; Australia
RTA Boyne Limited; Australia
RTA Boyne Limited; Australia
RTA Gove Pty Limited; Australia
RTA Gove Pty Limited; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
RTA Holdco 1 Limited; United Kingdom
RTA Holdco 1 Limited; United Kingdom
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
RTA Holdco 4 Limited; United Kingdom
RTA Holdco 4 Limited; United Kingdom
US$1.00 Ordinary
US$1.00 Ordinary
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
RTA Holdco 7 Limited; United Kingdom
RTA Holdco 7 Limited; United Kingdom
US$1.00 Ordinary
US$1.00 Ordinary
RTA Holdco 8 Limited; United Kingdom
RTA Holdco 8 Limited; United Kingdom
US$1.00 Ordinary
US$1.00 Ordinary
RTA Holdco Australia 1 Pty Ltd; Australia
RTA Holdco Australia 1 Pty Ltd; Australia
AUD Ordinary
AUD Ordinary
RTA Holdco Australia 3 Pty Ltd; Australia
RTA Holdco Australia 3 Pty Ltd; Australia
AUD Ordinary
AUD Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
US$1.00
US$1.00
Ordinary shares
Ordinary shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Class A
AUD Class A
shares
shares
AUD1.00 Class B
AUD1.00 Class B
shares
shares
US$0.0001
US$0.0001
Ordinary shares
Ordinary shares
shares
shares
US$0.732815
US$0.732815
Ordinary shares
Ordinary shares
shares
shares
shares
shares
shares
shares
shares
shares
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Name of undertaking and country
of incorporation
RTA Holdco Australia 5 Pty Ltd; Australia
RTA Holdco Australia 6 Pty Ltd; Australia
RTA HOLDCO FRANCE 1 S.A.S.; France
RTA HOLDCO FRANCE 2 S.A.S.; France
RTA Pacific Pty Limited; Australia
RTA Sales Pty Ltd; Australia
RTA Smelter Development Pty Limited;
Australia
RTA Weipa Pty Ltd; Australia
RTA Yarwun Pty Ltd; Australia
RTAlcan 2 LLC; United States
RTAlcan 3 LLC; United States
RTLDS Aus Pty Ltd; Australia(a)
RTLDS UK Limited; United Kingdom
RTPDS Aus Pty Ltd; Australia
Share class
AUD Ordinary
shares
AUD Ordinary
shares
€10.00 Ordinary
shares
€10.00 Ordinary
shares
AUD Ordinary
shares
AUD Class A
shares
AUD
Class B shares
AUD Ordinary
shares
AUD Ordinary
shares
AUD Ordinary
shares
US$ Common
shares
US$ Common
shares
AUD Ordinary
shares
£1.00 Ordinary
shares
AUD Ordinary
shares
Scheuch Unterstuetzungskasse GmbH;
Germany
€51.129 Ordinary
shares
Skymont Corporation; United States
US$ Common
shares
Sohio Western Mining Company; United
States
US$100.00
Common shares
Solwezi Metals Exploration Limited; Zambia
ZMW1.00 Ordinary
shares
Southern Copper Pty. Limited; Australia
AUD A shares
AUD B shares
AUD Ordinary
shares
Swift Current Land & Cattle LLC; United
States(c)
-
Swiss Aluminium Australia Limited; Australia AUD Ordinary
shares
AUD Stock Unit A
shares
AUD Stock Unit B
shares
AUD Stock Unit C
shares
£1.00 Ordinary
shares
AUD A shares
AUD B shares
TBAC Limited; United Kingdom
Technological Resources Pty. Limited;
Australia(a)
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
60 Avenue Charles de Gaulle, 92200, Neuilly-Sur-Seine, France
155 Charlotte Street, Brisbane QLD 4000, Australia
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
100
100
100
100
100
100
100
100
100
100
100
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
6 St James's Square, London, SW1Y 4AD, United Kingdom
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Alusingenplatz 1, D-78221, Singen, Germany
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Block A, Suites GF05-GF08, 4 Bishops Office Park, Bishops Road,
Kabulonga, Lusaka, Zambia
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
100
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
100
155 Charlotte Street, Brisbane QLD 4000, Australia
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
304
304
304
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Financial statements continued
Notes to the 2021 financial statements
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
100
100
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
251 Little Falls Drive, Wilmington DE 19808, United States
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
100
100
100
100
100
100
100
100
100
100
100
6 St James's Square, London, SW1Y 4AD, United Kingdom
1108 E. South Union Avenue, Midvale UT 84047, United States
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
251 Little Falls Drive, Wilmington DE 19808, United States
100
-
100
100
100
100
100
100
100
100
100
100
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
of incorporation
Share class
The Barrier Corporation (Vic.) Pty. Limited;
Australia(a)(d)
AUD Ordinary
shares
The Kelian Community and Forest Protection
Trust; Singapore(c)
-
The Pyrites Company, Inc.; United States
US$1.00 Common
shares
The Roberval and Saguenay Railway
Company/ La Compagnie du Chemin de Fer
Roberval Saguenay; Canada
The Zinc Corporation Pty Ltd; Australia
Thos. W. Ward Limited; United Kingdom
CAD100.00 Ordinary
shares
100
CAD100.00
Preference shares
6% non-cumulative
AUD Ordinary
shares
AUD Z Class
Ordinary shares
£0.25 Ordinary
shares
Three Crowns Insurance Company; United
States
US$2.00 Common
shares
Tinto Holdings Australia Pty. Limited;
Australia
Trans Territory Pipeline Pty Limited;
Australia
U.S. Borax Inc.; United States
Victoria Technology Inc.; United States(a)
AUD Ordinary
shares
AUD Ordinary
shares
US$0.10 Common
shares
US$1.00 Ordinary
shares
Waste Solutions and Recycling LLC; United
States
US$ Unit shares
100
West Kutai Foundation Limited; Singapore(c)
-
Wimmera Industrial Minerals Pty. Limited;
Australia(a)
AUD Ordinary
shares
Winchester South Development Company
Proprietary Limited; Australia
AUD Ordinary
shares
Wyoming Coal Resources Company; United
States
US$0.01 Common
shares
-
100
100
100
306
306
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Financial statements continued
Financial statements
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
undertakings and significant holdings in undertakings other than subsidiary companies
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Wholly owned subsidiary undertakings continued
Wholly owned subsidiary undertakings continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Share class
Share class
ownership
ownership
Registered office address
Registered office address
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
The Barrier Corporation (Vic.) Pty. Limited;
The Barrier Corporation (Vic.) Pty. Limited;
AUD Ordinary
AUD Ordinary
Australia(a)(d)
Australia(a)(d)
The Kelian Community and Forest Protection
The Kelian Community and Forest Protection
Trust; Singapore(c)
Trust; Singapore(c)
The Pyrites Company, Inc.; United States
The Pyrites Company, Inc.; United States
US$1.00 Common
US$1.00 Common
shares
shares
-
-
shares
shares
The Roberval and Saguenay Railway
The Roberval and Saguenay Railway
CAD100.00 Ordinary
CAD100.00 Ordinary
Company/ La Compagnie du Chemin de Fer
Company/ La Compagnie du Chemin de Fer
shares
shares
Roberval Saguenay; Canada
Roberval Saguenay; Canada
CAD100.00
CAD100.00
Preference shares
Preference shares
100
100
6% non-cumulative
6% non-cumulative
The Zinc Corporation Pty Ltd; Australia
The Zinc Corporation Pty Ltd; Australia
AUD Ordinary
AUD Ordinary
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Canada
Thos. W. Ward Limited; United Kingdom
Thos. W. Ward Limited; United Kingdom
£0.25 Ordinary
£0.25 Ordinary
6 St James's Square, London, SW1Y 4AD, United Kingdom
6 St James's Square, London, SW1Y 4AD, United Kingdom
100
100
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
States
States
Australia
Australia
Australia
Australia
Tinto Holdings Australia Pty. Limited;
Tinto Holdings Australia Pty. Limited;
Trans Territory Pipeline Pty Limited;
Trans Territory Pipeline Pty Limited;
U.S. Borax Inc.; United States
U.S. Borax Inc.; United States
US$0.10 Common
US$0.10 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Waste Solutions and Recycling LLC; United
Waste Solutions and Recycling LLC; United
US$ Unit shares
US$ Unit shares
100
100
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
West Kutai Foundation Limited; Singapore(c)
West Kutai Foundation Limited; Singapore(c)
-
-
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
10 Collyer Quay, #10-01 Ocean Financial Centre, 049315, Singapore
Wimmera Industrial Minerals Pty. Limited;
Wimmera Industrial Minerals Pty. Limited;
AUD Ordinary
AUD Ordinary
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
States
States
Australia(a)
Australia(a)
States
States
Winchester South Development Company
Winchester South Development Company
AUD Ordinary
AUD Ordinary
Proprietary Limited; Australia
Proprietary Limited; Australia
Wyoming Coal Resources Company; United
Wyoming Coal Resources Company; United
US$0.01 Common
US$0.01 Common
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
shares
shares
AUD Z Class
AUD Z Class
Ordinary shares
Ordinary shares
shares
shares
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
shares
Name of undertaking and country
of incorporation
201 Logistics Center, LLC; United States(c)
7600 West Center, LLC; United States(c)
AGM Holding Company Pte. Ltd.; Singapore
Alufluor AB; Sweden
Aluminerie Alouette Inc.; Canada
Aluminerie De Bécancour, Inc.; Canada
Aluminium & Chemie Rotterdam B.V.;
Netherlands
Asia Gold Mongolia LLC; Mongolia
Asia Naran Bulag LLC; Mongolia
Share class
-
-
US$ Ordinary
shares
SEK1,000.00
Ordinary shares
CAD Ordinary
shares
CAD1.00 Ordinary
shares
€4,555.00
Ordinary shares
MNT1,250.00
Common shares
MNT1,000.00
Common shares
Balkhash Saryshagan LLP; Kazakhstan(c)
-
Three Crowns Insurance Company; United
Three Crowns Insurance Company; United
US$2.00 Common
US$2.00 Common
1108 E. South Union Avenue, Midvale UT 84047, United States
1108 E. South Union Avenue, Midvale UT 84047, United States
Bektau B.V.; Netherlands
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Level 7, 360 Collins Street, Melbourne VIC 3000, Australia
Boyne Smelters Limited; Australia
€200.00 Ordinary
shares
AUD A1 Class
shares
AUD A2 Class
shares
AUD B1 Class
shares
Victoria Technology Inc.; United States(a)
Victoria Technology Inc.; United States(a)
US$1.00 Ordinary
US$1.00 Ordinary
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
CanPacific Potash Inc.; Canada(c)
-
Carol Lake Company Ltd.; Canada
Chlor Alkali Unit Pte Ltd; Singapore
CAD100.00
Ordinary shares
SGD1.00 Ordinary
shares
US$1.00 Ordinary
shares
68.4
% of share
class held
by Group
companies
Effective
Group %
ownership
-
-
50
50
Registered office address
1209 Orange Street, Wilmington DE 19801, United States
9090 S. Sandy Parkway, Sandy UT 84070, United States
100
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
50
40
50
40
Industrigatan 70, Box 902, S-25109, Helsingborg, Sweden
400, Chemin de la Pointe-Noire, C.P. 1650, Sept-Îles Québec G4R 5M9,
Canada
50.1
25.2
5555 Pierre Thibault Street, PO 30, Becancour, Quebec G0X 1B, Canada
65.8
65.8
Oude Maasweg 80, NL-3197 KJ, Botlek, Rotterdam, The Netherlands
100
100
-
75
100
100
100
-
100
100
50.8
50.8
75
75
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
Dostyk 310/G, Almaty, 050020, Kazakhstan
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
59.4
155 Charlotte Street, Brisbane QLD 4000, Australia
32
59
374 Third Avenue South, Saskatoon SK S7K 1M5, Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
68.4
12 Marina Boulevard, #20-01 MBFC Tower 3, 018982, Singapore
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Dampier Salt Limited; Australia
AUD Ordinary
shares
68.4
68.4
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Elysis Limited Partnership / Elysis Societe en
Commandite; Canada
US$1,000.00 Class
B shares
100
48.2
2323-1, Place Ville Marie, Montréal QC H3B 5M5, Canada
Enarotali Gold Project Limited; Jersey
£0.001 Ordinary
shares
25
25
IFC 5, St Helier, JE1 1ST, Jersey
Energy Resources of Australia Ltd; Australia AUD A Class
Ordinary shares
86.3
86.3
Level 5 NICTA Building B, 7 London Circuit, Canberra City ACT 2601,
Australia
Fabrica De Plasticos Mycsa, S.A.; Venezuela,
Bolivarian Republic of(d)
VEF1.00 Common
shares
49
49
Urbanización Industrial San Ignacio, parcela 2-A, vía San Pedro, Los
Teques, Estado Miranda, Venezuela
Global Hubco BV; Netherlands
€1.00 Ordinary
shares
33.3
33.3
Luna Arena, Herikerbergweg 238, 1101, CM, Amsterdam Zuidoost,
Netherlands
Gulf Power Company / La Compagnie Gulf
Power; Canada
CAD100.00
Ordinary shares
100
58.7
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Halco (Mining) Inc.; United States
US$100.00
Ordinary shares
45
45
30 Isabella Street, 3rd Floor, Pittsburgh, Pennsylvania, 15212, U.S.A.
306
306
306
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Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
undertakings and significant holdings in undertakings other than subsidiary companies continued
Name of undertaking and country
of incorporation
Heruga Exploration LLC; Mongolia
% of share
class held
by Group
companies
100
Share class
MNT12,500.00
Common shares
Hope Downs Marketing Company Pty Ltd;
Australia
IAL Holdings Singapore Pte. Ltd.; Singapore
AUD A Class shares 100
US$ Ordinary shares 100
Effective
Group %
ownership
50.8
50
50.8
Registered office address
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
Iron Ore Company of Canada; United States
Korgantas LLP; Kazakhstan(c)
US$1,000.00 Series
A shares
US$1,000.00
Series E shares
US$1,000.00
Series F shares
-
Lao Sanxai Minerals Company Limited; Lao
People's Democratic Republic
US$1.00 Ordinary
shares
Magma Arizona Railroad Company; United
States
Minera Escondida Ltda; Chile(c)
US$100.00
Common shares
-
Minmetals Rio Tinto Exploration Company
Limited; China
CNY1.00 Ordinary
shares
New Zealand Aluminium Smelters Ltd; New
Zealand
Northern Land Company Ltd; Canada
NZAS Retirement Fund Trustee Limited; New
Zealand
Oyu Tolgoi LLC; Mongolia(e)
Oyu Tolgoi Netherlands BV; Netherlands
Pechiney Reynolds Quebec, Inc.; United
States
Port d'Ehoala S.A.; Madagascar
Procivis Savoie; France
PT Hutan Lindung Kelian Lestari; Indonesia
PT Kelian Equatorial Mining; Indonesia
QIT Madagascar Minerals SA; Madagascar
Quebec North Shore and Labrador Railway
Company / Compagnie de Chemin de Fer du
Littoral Nord de Quebec et du Labrador Inc.;
Canada
NZD1.00 Class A
Ordinary shares
CAD1.00 Ordinary
shares
NZD Ordinary
shares
MNT10,000.00
Common shares
€100.00 Ordinary
shares
US$10.00 Common
shares
US$100.00
Preferred shares
US$100.00
Ordinary shares
€19.00 Ordinary
shares
IDR9,803.00
Ordinary shares
IDR1,080.00
Ordinary shares
US$10.00 Common
shares
US$ Certificats de
droit de vote
91.4
100
100
-
70
100
-
50
100
100
100
66
100
50
100
100
58.7
1209 Orange Street, Wilmington DE 19801, United States
75
70
55
30
50
Dostyk 310/G, Almaty, 050020, Kazakhstan
5th Floor, AGL Building, 33 Lane Xang Avenue, Hatsady Village,
Chanthaboury District, Vientiane Capital, Lao People's Democratic
Republic
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
Cerro el Plomo 6000, Piso 15, Santiago, 7560623, Chile
422-2, 4th Floor, Building #1 of Yongyou Industrial Park, Yazhou Bay
Science & Technology City, Yazhou District, Sanya City, Hainan
Province, China
79.4
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
59
79.4
33.5
50.8
2 Avalon Drive, Labrador City NL A2V 2V6, Canada
Level 2, 20 Customhouse Quay, Wellington, 6011, New Zealand
Level 12 Monnis Tower, Chinggis Avenue-15, 1st khoroo, Sukhbaatar
District, Ulaanbaatar, 14240, Mongolia
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
50.2
233 South 13th Street, Suite 1900, Lincoln NE 68508, United States
80
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
Madagascar
22.1
22.1
116 Quai Charles Roissard, 73000, Chambéry, France
99
90
84.2
0
99
90
80
Kelian Mine Site, West Kutai, East Kalimantan, Indonesia
Sampoerna Strategic Square, South Tower, Level 30, Jl. Jenderal
Sudirman Kav. 45-46, Jakarta, 12930, Indonesia
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
Madagascar
CAD27.59 Ordinary
shares
100
58.7
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Canada
Queensland Alumina Limited; Australia
AUD Class B shares 100
AUD Class C shares 100
AUD Class D shares 100
Regeneration Enterprises, Inc.; United States US$ Class A shares 25
Resolution Copper Mining LLC; United
States(c)
Richards Bay Mining (Proprietary) Limited;
South Africa
-
-
ZAR0.01 B Ordinary
shares
100
80
25
55
74
Plant Operations Building, Parsons Point, Gladstone QLD 4680,
Australia
2657 Windmill Parkway #302, Henderson NV 89074, United States
251 Little Falls Drive, Wilmington DE 19808, United States
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
308
308
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Financial statements continued
Financial statements
Iron Ore Company of Canada; United States
Iron Ore Company of Canada; United States
US$1,000.00 Series
US$1,000.00 Series
AUD B shares
76.4
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
undertakings and significant holdings in undertakings other than subsidiary companies continued
undertakings and significant holdings in undertakings other than subsidiary companies continued
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Heruga Exploration LLC; Mongolia
Heruga Exploration LLC; Mongolia
Hope Downs Marketing Company Pty Ltd;
Hope Downs Marketing Company Pty Ltd;
AUD A Class shares 100
AUD A Class shares 100
Australia
Australia
Australia
Australia
% of share
% of share
class held
class held
by Group
by Group
companies
companies
100
100
Effective
Effective
Group %
Group %
50.8
50.8
50
50
50.8
50.8
ownership
ownership
Registered office address
Registered office address
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
District, Ulaanbaatar, 14241, Mongolia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
IAL Holdings Singapore Pte. Ltd.; Singapore
IAL Holdings Singapore Pte. Ltd.; Singapore
US$ Ordinary shares 100
US$ Ordinary shares 100
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
Robe River Mining Co. Pty. Ltd.; Australia
AUD A shares
Name of undertaking and country
of incorporation
Share class
Richards Bay Titanium (Proprietary) Limited;
South Africa
ZAR0.01 B
Ordinary shares
Rightship Pty Ltd; Australia
Rio Tinto Orissa Mining Private Ltd; India
Rio Tinto Sohar Logistics LLC; Oman(d)
AUD Ordinary
shares
INR100.00 Ordinary
shares
OMR1.00 Ordinary
shares
Share class
Share class
MNT12,500.00
MNT12,500.00
Common shares
Common shares
A shares
A shares
US$1,000.00
US$1,000.00
Series E shares
Series E shares
US$1,000.00
US$1,000.00
Series F shares
Series F shares
MNT10,000.00
MNT10,000.00
Common shares
Common shares
shares
shares
shares
shares
shares
shares
shares
shares
US$100.00
US$100.00
Preferred shares
Preferred shares
US$100.00
US$100.00
Ordinary shares
Ordinary shares
€19.00 Ordinary
€19.00 Ordinary
shares
shares
IDR9,803.00
IDR9,803.00
Ordinary shares
Ordinary shares
IDR1,080.00
IDR1,080.00
Ordinary shares
Ordinary shares
91.4
91.4
100
100
100
100
-
-
70
70
100
100
-
-
50
50
100
100
100
100
100
100
66
66
100
100
50
50
100
100
100
100
99
99
90
90
84.2
84.2
Korgantas LLP; Kazakhstan(c)
Korgantas LLP; Kazakhstan(c)
Lao Sanxai Minerals Company Limited; Lao
Lao Sanxai Minerals Company Limited; Lao
US$1.00 Ordinary
US$1.00 Ordinary
People's Democratic Republic
People's Democratic Republic
shares
shares
Magma Arizona Railroad Company; United
Magma Arizona Railroad Company; United
US$100.00
US$100.00
Common shares
Common shares
States
States
Minera Escondida Ltda; Chile(c)
Minera Escondida Ltda; Chile(c)
Minmetals Rio Tinto Exploration Company
Minmetals Rio Tinto Exploration Company
CNY1.00 Ordinary
CNY1.00 Ordinary
Limited; China
Limited; China
shares
shares
-
-
-
-
New Zealand Aluminium Smelters Ltd; New
New Zealand Aluminium Smelters Ltd; New
NZD1.00 Class A
NZD1.00 Class A
Zealand
Zealand
Ordinary shares
Ordinary shares
Northern Land Company Ltd; Canada
Northern Land Company Ltd; Canada
CAD1.00 Ordinary
CAD1.00 Ordinary
NZAS Retirement Fund Trustee Limited; New
NZAS Retirement Fund Trustee Limited; New
NZD Ordinary
NZD Ordinary
Zealand
Zealand
Oyu Tolgoi LLC; Mongolia(e)
Oyu Tolgoi LLC; Mongolia(e)
Oyu Tolgoi Netherlands BV; Netherlands
Oyu Tolgoi Netherlands BV; Netherlands
€100.00 Ordinary
€100.00 Ordinary
Pechiney Reynolds Quebec, Inc.; United
Pechiney Reynolds Quebec, Inc.; United
US$10.00 Common
US$10.00 Common
States
States
Port d'Ehoala S.A.; Madagascar
Port d'Ehoala S.A.; Madagascar
Procivis Savoie; France
Procivis Savoie; France
PT Hutan Lindung Kelian Lestari; Indonesia
PT Hutan Lindung Kelian Lestari; Indonesia
PT Kelian Equatorial Mining; Indonesia
PT Kelian Equatorial Mining; Indonesia
75
75
70
70
55
55
30
30
50
50
59
59
79.4
79.4
33.5
33.5
50.8
50.8
80
80
99
99
90
90
80
80
80
80
25
25
55
55
74
74
58.7
58.7
1209 Orange Street, Wilmington DE 19801, United States
1209 Orange Street, Wilmington DE 19801, United States
Dostyk 310/G, Almaty, 050020, Kazakhstan
Dostyk 310/G, Almaty, 050020, Kazakhstan
5th Floor, AGL Building, 33 Lane Xang Avenue, Hatsady Village,
5th Floor, AGL Building, 33 Lane Xang Avenue, Hatsady Village,
Chanthaboury District, Vientiane Capital, Lao People's Democratic
Chanthaboury District, Vientiane Capital, Lao People's Democratic
Republic
Republic
Cerro el Plomo 6000, Piso 15, Santiago, 7560623, Chile
Cerro el Plomo 6000, Piso 15, Santiago, 7560623, Chile
422-2, 4th Floor, Building #1 of Yongyou Industrial Park, Yazhou Bay
422-2, 4th Floor, Building #1 of Yongyou Industrial Park, Yazhou Bay
Science & Technology City, Yazhou District, Sanya City, Hainan
Science & Technology City, Yazhou District, Sanya City, Hainan
Province, China
Province, China
79.4
79.4
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
1530 Tiwai Road, Tiwai Point, Invercargill, 9877, New Zealand
2 Avalon Drive, Labrador City NL A2V 2V6, Canada
2 Avalon Drive, Labrador City NL A2V 2V6, Canada
Level 2, 20 Customhouse Quay, Wellington, 6011, New Zealand
Level 2, 20 Customhouse Quay, Wellington, 6011, New Zealand
Level 12 Monnis Tower, Chinggis Avenue-15, 1st khoroo, Sukhbaatar
Level 12 Monnis Tower, Chinggis Avenue-15, 1st khoroo, Sukhbaatar
District, Ulaanbaatar, 14240, Mongolia
District, Ulaanbaatar, 14240, Mongolia
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
Robe River Ore Sales Pty. Ltd.; Australia
Saryarka B.V.; Netherlands
SGLS LLC; Mongolia
AUD Ordinary
shares
€200.00 Ordinary
shares
MNT10,000.00
Common shares
Sharp Strategic Funding Pte. Ltd.; Singapore US$ Common
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
8825 N. 23rd Avenue, Suite 100, Phoenix AZ 85021, United States
Simfer Jersey Limited; Jersey
Simfer Jersey Nominee Limited; United
Kingdom
SIMFER S.A.; Guinea(e)
Singapore Metals Pte. Ltd.; Singapore
shares
US$ Ordinary
shares
£1.00 Ordinary
shares
GNF100,000.00
Ordinary shares
US$ Ordinary
shares
Société Minière Et De Participations Guinée-
Alusuisse; Guinea(c)
-
Sohar Aluminium Co. L.L.C.; Oman
THR Aruba Holdings LLC A.V.V.; Aruba
OMR1.00 Ordinary
shares
US$1.00 Common
shares
THR Delaware Holdings, LLC; United States(c)
-
50.2
50.2
233 South 13th Street, Suite 1900, Lincoln NE 68508, United States
233 South 13th Street, Suite 1900, Lincoln NE 68508, United States
THR Kharmagtai Pte. Ltd.; Singapore
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
THR MINES (BC) LTD.; Canada
Madagascar
Madagascar
THR Mines Services Co. Ltd.; Canada
US$ Ordinary
shares
CAD Common
shares
US$ Common
shares
CAD Common
shares
QIT Madagascar Minerals SA; Madagascar
QIT Madagascar Minerals SA; Madagascar
US$10.00 Common
US$10.00 Common
shares
shares
US$ Certificats de
US$ Certificats de
droit de vote
droit de vote
0
0
Madagascar
Madagascar
Quebec North Shore and Labrador Railway
Quebec North Shore and Labrador Railway
Company / Compagnie de Chemin de Fer du
Company / Compagnie de Chemin de Fer du
CAD27.59 Ordinary
CAD27.59 Ordinary
Littoral Nord de Quebec et du Labrador Inc.;
Littoral Nord de Quebec et du Labrador Inc.;
shares
shares
100
100
58.7
58.7
Canada
Canada
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
400-1190 Avenue des Canadiens-de-Montréal, Montréal QC H3B 0E3,
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
Immeuble ASSIST, Ivandry, Lot N°35, 5ème étage, Antananarivo, 101 ,
THR Ulaan Pte. Ltd.; Singapore
shares
US$ Ordinary
shares
THR OYU TOLGOI LTD.; Virgin Islands, British US$1.00 Ordinary
22.1
22.1
22.1
22.1
116 Quai Charles Roissard, 73000, Chambéry, France
116 Quai Charles Roissard, 73000, Chambéry, France
Kelian Mine Site, West Kutai, East Kalimantan, Indonesia
Kelian Mine Site, West Kutai, East Kalimantan, Indonesia
Sampoerna Strategic Square, South Tower, Level 30, Jl. Jenderal
Sampoerna Strategic Square, South Tower, Level 30, Jl. Jenderal
Sudirman Kav. 45-46, Jakarta, 12930, Indonesia
Sudirman Kav. 45-46, Jakarta, 12930, Indonesia
Canada
Canada
Queensland Alumina Limited; Australia
Queensland Alumina Limited; Australia
AUD Class B shares 100
AUD Class B shares 100
Resolution Copper Mining LLC; United
Resolution Copper Mining LLC; United
States(c)
States(c)
South Africa
South Africa
Richards Bay Mining (Proprietary) Limited;
Richards Bay Mining (Proprietary) Limited;
ZAR0.01 B Ordinary
ZAR0.01 B Ordinary
AUD Class C shares 100
AUD Class C shares 100
AUD Class D shares 100
AUD Class D shares 100
-
-
shares
shares
-
-
100
100
Plant Operations Building, Parsons Point, Gladstone QLD 4680,
Plant Operations Building, Parsons Point, Gladstone QLD 4680,
Australia
Australia
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
Regeneration Enterprises, Inc.; United States US$ Class A shares 25
Regeneration Enterprises, Inc.; United States US$ Class A shares 25
2657 Windmill Parkway #302, Henderson NV 89074, United States
2657 Windmill Parkway #302, Henderson NV 89074, United States
51
70
40
65
75
100
100
53
100
85
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
100
74
The Farm RBM, Number 16317, KwaZulu-Natal, 3900, South Africa
33.3
33.3
Level 20, 500 Collins Street, Melbourne VIC 3000, Australia
51
70
73.6
57.1
220, 2nd Floor, DLF Cyber City, Chandaka Industrial Area, Patia,
Bhubneshwar, Odisha, 751024, India
P.O. Box 686, Ruwi, 112, Oman
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
75
Welplaatweg 104, 3197 KS , Botlek, Rotterdam, Netherlands
50.8
Floor 17, Shangri-La Center, Olympic Street-19, Khoroo 1, Sukhbaatar
District, Ulaanbaatar, 14241, Mongolia
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
53
53
45
PO Box 536, 13-14 Esplanade, St Helier, JE4 5UR, Jersey
6 St James's Square, London, SW1Y 4AD, United Kingdom
Immeuble Camayenne, Corniche Nord , Commune de Dixinn, BP 848,
Conakry, République de Guinée, Guinea
100
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
-
20
50
20
Tougue, Guinea
Sohar Industrial Estate, P.O. Box 80, PC 327, Sohar, Sultanate of Oman
100
50.8
Caya Dr. J.E.M. (Loy) Arends, 18-A, Oranjestad, Aruba
-
100
100
100
100
100
100
50.8
615 South DePont Highway, Kent County, Dover DE 19901, United
States
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
50.8
1800-510 West Georgia Street, Vancouver BC V6B 0M3, Canada
50.8
301-303 Alexander Street, Whitehorse YT Y1A 2L5, Canada
50.8
Road Town, Tortolla, VG1110, Virgin Islands, British
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
308
308
308
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309309
Financial statements continued
Notes to the 2021 financial statements
44 Related undertakings continued
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
undertakings and significant holdings in undertakings other than subsidiary companies continued
Name of undertaking and country
of incorporation
Share class
Tomago Aluminium Company Pty Limited;
Australia
AUD Ordinary
shares
% of share
class held
by Group
companies
Effective
Group %
ownership
Registered office address
51.6
51.6
638 Tomago Road, Tomago NSW 2322, Australia
TRQ Australia Pty. Ltd.; Australia
AUD Ordinary
shares
100
50.8
Level 25, Suite 2, 100 Miller Street, North Sydney NSW 2060, Australia
Turquoise Hill (Beijing) Services Company
Ltd; China(c)
Turquoise Hill Netherlands Cooperatief U.A.;
Netherlands(c)
-
-
-
-
50.8
Unit 304-21, 3rd Floor, Building B, Workers Stadium North Road,
Chaoyang District, Beijing, JIA NO. 2, China
50.8
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
Turquoise Hill Resources Ltd.; Canada
CAD Common
shares
50.8
50.8
301-303 Alexander Street, Whitehorse YT Y1A 2L5, Canada
Turquoise Hill Resources Philippines Inc.;
Philippines(d)
PHP100.00
Common shares
99.996
50.8
21st Floor, Philamlife Tower, 8767 Paswo de Roxas, Makati City, 1226,
Philippines
Turquoise Hill Resources Singapore Pte Ltd.;
Singapore
SGD1.00 Common
shares
100
50.8
2 Venture Drive, #24-01, Vision Exchange, 608526, Singapore
Wright Mgmt Services Pte. Ltd.; Singapore
Yalleen Pastoral Co. Pty. Ltd.; Australia
US$ Common
shares
AUD Ordinary
shares
100
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
65.7
57.4
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Australia
In addition, the Group participates in the following unincorporated arrangements:
Name of undertaking and country of incorporation
Address or principal place of business
Bao-HI Ranges Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Cape Bougainville Joint Venture; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Channar Mining Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Gladstone Power Station Joint Venture; Australia
NRG Gladstone Operating Service, Power Station, Gladstone QLD 4680, Australia
Green Mountain Mining Venture; United States
251 Little Falls Drive, Wilmington DE 19808, United States
Hope Downs Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Mitchell Plateau Joint Venture; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Rhodes Ridge Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Robe River Iron Associates Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Tomago Aluminium Joint Venture; Australia
638 Tomago Road, Tomago NSW 2322, Australia
Winter Road Joint Venture; Canada
300-5201 50th Avenue, Yellowknife NT X1A 2P9, Canada
Yarraloola Pastoral Co; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Interest % owned
by the Group
54
67.5
60
42.1
100
50
65.6
50
57.1
51.6
33.3
57.1
Directly held by Rio Tinto Limited.
Directly held by Rio Tinto plc.
Group ownership is held through an interest in capital. The entity has no classes of shares.
In liquidation or application for dissolution filed.
(a)
(b)
(c)
(d)
(e) Classed as a subsidiary in accordance with section 1162 (4)(a) of the UK Companies Act 2006 on the grounds of dominant influence.
310
310
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Annual Report 2021 | riotinto.com
Financial statements continued
Financial statements
Notes to the 2021 financial statements
44 Related undertakings continued
44 Related undertakings continued
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
Other Group entities including subsidiaries where the effective ownership is less than 100%, associated
undertakings and significant holdings in undertakings other than subsidiary companies continued
undertakings and significant holdings in undertakings other than subsidiary companies continued
45 Events after the balance sheet date
Oyu Tolgoi: approval for commencement of underground operations
% of share
% of share
class held
class held
by Group
by Group
companies
companies
Effective
Effective
Group %
Group %
ownership
ownership
Share class
Share class
Registered office address
Registered office address
Tomago Aluminium Company Pty Limited;
Tomago Aluminium Company Pty Limited;
AUD Ordinary
AUD Ordinary
51.6
51.6
51.6
51.6
638 Tomago Road, Tomago NSW 2322, Australia
638 Tomago Road, Tomago NSW 2322, Australia
Name of undertaking and country
Name of undertaking and country
of incorporation
of incorporation
Australia
Australia
TRQ Australia Pty. Ltd.; Australia
TRQ Australia Pty. Ltd.; Australia
Turquoise Hill (Beijing) Services Company
Turquoise Hill (Beijing) Services Company
Turquoise Hill Netherlands Cooperatief U.A.;
Turquoise Hill Netherlands Cooperatief U.A.;
shares
shares
AUD Ordinary
AUD Ordinary
shares
shares
100
100
50.8
50.8
Level 25, Suite 2, 100 Miller Street, North Sydney NSW 2060, Australia
Level 25, Suite 2, 100 Miller Street, North Sydney NSW 2060, Australia
50.8
50.8
Unit 304-21, 3rd Floor, Building B, Workers Stadium North Road,
Unit 304-21, 3rd Floor, Building B, Workers Stadium North Road,
Chaoyang District, Beijing, JIA NO. 2, China
Chaoyang District, Beijing, JIA NO. 2, China
50.8
50.8
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
Unit 02.01, Kingsforweg 151, 1043 GR, Amsterdam , Netherlands
Ltd; China(c)
Ltd; China(c)
Netherlands(c)
Netherlands(c)
Philippines(d)
Philippines(d)
Singapore
Singapore
Turquoise Hill Resources Ltd.; Canada
Turquoise Hill Resources Ltd.; Canada
CAD Common
CAD Common
50.8
50.8
50.8
50.8
301-303 Alexander Street, Whitehorse YT Y1A 2L5, Canada
301-303 Alexander Street, Whitehorse YT Y1A 2L5, Canada
Turquoise Hill Resources Philippines Inc.;
Turquoise Hill Resources Philippines Inc.;
PHP100.00
PHP100.00
21st Floor, Philamlife Tower, 8767 Paswo de Roxas, Makati City, 1226,
21st Floor, Philamlife Tower, 8767 Paswo de Roxas, Makati City, 1226,
Common shares
Common shares
99.996
99.996
50.8
50.8
Philippines
Philippines
Turquoise Hill Resources Singapore Pte Ltd.;
Turquoise Hill Resources Singapore Pte Ltd.;
SGD1.00 Common
SGD1.00 Common
50.8
50.8
2 Venture Drive, #24-01, Vision Exchange, 608526, Singapore
2 Venture Drive, #24-01, Vision Exchange, 608526, Singapore
Wright Mgmt Services Pte. Ltd.; Singapore
Wright Mgmt Services Pte. Ltd.; Singapore
US$ Common
US$ Common
50.8
50.8
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
77 Robinson Road #13-00, Robinson 77, 068896, Singapore
Yalleen Pastoral Co. Pty. Ltd.; Australia
Yalleen Pastoral Co. Pty. Ltd.; Australia
AUD Ordinary
AUD Ordinary
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000,
65.7
65.7
57.4
57.4
Australia
Australia
-
-
-
-
100
100
100
100
-
-
-
-
shares
shares
shares
shares
shares
shares
shares
shares
In addition, the Group participates in the following unincorporated arrangements:
In addition, the Group participates in the following unincorporated arrangements:
Interest % owned
Interest % owned
by the Group
by the Group
Name of undertaking and country of incorporation
Name of undertaking and country of incorporation
Address or principal place of business
Address or principal place of business
Bao-HI Ranges Joint Venture; Australia
Bao-HI Ranges Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Cape Bougainville Joint Venture; Australia
Cape Bougainville Joint Venture; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Channar Mining Joint Venture; Australia
Channar Mining Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Gladstone Power Station Joint Venture; Australia
Gladstone Power Station Joint Venture; Australia
NRG Gladstone Operating Service, Power Station, Gladstone QLD 4680, Australia
NRG Gladstone Operating Service, Power Station, Gladstone QLD 4680, Australia
Green Mountain Mining Venture; United States
Green Mountain Mining Venture; United States
251 Little Falls Drive, Wilmington DE 19808, United States
251 Little Falls Drive, Wilmington DE 19808, United States
Hope Downs Joint Venture; Australia
Hope Downs Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Mitchell Plateau Joint Venture; Australia
Mitchell Plateau Joint Venture; Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
155 Charlotte Street, Brisbane QLD 4000, Australia
Rhodes Ridge Joint Venture; Australia
Rhodes Ridge Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Robe River Iron Associates Joint Venture; Australia
Robe River Iron Associates Joint Venture; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Tomago Aluminium Joint Venture; Australia
Tomago Aluminium Joint Venture; Australia
638 Tomago Road, Tomago NSW 2322, Australia
638 Tomago Road, Tomago NSW 2322, Australia
Winter Road Joint Venture; Canada
Winter Road Joint Venture; Canada
300-5201 50th Avenue, Yellowknife NT X1A 2P9, Canada
300-5201 50th Avenue, Yellowknife NT X1A 2P9, Canada
Yarraloola Pastoral Co; Australia
Yarraloola Pastoral Co; Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
Level 18, Central Park, 152-158 St Georges Terrace, Perth WA 6000, Australia
54
54
67.5
67.5
60
60
42.1
42.1
100
100
50
50
65.6
65.6
50
50
57.1
57.1
51.6
51.6
33.3
33.3
57.1
57.1
Directly held by Rio Tinto Limited.
Directly held by Rio Tinto Limited.
Directly held by Rio Tinto plc.
Directly held by Rio Tinto plc.
(a)
(a)
(b)
(b)
(c)
(c)
(d)
(d)
Group ownership is held through an interest in capital. The entity has no classes of shares.
Group ownership is held through an interest in capital. The entity has no classes of shares.
In liquidation or application for dissolution filed.
In liquidation or application for dissolution filed.
(e) Classed as a subsidiary in accordance with section 1162 (4)(a) of the UK Companies Act 2006 on the grounds of dominant influence.
(e) Classed as a subsidiary in accordance with section 1162 (4)(a) of the UK Companies Act 2006 on the grounds of dominant influence.
On 25 January 2022, Rio Tinto, Turquoise Hill Resources Ltd (Turquoise Hill) and the Government of Mongolia announced their agreement, and
unanimous approval by the Board of Oyu Tolgoi, to commencement of underground operations.
As part of a comprehensive project budget and funding package undertaken between the parties in reaching this agreement, Turquoise Hill agreed
to waive in full, funding balances arising from a carry account loan with Erdenes Oyu Tolgoi (Erdenes) of US$2.4 billion, comprising the amount of
common share investments in Oyu Tolgoi LLC funded by Turquoise Hill on behalf of Erdenes to build the project to date, plus US$1.0 billion of
accrued interest. The waiver took effect on 25 January 2022. Rio Tinto and Turquoise Hill have also agreed a plan to deliver the funding required
until sustainable underground production is reached.
Prior to the waiver agreement, the funding balances owing from Erdenes to Turquoise Hill were expected to be repaid via a pledge over Erdenes’
share of future Oyu Tolgoi common share dividends. For this reason, and because the arrangement is between Turquoise Hill and Erdenes rather
than with Oyu Tolgoi LLC itself, both the principal and interest are treated as transactions with owners acting in their capacity as owners.
Consequently, at 31 December 2021, related amounts are recorded as a reduction in the share of equity attributable to non-controlling interests,
resulting in an increase to the effective interest in Oyu Tolgoi attributable to owners of Rio Tinto. Refer to note 1 (xii) on page 236 and note 32 (k)
on page 277.
Funding balances owing from Erdenes to Turquoise Hill are not classified as loan receivables in the Group Balance Sheet, and there is no interest
income shown in the Group Income Statement. Accumulation of interest on the funding balances increases the share of retained earnings
attributable to Rio Tinto as it is accrued.
Waiving the funding balances owing from Erdenes to Turquoise Hill increases Erdenes’ economic share arising through entitlement to cash flows
from future dividends of Oyu Tolgoi. In the 2022 Group results, there will be no Income Statement charge for loan forgiveness or write-off as a
result of the waiver, and net assets and liabilities for Oyu Tolgoi included in the Group Balance sheet remained unchanged. There is no exchange
of cash or other financial assets between parties and there will be no change to the underlying free cash flows of the Oyu Tolgoi operations and
development project. The waiver does not have an impact on the Group's assessment of impairment indicators for either 2021 or 2022, since it
relates to the project shareholders' funding arrangements rather than the economic capability of the Cash Generating Unit itself, refer to note 6. A
reallocation of the net asset value allocation between the owners of Oyu Tolgoi will be recorded in the Group Statement of Changes in Equity for
2022 reporting periods by reducing equity attributable to owners of Rio Tinto and increasing equity attributable to non-controlling interests:
Change in equity interest held by Rio Tinto
Equity issued to owners of non-controlling interests
There were no other significant events after the balance sheet date requiring disclosure.
Retained
earnings
US$m
Non-
controlling
interests
US$m
(490)
490
(711)
711
310
310
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Financial statements
Financial statements continued
Rio Tinto plc
Rio Tinto plc
Company Balance Sheet
Company Balance Sheet
As at 31 December
Non-current assets
Investments
Trade and other receivables
Current assets
Trade and other receivables
Cash at bank and in hand
Total assets
Current liabilities
Trade and other payables
Dividends payable
Other financial liabilities
Non-current liabilities
Other financial liabilities
Total liabilities
Net assets
Capital and reserves
Share capital
Share premium account
Other reserves
Retained earnings
Total equity
Note
2021
US$m
2020
US$m
B
C
D
G
G
E
F
36,280
140
36,420
16,388
36
16,424
52,844
36,320
206
36,526
5,710
11
5,721
42,247
(13,196)
(40)
(61)
(13,297)
(13,205)
(24)
(67)
(13,296)
(96)
(13,393)
(156)
(13,452)
39,451
28,795
207
4,320
12,005
22,919
39,451
207
4,313
12,005
12,270
28,795
The Rio Tinto plc financial statements have been prepared in accordance with Financial Reporting Standard 101 “Reduced Disclosure
Framework” (FRS 101). Note A explains the principal accounting policies.
Profit after tax and total comprehensive income for the year amounted to US$22,442 million (2020: US$4,027 million). As permitted by section
408 of the UK Companies Act 2006, no statement of comprehensive income for the Rio Tinto plc parent company is shown.
The Rio Tinto plc company balance sheet, statement of comprehensive income and the related notes were approved by the directors on 23
February 2022 and the balance sheet is signed on their behalf by
Simon Thompson
Chairman
Rio Tinto plc
Registered number: 719885
Jakob Stausholm
Chief Executive
Peter Cunningham
Chief Financial Officer
Rio Tinto plc (the “Company”) is incorporated in the United Kingdom, registered in England and Wales, and domiciled in the United Kingdom.
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Financial statements
Financial statements
Financial statements continued
Rio Tinto plc
Rio Tinto plc
Rio Tinto plc
Company Balance Sheet
Company Balance Sheet
Company Balance Sheet
Financial statements continued
Financial statements
Rio Tinto plc
Rio Tinto plc
Company Statement of Changes in Equity
Company Statement of Changes in Equity
As at 31 December
As at 31 December
Non-current assets
Non-current assets
Investments
Investments
Trade and other receivables
Trade and other receivables
Current assets
Current assets
Trade and other receivables
Trade and other receivables
Cash at bank and in hand
Cash at bank and in hand
Total assets
Total assets
Current liabilities
Current liabilities
Trade and other payables
Trade and other payables
Dividends payable
Dividends payable
Other financial liabilities
Other financial liabilities
Non-current liabilities
Non-current liabilities
Other financial liabilities
Other financial liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Capital and reserves
Capital and reserves
Share capital
Share capital
Share premium account
Share premium account
Other reserves
Other reserves
Retained earnings
Retained earnings
Total equity
Total equity
Year ended 31 December 2021
Opening balance
Profit for the financial year (comprehensive income)
Dividends
Proceeds from issue of shares
Share-based payments
Total
Year ended 31 December 2020
Opening balance
Profit for the financial year (comprehensive income)
Dividends
Proceeds from issue of shares
Share-based payments
Total
Share
capital
US$m
207
—
—
—
—
207
Share
capital
US$m
207
—
—
—
—
207
Share
premium
account
US$m
4,313
—
—
7
—
4,320
Share
premium
account
US$m
4,312
—
—
1
—
4,313
Other
reserves
US$m
12,005
—
—
—
—
12,005
Other
reserves
US$m
12,005
—
—
—
—
12,005
Retained
earnings
US$m
12,270
22,442
(11,859)
—
66
22,919
Total
equity
US$m
28,795
22,442
(11,859)
7
66
39,451
Retained
earnings
US$m
12,896
4,027
(4,720)
—
67
12,270
Total
equity
US$m
29,420
4,027
(4,720)
1
67
28,795
Note
Note
2021
2021
US$m
US$m
2020
2020
US$m
US$m
B
B
36,280
36,280
140
140
36,420
36,420
C
C
16,388
16,388
36
36
16,424
16,424
52,844
52,844
36,320
36,320
206
206
36,526
36,526
5,710
5,710
11
11
5,721
5,721
42,247
42,247
D
D
(13,196)
(13,196)
(13,205)
(13,205)
G
G
(40)
(40)
(61)
(61)
(24)
(24)
(67)
(67)
(13,297)
(13,297)
(13,296)
(13,296)
G
G
(96)
(96)
(156)
(156)
(13,393)
(13,393)
(13,452)
(13,452)
39,451
39,451
28,795
28,795
E
E
F
F
207
207
4,320
4,320
12,005
12,005
22,919
22,919
39,451
39,451
207
207
4,313
4,313
12,005
12,005
12,270
12,270
28,795
28,795
The Rio Tinto plc financial statements have been prepared in accordance with Financial Reporting Standard 101 “Reduced Disclosure
The Rio Tinto plc financial statements have been prepared in accordance with Financial Reporting Standard 101 “Reduced Disclosure
Framework” (FRS 101). Note A explains the principal accounting policies.
Framework” (FRS 101). Note A explains the principal accounting policies.
Profit after tax and total comprehensive income for the year amounted to US$22,442 million (2020: US$4,027 million). As permitted by section
Profit after tax and total comprehensive income for the year amounted to US$22,442 million (2020: US$4,027 million). As permitted by section
408 of the UK Companies Act 2006, no statement of comprehensive income for the Rio Tinto plc parent company is shown.
408 of the UK Companies Act 2006, no statement of comprehensive income for the Rio Tinto plc parent company is shown.
The Rio Tinto plc company balance sheet, statement of comprehensive income and the related notes were approved by the directors on 23
The Rio Tinto plc company balance sheet, statement of comprehensive income and the related notes were approved by the directors on 23
February 2022 and the balance sheet is signed on their behalf by
February 2022 and the balance sheet is signed on their behalf by
Simon Thompson
Simon Thompson
Chairman
Chairman
Rio Tinto plc
Rio Tinto plc
Registered number: 719885
Registered number: 719885
Jakob Stausholm
Jakob Stausholm
Chief Executive
Chief Executive
Peter Cunningham
Peter Cunningham
Chief Financial Officer
Chief Financial Officer
Rio Tinto plc (the “Company”) is incorporated in the United Kingdom, registered in England and Wales, and domiciled in the United Kingdom.
Rio Tinto plc (the “Company”) is incorporated in the United Kingdom, registered in England and Wales, and domiciled in the United Kingdom.
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Financial statements
Financial statements continued
Notes to the Rio Tinto plc Financial
Statements
Notes to the Rio Tinto plc Financial Statements
A Principal accounting policies
a. Basis of preparation
The Rio Tinto plc company financial statements have been prepared
using the historical cost convention, as modified by the revaluation of
certain financial liabilities and in accordance with the UK Companies
Act 2006 and Financial Reporting Standard 101 Reduced Disclosure
Framework (“FRS 101”). The financial statements have been prepared
on a going concern basis. Further information is disclosed on page 219
within note 1 of the Consolidated financial statements.
In preparing these financial statements, the company applies the
recognition, measurement and disclosure requirements of UK-adopted
international accounting standards, but makes amendments where
necessary in order to comply with Companies Act 2006.
The accounting policies set out below have been applied consistently
to all periods presented in these financial statements. The following
exemptions available under FRS 101 have been applied:
– Paragraphs 45(b) and 46 to 52 of IFRS 2, “Share-based
Payment” (details of the number and weighted average exercise
prices of share options and how the fair value of goods and services
received was determined).
– Paragraphs 91-99 of IFRS 13 “Fair Value Measurement” (disclosure
of valuation techniques and inputs used for fair value measurement
of assets and liabilities).
– IFRS 7 “Financial Instruments: Disclosures”.
– Paragraph 38 of IAS 1 “Presentation of financial statements”,
comparative information requirements in respect of Paragraph
79(a)(iv) of IAS 1.
– The following paragraphs of IAS 1 “Presentation of financial
statements”:
– 10 (d) (statement of cash flows);
– 16 (statement of compliance with all IFRS);
– 38A (requirement for minimum of two primary statements,
including cash flow statements);
– 38B-D (additional comparative information);
– 111 (cash flow statement information); and
– 134-136 (capital management disclosures).
– IAS 7 “Statement of Cash Flows”.
– Paragraph 30 and 31 of IAS 8 “Accounting policies, changes in
accounting estimates and errors” (requirement for the disclosure of
information when an entity has not applied a new IFRS that has
been issued and is not yet effective).
– Paragraph 17 of IAS 24 “Related party disclosures” (key
management compensation).
– The requirements of IAS 24, “Related party disclosures” to disclose
related party transactions entered into between two or more
members of a group.
b.Judgments in applying accounting policies and key
sources of estimation uncertainty
The preparation of the financial statements requires management to
make assumptions, judgments and estimates and to use judgment in
applying accounting policies and making critical accounting estimates.
These judgments, estimates and assumptions are based on
management’s best knowledge of the relevant facts and
circumstances, having regard to previous experience, but actual
results may differ materially from the amounts included in the
financial statements.
The key area of judgment that has the most significant effect on
the amounts recognised in the financial statements is the review for
impairment of investment carrying values.
Investments in subsidiaries are reviewed for impairment where events
or changes in circumstances indicate that the carrying amount of the
investment may not be recoverable. The unit of account being the
equity of the subsidiary taken as a whole, which may comprise
interests in multiple cash-generating units.
If any such indication exists, Rio Tinto plc makes an assessment of the
recoverable amount. If the asset is determined to be impaired, an
impairment loss will be recorded and the asset written down based on
the amount by which the asset carrying amount exceeds the higher of
fair value less cost of disposal and value in use. An impairment loss is
recognised immediately in the income statement.
c. Currency translation
Items included in the financial statements are measured using the
currency of the primary economic environment in which the Company
operates (the functional currency). The financial statements are
presented in US dollars, which is the Company’s functional and
presentation currency. Transactions denominated in other currencies,
including the issue of shares, are translated into the functional
currency using the exchange rates prevailing at the date of
the transaction.
Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies, are recognised in the profit and loss account.
Exchange rates used are consistent with the rates used by the Group
as disclosed in the consolidated financial statements (note 40).
d.Investments
Investments in Group companies are valued at cost less accumulated
impairment losses. Investments are reviewed for impairment if events
or changes in circumstances indicate that the carrying amount may
not be recoverable.
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Financial statements
Financial statements
Financial statements continued
Financial statements
Financial statements
Notes to the Rio Tinto plc Financial
Statements
e. Financial guarantees
Financial guarantees are recognised initially at fair value.
Subsequently, the liability is measured at the higher of the best
estimate of the expenditure required to settle the present obligation
and the amount initially recognised less cumulative amortisation.
f. Share-based payments
The Company operates a number of share-based payment plans for
Group employees, the details of which are included in the consolidated
financial statements (note 41). The fair value of the Company’s share
plans is recognised as an addition to the cost of the investment in the
subsidiary in which the relevant employees work over the expected
vesting period, with a corresponding entry to retained earnings.
Payments received from the Company’s subsidiaries in respect of
these share-based payments are recognised as a reduction in the cost
of the investment. The Company uses fair values provided by
independent actuaries calculated using either a lattice-based option
valuation model or a Monte Carlo simulation model. The fair value of
the share plans is determined at the date of grant, taking into account
any market-based vesting conditions attached to the award.
Non-market based vesting conditions (eg relative EBIT margin
performance targets) are taken into account in estimating the number
of awards likely to vest. The estimate of the number of awards likely to
vest is reviewed at each balance sheet date up to the vesting date, at
which point the estimate is adjusted to reflect the actual awards
issued. No adjustment is made after the vesting date even if the
awards are forfeited or not exercised.
g.Dividend income
Dividend income is recognised when the right to receive payment
is established.
h.Treasury shares
The consideration paid for shares repurchased by the Company and
held as treasury shares is recognised as a reduction in shareholders’
funds through retained earnings.
Notes to the Rio Tinto plc Financial
Notes to the Rio Tinto plc Financial
Statements
Statements
Notes to the Rio Tinto plc Financial Statements
A Principal accounting policies
A Principal accounting policies
a. Basis of preparation
a. Basis of preparation
The Rio Tinto plc company financial statements have been prepared
The Rio Tinto plc company financial statements have been prepared
using the historical cost convention, as modified by the revaluation of
using the historical cost convention, as modified by the revaluation of
certain financial liabilities and in accordance with the UK Companies
certain financial liabilities and in accordance with the UK Companies
Act 2006 and Financial Reporting Standard 101 Reduced Disclosure
Act 2006 and Financial Reporting Standard 101 Reduced Disclosure
Framework (“FRS 101”). The financial statements have been prepared
Framework (“FRS 101”). The financial statements have been prepared
on a going concern basis. Further information is disclosed on page 219
on a going concern basis. Further information is disclosed on page 219
within note 1 of the Consolidated financial statements.
within note 1 of the Consolidated financial statements.
In preparing these financial statements, the company applies the
In preparing these financial statements, the company applies the
recognition, measurement and disclosure requirements of UK-adopted
recognition, measurement and disclosure requirements of UK-adopted
international accounting standards, but makes amendments where
international accounting standards, but makes amendments where
necessary in order to comply with Companies Act 2006.
necessary in order to comply with Companies Act 2006.
The accounting policies set out below have been applied consistently
The accounting policies set out below have been applied consistently
to all periods presented in these financial statements. The following
to all periods presented in these financial statements. The following
exemptions available under FRS 101 have been applied:
exemptions available under FRS 101 have been applied:
– Paragraphs 45(b) and 46 to 52 of IFRS 2, “Share-based
– Paragraphs 45(b) and 46 to 52 of IFRS 2, “Share-based
Payment” (details of the number and weighted average exercise
Payment” (details of the number and weighted average exercise
prices of share options and how the fair value of goods and services
prices of share options and how the fair value of goods and services
received was determined).
received was determined).
b.Judgments in applying accounting policies and key
b.Judgments in applying accounting policies and key
sources of estimation uncertainty
sources of estimation uncertainty
The preparation of the financial statements requires management to
The preparation of the financial statements requires management to
make assumptions, judgments and estimates and to use judgment in
make assumptions, judgments and estimates and to use judgment in
applying accounting policies and making critical accounting estimates.
applying accounting policies and making critical accounting estimates.
These judgments, estimates and assumptions are based on
These judgments, estimates and assumptions are based on
management’s best knowledge of the relevant facts and
management’s best knowledge of the relevant facts and
circumstances, having regard to previous experience, but actual
circumstances, having regard to previous experience, but actual
results may differ materially from the amounts included in the
results may differ materially from the amounts included in the
financial statements.
financial statements.
The key area of judgment that has the most significant effect on
The key area of judgment that has the most significant effect on
the amounts recognised in the financial statements is the review for
the amounts recognised in the financial statements is the review for
impairment of investment carrying values.
impairment of investment carrying values.
Investments in subsidiaries are reviewed for impairment where events
Investments in subsidiaries are reviewed for impairment where events
or changes in circumstances indicate that the carrying amount of the
or changes in circumstances indicate that the carrying amount of the
investment may not be recoverable. The unit of account being the
investment may not be recoverable. The unit of account being the
equity of the subsidiary taken as a whole, which may comprise
equity of the subsidiary taken as a whole, which may comprise
interests in multiple cash-generating units.
interests in multiple cash-generating units.
– Paragraphs 91-99 of IFRS 13 “Fair Value Measurement” (disclosure
– Paragraphs 91-99 of IFRS 13 “Fair Value Measurement” (disclosure
If any such indication exists, Rio Tinto plc makes an assessment of the
If any such indication exists, Rio Tinto plc makes an assessment of the
of valuation techniques and inputs used for fair value measurement
of valuation techniques and inputs used for fair value measurement
recoverable amount. If the asset is determined to be impaired, an
recoverable amount. If the asset is determined to be impaired, an
of assets and liabilities).
of assets and liabilities).
– IFRS 7 “Financial Instruments: Disclosures”.
– IFRS 7 “Financial Instruments: Disclosures”.
– Paragraph 38 of IAS 1 “Presentation of financial statements”,
– Paragraph 38 of IAS 1 “Presentation of financial statements”,
comparative information requirements in respect of Paragraph
comparative information requirements in respect of Paragraph
79(a)(iv) of IAS 1.
79(a)(iv) of IAS 1.
statements”:
statements”:
– The following paragraphs of IAS 1 “Presentation of financial
– The following paragraphs of IAS 1 “Presentation of financial
– 10 (d) (statement of cash flows);
– 10 (d) (statement of cash flows);
– 16 (statement of compliance with all IFRS);
– 16 (statement of compliance with all IFRS);
– 38A (requirement for minimum of two primary statements,
– 38A (requirement for minimum of two primary statements,
including cash flow statements);
including cash flow statements);
– 38B-D (additional comparative information);
– 38B-D (additional comparative information);
– 111 (cash flow statement information); and
– 111 (cash flow statement information); and
– 134-136 (capital management disclosures).
– 134-136 (capital management disclosures).
– IAS 7 “Statement of Cash Flows”.
– IAS 7 “Statement of Cash Flows”.
– Paragraph 30 and 31 of IAS 8 “Accounting policies, changes in
– Paragraph 30 and 31 of IAS 8 “Accounting policies, changes in
accounting estimates and errors” (requirement for the disclosure of
accounting estimates and errors” (requirement for the disclosure of
information when an entity has not applied a new IFRS that has
information when an entity has not applied a new IFRS that has
been issued and is not yet effective).
been issued and is not yet effective).
– Paragraph 17 of IAS 24 “Related party disclosures” (key
– Paragraph 17 of IAS 24 “Related party disclosures” (key
management compensation).
management compensation).
impairment loss will be recorded and the asset written down based on
impairment loss will be recorded and the asset written down based on
the amount by which the asset carrying amount exceeds the higher of
the amount by which the asset carrying amount exceeds the higher of
fair value less cost of disposal and value in use. An impairment loss is
fair value less cost of disposal and value in use. An impairment loss is
recognised immediately in the income statement.
recognised immediately in the income statement.
c. Currency translation
c. Currency translation
Items included in the financial statements are measured using the
Items included in the financial statements are measured using the
currency of the primary economic environment in which the Company
currency of the primary economic environment in which the Company
operates (the functional currency). The financial statements are
operates (the functional currency). The financial statements are
presented in US dollars, which is the Company’s functional and
presented in US dollars, which is the Company’s functional and
presentation currency. Transactions denominated in other currencies,
presentation currency. Transactions denominated in other currencies,
including the issue of shares, are translated into the functional
including the issue of shares, are translated into the functional
currency using the exchange rates prevailing at the date of
currency using the exchange rates prevailing at the date of
the transaction.
the transaction.
Foreign exchange gains and losses resulting from the settlement of
Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the translation at year-end exchange
such transactions, and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
rates of monetary assets and liabilities denominated in foreign
currencies, are recognised in the profit and loss account.
currencies, are recognised in the profit and loss account.
Exchange rates used are consistent with the rates used by the Group
Exchange rates used are consistent with the rates used by the Group
as disclosed in the consolidated financial statements (note 40).
as disclosed in the consolidated financial statements (note 40).
– The requirements of IAS 24, “Related party disclosures” to disclose
– The requirements of IAS 24, “Related party disclosures” to disclose
related party transactions entered into between two or more
related party transactions entered into between two or more
d.Investments
d.Investments
members of a group.
members of a group.
Investments in Group companies are valued at cost less accumulated
Investments in Group companies are valued at cost less accumulated
impairment losses. Investments are reviewed for impairment if events
impairment losses. Investments are reviewed for impairment if events
or changes in circumstances indicate that the carrying amount may
or changes in circumstances indicate that the carrying amount may
not be recoverable.
not be recoverable.
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Financial statements
Financial statements continued
Notes to the Rio Tinto plc Financial
Statements continued
Notes to the Rio Tinto plc Financial Statements
B Investments
Investments in Group companies:
At 1 January
Additions
Other adjustments
At 31 December
2021
US$m
2020
US$m
36,320
67
(107)
36,280
36,250
70
—
36,320
At 31 December 2021, the Company had the following principal subsidiaries:
Company
Rio Tinto International Holdings Limited
Rio Tinto European Holdings Limited
Principal activity
Holding company
Holding company
Country of
incorporation
Percentage
shareholding
UK
UK
100 %
100 %
In accordance with section 409 of the UK Companies Act 2006, a full list of related undertakings is disclosed in the consolidated financial
statements (note 44).
C Trade and other receivables
Trade and other receivables includes US$16,260 million (31 December 2020: US$5,656 million), which is subject to interest based on LIBOR, is
unsecured and repayable on demand.
D Trade and other payables
Trade and other payables include US$13,162 million (31 December 2020: US$13,042 million) which is subject to interest rates based on LIBOR, is
unsecured and repayable on demand.
E Share capital
Issued and fully paid up share capital of 10p each(a)
At 1 January
Ordinary shares purchased and cancelled(b)
At 31 December
Special Voting Share of 10p each(c)
DLC Dividend Share of 10p each(c)
Equalisation Share of 10p each(c)
2021
US$m
207
—
207
1 only
1 only
1 only
2020
US$m
207
—
207
1 only
1 only
1 only
(a)
(b)
(c)
38,581 new shares (2020: 39,273 new shares) were issued during the year and 1,197,858 shares (2020: 568,863 shares) were reissued from Treasury during the year resulting from the
vesting of awards and the exercise of options under Rio Tinto plc employee share-based payment plans, with exercise prices and market values between £44.61 and £64.80 per share.
The authority for the Company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares (2020: 3,627,568 shares) were bought back and cancelled in
2021 under the on-market buy-back programme.
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
and is governed by the terms of the DLC Merger Sharing Agreement.
F Other reserves
Other reserves include US$11,936 million (2020: US$11,936 million) which represents the difference between the nominal value and issue price
of the shares issued arising from Rio Tinto plc’s rights issue completed in July 2009.
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Financial statements
Financial statements
Financial statements continued
Financial statements continued
Financial statements
Notes to the Rio Tinto plc Financial
Notes to the Rio Tinto plc Financial
Statements continued
Statements continued
Notes to the Rio Tinto plc Financial Statements
2021
2021
US$m
US$m
2020
2020
US$m
US$m
36,320
36,320
36,250
36,250
67
67
(107)
(107)
70
70
—
—
36,280
36,280
36,320
36,320
Principal activity
Principal activity
Holding company
Holding company
Holding company
Holding company
Country of
Country of
incorporation
incorporation
Percentage
Percentage
shareholding
shareholding
UK
UK
UK
UK
100 %
100 %
100 %
100 %
At 31 December 2021, the Company had the following principal subsidiaries:
At 31 December 2021, the Company had the following principal subsidiaries:
In accordance with section 409 of the UK Companies Act 2006, a full list of related undertakings is disclosed in the consolidated financial
In accordance with section 409 of the UK Companies Act 2006, a full list of related undertakings is disclosed in the consolidated financial
Trade and other receivables includes US$16,260 million (31 December 2020: US$5,656 million), which is subject to interest based on LIBOR, is
Trade and other receivables includes US$16,260 million (31 December 2020: US$5,656 million), which is subject to interest based on LIBOR, is
Trade and other payables include US$13,162 million (31 December 2020: US$13,042 million) which is subject to interest rates based on LIBOR, is
Trade and other payables include US$13,162 million (31 December 2020: US$13,042 million) which is subject to interest rates based on LIBOR, is
B Investments
B Investments
Investments in Group companies:
Investments in Group companies:
At 1 January
At 1 January
Additions
Additions
Other adjustments
Other adjustments
At 31 December
At 31 December
Company
Company
Rio Tinto International Holdings Limited
Rio Tinto International Holdings Limited
Rio Tinto European Holdings Limited
Rio Tinto European Holdings Limited
statements (note 44).
statements (note 44).
C Trade and other receivables
C Trade and other receivables
unsecured and repayable on demand.
unsecured and repayable on demand.
D Trade and other payables
D Trade and other payables
unsecured and repayable on demand.
unsecured and repayable on demand.
E Share capital
E Share capital
Issued and fully paid up share capital of 10p each(a)
Issued and fully paid up share capital of 10p each(a)
At 1 January
At 1 January
Ordinary shares purchased and cancelled(b)
Ordinary shares purchased and cancelled(b)
At 31 December
At 31 December
Special Voting Share of 10p each(c)
Special Voting Share of 10p each(c)
DLC Dividend Share of 10p each(c)
DLC Dividend Share of 10p each(c)
Equalisation Share of 10p each(c)
Equalisation Share of 10p each(c)
2021
2021
US$m
US$m
207
207
—
—
207
207
1 only
1 only
1 only
1 only
1 only
1 only
2020
2020
US$m
US$m
207
207
—
—
207
207
1 only
1 only
1 only
1 only
1 only
1 only
(a)
(a)
38,581 new shares (2020: 39,273 new shares) were issued during the year and 1,197,858 shares (2020: 568,863 shares) were reissued from Treasury during the year resulting from the
38,581 new shares (2020: 39,273 new shares) were issued during the year and 1,197,858 shares (2020: 568,863 shares) were reissued from Treasury during the year resulting from the
vesting of awards and the exercise of options under Rio Tinto plc employee share-based payment plans, with exercise prices and market values between £44.61 and £64.80 per share.
vesting of awards and the exercise of options under Rio Tinto plc employee share-based payment plans, with exercise prices and market values between £44.61 and £64.80 per share.
(b)
(b)
The authority for the Company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares (2020: 3,627,568 shares) were bought back and cancelled in
The authority for the Company to buy back its ordinary shares was renewed at the 2021 annual general meeting. No shares (2020: 3,627,568 shares) were bought back and cancelled in
2021 under the on-market buy-back programme.
2021 under the on-market buy-back programme.
(c)
(c)
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
The “Special Voting Share” was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC Merger. The “DLC Dividend
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
Share” was issued to a subsidiary of Rio Tinto Limited to facilitate the efficient management of funds within the DLC structure. In addition, an Equalisation Share is authorised but not issued
and is governed by the terms of the DLC Merger Sharing Agreement.
and is governed by the terms of the DLC Merger Sharing Agreement.
F Other reserves
F Other reserves
Other reserves include US$11,936 million (2020: US$11,936 million) which represents the difference between the nominal value and issue price
Other reserves include US$11,936 million (2020: US$11,936 million) which represents the difference between the nominal value and issue price
of the shares issued arising from Rio Tinto plc’s rights issue completed in July 2009.
of the shares issued arising from Rio Tinto plc’s rights issue completed in July 2009.
G Rio Tinto plc guarantees
Rio Tinto plc provides a number of guarantees in respect of Group companies.
Rio Tinto plc and Rio Tinto Limited have jointly guaranteed the Group’s external listed debt under the US Shelf Programme, European Debt
Issuance Programme and Commercial Paper Programme which totalled US$5.5 billion at 31 December 2021 (31 December 2020: US$5.5 billion).
In addition, these entities also jointly guarantee the Group’s undrawn credit facility which was US$7.5 billion at 31 December 2021 (31 December
2020: US$7.5 billion). Rio Tinto plc has provided guarantees in respect of certain derivative contracts that are in a liability position of US$273
million at 31 December 2021 (31 December 2020: US$141 million).
Rio Tinto plc has provided a guarantee, known as the completion support undertaking (CSU), in favour of the Oyu Tolgoi LLC project finance
lenders. At 31 December 2021, US$4.3 billion of project finance debt was outstanding under this facility (31 December 2020: US$4.3 billion). Oyu
Tolgoi LLC is owned by Erdenes Oyu Tolgoi LLC (34%), which is controlled by the Government of Mongolia, and Turquoise Hill Resources Ltd
(66%, of which Rio Tinto owns 51%). The project finance has been raised for development of the underground mine and the CSU will terminate on
the completion of the underground mine according to a set of completion tests set out in the project finance facility.
The Rio Tinto guarantee applies to the extent that Turquoise Hill Resources Ltd cannot satisfy Oyu Tolgoi LLC’s project finance debt servicing
obligations under its own guarantee to the lenders, called the sponsor debt service undertaking (DSU). Both the CSU and DSU contain a carve-out
for certain political risk events.
During 2021, fees of US$108 million (2020: US$108 million) were received from Oyu Tolgoi LLC and Turquoise Hill Resources Ltd as consideration
for the provision of the CSU.
Rio Tinto plc has provided a number of guarantees in relation to various pension funds. Subject to certain conditions, Rio Tinto plc would pay any
contributions due from Group companies participating in these funds in the event that the companies fail to meet their contribution requirements.
The guarantees were not called upon in 2021. The aggregate of company contributions to these plans in 2021 was US$8 million (2020: US$10
million).
Other guarantees issued by Rio Tinto plc in relation to Rio Tinto Group entities as at 31 December 2021 amount to US$426 million (31 December
2020: US$388 million). Included within this balance is US$35 million (31 December 2020: US$35 million) in relation to non-wholly owned
subsidiaries.
Pursuant to the DLC Merger, both Rio Tinto plc and Rio Tinto Limited issued deed poll guarantees by which each company guaranteed contractual
obligations incurred by the other or guaranteed by the other.
The liability recognised for financial guarantees is US$156 million (31 December 2020: US$223 million) presented in “Other financial liabilities” in
the balance sheet.
H Contingent liabilities
Details of contingent liabilities are included in note 30 to the Group financial statements.
I Auditor’s remuneration
Amounts receivable by the Company’s auditor and its associates in respect of services to the Company and its associates, have not been disclosed
as the information is required instead to be disclosed on a consolidated basis in the consolidated financial statements.
J Events after the balance sheet date
There were no significant events after the balance sheet date requiring disclosure.
316
316
316
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317317
Financial statements continued
Financial statements continued
Rio Tinto Financial Information by Business
Unit
Rio Tinto Financial Information by Business Unit
Gross product sales(a)
for the year ended
31 December
Adjusted
Adjusted
Underlying EBITDA(b)
for the year ended
31 December
Adjusted
Adjusted
Underlying earnings(c)
for the year ended
31 December
Adjusted
Adjusted
2021
US$m
2020
US$m
2019
US$m
2021
US$m
2020
US$m
2019
US$m
2021
US$m
2020
US$m
2019
US$m
39,111
298
2,147
(1,974)
39,582
27,027
252
657
(428)
27,508
23,681
271
123
—
24,075
27,837
39
(81)
(203)
18,896
43
(32)
(70)
27,592
18,837
15,936
75
87
—
16,098
17,544
10
(79)
(152)
11,551
12
(112)
(53)
17,323
11,398
9,619
27
(8)
—
9,638
Rio Tinto
interest
%
(d)
68.4
(e)
(e)
2,490
2,720
4,940
2,204
2,302
2,203
2,233
2,743
4,489
6,706
1,944
2,947
(2,718) (2,510) (3,079)
8,458
11,881
856
814
9,314
12,695
—
—
9,314
12,695
9,275
1,065
10,340
—
10,340
619
569
2,592
693
14
4,487
26
4,513
943
262
904
112
6
2,227
7
2,234
1,045
567
755
(22)
30
2,375
16
2,391
174
306
1,454
426
192
2,552
17
2,569
(131)
(82)
(106)
(101)
4,382
2,152
2,285
2,468
100.0
30.0
(f)
(g)
2,528
2,935
1,971
7,434
—
393
7,827
1,529
2,296
1,078
4,903
—
66
4,969
1,879
2,136
1,166
5,181
—
15
5,196
1,142
2,013
1,213
4,368
588
1,462
390
2,440
843
1,034
357
2,234
513
1,003
325
1,841
(58)
(341)
(14)
(342)
(12)
(304)
(43)
(219)
3,969
2,084
1,918
1,579
58.7
(h)
100.0
(i)
3,526
1,791
592
501
6,410
71
6,481
2,444
1,651
564
459
5,118
52
5,170
2,189
1,938
593
619
5,339
55
5,394
2,026
470
89
180
2,765
1,130
476
126
83
1,815
1,024
611
180
151
1,966
734
176
32
99
1,041
(162)
(105)
(104)
2,603
1,710
1,862
(153)
888
434
92
169
(6)
(159)
530
(5)
525
(54)
471
149
650
160
959
(6)
(199)
754
383
216
65
9
673
(93)
580
498
247
40
(137)
21
669
10
679
(80)
599
397
325
25
747
(5)
(167)
575
332
254
96
(21)
661
(96)
565
(j)
251
321
393
(28)
24
(22)
(84)
(48)
(64)
(268)
(264)
(31)
42
(94)
(9)
19
(32)
(3)
66,568
47,018
45,367
38,560
24,713
22,132
22,193
13,123
11,310
110
117
59
133
118
60
(108)
(455)
(216)
(14)
(51)
(585)
(215)
(95)
(94)
(550)
(231)
(122)
10,373
(286) (2,679) (2,363)
12,448
(k)
(80)
(613)
(257)
(133)
(545)
(250)
(183)
(496)
(315)
37,720
23,902
21,197
21,380
(3,073) (2,407) (2,202)
(811)
(395)
(722)
(269) (1,272) (3,487)
(4,525) (4,074) (4,272)
(497)
(759)
(576)
(443)
(653)
(296)
(26) (1,751)
(648)
63,495
44,611
43,165
30,833
15,391
11,119
21,094
9,769
8,010
Iron Ore
Pilbara
Dampier Salt
Evaluation projects/other
Intra-segment
Total Iron Ore
Aluminium
Bauxite
Alumina
Primary Metal
Pacific Aluminium
Intra-segment and other
Integrated operations
Other product group items
Product group operations
Evaluation projects/other
Total Aluminium
Copper
Kennecott
Escondida
Oyu Tolgoi and Turquoise Hill
Product group operations
Simandou iron ore project
Evaluation projects/other
Total Copper
Minerals
Iron Ore Company of Canada
Rio Tinto Iron & Titanium
Rio Tinto Borates
Diamonds
Product group operations
Evaluation projects/other
Total Minerals
Other operations
Inter-segment transactions
Product group total
Central pension costs, share-based payments, insurance
and derivatives
Restructuring, project and one-off costs
Central costs
Central exploration and evaluation
Net interest
Underlying EBITDA/earnings
Items excluded from underlying EBITDA/earnings
Reconciliation to Group income statement
Share of equity accounted unit sales and intra-subsidiary/
equity accounted unit sales
Impairment charges net of reversals
Depreciation and amortisation in subsidiaries excluding
capitalised depreciation
Depreciation and amortisation in equity accounted units
Taxation and finance items in equity accounted units
Finance items
Consolidated sales revenue/profit before taxation/net
earnings
318
318
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Financial statements continued
Financial statements continued
Financial statements continued
Rio Tinto Financial Information by Business
Rio Tinto Financial Information by Business
Unit
Unit
Rio Tinto Financial Information by Business Unit
Financial statements
Financial statements
Rio Tinto Financial Information by Business
Unit
Capital expenditure(l)
for the year
ended 31 December
Depreciation and amortisation
for the year
ended 31 December
Operating assets(m)
as at 31 December
Employees for the year
ended 31 December
Adjusted Adjusted
Adjusted Adjusted
Adjusted Adjusted
Adjusted Adjusted
Rio Tinto
interest
%
2021
US$m
2020
US$m
2019
US$m
2021
US$m
2020
US$m
2019
US$m
2021
US$m
2020
US$m
2019
US$m
2021
2020
2019
Iron Ore
Pilbara
Dampier Salt
Evaluation projects/other
Intra-segment
Total Iron Ore
Aluminium
Bauxite
Alumina
Primary Metal
Pacific Aluminium
Intra-segment and other
Integrated operations
Other product group items
Product group operations
Evaluation projects/other
Total Aluminium
Copper
Kennecott
Escondida
Oyu Tolgoi and Turquoise Hill
Product group operations
Simandou iron ore project
Evaluation projects/other
Total Copper
Minerals
Iron Ore Company of Canada
Rio Tinto Iron & Titanium
Rio Tinto Borates
Diamonds
Product group operations
Evaluation projects/other
Total Minerals
Other operations
Inter-segment transactions
Product group total
Other items
Less: equity accounted units
Total
Add back: Proceeds from disposal
of property, plant and equipment
Total capital expenditure per cash
flow statement
Add: Net cash/(debt)
Equity attributable to owners of
Rio Tinto
(d)
68.4
(e)
(e)
3,928
19
—
—
3,947
2,919
22
—
—
2,941
1,720
21
—
—
1,741
2,003
20
—
—
2,023
1,819
19
—
—
1,838
1,704
19
—
—
1,723
16,850
159
1,283
(255)
16,253
163
338
(104)
13,865
152
2
—
14,019
12,810
388
16
—
13,214
11,522
351
10
—
11,883
10,634
347
—
—
10,981
18,037
16,650
180
362
698
133
(1)
142
228
602
114
(1)
1,372
—
1,372
—
1,372
1,085
—
1,085
—
1,085
387
282
658
129
—
1,456
—
1,456
—
1,456
328
165
694
103
(1)
290
138
643
119
1
1,191
—
1,191
—
1,191
286
187
682
154
—
1,309
—
1,309
3
1,312
2,542
2,258
9,734
228
839
15,601
—
15,601
—
15,601
2,593
2,294
9,361
455
662
15,365
—
15,365
—
15,365
2,597
2,009
9,674
970
780
16,030
—
16,030
—
16,030
2,972
2,463
6,280
2,450
185
14,350
—
14,350
—
14,350
2,853
2,383
6,282
2,469
141
14,128
—
14,128
—
14,128
2,940
2,269
6,357
2,356
127
14,049
—
14,049
—
14,049
1,289
—
1,289
—
1,289
100.0
30.0
(f)
(g)
411
220
911
1,542
—
6
1,548
618
178
1,038
1,834
444
315
1,289
2,048
(2)
5
1,837
(1)
1
2,048
538
348
213
1,099
—
4
1,103
472
428
189
1,089
—
4
1,093
457
508
208
1,173
—
3
1,176
2,404
2,515
8,998
13,917
13
210
14,140
2,317
2,726
8,111
13,154
16
192
13,362
2,012
2,871
6,780
11,663
20
152
11,835
2,051
1,166
3,508
6,725
101
228
7,054
2,171
1,124
3,450
6,745
69
159
6,973
2,066
1,068
3,152
6,286
74
150
6,510
58.7
(h)
100.0
(i)
377
184
43
25
629
15
644
243
144
42
25
454
1
455
(j)
(11)
2
255
249
43
38
585
—
585
1
197
213
51
12
473
1
474
199
170
173
49
60
452
—
452
199
172
193
60
144
569
—
569
180
1,077
3,369
487
(19)
1,009
3,390
502
(7)
4,914
43
4,957
4,894
33
4,927
803
3,507
525
195
5,030
37
5,067
2,877
4,129
978
646
8,630
136
8,766
2,716
4,151
966
885
8,718
77
8,795
2,617
4,115
924
940
8,596
53
8,649
(1,533)
(12)
(550)
129
49,883
(446)
127
46,632
297
488
1,016
7,500
6,320
5,831
5,088
4,773
4,960
51,190
43,681
42,267
41,205
117
(294)
79
(255)
64
(456)
106
(497)
82
(576)
7,323
6,144
5,439
4,697
4,279
61
45
49
7,384
6,189
5,488
77
(653)
4,384
(1,334) (2,165) (2,449) 5,664
5,207
4,802
49,856
47,718
44,183
49,345
47,474
46,007
1,576
(664) (3,651)
51,432
47,054
40,532
Evaluation projects/other
Evaluation projects/other
Iron Ore
Iron Ore
Pilbara
Pilbara
Dampier Salt
Dampier Salt
Intra-segment
Intra-segment
Total Iron Ore
Total Iron Ore
Aluminium
Aluminium
Bauxite
Bauxite
Alumina
Alumina
Primary Metal
Primary Metal
Pacific Aluminium
Pacific Aluminium
Intra-segment and other
Intra-segment and other
Integrated operations
Integrated operations
Other product group items
Other product group items
Product group operations
Product group operations
Evaluation projects/other
Evaluation projects/other
Total Aluminium
Total Aluminium
Copper
Copper
Kennecott
Kennecott
Escondida
Escondida
Oyu Tolgoi and Turquoise Hill
Oyu Tolgoi and Turquoise Hill
Product group operations
Product group operations
Simandou iron ore project
Simandou iron ore project
Evaluation projects/other
Evaluation projects/other
Total Copper
Total Copper
Minerals
Minerals
Iron Ore Company of Canada
Iron Ore Company of Canada
Rio Tinto Iron & Titanium
Rio Tinto Iron & Titanium
Rio Tinto Borates
Rio Tinto Borates
Diamonds
Diamonds
Product group operations
Product group operations
Evaluation projects/other
Evaluation projects/other
Total Minerals
Total Minerals
Other operations
Other operations
Inter-segment transactions
Inter-segment transactions
Product group total
Product group total
Central pension costs, share-based payments, insurance
Central pension costs, share-based payments, insurance
and derivatives
and derivatives
Restructuring, project and one-off costs
Restructuring, project and one-off costs
Central costs
Central costs
Net interest
Net interest
Central exploration and evaluation
Central exploration and evaluation
Underlying EBITDA/earnings
Underlying EBITDA/earnings
Items excluded from underlying EBITDA/earnings
Items excluded from underlying EBITDA/earnings
Reconciliation to Group income statement
Reconciliation to Group income statement
Share of equity accounted unit sales and intra-subsidiary/
Share of equity accounted unit sales and intra-subsidiary/
equity accounted unit sales
equity accounted unit sales
Impairment charges net of reversals
Impairment charges net of reversals
Depreciation and amortisation in subsidiaries excluding
Depreciation and amortisation in subsidiaries excluding
capitalised depreciation
capitalised depreciation
Depreciation and amortisation in equity accounted units
Depreciation and amortisation in equity accounted units
Taxation and finance items in equity accounted units
Taxation and finance items in equity accounted units
Finance items
Finance items
earnings
earnings
Consolidated sales revenue/profit before taxation/net
Consolidated sales revenue/profit before taxation/net
Gross product sales(a)
Gross product sales(a)
for the year ended
for the year ended
31 December
31 December
Underlying EBITDA(b)
Underlying EBITDA(b)
for the year ended
for the year ended
31 December
31 December
Underlying earnings(c)
Underlying earnings(c)
for the year ended
for the year ended
31 December
31 December
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Adjusted
Rio Tinto
Rio Tinto
interest
interest
%
%
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
(d)
(d)
39,111
39,111
27,027
27,027
23,681
23,681
27,837
27,837
18,896
18,896
15,936
15,936
17,544
17,544
11,551
11,551
9,619
9,619
68.4
68.4
298
298
2,147
2,147
(e)
(e)
(e)
(e)
(1,974)
(1,974)
(428)
(428)
252
252
657
657
271
271
123
123
—
—
39
39
(81)
(81)
(203)
(203)
43
43
(32)
(32)
(70)
(70)
75
75
87
87
—
—
10
10
12
12
(79)
(79)
(112)
(112)
(152)
(152)
(53)
(53)
27
27
(8)
(8)
—
—
39,582
39,582
27,508
27,508
24,075
24,075
27,592
27,592
18,837
18,837
16,098
16,098
17,323
17,323
11,398
11,398
9,638
9,638
2,203
2,203
2,302
2,302
2,490
2,490
2,743
2,743
2,233
2,233
2,720
2,720
2,947
2,947
1,944
1,944
2,204
2,204
(2,718) (2,510) (3,079)
(2,718) (2,510) (3,079)
619
619
569
569
693
693
14
14
6,706
6,706
4,489
4,489
4,940
4,940
2,592
2,592
755
755
1,454
1,454
943
943
1,045
1,045
567
567
(22)
(22)
30
30
174
174
306
306
426
426
192
192
262
262
904
904
112
112
6
6
7
7
11,881
11,881
8,458
8,458
9,275
9,275
4,487
4,487
2,227
2,227
2,375
2,375
2,552
2,552
814
814
856
856
1,065
1,065
26
26
16
16
17
17
12,695
12,695
9,314
9,314
10,340
10,340
4,513
4,513
2,234
2,234
2,391
2,391
2,569
2,569
—
—
—
—
—
—
(131)
(131)
(82)
(82)
(106)
(106)
(101)
(101)
(54)
(54)
12,695
12,695
9,314
9,314
10,340
10,340
4,382
4,382
2,152
2,152
2,285
2,285
2,468
2,468
471
471
(6)
(6)
(137)
(137)
100.0
100.0
2,528
2,528
1,529
1,529
1,879
1,879
1,142
1,142
588
588
843
843
513
513
30.0
30.0
2,935
2,935
2,296
2,296
2,136
2,136
2,013
2,013
1,462
1,462
1,034
1,034
1,003
1,003
(f)
(f)
1,971
1,971
1,078
1,078
1,166
1,166
1,213
1,213
390
390
357
357
325
325
7,434
7,434
4,903
4,903
5,181
5,181
4,368
4,368
2,440
2,440
2,234
2,234
1,841
1,841
(g)
(g)
—
—
393
393
—
—
66
66
—
—
15
15
(58)
(58)
(14)
(14)
(12)
(12)
(43)
(43)
(6)
(6)
(5)
(5)
(341)
(341)
(342)
(342)
(304)
(304)
(219)
(219)
(199)
(199)
(167)
(167)
7,827
7,827
4,969
4,969
5,196
5,196
3,969
3,969
2,084
2,084
1,918
1,918
1,579
1,579
754
754
575
575
58.7
58.7
3,526
3,526
2,444
2,444
2,189
2,189
2,026
2,026
1,130
1,130
1,024
1,024
(h)
(h)
1,791
1,791
1,651
1,651
1,938
1,938
100.0
100.0
(i)
(i)
592
592
501
501
564
564
459
459
593
593
619
619
470
470
89
89
180
180
476
476
126
126
83
83
611
611
180
180
151
151
734
734
176
176
32
32
99
99
6,410
6,410
5,118
5,118
5,339
5,339
2,765
2,765
1,815
1,815
1,966
1,966
1,041
1,041
71
71
52
52
55
55
(162)
(162)
(105)
(105)
(104)
(104)
(153)
(153)
(93)
(93)
6,481
6,481
5,170
5,170
5,394
5,394
2,603
2,603
1,710
1,710
1,862
1,862
888
888
580
580
(j)
(j)
251
251
321
321
393
393
(28)
(28)
24
24
(22)
(22)
(84)
(84)
(48)
(48)
(64)
(64)
(268)
(268)
(264)
(264)
(31)
(31)
42
42
(94)
(94)
(9)
(9)
19
19
(32)
(32)
(3)
(3)
66,568
66,568
47,018
47,018
45,367
45,367
38,560
38,560
24,713
24,713
22,132
22,132
22,193
22,193
13,123
13,123
11,310
11,310
434
434
92
92
169
169
(159)
(159)
530
530
(5)
(5)
525
525
149
149
650
650
160
160
959
959
383
383
216
216
65
65
9
9
673
673
498
498
247
247
40
40
21
21
669
669
10
10
679
679
(80)
(80)
599
599
397
397
325
325
25
25
747
747
332
332
254
254
96
96
(21)
(21)
661
661
(96)
(96)
565
565
110
110
117
117
59
59
133
133
118
118
60
60
(80)
(80)
(613)
(613)
(257)
(257)
(133)
(133)
(545)
(545)
(250)
(250)
(183)
(183)
(496)
(496)
(51)
(51)
(585)
(585)
(315)
(315)
(215)
(215)
(108)
(108)
(455)
(455)
(216)
(216)
(14)
(14)
(94)
(94)
(550)
(550)
(231)
(231)
(122)
(122)
(95)
(95)
37,720
37,720
23,902
23,902
21,197
21,197
21,380
21,380
12,448
12,448
10,373
10,373
(811)
(811)
(395)
(395)
(722)
(722)
(286) (2,679) (2,363)
(286) (2,679) (2,363)
(k)
(k)
(3,073) (2,407) (2,202)
(3,073) (2,407) (2,202)
(269) (1,272) (3,487)
(269) (1,272) (3,487)
(4,525) (4,074) (4,272)
(4,525) (4,074) (4,272)
(497)
(497)
(759)
(759)
(576)
(576)
(443)
(443)
(653)
(653)
(296)
(296)
(26) (1,751)
(26) (1,751)
(648)
(648)
63,495
63,495
44,611
44,611
43,165
43,165
30,833
30,833
15,391
15,391
11,119
11,119
21,094
21,094
9,769
9,769
8,010
8,010
318
318
318
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319319
Financial statements continued
Financial statements continued
Notes to Financial Information by Business
Unit
Notes to Financial Information by Business Unit
Business units are classified according to the Group’s management
structure.
The financial information by business unit has been recast in
accordance with the organisational restructure announced on 28
January 2021 and to improve the grouping of central costs according to
their nature. The main impacts are as follows: Simandou has moved
from the previous Energy & Minerals product group to the Copper
product group; Uranium has moved from the previous Energy &
Minerals product group to Other Operations; Diamonds has moved
from the previous Copper & Diamonds product group to the Minerals
product group; the Minerals product group retains the Argyle residual
operations and from 1 January 2021, Argyle closure has moved to
Other Operations. Argyle Residual operations includes activity relating
to the sale of remaining diamond inventory and property held. Argyle
closure includes activity relating to the management and execution of
the Argyle mine closure obligations and management of entities with
interests in state and traditional owner agreements and licences. As a
result of these changes, the Copper & Diamonds segment is renamed
Copper and the Energy & Minerals segment is renamed Minerals from
2021.
The disclosures in this note include certain alternative performance
measures (APMs). For more information on the APMs used by the
Group, including definitions and calculations, please refer to pages 343
to 347.
(a) Gross product sales include the sales revenue of equity accounted
units on a proportionately consolidated basis (after adjusting for
sales to subsidiaries) in addition to consolidated sales.
Consolidated sales revenue includes subsidiary sales to equity
accounted units, which are not included in gross product sales.
(b) Underlying EBITDA of subsidiaries, joint operations and the
Group’s share relating to equity accounted units represents profit
before: tax, net finance items, depreciation and amortisation
charged to the income statement in the period. Underlying
EBITDA excludes the EBITDA impact of the same items that are
excluded from underlying earnings.
(c) Underlying earnings represent net earnings attributable to the
owners of Rio Tinto, adjusted to exclude items which do not
reflect the underlying performance of the Group's operations.
Business unit earnings are stated before finance items, but after
the amortisation of discount related to provisions. Earnings
attributed to business units do not include amounts that are
excluded in arriving at underlying earnings.
(d) Pilbara represents the Group’s 100% holding in Hamersley, 50%
holding in Hope Downs Joint Venture and 65% holding in Robe
River Iron Associates. The Group’s net beneficial interest in Robe
River Iron Associates is 53%, as 30% is held through a 60%
owned subsidiary and 35% is held through a 100% owned
subsidiary.
(e) Gross product sales, Underlying EBITDA, Net Earnings and
Operating assets within Evaluation projects/other include
activities relating to the shipment and blending of Pilbara and Iron
Ore Company of Canada (IOC) iron ore inventories held at portside
in China and sold to domestic customers. Transactions between
Pilbara and our portside trading business are eliminated through
the Iron Ore “intra-segment” line and transactions between IOC
and the portside trading business are eliminated through “inter-
segment transactions”.
(f) Our interest in Oyu Tolgoi is held indirectly through our 50.8%
investment in Turquoise Hill Resources Ltd (TRQ), where TRQ’s
principal asset is its 66% investment in Oyu Tolgoi LLC, which
owns the Oyu Tolgoi copper-gold mine.
(g) Simfer Jersey Limited, a company incorporated in Jersey, in which
the Group has a 53% interest, has an 85% interest in Simfer S.A.,
the company that manages the Simandou project in Guinea. The
Group therefore has a 45.05% indirect interest in Simfer S.A.
These entities are consolidated as subsidiaries and together
referred to as the Simandou iron ore project.
(h)
(i)
Includes our interests in Rio Tinto Fer et Titane (100%), QIT
Madagascar Minerals (QMM, 80%) and Richards Bay Minerals
(attributable interest of 74%).
Includes our interests in Argyle (100%) residual operations which
relates to the sale of remaining inventory and Diavik. Until 18
November we recognised our 60% share of assets, revenue and
expenses relating to the Diavik joint venture. Liabilities were
recognised according to Diavik Diamond Mine Inc’s contractual
obligations at 100%, with a corresponding 40% receivable or
contingent asset representing the co-owner’s share where
applicable. Post acquisition, we now consolidate (100%) of the
Diavik Diamond Mine. From 1 June 2021, management
responsibility for rehabilitation of the Argyle site moved from
Minerals to Rio Tinto Closure (RTC), hence, Argyle closure is
reported in Other operations effective from 1 January 2021. Refer
to (j) below.
(j) Other operations include our 100% interest in the Gove alumina
refinery (under rehabilitation), Rio Tinto Marine, and the
remaining legacy liabilities of Rio Tinto Coal Australia. These
include provisions for onerous contracts, in relation to rail
infrastructure capacity, partly offset by financial assets and
receivables relating to contingent royalties and disposal proceeds.
From 1 January 2021, Uranium moved from Minerals to Other
operations. From 1 January 2021, Argyle closure is reported as
part of Other Operations.
(k) Mark-to-market movements on commodity derivatives entered
into with the commercial objective of achieving spot pricing for
the underlying transaction at the date of settlement have been
reclassified from Central costs and are now included in Central
pensions, share based payments, insurance & derivatives, in order
to provide a better understanding of Central costs. The impact of
this change on the reported comparatives is insignificant, and
therefore the comparatives have not been restated.
(l)
Capital expenditure is the net cash outflow on purchases less
sales of property, plant and equipment, capitalised evaluation
costs and purchases less sales of other intangible assets. The
details provided include 100% of subsidiaries’ capital expenditure
and Rio Tinto’s share of the capital expenditure of joint operations
and equity accounted units.
(m) Operating assets of the Group represents equity attributable to
Rio Tinto adding back net cash/(debt). Operating assets of
subsidiaries, joint operations and the Group’s share relating to
equity accounted units are comprised of net assets excluding net
cash/(debt) and post-retirement assets and liabilities, net of tax.
Operating assets are stated after the deduction of non-controlling
interests, these are calculated by reference to the net assets of
the relevant companies (i.e. inclusive of such companies’ debt and
amounts due to or from Rio Tinto Group companies).
320
320
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Unit
Unit
structure.
structure.
2021.
2021.
to 347.
to 347.
Financial statements continued
Financial statements continued
Financial statements continued
Notes to Financial Information by Business
Notes to Financial Information by Business
Notes to Financial Information by Business Unit
Business units are classified according to the Group’s management
Business units are classified according to the Group’s management
(f) Our interest in Oyu Tolgoi is held indirectly through our 50.8%
(f) Our interest in Oyu Tolgoi is held indirectly through our 50.8%
investment in Turquoise Hill Resources Ltd (TRQ), where TRQ’s
investment in Turquoise Hill Resources Ltd (TRQ), where TRQ’s
principal asset is its 66% investment in Oyu Tolgoi LLC, which
principal asset is its 66% investment in Oyu Tolgoi LLC, which
owns the Oyu Tolgoi copper-gold mine.
owns the Oyu Tolgoi copper-gold mine.
The financial information by business unit has been recast in
The financial information by business unit has been recast in
accordance with the organisational restructure announced on 28
accordance with the organisational restructure announced on 28
January 2021 and to improve the grouping of central costs according to
January 2021 and to improve the grouping of central costs according to
(g) Simfer Jersey Limited, a company incorporated in Jersey, in which
(g) Simfer Jersey Limited, a company incorporated in Jersey, in which
their nature. The main impacts are as follows: Simandou has moved
their nature. The main impacts are as follows: Simandou has moved
the Group has a 53% interest, has an 85% interest in Simfer S.A.,
the Group has a 53% interest, has an 85% interest in Simfer S.A.,
from the previous Energy & Minerals product group to the Copper
from the previous Energy & Minerals product group to the Copper
the company that manages the Simandou project in Guinea. The
the company that manages the Simandou project in Guinea. The
product group; Uranium has moved from the previous Energy &
product group; Uranium has moved from the previous Energy &
Group therefore has a 45.05% indirect interest in Simfer S.A.
Group therefore has a 45.05% indirect interest in Simfer S.A.
Minerals product group to Other Operations; Diamonds has moved
Minerals product group to Other Operations; Diamonds has moved
These entities are consolidated as subsidiaries and together
These entities are consolidated as subsidiaries and together
from the previous Copper & Diamonds product group to the Minerals
from the previous Copper & Diamonds product group to the Minerals
referred to as the Simandou iron ore project.
referred to as the Simandou iron ore project.
product group; the Minerals product group retains the Argyle residual
product group; the Minerals product group retains the Argyle residual
operations and from 1 January 2021, Argyle closure has moved to
operations and from 1 January 2021, Argyle closure has moved to
(h)
(h)
Includes our interests in Rio Tinto Fer et Titane (100%), QIT
Includes our interests in Rio Tinto Fer et Titane (100%), QIT
Other Operations. Argyle Residual operations includes activity relating
Other Operations. Argyle Residual operations includes activity relating
Madagascar Minerals (QMM, 80%) and Richards Bay Minerals
Madagascar Minerals (QMM, 80%) and Richards Bay Minerals
to the sale of remaining diamond inventory and property held. Argyle
to the sale of remaining diamond inventory and property held. Argyle
closure includes activity relating to the management and execution of
closure includes activity relating to the management and execution of
the Argyle mine closure obligations and management of entities with
the Argyle mine closure obligations and management of entities with
interests in state and traditional owner agreements and licences. As a
interests in state and traditional owner agreements and licences. As a
result of these changes, the Copper & Diamonds segment is renamed
result of these changes, the Copper & Diamonds segment is renamed
Copper and the Energy & Minerals segment is renamed Minerals from
Copper and the Energy & Minerals segment is renamed Minerals from
(attributable interest of 74%).
(attributable interest of 74%).
(i)
(i)
Includes our interests in Argyle (100%) residual operations which
Includes our interests in Argyle (100%) residual operations which
relates to the sale of remaining inventory and Diavik. Until 18
relates to the sale of remaining inventory and Diavik. Until 18
November we recognised our 60% share of assets, revenue and
November we recognised our 60% share of assets, revenue and
expenses relating to the Diavik joint venture. Liabilities were
expenses relating to the Diavik joint venture. Liabilities were
recognised according to Diavik Diamond Mine Inc’s contractual
recognised according to Diavik Diamond Mine Inc’s contractual
obligations at 100%, with a corresponding 40% receivable or
obligations at 100%, with a corresponding 40% receivable or
contingent asset representing the co-owner’s share where
contingent asset representing the co-owner’s share where
applicable. Post acquisition, we now consolidate (100%) of the
applicable. Post acquisition, we now consolidate (100%) of the
responsibility for rehabilitation of the Argyle site moved from
responsibility for rehabilitation of the Argyle site moved from
Minerals to Rio Tinto Closure (RTC), hence, Argyle closure is
Minerals to Rio Tinto Closure (RTC), hence, Argyle closure is
The disclosures in this note include certain alternative performance
The disclosures in this note include certain alternative performance
measures (APMs). For more information on the APMs used by the
measures (APMs). For more information on the APMs used by the
Group, including definitions and calculations, please refer to pages 343
Group, including definitions and calculations, please refer to pages 343
Diavik Diamond Mine. From 1 June 2021, management
Diavik Diamond Mine. From 1 June 2021, management
(a) Gross product sales include the sales revenue of equity accounted
(a) Gross product sales include the sales revenue of equity accounted
reported in Other operations effective from 1 January 2021. Refer
reported in Other operations effective from 1 January 2021. Refer
units on a proportionately consolidated basis (after adjusting for
units on a proportionately consolidated basis (after adjusting for
to (j) below.
to (j) below.
sales to subsidiaries) in addition to consolidated sales.
sales to subsidiaries) in addition to consolidated sales.
Consolidated sales revenue includes subsidiary sales to equity
Consolidated sales revenue includes subsidiary sales to equity
accounted units, which are not included in gross product sales.
accounted units, which are not included in gross product sales.
(b) Underlying EBITDA of subsidiaries, joint operations and the
(b) Underlying EBITDA of subsidiaries, joint operations and the
(j) Other operations include our 100% interest in the Gove alumina
(j) Other operations include our 100% interest in the Gove alumina
refinery (under rehabilitation), Rio Tinto Marine, and the
refinery (under rehabilitation), Rio Tinto Marine, and the
remaining legacy liabilities of Rio Tinto Coal Australia. These
remaining legacy liabilities of Rio Tinto Coal Australia. These
include provisions for onerous contracts, in relation to rail
include provisions for onerous contracts, in relation to rail
Group’s share relating to equity accounted units represents profit
Group’s share relating to equity accounted units represents profit
infrastructure capacity, partly offset by financial assets and
infrastructure capacity, partly offset by financial assets and
before: tax, net finance items, depreciation and amortisation
before: tax, net finance items, depreciation and amortisation
charged to the income statement in the period. Underlying
charged to the income statement in the period. Underlying
receivables relating to contingent royalties and disposal proceeds.
receivables relating to contingent royalties and disposal proceeds.
From 1 January 2021, Uranium moved from Minerals to Other
From 1 January 2021, Uranium moved from Minerals to Other
EBITDA excludes the EBITDA impact of the same items that are
EBITDA excludes the EBITDA impact of the same items that are
operations. From 1 January 2021, Argyle closure is reported as
operations. From 1 January 2021, Argyle closure is reported as
excluded from underlying earnings.
excluded from underlying earnings.
part of Other Operations.
part of Other Operations.
(c) Underlying earnings represent net earnings attributable to the
(c) Underlying earnings represent net earnings attributable to the
(k) Mark-to-market movements on commodity derivatives entered
(k) Mark-to-market movements on commodity derivatives entered
owners of Rio Tinto, adjusted to exclude items which do not
owners of Rio Tinto, adjusted to exclude items which do not
into with the commercial objective of achieving spot pricing for
into with the commercial objective of achieving spot pricing for
reflect the underlying performance of the Group's operations.
reflect the underlying performance of the Group's operations.
the underlying transaction at the date of settlement have been
the underlying transaction at the date of settlement have been
Business unit earnings are stated before finance items, but after
Business unit earnings are stated before finance items, but after
reclassified from Central costs and are now included in Central
reclassified from Central costs and are now included in Central
the amortisation of discount related to provisions. Earnings
the amortisation of discount related to provisions. Earnings
attributed to business units do not include amounts that are
attributed to business units do not include amounts that are
excluded in arriving at underlying earnings.
excluded in arriving at underlying earnings.
pensions, share based payments, insurance & derivatives, in order
pensions, share based payments, insurance & derivatives, in order
to provide a better understanding of Central costs. The impact of
to provide a better understanding of Central costs. The impact of
this change on the reported comparatives is insignificant, and
this change on the reported comparatives is insignificant, and
therefore the comparatives have not been restated.
therefore the comparatives have not been restated.
(d) Pilbara represents the Group’s 100% holding in Hamersley, 50%
(d) Pilbara represents the Group’s 100% holding in Hamersley, 50%
holding in Hope Downs Joint Venture and 65% holding in Robe
holding in Hope Downs Joint Venture and 65% holding in Robe
(l)
(l)
Capital expenditure is the net cash outflow on purchases less
Capital expenditure is the net cash outflow on purchases less
River Iron Associates. The Group’s net beneficial interest in Robe
River Iron Associates. The Group’s net beneficial interest in Robe
sales of property, plant and equipment, capitalised evaluation
sales of property, plant and equipment, capitalised evaluation
River Iron Associates is 53%, as 30% is held through a 60%
River Iron Associates is 53%, as 30% is held through a 60%
owned subsidiary and 35% is held through a 100% owned
owned subsidiary and 35% is held through a 100% owned
subsidiary.
subsidiary.
(e) Gross product sales, Underlying EBITDA, Net Earnings and
(e) Gross product sales, Underlying EBITDA, Net Earnings and
costs and purchases less sales of other intangible assets. The
costs and purchases less sales of other intangible assets. The
details provided include 100% of subsidiaries’ capital expenditure
details provided include 100% of subsidiaries’ capital expenditure
and Rio Tinto’s share of the capital expenditure of joint operations
and Rio Tinto’s share of the capital expenditure of joint operations
and equity accounted units.
and equity accounted units.
Operating assets within Evaluation projects/other include
Operating assets within Evaluation projects/other include
(m) Operating assets of the Group represents equity attributable to
(m) Operating assets of the Group represents equity attributable to
activities relating to the shipment and blending of Pilbara and Iron
activities relating to the shipment and blending of Pilbara and Iron
Rio Tinto adding back net cash/(debt). Operating assets of
Rio Tinto adding back net cash/(debt). Operating assets of
Ore Company of Canada (IOC) iron ore inventories held at portside
Ore Company of Canada (IOC) iron ore inventories held at portside
subsidiaries, joint operations and the Group’s share relating to
subsidiaries, joint operations and the Group’s share relating to
in China and sold to domestic customers. Transactions between
in China and sold to domestic customers. Transactions between
equity accounted units are comprised of net assets excluding net
equity accounted units are comprised of net assets excluding net
Pilbara and our portside trading business are eliminated through
Pilbara and our portside trading business are eliminated through
cash/(debt) and post-retirement assets and liabilities, net of tax.
cash/(debt) and post-retirement assets and liabilities, net of tax.
the Iron Ore “intra-segment” line and transactions between IOC
the Iron Ore “intra-segment” line and transactions between IOC
Operating assets are stated after the deduction of non-controlling
Operating assets are stated after the deduction of non-controlling
and the portside trading business are eliminated through “inter-
and the portside trading business are eliminated through “inter-
interests, these are calculated by reference to the net assets of
interests, these are calculated by reference to the net assets of
segment transactions”.
segment transactions”.
the relevant companies (i.e. inclusive of such companies’ debt and
the relevant companies (i.e. inclusive of such companies’ debt and
amounts due to or from Rio Tinto Group companies).
amounts due to or from Rio Tinto Group companies).
Financial statements continued
Financial statements
Australian Corporations Act – Summary of
Australian Corporations Act – Summary of
ASIC Relief
ASIC Relief
Pursuant to section 340 of the Australian Corporations Act 2001
(Corporations Act), the Australian Securities and Investments
Commission issued an order dated 16 July 2021 that granted relief to
Rio Tinto Limited from certain requirements of the Corporations Act in
relation to its financial statements and associated reports. The order
essentially continues the relief that has applied to Rio Tinto Limited
since the formation of the Group’s dual listed companies (DLC)
structure in 1995. The order applies to Rio Tinto Limited’s financial
reporting obligations for the financial years up to and including 31
December 2023.
In essence, instead of being required under the Corporations Act to
prepare consolidated financial statements covering only itself and its
controlled entities, the order allows Rio Tinto Limited to prepare
consolidated financial statements in which it, Rio Tinto plc and their
respective controlled entities are treated as a single economic entity.
In addition, those consolidated financial statements are to be prepared:
Those consolidated financial statements must also be audited in
relation to their compliance with relevant Australian and UK
requirements. Rio Tinto Limited must also prepare a Directors’ Report
which satisfies the content requirements of the Corporations Act
(applied on the basis that for these purposes the consolidated entity is
the Group, and the consolidated financial statements cover the Group).
This includes a Remuneration Report (see pages 168 to 198) prepared
in accordance with the requirements of the Corporations Act.
Rio Tinto Limited is also required to comply generally with the
lodgement and distribution requirements of the Corporations Act
(including timing requirements) in relation to those consolidated
financial statements (including any concise financial statements), the
Auditors’ report and the Directors’ Report. The Corporations Act also
requires that a non-binding resolution to adopt the Remuneration
Report be voted on by shareholders at Rio Tinto Limited’s annual
general meeting.
Rio Tinto Limited is not required to prepare separate consolidated
financial statements solely for it and its controlled entities. Rio Tinto
Limited is also not required to prepare and lodge parent entity financial
statements for itself in respect of each relevant financial year.
Rio Tinto Limited must, however, in accordance with the Corporations
Act include in the consolidated financial statements for the Group, as a
note, various parent entity information regarding Rio Tinto Limited
(including in relation to assets, liabilities, shareholders’ equity, profit
and loss, income, guarantees, contingent liabilities, and contractual
commitments) prepared in accordance with AAS (see page 291).
– in accordance with the principles and requirements of International
Financial Reporting Standards as adopted by the United Kingdom
(UK IFRS) rather than the Australian Accounting Standards (AAS)
(except for one limited instance in the case of any concise report),
and in accordance with UK financial reporting obligations generally;
– on the basis that the transitional provisions of International Financial
Reporting Standard 1, First-time Adoption of International Financial
Reporting Standards, should be applied using the combined financial
statements previously prepared for Rio Tinto Limited, Rio Tinto plc
and their respective controlled entities under Generally Accepted
Accounting Principles in the United Kingdom, under which the DLC
Merger between Rio Tinto Limited and Rio Tinto plc was accounted
for using “merger”, rather than “acquisition”, accounting (reflecting
that neither Rio Tinto Limited nor Rio Tinto plc was acquired by, or is
controlled by, the other; and meaning that the existing carrying
amounts, rather than fair values, of assets and liabilities at the time
of the DLC Merger were used to measure those assets and liabilities
at formation);
– on the basis that Rio Tinto Limited and Rio Tinto plc are a single
company (with their respective shareholders being the shareholders
in that single company); and
– with a reconciliation, from UK IFRS to AAS, of the following amounts:
consolidated loss/profit for the financial year, total consolidated
comprehensive loss/income for the financial year and total
consolidated equity at the end of the financial year (see page 217).
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Financial statements
Financial statements continued
Directors’ Declaration
Directors’ Declaration
Directors' statement of responsibilities in relation to the Group financial statements,
Directors’ statement of responsibilities in relation to the Group financial statements,
Rio Tinto plc financial statements and Rio Tinto Limited financial statements
Rio Tinto plc financial statements and Rio Tinto Limited financial statements
The directors are responsible for preparing the Annual Report, the
Remuneration Report and the financial statements in accordance with
applicable law and regulations.
The directors are also responsible for safeguarding the assets of the
companies and the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
UK and Australian company law requires the directors to prepare
financial statements for each financial year. Under UK law, the
directors have elected to prepare the group financial statements in
accordance with UK-adopted international accounting standards and
applicable law and have elected to prepare the parent company
financial statements in accordance with UK accounting standards and
applicable law (UK Generally Accepted Accounting Practice), including
FRS 101 Reduced Disclosure Framework. Under Australian law, the
directors are also required to prepare certain Rio Tinto Limited parent
company financial statements in accordance with Australian
Accounting Standards (AAS). In preparing the Group financial
statements, the directors have also elected to comply with IFRSs,
issued by the International Accounting Standards Board (IASB).
Under UK and Australian company law the directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the companies as
at the end of the financial year, and of the profit or loss of the
companies and Group for the period (as applicable).
In preparing these financial statements, the directors are required to:
– select suitable accounting policies and apply them consistently;
– make judgments and estimates that are reasonable, relevant,
reliable and prudent;
– state whether applicable UK adopted international accounting
standards and AAS have been followed, subject to any material
departures disclosed and explained in the Group and parent
company financial statements respectively;
– assess the Group and companies’ ability to continue as a going
concern, disclosing as applicable, matters related to going concern;
– use the going concern basis of accounting unless they either intend
to liquidate the Group or the companies or to cease operations, or
have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the transactions of the
companies and the Group and disclose with reasonable accuracy at any
time the financial position of the companies and the Group and enable
them to ensure that:
– the Group financial statements comply with the UK Companies Act
2006, the Australian Corporations Act 2001 as amended by the
Australian Securities and Investments Commission Order dated 16
July 2021;
– the Rio Tinto plc financial statements comply with the UK
Companies Act 2006;
– the Rio Tinto Limited parent company disclosures comply with
the Corporations Act as amended by the Australian Securities and
Investments Commission Order dated 16 July 2021; and
– the Remuneration Report complies with the UK Companies Act
2006 and the Australian Corporations Act 2001 as amended by the
Australian Securities and Investments Commission Order dated 16
July 2021.
The directors are responsible for the maintenance and integrity of the
Group’s website. Legislation governing the preparation and
dissemination of financial statements may differ between jurisdictions
in which the Group reports.
Each of the current directors, whose names and function are listed on
pages 134-135 in the Governance section, confirm that, to the best of
their knowledge:
– the Rio Tinto Group financial statements and notes, which have
been prepared in accordance with international accounting
standards in conformity with the requirements of UK-adopted
international accounting standards, the Australian Corporations Act
2001 as amended by the Australian Securities and Investments
Commission Order dated 16 July 2021, the UK Companies Act 2006,
give a true and fair view of the assets, liabilities, financial position
and profit of the Group;
– the Rio Tinto plc financial statements and notes, which have been
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, give a true and fair view of the assets,
liabilities, financial position and profit of the company;
– the Rio Tinto Limited parent company disclosures, which have been
prepared in accordance with the AAS and Australian Corporations
Act 2001 as amended by the Australian Securities and Investments
Commission Order dated 16 July 2021, give a true and fair view of
the assets, liabilities, financial position and profit of the company;
– the Strategic Report section of the Annual Report includes a fair
review of the development and performance of the business and the
position of the Group, together with a description of the principal
risks and uncertainties that it faces; and
– there are reasonable grounds to believe that each of the Rio Tinto
Group, Rio Tinto plc and Rio Tinto Limited will be able to pay its
debts as and when they become due and payable.
The directors have been given the declarations by the Chief Executive
and Chief Financial Officer required by section 295A of the Australian
Corporations Act 2001 as amended by the Australian Securities and
Investments Commission Order dated 16 July 2021.
Disclosure of information to auditors
The directors in office at the date of this report have each confirmed
that:
– so far as they are aware, there is no relevant audit information of
which the Group’s auditors are unaware; and
– they have taken all the steps that they ought to have taken as a
director to make themselves aware of any relevant audit
information and to establish that the Group’s auditors are aware of
that information.
This declaration is made in accordance with a resolution of the Board.
Simon Thompson
Chairman
Jakob Stausholm
Chief Executive
Peter Cunningham
Chief Financial Officer
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Financial statements
Financial statements
Financial statements continued
Directors’ Declaration
Directors’ Declaration
Directors’ Declaration
Directors' statement of responsibilities in relation to the Group financial statements,
Directors' statement of responsibilities in relation to the Group financial statements,
Directors’ statement of responsibilities in relation to the Group financial statements,
Rio Tinto plc financial statements and Rio Tinto Limited financial statements
Rio Tinto plc financial statements and Rio Tinto Limited financial statements
Rio Tinto plc financial statements and Rio Tinto Limited financial statements
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
The directors are responsible for preparing the Annual Report, the
The directors are responsible for preparing the Annual Report, the
The directors are also responsible for safeguarding the assets of the
The directors are also responsible for safeguarding the assets of the
Remuneration Report and the financial statements in accordance with
Remuneration Report and the financial statements in accordance with
companies and the Group and hence for taking reasonable steps for
companies and the Group and hence for taking reasonable steps for
applicable law and regulations.
applicable law and regulations.
the prevention and detection of fraud and other irregularities.
the prevention and detection of fraud and other irregularities.
REPORT ON THE AUDITS OF THE FINANCIAL STATEMENTS
1. OPINIONS: OUR OPINIONS ARE UNMODIFIED
UK and Australian company law requires the directors to prepare
UK and Australian company law requires the directors to prepare
The directors are responsible for the maintenance and integrity of the
The directors are responsible for the maintenance and integrity of the
In KPMG UK’s opinion:
financial statements for each financial year. Under UK law, the
financial statements for each financial year. Under UK law, the
Group’s website. Legislation governing the preparation and
Group’s website. Legislation governing the preparation and
directors have elected to prepare the group financial statements in
directors have elected to prepare the group financial statements in
dissemination of financial statements may differ between jurisdictions
dissemination of financial statements may differ between jurisdictions
accordance with UK-adopted international accounting standards and
accordance with UK-adopted international accounting standards and
in which the Group reports.
in which the Group reports.
applicable law and have elected to prepare the parent company
applicable law and have elected to prepare the parent company
financial statements in accordance with UK accounting standards and
financial statements in accordance with UK accounting standards and
Each of the current directors, whose names and function are listed on
Each of the current directors, whose names and function are listed on
applicable law (UK Generally Accepted Accounting Practice), including
applicable law (UK Generally Accepted Accounting Practice), including
pages 134-135 in the Governance section, confirm that, to the best of
pages 134-135 in the Governance section, confirm that, to the best of
FRS 101 Reduced Disclosure Framework. Under Australian law, the
FRS 101 Reduced Disclosure Framework. Under Australian law, the
their knowledge:
their knowledge:
directors are also required to prepare certain Rio Tinto Limited parent
directors are also required to prepare certain Rio Tinto Limited parent
company financial statements in accordance with Australian
company financial statements in accordance with Australian
Accounting Standards (AAS). In preparing the Group financial
Accounting Standards (AAS). In preparing the Group financial
statements, the directors have also elected to comply with IFRSs,
statements, the directors have also elected to comply with IFRSs,
issued by the International Accounting Standards Board (IASB).
issued by the International Accounting Standards Board (IASB).
Under UK and Australian company law the directors must not approve
Under UK and Australian company law the directors must not approve
the financial statements unless they are satisfied that they give a true
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the companies as
and fair view of the state of affairs of the Group and the companies as
at the end of the financial year, and of the profit or loss of the
at the end of the financial year, and of the profit or loss of the
companies and Group for the period (as applicable).
companies and Group for the period (as applicable).
In preparing these financial statements, the directors are required to:
In preparing these financial statements, the directors are required to:
– select suitable accounting policies and apply them consistently;
– select suitable accounting policies and apply them consistently;
– make judgments and estimates that are reasonable, relevant,
– make judgments and estimates that are reasonable, relevant,
reliable and prudent;
reliable and prudent;
– state whether applicable UK adopted international accounting
– state whether applicable UK adopted international accounting
standards and AAS have been followed, subject to any material
standards and AAS have been followed, subject to any material
departures disclosed and explained in the Group and parent
departures disclosed and explained in the Group and parent
company financial statements respectively;
company financial statements respectively;
– assess the Group and companies’ ability to continue as a going
– assess the Group and companies’ ability to continue as a going
– the Rio Tinto Group financial statements and notes, which have
– the Rio Tinto Group financial statements and notes, which have
been prepared in accordance with international accounting
been prepared in accordance with international accounting
standards in conformity with the requirements of UK-adopted
standards in conformity with the requirements of UK-adopted
international accounting standards, the Australian Corporations Act
international accounting standards, the Australian Corporations Act
2001 as amended by the Australian Securities and Investments
2001 as amended by the Australian Securities and Investments
Commission Order dated 16 July 2021, the UK Companies Act 2006,
Commission Order dated 16 July 2021, the UK Companies Act 2006,
give a true and fair view of the assets, liabilities, financial position
give a true and fair view of the assets, liabilities, financial position
and profit of the Group;
and profit of the Group;
– the Rio Tinto plc financial statements and notes, which have been
– the Rio Tinto plc financial statements and notes, which have been
prepared in accordance with United Kingdom Generally Accepted
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice, give a true and fair view of the assets,
Accounting Practice, give a true and fair view of the assets,
liabilities, financial position and profit of the company;
liabilities, financial position and profit of the company;
– the Rio Tinto Limited parent company disclosures, which have been
– the Rio Tinto Limited parent company disclosures, which have been
prepared in accordance with the AAS and Australian Corporations
prepared in accordance with the AAS and Australian Corporations
Act 2001 as amended by the Australian Securities and Investments
Act 2001 as amended by the Australian Securities and Investments
Commission Order dated 16 July 2021, give a true and fair view of
Commission Order dated 16 July 2021, give a true and fair view of
the assets, liabilities, financial position and profit of the company;
the assets, liabilities, financial position and profit of the company;
– the Strategic Report section of the Annual Report includes a fair
– the Strategic Report section of the Annual Report includes a fair
review of the development and performance of the business and the
review of the development and performance of the business and the
position of the Group, together with a description of the principal
position of the Group, together with a description of the principal
risks and uncertainties that it faces; and
risks and uncertainties that it faces; and
concern, disclosing as applicable, matters related to going concern;
concern, disclosing as applicable, matters related to going concern;
– there are reasonable grounds to believe that each of the Rio Tinto
– there are reasonable grounds to believe that each of the Rio Tinto
– use the going concern basis of accounting unless they either intend
– use the going concern basis of accounting unless they either intend
to liquidate the Group or the companies or to cease operations, or
to liquidate the Group or the companies or to cease operations, or
have no realistic alternative but to do so.
have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the transactions of the
that are sufficient to show and explain the transactions of the
companies and the Group and disclose with reasonable accuracy at any
companies and the Group and disclose with reasonable accuracy at any
time the financial position of the companies and the Group and enable
time the financial position of the companies and the Group and enable
them to ensure that:
them to ensure that:
– the Group financial statements comply with the UK Companies Act
– the Group financial statements comply with the UK Companies Act
2006, the Australian Corporations Act 2001 as amended by the
2006, the Australian Corporations Act 2001 as amended by the
Australian Securities and Investments Commission Order dated 16
Australian Securities and Investments Commission Order dated 16
that:
that:
July 2021;
July 2021;
Companies Act 2006;
Companies Act 2006;
– the Rio Tinto plc financial statements comply with the UK
– the Rio Tinto plc financial statements comply with the UK
Group, Rio Tinto plc and Rio Tinto Limited will be able to pay its
Group, Rio Tinto plc and Rio Tinto Limited will be able to pay its
debts as and when they become due and payable.
debts as and when they become due and payable.
The directors have been given the declarations by the Chief Executive
The directors have been given the declarations by the Chief Executive
and Chief Financial Officer required by section 295A of the Australian
and Chief Financial Officer required by section 295A of the Australian
Corporations Act 2001 as amended by the Australian Securities and
Corporations Act 2001 as amended by the Australian Securities and
Investments Commission Order dated 16 July 2021.
Investments Commission Order dated 16 July 2021.
Disclosure of information to auditors
Disclosure of information to auditors
The directors in office at the date of this report have each confirmed
The directors in office at the date of this report have each confirmed
– so far as they are aware, there is no relevant audit information of
– so far as they are aware, there is no relevant audit information of
which the Group’s auditors are unaware; and
which the Group’s auditors are unaware; and
– they have taken all the steps that they ought to have taken as a
– they have taken all the steps that they ought to have taken as a
director to make themselves aware of any relevant audit
director to make themselves aware of any relevant audit
– the Rio Tinto Limited parent company disclosures comply with
– the Rio Tinto Limited parent company disclosures comply with
information and to establish that the Group’s auditors are aware of
information and to establish that the Group’s auditors are aware of
the Corporations Act as amended by the Australian Securities and
the Corporations Act as amended by the Australian Securities and
that information.
that information.
Investments Commission Order dated 16 July 2021; and
Investments Commission Order dated 16 July 2021; and
This declaration is made in accordance with a resolution of the Board.
This declaration is made in accordance with a resolution of the Board.
– the Remuneration Report complies with the UK Companies Act
– the Remuneration Report complies with the UK Companies Act
2006 and the Australian Corporations Act 2001 as amended by the
2006 and the Australian Corporations Act 2001 as amended by the
Australian Securities and Investments Commission Order dated 16
Australian Securities and Investments Commission Order dated 16
July 2021.
July 2021.
Simon Thompson
Simon Thompson
Chairman
Chairman
Jakob Stausholm
Jakob Stausholm
Chief Executive
Chief Executive
Peter Cunningham
Peter Cunningham
Chief Financial Officer
Chief Financial Officer
the financial statements give a true and fair view of the state of the Group’s and of the UK parent company, Rio Tinto plc’s, affairs as at 31 December
2021, and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards and IFRSs as issued
by the International Accounting Standards Board (IASB). As explained in note 1 to the financial statements, the Group, in addition to complying with
its legal obligation to apply UK-adopted international accounting standards, has applied IFRSs as issued by the IASB;
the Rio Tinto plc company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 101
“Reduced Disclosure Framework”; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
In KPMG Australia’s opinion:
The accompanying Group financial statements are in accordance with the Australian Corporations Act 2001, as amended by the Australian Securities
and Investments Commission Order dated 16 July 2021 (the “ASIC Order”) including:
o
o
giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its financial performance for the year then ended; and
complying with UK-adopted international accounting standards and the Australian Corporations Regulations 2001.
For the purpose of these reports, the terms ‘we’ and ‘our’ denote KPMG UK in relation to UK responsibilities and reporting obligations to the members of
Rio Tinto plc, and KPMG Australia in relation to Australian responsibilities and reporting obligations to the members of Rio Tinto Limited. Rio Tinto (‘the
Group’ or ‘Rio Tinto Group’) consists of Rio Tinto plc, Rio Tinto Limited (individually ‘the Company’ or together ‘the Companies’) and their respective
subsidiaries including the Group’s share of joint arrangements and associates, during the financial year ended 31 December 2021. The ‘Group financial
statements’ denotes the financial statements prepared for the Rio Tinto Group. ‘Rio Tinto plc company financial statements’ denotes the company only
financial statements for the UK parent company, Rio Tinto plc. The 'Group financial statements' and 'Rio Tinto plc company financial statements' taken
together are referred to as ‘financial statements’.
What our opinions cover
We have audited the Group financial statements as at and for the year ended 31 December 2021 (‘FY21’) included in the Annual Report and Accounts,
which comprise:
Rio Tinto Group
Group Income Statement
Group Statement of Comprehensive Income
Group Cash Flow Statement
Group Balance Sheet
Group Statement of Changes in Equity
notesa to the Group financial statements, including the summary of significant accounting policies, the outline of dual listed companies structure and
basis of preparation of the Group financial statements.
KPMG UK has also audited the UK parent company, Rio Tinto plc’s financial statements for the year ended 31 December 2021, which comprise the UK
parent company balance sheet; the UK parent company statement of changes in equity; and related notes, which include a description of the significant
accounting policies and other explanatory information.
KPMG Australia has considered the Directors’ declaration, the Reconciliation with Australian Accounting Standards note and the Australian Corporations
Act – Summary of ASIC relief note to be part of the Group financial statements when forming its opinion under the requirements of the Australian
Corporations Act 2001, as amended by the ASIC Order. KPMG Australia has also audited the Remuneration Report included in the Directors’ report for the
year ended 31 December 2021.
Basis for opinions
We conducted our audits in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), Australian Auditing Standards (“ASAs”) and applicable
laws. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of
our report. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinions. Our audit opinions are consistent
with our report to the audit committee.
a KPMG UK has considered notes 1 – 42 and notes 44 – 45 and KPMG Australia has considered notes 1 – 45 to be part of the Group financial statements in forming
their respective opinions.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
2. OVERVIEW OF OUR AUDITS
Evaluation of impairment assessments of property, plant
and equipment in specific cash generating units
Key Audit Matters
Recurring
key audit matters
Evaluation of certain provisions for close-down, restoration
and environmental obligations (‘closure provisions’)
Evaluation of provisions for uncertain tax positions
Evaluation of recoverability of Rio Tinto plc’s Investments in
subsidiaries (KPMG UK only)
FY21 Audit risk
significance
vs FY20
Item
3.1
3.2
3.3
3.4
Audit Committee
interaction
During the year, the Audit Committee (AC) met seven times. We are invited to attend all Audit Committee meetings and are
invited to meet with the AC in private sessions without Executive Directors being present. For each Key Audit Matter, we have
set out communications with the Audit Committee in Section 3, including matters that required particular judgment.
The matters included in the Audit Committee Chair’s report on page 153 are consistent with our observations of those
meetings. Our audit opinions and matters included in this report are consistent with those discussed and included in our
reports to the Rio Tinto Audit Committee.
Our independence
We have fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed public interest
entities; the Australian Corporations Act 2001 as amended by the ASIC
Order; and the relevant ethical requirements of the Australian
Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (including Independence Standards).
Total audit fee
US$21.2m
Total non-audit fees
US$3.9m
Non-audit fee as a % of
audit fee %
18.4%
We have not provided any services which are prohibited by the
standards noted above to the Group during the year ended 31 December
2021 (FY21) or subsequently.
Next financial period which
requires a tender
The period of total uninterrupted engagement is for the two financial
years ended 31 December 2021.
Tenure of Group signing
and component partners
31
December
2030
1 – 2 years
The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement.
We have determined overall materiality for the Group at US$700m (2020: US$ 550m).
Materiality
(Section 7 below)
A key judgment in determining materiality (and performance materiality) was the appropriate benchmark to select, based on
our perception of the needs of the members of the Companies. We considered which benchmarks and Key Performance
Indicators have the greatest bearing on decisions of the members of the Companies.
We determined that profit before tax, is the key measure for performance of the Group. As such, we based our materiality
on profit before tax excluding certain identified items which could significantly distort results in any one particular year, of
which US$700m represents 2.3% (2020: 3.3%).
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Evaluation of impairment assessments of property, plant
and equipment in specific cash generating units
Key Audit Matters
Evaluation of certain provisions for close-down, restoration
and environmental obligations (‘closure provisions’)
Recurring
key audit matters
Evaluation of provisions for uncertain tax positions
Evaluation of recoverability of Rio Tinto plc’s Investments in
subsidiaries (KPMG UK only)
FY21 Audit risk
significance
vs FY20
Item
3.1
3.2
3.3
3.4
Audit Committee
interaction
During the year, the Audit Committee (AC) met seven times. We are invited to attend all Audit Committee meetings and are
invited to meet with the AC in private sessions without Executive Directors being present. For each Key Audit Matter, we have
set out communications with the Audit Committee in Section 3, including matters that required particular judgment.
The matters included in the Audit Committee Chair’s report on page 153 are consistent with our observations of those
meetings. Our audit opinions and matters included in this report are consistent with those discussed and included in our
reports to the Rio Tinto Audit Committee.
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
2. OVERVIEW OF OUR AUDITS
2. OVERVIEW OF OUR AUDITS (CONTINUED)
Materiality
(Section 7 below)
800
600
400
200
0
700
550
525
358
375
250
500
340
54
32
35
25
Group
Materiality
Group
Performance
materiality
Highest
component
materiality
Lowest
component
materiality
Reporting
differences
threshold
UK Parent
company
materiality
US$m FY 21
US$m FY 20
We have fulfilled our ethical responsibilities under, and we remain
independent of the Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed public interest
entities; the Australian Corporations Act 2001 as amended by the ASIC
Order; and the relevant ethical requirements of the Australian
Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (including Independence Standards).
Our independence
Total audit fee
US$21.2m
Total non-audit fees
US$3.9m
Non-audit fee as a % of
audit fee %
requires a tender
Tenure of Group signing
and component partners
18.4%
31
December
2030
1 – 2 years
We have not provided any services which are prohibited by the
standards noted above to the Group during the year ended 31 December
Next financial period which
2021 (FY21) or subsequently.
The period of total uninterrupted engagement is for the two financial
years ended 31 December 2021.
Group scope
(Section 8 below)
The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement.
We have determined overall materiality for the Group at US$700m (2020: US$ 550m).
Materiality
(Section 7 below)
A key judgment in determining materiality (and performance materiality) was the appropriate benchmark to select, based on
our perception of the needs of the members of the Companies. We considered which benchmarks and Key Performance
Indicators have the greatest bearing on decisions of the members of the Companies.
We determined that profit before tax, is the key measure for performance of the Group. As such, we based our materiality
on profit before tax excluding certain identified items which could significantly distort results in any one particular year, of
which US$700m represents 2.3% (2020: 3.3%).
We performed our risk assessment and planning procedures to determine which of the Group’s components are likely to
include risks of material misstatement to the Group financial statements, including the type of procedures to be performed
at these components and the extent of involvement required from our component auditors around the world. We scoped:
•
•
•
•
•
Four components, Pilbara Iron Ore, Aluminium Atlantic operations, Oyu Tolgoi and Rio Tinto Treasury UK as individually
financially significant components which were subject to full scope audits by component auditors;
Four further components subject to full scope audits by component auditors;
Three components subject to ‘audit of specific account balance’ which are associated with a significant risk in relation
to provision for closedown, restoration, and environmental obligations;
One component subject to ‘audit of specific account balance’ which is associated with a significant risk in relation to
uncertain tax positions; and
Nine further components subject to ‘audits of specific account balance’ to ensure sufficient audit coverage.
Certain Group sales and purchase transactions that originate in various countries are processed in Singapore and Delhi where
we have also established audit teams to perform testing on behalf of our component teams. We tested the key controls that
operate in Singapore and Delhi that relate to the transactions that we have tested at these locations. Other procedures that
were performed centrally are set out in more detail in Section 8 below.
In addition, we performed Group level analysis on the remaining components to determine whether risks of material
misstatement existed in those components and planned audit responses thereto.
We consider the scope of our audits, as agreed with the Audit Committee, to be an appropriate basis for our audit opinions.
The total number of components within the scope of our work:
Full scope audits for group audit purposes
Audit of ‘specific account balance’ for group audit purposes
Total
Coverage % on the Group financial statements
19
23
4
9
Group
revenue
68
77
11
14
19
Group
profit before
tax
59
27
70
Number of components
(to reflect FY21 reporting
structure)
FY21
FY20
8
12
20
8
13
21
13
11
23
32
Total assets
57
64
Full scope audits for group audit purposes – FY21
Audits of ‘specific account balance’ for group reporting – FY21
Full scope audits for group audit purposes – FY20
Audits of ‘specific account balance’ for group reporting – FY20
Out of scope
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3. KEY AUDIT MATTERS
What we mean
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the current year financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest
effect on:
the overall audit strategy;
the allocation of resources in the audit; and
directing the efforts of the engagement team.
We include below the key audit matters (unchanged from 2020), in decreasing order of audit significance, in arriving at the audit opinions above, together
with our principal audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed in the context of, and our results are based on procedures undertaken for the purpose of our audit of the financial statements as a whole
and in forming our opinions thereon, and consequently are incidental to those opinions, and we do not provide separate opinions on these matters.
3.1 Evaluation of impairment assessments of property, plant and equipment in specific cash generating units (‘CGU’)
Financial statement elements
Our results
Cash generating units (‘CGU’):
-
-
Oyu Tolgoi copper-gold mine (‘Oyu Tolgoi’) (Carrying
value: US$11.8billion); and
Kitimat aluminium smelter (‘Kitimat’) (Carrying value:
US$3,323m)
FY21: Acceptable (FY20: In the prior year, the aforementioned cash generating units
were evaluated for indicators of impairment or impairment reversal of property,
plant and equipment with acceptable results).
Description of the key audit matter
Our response to the risk
The Group has determined that there were indicators of
impairments of property, plant and equipment in the Oyu
Tolgoi and Kitimat CGUs, which led to the Group estimating
recoverable amounts of the CGUs (based on fair value less
costs of disposal methodology) and comparing them to the
respective carrying amounts. The Group concluded that the
Kitimat CGU was impaired by US$269m and that the Oyu
Tolgoi CGU did not require impairment or reversal of
impairment.
The determination of recoverable amounts of the CGUs
required the Group to exercise judgment and estimation in
arriving at key assumptions. These key assumptions included
forecast commodity prices and discount rates.
Specifically, in relation to the Oyu Tolgoi CGU, other key
assumptions used by the Group included the timing and
volume of the forecast production from the underground
project and the adjustments applied to the future cash flows
to reflect development and other project risks.
Other key assumptions for the Kitimat CGU used by the Group
included the timing and volume of forecast production and
shipment.
Our procedures to address the risk included:
Control operation
Evaluating the design and testing the operating effectiveness of certain internal
controls of the Group related to the impairment process for determination of the
recoverable amounts of property, plant and equipment for the Oyu Tolgoi and
Kitimat CGUs.
Tests of detail
We performed the following procedures to challenge the Group while evaluating the
key assumptions used to determine the recoverable amounts:
•
involved our own valuation professionals with specialised skills and knowledge
who assisted us in assessing:
o
o
the discount rates, by comparing assumptions used to calculate the
discount rate to a range of internal and external sources; and
the forecast commodity prices, by comparing them to market
consensus forecasts.
Specifically, for the Oyu Tolgoi CGU we,
•
assessed the scope, competency and objectivity of the Group’s internal experts
who prepared the life of mine plans (which details the timing and production
volumes) utilised in the Group’s impairment assessment, and analysed against
our knowledge of the operation and industry; and
• made inquiries with senior finance and operational personnel within the Group
and used our audit knowledge to corroborate and challenge:
o
o
the Group’s assumptions on timing and volume of production from
the underground project; and
the adjustments applied to the cash flows to reflect development
and other project risks.
326
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3. KEY AUDIT MATTERS
What we mean
effect on:
the overall audit strategy;
the allocation of resources in the audit; and
directing the efforts of the engagement team.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the current year financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest
We include below the key audit matters (unchanged from 2020), in decreasing order of audit significance, in arriving at the audit opinions above, together
with our principal audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters
were addressed in the context of, and our results are based on procedures undertaken for the purpose of our audit of the financial statements as a whole
and in forming our opinions thereon, and consequently are incidental to those opinions, and we do not provide separate opinions on these matters.
3.1 Evaluation of impairment assessments of property, plant and equipment in specific cash generating units (‘CGU’)
Financial statement elements
Our results
Cash generating units (‘CGU’):
-
-
Oyu Tolgoi copper-gold mine (‘Oyu Tolgoi’) (Carrying
value: US$11.8billion); and
Kitimat aluminium smelter (‘Kitimat’) (Carrying value:
US$3,323m)
FY21: Acceptable (FY20: In the prior year, the aforementioned cash generating units
were evaluated for indicators of impairment or impairment reversal of property,
plant and equipment with acceptable results).
Description of the key audit matter
Our response to the risk
The Group has determined that there were indicators of
Our procedures to address the risk included:
impairments of property, plant and equipment in the Oyu
Tolgoi and Kitimat CGUs, which led to the Group estimating
recoverable amounts of the CGUs (based on fair value less
costs of disposal methodology) and comparing them to the
respective carrying amounts. The Group concluded that the
Kitimat CGU was impaired by US$269m and that the Oyu
Tolgoi CGU did not require impairment or reversal of
impairment.
The determination of recoverable amounts of the CGUs
required the Group to exercise judgment and estimation in
arriving at key assumptions. These key assumptions included
forecast commodity prices and discount rates.
Specifically, in relation to the Oyu Tolgoi CGU, other key
assumptions used by the Group included the timing and
volume of the forecast production from the underground
project and the adjustments applied to the future cash flows
to reflect development and other project risks.
Other key assumptions for the Kitimat CGU used by the Group
included the timing and volume of forecast production and
shipment.
Evaluating the design and testing the operating effectiveness of certain internal
controls of the Group related to the impairment process for determination of the
recoverable amounts of property, plant and equipment for the Oyu Tolgoi and
Control operation
Kitimat CGUs.
Tests of detail
We performed the following procedures to challenge the Group while evaluating the
key assumptions used to determine the recoverable amounts:
•
involved our own valuation professionals with specialised skills and knowledge
who assisted us in assessing:
o
o
the discount rates, by comparing assumptions used to calculate the
discount rate to a range of internal and external sources; and
the forecast commodity prices, by comparing them to market
consensus forecasts.
Specifically, for the Oyu Tolgoi CGU we,
•
assessed the scope, competency and objectivity of the Group’s internal experts
who prepared the life of mine plans (which details the timing and production
volumes) utilised in the Group’s impairment assessment, and analysed against
our knowledge of the operation and industry; and
• made inquiries with senior finance and operational personnel within the Group
and used our audit knowledge to corroborate and challenge:
the Group’s assumptions on timing and volume of production from
o
o
the underground project; and
and other project risks.
the adjustments applied to the cash flows to reflect development
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
3. KEY AUDIT MATTERS (CONTINUED)
3.1 Evaluation of impairment assessments of property, plant and equipment in specific cash generating units (‘CGU’) (continued)
Description of the key audit matter
Our response to the risk
We have identified the Group’s impairment assessments
of property, plant and equipment in the Oyu Tolgoi and
Kitimat CGUs as a key audit matter. This was due to the
complex auditor judgment relating to the facts and
impairment
circumstances of each of the Group’s
assessments, the level of specialised skills needed to
evaluate certain key assumptions noted above and the
increased risk of error due to the size of the CGUs.
The effect of these matters is that, as part of our risk
assessment, we determined that the key assumptions
used by the Group have a high degree of estimation
uncertainty with a wide potential range of reasonable
outcomes.
Refer to notes 1(i) and 6, and the Audit Committee’s
views set out on page 153.
Our procedures to address the risk included (continued):
Tests of detail (continued)
Specifically, for the Kitimat CGU we,
•
•
compared the Group’s historical forecast production and shipment volumes to
actual volumes to assess the Group’s ability to accurately forecast; and
assessed the consistency of the Group’s forecast production volumes and timing
thereof with the planned ramp up schedule and corroborated this through inquiry
of the operational personnel.
Additionally, we performed the following procedure for both the CGUs:
•
evaluating the compliance of the impairment assessments to the relevant
accounting standards, checking their mathematical accuracy and agreeing the
carrying value of the CGUs to the Group’s accounting records.
Impact of climate change
We involved our sustainability specialists to assist in understanding the Group’s approach
to incorporating the impacts of climate change into its pricing process and in comparing
carbon pricing assumptions to publicly available information.
Assessing disclosures
We assessed the related disclosures in notes 1 and 6, including sensitivity disclosures, for
compliance with the relevant accounting requirements and against the results of our
work.
Communications with Rio Tinto’s Audit Committee
We discussed with and reported to the Audit Committee:
•
•
•
•
Indicators of impairment noted for Kitimat CGU which included production challenges due to the labour strike and subsequent restart to operations.
Indicators of impairment noted for the Oyu Tolgoi CGU which included political and stakeholder challenges including risks around funding,
complexities associated with the underground development and delay in the undercut and thereby the timing of the production from the
underground project.
Involvement of our valuation professionals assisting in assessing the discount rates and commodity pricing.
How the Group considered the impacts of climate change within the impairment tests.
Based on the risk identified and our procedures performed, we found the Group’s determination of the recoverable amount and the related impairment
charge booked for the Kitimat CGU and the related disclosures in the financial statements comply with the accounting requirements and are acceptable.
3.2 Evaluation of certain provisions for close-down, restoration and environmental obligations (‘closure provisions’)
Financial statement elements
Our results
Carrying value of closure provisions:
As at 31 December 2021
US$13,335m)
- US$14,542m
(2020:
FY21: Acceptable (FY20: Acceptable)
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3. KEY AUDIT MATTERS (CONTINUED)
3.2 Evaluation of certain provisions for close-down, restoration and environmental obligations (‘closure provisions’) (continued)
Description of the key audit matter
Our response to the risk
The Group incurs legal and constructive obligations for
close-down and restoration activities which include the
dismantling and demolition of infrastructure, the removal
of residual materials and the remediation of disturbed
areas for mines and certain refineries and smelters.
Generally, there is relatively limited activity within the
Group or broader industry of completing large scale
restoration and rehabilitation projects, and elements of
restoration and rehabilitation of each site are relatively
unique to the site. As such, there are limited comparable
historical precedents against which to benchmark
estimates of future costs, which increases estimation
uncertainty.
A significant proportion of the Group’s assets have long
remaining lives, which also increases the estimation
uncertainty relating to the rehabilitation activities
required and the timing and amount of the associated
future cash flows. Because of this, the effect of the time
value of money is material.
Close-down, restoration and environmental remediation
activities are governed by a combination of legislative
requirements, the Group’s policies, and commitments
made to stakeholders. These vary across location, product
and operation.
The Group has disclosed that the determination of when
an estimate associated with close-down, restoration and
environmental obligations is sufficiently reliable to update
is an area of judgment that may have a significant effect
on the amounts recognised in the financial statements.
The evaluation of closure provisions for certain sites
within Rio Tinto Iron ore (‘Pilbara’), Gove refinery (‘Gove’)
and Energy Resources of Australia (‘ERA’) is a key audit
matter due to the amount of the provision and the
judgment and specialised skills involved in our audit
testing of certain key assumptions used by the Group to
determine the provision including:
•
•
•
associated
future close-down and restoration costs
post-closure
the
costs
including
monitoring (‘closure costs’);
the life of the operation and the nature and timing
of closure and rehabilitation activities; and
the discount rate.
to
Our procedures to address the risk included:
Control operation
Evaluating the design and testing the operating effectiveness of certain internal controls
over the Group’s process to estimate provisions for close-down, restoration and
environmental obligations over the Group’s selection of key assumptions to be used.
Tests of detail
We performed the following procedures:
•
•
evaluated the scope, competency and objectivity of the Group’s experts, both
internal and/or external to the Group, who produce the cost estimates by
examining the work they were
involved to perform, their professional
qualifications and experience; and
inspected the most recent closure studies and other technical material prepared
by the Group relating to changes in the closure provision to assess the nature and
scope of work planned to be undertaken. This included assumptions relating to the
life of the operation and the nature and timing of closure and rehabilitation
activities and expectation.
For certain closure provisions within Pilbara and Gove, we:
•
•
compared historical forecast cost assumptions to actual costs to assess the Group’s
ability to accurately forecast; and
compared the nature, timing and the estimated closure costs included in the
studies with those used in the calculation of the provision.
Additionally, for the closure provisions within ERA and Gove, we assessed updates to the
provision for changes to previous estimates or the correction of prior period errors, and
against our knowledge.
For operations that the Group determined did not require a change in key assumptions
during the year, we considered the consistency of the Group’s conclusion with our
understanding of the obligations associated with that operation and its closure
remediation plan.
Our closure and valuation expertise
We involved our own valuations professionals with specialised skills and knowledge who
assisted in evaluating the discount rate applied by the Group to calculate the net present
value of these provisions. We compared it to external data including yields on long-term
government bonds and external market research.
We involved our own environmental professionals for Pilbara, Gove and ERA with
specialised skills and knowledge who assisted us in assessing certain assumptions
regarding the forecast closure costs of closure activities based on their experience and
familiarity with applicable legislative requirements and industry practice and the
Group’s closure commitments.
Refer to notes 1(l) and 25, and the Audit Committee’s
views set out on page 153.
Assessing disclosures
• We assessed the appropriateness of the related disclosures in notes 1 and 25 of
the financial statements including the Group’s disclosure of the key source of
estimation uncertainty surrounding the preliminary closure studies on ERA’s
Ranger Uranium mine against the results of our work and the accounting
requirements.
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and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
3. KEY AUDIT MATTERS (CONTINUED)
3. KEY AUDIT MATTERS (CONTINUED)
3.2 Evaluation of certain provisions for close-down, restoration and environmental obligations (‘closure provisions’) (continued)
3.2 Evaluation of certain provisions for close-down, restoration and environmental obligations (‘closure provisions’) (continued)
Description of the key audit matter
Our response to the risk
The Group incurs legal and constructive obligations for
Our procedures to address the risk included:
Communications with Rio Tinto’s Audit Committee
We discussed with and reported to the Audit Committee:
close-down and restoration activities which include the
dismantling and demolition of infrastructure, the removal
of residual materials and the remediation of disturbed
areas for mines and certain refineries and smelters.
Generally, there is relatively limited activity within the
Group or broader industry of completing large scale
restoration and rehabilitation projects, and elements of
restoration and rehabilitation of each site are relatively
unique to the site. As such, there are limited comparable
historical precedents against which to benchmark
estimates of future costs, which increases estimation
uncertainty.
A significant proportion of the Group’s assets have long
remaining lives, which also increases the estimation
uncertainty relating to the rehabilitation activities
required and the timing and amount of the associated
future cash flows. Because of this, the effect of the time
value of money is material.
Close-down, restoration and environmental remediation
activities are governed by a combination of legislative
requirements, the Group’s policies, and commitments
made to stakeholders. These vary across location, product
and operation.
•
•
The Group has disclosed that the determination of when
an estimate associated with close-down, restoration and
environmental obligations is sufficiently reliable to update
is an area of judgment that may have a significant effect
on the amounts recognised in the financial statements.
The evaluation of closure provisions for certain sites
within Rio Tinto Iron ore (‘Pilbara’), Gove refinery (‘Gove’)
and Energy Resources of Australia (‘ERA’) is a key audit
matter due to the amount of the provision and the
judgment and specialised skills involved in our audit
testing of certain key assumptions used by the Group to
determine the provision including:
•
•
•
the
future close-down and restoration costs
including
costs
associated
to
post-closure
monitoring (‘closure costs’);
the life of the operation and the nature and timing
of closure and rehabilitation activities; and
the discount rate.
Refer to notes 1(l) and 25, and the Audit Committee’s
views set out on page 153.
Control operation
Evaluating the design and testing the operating effectiveness of certain internal controls
over the Group’s process to estimate provisions for close-down, restoration and
environmental obligations over the Group’s selection of key assumptions to be used.
Tests of detail
We performed the following procedures:
•
evaluated the scope, competency and objectivity of the Group’s experts, both
internal and/or external to the Group, who produce the cost estimates by
examining the work they were
involved to perform, their professional
qualifications and experience; and
•
inspected the most recent closure studies and other technical material prepared
by the Group relating to changes in the closure provision to assess the nature and
scope of work planned to be undertaken. This included assumptions relating to the
life of the operation and the nature and timing of closure and rehabilitation
activities and expectation.
For certain closure provisions within Pilbara and Gove, we:
compared historical forecast cost assumptions to actual costs to assess the Group’s
ability to accurately forecast; and
compared the nature, timing and the estimated closure costs included in the
studies with those used in the calculation of the provision.
Additionally, for the closure provisions within ERA and Gove, we assessed updates to the
provision for changes to previous estimates or the correction of prior period errors, and
against our knowledge.
For operations that the Group determined did not require a change in key assumptions
during the year, we considered the consistency of the Group’s conclusion with our
understanding of the obligations associated with that operation and its closure
remediation plan.
Our closure and valuation expertise
We involved our own valuations professionals with specialised skills and knowledge who
assisted in evaluating the discount rate applied by the Group to calculate the net present
value of these provisions. We compared it to external data including yields on long-term
government bonds and external market research.
We involved our own environmental professionals for Pilbara, Gove and ERA with
specialised skills and knowledge who assisted us in assessing certain assumptions
regarding the forecast closure costs of closure activities based on their experience and
familiarity with applicable legislative requirements and industry practice and the
Group’s closure commitments.
Assessing disclosures
• We assessed the appropriateness of the related disclosures in notes 1 and 25 of
the financial statements including the Group’s disclosure of the key source of
estimation uncertainty surrounding the preliminary closure studies on ERA’s
Ranger Uranium mine against the results of our work and the accounting
requirements.
•
•
•
Key procedures performed which included evaluating the scope, competency and objectivity of the Group’s experts, who produce the cost estimates,
comparing historical forecast cost assumptions to actual costs, inspecting most recent closure studies, and comparing the nature, timing and the
estimated closure costs included in the studies with those used in the calculation of the provision.
Involvement of our valuation professionals assisting in assessing the discount rates applied by the Group.
Involvement of our environmental professionals for Pilbara, Gove and ERA who assisted us in assessing certain assumptions regarding the forecast
closure costs of closure activities.
Based on the risk identified and our procedures performed, we consider that the level of provisions for close-down, restoration and environmental
obligations and related disclosures to be acceptable.
3.3 Evaluation of provisions for uncertain tax positions
Financial statement elements
Our results
Provisions for uncertain tax positions
FY21: Acceptable (FY20: Acceptable)
Description of the key audit matter
Our response to the risk
The Group operates across multiple tax jurisdictions and
is subject to periodic challenge by local tax authorities on
a range of tax matters including transfer pricing, royalties,
other resource and production-based taxes, and indirect
taxes.
Where the amount of tax payable is uncertain, the Group
establishes provisions based on judgment and estimates
relating to tax law, settlement negotiations or changes in
legislation. The Group maintains material provisions for
uncertain tax positions.
We focused our work on the Group’s uncertain tax
positions associated to disputes with the Australian
Taxation Office (ATO) related to transfer pricing and
related issues and with the Mongolian Tax Authority
regarding transaction related issues.
As part of our risk assessment, we determined that these
uncertain tax positions have a high degree of estimation
uncertainty with a wide range of potential outcomes. The
evaluation of these provisions for uncertain tax positions
is a key audit matter due to the judgment, estimation
uncertainty and specialised skills involved in auditing
these provisions for uncertain tax positions.
Refer to notes 1(n) and 9, and the Audit Committee’s
views set out on page 153.
Our procedures to address the risk included:
Control operation
Evaluating the design and testing the operating effectiveness of certain internal controls
related to the tax process, including controls over the assessment of provisions for
uncertain tax positions.
Our taxation expertise
We involved our own tax professionals with specialised skills and knowledge of the
application of legislation by the relevant tax authorities, knowledge of tax audits and
relevant compliance programmes. They assisted us in challenging the Group’s
assessment of uncertain tax positions including assumptions applied and estimates
made associated to its disputes with the Australian Taxation Office and Mongolian Tax
Authority, which included:
•
•
assessing the implications of results of historical tax audits, and outcomes from
comparable situations for the positions taken by the Group; and
inspecting
including
internally and externally prepared documentation,
correspondence with tax authorities, transfer pricing documentation and third -
party tax advice received by the Group, to evaluate the Group’s current disputes
and uncertain tax positions.
Assessing disclosures
We assessed the appropriateness of the Group’s tax disclosures in notes 1(n) and 9 of
the financial statements against the accounting requirements and the results of our
work.
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of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
3. KEY AUDIT MATTERS (CONTINUED)
3.3 Evaluation of provisions for uncertain tax positions (continued)
Communications with Rio Tinto’s Audit Committee
We discussed with and reported to the Audit Committee:
•
•
•
How we considered specific external advice obtained by the Group in respect of these disputes regarding our view on the appropriateness of
provisioning.
How we considered the merits of the technical tax positions adopted by the Group, having regard to relevant tax legislation and case law, in
determining the Group’s tax provisions.
The Group’s history of resolving disputes with tax authorities.
Based on the risk identified and our procedures performed, we consider that the level of tax provisioning and related disclosures to be acceptable.
3.4 Evaluation of recoverability of Rio Tinto plc’s investments in subsidiaries (KPMG UK only)
Financial statement elements
Our results
Carrying value of Rio Tinto plc’s investments in Group
companies, for FY21 is US$36,280m (2020: US$ 36,320m)
FY21: Acceptable (FY20: Acceptable)
Description of the key audit matter
Our response to the risk
In respect of KPMG UK’s audit of the UK parent company,
Rio Tinto plc, the sole key audit matter relates to the
recoverability of its investment in its subsidiaries of the
Group.
We performed the tests below rather than seeking to rely on any of the company’s
controls because the nature of the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures described.
Our procedures to address the risk included:
Their recoverability is not at a high risk of significant
misstatement or subject to significant judgment.
Tests of detail
However, due to the value of these investments in the
context of the UK parent company, Rio Tinto plc’s
financial statements, this is the area that had the greatest
effect overall on our UK parent company audit.
Comparing the carrying amount of its investments with the relevant subsidiaries’ draft
balance sheet to identify whether their net assets, being an approximation of their
minimum recoverable amount, were in excess of their carrying amount and assessing
whether those subsidiaries have historically been profit-making.
Communications with Rio Tinto’s Audit Committee
We reported to the Audit Committee that based on the risk identified and our procedures performed, we found the company’s conclusion that there is
no impairment of its investments in subsidiaries to be acceptable.
4. THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT
In planning our audit, we considered the potential impacts of climate change on the Group’s business and its financial statements, based on our knowledge
of the Group’s operations and their stated strategy with respect to climate change.
The context of climate change for the Group
Unlike some other major resources companies, the Group does not mine or extract hydrocarbons such as coal, natural gas, or oil but it does emit
greenhouse gases directly from energy used in its mining operations, the processing of metals and minerals, and the transportation of its products. Some
of the Group’s products are used in energy and carbon intensive industries including steel and aluminium production. Other of the Group’s products, such
as copper, are expected to continue to be important in the transition to a low-carbon economy.
As explained in note 1 of the Group’s financial statements, in October 2021 the Group announced updated targets to reduce scope 1 and 2 carbon emissions
relative to its 2018 baseline by 15% in 2025, by 50% in 2030 and to achieve net zero emissions across its operations by 2050. The Group has disclosed its
expectation to make incremental capital expenditure of US$7.5 billion associated with key decarbonisation projects to achieve this target by 2030,
particularly to enable a move to renewable power, to electrify processing and to run electric mobile fleets.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
3. KEY AUDIT MATTERS (CONTINUED)
3.3 Evaluation of provisions for uncertain tax positions (continued)
Communications with Rio Tinto’s Audit Committee
We discussed with and reported to the Audit Committee:
provisioning.
•
•
•
determining the Group’s tax provisions.
The Group’s history of resolving disputes with tax authorities.
How we considered specific external advice obtained by the Group in respect of these disputes regarding our view on the appropriateness of
How we considered the merits of the technical tax positions adopted by the Group, having regard to relevant tax legislation and case law, in
Based on the risk identified and our procedures performed, we consider that the level of tax provisioning and related disclosures to be acceptable.
3.4 Evaluation of recoverability of Rio Tinto plc’s investments in subsidiaries (KPMG UK only)
Financial statement elements
Our results
Carrying value of Rio Tinto plc’s investments in Group
companies, for FY21 is US$36,280m (2020: US$ 36,320m)
FY21: Acceptable (FY20: Acceptable)
Description of the key audit matter
Our response to the risk
In respect of KPMG UK’s audit of the UK parent company,
We performed the tests below rather than seeking to rely on any of the company’s
Rio Tinto plc, the sole key audit matter relates to the
controls because the nature of the balance is such that we would expect to obtain audit
recoverability of its investment in its subsidiaries of the
evidence primarily through the detailed procedures described.
Group.
Our procedures to address the risk included:
Their recoverability is not at a high risk of significant
misstatement or subject to significant judgment.
Tests of detail
However, due to the value of these investments in the
context of the UK parent company, Rio Tinto plc’s
financial statements, this is the area that had the greatest
effect overall on our UK parent company audit.
Comparing the carrying amount of its investments with the relevant subsidiaries’ draft
balance sheet to identify whether their net assets, being an approximation of their
minimum recoverable amount, were in excess of their carrying amount and assessing
whether those subsidiaries have historically been profit-making.
Communications with Rio Tinto’s Audit Committee
4. THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT
In planning our audit, we considered the potential impacts of climate change on the Group’s business and its financial statements, based on our knowledge
of the Group’s operations and their stated strategy with respect to climate change.
The context of climate change for the Group
Unlike some other major resources companies, the Group does not mine or extract hydrocarbons such as coal, natural gas, or oil but it does emit
greenhouse gases directly from energy used in its mining operations, the processing of metals and minerals, and the transportation of its products. Some
of the Group’s products are used in energy and carbon intensive industries including steel and aluminium production. Other of the Group’s products, such
as copper, are expected to continue to be important in the transition to a low-carbon economy.
As explained in note 1 of the Group’s financial statements, in October 2021 the Group announced updated targets to reduce scope 1 and 2 carbon emissions
relative to its 2018 baseline by 15% in 2025, by 50% in 2030 and to achieve net zero emissions across its operations by 2050. The Group has disclosed its
expectation to make incremental capital expenditure of US$7.5 billion associated with key decarbonisation projects to achieve this target by 2030,
particularly to enable a move to renewable power, to electrify processing and to run electric mobile fleets.
4. THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT (CONTINUED)
The Group’s assessment of accounting consequences
IFRS requires the Group’s financial reporting to be based, amongst other things, on the Group’s best estimate of assumptions that are reasonable and
supportable as at the date of reporting. Those assumptions may not align with the ways in which the global economy, society and government policies will
need to change to meet the targets to limit global warming to 1.5oc which is aligned with the stretch goal of the 2015 COP 21 Paris Agreement.
The Group has set carbon emission targets and estimated the incremental capital and operational expenditure required to deliver those targets. The Group
has considered the potential for asset obsolescence or shorter economic lives of its existing property, plant and equipment, particularly with respect to
carbon intensive assets such as coal fired power stations and aluminium smelters, but has not yet made any material changes to accounting estimates as
a result.
The Group discloses judgments and estimates which are potentially impacted by climate change, including internal commodity pricing estimates and
forecast carbon taxes, which are pervasively used in various financial processes of the Group. These processes include, but are not restricted to, impairment
assessments for certain CGUs.
The Group has provided more detail on how they have considered climate change in their financial reporting in note 1 of the Group’s financial statements.
This year the Group has also provided additional disclosures to illustrate the impact of commodity and carbon prices on the net present value of certain
CGUs that were subject to impairment tests in the year under a scenario which aligns to the Group’s interpretation of “Paris Aligned”. More detail on these
disclosures can be found in note 6 of the Group’s financial statements.
Our audit response
Risk assessment procedures
As part of our risk assessment procedures, we made enquiries, with the assistance of our sustainability specialists, of key members of management. Our
enquiries focussed on understanding the Group’s climate related strategy and identifying those areas where climate change could have a potential material
impact on the financial statements.
We challenged management’s assessment that its stated climate change strategy did not result in any impairment trigger or reassessment of useful
economic lives on carbon intensive assets in these financial statements, taking into account the remaining life of relevant assets, and headroom on CGUs
that could be most impacted by climate change.
We did not identify the impact of climate risk as a separate Key Audit Matter in our audit given the nature of the Group’s operations and knowledge gained
of its impact on critical accounting estimates and judgements during our risk assessment procedures and testing.
Audit procedures in relation to Key Audit Matters
We did not consider the impact of climate change to be significant to our audit response for the Key Audit Matters relating to closure provisions or uncertain
tax matters, but have performed procedures to address the impact of climate change on our Key Audit Matter relating to the evaluation of impairment
assessments of property, plant and equipment in certain CGUs, as set out in section 3 of this report. Within that section of our audit report, we explain
how we involved our sustainability specialists to compare carbon pricing assumptions in the impairment assessments to publicly available information for
certain CGUs in arriving at our audit conclusions.
We reported to the Audit Committee that based on the risk identified and our procedures performed, we found the company’s conclusion that there is
no impairment of its investments in subsidiaries to be acceptable.
Other audit procedures
During the course of our audit, we carried out the following additional audit procedures:
•
•
•
we considered the Group’s processes around climate change related disclosures in the Annual Report and read the disclosures in the Strategic Report
and Directors’ Report and considered its consistency with the financial statements and our audit knowledge;
we assessed the appropriateness of climate-related financial disclosures, including TCFD recommended disclosures; and
we assessed the consistency between the Group’s estimate of the capital expenditure planned for decarbonisation of US$7.5 billion with the cash
flows used in its going concern and viability assessments.
The audit procedures were performed principally by the group engagement team with the support of our sustainability specialists.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
5. GOING CONCERN, VIABILITY AND PRINCIPAL RISKS AND UNCERTAINTIES (KPMG UK ONLY)
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the UK parent company or the Group
or to cease their operations, and they have concluded that the UK parent company’s and the Group’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at
least a year from the date of approval of the financial statements (“the going concern period”).
Going concern
Our responsibility
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent risks to
its business model and analysed how those risks might affect
the Group’s financial resources or ability to continue operations
over the going concern period. The risks we consider as most
relevant to the level of the Group’s financial resources over this
period relate to levels of demand and commodity pricing.
We critically assessed the assumptions in the Directors’
downside scenarios relevant to liquidity and covenant metrics,
in particular in relation to revenue growth by comparing to
historical trends and assessing whether downside scenarios
applied take into account reasonably possible downsides. The
extent of our work was influenced by the level of liquidity.
We assessed the completeness of the going concern disclosure.
Our conclusions
We consider that the Directors’ use of the going concern basis of accounting in the
preparation of the Group’s and UK parent company’s financial statements
is
appropriate.
We have not identified, and concur with the Directors’ assessment that there is not, a
material uncertainty related to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s or UK parent company's ability to continue as a
going concern for the going concern period.
We have nothing material to add or draw attention to in relation to the Directors’
statement in note 1 to the financial statements on the use of the going concern basis of
accounting with no material uncertainties that may cast significant doubt over the Group
and UK parent company’s use of that basis for the going concern period, and we found
the going concern disclosure in note 1 to be acceptable.
The related statement under the UK Listing Rules set out on page 199 is materially
consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events
may result in outcomes that are inconsistent with judgments that were reasonable at
the time they were made, the above conclusions are not a guarantee that the Group or
the UK parent company will continue in operation.
Disclosures on emerging and principal risks and longer-term viability
Our responsibility
Our reporting
We are required to perform procedures to identify whether
there is a material inconsistency between the Directors’
disclosures in respect of emerging and principal risks and the
viability statement, and the financial statements and our audit
knowledge.
Based on the knowledge we acquired during our financial statement audit, we have
nothing further to add or draw attention to in relation to:
••
••
••
the Directors’ confirmation within the viability statement that they have carried
out a robust assessment of the emerging and principal risks facing the Group,
including those that would threaten its business model, future performance,
solvency and liquidity;
the Principal Risks and Uncertainties disclosures describing these risks and
explaining how they are being managed and mitigated; and
the Directors’ explanation in the viability statement of how they have assessed the
prospects of the Group, over what period they have done so and why they
considered that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications
or assumptions.
Under the UK Listing Rules we are also required to review the Viability Statement set out
on page 115. Based on the above procedures, we have concluded that the above
disclosures are materially consistent with the financial statements and our audit
knowledge.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
5. GOING CONCERN, VIABILITY AND PRINCIPAL RISKS AND UNCERTAINTIES (KPMG UK ONLY)
5. GOING CONCERN, VIABILITY AND PRINCIPAL RISKS AND UNCERTAINTIES (KPMG UK ONLY) (CONTINUED)
Disclosures on emerging and principal risks and longer-term viability (continued)
Our reporting
Our work is limited to assessing these matters in the context of only the knowledge
acquired during our financial statement audit. As we cannot predict all future events or
conditions and as subsequent events may result in outcomes that are inconsistent with
judgments that were reasonable at the time they were made, the absence of anything
to report on these statements is not a guarantee as to the Group’s and UK parent
company’s longer-term viability.
6. KPMG UK’S REPORTING ON OUR ABILITY TO DETECT IRREGULARITIES, AND OUR RESPONSE
Fraud – Identifying and responding to risks of material misstatements due to fraud
Fraud risk assessment
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure by the Directors and other management to commit, or provide an opportunity to commit, fraud. Our
risk assessment procedures included:
••
••
••
••
••
detecting and responding to the risks of fraud; and
internal controls established to mitigate risks related to fraud;
Enquiries of the Directors, other management, internal audit and the Audit Committee, including obtaining and
reviewing supporting documentation, concerning the Group’s policies and procedures relating to:
-
-
Enquiries of the Directors, other management, internal audit and the Audit Committee as to whether they had
knowledge of any actual, suspected or alleged fraud;
Reading Board and Audit Committee minutes;
Considering remuneration incentive schemes and performance targets for Directors and other management, including
the flexed and unflexed underlying earnings and STIP free cash flow target ranges for executive remuneration; and
Discussions among the engagement team regarding how and where fraud might occur in the financial statements and
any potential indicators of fraud. The engagement team includes audit partners and staff who have extensive
experience of working with companies in the mining sector, and this experience was relevant to the discussion about
where fraud risks may arise. The discussions also involved our own forensic specialists to assist us in identifying fraud
risks based on discussions of the circumstances of the Group, who advised the engagement team of fraud schemes
that had arisen in similar sectors and industries and participated in the initial fraud risk assessment discussions.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout
the audit. This included communication from the group audit team to component audit teams of relevant fraud risks identified
at the group level and requests to component audit teams to report to the group audit team any instances of fraud that could
give rise to a material misstatement of the Group financial statements.
Fraud risks
As required by UK auditing standards we addressed the risk of management override of controls and the risk of fraudulent
revenue recognition. In particular we considered the risk that revenue is recorded in the wrong period, specifically overstated
and the risk that Group and component management may be in a position to make inappropriate accounting entries, and the
risk of bias in accounting estimates and judgments.
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the UK parent company or the Group
or to cease their operations, and they have concluded that the UK parent company’s and the Group’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at
least a year from the date of approval of the financial statements (“the going concern period”).
Going concern
Our responsibility
Our conclusions
We used our knowledge of the Group, its industry, and the
We consider that the Directors’ use of the going concern basis of accounting in the
general economic environment to identify the inherent risks to
preparation of the Group’s and UK parent company’s financial statements
is
its business model and analysed how those risks might affect
appropriate.
the Group’s financial resources or ability to continue operations
over the going concern period. The risks we consider as most
relevant to the level of the Group’s financial resources over this
period relate to levels of demand and commodity pricing.
We critically assessed the assumptions in the Directors’
downside scenarios relevant to liquidity and covenant metrics,
in particular in relation to revenue growth by comparing to
historical trends and assessing whether downside scenarios
applied take into account reasonably possible downsides. The
extent of our work was influenced by the level of liquidity.
We assessed the completeness of the going concern disclosure.
We have not identified, and concur with the Directors’ assessment that there is not, a
material uncertainty related to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s or UK parent company's ability to continue as a
going concern for the going concern period.
We have nothing material to add or draw attention to in relation to the Directors’
statement in note 1 to the financial statements on the use of the going concern basis of
accounting with no material uncertainties that may cast significant doubt over the Group
and UK parent company’s use of that basis for the going concern period, and we found
the going concern disclosure in note 1 to be acceptable.
The related statement under the UK Listing Rules set out on page 199 is materially
consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events
may result in outcomes that are inconsistent with judgments that were reasonable at
the time they were made, the above conclusions are not a guarantee that the Group or
the UK parent company will continue in operation.
Disclosures on emerging and principal risks and longer-term viability
Our responsibility
Our reporting
disclosures in respect of emerging and principal risks and the
viability statement, and the financial statements and our audit
knowledge.
We are required to perform procedures to identify whether
Based on the knowledge we acquired during our financial statement audit, we have
there is a material inconsistency between the Directors’
nothing further to add or draw attention to in relation to:
••
••
••
the Directors’ confirmation within the viability statement that they have carried
out a robust assessment of the emerging and principal risks facing the Group,
including those that would threaten its business model, future performance,
solvency and liquidity;
the Principal Risks and Uncertainties disclosures describing these risks and
explaining how they are being managed and mitigated; and
the Directors’ explanation in the viability statement of how they have assessed the
prospects of the Group, over what period they have done so and why they
considered that period to be appropriate, and their statement as to whether they
have a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications
or assumptions.
Under the UK Listing Rules we are also required to review the Viability Statement set out
on page 115. Based on the above procedures, we have concluded that the above
disclosures are materially consistent with the financial statements and our audit
knowledge.
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333
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
6. KPMG UK’S REPORTING ON OUR ABILITY TO DETECT IRREGULARITIES, AND OUR RESPONSE (CONTINUED)
Fraud – Identifying and responding to risks of material misstatements due to fraud (continued)
Procedures to address
fraud risks
Our audit procedures included evaluating the design, implementation, and operating effectiveness of internal controls
relevant to mitigate these risks.
We also performed substantive audit procedures including:
••
••
••
••
Comparing journal entries to supporting documentation for a selection based on risk including, for example, those
posted by senior finance management, those posted to unusual accounts or those containing unusual journal
descriptions;
Assessing significant accounting estimates for bias;
Obtaining third party confirmations for all material cash balances; and
Assessing when revenue was recognised, particularly focusing on revenue recognised in the days before and after the
year end date, and whether it was recognised in the appropriate year.
Work on the fraud risks was performed by a combination of component auditors and the group audit team.
Laws and regulations – Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
Risk assessment
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements. For this risk assessment, matters considered included the following:
••
••
••
••
our general commercial and mining sector experience;
through discussion with the Directors and other management (as required by auditing standards);
from inspection of the Group’s regulatory and legal correspondence; and
discussions with the Directors and other management about the policies and procedures regarding compliance with
laws and regulations.
As the Group operates in a regulated environment, our assessment of risks of material misstatement also involved gaining an
understanding of control environment including the Group’s higher-level procedures for complying with regulatory
requirements.
Risk communication
Our communication of identified laws and regulations risks was made throughout our team and we remained alert to any
indications of non-compliance throughout the audit. This included communication from the group audit team to all
component audit teams of relevant laws and regulations identified at group level, and a request for component auditors to
report to the group audit team any instances of non-compliance with laws and regulations that could give rise to a material
misstatement of the Group financial statements.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including:
Direct laws context
and link to audit
••
••
••
••
financial reporting legislation (including related companies’ legislation);
distributable profits legislation;
taxation legislation (direct and indirect); and
pensions legislation.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
6. KPMG UK’S REPORTING ON OUR ABILITY TO DETECT IRREGULARITIES, AND OUR RESPONSE (CONTINUED)
6. KPMG UK’S REPORTING ON OUR ABILITY TO DETECT IRREGULARITIES, AND OUR RESPONSE (CONTINUED)
Fraud – Identifying and responding to risks of material misstatements due to fraud (continued)
Laws and regulations – Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
(continued)
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a
material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation
or harm to the Group’s license to operate.
We identified the following areas as those most likely to have such an effect:
Most significant
indirect
law/regulation areas
••
••
••
••
••
anti-bribery, fraud and corruption;
health and safety legislation;
employment and social security legislation;
environmental protection legislation; and
competition legislation.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry
of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach
of law or regulations is not disclosed to us or evident from relevant correspondence, our audit will not detect that breach.
For the contingent liabilities disclosed in note 30 we assessed disclosures against our understanding from legal confirmations
received from external counsel. For the uncertain tax positions referred to in note 1 we performed procedures as detailed in
our key audit matter (page 329).
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial
statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited
procedures required by UK auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
7. OUR DETERMINATION OF MATERIALITY
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us
determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually
and in the aggregate, on the financial statements as a whole.
Our audit procedures included evaluating the design, implementation, and operating effectiveness of internal controls
relevant to mitigate these risks.
We also performed substantive audit procedures including:
Procedures to address
fraud risks
descriptions;
Comparing journal entries to supporting documentation for a selection based on risk including, for example, those
posted by senior finance management, those posted to unusual accounts or those containing unusual journal
Assessing significant accounting estimates for bias;
Obtaining third party confirmations for all material cash balances; and
Assessing when revenue was recognised, particularly focusing on revenue recognised in the days before and after the
year end date, and whether it was recognised in the appropriate year.
Work on the fraud risks was performed by a combination of component auditors and the group audit team.
Laws and regulations – Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements. For this risk assessment, matters considered included the following:
Risk assessment
our general commercial and mining sector experience;
through discussion with the Directors and other management (as required by auditing standards);
from inspection of the Group’s regulatory and legal correspondence; and
discussions with the Directors and other management about the policies and procedures regarding compliance with
laws and regulations.
requirements.
As the Group operates in a regulated environment, our assessment of risks of material misstatement also involved gaining an
understanding of control environment including the Group’s higher-level procedures for complying with regulatory
Our communication of identified laws and regulations risks was made throughout our team and we remained alert to any
indications of non-compliance throughout the audit. This included communication from the group audit team to all
Risk communication
component audit teams of relevant laws and regulations identified at group level, and a request for component auditors to
report to the group audit team any instances of non-compliance with laws and regulations that could give rise to a material
misstatement of the Group financial statements.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including:
Direct laws context
and link to audit
distributable profits legislation;
taxation legislation (direct and indirect); and
pensions legislation.
financial reporting legislation (including related companies’ legislation);
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
••
••
••
••
••
••
••
••
••
••
••
••
US$700m
(2020: US$550m)
What we mean by materiality
This is the amount representing the total magnitude of misstatements that we expect to influence the economic decisions of
the users of these financial statements.
Basis for determining materiality and judgments applied
Our assessment of overall group materiality was US$700m (2020: US$550m). This was derived from the level of profit before
tax excluding certain identified items which could significantly distort results in any one particular year. We consider profit
before tax, excluding certain identified items, is a key indicator of performance, the basis for earnings, and therefore the
primary focus of a reasonable investor. We have checked analyst consensus data and other investor commentary for signals
of alternate significant influencers of economic decisions. No revisions to our calculation methodology resulted therefrom.
The certain identified item excluded in FY21 was:
••
net pre-tax impairments US$269m charge (2020: US$1,243m charge)
Materiality of US$700m (2020: US$550m) was determined by applying a percentage to the profit before tax, excluding certain
identified items US$31,102m (2020: US$16,634m).
Materiality for the Rio Tinto plc company financial statements as a whole was set at US$500m (2020: US$340m), determined
with reference to a benchmark of the UK parent company’s total assets of which it represents 0.9% (2020: 0.8%).
Materiality
financial
as a whole
for
the
statements
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
7. OUR DETERMINATION OF MATERIALITY (CONTINUED)
US$525m
(2020: US$358m)
Performance
materiality
What we mean by performance materiality
Our procedures on individual account balances and disclosures were performed to performance materiality, to reduce to an
acceptable level the risk that individually immaterial misstatements in individual account balances might add up to a material
amount across the financial statements as a whole.
Basis for determining performance materiality and judgments applied
We have considered performance materiality at a level of 75% (2020: 65%) of materiality for the Rio Tinto Group financial
statements as a whole, and for the Rio Tinto plc company financial statements to be appropriate, having taken account of:
The level of audit differences (adjusted and unadjusted) identified during our previous audit; and
••
•• Our view of the strength and robustness of the control environment, including the tone at the top and culture of Rio
Tinto’s organisation as well as control deficiencies identified in previous audits.
The level of performance materiality we considered appropriate was lower in FY 20 primarily as it was our first year of audit.
Performance materiality for the Rio Tinto plc company financial statements, was set at US$375m (2020: US$221m).
US$35m
(2020: US$25m)
Audit misstatement
posting threshold
What we mean by Audit misstatement posting threshold
This is the amount below which identified misstatements are clearly trivial from a quantitative point of view. We may become
aware of misstatements below this threshold which could alter the nature, timing and extent of our audit procedures, for
example if we identify smaller misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Rio Tinto’s Audit Committee.
Basis for determining the audit misstatement reporting threshold and judgments applied
We set our audit misstatement posting at 5% of our materiality, rounded down to US$35m (2020: US$25m). We also report
to the Audit Committee any items that warrant reporting on qualitative grounds.
Materiality for the Group financial statements was set at US$700m (2020: US$550m) which compared to the following main Financial Statement caption
amounts as follows:
FY21
FY21
FY20
FY20
Financial statement caption
Group materiality as % of caption
Financial statement caption
Group materiality as % of caption
Total Group revenue
US$63,495m
1.1%
US$44,611m
1.2%
Group profit before
tax
US$30,833m
2.3%
Total Group assets
US$102,896m
0.7%
US$15,391m
3.6%
US$97,390m
0.6%
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
7. OUR DETERMINATION OF MATERIALITY (CONTINUED)
What we mean by performance materiality
Our procedures on individual account balances and disclosures were performed to performance materiality, to reduce to an
acceptable level the risk that individually immaterial misstatements in individual account balances might add up to a material
amount across the financial statements as a whole.
Basis for determining performance materiality and judgments applied
We have considered performance materiality at a level of 75% (2020: 65%) of materiality for the Rio Tinto Group financial
statements as a whole, and for the Rio Tinto plc company financial statements to be appropriate, having taken account of:
••
The level of audit differences (adjusted and unadjusted) identified during our previous audit; and
•• Our view of the strength and robustness of the control environment, including the tone at the top and culture of Rio
Tinto’s organisation as well as control deficiencies identified in previous audits.
The level of performance materiality we considered appropriate was lower in FY 20 primarily as it was our first year of audit.
Performance materiality for the Rio Tinto plc company financial statements, was set at US$375m (2020: US$221m).
What we mean by Audit misstatement posting threshold
This is the amount below which identified misstatements are clearly trivial from a quantitative point of view. We may become
aware of misstatements below this threshold which could alter the nature, timing and extent of our audit procedures, for
example if we identify smaller misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Rio Tinto’s Audit Committee.
US$525m
(2020: US$358m)
Performance
materiality
US$35m
(2020: US$25m)
Audit misstatement
posting threshold
Materiality for the Group financial statements was set at US$700m (2020: US$550m) which compared to the following main Financial Statement caption
amounts as follows:
FY21
FY21
FY20
FY20
Financial statement caption
Group materiality as % of caption
Financial statement caption
Group materiality as % of caption
Total Group revenue
Total Group assets
Group profit before
tax
US$30,833m
US$102,896m
US$63,495m
1.1%
US$44,611m
1.2%
2.3%
3.6%
0.7%
0.6%
US$15,391m
US$97,390m
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
8. THE SCOPE OF OUR AUDIT
What we mean
Basis for determining the audit misstatement reporting threshold and judgments applied
Group scope
We set our audit misstatement posting at 5% of our materiality, rounded down to US$35m (2020: US$25m). We also report
to the Audit Committee any items that warrant reporting on qualitative grounds.
How we determined the procedures to be performed across the Group:
We performed risk assessment and planning procedures and scoped in:
•
•
•
Four components, Pilbara Iron Ore, Aluminium Atlantic operations, Oyu Tolgoi and Rio Tinto Treasury UK as individually
financially significant components which were subject to full scope audits by component auditors;
Four further components subject to full scope audits by component auditors;
Three components subject to ‘audit of specific account balance’ which are associated with a significant risk in relation to
provision for closedown, restoration, and environmental obligations;
• One component subject to ‘audit of specific account balance’ which is associated with a significant risk in relation to
uncertain tax positions; and
• Nine further components subject to ‘audits of specific account balance’ to ensure sufficient audit coverage.
for group audit
Full scope audits
purposes
Audits of ‘specific account balance’ for
group reporting
Total
Range of component
materialities FY21
US$70m - US$375m
US$54m - US$150m
Number of components
(reflecting FY21 reporting structure)
FY21
FY20
8
13
21
8
12
20
We have also performed audit procedures centrally across the Group, beyond the component scope set out above, in the
following areas:
Testing of IT systems and configurations;
Consolidation of the financial information;
Climate considerations and impact on the financial statements;
Evaluating the Group’s uncertain tax position on DLC Dividend financing;
Identifying journal entries with a defined high-risk criteria; and
Pensions.
Coverage % on the Group financial statements
Full scope audits for group audit
purposes
Audits of ‘specific account balance’
for group reporting
Total Group revenue
Group profit before
tax
Total Group assets
77% (2020: 68%)
70% (2020: 59%)
64% (2020: 57%)
19% (2020: 23%)
19% (2020: 27%)
23% (2020: 32%)
Out-of-scope
04% (2020: 09%)
11% (2020: 14%)
13% (2020: 11%)
None of the out-of-scope entities individually represented more than 2% (2020: 4%) of any of total Group revenue, total
profits and losses making up Group profit before taxation or Group assets. The work on 20 of the 21 in-scope components
(2020: 19 of the 20 components, reflecting FY 21 reporting structure) was performed by KPMG member firms. The audit of
the UK parent company, Rio Tinto plc company financial statements was performed by the group audit team.
Approach on controls
For the audit of the Group financial statements, we were able to rely upon the Group’s internal controls over financial
reporting in several areas of our audit, where our controls testing supported this approach, which enabled us to reduce the
scope of our substantive audit work; in the other areas the scope of the audit work performed was fully substantive. For the
audit of the Rio Tinto plc company financial statements, the scope of the audit work performed was fully substantive as we
did not place reliance upon Rio Tinto plc’s internal controls over financial reporting.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
8. THE SCOPE OF OUR AUDIT (CONTINUED)
What we mean
The extent of the Group audit team’s involvement in component audits.
Group audit team
oversight
As part of determining the scope and preparing our audit plan and strategy, the group audit team held various meetings with
our component auditors in UK, Australia, Canada, South Africa, Singapore and Chile to discuss key audit risks and obtain input
from component teams.
The group audit team additionally held workshops for all the components whereby the component auditors and the group
audit team’s discussions included the significant risks, close calls and fraud risk factors.
The group audit team instructed component auditors as to the significant areas to be covered, including the relevant risks
detailed above and the information to be reported back. The group audit team approved the component materialities, which
ranged from US$54m to US$375m, having regard to the mix of size and risk profile of the components.
It was not practicable in the current environment, due to the coronavirus pandemic and on-going restrictions on movement
of people across borders, to travel and physically visit many sites. However, the group audit team was able to visit some sites:
Sites visited
2021
2020
••
••
Pilbara
Perth (Southern Hemisphere
Hub)
••
••
••
Pilbara
Oyu Tolgoi (Virtual)
Perth (Southern Hemisphere
Hub)
Aside from the site visits mentioned above, frequent video conference calls were held throughout the audit with the
component auditors. During these video conference calls we inspected the component team’s key work papers related to
significant risks and assessed the appropriateness of conclusions and consistencies between reported findings and work
performed.
9. KPMG AUSTRALIA’S REPORT ON THE DIRECTORS REMUNERATION REPORT
Opinion
In our opinion, the Remuneration Report of Rio Tinto Limited for the year ended 31 December 2021 complies with Section
300A of the Australian Corporations Act 2001.
Our responsibilities
KPMG Australia is required to audit and express an opinion on the Remuneration Report, for the year ended 31 December
2021, included in pages 160 to 198 of the Annual Report, based on its audit conducted in accordance with Australian Auditing
Standards.
Directors’
responsibilities
The Directors of Rio Tinto Limited are responsible for the preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
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What we mean
The extent of the Group audit team’s involvement in component audits.
As part of determining the scope and preparing our audit plan and strategy, the group audit team held various meetings with
our component auditors in UK, Australia, Canada, South Africa, Singapore and Chile to discuss key audit risks and obtain input
from component teams.
The group audit team additionally held workshops for all the components whereby the component auditors and the group
audit team’s discussions included the significant risks, close calls and fraud risk factors.
The group audit team instructed component auditors as to the significant areas to be covered, including the relevant risks
detailed above and the information to be reported back. The group audit team approved the component materialities, which
ranged from US$54m to US$375m, having regard to the mix of size and risk profile of the components.
It was not practicable in the current environment, due to the coronavirus pandemic and on-going restrictions on movement
of people across borders, to travel and physically visit many sites. However, the group audit team was able to visit some sites:
Group audit team
oversight
2021
2020
••
••
Pilbara
Hub)
Perth (Southern Hemisphere
Oyu Tolgoi (Virtual)
Perth (Southern Hemisphere
••
••
••
Pilbara
Hub)
Aside from the site visits mentioned above, frequent video conference calls were held throughout the audit with the
component auditors. During these video conference calls we inspected the component team’s key work papers related to
significant risks and assessed the appropriateness of conclusions and consistencies between reported findings and work
Sites visited
performed.
Opinion
300A of the Australian Corporations Act 2001.
In our opinion, the Remuneration Report of Rio Tinto Limited for the year ended 31 December 2021 complies with Section
Our responsibilities
2021, included in pages 160 to 198 of the Annual Report, based on its audit conducted in accordance with Australian Auditing
KPMG Australia is required to audit and express an opinion on the Remuneration Report, for the year ended 31 December
Standards.
Directors’
responsibilities
The Directors of Rio Tinto Limited are responsible for the preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001.
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
8. THE SCOPE OF OUR AUDIT (CONTINUED)
10. OTHER INFORMATION IN THE ANNUAL REPORT
The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Other Information is
financial and non-financial information in Rio Tinto’s annual reporting which is provided in addition to the financial statements and the Auditors’ Report.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly
stated below, or any form of assurance conclusion thereon except for KPMG UK’s opinion on disclosures of emerging and principal risks and longer-term
viability and KPMG Australia’s report on the directors’ remuneration report and its related assurance opinion stated above.
All other information
Our responsibility
Our reporting
Our responsibility is to read the other information and, in doing so, consider whether, based on our
financial statements audit work, the information is materially misstated or inconsistent with the
financial statements or our audit knowledge and report such misstatements or inconsistencies.
Based solely on that work we have not identified
material misstatements or inconsistencies in the
other information.
Strategic report and directors’ report (KPMG UK only)
Our responsibility
Our reporting
Based solely on our work on the other information described above we are required to report:
••
••
••
if we have identified material misstatements in the strategic report and the directors’ report;
No material misstatements noted.
if in our opinion the information given in those reports for FY21 is consistent with the financial
statements; and
Information in those reports for FY21 is consistent
with the financial statements.
if in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Those reports have been prepared in accordance
with Companies Act 2006.
9. KPMG AUSTRALIA’S REPORT ON THE DIRECTORS REMUNERATION REPORT
Directors’ remuneration report (KPMG UK only)
Our responsibility
Our reporting
KPMG UK is required to form an opinion as to whether the part of the Directors’ Remuneration
Report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion the part of the Directors’
Remuneration Report to be audited has been
properly prepared
the
Companies Act 2006.
in accordance with
Corporate governance disclosures (KPMG UK only)
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency
between the financial statements and our audit knowledge, and:
•
•
•
the Directors’ statement that they consider that the annual report and financial statements
taken as a whole is fair, balanced and understandable, and provides the information necessary
for the Rio Tinto plc’s members to assess the Group’s position and performance, business
model and strategy;
the section of the annual report describing the work of the Audit Committee, including the
significant issues that the Audit Committee considered in relation to the financial statements,
and how these issues were addressed; and
the section of the annual report that describes the review of the effectiveness of the Group’s
risk management and internal control systems.
Our reporting
Based on those procedures, we have concluded
that each of these disclosures
is materially
consistent with the financial statements and our
audit knowledge.
We are also required to review the part of Corporate Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate Governance Code specified by the UK Listing
Rules for our review, and to report if a corporate governance statement has not been prepared by
the company.
We have nothing to report in this respect.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
10. OTHER INFORMATION IN THE ANNUAL REPORT (CONTINUED)
Other matters on which we are required to report by exception (KPMG UK only)
Our responsibility
Our reporting
Under the Companies Act 2006, we are required to report to you if, in our opinion:
We have nothing to report in these respects.
adequate accounting records have not been kept by the UK parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
the UK parent company financial statements and the part of the Directors’ Remuneration
Report to be audited are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
11. RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities for the financial statements
As explained more fully in their statement set out on page 322 of the financial statements, the Directors are responsible for: the preparation of the
financial statements, including being satisfied that they give a true and fair view in accordance with the relevant financial reporting frameworks;
implementing such internal control as they determine is necessary to enable the preparation of financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error; assessing the Group, Rio Tinto plc’s and Rio Tinto Limited’s ability to continue as a going
concern and whether the use of the going concern basis of accounting is appropriate, disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either intend to liquidate the Group, Rio Tinto plc and Rio Tinto Limited or to cease operations,
or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due
to fraud or other irregularities, or error, and to issue our opinions in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) and ASAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud, other irregularities or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the financial statements.
A fuller description of KPMG UK’s responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. A further description of
KPMG Australia’s responsibilities for the audit of the Financial Statements is located at the Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Australian auditor’s report.
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Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
of KPMG LLP (‘KPMG UK’) to the members of Rio Tinto plc
and of KPMG (‘KPMG Australia’) to the members of Rio Tinto Limited
Independent auditors’ reports
10. OTHER INFORMATION IN THE ANNUAL REPORT (CONTINUED)
12. THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES
KPMG UK’s report is made solely to Rio Tinto plc’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms
of our engagement by that company. Our audit work has been undertaken so that we might state to the members of Rio Tinto plc those matters we are
required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed with Rio
Tinto plc, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Rio Tinto plc’s
members, as a body, for our audit work, for this report, or for the opinion we have formed.
KPMG Australia’s report is made solely to Rio Tinto Limited’s members, as a body, in accordance with the Australian Corporations Act 2001 as amended
by the ASIC Order dated 16 July 2021. Our audit work has been undertaken so that we might state to the members of Rio Tinto Limited those matters we
are required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed with
Rio Tinto Limited, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Rio
Tinto Limited’s members, as a body, for our audit work, for this report, or for the opinion we have formed.
Jonathan Downer (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
London, United Kingdom
23 February 2022
Trevor Hart
Partner
KPMG
Perth, Australia
23 February 2022
Other matters on which we are required to report by exception (KPMG UK only)
Our responsibility
Our reporting
Under the Companies Act 2006, we are required to report to you if, in our opinion:
We have nothing to report in these respects.
adequate accounting records have not been kept by the UK parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
the UK parent company financial statements and the part of the Directors’ Remuneration
Report to be audited are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
11. RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities for the financial statements
As explained more fully in their statement set out on page 322 of the financial statements, the Directors are responsible for: the preparation of the
financial statements, including being satisfied that they give a true and fair view in accordance with the relevant financial reporting frameworks;
implementing such internal control as they determine is necessary to enable the preparation of financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error; assessing the Group, Rio Tinto plc’s and Rio Tinto Limited’s ability to continue as a going
concern and whether the use of the going concern basis of accounting is appropriate, disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either intend to liquidate the Group, Rio Tinto plc and Rio Tinto Limited or to cease operations,
or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due
to fraud or other irregularities, or error, and to issue our opinions in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) and ASAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud, other irregularities or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the financial statements.
A fuller description of KPMG UK’s responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities. A further description of
KPMG Australia’s responsibilities for the audit of the Financial Statements is located at the Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Australian auditor’s report.
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Financial statements continued
Lead Auditor's Independence Declaration
Lead Auditor’s Independence Declaration under Section 307C
under Section 307C of the Australian
of the Australian Corporations Act 2001
Corporations Act 2001
To the Directors of Rio Tinto Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Rio Tinto Limited for the year ended 31 December 2021 there
have been:
(a) no contraventions of the auditor independence requirements as set out in the Australian Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Rio Tinto Limited and the entities it controlled during the period.
KPMG
Trevor Hart
Partner
Perth
23 February 2022
Liability limited by a scheme approved under Professional Standards Legislation
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Financial statements continued
Financial statements continued
Lead Auditor's Independence Declaration
Lead Auditor's Independence Declaration
Lead Auditor’s Independence Declaration under Section 307C
under Section 307C of the Australian
under Section 307C of the Australian
of the Australian Corporations Act 2001
Corporations Act 2001
Corporations Act 2001
To the Directors of Rio Tinto Limited
To the Directors of Rio Tinto Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Rio Tinto Limited for the year ended 31 December 2021 there
I declare that, to the best of my knowledge and belief, in relation to the audit of Rio Tinto Limited for the year ended 31 December 2021 there
(a) no contraventions of the auditor independence requirements as set out in the Australian Corporations Act 2001 in relation to the audit; and
(a) no contraventions of the auditor independence requirements as set out in the Australian Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Rio Tinto Limited and the entities it controlled during the period.
This declaration is in respect of Rio Tinto Limited and the entities it controlled during the period.
have been:
have been:
KPMG
KPMG
Trevor Hart
Trevor Hart
Partner
Partner
Perth
Perth
23 February 2022
23 February 2022
Liability limited by a scheme approved under Professional Standards Legislation
Liability limited by a scheme approved under Professional Standards Legislation
Alternative Performance Measures
Alternative Performance Measures
Alternative Performance Measures
The Group presents certain alternative performance measures (APMs) which are reconciled to directly comparable IFRS financial measures below.
These APMs are used by management to assess the performance of the business and provide additional information, which investors may find
useful. APMs are presented in order to give further insight into the underlying business performance of the Group's operations.
APMs are not consistently defined and calculated by all companies, including those in the Group’s industry. Accordingly, these measures used by
the Group may not be comparable with similarly titled measures and disclosures made by other companies. Consequently, these APMs should not
be regarded as a substitute for the IFRS measures and should be considered supplementary to those measures.
The following tables present the Group's key financial measures not defined according to IFRS and a reconciliation between those APMs and their
nearest respective IFRS measures.
APMs derived from the income statement
The following income statement measures are used by the Group to provide greater understanding of the underlying business performance of its
operations and to enhance comparability of reporting periods. They indicate the underlying commercial and operating performance of our assets
including revenue generation, productivity and cost management.
Gross product sales
Gross product sales include consolidated sales revenue plus the equivalent sales revenue of equity accounted units in proportion to our equity
interest (after adjusting for sales to/from subsidiaries).
Gross product sales measures revenue on a basis that is comparable to our Underlying EBITDA metric.
Consolidated sales revenue
Share of equity accounted unit sales and inter-subsidiary/equity accounted unit sales
Gross product sales
Underlying EBITDA
2021
US$m
63,495
3,073
66,568
2020
US$m
44,611
2,407
47,018
2019
US$m
43,165
2,202
45,367
Underlying EBITDA represents profit before tax, net finance items, depreciation and amortisation excluding the EBITDA impact of the same items
that are excluded in arriving at underlying earnings (as defined on page 345).
Profit after tax
Depreciation and amortisation in subsidiaries excluding capitalised depreciation
Depreciation and amortisation in equity accounted units
Finance items in subsidiaries
Taxation in subsidiaries
Taxation and finance items in equity accounted units
Impairment charges net of reversals
Gain on recognition of a new wharf at Kitimat, Canada
Losses/(gains) on embedded commodity derivatives not qualifying for hedge accounting (including exchange)
Net losses on consolidation and disposal of interests in businesses
Other exclusions
Change in closure estimates (non-operating and fully impaired sites)
Underlying EBITDA
2021
US$m
22,575
4,525
497
26
8,258
759
269
(336)
51
—
—
1,096
37,720
2020
US$m
10,400
4,074
576
1,751
4,991
443
1,272
—
(6)
—
—
401
23,902
2019
US$m
6,972
4,272
653
648
4,147
296
3,487
—
260
291
171
—
21,197
342
342
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Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures
Underlying EBITDA margin
Underlying EBITDA margin is defined as Group underlying EBITDA divided by gross product sales.
Underlying EBITDA
Gross product sales
Underlying EBITDA margin
Pilbara underlying FOB EBITDA margin
2021
US$m
37,720
66,568
57 %
2020
US$m
23,902
47,018
51 %
2019
US$m
21,197
45,367
47 %
The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara underlying EBITDA divided by Pilbara gross product sales,
excluding freight revenue.
Pilbara
Underlying EBITDA
Pilbara gross product sales
Less: Freight revenue
Pilbara gross product sales, excluding freight revenue
Pilbara underlying FOB EBITDA margin
2021
US$m
2020
US$m
2019
US$m
27,837
39,111
(2,707)
36,404
76 %
18,896
27,027
(1,487)
25,540
74 %
15,936
23,681
(1,671)
22,010
72 %
Underlying EBITDA margin from Aluminium integrated operations
Underlying EBITDA margin from integrated operations is defined as underlying EBITDA divided by gross product sales.
Aluminium
Underlying EBITDA - integrated operations
Gross product sales - integrated operations
Underlying EBITDA margin from integrated operations
Underlying EBITDA margin (product group operations)
2021
US$m
4,487
11,881
38 %
2020
US$m
2,227
8,458
26 %
2019
US$m
2,375
9,275
26 %
Underlying EBITDA margin (product group operations) is defined as underlying EBITDA divided by gross product sales.
Copper
Underlying EBITDA - product group operations
Gross product sales - product group operations
Underlying EBITDA margin - product group operations
Minerals
Underlying EBITDA - product group operations
Gross product sales - product group operations
Underlying EBITDA margin - product group operations
Adjusted(a)
Adjusted(a)
2020
US$m
2,440
4,903
50 %
2019
US$m
2,234
5,181
43 %
Adjusted(a)
Adjusted(a)
2020
US$m
1,815
5,118
35 %
2019
US$m
1,966
5,339
37 %
2021
US$m
4,368
7,434
59 %
2021
US$m
2,765
6,410
43 %
(a)
The comparatives have been recast in accordance with the organisational restructure announced on 28 January 2021.The main impacts are as follows: Simandou has moved from the
previous Energy & Minerals product group to the Copper product group; Uranium has moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved
from the previous Copper & Diamonds product group to the Minerals product group; the Minerals product group retains the Argyle residual operations and from 1 January 2021, Argyle
closure has moved to Other Operations. Argyle residual operations includes activity relating to the sale of remaining diamond inventory and property held. Argyle closure include activity
relating to the management and execution of the Argyle mine closure obligations and management of entities with interests in state and traditional owner agreements and licences. As a
result of these changes, the Copper & Diamonds segment is renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021.
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Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures
Underlying EBITDA margin
Underlying EBITDA margin
Underlying EBITDA margin is defined as Group underlying EBITDA divided by gross product sales.
Underlying EBITDA margin is defined as Group underlying EBITDA divided by gross product sales.
The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara underlying EBITDA divided by Pilbara gross product sales,
The Pilbara underlying free on board (FOB) EBITDA margin is defined as Pilbara underlying EBITDA divided by Pilbara gross product sales,
Underlying EBITDA
Underlying EBITDA
Gross product sales
Gross product sales
Underlying EBITDA margin
Underlying EBITDA margin
Pilbara underlying FOB EBITDA margin
Pilbara underlying FOB EBITDA margin
excluding freight revenue.
excluding freight revenue.
Pilbara
Pilbara
Underlying EBITDA
Underlying EBITDA
Pilbara gross product sales
Pilbara gross product sales
Less: Freight revenue
Less: Freight revenue
Pilbara gross product sales, excluding freight revenue
Pilbara gross product sales, excluding freight revenue
Pilbara underlying FOB EBITDA margin
Pilbara underlying FOB EBITDA margin
Copper
Copper
Underlying EBITDA - product group operations
Underlying EBITDA - product group operations
Gross product sales - product group operations
Gross product sales - product group operations
Underlying EBITDA margin - product group operations
Underlying EBITDA margin - product group operations
Minerals
Minerals
Underlying EBITDA - product group operations
Underlying EBITDA - product group operations
Gross product sales - product group operations
Gross product sales - product group operations
Underlying EBITDA margin - product group operations
Underlying EBITDA margin - product group operations
Underlying EBITDA margin from Aluminium integrated operations
Underlying EBITDA margin from Aluminium integrated operations
Underlying EBITDA margin from integrated operations is defined as underlying EBITDA divided by gross product sales.
Underlying EBITDA margin from integrated operations is defined as underlying EBITDA divided by gross product sales.
Aluminium
Aluminium
Underlying EBITDA - integrated operations
Underlying EBITDA - integrated operations
Gross product sales - integrated operations
Gross product sales - integrated operations
Underlying EBITDA margin from integrated operations
Underlying EBITDA margin from integrated operations
Underlying EBITDA margin (product group operations)
Underlying EBITDA margin (product group operations)
Underlying EBITDA margin (product group operations) is defined as underlying EBITDA divided by gross product sales.
Underlying EBITDA margin (product group operations) is defined as underlying EBITDA divided by gross product sales.
2021
2021
US$m
US$m
37,720
37,720
66,568
66,568
57 %
57 %
2020
2020
US$m
US$m
23,902
23,902
47,018
47,018
51 %
51 %
2019
2019
US$m
US$m
21,197
21,197
45,367
45,367
47 %
47 %
2021
2021
US$m
US$m
2020
2020
US$m
US$m
2019
2019
US$m
US$m
27,837
27,837
39,111
39,111
(2,707)
(2,707)
36,404
36,404
76 %
76 %
18,896
18,896
27,027
27,027
(1,487)
(1,487)
25,540
25,540
74 %
74 %
15,936
15,936
23,681
23,681
(1,671)
(1,671)
22,010
22,010
72 %
72 %
2021
2021
US$m
US$m
4,487
4,487
11,881
11,881
38 %
38 %
2021
2021
US$m
US$m
4,368
4,368
7,434
7,434
59 %
59 %
2021
2021
US$m
US$m
2,765
2,765
6,410
6,410
43 %
43 %
2020
2020
US$m
US$m
2,227
2,227
8,458
8,458
26 %
26 %
2020
2020
US$m
US$m
2,440
2,440
4,903
4,903
50 %
50 %
2020
2020
US$m
US$m
1,815
1,815
5,118
5,118
35 %
35 %
2019
2019
US$m
US$m
2,375
2,375
9,275
9,275
26 %
26 %
2019
2019
US$m
US$m
2,234
2,234
5,181
5,181
43 %
43 %
2019
2019
US$m
US$m
1,966
1,966
5,339
5,339
37 %
37 %
Adjusted(a)
Adjusted(a)
Adjusted(a)
Adjusted(a)
Adjusted(a)
Adjusted(a)
Adjusted(a)
Adjusted(a)
(a)
(a)
The comparatives have been recast in accordance with the organisational restructure announced on 28 January 2021.The main impacts are as follows: Simandou has moved from the
The comparatives have been recast in accordance with the organisational restructure announced on 28 January 2021.The main impacts are as follows: Simandou has moved from the
previous Energy & Minerals product group to the Copper product group; Uranium has moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved
previous Energy & Minerals product group to the Copper product group; Uranium has moved from the previous Energy & Minerals product group to Other Operations; Diamonds has moved
from the previous Copper & Diamonds product group to the Minerals product group; the Minerals product group retains the Argyle residual operations and from 1 January 2021, Argyle
from the previous Copper & Diamonds product group to the Minerals product group; the Minerals product group retains the Argyle residual operations and from 1 January 2021, Argyle
closure has moved to Other Operations. Argyle residual operations includes activity relating to the sale of remaining diamond inventory and property held. Argyle closure include activity
closure has moved to Other Operations. Argyle residual operations includes activity relating to the sale of remaining diamond inventory and property held. Argyle closure include activity
relating to the management and execution of the Argyle mine closure obligations and management of entities with interests in state and traditional owner agreements and licences. As a
relating to the management and execution of the Argyle mine closure obligations and management of entities with interests in state and traditional owner agreements and licences. As a
result of these changes, the Copper & Diamonds segment is renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021.
result of these changes, the Copper & Diamonds segment is renamed Copper and the Energy & Minerals segment is renamed Minerals from 2021.
Alternative Performance Measures
Underlying earnings
Underlying earnings represent net earnings attributable to the owners of Rio Tinto, adjusted to exclude items, which do not reflect the underlying
performance of the Group’s operations.
Exclusions from underlying earnings are those gains and losses, that individually, or in aggregate with similar items, are of a nature and size to
require exclusion in order to provide additional insight into underlying business performance.
The following items are excluded from net earnings in arriving at underlying earnings in each period irrespective of materiality:
–
–
–
–
–
Net gains/(losses) on disposal of interests in businesses.
Impairment charges and reversals.
Profit/(loss) after tax from discontinued operations.
Exchange and derivative gains and losses. This exclusion includes exchange gains/(losses) on external net debt and intragroup balances,
unrealised gains/(losses) on currency and interest rate derivatives not qualifying for hedge accounting, unrealised gains/(losses) on certain
commodity derivatives not qualifying for hedge accounting, and unrealised gains/(losses) on embedded derivatives not qualifying for hedge
accounting.
Adjustments to closure provisions where the adjustment is associated to an impairment charge, for legacy sites where the disturbance or
environmental contamination relates to the pre-acquisition period.
The reconciliation of underlying earnings to net earnings can be found in note 2.
Basic underlying earnings per share
Basic underlying earnings per share is calculated as underlying earnings divided by the weighted average number of shares outstanding during
the year.
On a per share basis, this allows the comparability of underlying financial performance adjusted to exclude items, which do not reflect the
underlying performance of the Group's operations.
Basic earnings per ordinary share
Items excluded from underlying earnings per share
Basic underlying earnings per ordinary share
Interest cover
2021
(cents)
1,303.4
17.7
1,321.1
2020
(cents)
604.0
165.6
769.6
Interest cover is a financial metric used when managing our risk. It represents the number of times finance income and finance costs (including
amounts capitalised) is covered by profit before taxation before finance income, finance costs, share of profit after tax of equity accounted units
and items excluded from underlying earnings, plus dividends from equity accounted units.
Profit before taxation
Add back
Finance income
Finance costs
Share of profit after tax of equity accounted units
Items excluded from underlying earnings
Add: Dividends from equity accounted units
Calculated earnings
Finance income
Finance costs
Add: Amounts capitalised
Total Finance income/costs before capitalisation
Interest cover
2021
US$m
2020
US$m
30,833
15,391
(64)
243
(1,042)
508
1,431
31,909
64
(243)
(358)
(537)
(141)
268
(652)
2,891
594
18,351
141
(268)
(340)
(467)
59
39
344
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Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures
Payout ratio
The payout ratio is used by us to guide the dividend policy we implemented in 2016, with which we have sought to return 40-60% of underlying
earnings, on average through the cycle to shareholders as dividends. It is calculated as total equity dividends per share to owners of Rio Tinto
declared in respect of the financial year divided by underlying earnings per share (as defined above). Dividends declared usually include an interim
dividend paid in the year, and a final dividend paid after the end of the year. Any special dividends declared in respect of the financial year are also
included.
Interim dividend declared per share
Interim special dividend declared per share
Final dividend declared per share
Final special dividend declared per share
Total dividend declared per share for the year
Underlying earnings per share
Payout ratio
APMs derived from cash flow statement
Capital expenditure
2021
(cents)
376.0
185.0
417.0
62.0
1,040.0
2020
(cents)
155.0
—
309.0
93.0
557.0
1,321.1
769.6
79 %
72 %
Capital expenditure comprises the net sustaining and development expenditure on property, plant and equipment, and on intangible assets. This
is equivalent to “Purchases of property, plant and equipment and intangible assets” in the cash flow statement less “Sales of property, plant and
equipment and intangible assets”.
This measure is used to support management's objective of effective and efficient capital allocation as we need to invest in existing assets in order
to maintain and improve productive capacity, and in new assets to grow the business.
Free cash flow
Free cash flow is defined as net cash generated from operating activities minus purchases of property, plant and equipment and intangibles and
payments of lease principal, plus proceeds from the sale of property, plant and equipment and intangible assets.
This measures the net cash returned by the business after the expenditure of sustaining and development capital. This cash can be used for
shareholder returns, reducing debt and other investing/financing activities.
Net cash generated from operating activities
Less: Purchase of property, plant and equipment and intangible assets
Less: Lease principal payments
Add: Sales of property, plant and equipment and intangible assets
Free cash flow
APMs derived from the balance sheet
Net cash/(debt)
2021
US$m
25,345
(7,384)
(358)
61
17,664
2020
US$m
15,875
(6,189)
(324)
45
9,407
2019
US$m
14,912
(5,488)
(315)
49
9,158
Net cash/(debt) is total borrowings plus lease liabilities less cash and cash equivalents and other liquid investments, adjusted for derivatives
related to net debt.
Net cash/(debt) measures how we are managing our balance sheet and capital structure. Refer to Consolidated net cash/(debt) note for the
reconciliation on page 257.
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Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures continued
Alternative Performance Measures
Payout ratio
Payout ratio
included.
included.
The payout ratio is used by us to guide the dividend policy we implemented in 2016, with which we have sought to return 40-60% of underlying
The payout ratio is used by us to guide the dividend policy we implemented in 2016, with which we have sought to return 40-60% of underlying
earnings, on average through the cycle to shareholders as dividends. It is calculated as total equity dividends per share to owners of Rio Tinto
earnings, on average through the cycle to shareholders as dividends. It is calculated as total equity dividends per share to owners of Rio Tinto
declared in respect of the financial year divided by underlying earnings per share (as defined above). Dividends declared usually include an interim
declared in respect of the financial year divided by underlying earnings per share (as defined above). Dividends declared usually include an interim
dividend paid in the year, and a final dividend paid after the end of the year. Any special dividends declared in respect of the financial year are also
dividend paid in the year, and a final dividend paid after the end of the year. Any special dividends declared in respect of the financial year are also
Interim dividend declared per share
Interim dividend declared per share
Interim special dividend declared per share
Interim special dividend declared per share
Final dividend declared per share
Final dividend declared per share
Final special dividend declared per share
Final special dividend declared per share
Total dividend declared per share for the year
Total dividend declared per share for the year
Underlying earnings per share
Underlying earnings per share
Payout ratio
Payout ratio
APMs derived from cash flow statement
APMs derived from cash flow statement
Capital expenditure
Capital expenditure
Capital expenditure comprises the net sustaining and development expenditure on property, plant and equipment, and on intangible assets. This
Capital expenditure comprises the net sustaining and development expenditure on property, plant and equipment, and on intangible assets. This
is equivalent to “Purchases of property, plant and equipment and intangible assets” in the cash flow statement less “Sales of property, plant and
is equivalent to “Purchases of property, plant and equipment and intangible assets” in the cash flow statement less “Sales of property, plant and
equipment and intangible assets”.
equipment and intangible assets”.
This measure is used to support management's objective of effective and efficient capital allocation as we need to invest in existing assets in order
This measure is used to support management's objective of effective and efficient capital allocation as we need to invest in existing assets in order
to maintain and improve productive capacity, and in new assets to grow the business.
to maintain and improve productive capacity, and in new assets to grow the business.
Free cash flow
Free cash flow
Free cash flow is defined as net cash generated from operating activities minus purchases of property, plant and equipment and intangibles and
Free cash flow is defined as net cash generated from operating activities minus purchases of property, plant and equipment and intangibles and
payments of lease principal, plus proceeds from the sale of property, plant and equipment and intangible assets.
payments of lease principal, plus proceeds from the sale of property, plant and equipment and intangible assets.
This measures the net cash returned by the business after the expenditure of sustaining and development capital. This cash can be used for
This measures the net cash returned by the business after the expenditure of sustaining and development capital. This cash can be used for
shareholder returns, reducing debt and other investing/financing activities.
shareholder returns, reducing debt and other investing/financing activities.
Net cash generated from operating activities
Net cash generated from operating activities
Less: Purchase of property, plant and equipment and intangible assets
Less: Purchase of property, plant and equipment and intangible assets
Less: Lease principal payments
Less: Lease principal payments
Add: Sales of property, plant and equipment and intangible assets
Add: Sales of property, plant and equipment and intangible assets
Free cash flow
Free cash flow
APMs derived from the balance sheet
APMs derived from the balance sheet
Net cash/(debt)
Net cash/(debt)
related to net debt.
related to net debt.
reconciliation on page 257.
reconciliation on page 257.
Net cash/(debt) is total borrowings plus lease liabilities less cash and cash equivalents and other liquid investments, adjusted for derivatives
Net cash/(debt) is total borrowings plus lease liabilities less cash and cash equivalents and other liquid investments, adjusted for derivatives
Net cash/(debt) measures how we are managing our balance sheet and capital structure. Refer to Consolidated net cash/(debt) note for the
Net cash/(debt) measures how we are managing our balance sheet and capital structure. Refer to Consolidated net cash/(debt) note for the
2021
2021
US$m
US$m
25,345
25,345
(7,384)
(7,384)
(358)
(358)
61
61
17,664
17,664
2020
2020
US$m
US$m
15,875
15,875
(6,189)
(6,189)
(324)
(324)
45
45
9,407
9,407
2019
2019
US$m
US$m
14,912
14,912
(5,488)
(5,488)
(315)
(315)
49
49
9,158
9,158
Alternative Performance Measures
Net gearing ratio
Net gearing ratio is defined as net (cash)/debt divided by the sum of net debt and total equity at the end of each period. It demonstrates the
degree to which the Group's operations are funded by debt versus equity.
Net (cash)/debt
Net (cash)/debt
Total equity
Net (cash)/debt plus total equity
Net gearing ratio
Underlying return on capital employed
2021
US$m
(1,576)
(1,576)
56,590
55,014
(3%)
2020
US$m
664
664
51,903
52,567
1%
Underlying return on capital employed (“ROCE”) is defined as underlying earnings excluding net interest divided by average capital employed
(operating assets).
Underlying ROCE measures how efficiently we generate profits from investment in our portfolio of assets.
2021
2021
(cents)
(cents)
376.0
376.0
185.0
185.0
417.0
417.0
62.0
62.0
1,040.0
1,040.0
2020
2020
(cents)
(cents)
155.0
155.0
—
—
309.0
309.0
93.0
93.0
557.0
557.0
1,321.1
1,321.1
769.6
769.6
79 %
79 %
72 %
72 %
Profit after tax attributable to owners of Rio Tinto (net earnings)
Items added back to derive underlying earnings (refer to page 345)
Underlying earnings
Add/(deduct):
Finance income per the income statement
Finance costs per the income statement
Tax on finance cost
Non-controlling interest share of net finance costs
Net interest cost in equity accounted units (Rio Tinto share)
Net interest
Adjusted underlying earnings
Equity attributable to owners of Rio Tinto - beginning of the period
Net debt - beginning of the period
Capital employed - beginning of the period
Equity attributable to owners of Rio Tinto - end of the period
Net (cash)/debt - end of the period
Capital employed - end of the period
Average capital employed
Underlying return on capital employed
2021
US$m
21,094
286
21,380
(64)
243
(52)
(64)
32
95
21,475
47,054
664
47,718
51,432
(1,576)
49,856
48,787
44 %
2020
US$m
9,769
2,679
12,448
(141)
268
(38)
(107)
32
14
12,462
40,532
3,651
44,183
47,054
664
47,718
45,951
27 %
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Financial Summary 2012-2021
Financial Summary
Financial Summary 2012-2021
US$m
Gross product sales(a)
Share of equity accounted units' sales
revenue and items excluded from underlying
earnings
Consolidated sales revenue
Underlying profit before interest and tax
(PBIT)
Finance costs(b)
Exchange differences and derivatives(c)
Other exclusions from underlying earnings
Profit/(loss) before tax (PBT)
Tax on exclusions
Tax on underlying PBT
Loss after tax from discontinued operations
Attributable to non-controlling interests
Net earnings/(loss)
Underlying EBITDA
Underlying earnings(d)
Earnings/(loss) per share (basic) –
continuing operations
Underlying earnings per share (basic) –
continuing operations
Dividends per share: declared for year(e)
Rio Tinto shareholders (US cents)
Rio Tinto plc (pence)
Rio Tinto Limited (Aus. cents)
Net assets
Fixed assets(f)
Other assets less liabilities
Provisions (including deferred tax liabilities)
Net cash/(debt)
Non-controlling interests
Equity attributable to owners of Rio Tinto
Capital expenditure(g)
Acquisitions
Disposals
Net cash generated from operating
activities(h)
Cash flows before financing activities(i)
Ratios
Net cash/(debt) to total capital(j)
Underlying earnings: owners' equity(k)
Interest cover(l)
2012
55,597
2013
54,575
2014
50,041
2015
36,784
2016
35,336
2017
41,867
2018
42,835
2019
45,367
2020
47,018
2021
66,568
(4,655)
(3,404)
(2,377)
(1,955)
(1,555)
(1,837)
(2,313)
(2,202)
(2,407)
(3,073)
50,942
51,171
47,664
34,829
33,781
40,030
40,522
43,165
44,611
63,495
13,467
16,039
13,851
7,310
8,053
13,363
13,208
15,979
18,786
31,938
(616)
695
(15,977)
(2,431)
2,896
(3,485)
(7)
(1)
(3,028)
19,245
9,269
(794)
(3,362)
(8,378)
3,505
2,642
(5,068)
(967)
(2,021)
(1,311)
9,552
423
(3,476)
(1,076)
(3,458)
(3,502)
(726)
567
(1,560)
(1,360)
622
(972)
6,343
(155)
(1,412)
—
2,586
3,665
21,509
10,217
—
28
6,527
19,665
9,305
—
853
(866)
—
(159)
4,617
13,510
5,100
12,621
4,540
(1,090)
(1,078)
1,621
12,816
(680)
923
4,716
18,167
(596)
(3,369)
—
(89)
(801)
(3,441)
—
(287)
8,762
18,580
8,627
13,638
18,136
8,808
(638)
(273)
(3,949)
(504)
(1,247)
(1,644)
11,119
391
(4,538)
15,391
204
(5,195)
—
1,038
8,010
21,197
10,373
—
(631)
9,769
23,902
12,448
(597)
521
(1,029)
30,833
224
(8,482)
—
(1,481)
21,094
37,720
21,380
(163.4)c
198.4c
353.1c
(47.5)c
256.9c
490.4c
793.2c
491.4c
604.0c
1303.4c
501.3c
553.1c
503.4c
248.8c
283.8c
482.8c
512.3c
636.3c
769.6c
1321.1c
167.00c
106.77p
160.18c
192.00c
120.10p
213.14c
215.00c
134.88p
256.07c
215.00c
143.13p
296.80c
170.00c
134.36p
222.75c
290.00c
212.56p
366.25c
307.00c
232.78p
421.73c
443.00c
350.61p
657.32c
557.00c 1040.00c
408.37p
756.42p
733.88c 1422.90c
90,580
8,478
(22,126)
(19,192)
(11,187)
81,554
8,224
(18,221)
(18,055)
(7,616)
80,669
4,596
(18,176)
(12,495)
(8,309)
70,226
4,037
(16,352)
(13,783)
(6,779)
68,104
4,128
(16,915)
(9,587)
(6,440)
70,735
2,495
(18,270)
(3,845)
(6,404)
64,351
2,498
(17,281)
255
(6,137)
64,902
2,314
(18,323)
(3,651)
(4,710)
46,553
45,886
46,285
37,349
39,290
44,711
43,686
40,532
70,347
3,124
72,142
4,411
(20,904) (21,539)
1,576
(5,158)
51,432
(664)
(4,849)
47,054
(17,615)
(1,335)
251
(13,001)
(8,162)
4
1,896
—
887
(4,685)
(3)
(38)
(3,012)
(4,482)
—
761
—
2,675
(5,430)
(5)
7,733
(5,488)
(6,189)
—
(80)
—
10
(7,384)
—
4
9,430
15,078
14,286
9,383
8,465
13,884
11,821
14,912
15,875
25,345
(8,813)
4,132
7,783
4,783
6,361
11,511
13,142
9,411
9,319
18,186
-25%
19%
13
-25%
22%
13
-19%
20%
13
-24%
11%
7
-17%
13%
7
-7%
21%
14
1%
20%
22
7%
25%
28
1%
28%
39
-3%
43%
59
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
Gross product sales include consolidated sales revenue plus the equivalent sales revenue of equity accounted units in proportion to our equity interest (after adjusting for sales to/from
subsidiaries).
Finance costs include net interest and amortisation of discount. From 1 January 2019, it also included the impact of adopting IFRS 16 “Leases”.
Under IFRS, as defined in note 1, certain gains and losses on currency exchange and on revaluation of derivatives are included in the Group’s net earnings/(loss). These items are excluded
from underlying earnings.
Underlying earnings is an additional measure of earnings, which is reported by Rio Tinto with its IFRS (as defined in note 1) results to provide greater understanding of the underlying
business performance of its operations. It is defined in note 2 to the financial statements. Underlying profit before interest and tax (PBIT) is similar to underlying earnings except that it is
stated before interest and tax.
Dividends per share are the amounts declared in respect of each financial year excluding share buy-backs and special dividends relating to the return of divestment proceeds. These usually
include an interim dividend paid in the year, a final dividend paid after the end of the year and special dividends where applicable.
Fixed assets include: property, plant and equipment, intangible assets, goodwill, and investments in, and long-term loans to, equity accounted units. From 1 January 2019, it also includes
the impact of adopting IFRS 16.
Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment or intangible assets.
Net cash generated from operating activities represents the cash generated by the Group’s consolidated operations, after payment of interest, taxes, and dividends to non-controlling
interests in subsidiaries.
Cash flow before financing activities is stated before deducting dividends payable to owners of Rio Tinto.
Total capital comprises equity attributable to owners of Rio Tinto plus net debt and non-controlling interests.
Underlying earnings: owners’ equity represents underlying earnings expressed as a percentage of the mean of opening and closing equity attributable to owners of Rio Tinto.
Interest cover is a financial metric used when managing our risk. It represents the number of times finance income and finance costs (including amounts capitalised) is covered by profit
before taxation before finance income, finance costs, share of profit after tax of equity accounted units and items excluded from underlying earnings, plus dividends from equity accounted
units.
348
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Summary Financial Data in Australian
Dollars, Sterling and US Dollars
Summary Financial Data in Australian Dollars,
Sterling and US Dollars
Financial Summary
2021
A$m
84,488
88,577
41,027
30,039
28,068
50,191
28,449
1734.3c
1757.8c
906.90c
370.27c
577.04c
85.80c
24,199
2,173
70,906
2020
A$m
64,577
68,061
22,279
15,055
14,141
34,599
18,019
874.3c
1114.1c
566.21c
—
397.48c
119.63c
13,490
(864)
61,252
2021
£m
46,151
48,385
22,411
16,409
15,332
27,417
15,540
947.4p
960.2p
492.70p
200.03p
306.72p
45.60p
13,218
1,168
38,108
2020
£m
34,749 Consolidated sales revenue
36,624 Gross product sales
11,989 Profit before tax from continuing operations
8,101 Profit for the year from continuing operations
7,609 Net earnings attributable to Rio Tinto shareholders
18,618 Underlying EBITDA
9,696 Underlying earnings(a)
470.5p Basic earnings per ordinary share(b)
599.5p Basic underlying earnings per ordinary share(a)(b)
Dividends per share to Rio Tinto shareholders(c)
- paid – ordinary dividend
- paid – special dividend
- proposed – ordinary dividend
- proposed – special dividend
297.21p
—
221.86p
66.77p
7,259 Cash flow before financing activities
(488) Net cash/(debt)
34,592 Equity attributable to Rio Tinto shareholders
2021
US$m
63,495
66,568
30,833
22,575
21,094
37,720
21,380
1303.4c
1321.1c
685.0c
278.0c
417.0c
62.0c
18,186
1,576
51,432
2020
US$m
44,611
47,018
15,391
10,400
9,769
23,902
12,448
604.0c
769.6c
386.0c
—
309.0c
93.0c
9,319
(664)
47,054
(a)
(b)
(c)
Underlying earnings exclude impairments and other charges of US$286 million (2020: US$2,679 million), which are analysed on page 240.
Basic earnings per ordinary share and basic underlying earnings per ordinary share do not recognise the dilution resulting from share options on issue.
The Australian dollar and sterling amounts are based on the US dollar amounts, retranslated at average or closing rates as appropriate, except for the dividends which are the actual
amounts.
The financial data above has been extracted from the financial information set out on pages 212-311.
Financial Summary 2012-2021
Financial Summary 2012-2021
Financial Summary
Financial Summary 2012-2021
US$m
US$m
Gross product sales(a)
Gross product sales(a)
2012
2012
2013
2013
2014
2014
2015
2015
2016
2016
2017
2017
2018
2018
2019
2019
2020
2020
2021
2021
55,597
55,597
54,575
54,575
50,041
50,041
36,784
36,784
35,336
35,336
41,867
41,867
42,835
42,835
45,367
45,367
47,018
47,018
66,568
66,568
Consolidated sales revenue
Consolidated sales revenue
50,942
50,942
51,171
51,171
47,664
47,664
34,829
34,829
33,781
33,781
40,030
40,030
40,522
40,522
43,165
43,165
44,611
44,611
63,495
63,495
(4,655)
(4,655)
(3,404)
(3,404)
(2,377)
(2,377)
(1,955)
(1,955)
(1,555)
(1,555)
(1,837)
(1,837)
(2,313)
(2,313)
(2,202)
(2,202)
(2,407)
(2,407)
(3,073)
(3,073)
13,467
13,467
16,039
16,039
13,851
13,851
7,310
7,310
8,053
8,053
13,363
13,363
13,208
13,208
15,979
15,979
18,786
18,786
31,938
31,938
Exchange differences and derivatives(c)
Exchange differences and derivatives(c)
695
695
(3,362)
(3,362)
(2,021)
(2,021)
(3,458)
(3,458)
622
622
(1,078)
(1,078)
Other exclusions from underlying earnings
Other exclusions from underlying earnings
(15,977)
(15,977)
(8,378)
(8,378)
(1,311)
(1,311)
(3,502)
(3,502)
(972)
(972)
1,621
1,621
(616)
(616)
(794)
(794)
(967)
(967)
(1,076)
(1,076)
(1,360)
(1,360)
(1,090)
(1,090)
(680)
(680)
923
923
4,716
4,716
(638)
(638)
(273)
(273)
(504)
(504)
(1,247)
(1,247)
(597)
(597)
521
521
(3,949)
(3,949)
(1,644)
(1,644)
(1,029)
(1,029)
(2,431)
(2,431)
2,896
2,896
3,505
3,505
2,642
2,642
9,552
9,552
423
423
(726)
(726)
6,343
6,343
12,816
12,816
18,167
18,167
11,119
11,119
15,391
15,391
30,833
30,833
567
567
(155)
(155)
(596)
(596)
(801)
(801)
391
391
204
204
224
224
(3,485)
(3,485)
(5,068)
(5,068)
(3,476)
(3,476)
(1,560)
(1,560)
(1,412)
(1,412)
(3,369)
(3,369)
(3,441)
(3,441)
(4,538)
(4,538)
(5,195)
(5,195)
(8,482)
(8,482)
(7)
(7)
(1)
(1)
(3,028)
(3,028)
—
—
2,586
2,586
3,665
3,665
—
—
28
28
—
—
853
853
—
—
—
—
—
—
(159)
(159)
(89)
(89)
(287)
(287)
6,527
6,527
(866)
(866)
4,617
4,617
8,762
8,762
13,638
13,638
—
—
1,038
1,038
8,010
8,010
—
—
—
—
(631)
(631)
(1,481)
(1,481)
9,769
9,769
21,094
21,094
19,245
19,245
21,509
21,509
19,665
19,665
12,621
12,621
13,510
13,510
18,580
18,580
18,136
18,136
21,197
21,197
23,902
23,902
37,720
37,720
9,269
9,269
10,217
10,217
9,305
9,305
4,540
4,540
5,100
5,100
8,627
8,627
8,808
8,808
10,373
10,373
12,448
12,448
21,380
21,380
(163.4)c
(163.4)c
198.4c
198.4c
353.1c
353.1c
(47.5)c
(47.5)c
256.9c
256.9c
490.4c
490.4c
793.2c
793.2c
491.4c
491.4c
604.0c
604.0c
1303.4c
1303.4c
501.3c
501.3c
553.1c
553.1c
503.4c
503.4c
248.8c
248.8c
283.8c
283.8c
482.8c
482.8c
512.3c
512.3c
636.3c
636.3c
769.6c
769.6c
1321.1c
1321.1c
167.00c
167.00c
106.77p
106.77p
160.18c
160.18c
192.00c
192.00c
120.10p
120.10p
213.14c
213.14c
215.00c
215.00c
134.88p
134.88p
256.07c
256.07c
215.00c
215.00c
143.13p
143.13p
296.80c
296.80c
170.00c
170.00c
134.36p
134.36p
222.75c
222.75c
290.00c
290.00c
212.56p
212.56p
366.25c
366.25c
307.00c
307.00c
232.78p
232.78p
421.73c
421.73c
443.00c
443.00c
350.61p
350.61p
657.32c
657.32c
557.00c 1040.00c
557.00c 1040.00c
408.37p
408.37p
756.42p
756.42p
733.88c 1422.90c
733.88c 1422.90c
Share of equity accounted units' sales
Share of equity accounted units' sales
revenue and items excluded from underlying
revenue and items excluded from underlying
earnings
earnings
Underlying profit before interest and tax
Underlying profit before interest and tax
(PBIT)
(PBIT)
Finance costs(b)
Finance costs(b)
Profit/(loss) before tax (PBT)
Profit/(loss) before tax (PBT)
Tax on exclusions
Tax on exclusions
Tax on underlying PBT
Tax on underlying PBT
Loss after tax from discontinued operations
Loss after tax from discontinued operations
Attributable to non-controlling interests
Attributable to non-controlling interests
Net earnings/(loss)
Net earnings/(loss)
Underlying EBITDA
Underlying EBITDA
Underlying earnings(d)
Underlying earnings(d)
Earnings/(loss) per share (basic) –
Earnings/(loss) per share (basic) –
continuing operations
continuing operations
Underlying earnings per share (basic) –
Underlying earnings per share (basic) –
continuing operations
continuing operations
Dividends per share: declared for year(e)
Dividends per share: declared for year(e)
Rio Tinto shareholders (US cents)
Rio Tinto shareholders (US cents)
Rio Tinto plc (pence)
Rio Tinto plc (pence)
Rio Tinto Limited (Aus. cents)
Rio Tinto Limited (Aus. cents)
Net assets
Net assets
Fixed assets(f)
Fixed assets(f)
90,580
90,580
81,554
81,554
80,669
80,669
70,226
70,226
68,104
68,104
70,735
70,735
64,351
64,351
64,902
64,902
70,347
70,347
72,142
72,142
Other assets less liabilities
Other assets less liabilities
8,478
8,478
8,224
8,224
4,596
4,596
4,037
4,037
4,128
4,128
2,495
2,495
2,498
2,498
2,314
2,314
3,124
3,124
4,411
4,411
Provisions (including deferred tax liabilities)
Provisions (including deferred tax liabilities)
(22,126)
(22,126)
(18,221)
(18,221)
(18,176)
(18,176)
(16,352)
(16,352)
(16,915)
(16,915)
(18,270)
(18,270)
(17,281)
(17,281)
(18,323)
(18,323)
(20,904) (21,539)
(20,904) (21,539)
Net cash/(debt)
Net cash/(debt)
Non-controlling interests
Non-controlling interests
(19,192)
(19,192)
(18,055)
(18,055)
(12,495)
(12,495)
(13,783)
(13,783)
(9,587)
(9,587)
(3,845)
(3,845)
255
255
(3,651)
(3,651)
(664)
(664)
1,576
1,576
(11,187)
(11,187)
(7,616)
(7,616)
(8,309)
(8,309)
(6,779)
(6,779)
(6,440)
(6,440)
(6,404)
(6,404)
(6,137)
(6,137)
(4,710)
(4,710)
(4,849)
(4,849)
(5,158)
(5,158)
Equity attributable to owners of Rio Tinto
Equity attributable to owners of Rio Tinto
46,553
46,553
45,886
45,886
46,285
46,285
37,349
37,349
39,290
39,290
44,711
44,711
43,686
43,686
40,532
40,532
47,054
47,054
51,432
51,432
Capital expenditure(g)
Capital expenditure(g)
(17,615)
(17,615)
(13,001)
(13,001)
(8,162)
(8,162)
(4,685)
(4,685)
(3,012)
(3,012)
(4,482)
(4,482)
(5,430)
(5,430)
(5,488)
(5,488)
(6,189)
(6,189)
(7,384)
(7,384)
(1,335)
(1,335)
4
4
251
251
1,896
1,896
—
—
887
887
(3)
(3)
(38)
(38)
—
—
761
761
—
—
(5)
(5)
2,675
2,675
7,733
7,733
—
—
(80)
(80)
—
—
10
10
—
—
4
4
Net cash generated from operating
Net cash generated from operating
9,430
9,430
15,078
15,078
14,286
14,286
9,383
9,383
8,465
8,465
13,884
13,884
11,821
11,821
14,912
14,912
15,875
15,875
25,345
25,345
Cash flows before financing activities(i)
Cash flows before financing activities(i)
(8,813)
(8,813)
4,132
4,132
7,783
7,783
4,783
4,783
6,361
6,361
11,511
11,511
13,142
13,142
9,411
9,411
9,319
9,319
18,186
18,186
Net cash/(debt) to total capital(j)
Net cash/(debt) to total capital(j)
Underlying earnings: owners' equity(k)
Underlying earnings: owners' equity(k)
-25%
-25%
19%
19%
13
13
-25%
-25%
22%
22%
13
13
-19%
-19%
20%
20%
13
13
-24%
-24%
11%
11%
7
7
-17%
-17%
13%
13%
7
7
-7%
-7%
21%
21%
14
14
1%
1%
20%
20%
22
22
7%
7%
25%
25%
28
28
1%
1%
28%
28%
39
39
-3%
-3%
43%
43%
59
59
(a)
(a)
Gross product sales include consolidated sales revenue plus the equivalent sales revenue of equity accounted units in proportion to our equity interest (after adjusting for sales to/from
Gross product sales include consolidated sales revenue plus the equivalent sales revenue of equity accounted units in proportion to our equity interest (after adjusting for sales to/from
Finance costs include net interest and amortisation of discount. From 1 January 2019, it also included the impact of adopting IFRS 16 “Leases”.
Finance costs include net interest and amortisation of discount. From 1 January 2019, it also included the impact of adopting IFRS 16 “Leases”.
Under IFRS, as defined in note 1, certain gains and losses on currency exchange and on revaluation of derivatives are included in the Group’s net earnings/(loss). These items are excluded
Under IFRS, as defined in note 1, certain gains and losses on currency exchange and on revaluation of derivatives are included in the Group’s net earnings/(loss). These items are excluded
(d)
(d)
Underlying earnings is an additional measure of earnings, which is reported by Rio Tinto with its IFRS (as defined in note 1) results to provide greater understanding of the underlying
Underlying earnings is an additional measure of earnings, which is reported by Rio Tinto with its IFRS (as defined in note 1) results to provide greater understanding of the underlying
business performance of its operations. It is defined in note 2 to the financial statements. Underlying profit before interest and tax (PBIT) is similar to underlying earnings except that it is
business performance of its operations. It is defined in note 2 to the financial statements. Underlying profit before interest and tax (PBIT) is similar to underlying earnings except that it is
(e)
(e)
Dividends per share are the amounts declared in respect of each financial year excluding share buy-backs and special dividends relating to the return of divestment proceeds. These usually
Dividends per share are the amounts declared in respect of each financial year excluding share buy-backs and special dividends relating to the return of divestment proceeds. These usually
include an interim dividend paid in the year, a final dividend paid after the end of the year and special dividends where applicable.
include an interim dividend paid in the year, a final dividend paid after the end of the year and special dividends where applicable.
(f)
(f)
Fixed assets include: property, plant and equipment, intangible assets, goodwill, and investments in, and long-term loans to, equity accounted units. From 1 January 2019, it also includes
Fixed assets include: property, plant and equipment, intangible assets, goodwill, and investments in, and long-term loans to, equity accounted units. From 1 January 2019, it also includes
Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment or intangible assets.
Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment or intangible assets.
Net cash generated from operating activities represents the cash generated by the Group’s consolidated operations, after payment of interest, taxes, and dividends to non-controlling
Net cash generated from operating activities represents the cash generated by the Group’s consolidated operations, after payment of interest, taxes, and dividends to non-controlling
Cash flow before financing activities is stated before deducting dividends payable to owners of Rio Tinto.
Cash flow before financing activities is stated before deducting dividends payable to owners of Rio Tinto.
Total capital comprises equity attributable to owners of Rio Tinto plus net debt and non-controlling interests.
Total capital comprises equity attributable to owners of Rio Tinto plus net debt and non-controlling interests.
Underlying earnings: owners’ equity represents underlying earnings expressed as a percentage of the mean of opening and closing equity attributable to owners of Rio Tinto.
Underlying earnings: owners’ equity represents underlying earnings expressed as a percentage of the mean of opening and closing equity attributable to owners of Rio Tinto.
Interest cover is a financial metric used when managing our risk. It represents the number of times finance income and finance costs (including amounts capitalised) is covered by profit
Interest cover is a financial metric used when managing our risk. It represents the number of times finance income and finance costs (including amounts capitalised) is covered by profit
before taxation before finance income, finance costs, share of profit after tax of equity accounted units and items excluded from underlying earnings, plus dividends from equity accounted
before taxation before finance income, finance costs, share of profit after tax of equity accounted units and items excluded from underlying earnings, plus dividends from equity accounted
Acquisitions
Acquisitions
Disposals
Disposals
activities(h)
activities(h)
Ratios
Ratios
Interest cover(l)
Interest cover(l)
subsidiaries).
subsidiaries).
from underlying earnings.
from underlying earnings.
stated before interest and tax.
stated before interest and tax.
the impact of adopting IFRS 16.
the impact of adopting IFRS 16.
interests in subsidiaries.
interests in subsidiaries.
(b)
(b)
(c)
(c)
(g)
(g)
(h)
(h)
(i)
(i)
(j)
(j)
(k)
(k)
(l)
(l)
units.
units.
348
348
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Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
349
349
Production, Ore Reserves, Mineral Resources
and Operations
Metals and Minerals Production
Mineral Resources and Ore Reserves
Competent Persons
Mines and Production Facilities
351
353
378
380
350
Annual Report 2021 | riotinto.com
Production, Ore Reserves, Mineral Resources
and Operations
Metals and Minerals Production
Mineral Resources and Ore Reserves
Competent Persons
Mines and Production Facilities
351
353
378
380
Production, Ore Reserves, Mineral Resources and Operations
Metals and minerals production
ALUMINA ('000 tonnes)
Jonquière (Vaudreuil) (Canada)(b)
Jonquière (Vaudreuil) specialty plant (Canada)
Queensland Alumina (Australia)
São Luis (Alumar) (Brazil)
Yarwun (Australia)
Rio Tinto total
ALUMINIUM ('000 tonnes)
Alma (Canada)
Alouette (Sept-Îles) (Canada)
Arvida (Canada)
Arvida AP60 (Canada)
Bécancour (Canada)
Bell Bay (Australia)
Boyne Island (Australia)
Grande-Baie (Canada)
ISAL (Reykjavik) (Iceland)
Kitimat (Canada)
Laterrière (Canada)
Sohar (Oman)
Tiwai Point (New Zealand)
Tomago (Australia)
Rio Tinto total
BAUXITE ('000 tonnes)
Gove (Australia)
Porto Trombetas (MRN) (Brazil)
Sangaredi (Guinea)
Weipa (Australia)
Rio Tinto total
BORATES (‘000 tonnes)(d)
Rio Tinto Borates – Boron (US)
COPPER (mined) ('000 tonnes)
Bingham Canyon (US)
Escondida (Chile)
Oyu Tolgoi (Mongolia)(e)
Rio Tinto total
COPPER (refined) ('000 tonnes)
Escondida (Chile)
Kennecott (US)
Rio Tinto total
DIAMONDS (‘000 carats)
Argyle (Australia)(f)
Diavik (Canada)(g)
Rio Tinto total
GOLD (mined) (‘000 ounces)
Bingham Canyon (US)
Escondida (Chile)
Oyu Tolgoi (Mongolia)(e)
Rio Tinto total
GOLD (refined) (‘000 ounces)
Kennecott (US)
IRON ORE (‘000 tonnes)
Hamersley mines (Australia)
Hamersley – Channar (Australia)(i)
Hope Downs (Australia)
Iron Ore Company of Canada (Canada)
Robe River - Robe Valley (Australia)
Robe River - West Angelas (Australia)
Rio Tinto total
2021 Production
2020 Production
2019 Production
Rio Tinto
% share(a)
100.0%
100.0%
80.0%
10.0%
100.0%
100.0%
40.0%
100.0%
100.0%
25.1%
100.0%
59.4%
100.0%
100.0%
100.0%
100.0%
20.0%
79.4%
51.6%
100.0%
12.0%
23.0%(c)
100.0%
Total
1,364
107
3,705
3,662
3,093
471
629
168
60
463
189
502
230
203
263
252
395
333
592
11,763
11,383
15,797
34,088
Rio Tinto
share
1,364
107
2,964
366
3,093
7,894
471
251
168
60
116
189
298
230
203
263
252
79
264
305
3,151
11,763
1,366
7,109
34,088
54,326
Total
1,424
94
3,701
3,848
3,175
473
623
169
60
393
192
510
225
183
329
250
397
333
592
12,299
11,629
16,506
35,009
Rio Tinto
share
1,424
94
2,961
385
3,175
8,039
473
249
169
60
98
192
303
225
183
329
250
79
265
305
3,180
12,299
1,395
7,428
35,009
56,131
Total
1,413
109
3,454
3,679
3,091
472
602
175
60
77
189
499
233
184
385
257
391
351
588
12,201
11,060
13,701
35,411
Rio Tinto
share
1,413
109
2,763
368
3,091
7,744
472
241
175
60
19
189
296
233
184
385
257
78
279
303
3,171
12,201
1,327
6,165
35,411
55,105
100.0%
488
488
480
480
520
520
100.0%
30.0%
33.5%
30.0%
100.0%
159.4
931.8
163.0
195.3
143.3
100.0%
100.0%
–
5,843
100.0%
30.0%
33.5%
139.5
161.7
468.1
159.4
279.5
54.6
493.5
58.6
143.3
201.9
–
3,847
3,847
139.5
48.5
156.9
344.9
140.0
1,125.9
149.6
233.9
84.8
10,945
6,218
171.2
169.5
181.9
140.0
337.8
50.2
527.9
70.2
84.8
155.0
10,945
3,731
14,676
171.2
50.9
61.0
283.0
186.8
1,138.6
146.3
250.2
184.6
12,999
6,719
234.7
246.7
241.8
186.8
341.6
49.1
577.4
75.0
184.6
259.6
12,999
4,031
17,030
234.7
74.0
81.1
389.7
100.0%
176.4
176.4
117.5
117.5
218.7
218.7
(h)
199,699
199,699
210,682
210,682
209,392
209,392
100.0%
50.0%
58.7%
53.0%
53.0%
10,630
49,284
16,564
25,497
34,613
10,630
24,642
9,727
13,514
18,345
276,557
9,175
49,045
17,715
30,295
34,209
6,139
24,522
10,402
16,056
18,131
285,932
7,970
48,264
17,943
26,951
34,086
4,782
24,132
10,536
14,284
18,066
281,192
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351
Metals and minerals production continued
MOLYBDENUM (‘000 tonnes)
Bingham Canyon (US)
SALT (‘000 tonnes)
Dampier Salt (Australia)
SILVER (mined) (‘000 ounces)
Bingham Canyon (US)
Escondida (Chile)
Oyu Tolgoi (Mongolia)(e)
Rio Tinto total
SILVER (refined) (‘000 ounces)
Kennecott (US)
TITANIUM DIOXIDE SLAG (‘000 tonnes)
Rio Tinto Iron & Titanium
(Canada/South Africa)(j)
URANIUM (‘000 lbs U3O8)
Energy Resources of Australia (Australia)(k)
Rössing (Namibia)(l)
Rio Tinto total
Production data notes:
2021 Production
2020 Production
2019 Production
Rio Tinto
% share(a)
100%
Total
7.6
Rio Tinto
share
7.6
Total
20.4
Rio Tinto
share
20.4
Total
11.2
Rio Tinto
share
11.2
68.4%
8,555
5,848
7,111
4,861
7,931
5,422
100.0%
30.0%
33.5%
2,228
5,305
977
2,228
1,591
328
4,148
2,205
6,196
876
2,205
1,859
293
4,357
2,815
7,687
867
2,815
2,306
290
5,412
100.0%
2,671
2,671
1,363
1,363
2,853
2,853
100.0%
1,014
1,014
1,120
1,120
1,206
1,206
86.3%
–
75
–
65
–
65
3,471
–
2,870
–
2,870
3,860
3,080
2,640
2,114
4,754
Mine production figures for metals refer to the total quantity of metal produced in concentrates, leach liquor or doré bullion irrespective of whether
these products are then refined onsite, except for the data for bauxite and iron ore which can represent production of marketable quantities of ore
plus concentrates and pellets. Production figures are sometimes more precise than the rounded numbers shown, hence small differences may result
from calculation of Rio Tinto share of production.
(a) Rio Tinto percentage share, shown above, is as at the end of 2021. The footnotes below include all ownership changes over the three years.
(b) Jonquière’s (Vaudreuil’s) production shows smelter grade alumina only and excludes hydrate produced and used for specialty alumina.
(c) Rio Tinto has a 22.95% shareholding in the Sangaredi mine but benefits from 45.0% of production.
(d) Borate quantities are expressed as B2O3.
(e) Rio Tinto owns a 33.52% indirect interest in Oyu Tolgoi through its 50.79% interest in Turquoise Hill Resources Ltd.
(f) The Argyle diamonds mine closed on 3 November 2020. Production is reported up to that date.
(g) On 17 November 2021, Rio Tinto’s ownership interest in Diavik increased from 60% to 100%. Production is reported including this change from 1 November 2021.
(h) Includes 100% of production from Paraburdoo, Mt Tom Price, Marandoo, Yandicoogina, Brockman, Nammuldi, Silvergrass and the Eastern Range mines. Whilst Rio Tinto owns 54% of the Eastern
Range mine, under the terms of the joint venture agreement, Hamersley Iron manages the operation and is obliged to purchase all mine production from the joint venture and therefore all of the
production is included in Rio Tinto's share of production.
(i) Rio Tinto’s ownership interest in Channar mine increased from 60% to 100%, following conclusion of its joint venture with Sinosteel Corporation upon reaching planned 290 million tonnes
production on 22 October 2020. Production is reported at 100% from this date onward. Historic data is unchanged.
(j) Quantities comprise 100% of Rio Tinto Fer et Titane and Rio Tinto’s 74% share of Richards Bay Minerals’ production. Ilmenite mined in Madagascar is being processed in Canada.
(k) ERA report drummed U3O8. ERA ceased processing operations on 8 January 2021, as required by the Ranger Authority. In February 2020, our interest in Energy Resources of Australia (ERA)
increased from 68.4% to 86.3% as a result of new ERA shares issued to Rio Tinto under the Entitlement Offer and Underwriting Agreement to raise funds for the rehabilitation of the Ranger
Project Area. Production is reported including this change from 1 March 2020.
(l) Rössing report drummed U3O8. On 16 July 2019, Rio Tinto completed the sale of its entire interest in the Rössing uranium mine in Namibia to China National Uranium Corporation Limited.
352
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Metals and minerals production continued
Production, Ore Reserves, Mineral Resources and Operations
MOLYBDENUM (‘000 tonnes)
Bingham Canyon (US)
SALT (‘000 tonnes)
Dampier Salt (Australia)
SILVER (mined) (‘000 ounces)
Bingham Canyon (US)
Escondida (Chile)
Oyu Tolgoi (Mongolia)(e)
Rio Tinto total
SILVER (refined) (‘000 ounces)
Kennecott (US)
TITANIUM DIOXIDE SLAG (‘000 tonnes)
Energy Resources of Australia (Australia)(k)
Rio Tinto Iron & Titanium
(Canada/South Africa)(j)
URANIUM (‘000 lbs U3O8)
Rössing (Namibia)(l)
Rio Tinto total
Production data notes:
2021 Production
2020 Production
2019 Production
68.4%
8,555
5,848
7,111
4,861
7,931
5,422
Rio Tinto
% share(a)
100%
Total
7.6
Rio Tinto
share
7.6
100.0%
30.0%
33.5%
2,228
5,305
977
2,228
1,591
328
4,148
Total
20.4
2,205
6,196
876
Rio Tinto
share
20.4
2,205
1,859
293
4,357
Total
11.2
2,815
7,687
867
Rio Tinto
share
11.2
2,815
2,306
290
5,412
100.0%
2,671
2,671
1,363
1,363
2,853
2,853
100.0%
1,014
1,014
1,120
1,120
1,206
1,206
86.3%
–
75
–
65
–
65
3,471
–
2,870
–
2,870
3,860
3,080
2,640
2,114
4,754
Mine production figures for metals refer to the total quantity of metal produced in concentrates, leach liquor or doré bullion irrespective of whether
these products are then refined onsite, except for the data for bauxite and iron ore which can represent production of marketable quantities of ore
plus concentrates and pellets. Production figures are sometimes more precise than the rounded numbers shown, hence small differences may result
from calculation of Rio Tinto share of production.
(a) Rio Tinto percentage share, shown above, is as at the end of 2021. The footnotes below include all ownership changes over the three years.
(b) Jonquière’s (Vaudreuil’s) production shows smelter grade alumina only and excludes hydrate produced and used for specialty alumina.
(c) Rio Tinto has a 22.95% shareholding in the Sangaredi mine but benefits from 45.0% of production.
(d) Borate quantities are expressed as B2O3.
(e) Rio Tinto owns a 33.52% indirect interest in Oyu Tolgoi through its 50.79% interest in Turquoise Hill Resources Ltd.
(f) The Argyle diamonds mine closed on 3 November 2020. Production is reported up to that date.
(g) On 17 November 2021, Rio Tinto’s ownership interest in Diavik increased from 60% to 100%. Production is reported including this change from 1 November 2021.
(h) Includes 100% of production from Paraburdoo, Mt Tom Price, Marandoo, Yandicoogina, Brockman, Nammuldi, Silvergrass and the Eastern Range mines. Whilst Rio Tinto owns 54% of the Eastern
Range mine, under the terms of the joint venture agreement, Hamersley Iron manages the operation and is obliged to purchase all mine production from the joint venture and therefore all of the
production is included in Rio Tinto's share of production.
(i) Rio Tinto’s ownership interest in Channar mine increased from 60% to 100%, following conclusion of its joint venture with Sinosteel Corporation upon reaching planned 290 million tonnes
production on 22 October 2020. Production is reported at 100% from this date onward. Historic data is unchanged.
(j) Quantities comprise 100% of Rio Tinto Fer et Titane and Rio Tinto’s 74% share of Richards Bay Minerals’ production. Ilmenite mined in Madagascar is being processed in Canada.
(k) ERA report drummed U3O8. ERA ceased processing operations on 8 January 2021, as required by the Ranger Authority. In February 2020, our interest in Energy Resources of Australia (ERA)
increased from 68.4% to 86.3% as a result of new ERA shares issued to Rio Tinto under the Entitlement Offer and Underwriting Agreement to raise funds for the rehabilitation of the Ranger
Project Area. Production is reported including this change from 1 March 2020.
(l) Rössing report drummed U3O8. On 16 July 2019, Rio Tinto completed the sale of its entire interest in the Rössing uranium mine in Namibia to China National Uranium Corporation Limited.
Mineral Resources and Ore Reserves
Mineral Resources and Ore Reserves for Rio Tinto managed operations
are reported in accordance with the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, December
2012 (the JORC Code) as required by the Australian Securities
Exchange (ASX). Rio Tinto also files an annual report on Form 20-F
(Form 20-F) with the US Securities and Exchange Commission (SEC)
and prepares for the Form 20-F the Mineral Resources and Ore
Reserves in accordance with subpart 1300 of Regulation S-K
(Regulation S-K). Some variations may occur between the reporting
in accordance with the JORC Code and Regulation S-K.
A Mineral Resource is a concentration or occurrence of solid material of
economic interest in or on the Earth’s crust in such form, grade (or
quality), and quantity that there are reasonable prospects for eventual
economic extraction. Estimates of such material are based largely on
geological information with only preliminary consideration of mining,
economic and other factors. While in the judgment of the Competent
Person there are realistic expectations that all or part of the Mineral
Resources will eventually become Proved or Probable Ore Reserves,
there is no guarantee that this will occur as the result depends on
further technical and economic studies and prevailing economic
conditions in the future.
An Ore Reserve is the economically mineable part of a Measured
and/or Indicated Mineral Resource. It includes diluting materials and
allowances for losses, which may occur when the material is mined or
extracted. It is defined by studies at Pre-Feasibility or Feasibility level
as appropriate, with the application of Modifying Factors. Such studies
demonstrate that, at the time of reporting, extraction can reasonably
be justified.
Rio Tinto’s Mineral Resources are reported as additional (exclusive) to
the reported Ore Reserves.
For Mineral Resource and Ore Reserve reporting, the JORC Code
envisages the use of reasonable investment assumptions to
test the economic viability of the Ore Reserves and the reasonable
prospects of eventual economic extraction for the Mineral Resources.
To achieve this, Rio Tinto uses internally generated projected long-term
commodity prices.
Regulation S-K requires the use of a justifiable commodity price to test
the economic viability of the Mineral Reserves and the reasonable
prospects of economic extraction for the Mineral Resources, and prices
used in calculating the estimates must be disclosed. As a result of the
commercial sensitivity of Rio Tinto’s long-term commodity prices,
Rio Tinto uses commercially available consensus pricing or historical
pricing for SEC reporting. For this reason and others, some Mineral
Reserves reported to the SEC in the Form 20-F may differ from those
Ore Reserves reported below.
Mineral Resource and Ore Reserve information in the tables below is
based on information compiled by Competent Persons (as defined by
the JORC Code), most of whom are full time employees of Rio Tinto or
related companies. Each has had a minimum of five years’ relevant
experience and is a member of a recognised professional body whose
members are bound by a professional code of ethics; being members
of The Australasian Institute of Mining and Metallurgy (the AusIMM),
Australian Institute of Geoscientists (AIG) or recognised professional
organisations (RPOs). Each Competent Person consents to the inclusion
in this Annual Report of information they have provided in the form and
context in which it appears. Competent Persons responsible for the
estimates are listed on pages 378-379, by operation, along with their
professional affiliation, employer, and accountability for Mineral
Resources and/or Ore Reserves.
Mineral Resources and Ore Reserves from externally managed
operations, in which Rio Tinto holds a minority share, are reported as
received from the managing entity and in accordance with the JORC code.
Figures from our managed operations are the responsibility of the
managing directors of the business units and estimates are carried out
by the Competent Persons.
The Mineral Resource and Ore Reserve figures in the following tables
are as of 31 December 2021. Summary data for year end 2020 are
shown for comparison. Metric units are used throughout. The figures
used to calculate Rio Tinto’s Mineral Resources and Ore Reserves are
more precise than the rounded numbers shown in the tables, hence
small differences might result if the calculations are repeated using the
tabulated figures.
During 2021, Rio Tinto carried out a periodic review of its Mineral
Resource and Ore Reserve reporting including a review of the
materiality of various deleterious elements and the level of breakdown
provided for each operation or project. As a result of this review, the
following changes have been implemented for 2021 annual reporting:
– Iron Ore – Pilbara operations: Silica, alumina, phosphorous and loss
on ignition (LOI) are now reported for the Pilbara operations.
Previously, deleterious elements were not considered material for
Pilbara operations due to the integrated nature and blending
practices. As such, providing these details at the deposit level had
the potential to mislead as ore from individual deposits is blended to
create a saleable product. With the changing market conditions,
Rio Tinto considers that these deleterious elements are becoming
more relevant to pricing outcomes and is implementing this revised
reporting to provide additional transparency. As the information may
still be misleading at a deposit level due to the integration and
blending practices, Rio Tinto has moved to reporting the Pilbara as a
single integrated property, with breakdown by type of mineralisation,
inclusive of deleterious elements. The tonnages attributable to each
joint venture are included in the narrative to ensure visibility of
this breakdown.
– Iron Ore – Simandou: Reporting of silica, alumina, phosphorous and LOI
has been implemented to align with the Pilbara operations reporting.
– Iron Ore – Iron Ore Company of Canada (IOC): Reporting of silica,
alumina and phosphorous has been implemented where possible to
align with the Pilbara operations reporting. However, Ore Reserves
are reported as saleable product (pellets and concentrate) and no
meaningful relationship has been established between the product
and feed grades of alumina and phosphorus, so these grades cannot
be reported for Ore Reserves. Saleable product is produced to meet
silica grade specifications, so the Ore Reserve silica grade is the
targeted silica grade for the currently anticipated long-term product
mix. LOI is not determined for resource drilling samples, so no
estimate of LOI is available for Ore Reserves or Mineral Resources.
– Bauxite: Total silica is now reported for all Rio Tinto Aluminium
operations. In the past, this was not considered material as the
majority of the bauxite sales were part of an integrated business.
Over time, more bauxite has been sold externally and hence silica
reporting is now considered to be more material. This is also better
aligned with current industry practice.
With the change in reporting practices outlined above, Rio Tinto has
also redesigned the Mineral Resource and Ore Reserve tables to report
all variables by operation and project rather than the previous practice
of reporting each economic variable separately. The 2020 Mineral
Resource and Ore Reserve numbers are also shown in the revised
format for ease of reconciliation.
JORC Table 1 reports for new or materially upgraded significant
deposits are released to the market; they are also available at riotinto.
com. JORC Table 1, SEC Technical Report Summaries and NI 43-101
technical reports generated by non-managed units or joint venture
partners are referenced within the reporting footnotes with the location
and initial reporting date identified.
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353
Ore Reserves
Bauxite(b)
Rio Tinto Aluminium (Australia)(c)
– Amrun(d)
– East Weipa and Andoom(d)
– Gove(e)
Total (Australia)
Porto Trombetas (MRN) (Brazil)(f)
Sangaredi (Guinea)(g)
Total Bauxite
Type of
mine(a)
O/P
O/P
O/P
O/P
O/P
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Tonnage
Mt
Grade
% Al2O3
% SiO2
Tonnage
Mt
Grade
% Al2O3
% SiO2
258
77
64
398
43
361
801
54.2
51.7
50.6
53.1
48.7
47.0
50.2
9.2
7.4
5.8
8.3
4.7
1.9
5.2
568
1
0.4
570
12
18
600
54.9
52.5
50.0
54.9
48.9
49.5
54.6
9.1
9.2
5.9
9.0
4.7
2.5
8.8
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) Bauxite Reserves are stated as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(c) Australian bauxite Reserves are stated as dry tonnes and total alumina and silica grade.
(d) Amrun and East Weipa and Andoom Reserve tonnes decreased following updated economic assumptions, updated orebody knowledge and mining depletion. A JORC Table 1 in support
of this change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/invest/financial-news-performance/resources-
and-reserves.
(e) Gove Reserve tonnes decreased following updated economic assumptions and mining depletion.
(f) Porto Trombetas (MRN) Reserves are stated as dry tonnes, available alumina grade and reactive silica grade. Reserve tonnes increased following conversion of Cipó and Teófilo Plateaus
Resources to Reserves.
(g) Sangaredi Reserve tonnes are reported on a 3% moisture basis and total alumina and silica grade.
Total ore reserves
as at 31 December 2021
Tonnage
Mt
Grade
% Al2O3
% SiO2
Rio Tinto share
Recoverable
mineral
Total ore reserves
as at 31 December 2020
Tonnage
Mt
Grade
% Al2O3
% SiO2
826
78
64
968
55
379
1,401
54.7
51.7
50.6
54.2
48.8
47.2
52.1
9.1
7.4
5.8
8.7
4.7
1.9
6.7
Rio Tinto
Interest
%
100.0
100.0
100.0
12.0
23.0
Mt
826
78
64
968
7
87
1,061
1,044
100
80
1,225
21
396
1,642
54.0
51.4
50.4
53.5
48.2
47.2
51.9
9.1
7.5
5.6
8.8
5.6
2.1
8.3
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Ore Reserves
Rio Tinto Aluminium (Australia)(c)
Rio Tinto Aluminium (Australia)(c)
Bauxite(b)
Bauxite(b)
– Amrun(d)
– Amrun(d)
– East Weipa and Andoom(d)
– East Weipa and Andoom(d)
– Gove(e)
– Gove(e)
Total (Australia)
Total (Australia)
Porto Trombetas (MRN) (Brazil)(f)
Porto Trombetas (MRN) (Brazil)(f)
Sangaredi (Guinea)(g)
Sangaredi (Guinea)(g)
Total Bauxite
Total Bauxite
Type of
Type of
mine(a)
mine(a)
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
Grade
Grade
% Al2O3
% Al2O3
% SiO2
% SiO2
Tonnage
Tonnage
Mt
Mt
Grade
Grade
% Al2O3
% Al2O3
% SiO2
% SiO2
258
258
77
77
64
64
398
398
43
43
361
361
801
801
54.2
54.2
51.7
51.7
50.6
50.6
53.1
53.1
48.7
48.7
47.0
47.0
50.2
50.2
9.2
9.2
7.4
7.4
5.8
5.8
8.3
8.3
4.7
4.7
1.9
1.9
5.2
5.2
568
568
1
1
0.4
0.4
570
570
12
12
18
18
600
600
54.9
54.9
52.5
52.5
50.0
50.0
54.9
54.9
48.9
48.9
49.5
49.5
54.6
54.6
9.1
9.1
9.2
9.2
5.9
5.9
9.0
9.0
4.7
4.7
2.5
2.5
8.8
8.8
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) Bauxite Reserves are stated as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(c) Australian bauxite Reserves are stated as dry tonnes and total alumina and silica grade.
(d) Amrun and East Weipa and Andoom Reserve tonnes decreased following updated economic assumptions, updated orebody knowledge and mining depletion. A JORC Table 1 in support
of this change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/invest/financial-news-performance/resources-
(e) Gove Reserve tonnes decreased following updated economic assumptions and mining depletion.
(f) Porto Trombetas (MRN) Reserves are stated as dry tonnes, available alumina grade and reactive silica grade. Reserve tonnes increased following conversion of Cipó and Teófilo Plateaus
and-reserves.
Resources to Reserves.
(g) Sangaredi Reserve tonnes are reported on a 3% moisture basis and total alumina and silica grade.
Production, Ore Reserves, Mineral Resources and Operations
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
Grade
Grade
% Al2O3
% Al2O3
% SiO2
% SiO2
826
826
78
78
64
64
968
968
55
55
379
379
1,401
1,401
54.7
54.7
51.7
51.7
50.6
50.6
54.2
54.2
48.8
48.8
47.2
47.2
52.1
52.1
9.1
9.1
7.4
7.4
5.8
5.8
8.7
8.7
4.7
4.7
1.9
1.9
6.7
6.7
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
100.0
100.0
100.0
100.0
12.0
12.0
23.0
23.0
Rio Tinto share
Rio Tinto share
Recoverable
Recoverable
mineral
mineral
Mt
Mt
826
826
78
78
64
64
968
968
7
7
87
87
1,061
1,061
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
Grade
Grade
% Al2O3
% Al2O3
% SiO2
% SiO2
1,044
1,044
100
100
80
80
1,225
1,225
21
21
396
396
1,642
1,642
54.0
54.0
51.4
51.4
50.4
50.4
53.5
53.5
48.2
48.2
47.2
47.2
51.9
51.9
9.1
9.1
7.5
7.5
5.6
5.6
8.8
8.8
5.6
5.6
2.1
2.1
8.3
8.3
354
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355
Ore Reserves continued
Type of
mine(a)
Tonnage
Grade
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Tonnage
Grade
Total ore reserves
as at 31 December 2021
Rio Tinto
share
Rio Tinto
Interest
Marketable
product
Total ore reserves
as at 31 December 2020
Iron Ore(b)
Australia(c)(d)
– Brockman Ore(e)(f)
– Marra Mamba Ore(g)
– Pisolite (Channel Iron) Ore(h)
Total (Australia)
O/P
O/P
O/P
Iron Ore Company of Canada (Canada)(i)
O/P
Total Iron Ore
Mt
% Fe % SiO2 % Al2O3
% P
% LOI
Mt
% Fe % SiO2 % Al2O3
% P
% LOI
% SiO2
% Al2O3
% P
% LOI
%
Mt
Mt
% Fe
% SiO2
% Al2O3
% P
% LOI
719
411
580
1,710
294
2,004
62.3
62.7
57.8
60.9
65.0
61.5
3.2
2.6
4.6
3.6
3.2
3.5
1.9
1.5
1.9
1.8
–
1.5
0.13
0.06
0.05
0.09
–
5.1
5.5
10.4
7.0
–
627
238
100
965
189
0.07
6.0
1,154
61.6
61.1
56.3
61.0
65.0
61.6
3.7
3.6
5.2
3.8
3.2
3.7
2.0
2.2
2.5
2.1
–
1.8
0.13
0.06
0.04
0.10
–
0.08
5.4
6.1
11.2
6.2
–
5.2
3.5
3.0
4.7
3.7
3.2
3.6
1.9
1.8
2.0
1.9
–
1.6
0.13
0.06
0.05
0.09
–
0.08
5.3
5.7
10.5
6.7
–
5.7
96.4
82.3
81.3
58.7
1,296
1,483
534
553
2,384
284
2,667
781
786
3,050
510
3,560
62.0
61.9
57.5
60.8
65.0
61.0
3.5
3.2
4.8
3.8
3.2
3.7
1.9
1.8
2.0
1.9
–
1.6
0.13
0.06
0.05
0.09
–
0.08
5.2
5.7
10.5
6.7
–
5.7
Tonnage
Mt
Grade
% Fe
1,345
649
680
2,675
483
3,158
62.0
62.1
57.6
60.9
65.0
61.5
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) Reserves of iron ore are shown as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(c) Australian iron ore Reserve tonnes are reported on a dry weight basis.
(d) The updated assessment of Reserves reflects measures Rio Tinto has put in place following the events in the Juukan Gorge on 24 May 2020. These measures are intended to protect a
number of sites, and to mitigate impacts to sites where there are existing heritage approvals authorising mining impacts, or a decision has been made not to seek regulatory approval to
conduct mining activities, given the heritage considerations identified by Traditional Owners. As a result, in 2021, Rio Tinto has removed 46 Mt from Reserves, primarily from Gudai-Darri.
Rio Tinto’s approach to cultural heritage management generally will continue to evolve in response to changes in agreements with Traditional Owners, further engagement with Traditional
Owners and changing heritage legislation. Any material changes to Reserves resulting from further refinement of Rio Tinto’s approach will be disclosed at the appropriate time.
(e) Brockman Ore Reserve tonnes decreased following mining depletion and updated pit designs. Reserves of Brockman ore are 96.4% Rio Tinto owned, 0.7% Eastern Ranges Joint Venture and
3% Hope Downs Joint Venture (based on allocated tonnages).
Joint venture discussions with China Baowu Group covering the Western Range Project (Brockman Ore) are continuing.
(f)
(g) Marra Mamba Ore Reserve tonnes decreased following mining depletion, updated geological models and pit designs. Reserves of Marra Mamba Ore are 82.3% Rio Tinto owned, with 6.6%
being Hope Downs Joint Venture and 11.1% being Robe Joint Venture (based on allocated tonnages).
(h) Pisolite Ore Reserve tonnes decreased following mining depletion and an updated geological model. Reserves of Pisolite Ore are 81.3% Rio Tinto owned, with the remaining 18.7% being
Robe River Joint Venture (based on allocated tonnages).
(i) Reserves at Iron Ore Company of Canada are reported as marketable product (57% pellets and 43% concentrate for sale) at a natural moisture content of 2%. The marketable product
is derived from mined material comprising 696 million dry tonnes at 38.6% iron, 36.6% silica, 0.18% alumina, 0.023% phosphorus (Proved) and 448 million dry tonnes at 37.9% iron,
36.8% silica, 0.22% alumina, 0.024% phosphorus (Probable) using process recovery factors derived from current IOC concentrating and pellet operations.
356
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Ore Reserves continued
Production, Ore Reserves, Mineral Resources and Operations
Iron Ore(b)
Iron Ore(b)
Australia(c)(d)
Australia(c)(d)
– Brockman Ore(e)(f)
– Brockman Ore(e)(f)
– Marra Mamba Ore(g)
– Marra Mamba Ore(g)
– Pisolite (Channel Iron) Ore(h)
– Pisolite (Channel Iron) Ore(h)
Total (Australia)
Total (Australia)
Iron Ore Company of Canada (Canada)(i)
Iron Ore Company of Canada (Canada)(i)
O/P
O/P
Total Iron Ore
Total Iron Ore
Type of
Type of
mine(a)
mine(a)
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Mt
Mt
% Fe % SiO2 % Al2O3
% Fe % SiO2 % Al2O3
% P
% P
% LOI
% LOI
Mt
Mt
% Fe % SiO2 % Al2O3
% Fe % SiO2 % Al2O3
% P
% P
% LOI
% LOI
O/P
O/P
O/P
O/P
O/P
O/P
719
719
411
411
580
580
1,710
1,710
294
294
2,004
2,004
62.3
62.3
62.7
62.7
57.8
57.8
60.9
60.9
65.0
65.0
61.5
61.5
3.2
3.2
2.6
2.6
4.6
4.6
3.6
3.6
3.2
3.2
3.5
3.5
1.9
1.9
1.5
1.5
1.9
1.9
1.8
1.8
–
–
1.5
1.5
0.13
0.13
0.06
0.06
0.05
0.05
0.09
0.09
–
–
5.1
5.1
5.5
5.5
10.4
10.4
7.0
7.0
–
–
627
627
238
238
100
100
965
965
189
189
0.07
0.07
6.0
6.0
1,154
1,154
61.6
61.6
61.1
61.1
56.3
56.3
61.0
61.0
65.0
65.0
61.6
61.6
3.7
3.7
3.6
3.6
5.2
5.2
3.8
3.8
3.2
3.2
3.7
3.7
2.0
2.0
2.2
2.2
2.5
2.5
2.1
2.1
–
–
1.8
1.8
0.13
0.13
0.06
0.06
0.04
0.04
0.10
0.10
–
–
0.08
0.08
5.4
5.4
6.1
6.1
11.2
11.2
6.2
6.2
–
–
5.2
5.2
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(c) Australian iron ore Reserve tonnes are reported on a dry weight basis.
(b) Reserves of iron ore are shown as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(d) The updated assessment of Reserves reflects measures Rio Tinto has put in place following the events in the Juukan Gorge on 24 May 2020. These measures are intended to protect a
number of sites, and to mitigate impacts to sites where there are existing heritage approvals authorising mining impacts, or a decision has been made not to seek regulatory approval to
conduct mining activities, given the heritage considerations identified by Traditional Owners. As a result, in 2021, Rio Tinto has removed 46 Mt from Reserves, primarily from Gudai-Darri.
Rio Tinto’s approach to cultural heritage management generally will continue to evolve in response to changes in agreements with Traditional Owners, further engagement with Traditional
Owners and changing heritage legislation. Any material changes to Reserves resulting from further refinement of Rio Tinto’s approach will be disclosed at the appropriate time.
(e) Brockman Ore Reserve tonnes decreased following mining depletion and updated pit designs. Reserves of Brockman ore are 96.4% Rio Tinto owned, 0.7% Eastern Ranges Joint Venture and
3% Hope Downs Joint Venture (based on allocated tonnages).
(f)
Joint venture discussions with China Baowu Group covering the Western Range Project (Brockman Ore) are continuing.
(g) Marra Mamba Ore Reserve tonnes decreased following mining depletion, updated geological models and pit designs. Reserves of Marra Mamba Ore are 82.3% Rio Tinto owned, with 6.6%
being Hope Downs Joint Venture and 11.1% being Robe Joint Venture (based on allocated tonnages).
(h) Pisolite Ore Reserve tonnes decreased following mining depletion and an updated geological model. Reserves of Pisolite Ore are 81.3% Rio Tinto owned, with the remaining 18.7% being
Robe River Joint Venture (based on allocated tonnages).
(i) Reserves at Iron Ore Company of Canada are reported as marketable product (57% pellets and 43% concentrate for sale) at a natural moisture content of 2%. The marketable product
is derived from mined material comprising 696 million dry tonnes at 38.6% iron, 36.6% silica, 0.18% alumina, 0.023% phosphorus (Proved) and 448 million dry tonnes at 37.9% iron,
36.8% silica, 0.22% alumina, 0.024% phosphorus (Probable) using process recovery factors derived from current IOC concentrating and pellet operations.
Tonnage
Tonnage
Mt
Mt
Grade
Grade
% Fe
% Fe
1,345
1,345
649
649
680
680
2,675
2,675
483
483
3,158
3,158
62.0
62.0
62.1
62.1
57.6
57.6
60.9
60.9
65.0
65.0
61.5
61.5
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Rio Tinto
Rio Tinto
share
share
Marketable
Marketable
product
product
Rio Tinto
Rio Tinto
Interest
Interest
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
% SiO2
% SiO2
% Al2O3
% Al2O3
% P
% P
% LOI
% LOI
%
%
Mt
Mt
Mt
Mt
% Fe
% Fe
% SiO2
% SiO2
% Al2O3
% Al2O3
% P
% P
% LOI
% LOI
3.5
3.5
3.0
3.0
4.7
4.7
3.7
3.7
3.2
3.2
3.6
3.6
1.9
1.9
1.8
1.8
2.0
2.0
1.9
1.9
–
–
1.6
1.6
0.13
0.13
0.06
0.06
0.05
0.05
0.09
0.09
–
–
0.08
0.08
5.3
5.3
5.7
5.7
10.5
10.5
6.7
6.7
–
–
5.7
5.7
96.4
96.4
82.3
82.3
81.3
81.3
58.7
58.7
1,296
1,296
1,483
1,483
534
534
553
553
2,384
2,384
284
284
2,667
2,667
781
781
786
786
3,050
3,050
510
510
3,560
3,560
62.0
62.0
61.9
61.9
57.5
57.5
60.8
60.8
65.0
65.0
61.0
61.0
3.5
3.5
3.2
3.2
4.8
4.8
3.8
3.8
3.2
3.2
3.7
3.7
1.9
1.9
1.8
1.8
2.0
2.0
1.9
1.9
–
–
1.6
1.6
0.13
0.13
0.06
0.06
0.05
0.05
0.09
0.09
–
–
0.08
0.08
5.2
5.2
5.7
5.7
10.5
10.5
6.7
6.7
–
–
5.7
5.7
356
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Annual Report 2021 | riotinto.com
357
Ore Reserves continued
Copper(b)
Bingham Canyon (US)(c)
Escondida (Chile)
– oxide
– sulphide
– sulphide leach
Total (Chile)
Oyu Tolgoi (Mongolia)
– Hugo Dummett North(d)
– Hugo Dummett North Extension
– Oyut open pit
– Oyut stockpiles
Total (Mongolia)
Total Copper
Type of
mine(a)
O/P
O/P
O/P
O/P
U/G
U/G
O/P
S/P
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Total ore reserves
as at 31 December 2021
Average mill
recovery %
Rio Tinto
Interest
Rio Tinto share
Recoverable Metal
Tonnage
Grade
Mt
341
77
3,416
1,325
4,818
–
–
261
–
261
5,421
% Cu
0.44
0.62
0.68
0.42
0.61
–
–
0.52
–
0.52
0.59
g/t Au
0.17
g/t Ag
2.06
% Mo
0.034
Mt
199
–
–
–
–
–
–
–
–
–
–
–
–
0.37
–
0.37
0.03
1.30
–
1.30
0.19
–
–
–
–
–
–
–
–
–
121
1,695
284
2,101
411
39
450
52
952
0.002
3,252
% Cu
0.44
0.53
0.57
0.39
0.54
1.55
1.55
0.40
0.31
0.94
0.65
g/t Au
0.19
g/t Ag
2.50
% Mo
0.019
Mt
541
% Cu
0.44
g/t Au
g/t Ag % Mo
0.17
2.22 0.029
Mo
57
%
Mt Cu Moz Au Moz Ag
Mt Mo
100 2.117 2.095 28.525 0.089
–
–
–
–
0.30
0.54
0.24
0.13
0.27
0.09
–
–
–
–
3.19
3.68
1.13
0.96
2.12
0.77
–
–
–
–
–
–
–
–
–
0.001
0.41 0.002
14.349 4.817 46.159 0.089
0.002
198
5,111
1,610
6,919
411
39
711
52
1,213
8,673
0.57
0.64
0.41
0.59
1.55
1.55
0.44
0.31
0.85
0.61
–
–
–
–
0.30
0.54
0.29
0.13
0.29
0.05
–
–
–
–
3.19
3.68
1.19
0.96
1.94
–
–
–
–
–
–
–
–
–
Cu
89
56
83
41
92
92
78
70
Au
69
–
–
–
79
81
66
53
Ag
74
–
–
–
81
83
53
51
–
–
–
–
–
–
–
30.0 0.187
30.0 8.233
30.0 0.821
9.241
–
–
–
–
–
–
–
–
33.5 1.971 1.060 11.411
29.4 0.166 0.162 1.134
33.5 0.815 1.462 4.816
33.5 0.038 0.039 0.273
2.990 2.722 17.634
Total ore reserves
as at 31 December 2020
g/t Au
g/t Ag % Mo
0.16
2.11
0.031
–
–
–
–
0.29
0.54
0.30
0.13
0.30
0.05
–
–
–
–
3.12
3.69
1.20
0.93
1.90
0.40
–
–
–
–
–
–
–
–
–
Mt
552
183
5,151
1,648
6,982
409
39
743
57
1,247
8,781
% Cu
0.44
0.56
0.65
0.42
0.59
1.51
1.56
0.44
0.32
0.82
0.62
–
–
–
–
–
–
–
–
–
(a) Type of mine: O/P = open pit/surface, U/G = underground, S/P = stockpile.
(b) Copper Reserves are reported as dry mill feed tonnes.
(c) Bingham Canyon Reserves molybdenum grades interpolated from exploration drilling assays have been factored based on a long reconciliation history to blast hole and mill samples.
(d) The Hugo Dummett North Reserves include approximately 1.7 million tonnes of stockpiled material at a grade of 0.57% copper, 0.18 g/t gold and 1.4 g/t silver. The Hugo Dummett North
underground mine is currently under construction.
358
Annual Report 2021 | riotinto.com
Ore Reserves continued
Production, Ore Reserves, Mineral Resources and Operations
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Average mill
Average mill
recovery %
recovery %
Rio Tinto
Rio Tinto
Interest
Interest
Rio Tinto share
Rio Tinto share
Recoverable Metal
Recoverable Metal
Tonnage
Tonnage
Grade
Grade
Copper(b)
Copper(b)
Bingham Canyon (US)(c)
Bingham Canyon (US)(c)
Escondida (Chile)
Escondida (Chile)
– oxide
– oxide
– sulphide
– sulphide
– sulphide leach
– sulphide leach
Total (Chile)
Total (Chile)
Oyu Tolgoi (Mongolia)
Oyu Tolgoi (Mongolia)
– Hugo Dummett North(d)
– Hugo Dummett North(d)
– Hugo Dummett North Extension
– Hugo Dummett North Extension
– Oyut open pit
– Oyut open pit
– Oyut stockpiles
– Oyut stockpiles
Total (Mongolia)
Total (Mongolia)
Total Copper
Total Copper
Type of
Type of
mine(a)
mine(a)
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
U/G
U/G
U/G
U/G
O/P
O/P
S/P
S/P
Mt
Mt
341
341
77
77
3,416
3,416
1,325
1,325
4,818
4,818
–
–
–
–
–
–
% Cu
% Cu
0.44
0.44
0.62
0.62
0.68
0.68
0.42
0.42
0.61
0.61
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
121
121
1,695
1,695
284
284
2,101
2,101
411
411
39
39
450
450
52
52
952
952
261
261
0.52
0.52
0.37
0.37
1.30
1.30
261
261
5,421
5,421
0.52
0.52
0.59
0.59
0.37
0.37
0.03
0.03
1.30
1.30
0.19
0.19
% Cu
% Cu
0.44
0.44
0.53
0.53
0.57
0.57
0.39
0.39
0.54
0.54
1.55
1.55
1.55
1.55
0.40
0.40
0.31
0.31
0.94
0.94
0.65
0.65
–
–
–
–
–
–
–
–
0.30
0.30
0.54
0.54
0.24
0.24
0.13
0.13
0.27
0.27
0.09
0.09
–
–
–
–
–
–
–
–
3.19
3.19
3.68
3.68
1.13
1.13
0.96
0.96
2.12
2.12
0.77
0.77
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.002
0.002
3,252
3,252
0.001
0.001
(a) Type of mine: O/P = open pit/surface, U/G = underground, S/P = stockpile.
(b) Copper Reserves are reported as dry mill feed tonnes.
(c) Bingham Canyon Reserves molybdenum grades interpolated from exploration drilling assays have been factored based on a long reconciliation history to blast hole and mill samples.
(d) The Hugo Dummett North Reserves include approximately 1.7 million tonnes of stockpiled material at a grade of 0.57% copper, 0.18 g/t gold and 1.4 g/t silver. The Hugo Dummett North
underground mine is currently under construction.
g/t Au
g/t Au
0.17
0.17
g/t Ag
g/t Ag
2.06
2.06
% Mo
% Mo
0.034
0.034
Mt
Mt
199
199
g/t Au
g/t Au
0.19
0.19
g/t Ag
g/t Ag
2.50
2.50
% Mo
% Mo
0.019
0.019
Mt
Mt
541
541
% Cu
% Cu
0.44
0.44
g/t Au
g/t Au
g/t Ag % Mo
g/t Ag % Mo
0.17
0.17
2.22 0.029
2.22 0.029
198
198
5,111
5,111
1,610
1,610
6,919
6,919
411
411
39
39
711
711
52
52
1,213
1,213
8,673
8,673
0.57
0.57
0.64
0.64
0.41
0.41
0.59
0.59
1.55
1.55
1.55
1.55
0.44
0.44
0.31
0.31
0.85
0.85
0.61
0.61
–
–
–
–
–
–
–
–
0.30
0.30
0.54
0.54
0.29
0.29
0.13
0.13
0.29
0.29
0.05
0.05
–
–
–
–
–
–
–
–
3.19
3.19
3.68
3.68
1.19
1.19
0.96
0.96
1.94
1.94
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Cu
Cu
89
89
56
56
83
83
41
41
92
92
92
92
78
78
70
70
Au
Au
69
69
–
–
–
–
–
–
79
79
81
81
66
66
53
53
Ag
Ag
74
74
–
–
–
–
–
–
81
81
83
83
53
53
51
51
Mo
Mo
57
57
%
%
Mt Cu Moz Au Moz Ag
Mt Cu Moz Au Moz Ag
Mt Mo
Mt Mo
100 2.117 2.095 28.525 0.089
100 2.117 2.095 28.525 0.089
–
–
–
–
–
–
–
–
–
–
–
–
–
–
30.0 0.187
30.0 0.187
30.0 8.233
30.0 8.233
30.0 0.821
30.0 0.821
9.241
9.241
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
33.5 1.971 1.060 11.411
33.5 1.971 1.060 11.411
29.4 0.166 0.162 1.134
29.4 0.166 0.162 1.134
33.5 0.815 1.462 4.816
33.5 0.815 1.462 4.816
33.5 0.038 0.039 0.273
33.5 0.038 0.039 0.273
2.990 2.722 17.634
2.990 2.722 17.634
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.41 0.002
0.41 0.002
14.349 4.817 46.159 0.089
14.349 4.817 46.159 0.089
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
g/t Au
g/t Au
g/t Ag % Mo
g/t Ag % Mo
0.16
0.16
2.11
2.11
0.031
0.031
–
–
–
–
–
–
–
–
0.29
0.29
0.54
0.54
0.30
0.30
0.13
0.13
0.30
0.30
0.05
0.05
–
–
–
–
–
–
–
–
3.12
3.12
3.69
3.69
1.20
1.20
0.93
0.93
1.90
1.90
0.40
0.40
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.002
0.002
Mt
Mt
552
552
183
183
5,151
5,151
1,648
1,648
6,982
6,982
409
409
39
39
743
743
57
57
1,247
1,247
8,781
8,781
% Cu
% Cu
0.44
0.44
0.56
0.56
0.65
0.65
0.42
0.42
0.59
0.59
1.51
1.51
1.56
1.56
0.44
0.44
0.32
0.32
0.82
0.82
0.62
0.62
358
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Annual Report 2021 | riotinto.com
359
Ore Reserves continued
360
Annual Report 2021 | riotinto.com
Ore Reserves continued
Production, Ore Reserves, Mineral Resources and Operations
360
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Annual Report 2021 | riotinto.com
361
Ore Reserves continued
Titanium Dioxide Feedstock(b)
QMM (Madagascar)(c)
RBM (South Africa)
RTFT (Canada)
Total Titanium Dioxide Feedstock
Type of
mine(a)
O/P
O/P
O/P
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Tonnage
Grade
Tonnage
Grade
Total ore reserves
as at 31 December 2021
Tonnage
Grade
Rio Tinto share
Marketable product
Tonnage
Grade
Total ore reserves
as at 31 December 2020
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Feedstock
Mt Zircon
Mt % Ti Minerals
% Zircon
245
922
–
1,167
3.7
2.2
–
2.6
0.2
0.3
–
0.3
64
471
153
689
3.4
2.5
80.0
19.8
0.2
0.3
–
0.2
309
1,393
153
1,856
3.7
2.3
80.0
9.0
0.2
0.3
–
0.3
4.4
10.8
48.5
63.7
0.3
2.6
–
2.9
358
1,426
152
1,936
3.5
2.4
80.1
8.7
0.2
0.3
–
0.3
Mt Titanium Dioxide
Rio Tinto
Interest
%
80.0
74.0
100.0
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) The marketable product (zircon at RBM and zirsil at QMM) is shown after all mining and processing losses. Titanium Dioxide Feedstock Reserves are expressed as dry in situ tonnes.
(c) QMM Reserve tonnes decreased as a result of an updated geological model and mining depletion.
362
Annual Report 2021 | riotinto.com
Ore Reserves continued
Production, Ore Reserves, Mineral Resources and Operations
Titanium Dioxide Feedstock(b)
Titanium Dioxide Feedstock(b)
QMM (Madagascar)(c)
QMM (Madagascar)(c)
RBM (South Africa)
RBM (South Africa)
RTFT (Canada)
RTFT (Canada)
Total Titanium Dioxide Feedstock
Total Titanium Dioxide Feedstock
Type of
Type of
mine(a)
mine(a)
O/P
O/P
O/P
O/P
O/P
O/P
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
245
245
922
922
–
–
1,167
1,167
3.7
3.7
2.2
2.2
–
–
2.6
2.6
0.2
0.2
0.3
0.3
–
–
0.3
0.3
64
64
471
471
153
153
689
689
3.4
3.4
2.5
2.5
80.0
80.0
19.8
19.8
0.2
0.2
0.3
0.3
–
–
0.2
0.2
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) The marketable product (zircon at RBM and zirsil at QMM) is shown after all mining and processing losses. Titanium Dioxide Feedstock Reserves are expressed as dry in situ tonnes.
(c) QMM Reserve tonnes decreased as a result of an updated geological model and mining depletion.
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Rio Tinto
Rio Tinto
Interest
Interest
Rio Tinto share
Rio Tinto share
Marketable product
Marketable product
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Grade
Grade
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
Mt Titanium Dioxide
Mt Titanium Dioxide
Feedstock
Feedstock
%
%
Mt Zircon
Mt Zircon
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
309
309
1,393
1,393
153
153
1,856
1,856
3.7
3.7
2.3
2.3
80.0
80.0
9.0
9.0
0.2
0.2
0.3
0.3
–
–
0.3
0.3
80.0
80.0
74.0
74.0
100.0
100.0
4.4
4.4
10.8
10.8
48.5
48.5
63.7
63.7
0.3
0.3
2.6
2.6
–
–
2.9
2.9
358
358
1,426
1,426
152
152
1,936
1,936
3.5
3.5
2.4
2.4
80.1
80.1
8.7
8.7
0.2
0.2
0.3
0.3
–
–
0.3
0.3
362
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Annual Report 2021 | riotinto.com
363
Ore Reserves continued
Borates(b)
Boron (US)
Jadar (Serbia)(c)
Total Borates
Diamonds(d)
Diavik (Canada)(e)(f)
Lithium
Jadar (Serbia)(c)
Type of
mine(a)
O/P
U/G
Type of
mine(a)
U/G
Type of
mine(a)
U/G
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Total ore reserves
as at 31 December 2021
Tonnage
Tonnage
Tonnage
Mt
9
–
9
Mt
5
–
5
Mt
14
–
14
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Total ore reserves
as at 31 December 2021
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Mt
Carats per tonne
Mt
Carats per tonne
Mt Carats per tonne
3.8
2.1
1.6
2.2
5.4
2.2
Proved ore reserves
as at 31 December 2021
Probable ore reserves
as at 31 December 2021
Total ore reserves
as at 31 December 2021
Tonnage
Mt
–
Grade
% Li2O
–
Tonnage
Mt
–
Grade
% Li2O
–
Tonnage
Mt
–
Grade
% Li2O
–
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) Reserves of borates are expressed in terms of marketable product (B2O3) tonnes after all mining and processing losses.
(c) As a result of the Government of Serbia in January 2022 cancelling the Spatial Plan and revoking all related permits, Rio Tinto has decided to no longer report an Ore Reserve for the 100%
owned Jadar lithium-borates project in western Serbia. A JORC Table 1 in support of this change will be released to the market contemporaneously with the release of this Annual Report
and can be viewed at riotinto.com/invest/financial-news-performance/resources-and-reserves.
(d) Reserves of diamonds are shown as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(e) Diavik Reserves are based on a nominal 1 millimetre lower cut-off size and a final re-crushing size of 6 millimetres.
(f) Diavik Reserve tonnes decreased following mining depletion. Reported to the market on 18 November 2021, Rio Tinto has obtained a 100% interest in Diavik.
Rio Tinto share
Marketable
product
Total ore reserves
as at 31 December 2020
Tonnage
Rio Tinto
Interest
%
100.0
100.0
Rio Tinto
Interest
%
100.0
Rio Tinto
Interest
%
100.0
Mt
14
–
14
Rio Tinto share
Recoverable
diamonds
M carats
11.7
Rio Tinto share
Marketable
product
Mt
–
Mt
15
2
17
Mt
9
Mt
17
Total ore reserves
as at 31 December 2020
Tonnage
Grade
Carats per tonne
2.1
Total ore reserves
as at 31 December 2020
Tonnage
Grade
% Li2O
1.81
Average mill
recovery
%
–
364
Annual Report 2021 | riotinto.com
Ore Reserves continued
Production, Ore Reserves, Mineral Resources and Operations
Borates(b)
Borates(b)
Boron (US)
Boron (US)
Jadar (Serbia)(c)
Jadar (Serbia)(c)
Total Borates
Total Borates
Diamonds(d)
Diamonds(d)
Diavik (Canada)(e)(f)
Diavik (Canada)(e)(f)
Lithium
Lithium
Jadar (Serbia)(c)
Jadar (Serbia)(c)
Type of
Type of
mine(a)
mine(a)
O/P
O/P
U/G
U/G
Type of
Type of
mine(a)
mine(a)
U/G
U/G
Type of
Type of
mine(a)
mine(a)
U/G
U/G
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
Mt
Mt
9
9
–
–
9
9
Mt
Mt
5
5
–
–
5
5
Mt
Mt
14
14
–
–
14
14
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Mt
Mt
Carats per tonne
Carats per tonne
Mt
Mt
Carats per tonne
Carats per tonne
Mt Carats per tonne
Mt Carats per tonne
3.8
3.8
2.1
2.1
1.6
1.6
2.2
2.2
5.4
5.4
2.2
2.2
Proved ore reserves
Proved ore reserves
as at 31 December 2021
as at 31 December 2021
Probable ore reserves
Probable ore reserves
as at 31 December 2021
as at 31 December 2021
Total ore reserves
Total ore reserves
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
–
–
Grade
Grade
% Li2O
% Li2O
–
–
Tonnage
Tonnage
Mt
Mt
–
–
Grade
Grade
% Li2O
% Li2O
–
–
Tonnage
Tonnage
Mt
Mt
–
–
Grade
Grade
% Li2O
% Li2O
–
–
(a) Type of mine: O/P = open pit/surface, U/G = underground.
(b) Reserves of borates are expressed in terms of marketable product (B2O3) tonnes after all mining and processing losses.
(c) As a result of the Government of Serbia in January 2022 cancelling the Spatial Plan and revoking all related permits, Rio Tinto has decided to no longer report an Ore Reserve for the 100%
owned Jadar lithium-borates project in western Serbia. A JORC Table 1 in support of this change will be released to the market contemporaneously with the release of this Annual Report
and can be viewed at riotinto.com/invest/financial-news-performance/resources-and-reserves.
(d) Reserves of diamonds are shown as recoverable Reserves of marketable product after accounting for all mining and processing losses. Mill recoveries are therefore not shown.
(e) Diavik Reserves are based on a nominal 1 millimetre lower cut-off size and a final re-crushing size of 6 millimetres.
(f) Diavik Reserve tonnes decreased following mining depletion. Reported to the market on 18 November 2021, Rio Tinto has obtained a 100% interest in Diavik.
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
100.0
100.0
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
Rio Tinto share
Rio Tinto share
Marketable
Marketable
product
product
Mt
Mt
14
14
–
–
14
14
Rio Tinto share
Rio Tinto share
Recoverable
Recoverable
diamonds
diamonds
M carats
M carats
11.7
11.7
Rio Tinto share
Rio Tinto share
Marketable
Marketable
product
product
Mt
Mt
–
–
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
15
15
2
2
17
17
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Grade
Grade
Mt
Mt
9
9
Carats per tonne
Carats per tonne
2.1
2.1
Total ore reserves
Total ore reserves
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
17
17
Grade
Grade
% Li2O
% Li2O
1.81
1.81
Average mill
Average mill
recovery
recovery
%
%
–
–
364
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Annual Report 2021 | riotinto.com
365
Mineral Resources
Bauxite
Rio Tinto Aluminium (Australia)(b)
– Amrun(c)
– East Weipa and Andoom(c)
– Gove
– North of Weipa
Total (Australia)
Porto Trombetas (MRN) (Brazil)(d)
Sangaredi (Guinea)(e)
Total Bauxite
Likely
mining
method(a)
O/P
O/P
O/P
O/P
O/P
O/P
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated resources
as at 31 December 2021
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Total mineral resources
as at 31 December 2020
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Mt
% Al2O3
% SiO2
Mt
% Al2O3
% SiO2
Mt
% Al2O3
% SiO2
Mt
% Al2O3
% SiO2
Mt
% Al2O3
% SiO2
%
Mt
% Al2O3
% SiO2
100
63
28
–
191
251
329
771
49.5
49.5
49.0
–
49.4
49.6
43.8
47.1
11.6
8.4
6.8
–
9.9
4.4
2.1
4.8
488
–
5.0
–
494
31
5,962
6,486
50.2
–
49.0
–
50.2
48.5
46.6
46.9
11.8
–
6.6
–
11.7
5.2
2.3
3.0
589
63
33
–
684
282
6,291
7,257
50.1
49.5
49.0
–
50.0
49.5
46.5
46.9
11.7
11.2
8.4
6.8
–
4.5
2.3
3.2
262
–
0.6
1,330
1,592
134
737
2,463
51.7
–
49.1
52.0
51.9
49.9
45.8
50.0
12.1
–
6.8
11.6
11.6
3.7
2.4
8.5
850
63
34
1,330
2,276
416
7,028
9,720
50.6
49.5
49.0
52.0
51.3
49.6
46.4
47.7
11.8
8.4
6.8
11.6
11.5
4.2
2.3
4.5
678
35
34
1,330
2,077
456
7,028
9,561
50.3
51.1
48.7
52.0
51.3
49.7
46.4
47.6
11.9
8.3
6.8
11.6
11.6
4.2
2.3
4.4
Rio Tinto
Interest
100.0
100.0
100.0
100.0
12.0
23.0
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Rio Tinto Aluminium bauxite Resources are stated as dry product tonnes and total alumina and silica grades.
(c) Amrun and East Weipa and Andoom Resource tonnes increased following conversion of Reserves to Resources based on updated economic assumptions. A JORC Table 1 in support of this
change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/invest/financial-news-performance/resources-and-reserves.
(d) Porto Trombetas (MRN) Resources are stated as dry in situ tonnes, available alumina grade and total silica grade.
(e) Sangredi Resource tonnes are reported on a 3% moisture basis and total alumina and silica grades.
366
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Production, Ore Reserves, Mineral Resources and Operations
Mineral Resources
Rio Tinto Aluminium (Australia)(b)
Rio Tinto Aluminium (Australia)(b)
Bauxite
Bauxite
– Amrun(c)
– Amrun(c)
– East Weipa and Andoom(c)
– East Weipa and Andoom(c)
– Gove
– Gove
– North of Weipa
– North of Weipa
Total (Australia)
Total (Australia)
Porto Trombetas (MRN) (Brazil)(d)
Porto Trombetas (MRN) (Brazil)(d)
Sangaredi (Guinea)(e)
Sangaredi (Guinea)(e)
Total Bauxite
Total Bauxite
Likely
Likely
mining
mining
method(a)
method(a)
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
as at 31 December 2021
as at 31 December 2021
Total Measured and Indicated resources
Total Measured and Indicated resources
as at 31 December 2021
as at 31 December 2021
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Rio Tinto
Rio Tinto
Interest
Interest
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Grade
Grade
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
%
%
Mt
Mt
% Al2O3
% Al2O3
% SiO2
% SiO2
100
100
63
63
28
28
–
–
191
191
251
251
329
329
771
771
49.5
49.5
49.5
49.5
49.0
49.0
–
–
49.4
49.4
49.6
49.6
43.8
43.8
47.1
47.1
11.6
11.6
8.4
8.4
6.8
6.8
–
–
9.9
9.9
4.4
4.4
2.1
2.1
4.8
4.8
488
488
5.0
5.0
–
–
–
–
494
494
31
31
5,962
5,962
6,486
6,486
50.2
50.2
11.8
11.8
49.0
49.0
–
–
–
–
50.2
50.2
48.5
48.5
46.6
46.6
46.9
46.9
11.7
11.7
6.6
6.6
–
–
–
–
5.2
5.2
2.3
2.3
3.0
3.0
589
589
63
63
33
33
–
–
684
684
282
282
6,291
6,291
7,257
7,257
50.1
50.1
49.5
49.5
49.0
49.0
–
–
50.0
50.0
49.5
49.5
46.5
46.5
46.9
46.9
11.7
11.7
8.4
8.4
6.8
6.8
–
–
11.2
11.2
4.5
4.5
2.3
2.3
3.2
3.2
262
262
–
–
0.6
0.6
1,330
1,330
1,592
1,592
134
134
737
737
2,463
2,463
51.7
51.7
–
–
49.1
49.1
52.0
52.0
51.9
51.9
49.9
49.9
45.8
45.8
50.0
50.0
12.1
12.1
–
–
6.8
6.8
11.6
11.6
11.6
11.6
3.7
3.7
2.4
2.4
8.5
8.5
850
850
63
63
34
34
1,330
1,330
2,276
2,276
416
416
7,028
7,028
9,720
9,720
50.6
50.6
49.5
49.5
49.0
49.0
52.0
52.0
51.3
51.3
49.6
49.6
46.4
46.4
47.7
47.7
11.8
11.8
8.4
8.4
6.8
6.8
11.6
11.6
11.5
11.5
4.2
4.2
2.3
2.3
4.5
4.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
12.0
12.0
23.0
23.0
678
678
35
35
34
34
1,330
1,330
2,077
2,077
456
456
7,028
7,028
9,561
9,561
50.3
50.3
51.1
51.1
48.7
48.7
52.0
52.0
51.3
51.3
49.7
49.7
46.4
46.4
47.6
47.6
11.9
11.9
8.3
8.3
6.8
6.8
11.6
11.6
11.6
11.6
4.2
4.2
2.3
2.3
4.4
4.4
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Rio Tinto Aluminium bauxite Resources are stated as dry product tonnes and total alumina and silica grades.
(c) Amrun and East Weipa and Andoom Resource tonnes increased following conversion of Reserves to Resources based on updated economic assumptions. A JORC Table 1 in support of this
change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/invest/financial-news-performance/resources-and-reserves.
(d) Porto Trombetas (MRN) Resources are stated as dry in situ tonnes, available alumina grade and total silica grade.
(e) Sangredi Resource tonnes are reported on a 3% moisture basis and total alumina and silica grades.
366
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
367
Mineral Resources continued
Likely
mining
method(a)
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
Iron Ore(b)
Australia
– Boolgeeda(c)
– Brockman(d)
– Brockman Process Ore(e)
– Channel Iron Deposit(f)
– Detrital(g)
– Marra Mamba(h)
Total (Australia)
Iron Ore Company of Canada
(Canada)(i)
Simandou (Guinea)(j)
Total Iron Ore
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated resources
as at 31 December 2021
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Total mineral resources
as at 31 December 2020
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage
Grade
Tonnage
Grade
Rio Tinto
Interest
Grade Tonnage
%
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
Mt
%
Fe
%
%
SiO2
Al2O3
%
P
%
LOI
%
Mt
%
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
Mt
–
556
276
723
0.5
379
158
416
Mt
–
1,521
655
Mt
–
–
62.5
57.2
56.5
61.3
62.3
–
3.2
6.3
5.9
4.4
2.8
–
–
1.8 0.13
4.0 0.16
–
5.1
7.0
2.5 0.06 10.2
1,800
2.9 0.06
1.5 0.06
4.4
6.0
89
607
–
63.0
57.0
58.4
60.6
61.8
–
3.1
6.1
4.5
5.0
3.3
–
–
–
–
1.8 0.12 4.4
2,077 62.8
4.1 0.16 7.3
931 57.0
2.6 0.08 8.8
2,523 57.9
3.8 0.06 3.7
90 60.6
1.8 0.06 5.9
986 62.0
1,935 59.4
4.6
2.3 0.09 7.4 4,672 60.2 4.1
2.5 0.10 6.7
6,607 60.0
–
3.1
6.1
4.9
5.0
3.1
4.2
–
–
1.8 0.12
4.1 0.16
2.6 0.07
3.8 0.06
1.7 0.06
2.4 0.10
40.8 36.3
0.2 0.02
–
628
38.6 37.2
0.2 0.03
–
786 39.0 37.1
0.2 0.03
66.8
1.2
6.0
1.1 0.06
1.9
1,645
65.2
2.2
1.3 0.08 2.9
2,061 65.5
2.0
1.3 0.07
2.0 0.08 6.0 6,945 59.4 6.7
2.0 0.09 5.2
9,454 59.4
6.5 2.00 0.09
2,509 59.5
–
4.6
7.2
9.2
3.7
6.0
6.9
–
2.7
5.4
Mt
532
5,246
2,111
4,662
1,413
4,300
57.9
62.2
56.9
56.1
60.8
61.7
4.8
3.2
5.8
6.2
4.0
3.0
4.3
895
811
19,969
38.3
65.3
59.0
37.8
2.8
5.8
18,264
59.7
0.10
7.0
24,870
3.9
1.9
4.1
3.1
3.7
1.7
2.6
0.2
1.1
2.4
0.17
0.14
0.17
0.08
0.06
0.06
0.03
0.06
0.10
7.6
5.4
7.8
9.8
4.3
6.4
–
2.5
6.5
532
7,323
3,042
7,184
1,503
5,287
1,681
2,872
29,423
57.9
62.4
57.0
56.7
60.8
61.8
59.8
38.6
65.5
59.1
4.8
3.2
5.9
5.7
4.1
3.0
4.3
37.5
2.3
6.0
3.9
1.8
4.1
2.9
3.7
1.7
2.6
0.2
1.2
2.3
0.17
0.13
0.17
0.08
0.06
0.06
0.10
0.03
0.07
0.09
7.6
5.2
7.6
9.6
4.3
6.3
7.0
–
2.6
6.2
100.0
74.3
70.5
70.1
74.2
64.5
58.7
45.1
532
7,266
3,025
7,026
1,486
5,449
24,784
1,781
2,757
29,322
57.9
62.4
57.0
56.7
60.8
61.8
59.8
38.4
65.5
59.0
4.8
3.2
6.0
5.8
4.1
3.1
4.3
37.5
2.2
6.1
3.9
1.8
4.1
3.0
3.8
1.7
2.6
0.2
1.2
2.3
0.17
0.13
0.17
0.08
0.06
0.06
0.10
0.03
0.07
0.09
7.6
5.2
7.6
9.6
4.2
6.3
7.0
–
2.7
6.2
Iron ore Resources are stated on a dry in situ weight basis.
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b)
(c) Boolgeeda Resources are 100% Rio Tinto owned.
(d) Brockman Resources are 74.3% Rio Tinto owned, 0.1% Bao-HI Joint Venture, 5.0% Hope Downs Joint Venture, 4.4% Robe River Iron Associates Joint Venture and 16.3% Rhodes Ridge Joint
Venture (based on allocated tonnages).
(e) Brockman Process Ore Resources are 70.5% Rio Tinto owned, 0.1% Bao-HI Joint Venture, 6.9% Hope Downs Joint Venture, 8.0% Robe River Iron Associates Joint Venture and 14.4%
Rhodes Ridge Joint Venture (based on allocated tonnages).
(f) Channel Iron Deposit Resources are 70.1% Rio Tinto owned and 29.9% Robe River Iron Associates Joint Venture (based on allocated tonnages).
(g) Detrital Resources are 74.2% Rio Tinto owned, 3.9% Hope Downs Joint Venture, 4.4% Robe River Iron Associates Joint Venture and 17.4% Rhodes Ridge Joint Venture (based on allocated
tonnages).
(h) Marra Mamba Resources are 64.5% Rio Tinto owned, 4.0% Hope Downs Joint Venture, 4.2% Robe River Iron Associates Joint Venture and 27.4% Rhodes Ridge Joint Venture (based on
(i)
allocated tonnages).
Iron Ore Company of Canada (IOC) Resources are stated as in situ material on a dry basis. This in situ material has the potential to produce marketable product (57% pellets and 43%
concentrate for sale at a natural moisture content of 2%) comprising 67 million tonnes at 65% iron 3.2% silica (Measured), 264 million tonnes at 65% iron 3.2% silica (Indicated) and
370 million tonnes at 65% iron 3.2% silica (Inferred) using process recovery factors derived from current IOC concentrating and pellet operations.
(j) Rio Tinto and Chinalco, who respectively own 45.05% and 39.95% of Simandou Blocks 3 and 4, are working with the government of Guinea to realise value from the world-class iron ore
deposit. The government of Guinea owns a 15% stake in the project.
368
Annual Report 2021 | riotinto.com
Mineral Resources continued
Production, Ore Reserves, Mineral Resources and Operations
method(a)
method(a)
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
as at 31 December 2021
as at 31 December 2021
Total Measured and Indicated resources
Total Measured and Indicated resources
as at 31 December 2021
as at 31 December 2021
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Rio Tinto
Rio Tinto
Interest
Interest
Grade Tonnage
Grade Tonnage
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
1,935 59.4
1,935 59.4
4.6
4.6
2.3 0.09 7.4 4,672 60.2 4.1
2.3 0.09 7.4 4,672 60.2 4.1
2.5 0.10 6.7
2.5 0.10 6.7
6,607 60.0
6,607 60.0
18,264
18,264
59.7
59.7
40.8 36.3
40.8 36.3
0.2 0.02
0.2 0.02
–
–
628
628
38.6 37.2
38.6 37.2
0.2 0.03
0.2 0.03
–
–
786 39.0 37.1
786 39.0 37.1
0.2 0.03
0.2 0.03
66.8
66.8
1.1 0.06
1.1 0.06
1.9
1.9
1,645
1,645
65.2
65.2
2.2
2.2
1.3 0.08 2.9
1.3 0.08 2.9
2,061 65.5
2,061 65.5
2.0
2.0
1.3 0.07
1.3 0.07
2,509 59.5
2,509 59.5
2.0 0.08 6.0 6,945 59.4 6.7
2.0 0.08 6.0 6,945 59.4 6.7
2.0 0.09 5.2
2.0 0.09 5.2
9,454 59.4
9,454 59.4
6.5 2.00 0.09
6.5 2.00 0.09
895
895
811
811
19,969
19,969
38.3
38.3
65.3
65.3
59.0
59.0
37.8
37.8
2.8
2.8
5.8
5.8
Mt
Mt
532
532
5,246
5,246
2,111
2,111
4,662
4,662
1,413
1,413
4,300
4,300
57.9
57.9
62.2
62.2
56.9
56.9
56.1
56.1
60.8
60.8
61.7
61.7
4.8
4.8
3.2
3.2
5.8
5.8
6.2
6.2
4.0
4.0
3.0
3.0
4.3
4.3
%
%
Fe
Fe
%
%
SiO2
SiO2
%
%
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
Mt
Mt
%
%
Fe
Fe
%
%
SiO2
SiO2
%
%
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
%
%
Mt
Mt
%
%
Fe
Fe
%
%
SiO2
SiO2
%
%
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
3.9
3.9
1.9
1.9
4.1
4.1
3.1
3.1
3.7
3.7
1.7
1.7
2.6
2.6
0.2
0.2
1.1
1.1
2.4
2.4
0.17
0.17
0.14
0.14
0.17
0.17
0.08
0.08
0.06
0.06
0.06
0.06
7.6
7.6
5.4
5.4
7.8
7.8
9.8
9.8
4.3
4.3
6.4
6.4
532
532
7,323
7,323
3,042
3,042
7,184
7,184
1,503
1,503
5,287
5,287
0.10
0.10
7.0
7.0
24,870
24,870
0.03
0.03
0.06
0.06
0.10
0.10
–
–
2.5
2.5
6.5
6.5
1,681
1,681
2,872
2,872
29,423
29,423
57.9
57.9
62.4
62.4
57.0
57.0
56.7
56.7
60.8
60.8
61.8
61.8
59.8
59.8
38.6
38.6
65.5
65.5
59.1
59.1
4.8
4.8
3.2
3.2
5.9
5.9
5.7
5.7
4.1
4.1
3.0
3.0
4.3
4.3
37.5
37.5
2.3
2.3
6.0
6.0
3.9
3.9
1.8
1.8
4.1
4.1
2.9
2.9
3.7
3.7
1.7
1.7
2.6
2.6
0.2
0.2
1.2
1.2
2.3
2.3
0.17
0.17
0.13
0.13
0.17
0.17
0.08
0.08
0.06
0.06
0.06
0.06
0.10
0.10
0.03
0.03
0.07
0.07
0.09
0.09
7.6
7.6
5.2
5.2
7.6
7.6
9.6
9.6
4.3
4.3
6.3
6.3
7.0
7.0
–
–
2.6
2.6
6.2
6.2
100.0
100.0
74.3
74.3
70.5
70.5
70.1
70.1
74.2
74.2
64.5
64.5
58.7
58.7
45.1
45.1
532
532
7,266
7,266
3,025
3,025
7,026
7,026
1,486
1,486
5,449
5,449
24,784
24,784
1,781
1,781
2,757
2,757
29,322
29,322
57.9
57.9
62.4
62.4
57.0
57.0
56.7
56.7
60.8
60.8
61.8
61.8
59.8
59.8
38.4
38.4
65.5
65.5
59.0
59.0
4.8
4.8
3.2
3.2
6.0
6.0
5.8
5.8
4.1
4.1
3.1
3.1
4.3
4.3
37.5
37.5
2.2
2.2
6.1
6.1
3.9
3.9
1.8
1.8
4.1
4.1
3.0
3.0
3.8
3.8
1.7
1.7
2.6
2.6
0.2
0.2
1.2
1.2
2.3
2.3
0.17
0.17
0.13
0.13
0.17
0.17
0.08
0.08
0.06
0.06
0.06
0.06
0.10
0.10
0.03
0.03
0.07
0.07
0.09
0.09
7.6
7.6
5.2
5.2
7.6
7.6
9.6
9.6
4.2
4.2
6.3
6.3
7.0
7.0
–
–
2.7
2.7
6.2
6.2
Likely
Likely
mining
mining
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
Iron Ore(b)
Iron Ore(b)
Australia
Australia
– Boolgeeda(c)
– Boolgeeda(c)
– Brockman(d)
– Brockman(d)
– Brockman Process Ore(e)
– Brockman Process Ore(e)
– Channel Iron Deposit(f)
– Channel Iron Deposit(f)
– Detrital(g)
– Detrital(g)
– Marra Mamba(h)
– Marra Mamba(h)
Total (Australia)
Total (Australia)
Iron Ore Company of Canada
Iron Ore Company of Canada
(Canada)(i)
(Canada)(i)
Simandou (Guinea)(j)
Simandou (Guinea)(j)
Total Iron Ore
Total Iron Ore
Mt
Mt
–
–
556
556
276
276
723
723
0.5
0.5
379
379
158
158
416
416
–
–
62.5
62.5
57.2
57.2
56.5
56.5
61.3
61.3
62.3
62.3
–
–
3.2
3.2
6.3
6.3
5.9
5.9
4.4
4.4
2.8
2.8
1.2
1.2
6.0
6.0
%
%
Fe
Fe
%
%
%
%
SiO2
SiO2
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
%
%
Fe
Fe
%
%
%
%
SiO2
SiO2
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
%
%
Fe
Fe
%
%
%
%
SiO2
SiO2
Al2O3
Al2O3
%
%
P
P
%
%
LOI
LOI
Mt
Mt
–
–
1,521
1,521
655
655
89
89
607
607
–
–
63.0
63.0
57.0
57.0
58.4
58.4
60.6
60.6
61.8
61.8
–
–
3.1
3.1
6.1
6.1
4.5
4.5
5.0
5.0
3.3
3.3
–
–
–
–
1.8 0.13
1.8 0.13
4.0 0.16
4.0 0.16
2.9 0.06
2.9 0.06
1.5 0.06
1.5 0.06
–
–
5.1
5.1
7.0
7.0
4.4
4.4
6.0
6.0
Mt
Mt
–
–
–
–
–
–
–
–
–
–
1.8 0.12 4.4
1.8 0.12 4.4
2,077 62.8
2,077 62.8
4.1 0.16 7.3
4.1 0.16 7.3
931 57.0
931 57.0
3.8 0.06 3.7
3.8 0.06 3.7
90 60.6
90 60.6
1.8 0.06 5.9
1.8 0.06 5.9
986 62.0
986 62.0
–
–
3.1
3.1
6.1
6.1
4.9
4.9
5.0
5.0
3.1
3.1
4.2
4.2
–
–
–
–
1.8 0.12
1.8 0.12
4.1 0.16
4.1 0.16
2.6 0.07
2.6 0.07
3.8 0.06
3.8 0.06
1.7 0.06
1.7 0.06
2.4 0.10
2.4 0.10
2.5 0.06 10.2
2.5 0.06 10.2
1,800
1,800
2.6 0.08 8.8
2.6 0.08 8.8
2,523 57.9
2,523 57.9
–
–
4.6
4.6
7.2
7.2
9.2
9.2
3.7
3.7
6.0
6.0
6.9
6.9
–
–
2.7
2.7
5.4
5.4
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b)
Iron ore Resources are stated on a dry in situ weight basis.
(c) Boolgeeda Resources are 100% Rio Tinto owned.
Venture (based on allocated tonnages).
Rhodes Ridge Joint Venture (based on allocated tonnages).
(d) Brockman Resources are 74.3% Rio Tinto owned, 0.1% Bao-HI Joint Venture, 5.0% Hope Downs Joint Venture, 4.4% Robe River Iron Associates Joint Venture and 16.3% Rhodes Ridge Joint
(e) Brockman Process Ore Resources are 70.5% Rio Tinto owned, 0.1% Bao-HI Joint Venture, 6.9% Hope Downs Joint Venture, 8.0% Robe River Iron Associates Joint Venture and 14.4%
(f) Channel Iron Deposit Resources are 70.1% Rio Tinto owned and 29.9% Robe River Iron Associates Joint Venture (based on allocated tonnages).
(g) Detrital Resources are 74.2% Rio Tinto owned, 3.9% Hope Downs Joint Venture, 4.4% Robe River Iron Associates Joint Venture and 17.4% Rhodes Ridge Joint Venture (based on allocated
tonnages).
allocated tonnages).
(h) Marra Mamba Resources are 64.5% Rio Tinto owned, 4.0% Hope Downs Joint Venture, 4.2% Robe River Iron Associates Joint Venture and 27.4% Rhodes Ridge Joint Venture (based on
(i)
Iron Ore Company of Canada (IOC) Resources are stated as in situ material on a dry basis. This in situ material has the potential to produce marketable product (57% pellets and 43%
concentrate for sale at a natural moisture content of 2%) comprising 67 million tonnes at 65% iron 3.2% silica (Measured), 264 million tonnes at 65% iron 3.2% silica (Indicated) and
370 million tonnes at 65% iron 3.2% silica (Inferred) using process recovery factors derived from current IOC concentrating and pellet operations.
(j) Rio Tinto and Chinalco, who respectively own 45.05% and 39.95% of Simandou Blocks 3 and 4, are working with the government of Guinea to realise value from the world-class iron ore
deposit. The government of Guinea owns a 15% stake in the project.
368
Annual Report 2021 | riotinto.com
Annual Report 2021 | riotinto.com
369
Mineral Resources continued
Likely
mining
method(a)
O/P
O/P
U/G
U/G
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
U/G
U/G
U/G
U/G
U/G
O/P
U/G
Copper(b)
Winu (Australia)(c)
Bingham Canyon (US)
– Bingham Open Pit(d)
– North Rim Skarn
Resolution (US)
Total (US)
Escondida (Chile)
– Chimborazo - sulphide
– Escondida - mixed
– Escondida - oxide
– Escondida - sulphide
– Pampa Escondida - sulphide
– Pinta Verde - oxide
– Pinta Verde - sulphide
Total (Chile)
La Granja (Peru)
Oyu Tolgoi (Mongolia)
– Heruga ETG
– Heruga OT
– Hugo Dummett North(e)
– Hugo Dummett North Extension
– Hugo Dummett South
– Oyut Open Pit
– Oyut Underground
Total (Mongolia)
Total Copper
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated resources
as at 31 December 2021
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
–
–
–
–
–
249
0.45
0.33
2.72
–
249 0.45 0.33 2.72
–
121
1
–
0.46
3.50
–
0.24
2.14 0.019
2.10 20.00
–
–
–
–
129
9
530
0.32
3.60
1.92
0.16
1.40 0.016
250 0.39 0.20 1.76 0.017
1.70 21.00
–
10 3.59 1.74 20.90
–
–
– 0.039
530 1.92
–
– 0.039
122 0.49 0.26 2.29 0.018
668 1.63 0.05 0.55 0.034
790 1.46 0.09 0.82 0.032
–
16
14
486
294
109
–
–
0.56
0.58
0.60
0.53
0.60
–
–
–
–
–
0.07
–
–
919 0.58 0.02
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
56
1.89
0.49
4.24
–
–
16
10
–
–
–
–
–
–
0.41
0.48
0.38
0.91
1.10
1.31
82 1.42 0.52 3.27
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
139
15
7
1,553
1,150
64
23
0.50
0.45
0.57
0.47
0.55
0.53
0.50
–
–
–
–
0.10
–
–
2,951 0.50 0.04
130
0.85
–
–
383
84
–
92
50
–
–
1.37
1.62
–
0.33
0.38
–
–
–
0.35
0.55
–
0.30
0.61
–
–
–
–
–
–
–
–
–
–
–
3.20
4.20
–
1.13
1.18
610 1.17 0.39 2.86
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
139 0.50
31 0.51
21 0.58
2,039 0.50
–
–
–
–
1,444 0.55 0.09
173 0.57
23 0.50
–
–
3,870 0.52 0.04
130 0.85
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
439 1.44 0.37 3.34
84 1.62 0.55 4.20
–
–
–
–
109 0.34 0.31 1.12
60 0.40 0.66 1.20
692 1.20 0.41 2.91
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,123 0.63 0.08 0.49 0.002
4,608 0.76 0.10 0.61 0.005
5,731 0.74
0.1 0.58 0.004
Mt
358
6
10
1,257
1,273
84
23
3
15
37
10,371
6,000
16,533
4,190
1,502
107
720
160
731
336
144
3,700
26,054
% Cu
0.37
0.29
3.70
1.36
1.37
0.60
0.45
0.78
0.53
0.43
0.54
0.45
0.49
0.50
0.41
0.42
0.83
1.05
0.83
0.29
0.41
0.59
0.55
g/t Au
0.28
g/t Ag
% Mo
1.95
0.14
1.50
1.19
21.00
0.01
0.17
0.003
0.035
0.035
Mt
608
256
20
1,787
2,063
223
54
24
12,410
7,444
188
60
20,403
4,320
1,502
107
1,159
244
731
445
204
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.012
0.011
0.005
4,392
0.002
31,785
% Cu
0.40
0.39
3.64
1.53
1.41
0.54
0.48
0.60
0.53
0.45
0.57
0.47
0.50
0.51
0.41
0.42
1.06
1.24
0.83
0.30
0.40
0.69
0.58
–
–
–
–
–
–
–
–
0.05
0.02
0.40
0.30
0.32
0.43
0.07
0.22
0.49
0.31
0.06
–
–
–
–
–
–
–
–
0.04
0.01
0.40
0.30
0.29
0.37
0.07
0.19
0.42
0.29
0.05
–
–
–
–
–
–
–
–
–
–
1.44
1.58
2.47
2.85
1.87
1.03
1.25
1.74
0.28
g/t Au
0.30
g/t Ag
2.26
% Mo
1.75
0.017
0.20
1.61
20.95
0.04
0.42
0.036
0.033
Rio Tinto
Interest
%
100.0
100.0
100.0
55.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
30.0
30.0
30.0
30.0
30.0
30.0
30.0
100
29.4
33.5
33.5
29.4
33.5
33.5
33.5
–
–
–
–
–
–
–
–
–
–
1.44
1.58
2.80
3.31
1.87
1.05
1.23
1.93
0.34
0.012
0.011
0.004
0.003
Total mineral resources
as at 31 December 2020
g/t Au
0.27
g/t Ag
2.15
% Mo
0.20
1.62
1.79
20.95
0.04
0.44
0.017
0.036
0.033
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.46
1.58
2.72
3.24
1.88
1.04
1.21
1.92
0.33
0.012
0.011
0.003
0.003
Mt
503
285
20
1,787
2,092
223
74
36
12,245
7,444
188
60
20,270
4,320
1,448
105
1,218
253
724
460
233
4,441
31,626
% Cu
0.35
0.38
3.65
1.53
1.39
0.54
0.55
0.77
0.53
0.45
0.57
0.47
0.50
0.51
0.41
0.42
1.02
1.21
0.84
0.30
0.39
0.68
0.58
–
–
–
–
–
–
–
–
0.05
0.02
0.40
0.30
0.31
0.42
0.07
0.21
0.45
0.30
0.06
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Copper Resources are stated on a dry in situ weight basis.
(c) Winu Resource tonnes increased on the basis of additional drilling, an updated geological model and study progression. This includes an upgrade of 248 million tonnes of Inferred Resource
to Indicated Resource. A JORC Table 1 in support of this change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/
invest/financial-news-performance/resources-and-reserves.
(d) Bingham Canyon Open Pit Resource molybdenum grades interpolated from exploration drilling assays have been factored based on a long reconciliation history to blast hole and
mill samples.
(e) The Hugo Dummett North Resource include approximately 1.3 million tonnes of stockpiled material at a grade of 0.35% copper, 0.11 g/t gold and 0.85 g/t silver. The Hugo Dummett
North underground mine is currently under construction.
370
Annual Report 2021 | riotinto.com
Mineral Resources continued
Production, Ore Reserves, Mineral Resources and Operations
method(a)
method(a)
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated resources
Total Measured and Indicated resources
as at 31 December 2021
as at 31 December 2021
as at 31 December 2021
as at 31 December 2021
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Rio Tinto
Rio Tinto
Interest
Interest
Tonnage
Tonnage
Grade
Grade
Mt
Mt
358
358
6
6
10
10
1,257
1,257
1,273
1,273
84
84
23
23
3
3
10,371
10,371
6,000
6,000
15
15
37
37
16,533
16,533
4,190
4,190
1,502
1,502
107
107
720
720
160
160
731
731
336
336
144
144
3,700
3,700
26,054
26,054
% Cu
% Cu
0.37
0.37
0.29
0.29
3.70
3.70
1.36
1.36
1.37
1.37
0.60
0.60
0.45
0.45
0.78
0.78
0.53
0.53
0.43
0.43
0.54
0.54
0.45
0.45
0.49
0.49
0.50
0.50
0.41
0.41
0.42
0.42
0.83
0.83
1.05
1.05
0.83
0.83
0.29
0.29
0.41
0.41
0.59
0.59
0.55
0.55
g/t Au
g/t Au
0.28
0.28
g/t Ag
g/t Ag
% Mo
% Mo
1.95
1.95
–
–
Mt
Mt
608
608
g/t Au
g/t Au
0.30
0.30
g/t Ag
g/t Ag
2.26
2.26
% Mo
% Mo
%
%
–
–
100.0
100.0
0.14
0.14
1.50
1.50
–
–
1.19
1.19
21.00
21.00
–
–
0.01
0.01
0.17
0.17
0.003
0.003
–
–
0.035
0.035
0.035
0.035
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.012
0.012
0.011
0.011
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.04
0.04
–
–
–
–
0.01
0.01
–
–
0.40
0.40
0.30
0.30
0.29
0.29
0.37
0.37
0.07
0.07
0.19
0.19
0.42
0.42
0.29
0.29
0.05
0.05
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.44
1.44
1.58
1.58
2.47
2.47
2.85
2.85
1.87
1.87
1.03
1.03
1.25
1.25
1.74
1.74
0.28
0.28
256
256
20
20
1,787
1,787
2,063
2,063
223
223
54
54
24
24
12,410
12,410
7,444
7,444
188
188
60
60
20,403
20,403
4,320
4,320
1,502
1,502
107
107
1,159
1,159
244
244
731
731
445
445
204
204
0.005
0.005
4,392
4,392
0.002
0.002
31,785
31,785
% Cu
% Cu
0.40
0.40
0.39
0.39
3.64
3.64
1.53
1.53
1.41
1.41
0.54
0.54
0.48
0.48
0.60
0.60
0.53
0.53
0.45
0.45
0.57
0.57
0.47
0.47
0.50
0.50
0.51
0.51
0.41
0.41
0.42
0.42
1.06
1.06
1.24
1.24
0.83
0.83
0.30
0.30
0.40
0.40
0.69
0.69
0.58
0.58
1.75
1.75
0.017
0.017
20.95
20.95
–
–
0.04
0.04
0.42
0.42
0.20
0.20
1.61
1.61
–
–
–
–
–
–
–
–
–
–
0.05
0.05
–
–
–
–
0.02
0.02
–
–
0.40
0.40
0.30
0.30
0.32
0.32
0.43
0.43
0.07
0.07
0.22
0.22
0.49
0.49
0.31
0.31
0.06
0.06
100.0
100.0
100.0
100.0
55.0
55.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
30.0
100
100
29.4
29.4
33.5
33.5
33.5
33.5
29.4
29.4
33.5
33.5
33.5
33.5
33.5
33.5
–
–
0.036
0.036
0.033
0.033
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.44
1.44
1.58
1.58
2.80
2.80
3.31
3.31
1.87
1.87
1.05
1.05
1.23
1.23
1.93
1.93
0.34
0.34
0.012
0.012
0.011
0.011
–
–
–
–
–
–
–
–
–
–
0.004
0.004
0.003
0.003
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
g/t Au
g/t Au
0.27
0.27
g/t Ag
g/t Ag
2.15
2.15
% Mo
% Mo
–
–
0.20
0.20
1.62
1.62
–
–
0.04
0.04
–
–
–
–
–
–
–
–
0.05
0.05
–
–
–
–
0.02
0.02
–
–
0.40
0.40
0.30
0.30
0.31
0.31
0.42
0.42
0.07
0.07
0.21
0.21
0.45
0.45
0.30
0.30
0.06
0.06
1.79
1.79
20.95
20.95
–
–
0.44
0.44
0.017
0.017
–
–
0.036
0.036
0.033
0.033
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.46
1.46
1.58
1.58
2.72
2.72
3.24
3.24
1.88
1.88
1.04
1.04
1.21
1.21
1.92
1.92
0.33
0.33
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.012
0.012
0.011
0.011
–
–
–
–
–
–
–
–
–
–
0.003
0.003
0.003
0.003
Mt
Mt
503
503
285
285
20
20
1,787
1,787
2,092
2,092
223
223
74
74
36
36
12,245
12,245
7,444
7,444
188
188
60
60
20,270
20,270
4,320
4,320
1,448
1,448
105
105
1,218
1,218
253
253
724
724
460
460
233
233
4,441
4,441
31,626
31,626
% Cu
% Cu
0.35
0.35
0.38
0.38
3.65
3.65
1.53
1.53
1.39
1.39
0.54
0.54
0.55
0.55
0.77
0.77
0.53
0.53
0.45
0.45
0.57
0.57
0.47
0.47
0.50
0.50
0.51
0.51
0.41
0.41
0.42
0.42
1.02
1.02
1.21
1.21
0.84
0.84
0.30
0.30
0.39
0.39
0.68
0.68
0.58
0.58
Likely
Likely
mining
mining
O/P
O/P
O/P
O/P
U/G
U/G
U/G
U/G
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
O/P
U/G
U/G
U/G
U/G
U/G
U/G
U/G
U/G
U/G
U/G
O/P
O/P
U/G
U/G
Copper(b)
Copper(b)
Winu (Australia)(c)
Winu (Australia)(c)
Bingham Canyon (US)
Bingham Canyon (US)
– Bingham Open Pit(d)
– Bingham Open Pit(d)
– North Rim Skarn
– North Rim Skarn
Resolution (US)
Resolution (US)
Total (US)
Total (US)
Escondida (Chile)
Escondida (Chile)
– Chimborazo - sulphide
– Chimborazo - sulphide
– Escondida - mixed
– Escondida - mixed
– Escondida - oxide
– Escondida - oxide
– Escondida - sulphide
– Escondida - sulphide
– Pinta Verde - oxide
– Pinta Verde - oxide
– Pinta Verde - sulphide
– Pinta Verde - sulphide
Total (Chile)
Total (Chile)
La Granja (Peru)
La Granja (Peru)
Oyu Tolgoi (Mongolia)
Oyu Tolgoi (Mongolia)
– Heruga ETG
– Heruga ETG
– Heruga OT
– Heruga OT
– Hugo Dummett South
– Hugo Dummett South
– Oyut Open Pit
– Oyut Open Pit
– Oyut Underground
– Oyut Underground
Total (Mongolia)
Total (Mongolia)
Total Copper
Total Copper
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
Mt % Cu g/t Au g/t Ag % Mo
249
249
0.45
0.45
0.33
0.33
2.72
2.72
249 0.45 0.33 2.72
249 0.45 0.33 2.72
121
121
0.24
0.24
2.14 0.019
2.14 0.019
0.16
0.16
1.40 0.016
1.40 0.016
250 0.39 0.20 1.76 0.017
250 0.39 0.20 1.76 0.017
0.46
0.46
3.50
3.50
2.10 20.00
2.10 20.00
1.70 21.00
1.70 21.00
10 3.59 1.74 20.90
10 3.59 1.74 20.90
– 0.039
– 0.039
530 1.92
530 1.92
– 0.039
– 0.039
122 0.49 0.26 2.29 0.018
122 0.49 0.26 2.29 0.018
668 1.63 0.05 0.55 0.034
668 1.63 0.05 0.55 0.034
790 1.46 0.09 0.82 0.032
790 1.46 0.09 0.82 0.032
–
–
16
16
14
14
486
486
294
294
109
109
0.56
0.56
0.58
0.58
0.60
0.60
0.53
0.53
0.60
0.60
–
–
1
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
129
129
9
9
530
530
0.32
0.32
3.60
3.60
1.92
1.92
139
139
15
15
7
7
1,553
1,553
1,150
1,150
64
64
23
23
0.50
0.50
0.45
0.45
0.57
0.57
0.47
0.47
0.55
0.55
0.53
0.53
0.50
0.50
130
130
0.85
0.85
–
–
–
–
–
–
–
–
–
–
383
383
84
84
–
–
92
92
50
50
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
139 0.50
139 0.50
31 0.51
31 0.51
21 0.58
21 0.58
2,039 0.50
2,039 0.50
173 0.57
173 0.57
23 0.50
23 0.50
130 0.85
130 0.85
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16
16
10
10
0.41
0.41
0.48
0.48
0.38
0.38
0.91
0.91
1.10
1.10
1.31
1.31
0.33
0.33
0.38
0.38
0.30
0.30
0.61
0.61
1.13
1.13
1.18
1.18
109 0.34 0.31 1.12
109 0.34 0.31 1.12
60 0.40 0.66 1.20
60 0.40 0.66 1.20
82 1.42 0.52 3.27
82 1.42 0.52 3.27
610 1.17 0.39 2.86
610 1.17 0.39 2.86
692 1.20 0.41 2.91
692 1.20 0.41 2.91
1,123 0.63 0.08 0.49 0.002
1,123 0.63 0.08 0.49 0.002
4,608 0.76 0.10 0.61 0.005
4,608 0.76 0.10 0.61 0.005
5,731 0.74
5,731 0.74
0.1 0.58 0.004
0.1 0.58 0.004
919 0.58 0.02
919 0.58 0.02
2,951 0.50 0.04
2,951 0.50 0.04
3,870 0.52 0.04
3,870 0.52 0.04
– Hugo Dummett North(e)
– Hugo Dummett North(e)
– Hugo Dummett North Extension
– Hugo Dummett North Extension
56
56
1.89
1.89
0.49
0.49
4.24
4.24
1.37
1.37
1.62
1.62
0.35
0.35
0.55
0.55
3.20
3.20
4.20
4.20
439 1.44 0.37 3.34
439 1.44 0.37 3.34
84 1.62 0.55 4.20
84 1.62 0.55 4.20
– Pampa Escondida - sulphide
– Pampa Escondida - sulphide
0.07
0.07
0.10
0.10
1,444 0.55 0.09
1,444 0.55 0.09
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Copper Resources are stated on a dry in situ weight basis.
invest/financial-news-performance/resources-and-reserves.
mill samples.
North underground mine is currently under construction.
(c) Winu Resource tonnes increased on the basis of additional drilling, an updated geological model and study progression. This includes an upgrade of 248 million tonnes of Inferred Resource
to Indicated Resource. A JORC Table 1 in support of this change will be released to the market contemporaneously with the release of this Annual Report and can be viewed at riotinto.com/
(d) Bingham Canyon Open Pit Resource molybdenum grades interpolated from exploration drilling assays have been factored based on a long reconciliation history to blast hole and
(e) The Hugo Dummett North Resource include approximately 1.3 million tonnes of stockpiled material at a grade of 0.35% copper, 0.11 g/t gold and 0.85 g/t silver. The Hugo Dummett
370
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371
Mineral Resources continued
Titanium Dioxide Feedstock(b)
QMM (Madagascar)
RBM (South Africa)(c)
RTFT (Canada)
Total Titanium Dioxide Feedstock
Likely
mining
method(a)
O/P
O/P
O/P
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated resources
as at 31 December 2021
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Total mineral resources
as at 31 December 2020
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
Mt % Ti Minerals
% Zircon
456
–
–
456
4.2
–
–
4.2
0.2
–
–
0.2
860
9
11
880
4.3
9.5
84.9
5.4
0.2
7.8
–
8.0
1,316
9
11
1,336
4.3
9.5
84.9
5.0
0.2
7.8
–
5.4
154
–
16
170
3.1
–
79.2
10.1
0.2
–
–
0.2
1,470
9
27
1,506
4.1
9.5
81.6
5.5
0.2
7.8
–
4.8
1,427
11
27
1,464
4.1
12.3
81.6
5.6
0.2
8.1
–
4.8
Rio Tinto
Interest
%
80.0
74.0
100.0
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Titanium dioxide feedstock Resources are stated as dry in situ tonnes.
(c) RBM Resource tonnes decreased due to mining depletion.
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Mineral Resources continued
Production, Ore Reserves, Mineral Resources and Operations
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated resources
Total Measured and Indicated resources
as at 31 December 2021
as at 31 December 2021
as at 31 December 2021
as at 31 December 2021
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Titanium Dioxide Feedstock(b)
Titanium Dioxide Feedstock(b)
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
QMM (Madagascar)
QMM (Madagascar)
RBM (South Africa)(c)
RBM (South Africa)(c)
RTFT (Canada)
RTFT (Canada)
Total Titanium Dioxide Feedstock
Total Titanium Dioxide Feedstock
456
456
–
–
–
–
456
456
4.2
4.2
–
–
–
–
4.2
4.2
0.2
0.2
–
–
–
–
0.2
0.2
860
860
9
9
11
11
880
880
4.3
4.3
9.5
9.5
84.9
84.9
5.4
5.4
0.2
0.2
7.8
7.8
–
–
8.0
8.0
1,316
1,316
9
9
11
11
1,336
1,336
4.3
4.3
9.5
9.5
84.9
84.9
5.0
5.0
0.2
0.2
7.8
7.8
–
–
5.4
5.4
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
154
154
–
–
16
16
170
170
3.1
3.1
–
–
79.2
79.2
10.1
10.1
0.2
0.2
–
–
–
–
0.2
0.2
1,470
1,470
9
9
27
27
1,506
1,506
4.1
4.1
9.5
9.5
81.6
81.6
5.5
5.5
0.2
0.2
7.8
7.8
–
–
4.8
4.8
Likely
Likely
mining
mining
method(a)
method(a)
O/P
O/P
O/P
O/P
O/P
O/P
Rio Tinto
Rio Tinto
Interest
Interest
%
%
80.0
80.0
74.0
74.0
100.0
100.0
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Grade
Grade
Mt % Ti Minerals
Mt % Ti Minerals
% Zircon
% Zircon
1,427
1,427
11
11
27
27
1,464
1,464
4.1
4.1
12.3
12.3
81.6
81.6
5.6
5.6
0.2
0.2
8.1
8.1
–
–
4.8
4.8
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Titanium dioxide feedstock Resources are stated as dry in situ tonnes.
(c) RBM Resource tonnes decreased due to mining depletion.
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373
Mineral Resources continued
Borates(b)
Jadar (Serbia)(c)
Diamonds(d)
Diavik (Canada)(e)
Lithium(f)
Jadar (Serbia)
Likely
mining
method(a)
U/G
Likely
mining
method(a)
U/G
Likely
mining
method(a)
U/G
Likely
mining
method(a)
Uranium(g)
Jabiluka (Energy Resources of Australia)
(Australia)
U/G
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated
resources as at 31 December 2021
Tonnage
Mt
–
Tonnage
Mt
14
Tonnage
Mt
14
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated
resources as at 31 December 2021
Tonnage
Grade
Tonnage
Grade
Tonnage
Grade
Mt
Carats per tonne
Mt
Carats per tonne
Mt Carats per tonne
1.2
2.2
0.9
2.9
2.1
2.5
Measured resources
as at 31 December 2021
Indicated resources
as at 31 December 2021
Total Measured and Indicated
resources as at 31 December 2021
Tonnage
Mt
–
Grade
% Li2O
–
Tonnage
Mt
85
Grade
% Li2O
1.76
Tonnage
Mt
85
Grade
% Li2O
1.76
Measured resources
as at 31 December 2021
Indicated resources
as at31 December 2021
Total Measured and Indicated
resources as at 31 December 2021
Tonnage
Mt
1
Grade
% U3O8
0.887
Tonnage
Mt
14
Grade
% U3O8
0.520
Tonnage
Mt
15
Grade
% U3O8
0.549
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Total mineral resources
as at 31 December 2020
Tonnage
Mt
7
Tonnage
Mt
58
Mt
10
Tonnage
Tonnage
Mt
21
Tonnage
Mt
144
Tonnage
Mt
25
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Tonnage
Grade
Tonnage
Grade
Mt
0.6
Carats per tonne
1.9
Mt
2.7
Carats per tonne
2.4
Inferred resources
as at 31 December 2021
Total resources
as at 31 December 2021
Grade
% Li2O
1.87
Grade
% U3O8
0.545
Grade
% Li2O
1.80
Grade
% U3O8
0.547
Rio Tinto
Interest
%
100.0
Rio Tinto
Interest
%
100.0
Rio Tinto
Interest
%
100
Rio Tinto
Interest
%
86.3
Tonnage
Mt
20
Tonnage
Mt
139
Tonnage
Mt
25
Total mineral resources
as at 31 December 2020
Tonnage
Grade
Mt
1.5
Carats per tonne
2.5
Total resources
as at 31 December 2020
Grade
% Li2O
1.78
Grade
% U3O8
0.547
Inferred resources
as at 31 December 2021
Total mineral resources
as at 31 December 2021
Total mineral resources
as at 31 December 2020
Jadar equivalent dry in situ Resource is 85 million tonnes at 16.1% B2O3 (Indicated) and 58 million tonnes at 12.0% B2O3 (Inferred).
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Borates Resources are reported as dry in situ B2O3 tonnes, rather than marketable product as in Reserves.
(c)
(d) Diamond Resources are stated as dry in situ tonnes.
(e) Reported to the market on 18 November 2021, Rio Tinto has obtained a 100% interest in Diavik. The 2020 Resource figure is reported based on the previous 60% ownership.
(f)
(g) Uranium Resources are stated as dry in situ tonnes. Rio Tinto acknowledge that they will not develop the Jabiluka mine without the approval of the Traditional Owners.
Lithium Resources are stated as dry in situ tonnes.
374
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Mineral Resources continued
Production, Ore Reserves, Mineral Resources and Operations
Borates(b)
Borates(b)
Jadar (Serbia)(c)
Jadar (Serbia)(c)
Diamonds(d)
Diamonds(d)
Diavik (Canada)(e)
Diavik (Canada)(e)
Lithium(f)
Lithium(f)
Jadar (Serbia)
Jadar (Serbia)
Uranium(g)
Uranium(g)
(Australia)
(Australia)
Jabiluka (Energy Resources of Australia)
Jabiluka (Energy Resources of Australia)
Likely
Likely
mining
mining
method(a)
method(a)
U/G
U/G
Likely
Likely
mining
mining
method(a)
method(a)
U/G
U/G
Likely
Likely
mining
mining
method(a)
method(a)
U/G
U/G
Likely
Likely
mining
mining
method(a)
method(a)
U/G
U/G
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated
Total Measured and Indicated
as at 31 December 2021
as at 31 December 2021
resources as at 31 December 2021
resources as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
–
–
Tonnage
Tonnage
Mt
Mt
14
14
Tonnage
Tonnage
Mt
Mt
14
14
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated
Total Measured and Indicated
as at 31 December 2021
as at 31 December 2021
resources as at 31 December 2021
resources as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Mt
Mt
Carats per tonne
Carats per tonne
Mt
Mt
Carats per tonne
Carats per tonne
Mt Carats per tonne
Mt Carats per tonne
1.2
1.2
2.2
2.2
0.9
0.9
2.9
2.9
2.1
2.1
2.5
2.5
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated
Total Measured and Indicated
as at 31 December 2021
as at 31 December 2021
resources as at 31 December 2021
resources as at 31 December 2021
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
Mt
Mt
–
–
Mt
Mt
1
1
Grade
Grade
% Li2O
% Li2O
–
–
Grade
Grade
% U3O8
% U3O8
0.887
0.887
Mt
Mt
85
85
Mt
Mt
14
14
Grade
Grade
% Li2O
% Li2O
1.76
1.76
Grade
Grade
% U3O8
% U3O8
0.520
0.520
Mt
Mt
85
85
Mt
Mt
15
15
Grade
Grade
% Li2O
% Li2O
1.76
1.76
Grade
Grade
% U3O8
% U3O8
0.549
0.549
Measured resources
Measured resources
as at 31 December 2021
as at 31 December 2021
Indicated resources
Indicated resources
Total Measured and Indicated
Total Measured and Indicated
as at31 December 2021
as at31 December 2021
resources as at 31 December 2021
resources as at 31 December 2021
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
Tonnage
(a) Likely mining method: O/P = open pit/surface; U/G = underground.
(b) Borates Resources are reported as dry in situ B2O3 tonnes, rather than marketable product as in Reserves.
(c)
Jadar equivalent dry in situ Resource is 85 million tonnes at 16.1% B2O3 (Indicated) and 58 million tonnes at 12.0% B2O3 (Inferred).
(d) Diamond Resources are stated as dry in situ tonnes.
(f)
Lithium Resources are stated as dry in situ tonnes.
(e) Reported to the market on 18 November 2021, Rio Tinto has obtained a 100% interest in Diavik. The 2020 Resource figure is reported based on the previous 60% ownership.
(g) Uranium Resources are stated as dry in situ tonnes. Rio Tinto acknowledge that they will not develop the Jabiluka mine without the approval of the Traditional Owners.
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
7
7
Tonnage
Tonnage
Mt
Mt
21
21
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Grade
Grade
Tonnage
Tonnage
Grade
Grade
Mt
Mt
0.6
0.6
Carats per tonne
Carats per tonne
1.9
1.9
Mt
Mt
2.7
2.7
Carats per tonne
Carats per tonne
2.4
2.4
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total resources
Total resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
58
58
Grade
Grade
% Li2O
% Li2O
1.87
1.87
Tonnage
Tonnage
Mt
Mt
144
144
Grade
Grade
% Li2O
% Li2O
1.80
1.80
Inferred resources
Inferred resources
as at 31 December 2021
as at 31 December 2021
Total mineral resources
Total mineral resources
as at 31 December 2021
as at 31 December 2021
Tonnage
Tonnage
Mt
Mt
10
10
Grade
Grade
% U3O8
% U3O8
0.545
0.545
Tonnage
Tonnage
Mt
Mt
25
25
Grade
Grade
% U3O8
% U3O8
0.547
0.547
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100.0
100.0
Rio Tinto
Rio Tinto
Interest
Interest
%
%
100
100
Rio Tinto
Rio Tinto
Interest
Interest
%
%
86.3
86.3
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
20
20
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Grade
Grade
Mt
Mt
1.5
1.5
Carats per tonne
Carats per tonne
2.5
2.5
Total resources
Total resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
139
139
Grade
Grade
% Li2O
% Li2O
1.78
1.78
Total mineral resources
Total mineral resources
as at 31 December 2020
as at 31 December 2020
Tonnage
Tonnage
Mt
Mt
25
25
Grade
Grade
% U3O8
% U3O8
0.547
0.547
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375
Mineral Resources continued
Mineral Resources and Ore Reserves governance and
internal controls
Rio Tinto has well-established governance processes and internal
controls to support the generation and publication of Mineral Resources
and Ore Reserves, including a series of business unit and product group
structures and processes independent of operational reporting.
Audit Committee
The Audit Committee’s remit includes the governance of Mineral
Resources and Ore Reserves. This includes an annual review of Mineral
Resources and Ore Reserves at a Group level, as well as a review of
findings and progress from the Group Internal Audit programme.
Ore Reserves Steering Committee
The Ore Reserves Steering Committee (ORSC), chaired by the Chief
Technical Officer, Development & Technology, meets at least quarterly.
The ORSC comprises senior representatives across our technical,
financial, governance and business groups and oversees the
appointment of Competent Persons nominated by the business units,
reviews Exploration Results, Mineral Resource or Ore Reserve data prior
to public reporting and oversees the development of the Group Mineral
Resource and Ore Reserve standards and guidance.
Orebody Knowledge Centre of Excellence
The Orebody Knowledge Centre of Excellence contains a dedicated
Orebody Knowledge Technical Assurance team. Orebody Knowledge
Technical Assurance, in conjunction with the ORSC, is the guardian and
author of Group Mineral Resource and Ore Reserve standards and
guidance and is responsible for the governance and compilation of
Group Mineral Resource, Ore Reserve and reconciliation reporting.
The Technical Assurance team also monitors the external reporting
environment, facilitates internal audits, and monitors actions with
Group Internal Audit.
Group Internal Audit
Mineral Resource and Ore Reserve internal audits are conducted by
independent external consulting personnel in a programme managed
by Group Internal Audit with the assistance of the Orebody Knowledge
Centre of Excellence and the ORSC. Material findings are reported
outside of the product group reporting line to the Audit Committee, and
all reports and action plans are reviewed by the ORSC for alignment to
internal and external reporting standards. During 2021, due to COVID
restrictions, two internal Mineral Resource and Ore Reserve audits were
completed remotely.
376
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Mineral Resources continued
Production, Ore Reserves, Mineral Resources and Operations
Mineral Resources and Ore Reserves governance and
Orebody Knowledge Centre of Excellence
Geoscientific information management and assurance
Mineral Resource and Ore Reserve risk management
internal controls
Rio Tinto has well-established governance processes and internal
controls to support the generation and publication of Mineral Resources
and Ore Reserves, including a series of business unit and product group
structures and processes independent of operational reporting.
Audit Committee
The Orebody Knowledge Centre of Excellence contains a dedicated
Orebody Knowledge Technical Assurance team. Orebody Knowledge
Technical Assurance, in conjunction with the ORSC, is the guardian and
author of Group Mineral Resource and Ore Reserve standards and
guidance and is responsible for the governance and compilation of
Group Mineral Resource, Ore Reserve and reconciliation reporting.
The Technical Assurance team also monitors the external reporting
environment, facilitates internal audits, and monitors actions with
The Audit Committee’s remit includes the governance of Mineral
Group Internal Audit.
Resources and Ore Reserves. This includes an annual review of Mineral
Resources and Ore Reserves at a Group level, as well as a review of
findings and progress from the Group Internal Audit programme.
Group Internal Audit
Ore Reserves Steering Committee
Mineral Resource and Ore Reserve internal audits are conducted by
independent external consulting personnel in a programme managed
by Group Internal Audit with the assistance of the Orebody Knowledge
The Ore Reserves Steering Committee (ORSC), chaired by the Chief
Centre of Excellence and the ORSC. Material findings are reported
Technical Officer, Development & Technology, meets at least quarterly.
outside of the product group reporting line to the Audit Committee, and
The ORSC comprises senior representatives across our technical,
all reports and action plans are reviewed by the ORSC for alignment to
financial, governance and business groups and oversees the
internal and external reporting standards. During 2021, due to COVID
appointment of Competent Persons nominated by the business units,
restrictions, two internal Mineral Resource and Ore Reserve audits were
reviews Exploration Results, Mineral Resource or Ore Reserve data prior
completed remotely.
to public reporting and oversees the development of the Group Mineral
Resource and Ore Reserve standards and guidance.
Risks to t’s Mineral Resource and Ore Reserve estimates are managed
through comprehensive risk assessments undertaken in support of the
annual reporting cycle. Risks are identified and managed by verifying
controls, determining and undertaking suitable actions to remove or
reduce the risk, conducting reviews and maintaining compliance with
standards and procedures. Risks are managed through a commercial
risk management solution.
At the end of each reporting cycle, analysis of the Mineral Resource and
Ore Reserve risks across all business units is undertaken to ensure both
consistency of reporting and to determine if any Group-wide risks to the
various processes exist.
Rio Tinto employs industry standard drilling, sampling, assaying and
quality assurance/quality control (QA/QC) practices supported by
formally documented procedures.
Diamond core and reverse circulation are the primary drilling methods
employed, with other methods such as sonic and air core utilised if
appropriate for the style of deposit. Drill hole locations are typically
confirmed by high-precision differential Global Positioning System
(GPS) and down-hole trace positioning is primarily achieved by
gyroscopic survey.
Drill sample recovery is typically recorded, and all geological data is
collected by qualified geoscientific professionals. Geological logging
consistency is secured via formal logging procedures and training,
reference materials, application of geological code libraries and digital
logging directly to the geological database.
On-site or commercial laboratories provide appropriate analytical
(assaying) techniques according to the commodity and style of deposit.
Reliability of assay data is maintained via QA/QC procedures which
monitor assay accuracy and precision through the analysis of blanks,
sample duplicates and matrix matched certified reference materials.
The Rio Tinto standard for geoscientific information management
is the industry-leading acQuire system and strict QA/QC criteria is
employed to ensure only high-quality assay data is uploaded to a
project’s database.
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377
Competent Persons
Bauxite
A McIntyre
W Saba
M A Diallo
M Keersemaker
J P M Franco
M A H Monteiro
Borates
B Griffiths
Copper
H Martin
A Schwarz
M Bixley
O Dendev
F Prince
R Hayes
E Mader
P Rodriguez
K Schroeder
J Vickery
F Barrera
R Maureira
J Marshall
J Pocoe
Association(a)
Employer
Accountability
Deposits
AusIMM
AusIMM
EFG
AusIMM
AusIMM
AusIMM
Rio Tinto
Compagnie des Bauxites de Guinée
Mineração Rio do Norte
Resources
Reserves
Resources
Reserves
Reserves
Resources and Reserves
Gove, East Weipa and Andoom, North of Weipa, Amrun
Gove, East Weipa and Andoom, Amrun
Sangaredi
Trombetas
SME
Rio Tinto
Resources and Reserves Boron
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
Rio Tinto
Rio Tinto
Rio Tinto
Resources
Resources
Reserves
Resources
Reserves
Resources
Reserves
Resources
Resources
Resolution(c)
Oyu Tolgoi(b) (c) (d)
Bingham Canyon(b) (c) (d)
Minera Escondida Ltda.
Rio Tinto
Rio Tinto
Resources and Reserves
Reserves
Resources
Resources
Resources
Escondida
Escondida, Escondida – Chimborazo – sulphide,
Pampa Escondida – sulphide(b), Pinta Verde
La Granja
Winu(b) (d)
378
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Competent Persons
Bauxite
A McIntyre
W Saba
M A Diallo
M Keersemaker
J P M Franco
M A H Monteiro
Borates
B Griffiths
Copper
H Martin
A Schwarz
M Bixley
O Dendev
F Prince
R Hayes
E Mader
P Rodriguez
K Schroeder
J Vickery
F Barrera
R Maureira
J Marshall
J Pocoe
AusIMM
AusIMM
EFG
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
Rio Tinto
Compagnie des Bauxites de Guinée
Mineração Rio do Norte
Resources and Reserves
Sangaredi
Trombetas
Gove, East Weipa and Andoom, North of Weipa, Amrun
Gove, East Weipa and Andoom, Amrun
SME
Rio Tinto
Resources and Reserves Boron
Rio Tinto
Rio Tinto
Rio Tinto
Resolution(c)
Oyu Tolgoi(b) (c) (d)
Bingham Canyon(b) (c) (d)
Minera Escondida Ltda.
Rio Tinto
Rio Tinto
Resources and Reserves
Escondida, Escondida – Chimborazo – sulphide,
Pampa Escondida – sulphide(b), Pinta Verde
Escondida
La Granja
Winu(b) (d)
Resources
Reserves
Resources
Reserves
Reserves
Resources
Resources
Reserves
Resources
Reserves
Resources
Reserves
Resources
Resources
Reserves
Resources
Resources
Resources
Association(a)
Employer
Accountability
Deposits
Association(a)
Employer
Accountability
Deposits
Production, Ore Reserves, Mineral Resources and Operations
Diamonds
C Auld
M Kontzamanis
K Pollock
Iron ore
K Tindale
M McDonald
B Power
S Roche
R Way
R Williams
P Ziemendorf
N Brajkovich
P Savory
C Kyngdon
L Vilela Couto
C Gagne
A Menaria
R Sarin
Lithium
G Davis
A Earl
J Garcia
M Sweeney
NAPEG
NAPEG
NAPEG
AusIMM
PEGNL
PEGNL
AusIMM
PEGNL
PEGNL
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
AusIMM
EFG
AusIMM
Titanium dioxide feedstock
OGQ
OIQ
OIQ
SAIMM
SACNASP
SACNASP
SAIMM
AusIMM
J Dumouchel
C Ferland
D Gallant
T Daling
A Louw
S Mnunu
P Kluge
F Hees
Uranium
S Pevely
Rio Tinto
Rio Tinto
Rio Tinto
Rio Tinto
Rio Tinto
Consultant – Snowden Group
Rio Tinto
Rio Tinto
Rio Tinto
Rio Tinto
Reserves
Reserves
Resources and Reserves
Diavik
Resources
Resources
Resources
Reserves
Resources
Reserves
Reserves
Resources
Resources
Resources
Reserves
Reserves
Reserves
Reserves
Reserves
Reserves
Resources
Resources
Resources
Resources
Reserves
Reserves
Resources
Resources
Reserves
Resources
Simandou
Iron Ore Company of Canada
Rio Tinto Iron Ore – Boolgeeda, Brockman, Brockman
Process Ore, Channel Iron Deposit, Detrital, Marra
Mamba
Rio Tinto Iron Ore – Brockman Ore, Marra Mamba
Ore, Pisolite (Channel Iron) Ore
Jadar(e)
Rio Tinto Fer et Titane (RTFT)
Richards Bay Minerals (RBM)(f)
QMM Madagascar Minerals(f)
AusIMM
Rio Tinto
Resources and Reserves
Energy Resources of Australia - Jabiluka
(a) AusIMM: Australasian Institute of Mining and Metallurgy
EFG: European Federation of Geologists
NAPEG: Association of Professional Engineers; Geologists and Geophysicists of the Northwest Territories
OGQ: L’Ordre des Géologues du Québec
OIQ: L’Ordre des Ingénieurs du Québec
PEGNL: Professional Engineers and Geoscientists Newfoundland and Labrador
SACNASP: South African Council for Natural Scientific Professions
SAIMM: Southern African Institute of Mining and Metallurgy
SME: Society of Mining, Metallurgy and Exploration
(b) Includes gold
(c) Includes molybdenum
(d) Includes silver
(e) Includes borates
(f) Includes zircon
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379
Mines and production facilities
Group mines as at 31 December 2021
Iron Ore
Production properties
Property
Mine
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
/ type of mine
Type of mineralisation
available facilities
Power source
Property description
Processing plants and other
Australian Pilbara
Operations
Hamersley Iron:
100% Rio Tinto
Rio Tinto
Channar was
previously 60%
owned by Rio Tinto
(through Channar
Mining Pty Ltd) and
40% by Sinosteel
Corporation
(Sinosteel Channar
Pty Ltd). Ownership
transferred to 100%
Rio Tinto following
completion of the
Channar Mining
Joint Venture
arrangement during
2020.
Brockman 2
Brockman 4
Channar
Gudai-Darri
Marandoo
Mount Tom Price
Nammuldi
Paraburdoo
Silvergrass
Western Turner
Syncline
Yandicoogina
Pilbara
region,
Western
Australia
Access and infrastructure within
the property includes:
– a network of sealed and
unsealed roads connecting to
public roads and highways;
– public and Rio Tinto-operated
airports;
– a Hamersley and Robe owned
integrated heavy haulage rail
network, operated by Pilbara
Iron comprising in excess of
1,890km of rail, multiple rail
cars and locomotives;
– four shipping terminals, located
at Dampier and Cape Lambert
and managed as a single
port system;
– water piping networks for both
abstracted water and supply of
fresh water to sites;
– managed accommodation
villages for FIFO sites;
– a housing portfolio managing
properties in the towns of
Dampier, Wickham, Karratha,
Pannawonica, Paraburdoo and
Tom Price;
– tailings storage facilities at
several mine sites.
All assets are subject to routine
inspections and ongoing
investment and maintenance
programmes to ensure these
remain fit-for-purpose.
Agreements for life of mine
with Government of Western
Australia, save for the
Yandicoogina mining lease,
which expires in 2039 with
an option to extend for
21 years.
Mount Tom Price, Marandoo,
Brockman 2, Brockman 4,
Nammuldi and Western
Turner Syncline Mineral and
Mining Leases held under
Iron Ore (Hamersley Range)
Agreement Act 1963.
Area of ML4SA subject to
current mining operations
approx 13,862 ha.
Area of M272SA subject to
current mining operations
approx 2,154 ha.
Gudai-Darri Mineral Lease
held under Iron Ore (Mount
Bruce) Agreement Act 1972.
Area of ML252SA subject to
current mining operations
approx 1,954 ha.
Paraburdoo and Eastern
Range Mineral Lease held
under Iron Ore (Hamersley
Range) Agreement Act
1968.
Area of ML246SA subject to
current mining operations
approx 1,990 ha
Channar Mining Lease held
under Iron Ore (Channar
Joint Venture) Agreement
Act 1987.
Mining lease expires in 2028
with an option to extend by
up to five years.
Area of M265SA subject to
current mining operations
approx 1,955 ha.
Yandicoogina Mining Lease
held under Iron Ore
(Yandicoogina) Agreement
Act 1996.
Area of M274SA subject to
current mining operations
approx 4,723 ha.
380
Annual Report 2021 | riotinto.com
State Agreement conditions
Mount Tom Price began
All mines
Brockman 2, Brockman 4,
At Brockman 2, Brockman 4,
Supplied through the
are set by the Western
operations in 1966,
operated by
Channar, Gudai-Darri, Tom
the Nammuldi dry plant and
integrated Hamersley
Australian Government and
followed by Paraburdoo
Rio Tinto within
Price, Paraburdoo and
Gudai-Darri, dry crushing and
and Robe power
broadly comprise
in 1974. During the
the property
Western Turner Syncline:
screening is used to produce
network operated by
environmental compliance
1990s, Channar (1990),
are open pit
mineralisation is haematite/
lump and fines iron ore
Pilbara Iron.
and reporting obligations;
Brockman 2 (1992),
mines. The
goethite mineralisation
products. Ore from the
closure and rehabilitation
Marandoo (1994) and
mining method
hosted within the banded
Silvergrass and Nammuldi
considerations; local
procurement and
community initiatives/
Yandicoogina (1998)
employed uses
iron formations of the
mines is blended and
achieved first ore.
conventional
Brockman Formation.
processed through a wet
Nammuldi achieved first
surface mining,
Detrital deposits also occur
scrubbing and screening
investment requirements;
ore in 2006 followed by
whereby
at these sites. At Tom Price
plant, ahead of desliming of
and payment of taxes and
Brockman 4 (2010),
shovels and
and Western Turner
the fines product using
government royalties.
Western Turner Syncline
loaders are
Syncline, some goethite/
hydrocyclones. At Marandoo,
(2011) and Silvergrass
used to load
haematite mineralisation
wet scrubbing and screening
(2017).The latest
drilled and
hosted within the Marra
is used to produce lump and
addition to the network
blasted
Mamba Formation also
fines iron ore products, prior
The current business also
operates under an
Indigenous Land Use
Agreement (ILUA) which
includes commitments for
payments made to trust
accounts; indigenous
employment and business
opportunities; and heritage
and cultural protections.
of Hamersley Iron mines
material into
occurs.
will be Gudai-Darri,
where first ore is now
trucks for
removal to
expected in the second
waste dumps
quarter of 2022, subject
or feed to
to the continuing
impacts of COVID-19.
process plants.
Marandoo and Silvergrass:
mineralisation occurs as
goethite/ haematite within
the banded iron formations
of the Marra Mamba
In addition to
Formation. Some detrital
mineralisation also occurs.
mining
activities,
Rio Tinto
conducts both
exploration and
development
drilling across
the property.
Yandicoogina: goethite
mineralisation occurs as
pisolite ores within the
paleo-channel of a channel
iron formation.
to desliming of fines products
using hydrocyclones. Ore
from the Channar and
Paraburdoo mines is crushed
and then processed through
a central tertiary crushing
and dry screening plant to
produce a dry lump product,
with further wet processing
of the fines using
hydrocyclones to remove
slimes. Ore from the Tom
Price and Western Turner
Syncline mines is directed to
either the high grade plant
for dry crushing and
screening to dry lump and
fines products, or to the low
grade plant for beneficiation.
Heavy media separation is
used to beneficiate low grade
lump, and a combination of
heavy media hydrocyclones
and spirals is used to
beneficiate the low grade
fines. At Yandi, ore is crushed
to fines product only through
a combination of dry crushing
and screening, or crushing
and wet processing of ore
using classification to remove
finer particles.
The processing plants within
the Hamersley Iron network
vary considerably in age, and
many plants have been
subject to brownfields
development since original
construction. All plants are
subject to an ongoing regime
of sustaining capital
investment and maintenance,
underpinned by asset
integrity audits, engineering
inspections, engineering life
cycles for key equipment and
safety inspections and audits.
Production, Ore Reserves, Mineral Resources and Operations
Property
Property
Mine
Mine
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description
Property description
/ type of mine
/ type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other
Processing plants and other
available facilities
available facilities
Power source
Power source
State Agreement conditions
State Agreement conditions
are set by the Western
are set by the Western
Australian Government and
Australian Government and
broadly comprise
broadly comprise
environmental compliance
environmental compliance
and reporting obligations;
and reporting obligations;
closure and rehabilitation
closure and rehabilitation
considerations; local
considerations; local
procurement and
procurement and
community initiatives/
community initiatives/
investment requirements;
investment requirements;
and payment of taxes and
and payment of taxes and
government royalties.
government royalties.
The current business also
The current business also
operates under an
operates under an
Indigenous Land Use
Indigenous Land Use
Agreement (ILUA) which
Agreement (ILUA) which
includes commitments for
includes commitments for
payments made to trust
payments made to trust
accounts; indigenous
accounts; indigenous
employment and business
employment and business
opportunities; and heritage
opportunities; and heritage
and cultural protections.
and cultural protections.
Mount Tom Price began
Mount Tom Price began
operations in 1966,
operations in 1966,
followed by Paraburdoo
followed by Paraburdoo
in 1974. During the
in 1974. During the
1990s, Channar (1990),
1990s, Channar (1990),
Brockman 2 (1992),
Brockman 2 (1992),
Marandoo (1994) and
Marandoo (1994) and
Yandicoogina (1998)
Yandicoogina (1998)
achieved first ore.
achieved first ore.
Nammuldi achieved first
Nammuldi achieved first
ore in 2006 followed by
ore in 2006 followed by
Brockman 4 (2010),
Brockman 4 (2010),
Western Turner Syncline
Western Turner Syncline
(2011) and Silvergrass
(2011) and Silvergrass
(2017).The latest
(2017).The latest
addition to the network
addition to the network
of Hamersley Iron mines
of Hamersley Iron mines
will be Gudai-Darri,
will be Gudai-Darri,
where first ore is now
where first ore is now
expected in the second
expected in the second
quarter of 2022, subject
quarter of 2022, subject
to the continuing
to the continuing
impacts of COVID-19.
impacts of COVID-19.
All mines
All mines
operated by
operated by
Rio Tinto within
Rio Tinto within
the property
the property
are open pit
are open pit
mines. The
mines. The
mining method
mining method
employed uses
employed uses
conventional
conventional
surface mining,
surface mining,
whereby
whereby
shovels and
shovels and
loaders are
loaders are
used to load
used to load
drilled and
drilled and
blasted
blasted
material into
material into
trucks for
trucks for
removal to
removal to
waste dumps
waste dumps
or feed to
or feed to
process plants.
process plants.
In addition to
In addition to
mining
mining
activities,
activities,
Rio Tinto
Rio Tinto
conducts both
conducts both
exploration and
exploration and
development
development
drilling across
drilling across
the property.
the property.
Brockman 2, Brockman 4,
Brockman 2, Brockman 4,
Channar, Gudai-Darri, Tom
Channar, Gudai-Darri, Tom
Price, Paraburdoo and
Price, Paraburdoo and
Western Turner Syncline:
Western Turner Syncline:
mineralisation is haematite/
mineralisation is haematite/
goethite mineralisation
goethite mineralisation
hosted within the banded
hosted within the banded
iron formations of the
iron formations of the
Brockman Formation.
Brockman Formation.
Detrital deposits also occur
Detrital deposits also occur
at these sites. At Tom Price
at these sites. At Tom Price
and Western Turner
and Western Turner
Syncline, some goethite/
Syncline, some goethite/
haematite mineralisation
haematite mineralisation
hosted within the Marra
hosted within the Marra
Mamba Formation also
Mamba Formation also
occurs.
occurs.
Marandoo and Silvergrass:
Marandoo and Silvergrass:
mineralisation occurs as
mineralisation occurs as
goethite/ haematite within
goethite/ haematite within
the banded iron formations
the banded iron formations
of the Marra Mamba
of the Marra Mamba
Formation. Some detrital
Formation. Some detrital
mineralisation also occurs.
mineralisation also occurs.
Yandicoogina: goethite
Yandicoogina: goethite
mineralisation occurs as
mineralisation occurs as
pisolite ores within the
pisolite ores within the
paleo-channel of a channel
paleo-channel of a channel
iron formation.
iron formation.
Supplied through the
Supplied through the
integrated Hamersley
integrated Hamersley
and Robe power
and Robe power
network operated by
network operated by
Pilbara Iron.
Pilbara Iron.
At Brockman 2, Brockman 4,
At Brockman 2, Brockman 4,
the Nammuldi dry plant and
the Nammuldi dry plant and
Gudai-Darri, dry crushing and
Gudai-Darri, dry crushing and
screening is used to produce
screening is used to produce
lump and fines iron ore
lump and fines iron ore
products. Ore from the
products. Ore from the
Silvergrass and Nammuldi
Silvergrass and Nammuldi
mines is blended and
mines is blended and
processed through a wet
processed through a wet
scrubbing and screening
scrubbing and screening
plant, ahead of desliming of
plant, ahead of desliming of
the fines product using
the fines product using
hydrocyclones. At Marandoo,
hydrocyclones. At Marandoo,
wet scrubbing and screening
wet scrubbing and screening
is used to produce lump and
is used to produce lump and
fines iron ore products, prior
fines iron ore products, prior
to desliming of fines products
to desliming of fines products
using hydrocyclones. Ore
using hydrocyclones. Ore
from the Channar and
from the Channar and
Paraburdoo mines is crushed
Paraburdoo mines is crushed
and then processed through
and then processed through
a central tertiary crushing
a central tertiary crushing
and dry screening plant to
and dry screening plant to
produce a dry lump product,
produce a dry lump product,
with further wet processing
with further wet processing
of the fines using
of the fines using
hydrocyclones to remove
hydrocyclones to remove
slimes. Ore from the Tom
slimes. Ore from the Tom
Price and Western Turner
Price and Western Turner
Syncline mines is directed to
Syncline mines is directed to
either the high grade plant
either the high grade plant
for dry crushing and
for dry crushing and
screening to dry lump and
screening to dry lump and
fines products, or to the low
fines products, or to the low
grade plant for beneficiation.
grade plant for beneficiation.
Heavy media separation is
Heavy media separation is
used to beneficiate low grade
used to beneficiate low grade
lump, and a combination of
lump, and a combination of
heavy media hydrocyclones
heavy media hydrocyclones
and spirals is used to
and spirals is used to
beneficiate the low grade
beneficiate the low grade
fines. At Yandi, ore is crushed
fines. At Yandi, ore is crushed
to fines product only through
to fines product only through
a combination of dry crushing
a combination of dry crushing
and screening, or crushing
and screening, or crushing
and wet processing of ore
and wet processing of ore
using classification to remove
using classification to remove
finer particles.
finer particles.
The processing plants within
The processing plants within
the Hamersley Iron network
the Hamersley Iron network
vary considerably in age, and
vary considerably in age, and
many plants have been
many plants have been
subject to brownfields
subject to brownfields
development since original
development since original
construction. All plants are
construction. All plants are
subject to an ongoing regime
subject to an ongoing regime
of sustaining capital
of sustaining capital
investment and maintenance,
investment and maintenance,
underpinned by asset
underpinned by asset
integrity audits, engineering
integrity audits, engineering
inspections, engineering life
inspections, engineering life
cycles for key equipment and
cycles for key equipment and
safety inspections and audits.
safety inspections and audits.
Australian Pilbara
Australian Pilbara
Hamersley Iron:
Hamersley Iron:
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Access and infrastructure within
Access and infrastructure within
Agreements for life of mine
Agreements for life of mine
Operations
Operations
Pilbara
Pilbara
region,
region,
Western
Western
Australia
Australia
Mines and production facilities
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Iron Ore
Iron Ore
Production properties
Production properties
Channar was
Channar was
previously 60%
previously 60%
owned by Rio Tinto
owned by Rio Tinto
(through Channar
(through Channar
Mining Pty Ltd) and
Mining Pty Ltd) and
40% by Sinosteel
40% by Sinosteel
Corporation
Corporation
(Sinosteel Channar
(Sinosteel Channar
Pty Ltd). Ownership
Pty Ltd). Ownership
transferred to 100%
transferred to 100%
Rio Tinto following
Rio Tinto following
completion of the
completion of the
Channar Mining
Channar Mining
Joint Venture
Joint Venture
arrangement during
arrangement during
2020.
2020.
Brockman 2
Brockman 2
Brockman 4
Brockman 4
Channar
Channar
Gudai-Darri
Gudai-Darri
Marandoo
Marandoo
Nammuldi
Nammuldi
Paraburdoo
Paraburdoo
Silvergrass
Silvergrass
Mount Tom Price
Mount Tom Price
Western Turner
Western Turner
Syncline
Syncline
Yandicoogina
Yandicoogina
the property includes:
the property includes:
– a network of sealed and
– a network of sealed and
unsealed roads connecting to
unsealed roads connecting to
public roads and highways;
public roads and highways;
– public and Rio Tinto-operated
– public and Rio Tinto-operated
airports;
airports;
– a Hamersley and Robe owned
– a Hamersley and Robe owned
integrated heavy haulage rail
integrated heavy haulage rail
network, operated by Pilbara
network, operated by Pilbara
Iron comprising in excess of
Iron comprising in excess of
1,890km of rail, multiple rail
1,890km of rail, multiple rail
cars and locomotives;
cars and locomotives;
– four shipping terminals, located
– four shipping terminals, located
at Dampier and Cape Lambert
at Dampier and Cape Lambert
and managed as a single
and managed as a single
port system;
port system;
– water piping networks for both
– water piping networks for both
abstracted water and supply of
abstracted water and supply of
fresh water to sites;
fresh water to sites;
– managed accommodation
– managed accommodation
villages for FIFO sites;
villages for FIFO sites;
– a housing portfolio managing
– a housing portfolio managing
properties in the towns of
properties in the towns of
Dampier, Wickham, Karratha,
Dampier, Wickham, Karratha,
Pannawonica, Paraburdoo and
Pannawonica, Paraburdoo and
Tom Price;
Tom Price;
– tailings storage facilities at
– tailings storage facilities at
several mine sites.
several mine sites.
All assets are subject to routine
All assets are subject to routine
inspections and ongoing
inspections and ongoing
investment and maintenance
investment and maintenance
programmes to ensure these
programmes to ensure these
remain fit-for-purpose.
remain fit-for-purpose.
with Government of Western
with Government of Western
Australia, save for the
Australia, save for the
Yandicoogina mining lease,
Yandicoogina mining lease,
which expires in 2039 with
which expires in 2039 with
an option to extend for
an option to extend for
21 years.
21 years.
Mount Tom Price, Marandoo,
Mount Tom Price, Marandoo,
Brockman 2, Brockman 4,
Brockman 2, Brockman 4,
Nammuldi and Western
Nammuldi and Western
Turner Syncline Mineral and
Turner Syncline Mineral and
Mining Leases held under
Mining Leases held under
Iron Ore (Hamersley Range)
Iron Ore (Hamersley Range)
Agreement Act 1963.
Agreement Act 1963.
Area of ML4SA subject to
Area of ML4SA subject to
current mining operations
current mining operations
approx 13,862 ha.
approx 13,862 ha.
Area of M272SA subject to
Area of M272SA subject to
current mining operations
current mining operations
approx 2,154 ha.
approx 2,154 ha.
Gudai-Darri Mineral Lease
Gudai-Darri Mineral Lease
held under Iron Ore (Mount
held under Iron Ore (Mount
Bruce) Agreement Act 1972.
Bruce) Agreement Act 1972.
Area of ML252SA subject to
Area of ML252SA subject to
current mining operations
current mining operations
approx 1,954 ha.
approx 1,954 ha.
Paraburdoo and Eastern
Paraburdoo and Eastern
Range Mineral Lease held
Range Mineral Lease held
under Iron Ore (Hamersley
under Iron Ore (Hamersley
Range) Agreement Act
Range) Agreement Act
1968.
1968.
Area of ML246SA subject to
Area of ML246SA subject to
current mining operations
current mining operations
approx 1,990 ha
approx 1,990 ha
Channar Mining Lease held
Channar Mining Lease held
under Iron Ore (Channar
under Iron Ore (Channar
Joint Venture) Agreement
Joint Venture) Agreement
Act 1987.
Act 1987.
Mining lease expires in 2028
Mining lease expires in 2028
with an option to extend by
with an option to extend by
up to five years.
up to five years.
Area of M265SA subject to
Area of M265SA subject to
current mining operations
current mining operations
approx 1,955 ha.
approx 1,955 ha.
Yandicoogina Mining Lease
Yandicoogina Mining Lease
held under Iron Ore
held under Iron Ore
(Yandicoogina) Agreement
(Yandicoogina) Agreement
Act 1996.
Act 1996.
Area of M274SA subject to
Area of M274SA subject to
current mining operations
current mining operations
approx 4,723 ha.
approx 4,723 ha.
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381
Mines and production facilities continued
Group mines as at 31 December 2021
Iron Ore continued
Property Mine
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Type of mineralisation
facilities
Power source
Property description /
type of mine
Processing plants and other available
Mineral lease expires in 2028 with
successive options to extend by
21 years.
Mineral lease held under Iron Ore
(Hamersley Range) Agreement
Act 1968.
Area of ML4SA subject to current
mining operations approx
1,048 ha.
State Agreement conditions are
The Bao-Hi joint
All mines operated
Mineralisation at
Ore from the Eastern Range mine
Supplied through
set by the Western Australian
venture was
by Rio Tinto within
Eastern Range
is crushed and then processed
the integrated
Government and broadly
comprise environmental
compliance and reporting
obligations; closure and
established in 2002
the property are
occurs as
through the central Paraburdoo
Hamersley and
and has delivered
open pit mines.
haematite/goethite
tertiary crushing and dry
Robe power
sales of more than
The mining method
mineralisation
screening plant to produce
network operated
200 million tonnes
employed uses
hosted within the
a dry lump product, with further
by Pilbara Iron.
rehabilitation considerations;
of iron ore to China.
conventional
banded iron
wet processing of the fines
local procurement and community
First ore from
surface mining,
formations of the
product using hydrocyclones
initiatives/investment
Eastern Range was
whereby shovels
requirements; and payment of
delivered in 2004.
and loaders are
Brockman
Formation.
to remove slimes.
Mining lease expires in 2027 with
two options to extend of 21 years
each.
Mining lease held under Iron Ore
(Hope Downs) Agreement Act
1992.
Area of M282SA subject to
current mining operations approx
4,079 ha.
State Agreement conditions are
Joint venture
All mines operated
Mineralisation at
Ore from Hope Downs 1 is
set by the Western Australian
between Rio Tinto
by Rio Tinto within
Hope Downs 1
processed through the Hope
Supplied through
the integrated
Government and broadly
comprise environmental
compliance and reporting
obligations; closure and
and Hancock
Prospecting.
the property are
open pit mines.
occurs as goethite/
Downs 1 processing plant, which
Hamersley and
haematite within
utilises dry crushing and
Robe power
Construction of
The mining method
the banded iron
screening to produce lump and
network operated
Stage 1 to
employed uses
formations of the
fines iron ore products.
by Pilbara Iron
rehabilitation considerations;
22 million tonnes
conventional
Marra Mamba
local procurement and community
per annum
surface mining,
Formation. Some
initiatives/investment
commenced 2006
whereby shovels
detrital
requirements; and payment of
and first production
and loaders are
mineralisation also
taxes and government royalties.
occurred 2007.
used to load drilled
occurs.
taxes and government royalties.
The current business also
operates under an Indigenous
Land Use Agreement (ILUA)
which includes commitments for
payments made to trust accounts;
indigenous employment and
business opportunities; and
heritage and cultural protections.
used to load drilled
and blasted
material into trucks
for removal to
waste dumps or
feed to process
plants.
In addition to
mining activities,
Rio Tinto conducts
both exploration
and development
drilling across the
property.
The current business also
operates under an Indigenous
Land Use Agreement (ILUA)
which includes commitments for
payments made to trust accounts;
indigenous employment and
business opportunities; and
heritage and cultural protections.
Stage 2 to
and blasted
30 million tonnes
material into trucks
per annum
completed 2009.
for removal to
waste dumps or
feed to process
plants.
In addition to
mining activities,
Rio Tinto conducts
both exploration
and development
drilling across the
property.
The processing plants within the
Hamersley Iron network vary
considerably in age, and many
plants have been subject to
brownfields development since
original construction. All plants
are subject to an ongoing regime
of sustaining capital investment
and maintenance, underpinned by
asset integrity audits, engineering
inspections, engineering life
cycles for key equipment and
safety inspections and audits.
The processing plants within the
Hamersley Iron network vary
considerably in age, and many
plants have been subject to
brownfields development since
original construction. All plants
are subject to an ongoing regime
of sustaining capital investment
and maintenance, underpinned by
asset integrity audits, engineering
inspections, engineering life
cycles for key equipment and
safety inspections and audits.
Eastern
Range
54% Rio Tinto.
Rio Tinto
Rio Tinto owns
54% of the
Bao-Hi joint
venture with
the remaining
46% held by
China Baowu
Pilbara
region,
Western
Australia
Access and infrastructure within the property includes:
– a network of sealed and unsealed roads connecting to
public roads and highways;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
these remain fit-for-purpose.
Hope
Downs 1
50% Rio Tinto.
Rio Tinto
50% Hancock
Prospecting
Pty Ltd
Pilbara
region,
Western
Australia
Access and infrastructure within the property includes:
– a network of sealed and unsealed roads connecting to
public roads and highways;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
these remain fit-for-purpose.
382
Annual Report 2021 | riotinto.com
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Property Mine
Property Mine
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description /
Property description /
type of mine
type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other available
Processing plants and other available
facilities
facilities
Power source
Power source
The Bao-Hi joint
The Bao-Hi joint
venture was
venture was
established in 2002
established in 2002
and has delivered
and has delivered
sales of more than
sales of more than
200 million tonnes
200 million tonnes
of iron ore to China.
of iron ore to China.
First ore from
First ore from
Eastern Range was
Eastern Range was
delivered in 2004.
delivered in 2004.
State Agreement conditions are
State Agreement conditions are
set by the Western Australian
set by the Western Australian
Government and broadly
Government and broadly
comprise environmental
comprise environmental
compliance and reporting
compliance and reporting
obligations; closure and
obligations; closure and
rehabilitation considerations;
rehabilitation considerations;
local procurement and community
local procurement and community
initiatives/investment
initiatives/investment
requirements; and payment of
requirements; and payment of
taxes and government royalties.
taxes and government royalties.
The current business also
The current business also
operates under an Indigenous
operates under an Indigenous
Land Use Agreement (ILUA)
Land Use Agreement (ILUA)
which includes commitments for
which includes commitments for
payments made to trust accounts;
payments made to trust accounts;
indigenous employment and
indigenous employment and
business opportunities; and
business opportunities; and
heritage and cultural protections.
heritage and cultural protections.
Joint venture
Joint venture
between Rio Tinto
between Rio Tinto
and Hancock
and Hancock
Prospecting.
Prospecting.
Construction of
Construction of
Stage 1 to
Stage 1 to
22 million tonnes
22 million tonnes
per annum
per annum
commenced 2006
commenced 2006
and first production
and first production
occurred 2007.
occurred 2007.
Stage 2 to
Stage 2 to
30 million tonnes
30 million tonnes
per annum
per annum
completed 2009.
completed 2009.
State Agreement conditions are
State Agreement conditions are
set by the Western Australian
set by the Western Australian
Government and broadly
Government and broadly
comprise environmental
comprise environmental
compliance and reporting
compliance and reporting
obligations; closure and
obligations; closure and
rehabilitation considerations;
rehabilitation considerations;
local procurement and community
local procurement and community
initiatives/investment
initiatives/investment
requirements; and payment of
requirements; and payment of
taxes and government royalties.
taxes and government royalties.
The current business also
The current business also
operates under an Indigenous
operates under an Indigenous
Land Use Agreement (ILUA)
Land Use Agreement (ILUA)
which includes commitments for
which includes commitments for
payments made to trust accounts;
payments made to trust accounts;
indigenous employment and
indigenous employment and
business opportunities; and
business opportunities; and
heritage and cultural protections.
heritage and cultural protections.
All mines operated
All mines operated
by Rio Tinto within
by Rio Tinto within
the property are
the property are
open pit mines.
open pit mines.
The mining method
The mining method
employed uses
employed uses
conventional
conventional
surface mining,
surface mining,
whereby shovels
whereby shovels
and loaders are
and loaders are
used to load drilled
used to load drilled
and blasted
and blasted
material into trucks
material into trucks
for removal to
for removal to
waste dumps or
waste dumps or
feed to process
feed to process
plants.
plants.
In addition to
In addition to
mining activities,
mining activities,
Rio Tinto conducts
Rio Tinto conducts
both exploration
both exploration
and development
and development
drilling across the
drilling across the
property.
property.
All mines operated
All mines operated
by Rio Tinto within
by Rio Tinto within
the property are
the property are
open pit mines.
open pit mines.
The mining method
The mining method
employed uses
employed uses
conventional
conventional
surface mining,
surface mining,
whereby shovels
whereby shovels
and loaders are
and loaders are
used to load drilled
used to load drilled
and blasted
and blasted
material into trucks
material into trucks
for removal to
for removal to
waste dumps or
waste dumps or
feed to process
feed to process
plants.
plants.
In addition to
In addition to
mining activities,
mining activities,
Rio Tinto conducts
Rio Tinto conducts
both exploration
both exploration
and development
and development
drilling across the
drilling across the
property.
property.
Supplied through
Supplied through
the integrated
the integrated
Hamersley and
Hamersley and
Robe power
Robe power
network operated
network operated
by Pilbara Iron.
by Pilbara Iron.
Mineralisation at
Mineralisation at
Eastern Range
Eastern Range
occurs as
occurs as
haematite/goethite
haematite/goethite
mineralisation
mineralisation
hosted within the
hosted within the
banded iron
banded iron
formations of the
formations of the
Brockman
Brockman
Formation.
Formation.
Ore from the Eastern Range mine
Ore from the Eastern Range mine
is crushed and then processed
is crushed and then processed
through the central Paraburdoo
through the central Paraburdoo
tertiary crushing and dry
tertiary crushing and dry
screening plant to produce
screening plant to produce
a dry lump product, with further
a dry lump product, with further
wet processing of the fines
wet processing of the fines
product using hydrocyclones
product using hydrocyclones
to remove slimes.
to remove slimes.
The processing plants within the
The processing plants within the
Hamersley Iron network vary
Hamersley Iron network vary
considerably in age, and many
considerably in age, and many
plants have been subject to
plants have been subject to
brownfields development since
brownfields development since
original construction. All plants
original construction. All plants
are subject to an ongoing regime
are subject to an ongoing regime
of sustaining capital investment
of sustaining capital investment
and maintenance, underpinned by
and maintenance, underpinned by
asset integrity audits, engineering
asset integrity audits, engineering
inspections, engineering life
inspections, engineering life
cycles for key equipment and
cycles for key equipment and
safety inspections and audits.
safety inspections and audits.
Mineralisation at
Mineralisation at
Hope Downs 1
Hope Downs 1
occurs as goethite/
occurs as goethite/
haematite within
haematite within
the banded iron
the banded iron
formations of the
formations of the
Marra Mamba
Marra Mamba
Formation. Some
Formation. Some
detrital
detrital
mineralisation also
mineralisation also
occurs.
occurs.
Ore from Hope Downs 1 is
Ore from Hope Downs 1 is
processed through the Hope
processed through the Hope
Downs 1 processing plant, which
Downs 1 processing plant, which
utilises dry crushing and
utilises dry crushing and
screening to produce lump and
screening to produce lump and
fines iron ore products.
fines iron ore products.
Supplied through
Supplied through
the integrated
the integrated
Hamersley and
Hamersley and
Robe power
Robe power
network operated
network operated
by Pilbara Iron
by Pilbara Iron
The processing plants within the
The processing plants within the
Hamersley Iron network vary
Hamersley Iron network vary
considerably in age, and many
considerably in age, and many
plants have been subject to
plants have been subject to
brownfields development since
brownfields development since
original construction. All plants
original construction. All plants
are subject to an ongoing regime
are subject to an ongoing regime
of sustaining capital investment
of sustaining capital investment
and maintenance, underpinned by
and maintenance, underpinned by
asset integrity audits, engineering
asset integrity audits, engineering
inspections, engineering life
inspections, engineering life
cycles for key equipment and
cycles for key equipment and
safety inspections and audits.
safety inspections and audits.
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Iron Ore continued
Iron Ore continued
Eastern
Eastern
Range
Range
Rio Tinto owns
Rio Tinto owns
54% of the
54% of the
Bao-Hi joint
Bao-Hi joint
venture with
venture with
the remaining
the remaining
46% held by
46% held by
China Baowu
China Baowu
54% Rio Tinto.
54% Rio Tinto.
Rio Tinto
Rio Tinto
Access and infrastructure within the property includes:
Access and infrastructure within the property includes:
Mineral lease expires in 2028 with
Mineral lease expires in 2028 with
Pilbara
Pilbara
region,
region,
Western
Western
Australia
Australia
– a network of sealed and unsealed roads connecting to
– a network of sealed and unsealed roads connecting to
21 years.
21 years.
public roads and highways;
public roads and highways;
successive options to extend by
successive options to extend by
Mineral lease held under Iron Ore
Mineral lease held under Iron Ore
(Hamersley Range) Agreement
(Hamersley Range) Agreement
Act 1968.
Act 1968.
Area of ML4SA subject to current
Area of ML4SA subject to current
mining operations approx
mining operations approx
1,048 ha.
1,048 ha.
50% Rio Tinto.
50% Rio Tinto.
Rio Tinto
Rio Tinto
Access and infrastructure within the property includes:
Access and infrastructure within the property includes:
Mining lease expires in 2027 with
Mining lease expires in 2027 with
Hope
Hope
Downs 1
Downs 1
50% Hancock
50% Hancock
Prospecting
Prospecting
Pty Ltd
Pty Ltd
Pilbara
Pilbara
region,
region,
Western
Western
Australia
Australia
– a network of sealed and unsealed roads connecting to
– a network of sealed and unsealed roads connecting to
each.
each.
public roads and highways;
public roads and highways;
two options to extend of 21 years
two options to extend of 21 years
Mining lease held under Iron Ore
Mining lease held under Iron Ore
(Hope Downs) Agreement Act
(Hope Downs) Agreement Act
1992.
1992.
Area of M282SA subject to
Area of M282SA subject to
current mining operations approx
current mining operations approx
4,079 ha.
4,079 ha.
– public and Rio Tinto-operated airports;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
– water piping networks for both abstracted water and
supply of fresh water to sites;
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
investment and maintenance programmes to ensure
these remain fit-for-purpose.
these remain fit-for-purpose.
– public and Rio Tinto-operated airports;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
– water piping networks for both abstracted water and
supply of fresh water to sites;
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
investment and maintenance programmes to ensure
these remain fit-for-purpose.
these remain fit-for-purpose.
382
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383
Mines and production facilities continued
Group mines as at 31 December 2021
Iron Ore continued
Property Mine
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Type of mineralisation
facilities
Power source
Property description /
type of mine
Processing plants and other available
Hope
Downs 4
50% Rio Tinto.
Rio Tinto
50% Hancock
Prospecting
Pty Ltd
Pilbara
region,
Western
Australia
Access and infrastructure within the property includes:
– a network of sealed and unsealed roads connecting to
public roads and highways;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
these remain fit-for-purpose.
Mining lease expires in 2027
with two options to extend of
21 years each.
Mining lease held under Iron Ore
(Hope Downs) Agreement Act
1992.
Area of M282SA subject to
current mining operations approx
3,254 ha.
State Agreement conditions are
Joint venture
All mines operated
Mineralisation at
Ore from Hope Downs 4 is
set by the Western Australian
between Rio Tinto
by Rio Tinto within
Hope Downs 4
processed through the Hope
Government and broadly
comprise environmental
compliance and reporting
obligations; closure and
and Hancock
Prospecting.
the property are
open pit mines.
occurs as
Downs 4 processing plant.
haematite/goethite
Wet scrubbing and screening are
Robe power
Construction of wet
The mining method
mineralisation
used to separate lump and fines
network operated
plant processing to
employed uses
hosted within the
products, prior to desliming of
by Pilbara Iron.
Supplied through
the integrated
Hamersley and
rehabilitation considerations;
15 million tonnes
conventional
banded iron
fines product using
local procurement and community
per annum
surface mining,
formations of the
hydrocyclones.
initiatives/investment
commenced 2011
whereby shovels
requirements; and payment of
and first production
and loaders are
Brockman
Formation.
taxes and government royalties.
occurred 2013.
used to load drilled
The current business also
operates under an Indigenous
Land Use Agreement (ILUA)
which includes commitments for
payments made to trust accounts;
indigenous employment and
business opportunities; and
heritage and cultural protections.
and blasted
material into trucks
for removal to
waste dumps or
feed to process
plants.
In addition to
mining activities,
Rio Tinto conducts
both exploration
and development
activities across the
property.
The processing plants within the
Hamersley Iron network vary
considerably in age, and many
plants have been subject to
brownfields development since
original construction. All plants
are subject to an ongoing regime
of sustaining capital investment
and maintenance, underpinned by
asset integrity audits, engineering
inspections, engineering life
cycles for key equipment and
safety inspections and audits.
384
Annual Report 2021 | riotinto.com
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Iron Ore continued
Iron Ore continued
50% Rio Tinto.
50% Rio Tinto.
Rio Tinto
Rio Tinto
Access and infrastructure within the property includes:
Access and infrastructure within the property includes:
Mining lease expires in 2027
Mining lease expires in 2027
Hope
Hope
Downs 4
Downs 4
50% Hancock
50% Hancock
Prospecting
Prospecting
Pty Ltd
Pty Ltd
Pilbara
Pilbara
region,
region,
Western
Western
Australia
Australia
– a network of sealed and unsealed roads connecting to
– a network of sealed and unsealed roads connecting to
21 years each.
21 years each.
public roads and highways;
public roads and highways;
with two options to extend of
with two options to extend of
Mining lease held under Iron Ore
Mining lease held under Iron Ore
(Hope Downs) Agreement Act
(Hope Downs) Agreement Act
1992.
1992.
Area of M282SA subject to
Area of M282SA subject to
current mining operations approx
current mining operations approx
3,254 ha.
3,254 ha.
– public and Rio Tinto-operated airports;
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated heavy
– a Hamersley and Robe owned integrated heavy
haulage rail network, operated by Pilbara Iron
haulage rail network, operated by Pilbara Iron
comprising in excess of 1,890km of rail, multiple rail
comprising in excess of 1,890km of rail, multiple rail
cars and locomotives;
cars and locomotives;
– four shipping terminals, located at Dampier and Cape
– four shipping terminals, located at Dampier and Cape
Lambert and managed as a single port system;
Lambert and managed as a single port system;
– water piping networks for both abstracted water and
– water piping networks for both abstracted water and
supply of fresh water to sites;
supply of fresh water to sites;
– managed accommodation villages for FIFO sites;
– managed accommodation villages for FIFO sites;
– a housing portfolio managing properties in the towns
– a housing portfolio managing properties in the towns
of Dampier, Wickham, Karratha, Pannawonica,
of Dampier, Wickham, Karratha, Pannawonica,
Paraburdoo and Tom Price;
Paraburdoo and Tom Price;
– tailings storage facilities at several mine sites.
– tailings storage facilities at several mine sites.
All assets are subject to routine inspections and ongoing
All assets are subject to routine inspections and ongoing
investment and maintenance programmes to ensure
investment and maintenance programmes to ensure
these remain fit-for-purpose.
these remain fit-for-purpose.
Property Mine
Property Mine
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description /
Property description /
type of mine
type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other available
Processing plants and other available
facilities
facilities
Power source
Power source
Supplied through
Supplied through
the integrated
the integrated
Hamersley and
Hamersley and
Robe power
Robe power
network operated
network operated
by Pilbara Iron.
by Pilbara Iron.
State Agreement conditions are
State Agreement conditions are
set by the Western Australian
set by the Western Australian
Government and broadly
Government and broadly
comprise environmental
comprise environmental
compliance and reporting
compliance and reporting
obligations; closure and
obligations; closure and
rehabilitation considerations;
rehabilitation considerations;
local procurement and community
local procurement and community
initiatives/investment
initiatives/investment
requirements; and payment of
requirements; and payment of
taxes and government royalties.
taxes and government royalties.
Joint venture
Joint venture
between Rio Tinto
between Rio Tinto
and Hancock
and Hancock
Prospecting.
Prospecting.
Construction of wet
Construction of wet
plant processing to
plant processing to
15 million tonnes
15 million tonnes
per annum
per annum
commenced 2011
commenced 2011
and first production
and first production
occurred 2013.
occurred 2013.
The current business also
The current business also
operates under an Indigenous
operates under an Indigenous
Land Use Agreement (ILUA)
Land Use Agreement (ILUA)
which includes commitments for
which includes commitments for
payments made to trust accounts;
payments made to trust accounts;
indigenous employment and
indigenous employment and
business opportunities; and
business opportunities; and
heritage and cultural protections.
heritage and cultural protections.
Mineralisation at
Mineralisation at
Hope Downs 4
Hope Downs 4
occurs as
occurs as
haematite/goethite
haematite/goethite
mineralisation
mineralisation
hosted within the
hosted within the
banded iron
banded iron
formations of the
formations of the
Brockman
Brockman
Formation.
Formation.
Ore from Hope Downs 4 is
Ore from Hope Downs 4 is
processed through the Hope
processed through the Hope
Downs 4 processing plant.
Downs 4 processing plant.
Wet scrubbing and screening are
Wet scrubbing and screening are
used to separate lump and fines
used to separate lump and fines
products, prior to desliming of
products, prior to desliming of
fines product using
fines product using
hydrocyclones.
hydrocyclones.
The processing plants within the
The processing plants within the
Hamersley Iron network vary
Hamersley Iron network vary
considerably in age, and many
considerably in age, and many
plants have been subject to
plants have been subject to
brownfields development since
brownfields development since
original construction. All plants
original construction. All plants
are subject to an ongoing regime
are subject to an ongoing regime
of sustaining capital investment
of sustaining capital investment
and maintenance, underpinned by
and maintenance, underpinned by
asset integrity audits, engineering
asset integrity audits, engineering
inspections, engineering life
inspections, engineering life
cycles for key equipment and
cycles for key equipment and
safety inspections and audits.
safety inspections and audits.
All mines operated
All mines operated
by Rio Tinto within
by Rio Tinto within
the property are
the property are
open pit mines.
open pit mines.
The mining method
The mining method
employed uses
employed uses
conventional
conventional
surface mining,
surface mining,
whereby shovels
whereby shovels
and loaders are
and loaders are
used to load drilled
used to load drilled
and blasted
and blasted
material into trucks
material into trucks
for removal to
for removal to
waste dumps or
waste dumps or
feed to process
feed to process
plants.
plants.
In addition to
In addition to
mining activities,
mining activities,
Rio Tinto conducts
Rio Tinto conducts
both exploration
both exploration
and development
and development
activities across the
activities across the
property.
property.
384
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385
Mines and production facilities continued
Group mines as at 31 December 2021
Iron Ore continued
Property
Mine
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Type of mineralisation
facilities
Power source
Property description /
type of mine
Processing plants and other available
Robe River Iron
Associates:
Robe Valley
mines:
– Mesa A
– Mesa J
West Angelas
53% Rio Tinto.
Rio Tinto
Robe River is a
joint venture
between
Rio Tinto
(53%), Mitsui
Iron Ore
Development
(33%), and
Nippon Steel
Corporation
(14%)
Pilbara
region,
Western
Australia
Access and infrastructure within the
property includes:
Agreements for life of mine with
Government of Western Australia.
– a network of sealed and unsealed roads
connecting to public roads and
highways;
Mineral lease held under Iron Ore
(Robe River) Agreement
Act 1964.
State Agreement conditions are
First shipment in
All mines operated
Robe Valley
Ore from the Robe Valley mines
Supplied through
set by the Western Australian
Government and broadly
comprise environmental
compliance and reporting
obligations; closure and
1972 from Robe
Valley. Interest
acquired in 2000
through North
by Rio Tinto within
deposits: goethite
of Mesa A and Mesa J is
the property are
open pit mines.
mineralisation
processed through either dry
occurs as pisolite
crushing and screening plants or
Robe power
The mining method
ores within the
through wet processing plants
network operated
the integrated
Hamersley and
Limited acquisition.
employed uses
paleo-channel of a
using scrubbing and screening to
by Pilbara Iron.
– public and Rio Tinto-operated airports;
– a Hamersley and Robe owned integrated
heavy haulage rail network, operated by
Pilbara Iron comprising in excess of
1,890km of rail, multiple rail cars
and locomotives;
– four shipping terminals, located at
Dampier and Cape Lambert and
managed as a single port system;
– water piping networks for both
abstracted water and supply of fresh
water to sites;
– managed accommodation villages for
FIFO sites;
– a housing portfolio managing properties
in the towns of Dampier, Wickham,
Karratha, Pannawonica, Paraburdoo and
Tom Price;
– tailings storage facilities at several
mine sites.
All assets are subject to routine
inspections and ongoing investment and
maintenance programmes to ensure these
remain fit-for-purpose.
Area of ML248SA subject to
current mining operations approx
11,563 ha.
rehabilitation considerations;
First ore was
conventional
local procurement and community
shipped from West
surface mining,
channel iron
formation.
initiatives/investment
Angelas in 2002.
requirements; and payment of
taxes and government royalties.
The current business also
operates under an Indigenous
Land Use Agreement (ILUA)
which includes commitments for
payments made to trust accounts;
indigenous employment and
business opportunities; and
heritage and cultural protections.
remove finer particles. Crushed
and deslimed ore from the Robe
Valley mines is railed to Cape
Lambert, where further dry
crushing and screening through a
dedicated processing plant
produces lump and fines iron ore
products.
whereby shovels
and loaders are
used to load drilled
and blasted
material into trucks
for removal to
waste dumps or
feed to process
plants.
Mineralisation at
West Angelas
occurs as goethite/
haematite within
the banded iron
formations of the
Marra Mamba
At West Angelas mine, dry
Formation. Some
crushing and screening is used to
detrital
produce lump and fines iron ore
In addition to
mineralisation also
products.
mining activities,
occurs.
Rio Tinto conducts
both exploration
and development
drilling across the
property.
The processing plants within the
Hamersley Iron network vary
considerably in age, and many
plants have been subject to
brownfields development since
original construction. All plants
are subject to an ongoing regime
of sustaining capital investment
and maintenance, underpinned by
asset integrity audits, engineering
inspections, engineering life
cycles for key equipment and
safety inspections and audits.
Dampier Salt
Port Hedland,
Dampier and
Lake Macleod
Road and port
Rio Tinto
(Dampier
Salt
Limited)
Gascoyne
and Pilbara
regions,
Western
Australia
68.4%
Rio Tinto.
Dampier Salt is
a joint venture
between
Rio Tinto
(68%),
Marubeni
Corporation
(22%) and
Sojitz (10%)
Mining and mineral leases
expiring in 2034 at Dampier, 2029
at Port Hedland and 2031 at Lake
MacLeod.
Mineral leases are held under
Dampier Solar Salt Industry
Agreement Act 1967, Leslie Solar
Salt Industry Agreement Act 1966
and Evaporites (Lake MacLeod)
Agreement Act 1967 respectively.
State Agreement conditions are
Construction of the
Solar evaporation of
Salt is grown every
Salt is processed through a
set by the Western Australian
Dampier field
seawater at
year through solar
washing plant, consisting of
Long-term
contracts with
started in 1969; first
Dampier and Port
evaporation in
screening washbelts at Lake
Hamersley Iron and
shipment in 1972.
Hedland;
permanent
MacLeod, Screwbowl classifiers
Horizon Power and
Lake MacLeod was
underground brine
crystallising pans.
and static screens at Port
on-site generation.
Government and broadly
comprise environmental
compliance and reporting
obligations; closure and
rehabilitation considerations;
an operating field.
extraction of
local procurement and community
Port Hedland was
gypsum at Lake
initiatives/investment
acquired in 2001 as
MacLeod.
acquired in 1978 as
at Lake MacLeod;
requirements; and payment of
an operating field.
taxes and government royalties.
Gypsum is present
in the top layer
covering most of
the Lake Macleod.
Hedland and sizing screens,
counter-current classifiers with
dewatering screens and
centrifuges at Dampier. Dampier
produces shipping-ready product
for immediate shiploading.
Washed salt at Lake MacLeod and
Port Hedland is dewatered on
stockpiles.
Lake Macleod also mines and
processes gypsum in leaching
heaps.
386
Annual Report 2021 | riotinto.com
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Iron Ore continued
Iron Ore continued
Robe River Iron
Robe River Iron
53% Rio Tinto.
53% Rio Tinto.
Rio Tinto
Rio Tinto
Access and infrastructure within the
Access and infrastructure within the
Agreements for life of mine with
Agreements for life of mine with
property includes:
property includes:
Government of Western Australia.
Government of Western Australia.
Pilbara
Pilbara
region,
region,
Western
Western
Australia
Australia
– a network of sealed and unsealed roads
– a network of sealed and unsealed roads
Mineral lease held under Iron Ore
Mineral lease held under Iron Ore
connecting to public roads and
connecting to public roads and
(Robe River) Agreement
(Robe River) Agreement
highways;
highways;
Act 1964.
Act 1964.
– public and Rio Tinto-operated airports;
– public and Rio Tinto-operated airports;
Area of ML248SA subject to
Area of ML248SA subject to
current mining operations approx
current mining operations approx
– a Hamersley and Robe owned integrated
– a Hamersley and Robe owned integrated
heavy haulage rail network, operated by
heavy haulage rail network, operated by
11,563 ha.
11,563 ha.
Associates:
Associates:
Robe Valley
Robe Valley
joint venture
joint venture
Robe River is a
Robe River is a
mines:
mines:
– Mesa A
– Mesa A
– Mesa J
– Mesa J
West Angelas
West Angelas
between
between
Rio Tinto
Rio Tinto
(53%), Mitsui
(53%), Mitsui
Iron Ore
Iron Ore
Development
Development
(33%), and
(33%), and
Nippon Steel
Nippon Steel
Corporation
Corporation
(14%)
(14%)
Pilbara Iron comprising in excess of
Pilbara Iron comprising in excess of
1,890km of rail, multiple rail cars
1,890km of rail, multiple rail cars
and locomotives;
and locomotives;
– four shipping terminals, located at
– four shipping terminals, located at
Dampier and Cape Lambert and
Dampier and Cape Lambert and
managed as a single port system;
managed as a single port system;
– water piping networks for both
– water piping networks for both
abstracted water and supply of fresh
abstracted water and supply of fresh
water to sites;
water to sites;
– managed accommodation villages for
– managed accommodation villages for
FIFO sites;
FIFO sites;
– a housing portfolio managing properties
– a housing portfolio managing properties
in the towns of Dampier, Wickham,
in the towns of Dampier, Wickham,
Karratha, Pannawonica, Paraburdoo and
Karratha, Pannawonica, Paraburdoo and
Tom Price;
Tom Price;
mine sites.
mine sites.
– tailings storage facilities at several
– tailings storage facilities at several
All assets are subject to routine
All assets are subject to routine
inspections and ongoing investment and
inspections and ongoing investment and
maintenance programmes to ensure these
maintenance programmes to ensure these
remain fit-for-purpose.
remain fit-for-purpose.
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Property
Property
Mine
Mine
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description /
Property description /
type of mine
type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other available
Processing plants and other available
facilities
facilities
Power source
Power source
First shipment in
First shipment in
1972 from Robe
1972 from Robe
Valley. Interest
Valley. Interest
acquired in 2000
acquired in 2000
through North
through North
Limited acquisition.
Limited acquisition.
First ore was
First ore was
shipped from West
shipped from West
Angelas in 2002.
Angelas in 2002.
State Agreement conditions are
State Agreement conditions are
set by the Western Australian
set by the Western Australian
Government and broadly
Government and broadly
comprise environmental
comprise environmental
compliance and reporting
compliance and reporting
obligations; closure and
obligations; closure and
rehabilitation considerations;
rehabilitation considerations;
local procurement and community
local procurement and community
initiatives/investment
initiatives/investment
requirements; and payment of
requirements; and payment of
taxes and government royalties.
taxes and government royalties.
The current business also
The current business also
operates under an Indigenous
operates under an Indigenous
Land Use Agreement (ILUA)
Land Use Agreement (ILUA)
which includes commitments for
which includes commitments for
payments made to trust accounts;
payments made to trust accounts;
indigenous employment and
indigenous employment and
business opportunities; and
business opportunities; and
heritage and cultural protections.
heritage and cultural protections.
Robe Valley
Robe Valley
deposits: goethite
deposits: goethite
mineralisation
mineralisation
occurs as pisolite
occurs as pisolite
ores within the
ores within the
paleo-channel of a
paleo-channel of a
channel iron
channel iron
formation.
formation.
Mineralisation at
Mineralisation at
West Angelas
West Angelas
occurs as goethite/
occurs as goethite/
haematite within
haematite within
the banded iron
the banded iron
formations of the
formations of the
Marra Mamba
Marra Mamba
Formation. Some
Formation. Some
detrital
detrital
mineralisation also
mineralisation also
occurs.
occurs.
All mines operated
All mines operated
by Rio Tinto within
by Rio Tinto within
the property are
the property are
open pit mines.
open pit mines.
The mining method
The mining method
employed uses
employed uses
conventional
conventional
surface mining,
surface mining,
whereby shovels
whereby shovels
and loaders are
and loaders are
used to load drilled
used to load drilled
and blasted
and blasted
material into trucks
material into trucks
for removal to
for removal to
waste dumps or
waste dumps or
feed to process
feed to process
plants.
plants.
In addition to
In addition to
mining activities,
mining activities,
Rio Tinto conducts
Rio Tinto conducts
both exploration
both exploration
and development
and development
drilling across the
drilling across the
property.
property.
Dampier Salt
Dampier Salt
Port Hedland,
Port Hedland,
Dampier and
Dampier and
Lake Macleod
Lake Macleod
Gascoyne
Gascoyne
Road and port
Road and port
Rio Tinto
Rio Tinto
(Dampier
(Dampier
Salt
Salt
Limited)
Limited)
and Pilbara
and Pilbara
regions,
regions,
Western
Western
Australia
Australia
68.4%
68.4%
Rio Tinto.
Rio Tinto.
Dampier Salt is
Dampier Salt is
a joint venture
a joint venture
between
between
Rio Tinto
Rio Tinto
(68%),
(68%),
Marubeni
Marubeni
Corporation
Corporation
(22%) and
(22%) and
Sojitz (10%)
Sojitz (10%)
Mining and mineral leases
Mining and mineral leases
expiring in 2034 at Dampier, 2029
expiring in 2034 at Dampier, 2029
at Port Hedland and 2031 at Lake
at Port Hedland and 2031 at Lake
MacLeod.
MacLeod.
Mineral leases are held under
Mineral leases are held under
Dampier Solar Salt Industry
Dampier Solar Salt Industry
Agreement Act 1967, Leslie Solar
Agreement Act 1967, Leslie Solar
Salt Industry Agreement Act 1966
Salt Industry Agreement Act 1966
and Evaporites (Lake MacLeod)
and Evaporites (Lake MacLeod)
Agreement Act 1967 respectively.
Agreement Act 1967 respectively.
State Agreement conditions are
State Agreement conditions are
set by the Western Australian
set by the Western Australian
Government and broadly
Government and broadly
comprise environmental
comprise environmental
compliance and reporting
compliance and reporting
obligations; closure and
obligations; closure and
rehabilitation considerations;
rehabilitation considerations;
local procurement and community
local procurement and community
initiatives/investment
initiatives/investment
requirements; and payment of
requirements; and payment of
taxes and government royalties.
taxes and government royalties.
Construction of the
Construction of the
Dampier field
Dampier field
started in 1969; first
started in 1969; first
shipment in 1972.
shipment in 1972.
Lake MacLeod was
Lake MacLeod was
acquired in 1978 as
acquired in 1978 as
an operating field.
an operating field.
Port Hedland was
Port Hedland was
acquired in 2001 as
acquired in 2001 as
an operating field.
an operating field.
Solar evaporation of
Solar evaporation of
seawater at
seawater at
Dampier and Port
Dampier and Port
Hedland;
Hedland;
underground brine
underground brine
at Lake MacLeod;
at Lake MacLeod;
extraction of
extraction of
gypsum at Lake
gypsum at Lake
MacLeod.
MacLeod.
Salt is grown every
Salt is grown every
year through solar
year through solar
evaporation in
evaporation in
permanent
permanent
crystallising pans.
crystallising pans.
Gypsum is present
Gypsum is present
in the top layer
in the top layer
covering most of
covering most of
the Lake Macleod.
the Lake Macleod.
Supplied through
Supplied through
the integrated
the integrated
Hamersley and
Hamersley and
Robe power
Robe power
network operated
network operated
by Pilbara Iron.
by Pilbara Iron.
Long-term
Long-term
contracts with
contracts with
Hamersley Iron and
Hamersley Iron and
Horizon Power and
Horizon Power and
on-site generation.
on-site generation.
Ore from the Robe Valley mines
Ore from the Robe Valley mines
of Mesa A and Mesa J is
of Mesa A and Mesa J is
processed through either dry
processed through either dry
crushing and screening plants or
crushing and screening plants or
through wet processing plants
through wet processing plants
using scrubbing and screening to
using scrubbing and screening to
remove finer particles. Crushed
remove finer particles. Crushed
and deslimed ore from the Robe
and deslimed ore from the Robe
Valley mines is railed to Cape
Valley mines is railed to Cape
Lambert, where further dry
Lambert, where further dry
crushing and screening through a
crushing and screening through a
dedicated processing plant
dedicated processing plant
produces lump and fines iron ore
produces lump and fines iron ore
products.
products.
At West Angelas mine, dry
At West Angelas mine, dry
crushing and screening is used to
crushing and screening is used to
produce lump and fines iron ore
produce lump and fines iron ore
products.
products.
The processing plants within the
The processing plants within the
Hamersley Iron network vary
Hamersley Iron network vary
considerably in age, and many
considerably in age, and many
plants have been subject to
plants have been subject to
brownfields development since
brownfields development since
original construction. All plants
original construction. All plants
are subject to an ongoing regime
are subject to an ongoing regime
of sustaining capital investment
of sustaining capital investment
and maintenance, underpinned by
and maintenance, underpinned by
asset integrity audits, engineering
asset integrity audits, engineering
inspections, engineering life
inspections, engineering life
cycles for key equipment and
cycles for key equipment and
safety inspections and audits.
safety inspections and audits.
Salt is processed through a
Salt is processed through a
washing plant, consisting of
washing plant, consisting of
screening washbelts at Lake
screening washbelts at Lake
MacLeod, Screwbowl classifiers
MacLeod, Screwbowl classifiers
and static screens at Port
and static screens at Port
Hedland and sizing screens,
Hedland and sizing screens,
counter-current classifiers with
counter-current classifiers with
dewatering screens and
dewatering screens and
centrifuges at Dampier. Dampier
centrifuges at Dampier. Dampier
produces shipping-ready product
produces shipping-ready product
for immediate shiploading.
for immediate shiploading.
Washed salt at Lake MacLeod and
Washed salt at Lake MacLeod and
Port Hedland is dewatered on
Port Hedland is dewatered on
stockpiles.
stockpiles.
Lake Macleod also mines and
Lake Macleod also mines and
processes gypsum in leaching
processes gypsum in leaching
heaps.
heaps.
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387
Mines and production facilities continued
Group mines as at 31 December 2021
Copper
Production properties
Property
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Type of mineralisation
available facilities
Power source
Property description /
type of mine
Processing plants and other
Escondida
30% Rio Tinto – 57.5% BHP, 10%
JECO Corporation consortium
comprising Mitsubishi, JX Nippon
Mining and Metals (10%), 2.5%
JECO 2 Ltd
BHP
Atacama
Desert, Chile
Pipeline and road to deep sea port
at Coloso; road and rail
2 concentrate pipelines from mine
site to port facility at Coloso, 2
desalinisation plants at Coloso port
along with water treatment plant
for concentrate filtrate, 2 water
pipelines and 4 pump stations for
freshwater supply to site, Roadway
to site, rail line for supplies and
cathode transport, power transport
facilities to tie site to power grid,
Site offices, housing, and cafeteria
facilities to support employees and
contractors on site, warehouse
buildings and laydown facilities to
support operations and projects
on site
Rights conferred by Government
under Chilean Mining Code.
Thirteen mineral rights leases
with a total of 57,047 hectares.
Annual tenement payments (during March
Production started
Two active surface
Consists of a series
Los Colorados,
Supplied from grid
per year)
in 1990 and since
open pit mines in
of porphyry deposits
Laguna Seca Line 1,
under various
then capacity has
production,
containing copper,
and Laguna Seca Line 2
contracts with local
been expanded
Escondida and
gold, silver, and
Concentrators. OLAP
generating
numerous times. In
Escondida Norte
molybdenum.
– oxide leach facility, SL
companies.
1998 first cathode
with ore being
was produced from
processed via 3
the oxide leach
processing options,
plant, and during
Oxide leach, Sulfide
2006 the sulphide
RoM leach, or
leach plant was
conventional
inaugurated, a year
flotation
after the start of
concentrators.
Rom leach facility and
SX/EW facility.
Near Salt Lake
City, Utah, US
Pipeline, road and rail
Wholly owned – approximately
95,000 acres in total.
Permit conditions are established by Utah
Interest acquired
Open pit
Porphyry and
Copperton
Supply contract
and US Government agencies and comprise:
in 1989. In 2012,
– Environmental compliance and reporting
– Closure and reclamation requirements
associated skarn
concentrator, Garfield
with Rocky
deposits containing
smelter, refinery, and
Mountain Power.
copper, gold, silver,
precious metals plant,
and molybdenum.
assay lab and tailings
storage facilities.
Air and road
Khanbogd
soum,
Umnugovi
province,
Mongolia
Three mining licences are 100%
held by Oyu Tolgoi LLC:
MV-006708 (the Manakht
licence: 4,533 ha), MV-006709
(the Oyu Tolgoi licence: 8,490
ha), and MV-006710 (the Khukh
Khad licence: 1,763 ha).
Two further licences are held in
joint venture with Entrée Gold
LLCMV-015226 (the Shivee
Tolgoi Licence) and MV-015225
(the Javkhlant Licence).
The licence term under the
Minerals Law of Mongolia is 30
years with two 20-year
extensions. First renewals are
due in 2033 and 2039 for the
Oyu Tolgoi and Entrée Gold
licences respectively.
Rio Tinto
Kennecott
Bingham
Canyon
Oyu Tolgoi
Rio Tinto
Kennecott
Copper
Rio Tinto
100% Rio Tinto
Oyu Tolgoi is TRQ’s principal and
only material mineral resource
property and is held through a
66% interest in Oyu Tolgoi LLC;
the remaining 34% interest is
held by the Government of
Mongolia through Erdenes Oyu
Tolgoi LLC.
Rio Tinto, with other Rio Tinto
affiliates, holds a 50.8% majority
interest in TRQ, and is responsible
for the day-to-day operational
management and development of
the project.
388
Annual Report 2021 | riotinto.com
Investment Agreement dated 6 October
Oyu Tolgoi was first
Ore Reserves have
Consists of a series
One copper
2009, between the Government of Mongolia,
discovered in 1996.
been reported at
of porphyry deposits
concentrator with a
Currently sources
its power under an
Oyu Tolgoi LLC, TRQ, and Rio Tinto in respect
Construction began
the Oyut and Hugo
containing copper,
nominal feed capacity
agreement with the
of Oyu Tolgoi (Investment Agreement).
in late 2009 after
North Deposits.
gold, silver, and
of 100ktpd currently
Inner Mongolia
The Oyut deposit is
molybdenum.
comprising 2 SAG mills,
Power International
Escondida Norte pit
production. During
2016, the third
concentrator plant
was commissioned.
the pushback of
the south wall
commenced,
extending the mine
life from 2018
to 2032
customers in 2013.
In 2015,
Underground
Development Plan
was signed with
Government of
Mongolia. Rio Tinto
continues to work
with the Government
of Mongolia and
TRQ to finalise
formal termination
of the Underground
Development Plan.
signing of an
Investment
currently mined as
Agreement with the
an open pit using a
Government of
conventional drill,
Mongolia, and first
blast, load, and haul
concentrate was
method. The Hugo
produced in 2012.
North deposit is
First sales of
currently being
concentrate were
developed as an
made to Chinese
underground mine.
Amended and Restated Shareholders
Agreement dated 8 June 2011 among Oyu
Tolgoi LLC, THR Oyu Tolgoi Ltd. (formerly
Ivanhoe Oyu Tolgoi (BVI) Ltd.), Oyu Tolgoi
Netherlands B.V. and Erdenes MGL LLC
(ARSHA). Erdenes MGL LLC since transferred
its shares in Oyu Tolgoi LLC and its rights
and obligations under the ARSHA to its
subsidiary, Erdenes Oyu Tolgoi LLC.
Underground Mine Development and
Financing Plan (Underground Development
Plan) dated 18 May 2015, between TRQ,
the Government of Mongolia, Erdenes
Oyu Tolgoi LLC, THR Oyu Tolgoi Ltd.,
Oyu Tolgoi Netherlands B.V., Rio Tinto
and Oyu Tolgoi LLC.
Power Source Framework Agreement dated
31 December 2018, between the Government
of Mongolia and Oyu Tolgoi LLC, including
the amendment to the PSFA dated 26 June
2020. Electricity Supply Agreement dated
26 January 2022, between Southern Region
Electricity Distribution Network SOSC,
National Power Transmission Grid SOSC,
National Dispatching Center LLC and
Oyu Tolgoi LLC.
In terms of key government permits, Oyu
Tolgoi LLC secured a land use permit until
2035 and water use permit until 2039 as
well as the mineral rights.
4 ball mills, rougher
and cleaner flotation
circuits and up to
1Mtpa copper
Cooperation
Company Ltd.
(IMPIC), via the
Mongolian National
concentrate capacity.
Power Transmission
Other major facilities
Grid (NPTG)
that support the
isolated operations
authority, with Grid
power from China
include Maintenance
and supplementary
workshops, heating
diesel power
plant, sealed airstrip
generation at site.
and terminal, and camp
Signed Tavan Tolgoi
facilities with up to
Power Plant Power
6,000 person capacity
Source Framework
to accommodate
agreement in
current operations and
December 2018.
the UG construction
project. UG
infrastructure in place
includes several shafts
for ore haulage, man
haulage and ventilation
plus a conveyor decline
to surface and
associated surface
infrastructure.
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Copper
Copper
Production properties
Production properties
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description /
Property description /
type of mine
type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other
Processing plants and other
available facilities
available facilities
Power source
Power source
2 concentrate pipelines from mine
2 concentrate pipelines from mine
site to port facility at Coloso, 2
site to port facility at Coloso, 2
desalinisation plants at Coloso port
desalinisation plants at Coloso port
along with water treatment plant
along with water treatment plant
for concentrate filtrate, 2 water
for concentrate filtrate, 2 water
pipelines and 4 pump stations for
pipelines and 4 pump stations for
freshwater supply to site, Roadway
freshwater supply to site, Roadway
to site, rail line for supplies and
to site, rail line for supplies and
cathode transport, power transport
cathode transport, power transport
facilities to tie site to power grid,
facilities to tie site to power grid,
Site offices, housing, and cafeteria
Site offices, housing, and cafeteria
facilities to support employees and
facilities to support employees and
contractors on site, warehouse
contractors on site, warehouse
buildings and laydown facilities to
buildings and laydown facilities to
support operations and projects
support operations and projects
on site
on site
Rio Tinto
Rio Tinto
Kennecott
Kennecott
Bingham
Bingham
Canyon
Canyon
100% Rio Tinto
100% Rio Tinto
Near Salt Lake
Near Salt Lake
Pipeline, road and rail
Pipeline, road and rail
Wholly owned – approximately
Wholly owned – approximately
City, Utah, US
City, Utah, US
95,000 acres in total.
95,000 acres in total.
Rio Tinto
Rio Tinto
Kennecott
Kennecott
Copper
Copper
Oyu Tolgoi
Oyu Tolgoi
Oyu Tolgoi is TRQ’s principal and
Oyu Tolgoi is TRQ’s principal and
Rio Tinto
Rio Tinto
Air and road
Air and road
Khanbogd
Khanbogd
soum,
soum,
Umnugovi
Umnugovi
province,
province,
Mongolia
Mongolia
only material mineral resource
only material mineral resource
property and is held through a
property and is held through a
66% interest in Oyu Tolgoi LLC;
66% interest in Oyu Tolgoi LLC;
the remaining 34% interest is
the remaining 34% interest is
held by the Government of
held by the Government of
Mongolia through Erdenes Oyu
Mongolia through Erdenes Oyu
Tolgoi LLC.
Tolgoi LLC.
Rio Tinto, with other Rio Tinto
Rio Tinto, with other Rio Tinto
affiliates, holds a 50.8% majority
affiliates, holds a 50.8% majority
interest in TRQ, and is responsible
interest in TRQ, and is responsible
for the day-to-day operational
for the day-to-day operational
management and development of
management and development of
the project.
the project.
Three mining licences are 100%
Three mining licences are 100%
held by Oyu Tolgoi LLC:
held by Oyu Tolgoi LLC:
MV-006708 (the Manakht
MV-006708 (the Manakht
licence: 4,533 ha), MV-006709
licence: 4,533 ha), MV-006709
(the Oyu Tolgoi licence: 8,490
(the Oyu Tolgoi licence: 8,490
ha), and MV-006710 (the Khukh
ha), and MV-006710 (the Khukh
Khad licence: 1,763 ha).
Khad licence: 1,763 ha).
Two further licences are held in
Two further licences are held in
joint venture with Entrée Gold
joint venture with Entrée Gold
LLCMV-015226 (the Shivee
LLCMV-015226 (the Shivee
Tolgoi Licence) and MV-015225
Tolgoi Licence) and MV-015225
(the Javkhlant Licence).
(the Javkhlant Licence).
The licence term under the
The licence term under the
Minerals Law of Mongolia is 30
Minerals Law of Mongolia is 30
years with two 20-year
years with two 20-year
extensions. First renewals are
extensions. First renewals are
due in 2033 and 2039 for the
due in 2033 and 2039 for the
Oyu Tolgoi and Entrée Gold
Oyu Tolgoi and Entrée Gold
licences respectively.
licences respectively.
Escondida
Escondida
30% Rio Tinto – 57.5% BHP, 10%
30% Rio Tinto – 57.5% BHP, 10%
BHP
BHP
Atacama
Atacama
Pipeline and road to deep sea port
Pipeline and road to deep sea port
Rights conferred by Government
Rights conferred by Government
JECO Corporation consortium
JECO Corporation consortium
comprising Mitsubishi, JX Nippon
comprising Mitsubishi, JX Nippon
Mining and Metals (10%), 2.5%
Mining and Metals (10%), 2.5%
JECO 2 Ltd
JECO 2 Ltd
Desert, Chile
Desert, Chile
at Coloso; road and rail
at Coloso; road and rail
under Chilean Mining Code.
under Chilean Mining Code.
Thirteen mineral rights leases
Thirteen mineral rights leases
with a total of 57,047 hectares.
with a total of 57,047 hectares.
Annual tenement payments (during March
Annual tenement payments (during March
per year)
per year)
Permit conditions are established by Utah
Permit conditions are established by Utah
and US Government agencies and comprise:
and US Government agencies and comprise:
– Environmental compliance and reporting
– Environmental compliance and reporting
– Closure and reclamation requirements
– Closure and reclamation requirements
Investment Agreement dated 6 October
Investment Agreement dated 6 October
2009, between the Government of Mongolia,
2009, between the Government of Mongolia,
Oyu Tolgoi LLC, TRQ, and Rio Tinto in respect
Oyu Tolgoi LLC, TRQ, and Rio Tinto in respect
of Oyu Tolgoi (Investment Agreement).
of Oyu Tolgoi (Investment Agreement).
Amended and Restated Shareholders
Amended and Restated Shareholders
Agreement dated 8 June 2011 among Oyu
Agreement dated 8 June 2011 among Oyu
Tolgoi LLC, THR Oyu Tolgoi Ltd. (formerly
Tolgoi LLC, THR Oyu Tolgoi Ltd. (formerly
Ivanhoe Oyu Tolgoi (BVI) Ltd.), Oyu Tolgoi
Ivanhoe Oyu Tolgoi (BVI) Ltd.), Oyu Tolgoi
Netherlands B.V. and Erdenes MGL LLC
Netherlands B.V. and Erdenes MGL LLC
(ARSHA). Erdenes MGL LLC since transferred
(ARSHA). Erdenes MGL LLC since transferred
its shares in Oyu Tolgoi LLC and its rights
its shares in Oyu Tolgoi LLC and its rights
and obligations under the ARSHA to its
and obligations under the ARSHA to its
subsidiary, Erdenes Oyu Tolgoi LLC.
subsidiary, Erdenes Oyu Tolgoi LLC.
Underground Mine Development and
Underground Mine Development and
Financing Plan (Underground Development
Financing Plan (Underground Development
Plan) dated 18 May 2015, between TRQ,
Plan) dated 18 May 2015, between TRQ,
the Government of Mongolia, Erdenes
the Government of Mongolia, Erdenes
Oyu Tolgoi LLC, THR Oyu Tolgoi Ltd.,
Oyu Tolgoi LLC, THR Oyu Tolgoi Ltd.,
Oyu Tolgoi Netherlands B.V., Rio Tinto
Oyu Tolgoi Netherlands B.V., Rio Tinto
and Oyu Tolgoi LLC.
and Oyu Tolgoi LLC.
Power Source Framework Agreement dated
Power Source Framework Agreement dated
31 December 2018, between the Government
31 December 2018, between the Government
of Mongolia and Oyu Tolgoi LLC, including
of Mongolia and Oyu Tolgoi LLC, including
the amendment to the PSFA dated 26 June
the amendment to the PSFA dated 26 June
2020. Electricity Supply Agreement dated
2020. Electricity Supply Agreement dated
26 January 2022, between Southern Region
26 January 2022, between Southern Region
Electricity Distribution Network SOSC,
Electricity Distribution Network SOSC,
National Power Transmission Grid SOSC,
National Power Transmission Grid SOSC,
National Dispatching Center LLC and
National Dispatching Center LLC and
Oyu Tolgoi LLC.
Oyu Tolgoi LLC.
In terms of key government permits, Oyu
In terms of key government permits, Oyu
Tolgoi LLC secured a land use permit until
Tolgoi LLC secured a land use permit until
2035 and water use permit until 2039 as
2035 and water use permit until 2039 as
well as the mineral rights.
well as the mineral rights.
Production started
Production started
in 1990 and since
in 1990 and since
then capacity has
then capacity has
been expanded
been expanded
numerous times. In
numerous times. In
1998 first cathode
1998 first cathode
was produced from
was produced from
the oxide leach
the oxide leach
plant, and during
plant, and during
2006 the sulphide
2006 the sulphide
leach plant was
leach plant was
inaugurated, a year
inaugurated, a year
after the start of
after the start of
Escondida Norte pit
Escondida Norte pit
production. During
production. During
2016, the third
2016, the third
concentrator plant
concentrator plant
was commissioned.
was commissioned.
Interest acquired
Interest acquired
in 1989. In 2012,
in 1989. In 2012,
the pushback of
the pushback of
the south wall
the south wall
commenced,
commenced,
extending the mine
extending the mine
life from 2018
life from 2018
to 2032
to 2032
Oyu Tolgoi was first
Oyu Tolgoi was first
discovered in 1996.
discovered in 1996.
Construction began
Construction began
in late 2009 after
in late 2009 after
signing of an
signing of an
Investment
Investment
Agreement with the
Agreement with the
Government of
Government of
Mongolia, and first
Mongolia, and first
concentrate was
concentrate was
produced in 2012.
produced in 2012.
First sales of
First sales of
concentrate were
concentrate were
made to Chinese
made to Chinese
customers in 2013.
customers in 2013.
In 2015,
In 2015,
Underground
Underground
Development Plan
Development Plan
was signed with
was signed with
Government of
Government of
Mongolia. Rio Tinto
Mongolia. Rio Tinto
continues to work
continues to work
with the Government
with the Government
of Mongolia and
of Mongolia and
TRQ to finalise
TRQ to finalise
formal termination
formal termination
of the Underground
of the Underground
Development Plan.
Development Plan.
Consists of a series
Consists of a series
of porphyry deposits
of porphyry deposits
containing copper,
containing copper,
gold, silver, and
gold, silver, and
molybdenum.
molybdenum.
Los Colorados,
Los Colorados,
Laguna Seca Line 1,
Laguna Seca Line 1,
and Laguna Seca Line 2
and Laguna Seca Line 2
Concentrators. OLAP
Concentrators. OLAP
– oxide leach facility, SL
– oxide leach facility, SL
Rom leach facility and
Rom leach facility and
SX/EW facility.
SX/EW facility.
Supplied from grid
Supplied from grid
under various
under various
contracts with local
contracts with local
generating
generating
companies.
companies.
Two active surface
Two active surface
open pit mines in
open pit mines in
production,
production,
Escondida and
Escondida and
Escondida Norte
Escondida Norte
with ore being
with ore being
processed via 3
processed via 3
processing options,
processing options,
Oxide leach, Sulfide
Oxide leach, Sulfide
RoM leach, or
RoM leach, or
conventional
conventional
flotation
flotation
concentrators.
concentrators.
Open pit
Open pit
Porphyry and
Porphyry and
associated skarn
associated skarn
deposits containing
deposits containing
copper, gold, silver,
copper, gold, silver,
and molybdenum.
and molybdenum.
Copperton
Copperton
concentrator, Garfield
concentrator, Garfield
smelter, refinery, and
smelter, refinery, and
precious metals plant,
precious metals plant,
assay lab and tailings
assay lab and tailings
storage facilities.
storage facilities.
Supply contract
Supply contract
with Rocky
with Rocky
Mountain Power.
Mountain Power.
Consists of a series
Consists of a series
of porphyry deposits
of porphyry deposits
containing copper,
containing copper,
gold, silver, and
gold, silver, and
molybdenum.
molybdenum.
Ore Reserves have
Ore Reserves have
been reported at
been reported at
the Oyut and Hugo
the Oyut and Hugo
North Deposits.
North Deposits.
The Oyut deposit is
The Oyut deposit is
currently mined as
currently mined as
an open pit using a
an open pit using a
conventional drill,
conventional drill,
blast, load, and haul
blast, load, and haul
method. The Hugo
method. The Hugo
North deposit is
North deposit is
currently being
currently being
developed as an
developed as an
underground mine.
underground mine.
Currently sources
Currently sources
its power under an
its power under an
agreement with the
agreement with the
Inner Mongolia
Inner Mongolia
Power International
Power International
Cooperation
Cooperation
Company Ltd.
Company Ltd.
(IMPIC), via the
(IMPIC), via the
Mongolian National
Mongolian National
Power Transmission
Power Transmission
Grid (NPTG)
Grid (NPTG)
authority, with Grid
authority, with Grid
power from China
power from China
and supplementary
and supplementary
diesel power
diesel power
generation at site.
generation at site.
Signed Tavan Tolgoi
Signed Tavan Tolgoi
Power Plant Power
Power Plant Power
Source Framework
Source Framework
agreement in
agreement in
December 2018.
December 2018.
One copper
One copper
concentrator with a
concentrator with a
nominal feed capacity
nominal feed capacity
of 100ktpd currently
of 100ktpd currently
comprising 2 SAG mills,
comprising 2 SAG mills,
4 ball mills, rougher
4 ball mills, rougher
and cleaner flotation
and cleaner flotation
circuits and up to
circuits and up to
1Mtpa copper
1Mtpa copper
concentrate capacity.
concentrate capacity.
Other major facilities
Other major facilities
that support the
that support the
isolated operations
isolated operations
include Maintenance
include Maintenance
workshops, heating
workshops, heating
plant, sealed airstrip
plant, sealed airstrip
and terminal, and camp
and terminal, and camp
facilities with up to
facilities with up to
6,000 person capacity
6,000 person capacity
to accommodate
to accommodate
current operations and
current operations and
the UG construction
the UG construction
project. UG
project. UG
infrastructure in place
infrastructure in place
includes several shafts
includes several shafts
for ore haulage, man
for ore haulage, man
haulage and ventilation
haulage and ventilation
plus a conveyor decline
plus a conveyor decline
to surface and
to surface and
associated surface
associated surface
infrastructure.
infrastructure.
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389
Mines and production facilities continued
Group mines as at 31 December 2021
Copper continued
Projects
Property
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Type of mineralisation
available facilities
Power source
Property description /
type of mine
Processing plants and other
Resolution
55% Rio Tinto,
45% BHP
Rio Tinto
Superior,
Arizona, Pinal
County, US
Road, rail and water
pipeline from Superior to
Florence, AZ
Unpatented Mining Claims:
Total of unpatented claims: 2,249
Total acres: 46,390 acres
To hold the unpatented lode/placer mining claims we file
annually with the Bureau of Land Management , a 'Notice of
Intent to Hold' and a Maintenance Fee of $165.00 for each
claim for the BLM. We then record the claims in the Arizona
counties of Pinal and Gila at a rate of $30.00 each.
Arizona State Land Department Exploration Permits:
RCML have a total of 15 exploration permits with a total
acreage of 4,162.89 acres. They have to be renewed once a
year at a cost of either $10.00 or $20.00 per acre currently.
Once we have the permits for 5 years a new permit will be
applied for the acreage for that section of land. Exploration
permits are only good for 5 years.
Exploration Licence E45/4833 hosts the deposit. Several
Miscellaneous Licences cover the road access route,
associated roads and the emergency-use airstrip. A Mining
Lease Application (M45/1288; 7,500ha) has been surveyed
and is awaiting formal approval.
Winu
100% Rio Tinto
Rio Tinto
Road
Great Sandy
Desert,
Western
Australia,
Australia
La Granja
100% Rio Tinto
RTX
Cajamarca,
Northern Peru
Mountain road access
only, 6hrs+ by 4x4
The present La Granja Mining Concession grants its
titleholders the right to explore and exploit all existing
mineral resources within the 3,900 hectares it covers. As
mining operations have not yet started, a full EIA has not
been required.
Because of special status
Rio Tinto received the
This is an exploration
Porphyry and
A Pre-Feasibility Study
Currently on local
due to acquisition through
Mining Concession in
site. Open pit is
privatisation, as well as
2005, after BHP and
envisaged for
associated skarn
deposits with high
(PFS) for a Starter Case
grid for exploration
mining 15 Mt of ore per
activities (incl camp)
the annual fee ($10m per
Cambior had returned
exploitation if the
grade breccias. Copper
annum, with dump leach
with back up generators.
year split 50:50 between
the leases to the
business case is positive.
with minor silver, and
processing only, and an
An upgraded power
Permitting: Resolution is
The Magma Vein
Underground
Porphyry copper and
Water treatment and
115kV power lines to Eat
molybdenum deposit.
reverse osmosis plant,
and West Plant sites
historic tailings
with supply contract
impoundments from the
with SRP.
Magma Mine.
in the permitting and
(formerly Silver Queen)
study stage of the project.
was discovered in the
It is currently at the
end of a multi-year
1870s and underground
mining continued at the
process to complete its
Magma Mine until 1998.
Environmental Impact
Statement under the
In 1996, the Resolution
deposit was discovered
National Environmental
via an underground
Protection Act. Future
drillhole directed south
permits will be required
from the Magma Mine
for operations such as air
workings. Kennecott
quality permits and aquifer
Exploration (Rio Tinto)
protection permits.
entered the project in
2001 and through an
exploration “earn-in”
agreement became
operator in 2004.
federal government fees
Peruvian Government.
and the establishment
Numerous studies up to
of a social fund), RTMP’s
PFS occurred between
title on it is subject to
2005-2015. In 2015 the
completion and delivery
project was handed over
of a Feasibility Study,
to RTX and returned to
and implementation of a
Conceptual Study
mine of approval of the
status. In 2017 the
Feasibility Study by the
project was placed on
Peruvian Government. The
care and maintenance
agreement is scheduled to
whilst commercial
expire (delivery of FS) in
options and closure and
2025, however, RTMP is
exit were evaluated by
seeking to implement
Rio Tinto.
a 3 year extension to
January 2028.
Annual exploration licence
The exploration licence
Winu is currently in the
Primary mineralisation
Winu comprises a mobile
Power is provided by
rental payments (annually
was granted to Rio Tinto
advanced stages of
is copper-gold-silver
exploration camp for up
diesel generators.
in October).
in October 2017 and
exploration and resource
mineralisation hosted
to 190 people,
Winu was discovered in
development. An open
within sulphide
unimproved access
December 2017.
pit operation is planned
breccias and quartz
roads and trails, and an
Exploration programmes
following the receipt of
veins. A supergene
emergency-use only
full approvals for the
enrichment profile
gravel airstrip.
mining operation.
caps most of the
primary mineralisation.
have evolved into
resource definition
studies since that time.
The initial Inferred
Mineral Resource was
announced in July 2020.
molybdenum.
Order of Magnitude
link would be required
(OoM) study for Large
for development of
Case of approximately
the asset.
160 Mt of ore per
annum, with mill and
concentrator as well as
dump leaching was
completed in 2013.
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Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Copper continued
Copper continued
Projects
Projects
Resolution
Resolution
55% Rio Tinto,
55% Rio Tinto,
Rio Tinto
Rio Tinto
Superior,
Superior,
Road, rail and water
Road, rail and water
Unpatented Mining Claims:
Unpatented Mining Claims:
45% BHP
45% BHP
Arizona, Pinal
Arizona, Pinal
pipeline from Superior to
pipeline from Superior to
County, US
County, US
Florence, AZ
Florence, AZ
Total of unpatented claims: 2,249
Total of unpatented claims: 2,249
Total acres: 46,390 acres
Total acres: 46,390 acres
To hold the unpatented lode/placer mining claims we file
To hold the unpatented lode/placer mining claims we file
annually with the Bureau of Land Management , a 'Notice of
annually with the Bureau of Land Management , a 'Notice of
Intent to Hold' and a Maintenance Fee of $165.00 for each
Intent to Hold' and a Maintenance Fee of $165.00 for each
claim for the BLM. We then record the claims in the Arizona
claim for the BLM. We then record the claims in the Arizona
counties of Pinal and Gila at a rate of $30.00 each.
counties of Pinal and Gila at a rate of $30.00 each.
Arizona State Land Department Exploration Permits:
Arizona State Land Department Exploration Permits:
RCML have a total of 15 exploration permits with a total
RCML have a total of 15 exploration permits with a total
acreage of 4,162.89 acres. They have to be renewed once a
acreage of 4,162.89 acres. They have to be renewed once a
year at a cost of either $10.00 or $20.00 per acre currently.
year at a cost of either $10.00 or $20.00 per acre currently.
Once we have the permits for 5 years a new permit will be
Once we have the permits for 5 years a new permit will be
applied for the acreage for that section of land. Exploration
applied for the acreage for that section of land. Exploration
permits are only good for 5 years.
permits are only good for 5 years.
Exploration Licence E45/4833 hosts the deposit. Several
Exploration Licence E45/4833 hosts the deposit. Several
Miscellaneous Licences cover the road access route,
Miscellaneous Licences cover the road access route,
associated roads and the emergency-use airstrip. A Mining
associated roads and the emergency-use airstrip. A Mining
Lease Application (M45/1288; 7,500ha) has been surveyed
Lease Application (M45/1288; 7,500ha) has been surveyed
and is awaiting formal approval.
and is awaiting formal approval.
Winu
Winu
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Great Sandy
Great Sandy
Road
Road
Desert,
Desert,
Western
Western
Australia,
Australia,
Australia
Australia
La Granja
La Granja
100% Rio Tinto
100% Rio Tinto
RTX
RTX
Cajamarca,
Cajamarca,
Mountain road access
Mountain road access
The present La Granja Mining Concession grants its
The present La Granja Mining Concession grants its
Northern Peru
Northern Peru
only, 6hrs+ by 4x4
only, 6hrs+ by 4x4
titleholders the right to explore and exploit all existing
titleholders the right to explore and exploit all existing
mineral resources within the 3,900 hectares it covers. As
mineral resources within the 3,900 hectares it covers. As
mining operations have not yet started, a full EIA has not
mining operations have not yet started, a full EIA has not
been required.
been required.
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Permitting: Resolution is
Permitting: Resolution is
in the permitting and
in the permitting and
study stage of the project.
study stage of the project.
It is currently at the
It is currently at the
end of a multi-year
end of a multi-year
process to complete its
process to complete its
Environmental Impact
Environmental Impact
Statement under the
Statement under the
National Environmental
National Environmental
Protection Act. Future
Protection Act. Future
permits will be required
permits will be required
for operations such as air
for operations such as air
quality permits and aquifer
quality permits and aquifer
protection permits.
protection permits.
Annual exploration licence
Annual exploration licence
rental payments (annually
rental payments (annually
in October).
in October).
Because of special status
Because of special status
due to acquisition through
due to acquisition through
privatisation, as well as
privatisation, as well as
the annual fee ($10m per
the annual fee ($10m per
year split 50:50 between
year split 50:50 between
federal government fees
federal government fees
and the establishment
and the establishment
of a social fund), RTMP’s
of a social fund), RTMP’s
title on it is subject to
title on it is subject to
completion and delivery
completion and delivery
of a Feasibility Study,
of a Feasibility Study,
and implementation of a
and implementation of a
mine of approval of the
mine of approval of the
Feasibility Study by the
Feasibility Study by the
Peruvian Government. The
Peruvian Government. The
agreement is scheduled to
agreement is scheduled to
expire (delivery of FS) in
expire (delivery of FS) in
2025, however, RTMP is
2025, however, RTMP is
seeking to implement
seeking to implement
a 3 year extension to
a 3 year extension to
January 2028.
January 2028.
The Magma Vein
The Magma Vein
(formerly Silver Queen)
(formerly Silver Queen)
was discovered in the
was discovered in the
1870s and underground
1870s and underground
mining continued at the
mining continued at the
Magma Mine until 1998.
Magma Mine until 1998.
In 1996, the Resolution
In 1996, the Resolution
deposit was discovered
deposit was discovered
via an underground
via an underground
drillhole directed south
drillhole directed south
from the Magma Mine
from the Magma Mine
workings. Kennecott
workings. Kennecott
Exploration (Rio Tinto)
Exploration (Rio Tinto)
entered the project in
entered the project in
2001 and through an
2001 and through an
exploration “earn-in”
exploration “earn-in”
agreement became
agreement became
operator in 2004.
operator in 2004.
The exploration licence
The exploration licence
was granted to Rio Tinto
was granted to Rio Tinto
in October 2017 and
in October 2017 and
Winu was discovered in
Winu was discovered in
December 2017.
December 2017.
Exploration programmes
Exploration programmes
have evolved into
have evolved into
resource definition
resource definition
studies since that time.
studies since that time.
The initial Inferred
The initial Inferred
Mineral Resource was
Mineral Resource was
announced in July 2020.
announced in July 2020.
Rio Tinto received the
Rio Tinto received the
Mining Concession in
Mining Concession in
2005, after BHP and
2005, after BHP and
Cambior had returned
Cambior had returned
the leases to the
the leases to the
Peruvian Government.
Peruvian Government.
Numerous studies up to
Numerous studies up to
PFS occurred between
PFS occurred between
2005-2015. In 2015 the
2005-2015. In 2015 the
project was handed over
project was handed over
to RTX and returned to
to RTX and returned to
Conceptual Study
Conceptual Study
status. In 2017 the
status. In 2017 the
project was placed on
project was placed on
care and maintenance
care and maintenance
whilst commercial
whilst commercial
options and closure and
options and closure and
exit were evaluated by
exit were evaluated by
Rio Tinto.
Rio Tinto.
Property description /
Property description /
type of mine
type of mine
Underground
Underground
Type of mineralisation
Type of mineralisation
Porphyry copper and
Porphyry copper and
molybdenum deposit.
molybdenum deposit.
Processing plants and other
Processing plants and other
available facilities
available facilities
Power source
Power source
Water treatment and
Water treatment and
reverse osmosis plant,
reverse osmosis plant,
historic tailings
historic tailings
impoundments from the
impoundments from the
Magma Mine.
Magma Mine.
115kV power lines to Eat
115kV power lines to Eat
and West Plant sites
and West Plant sites
with supply contract
with supply contract
with SRP.
with SRP.
Winu is currently in the
Winu is currently in the
advanced stages of
advanced stages of
exploration and resource
exploration and resource
development. An open
development. An open
pit operation is planned
pit operation is planned
following the receipt of
following the receipt of
full approvals for the
full approvals for the
mining operation.
mining operation.
Primary mineralisation
Primary mineralisation
is copper-gold-silver
is copper-gold-silver
mineralisation hosted
mineralisation hosted
within sulphide
within sulphide
breccias and quartz
breccias and quartz
veins. A supergene
veins. A supergene
enrichment profile
enrichment profile
caps most of the
caps most of the
primary mineralisation.
primary mineralisation.
Winu comprises a mobile
Winu comprises a mobile
exploration camp for up
exploration camp for up
to 190 people,
to 190 people,
unimproved access
unimproved access
roads and trails, and an
roads and trails, and an
emergency-use only
emergency-use only
gravel airstrip.
gravel airstrip.
Power is provided by
Power is provided by
diesel generators.
diesel generators.
This is an exploration
This is an exploration
site. Open pit is
site. Open pit is
envisaged for
envisaged for
exploitation if the
exploitation if the
business case is positive.
business case is positive.
Porphyry and
Porphyry and
associated skarn
associated skarn
deposits with high
deposits with high
grade breccias. Copper
grade breccias. Copper
with minor silver, and
with minor silver, and
molybdenum.
molybdenum.
Currently on local
Currently on local
grid for exploration
grid for exploration
activities (incl camp)
activities (incl camp)
with back up generators.
with back up generators.
An upgraded power
An upgraded power
link would be required
link would be required
for development of
for development of
the asset.
the asset.
A Pre-Feasibility Study
A Pre-Feasibility Study
(PFS) for a Starter Case
(PFS) for a Starter Case
mining 15 Mt of ore per
mining 15 Mt of ore per
annum, with dump leach
annum, with dump leach
processing only, and an
processing only, and an
Order of Magnitude
Order of Magnitude
(OoM) study for Large
(OoM) study for Large
Case of approximately
Case of approximately
160 Mt of ore per
160 Mt of ore per
annum, with mill and
annum, with mill and
concentrator as well as
concentrator as well as
dump leaching was
dump leaching was
completed in 2013.
completed in 2013.
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391
Mines and production facilities continued
Group mines as at 31 December 2021
Copper continued
Property
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
/ type of mine
Type of mineralisation
facilities
Power source
Property description
Processing plants and other available
Simandou
Rio Tinto
45.05%
Rio Tinto;
39.95% CIOH
(Chinalco,
Baowu, CCC
Group, CRC
Group);15%
GoG
The Simandou
South Mining
Concession is
located
~550km
east-south-
east of Conakry
in the Republic
of Guinea
Approximately 850km of
sealed and unsealed
roads; charter flights
from Conakry to Beyla
airstrip well maintained,
unsealed road 40km to
site.
Simandou South Mining Concession was ratified by the
Guinea Government on 26 May 2014. The Concession
duration is 25 years, renewed automatically for a further
period of 25 years followed by further 10 year periods in
accordance with the Guinean Mining Code. 369 km2 area.
Minerals
Production properties
Property
Ownership
Operator
Location
Access and Infrastructure Title/lease/acreage
Key permit conditions
History
Rio Tinto
Borates – Boron
100% Rio Tinto
Rio Tinto
Boron, California,
Kern County, United
States
Road and rail
Land holdings include 13,493 acres (owned
including mineral rights) for the mining
operation, plant infrastructure, and tailings
storage facility.
Rio Tinto Fer et
Titane Lac Tio
100% Rio Tinto
Rio Tinto
Havre-Saint-Pierre,
Province of Quebec,
Canada
Rail, road and port
(St Lawrence River)
A total of 6,534 hectares of licences including
two mining concessions of total 609ha, granted
by Province of Quebec in 1949 and 1951 which,
subject to certain Mining Act restrictions, confer
rights and obligations of an owner.
Rio Tinto
Fort-Dauphin,
Madagascar
Road and port
Mining lease covering 56,200 hectares, granted
by central government.
The permit has a validity of 30 years
Exploration project started in
Mineral sand
Coastal mineralised
QMM has an
On-site heavy fuel
as of 12 December 1996. Additional
1986; construction approved
dredging
sands.
operating Dredge,
oil generators; wind
QIT Madagascar
Minerals (80%)
QIT Madagascar
Minerals is 80%
owned by Rio Tinto
and 20% owned by
the Government of
Madagascar.
392
Annual Report 2021 | riotinto.com
The Concession duration is 25
No production
Open pit
Supergene-enriched
Run-of-mine ore is coarsely crushed
Current designs
years, renewed automatically
for a further period of 25 years
followed by further 10 year
periods in accordance with the
Guinean Mining Code, provided
Simfer has complied with its
obligations under the Amended
and Consolidated Basic
Convention entered into with
the Republic of Guinea, dated
26 May 2014. The Amended
and Consolidated Basic
Convention (ACdB) is still valid
and provides surety of tenure.
In 2012 the SEIA for the project
was approved by the Republic
of Guinea. A process is in place
to ensure this approval is
maintained. The Certificate of
Compliance for the Simandou
Mine SEIA is renewable on an
annual basis and is currently
valid until 28 January 2022.
itabirite hosted iron ore
at the mine site to P100 of – 80 mm
contemplate that power
deposits. The deposits
through two identical primary and
for the mine site and
are part of a
secondary crushing stations in a
other areas will be
supracrustal belt with
stacked arrangement. The coarsely
supplied by a diesel-
the BIF proto-ore likely
crushed ore is then conveyed to the
powered fuel station.
deposited in a shallow
mine stockyard. The ore is reclaimed
However, there is a plan
marine setting within a
from the stockpiles and conveyed to
to connect the facility to
forearc basin. The age of
the train load-out facility for loading
the power grid from local
deposition is considered
into trains which transport materials
operator Electricite de
to be between 2.7 Ga
to the port facility where it is shipped
Guinee as well. This will
and 2.2 Ga.
by bulk carrier to several ports in
require an approx. 20 km
China. There it is further crushed,
connection line to the
blended and in some instances
main grid once it is
ground to the required final product
available and would
size for fines pellet feed. Other major
substantially reduce
facilities that support the isolated
energy costs and fuel
operations include power generation,
consumption.
explosives facilities, fuel and
lubricants facilities, administration
buildings, workshops, permanent
village, etc.
Boron Operation currently has all
Deposit discovered in 1906,
Open pit
Sedimentary
Boron Operation
On-site co-
Property description /
type of mine
Type of mineralisation
other available facilities
Power source
Processing plants and
State and Federal environmental and
underground mining
operational permits in place to
operations began in 1925,
continue the mining and processing
3 underground mining
operation. Regular updates to permits
operations were consolidated
are ongoing.
and the mining method
switched to open pit mining
in 1956. Assets were
acquired by Rio Tinto in 1967.
sequence of tincal
consists of the open
generation units
and kernite
containing
interbedded
pit mine, an ore
and local power
crushing and
grid.
conveying system, 2
claystone enveloped
process plants
by facies consisting
(Primary Process
of ulexite and
and Boric Acid
colemanite bearing
Plant), Shipping
claystone, and
facility, and tailings
barren claystone.
storage facilities.
The property is held under Quebec
Production started 1950;
Open pit
Magmatic intrusion.
Lac Tio has a
Supplied by Hydro
provincial government mining
interest acquired in 1989.
crushing facility,
Quebec at regulated
dedicated railway,
tariff.
concession permits (Concession
minière No 368 and 381). Each is of
one year duration renewable as long
as the mine is in operation. RTFT has
also a number of claims (exclusive
exploration permits) covering ilmenite
occurrences in the region of the mine.
These claims are renewable every 2
years.
renewal for 10-years each period are
2005. Ilmenite and zirsil
granted at QMM’s request. An annual
production started 2008.
fee is payable to government
QMM intends to extract
authorities following notification at the
ilmenite and zirsil from heavy
beginning of January.
mineral sands over an area of
about 6,000 hectares along
the coast over the next 40
years.
stockpile at the
train terminal, ship
loader, office
buildings at the
mine and at the
terminal and waste
dumps.
Dry Mine Unit,
Heavy Mineral
Concentrator,
and solar project
agreements with
IPP are expected to
Mineral Separation
take the asset to
Plant, Port and bulk
50% RE by 2024.
loading facilities.
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Copper continued
Copper continued
45.05%
45.05%
Rio Tinto;
Rio Tinto;
39.95% CIOH
39.95% CIOH
(Chinalco,
(Chinalco,
Baowu, CCC
Baowu, CCC
Group, CRC
Group, CRC
Group);15%
Group);15%
GoG
GoG
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Simandou
Simandou
Rio Tinto
Rio Tinto
The Simandou
The Simandou
Approximately 850km of
Approximately 850km of
Simandou South Mining Concession was ratified by the
Simandou South Mining Concession was ratified by the
South Mining
South Mining
Concession is
Concession is
located
located
~550km
~550km
sealed and unsealed
sealed and unsealed
Guinea Government on 26 May 2014. The Concession
Guinea Government on 26 May 2014. The Concession
roads; charter flights
roads; charter flights
duration is 25 years, renewed automatically for a further
duration is 25 years, renewed automatically for a further
from Conakry to Beyla
from Conakry to Beyla
period of 25 years followed by further 10 year periods in
period of 25 years followed by further 10 year periods in
airstrip well maintained,
airstrip well maintained,
accordance with the Guinean Mining Code. 369 km2 area.
accordance with the Guinean Mining Code. 369 km2 area.
east-south-
east-south-
unsealed road 40km to
unsealed road 40km to
east of Conakry
east of Conakry
site.
site.
in the Republic
in the Republic
of Guinea
of Guinea
Minerals
Minerals
Production properties
Production properties
Rio Tinto
Rio Tinto
Borates – Boron
Borates – Boron
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Boron, California,
Boron, California,
Road and rail
Road and rail
Land holdings include 13,493 acres (owned
Land holdings include 13,493 acres (owned
Kern County, United
Kern County, United
States
States
including mineral rights) for the mining
including mineral rights) for the mining
operation, plant infrastructure, and tailings
operation, plant infrastructure, and tailings
storage facility.
storage facility.
Rio Tinto Fer et
Rio Tinto Fer et
Titane Lac Tio
Titane Lac Tio
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Havre-Saint-Pierre,
Havre-Saint-Pierre,
Rail, road and port
Rail, road and port
A total of 6,534 hectares of licences including
A total of 6,534 hectares of licences including
Province of Quebec,
Province of Quebec,
(St Lawrence River)
(St Lawrence River)
two mining concessions of total 609ha, granted
two mining concessions of total 609ha, granted
Canada
Canada
by Province of Quebec in 1949 and 1951 which,
by Province of Quebec in 1949 and 1951 which,
subject to certain Mining Act restrictions, confer
subject to certain Mining Act restrictions, confer
rights and obligations of an owner.
rights and obligations of an owner.
QIT Madagascar
QIT Madagascar
Minerals (80%)
Minerals (80%)
Rio Tinto
Rio Tinto
Road and port
Road and port
Mining lease covering 56,200 hectares, granted
Mining lease covering 56,200 hectares, granted
Fort-Dauphin,
Fort-Dauphin,
Madagascar
Madagascar
by central government.
by central government.
QIT Madagascar
QIT Madagascar
Minerals is 80%
Minerals is 80%
owned by Rio Tinto
owned by Rio Tinto
and 20% owned by
and 20% owned by
the Government of
the Government of
Madagascar.
Madagascar.
Key permit conditions
Key permit conditions
History
History
Property description
Property description
/ type of mine
/ type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other available
Processing plants and other available
facilities
facilities
Power source
Power source
No production
No production
Open pit
Open pit
The Concession duration is 25
The Concession duration is 25
years, renewed automatically
years, renewed automatically
for a further period of 25 years
for a further period of 25 years
followed by further 10 year
followed by further 10 year
periods in accordance with the
periods in accordance with the
Guinean Mining Code, provided
Guinean Mining Code, provided
Simfer has complied with its
Simfer has complied with its
obligations under the Amended
obligations under the Amended
and Consolidated Basic
and Consolidated Basic
Convention entered into with
Convention entered into with
the Republic of Guinea, dated
the Republic of Guinea, dated
26 May 2014. The Amended
26 May 2014. The Amended
and Consolidated Basic
and Consolidated Basic
Convention (ACdB) is still valid
Convention (ACdB) is still valid
and provides surety of tenure.
and provides surety of tenure.
In 2012 the SEIA for the project
In 2012 the SEIA for the project
was approved by the Republic
was approved by the Republic
of Guinea. A process is in place
of Guinea. A process is in place
to ensure this approval is
to ensure this approval is
maintained. The Certificate of
maintained. The Certificate of
Compliance for the Simandou
Compliance for the Simandou
Mine SEIA is renewable on an
Mine SEIA is renewable on an
annual basis and is currently
annual basis and is currently
valid until 28 January 2022.
valid until 28 January 2022.
Supergene-enriched
Supergene-enriched
itabirite hosted iron ore
itabirite hosted iron ore
deposits. The deposits
deposits. The deposits
are part of a
are part of a
supracrustal belt with
supracrustal belt with
the BIF proto-ore likely
the BIF proto-ore likely
deposited in a shallow
deposited in a shallow
marine setting within a
marine setting within a
forearc basin. The age of
forearc basin. The age of
deposition is considered
deposition is considered
to be between 2.7 Ga
to be between 2.7 Ga
and 2.2 Ga.
and 2.2 Ga.
Run-of-mine ore is coarsely crushed
Run-of-mine ore is coarsely crushed
at the mine site to P100 of – 80 mm
at the mine site to P100 of – 80 mm
through two identical primary and
through two identical primary and
secondary crushing stations in a
secondary crushing stations in a
stacked arrangement. The coarsely
stacked arrangement. The coarsely
crushed ore is then conveyed to the
crushed ore is then conveyed to the
mine stockyard. The ore is reclaimed
mine stockyard. The ore is reclaimed
from the stockpiles and conveyed to
from the stockpiles and conveyed to
the train load-out facility for loading
the train load-out facility for loading
into trains which transport materials
into trains which transport materials
to the port facility where it is shipped
to the port facility where it is shipped
by bulk carrier to several ports in
by bulk carrier to several ports in
China. There it is further crushed,
China. There it is further crushed,
blended and in some instances
blended and in some instances
ground to the required final product
ground to the required final product
size for fines pellet feed. Other major
size for fines pellet feed. Other major
facilities that support the isolated
facilities that support the isolated
operations include power generation,
operations include power generation,
explosives facilities, fuel and
explosives facilities, fuel and
lubricants facilities, administration
lubricants facilities, administration
buildings, workshops, permanent
buildings, workshops, permanent
village, etc.
village, etc.
Current designs
Current designs
contemplate that power
contemplate that power
for the mine site and
for the mine site and
other areas will be
other areas will be
supplied by a diesel-
supplied by a diesel-
powered fuel station.
powered fuel station.
However, there is a plan
However, there is a plan
to connect the facility to
to connect the facility to
the power grid from local
the power grid from local
operator Electricite de
operator Electricite de
Guinee as well. This will
Guinee as well. This will
require an approx. 20 km
require an approx. 20 km
connection line to the
connection line to the
main grid once it is
main grid once it is
available and would
available and would
substantially reduce
substantially reduce
energy costs and fuel
energy costs and fuel
consumption.
consumption.
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure Title/lease/acreage
Access and Infrastructure Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description /
Property description /
type of mine
type of mine
Type of mineralisation
Type of mineralisation
Processing plants and
Processing plants and
other available facilities
other available facilities
Power source
Power source
Boron Operation currently has all
Boron Operation currently has all
State and Federal environmental and
State and Federal environmental and
operational permits in place to
operational permits in place to
continue the mining and processing
continue the mining and processing
operation. Regular updates to permits
operation. Regular updates to permits
are ongoing.
are ongoing.
Open pit
Open pit
Deposit discovered in 1906,
Deposit discovered in 1906,
underground mining
underground mining
operations began in 1925,
operations began in 1925,
3 underground mining
3 underground mining
operations were consolidated
operations were consolidated
and the mining method
and the mining method
switched to open pit mining
switched to open pit mining
in 1956. Assets were
in 1956. Assets were
acquired by Rio Tinto in 1967.
acquired by Rio Tinto in 1967.
On-site co-
On-site co-
generation units
generation units
and local power
and local power
grid.
grid.
Sedimentary
Sedimentary
sequence of tincal
sequence of tincal
and kernite
and kernite
containing
containing
interbedded
interbedded
claystone enveloped
claystone enveloped
by facies consisting
by facies consisting
of ulexite and
of ulexite and
colemanite bearing
colemanite bearing
claystone, and
claystone, and
barren claystone.
barren claystone.
Boron Operation
Boron Operation
consists of the open
consists of the open
pit mine, an ore
pit mine, an ore
crushing and
crushing and
conveying system, 2
conveying system, 2
process plants
process plants
(Primary Process
(Primary Process
and Boric Acid
and Boric Acid
Plant), Shipping
Plant), Shipping
facility, and tailings
facility, and tailings
storage facilities.
storage facilities.
The property is held under Quebec
The property is held under Quebec
provincial government mining
provincial government mining
concession permits (Concession
concession permits (Concession
minière No 368 and 381). Each is of
minière No 368 and 381). Each is of
one year duration renewable as long
one year duration renewable as long
as the mine is in operation. RTFT has
as the mine is in operation. RTFT has
also a number of claims (exclusive
also a number of claims (exclusive
exploration permits) covering ilmenite
exploration permits) covering ilmenite
occurrences in the region of the mine.
occurrences in the region of the mine.
These claims are renewable every 2
These claims are renewable every 2
years.
years.
The permit has a validity of 30 years
The permit has a validity of 30 years
as of 12 December 1996. Additional
as of 12 December 1996. Additional
renewal for 10-years each period are
renewal for 10-years each period are
granted at QMM’s request. An annual
granted at QMM’s request. An annual
fee is payable to government
fee is payable to government
authorities following notification at the
authorities following notification at the
beginning of January.
beginning of January.
Production started 1950;
Production started 1950;
interest acquired in 1989.
interest acquired in 1989.
Open pit
Open pit
Magmatic intrusion.
Magmatic intrusion.
Mineral sand
Mineral sand
dredging
dredging
Coastal mineralised
Coastal mineralised
sands.
sands.
Exploration project started in
Exploration project started in
1986; construction approved
1986; construction approved
2005. Ilmenite and zirsil
2005. Ilmenite and zirsil
production started 2008.
production started 2008.
QMM intends to extract
QMM intends to extract
ilmenite and zirsil from heavy
ilmenite and zirsil from heavy
mineral sands over an area of
mineral sands over an area of
about 6,000 hectares along
about 6,000 hectares along
the coast over the next 40
the coast over the next 40
years.
years.
Supplied by Hydro
Supplied by Hydro
Quebec at regulated
Quebec at regulated
tariff.
tariff.
Lac Tio has a
Lac Tio has a
crushing facility,
crushing facility,
dedicated railway,
dedicated railway,
stockpile at the
stockpile at the
train terminal, ship
train terminal, ship
loader, office
loader, office
buildings at the
buildings at the
mine and at the
mine and at the
terminal and waste
terminal and waste
dumps.
dumps.
QMM has an
QMM has an
operating Dredge,
operating Dredge,
Dry Mine Unit,
Dry Mine Unit,
Heavy Mineral
Heavy Mineral
Concentrator,
Concentrator,
Mineral Separation
Mineral Separation
Plant, Port and bulk
Plant, Port and bulk
loading facilities.
loading facilities.
On-site heavy fuel
On-site heavy fuel
oil generators; wind
oil generators; wind
and solar project
and solar project
agreements with
agreements with
IPP are expected to
IPP are expected to
take the asset to
take the asset to
50% RE by 2024.
50% RE by 2024.
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393
Mines and production facilities continued
Group mines as at 31 December 2021
Minerals continued
Property
Ownership
Richards Bay
Minerals
RBM is a joint venture
between Rio Tinto (74%)
and Blue Horizon – a
consortium of investors
and our Host
Communities Mbonambi,
Sokhulu, Mkhwanazi and
Dube – which own 24%.
The remaining shares
are held in an employee
trust.
Operator
Rio Tinto
Location
Richards Bay,
KwaZulu-Natal,
South Africa
Access and
Infrastructure
Title/lease/acreage
Key permit conditions
History
/ type of mine
Type of mineralisation
available facilities
Power source
Property description
Processing plants and other
Rail, road and port Mineral rights for Reserve 4 and Reserve 10
issued by South African State and converted
to new order mining rights from 9 May 2012.
Mining rights run until 8 May 2041 and
covers 11,645 hectares including mined
Tisand area.
RBM operates in three lease areas,
Production started 1977;
Dune sand
Coastal mineralised
RBM manages and operates
Contract with
Tisand, Zulti North and Zulti South, by
initial interest acquired 1989.
dredging
sands
several dredges, dry mining
ESKOM.
Iron Ore Company
of Canada (IOC)
IOC is a joint venture
between Rio Tinto
(58.7%), Mitsubishi
(26.2%) and the
Labrador Iron Ore
Royalty Income
Corporation (15.1%).
Rio Tinto
Labrador City,
Province of
Newfoundland and
Labrador, Canada
Railway and port
facilities in
Sept-Îles, Quebec
(owned and
operated by IOC)
Public highway
Airport
Diavik
100% owned by Diavik
Diamond Mines (2012)
Inc.
Northwest
Territories (NWT),
Canada
Air, ice road in
winter
Diavik Diamond
Mines (2012) Inc. is
a Yellowknife-based
Canadian subsidiary
of Rio Tinto plc in
London, UK
Mining leases, surface rights and a tailings
disposal licence are held by the Labrador Iron
Ore Royalty Company (LIORC) under the
Labrador Mining and Exploration Act. LIORC
subleases these rights to IOC. The mining
leases cover 10,356 hectares, the surface
rights cover 8,805 hectares and the tailings
licence covers 2,784 hectares. These
subleased rights are valid until 2050. IOC
also directly holds three small mining leases,
but none produce saleable products. In
addition to the above rights, IOC also holds a
number of mineral licences, either directly or
under sublease from LIORC.
Three mineral rights leases with a total
acreage of 8,016 (3,244 ha). Mining leases
are issued by the NWT Government. One
lease was renewed in 2017 and two leases
were renewed in February 2018. The new
leases will expire after 21 years.
394
Annual Report 2021 | riotinto.com
units, heavy mineral
concentrators and a mineral
separation plant. RBM also
has a smelter with furnaces
to produce titania slag, pig
iron in addition to rutile and
zircon.
Ore delivery system
(crusher/conveyor and
automated train system)
Explosives plant, Train
loadout facilities, Rail line
(Labrador City to Sept-Îles),
Stockyards, Shiploaders
means of a notarial deed. Tisand
Fifth mining plant
(which contains the stockpiled tails)
commissioned in 2000. One
and Zulti North leases are held by
mining plant
Tisand (Pty) Ltd. In September 2012,
decommissioned in 2008. In
Rio Tinto completed the acquisition of
September 2012, Rio Tinto
BHP Billiton’s entire interests in RBM.
doubled its holding in
The acquisition resulted in Rio Tinto
Richards Bay Minerals to
effectively doubling its holding (74%)
74% following the acquisition
in RBM. The remaining 26% of RBM is
of BHP Billiton’s entire
owned by a consortium of local
interests.
communities and businesses (24%)
and RBM employees (2%), in line with
South Africa’s Broad-Based Black
Economic Empowerment legislation.
Newfoundland and Labrador permits
through acquisition of North
such as TMP Release, Tailings
Disposal Licence, Approval for
Ltd. Current operation began
in 1962 and has processed
Asbestos Disposal Site at Main landfill
over one billion tonnes of
Facility, Mill licence, PCB Storage
crude ore. Annual capacity
Facility, Landfill, Water withdrawal and
23 million tonnes of
use of bodies of water, Dewatering &
concentrate of which 12 to
Excavation of Maggie Lake, Infilling of
13 million tonnes can be
Carol Lake Lagoon and unnamed water
pelletised.
body, Sewage System/Water Supply
for Crusher Building. IOC holds also
Federal Permits (Fish Habitat
Compensation Agreement, Tailings
Management Plan and dewatering).
November 2021, Rio Tinto
became the sole owner of
Diavik Diamond Mine. This
followed the completion of a
transaction for Rio Tinto’s
acquisition of the 40% share
held by Dominion Diamond
Mines in Diavik, following the
Court of Queen’s Bench of
Alberta’s approval.
Several existing and valid
Interest acquired in 2000
Open pit
Oxide iron (specular
Concentrator (gravity and
Supplied by
hematite and
magnetite)
magnetic separation circuits),
Newfoundland
Pellet plant, Warehouses,
and Labrador
Workshops, Heating plant,
Hydro.
Our key permit conditions are local
Deposits discovered in
employment, procurement and benefit
1994-95. Construction
sharing commitments; environmental
approved in 2000. Diamond
compliance and reporting;
production started in 2003.
environmental security and closure
Fourth pipe commenced
Open pit and
underground
operations
(Blast-hole
stoping and
and rehabilitation planning; and
production in 2018. Mine life
Sub-level Cave
payment of taxes and government
through 2023-25. In
methods).
royalties.
Diamondiferous
Includes processing plant
On-site diesel
kimberlite deposit
and accommodation facilities
generators;
onsite.
installed
capacity 44MW
and 9.2MW of
wind capacity.
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Richards Bay
Richards Bay
Minerals
Minerals
RBM is a joint venture
RBM is a joint venture
Rio Tinto
Rio Tinto
Rail, road and port Mineral rights for Reserve 4 and Reserve 10
Rail, road and port Mineral rights for Reserve 4 and Reserve 10
Access and
Access and
Infrastructure
Infrastructure
Richards Bay,
Richards Bay,
KwaZulu-Natal,
KwaZulu-Natal,
South Africa
South Africa
issued by South African State and converted
issued by South African State and converted
to new order mining rights from 9 May 2012.
to new order mining rights from 9 May 2012.
Mining rights run until 8 May 2041 and
Mining rights run until 8 May 2041 and
covers 11,645 hectares including mined
covers 11,645 hectares including mined
Tisand area.
Tisand area.
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Minerals continued
Minerals continued
between Rio Tinto (74%)
between Rio Tinto (74%)
and Blue Horizon – a
and Blue Horizon – a
consortium of investors
consortium of investors
and our Host
and our Host
Communities Mbonambi,
Communities Mbonambi,
Sokhulu, Mkhwanazi and
Sokhulu, Mkhwanazi and
Dube – which own 24%.
Dube – which own 24%.
The remaining shares
The remaining shares
are held in an employee
are held in an employee
trust.
trust.
Iron Ore Company
Iron Ore Company
IOC is a joint venture
IOC is a joint venture
Rio Tinto
Rio Tinto
of Canada (IOC)
of Canada (IOC)
between Rio Tinto
between Rio Tinto
(58.7%), Mitsubishi
(58.7%), Mitsubishi
(26.2%) and the
(26.2%) and the
Labrador Iron Ore
Labrador Iron Ore
Royalty Income
Royalty Income
Corporation (15.1%).
Corporation (15.1%).
Labrador City,
Labrador City,
Province of
Province of
Railway and port
Railway and port
Mining leases, surface rights and a tailings
Mining leases, surface rights and a tailings
facilities in
facilities in
disposal licence are held by the Labrador Iron
disposal licence are held by the Labrador Iron
Newfoundland and
Newfoundland and
Sept-Îles, Quebec
Sept-Îles, Quebec
Ore Royalty Company (LIORC) under the
Ore Royalty Company (LIORC) under the
Labrador, Canada
Labrador, Canada
(owned and
(owned and
Labrador Mining and Exploration Act. LIORC
Labrador Mining and Exploration Act. LIORC
operated by IOC)
operated by IOC)
subleases these rights to IOC. The mining
subleases these rights to IOC. The mining
Public highway
Public highway
Airport
Airport
leases cover 10,356 hectares, the surface
leases cover 10,356 hectares, the surface
rights cover 8,805 hectares and the tailings
rights cover 8,805 hectares and the tailings
licence covers 2,784 hectares. These
licence covers 2,784 hectares. These
subleased rights are valid until 2050. IOC
subleased rights are valid until 2050. IOC
also directly holds three small mining leases,
also directly holds three small mining leases,
but none produce saleable products. In
but none produce saleable products. In
addition to the above rights, IOC also holds a
addition to the above rights, IOC also holds a
number of mineral licences, either directly or
number of mineral licences, either directly or
under sublease from LIORC.
under sublease from LIORC.
Diavik
Diavik
100% owned by Diavik
100% owned by Diavik
Diavik Diamond
Diavik Diamond
Northwest
Northwest
Air, ice road in
Air, ice road in
Three mineral rights leases with a total
Three mineral rights leases with a total
Diamond Mines (2012)
Diamond Mines (2012)
Mines (2012) Inc. is
Mines (2012) Inc. is
Territories (NWT),
Territories (NWT),
winter
winter
Inc.
Inc.
a Yellowknife-based
a Yellowknife-based
Canada
Canada
Canadian subsidiary
Canadian subsidiary
of Rio Tinto plc in
of Rio Tinto plc in
London, UK
London, UK
acreage of 8,016 (3,244 ha). Mining leases
acreage of 8,016 (3,244 ha). Mining leases
are issued by the NWT Government. One
are issued by the NWT Government. One
lease was renewed in 2017 and two leases
lease was renewed in 2017 and two leases
were renewed in February 2018. The new
were renewed in February 2018. The new
leases will expire after 21 years.
leases will expire after 21 years.
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description
Property description
/ type of mine
/ type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other
Processing plants and other
available facilities
available facilities
Power source
Power source
Contract with
Contract with
ESKOM.
ESKOM.
Dune sand
Dune sand
dredging
dredging
Coastal mineralised
Coastal mineralised
sands
sands
RBM manages and operates
RBM manages and operates
several dredges, dry mining
several dredges, dry mining
units, heavy mineral
units, heavy mineral
concentrators and a mineral
concentrators and a mineral
separation plant. RBM also
separation plant. RBM also
has a smelter with furnaces
has a smelter with furnaces
to produce titania slag, pig
to produce titania slag, pig
iron in addition to rutile and
iron in addition to rutile and
zircon.
zircon.
Open pit
Open pit
Oxide iron (specular
Oxide iron (specular
hematite and
hematite and
magnetite)
magnetite)
Supplied by
Supplied by
Newfoundland
Newfoundland
and Labrador
and Labrador
Hydro.
Hydro.
Concentrator (gravity and
Concentrator (gravity and
magnetic separation circuits),
magnetic separation circuits),
Pellet plant, Warehouses,
Pellet plant, Warehouses,
Workshops, Heating plant,
Workshops, Heating plant,
Ore delivery system
Ore delivery system
(crusher/conveyor and
(crusher/conveyor and
automated train system)
automated train system)
Explosives plant, Train
Explosives plant, Train
loadout facilities, Rail line
loadout facilities, Rail line
(Labrador City to Sept-Îles),
(Labrador City to Sept-Îles),
Stockyards, Shiploaders
Stockyards, Shiploaders
Open pit and
Open pit and
underground
underground
operations
operations
(Blast-hole
(Blast-hole
stoping and
stoping and
Sub-level Cave
Sub-level Cave
methods).
methods).
Diamondiferous
Diamondiferous
kimberlite deposit
kimberlite deposit
Includes processing plant
Includes processing plant
and accommodation facilities
and accommodation facilities
onsite.
onsite.
On-site diesel
On-site diesel
generators;
generators;
installed
installed
capacity 44MW
capacity 44MW
and 9.2MW of
and 9.2MW of
wind capacity.
wind capacity.
RBM operates in three lease areas,
RBM operates in three lease areas,
Tisand, Zulti North and Zulti South, by
Tisand, Zulti North and Zulti South, by
means of a notarial deed. Tisand
means of a notarial deed. Tisand
(which contains the stockpiled tails)
(which contains the stockpiled tails)
and Zulti North leases are held by
and Zulti North leases are held by
Tisand (Pty) Ltd. In September 2012,
Tisand (Pty) Ltd. In September 2012,
Rio Tinto completed the acquisition of
Rio Tinto completed the acquisition of
BHP Billiton’s entire interests in RBM.
BHP Billiton’s entire interests in RBM.
The acquisition resulted in Rio Tinto
The acquisition resulted in Rio Tinto
effectively doubling its holding (74%)
effectively doubling its holding (74%)
in RBM. The remaining 26% of RBM is
in RBM. The remaining 26% of RBM is
owned by a consortium of local
owned by a consortium of local
communities and businesses (24%)
communities and businesses (24%)
and RBM employees (2%), in line with
and RBM employees (2%), in line with
South Africa’s Broad-Based Black
South Africa’s Broad-Based Black
Economic Empowerment legislation.
Economic Empowerment legislation.
Several existing and valid
Several existing and valid
Newfoundland and Labrador permits
Newfoundland and Labrador permits
such as TMP Release, Tailings
such as TMP Release, Tailings
Disposal Licence, Approval for
Disposal Licence, Approval for
Asbestos Disposal Site at Main landfill
Asbestos Disposal Site at Main landfill
Facility, Mill licence, PCB Storage
Facility, Mill licence, PCB Storage
Facility, Landfill, Water withdrawal and
Facility, Landfill, Water withdrawal and
use of bodies of water, Dewatering &
use of bodies of water, Dewatering &
Excavation of Maggie Lake, Infilling of
Excavation of Maggie Lake, Infilling of
Carol Lake Lagoon and unnamed water
Carol Lake Lagoon and unnamed water
body, Sewage System/Water Supply
body, Sewage System/Water Supply
for Crusher Building. IOC holds also
for Crusher Building. IOC holds also
Federal Permits (Fish Habitat
Federal Permits (Fish Habitat
Compensation Agreement, Tailings
Compensation Agreement, Tailings
Management Plan and dewatering).
Management Plan and dewatering).
Our key permit conditions are local
Our key permit conditions are local
employment, procurement and benefit
employment, procurement and benefit
sharing commitments; environmental
sharing commitments; environmental
compliance and reporting;
compliance and reporting;
environmental security and closure
environmental security and closure
and rehabilitation planning; and
and rehabilitation planning; and
payment of taxes and government
payment of taxes and government
royalties.
royalties.
Production started 1977;
Production started 1977;
initial interest acquired 1989.
initial interest acquired 1989.
Fifth mining plant
Fifth mining plant
commissioned in 2000. One
commissioned in 2000. One
mining plant
mining plant
decommissioned in 2008. In
decommissioned in 2008. In
September 2012, Rio Tinto
September 2012, Rio Tinto
doubled its holding in
doubled its holding in
Richards Bay Minerals to
Richards Bay Minerals to
74% following the acquisition
74% following the acquisition
of BHP Billiton’s entire
of BHP Billiton’s entire
interests.
interests.
Interest acquired in 2000
Interest acquired in 2000
through acquisition of North
through acquisition of North
Ltd. Current operation began
Ltd. Current operation began
in 1962 and has processed
in 1962 and has processed
over one billion tonnes of
over one billion tonnes of
crude ore. Annual capacity
crude ore. Annual capacity
23 million tonnes of
23 million tonnes of
concentrate of which 12 to
concentrate of which 12 to
13 million tonnes can be
13 million tonnes can be
pelletised.
pelletised.
Deposits discovered in
Deposits discovered in
1994-95. Construction
1994-95. Construction
approved in 2000. Diamond
approved in 2000. Diamond
production started in 2003.
production started in 2003.
Fourth pipe commenced
Fourth pipe commenced
production in 2018. Mine life
production in 2018. Mine life
through 2023-25. In
through 2023-25. In
November 2021, Rio Tinto
November 2021, Rio Tinto
became the sole owner of
became the sole owner of
Diavik Diamond Mine. This
Diavik Diamond Mine. This
followed the completion of a
followed the completion of a
transaction for Rio Tinto’s
transaction for Rio Tinto’s
acquisition of the 40% share
acquisition of the 40% share
held by Dominion Diamond
held by Dominion Diamond
Mines in Diavik, following the
Mines in Diavik, following the
Court of Queen’s Bench of
Court of Queen’s Bench of
Alberta’s approval.
Alberta’s approval.
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395
Mines and production facilities continued
Group mines as at 31 December 2021
Minerals continued
Projects
Energy Resources
of Australia –
Ranger
86.3% Rio Tinto
with the remaining
13.7% held by
minority
shareholders
Energy Resources
of Australia
Northern Territory,
Australia
Road, rail and port
396
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Ownership
Operator
Location
Access and Infrastructure Title/lease/acreage
Key permit conditions
History
Property description
Processing plants and
/ type of mine
Type of mineralisation
other available facilities
Power source
Property
Jadar
100% Rio Tinto
Rio Tinto
Loznica town,
Serbia
Road and rail
The last extension of the Jadar exploration
licence expired on 14 February 2020, with no
legal basis for further extension of its term.
During the Feasibility Study the Project has
completed the Elaborate on Resources and
Reserves (declaration based on Serbian law),
obtained the Certificate on Resources and
Reserves on 6th January 2021 and has
submitted the request for exploitation field
licence (with Serbian Feasibility Study being
one of the supporting documents to
this request).
In January 2022, the Government of Serbia
cancelled the Spatial Plan for the Jadar project
and required all related permits to be revoked.
We remain committed to exploring all options
and are reviewing the legal basis of the decision
and the implications for our activities and
people in Serbia.
ERA Mining Tenure comprises two leases: the
Ranger Project Area (RPA, 79 km2) which hosts
the now mined out Ranger 1 and 3 and
undeveloped R3 Deeps uranium deposits, and
MLN1 (73 km2), which hosts the undeveloped
Tier 1 Jabiluka uranium deposit.
Mining tenure granted by Federal Government
as per Section 41 of the Atomic Energy Act. The
Authority to mine and process at Ranger is due
to expire on 8 January 2021, when “ERA shall
cease or suspend, as the case may be, all
mining operations permitted under this
Authority by 8 January 2021”.
The project is governed by two main
The Jadar deposit was discovered
Underground
Jadarite
pieces of Serbian legislation: Mining
in 2004 by Rio Tinto Exploration
mine
Law is administered by the Ministry of
geologists during a regional
Mining and Energy (MME) and
exploration program for borates in
Planning and Construction Law is
the Balkans. The deposit is in its
administered by the Ministry of
majority composed of a mineral
Construction, Transportation and
new to science named Jadarite
mineralisation is
present in three
broad zones
containing
The planned site
layout includes a
concentrator to
beneficiate the
primary ore, a
Connected to the
national electric
grid. Electricity
planned to be
sourced from
stratiform lenses of
chemical plant to
nearby
variable thickness.
produce boric acid
hydroelectrical
power plant.
Infrastructure (MCTI).
The permitting process base case
foresees the following:
– Mine, beneficiation plant and mine
surface facilities are subject to the
permitting procedure of MME.
– Processing plant, industrial waste
landfill and infrastructure (rail,
roads, power and water pipelines)
are subject to the unified permitting
procedure under MCTI.
closure activities.
MLN1 – Northern Territory Mineral
Lease granted in 1982 under the NT
Mining Act for an initial period of 42
years – Expires in 2024, which can be
renewed by the Minister for a further
period not exceeding 10 years
provided ERA has complied with
the NT Mining Act and the conditions
of MLN1
with high concentrations of
lithium and boron. Resource
definition and processing
workflow development and
testing were conducted for over a
decade. The Pre-feasibility Study
(PFS) completed in July 2020 has
shown that the Jadar project has
the potential to produce both
battery grade lithium carbonate
and boric acid. Based on current
estimates and subject to receiving
all relevant approvals, permits
and licences, first saleable
production is expected to be no
earlier than 2027 (previously
2026). In January 2022, the
Government of Serbia cancelled
the Spatial Plan for the Jadar
project and required all related
permits to be revoked. We remain
committed to exploring all options
and are reviewing the legal
basis of the decision and the
implications for our activities and
people in Serbia.
Processing of uranium ore
finished on 8 January 2021 with
the expiry of the RPA authority to
mine and process uranium ore.
Remaining reserves and
resources within the RPA
(including the Ranger 3 Deeps)
were extinguished in accordance
with JORC RPEEE guidelines,
leaving only the Jabiluka resource
as ERA's remaining asset.
Activities are now focused on
Closure and Rehabilitation of the
Ranger minesite. Since
commencing processing in 1982,
Ranger mine has produced over
132,000 tonnes of uranium oxide.
These units are
hosted in a much
thicker gently
and lithium
carbonate, paste
plant, water and
dipping sequence
waste treatment
mainly composed of
plants, surface
fine-grained
waste storage (dry
sediments affected
stack), railroad spur
by syn and post
depositional
faulting.
and warehouses for
product storage and
loading / unloading,
and office buildings.
tertiary crushing
circuits); Grinding
plant; Leaching
circuit; Counter
Current Decant
circuit; solvent
extraction circuit;
precipitation, drying
and packing circuit;
Neutralisation and
tailings disposal
system.
RPA – Granted under s41 of the
Mining commenced 1981. Interest
Hard rock Open
Paleo-Proterozoic,
Crushing (primary,
On-site diesel
Atomic Energy Act – Authority to
acquired through acquisition of
cut/ Stockpile
structurally-hosted
secondary and
generation.
process uranium expires 8 Jan 2021.
North 2000. Open pit mining
Lease expires 8 Jan 2026, allowing
ended 2012, since then ERA has
for 5 years of rehabilitation and
been processing ore stockpiles.
“unconformity-
type” uraninite.
Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Minerals continued
Minerals continued
Projects
Projects
Property
Property
Jadar
Jadar
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Loznica town,
Loznica town,
Road and rail
Road and rail
The last extension of the Jadar exploration
The last extension of the Jadar exploration
Serbia
Serbia
Energy Resources
Energy Resources
86.3% Rio Tinto
86.3% Rio Tinto
Energy Resources
Energy Resources
Northern Territory,
Northern Territory,
Road, rail and port
Road, rail and port
ERA Mining Tenure comprises two leases: the
ERA Mining Tenure comprises two leases: the
of Australia –
of Australia –
with the remaining
with the remaining
of Australia
of Australia
Australia
Australia
Ranger
Ranger
13.7% held by
13.7% held by
minority
minority
shareholders
shareholders
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure Title/lease/acreage
Access and Infrastructure Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description
Property description
/ type of mine
/ type of mine
Type of mineralisation
Type of mineralisation
Processing plants and
Processing plants and
other available facilities
other available facilities
Power source
Power source
licence expired on 14 February 2020, with no
licence expired on 14 February 2020, with no
legal basis for further extension of its term.
legal basis for further extension of its term.
During the Feasibility Study the Project has
During the Feasibility Study the Project has
completed the Elaborate on Resources and
completed the Elaborate on Resources and
Reserves (declaration based on Serbian law),
Reserves (declaration based on Serbian law),
obtained the Certificate on Resources and
obtained the Certificate on Resources and
Reserves on 6th January 2021 and has
Reserves on 6th January 2021 and has
submitted the request for exploitation field
submitted the request for exploitation field
licence (with Serbian Feasibility Study being
licence (with Serbian Feasibility Study being
one of the supporting documents to
one of the supporting documents to
this request).
this request).
In January 2022, the Government of Serbia
In January 2022, the Government of Serbia
cancelled the Spatial Plan for the Jadar project
cancelled the Spatial Plan for the Jadar project
and required all related permits to be revoked.
and required all related permits to be revoked.
We remain committed to exploring all options
We remain committed to exploring all options
and are reviewing the legal basis of the decision
and are reviewing the legal basis of the decision
and the implications for our activities and
and the implications for our activities and
people in Serbia.
people in Serbia.
Ranger Project Area (RPA, 79 km2) which hosts
Ranger Project Area (RPA, 79 km2) which hosts
the now mined out Ranger 1 and 3 and
the now mined out Ranger 1 and 3 and
undeveloped R3 Deeps uranium deposits, and
undeveloped R3 Deeps uranium deposits, and
MLN1 (73 km2), which hosts the undeveloped
MLN1 (73 km2), which hosts the undeveloped
Tier 1 Jabiluka uranium deposit.
Tier 1 Jabiluka uranium deposit.
Mining tenure granted by Federal Government
Mining tenure granted by Federal Government
as per Section 41 of the Atomic Energy Act. The
as per Section 41 of the Atomic Energy Act. The
Authority to mine and process at Ranger is due
Authority to mine and process at Ranger is due
to expire on 8 January 2021, when “ERA shall
to expire on 8 January 2021, when “ERA shall
cease or suspend, as the case may be, all
cease or suspend, as the case may be, all
mining operations permitted under this
mining operations permitted under this
Authority by 8 January 2021”.
Authority by 8 January 2021”.
The project is governed by two main
The project is governed by two main
pieces of Serbian legislation: Mining
pieces of Serbian legislation: Mining
Law is administered by the Ministry of
Law is administered by the Ministry of
Mining and Energy (MME) and
Mining and Energy (MME) and
Planning and Construction Law is
Planning and Construction Law is
administered by the Ministry of
administered by the Ministry of
Construction, Transportation and
Construction, Transportation and
Infrastructure (MCTI).
Infrastructure (MCTI).
The permitting process base case
The permitting process base case
foresees the following:
foresees the following:
– Mine, beneficiation plant and mine
– Mine, beneficiation plant and mine
surface facilities are subject to the
surface facilities are subject to the
permitting procedure of MME.
permitting procedure of MME.
– Processing plant, industrial waste
– Processing plant, industrial waste
landfill and infrastructure (rail,
landfill and infrastructure (rail,
roads, power and water pipelines)
roads, power and water pipelines)
are subject to the unified permitting
are subject to the unified permitting
procedure under MCTI.
procedure under MCTI.
RPA – Granted under s41 of the
RPA – Granted under s41 of the
Atomic Energy Act – Authority to
Atomic Energy Act – Authority to
process uranium expires 8 Jan 2021.
process uranium expires 8 Jan 2021.
Lease expires 8 Jan 2026, allowing
Lease expires 8 Jan 2026, allowing
for 5 years of rehabilitation and
for 5 years of rehabilitation and
closure activities.
closure activities.
MLN1 – Northern Territory Mineral
MLN1 – Northern Territory Mineral
Lease granted in 1982 under the NT
Lease granted in 1982 under the NT
Mining Act for an initial period of 42
Mining Act for an initial period of 42
years – Expires in 2024, which can be
years – Expires in 2024, which can be
renewed by the Minister for a further
renewed by the Minister for a further
period not exceeding 10 years
period not exceeding 10 years
provided ERA has complied with
provided ERA has complied with
the NT Mining Act and the conditions
the NT Mining Act and the conditions
of MLN1
of MLN1
The Jadar deposit was discovered
The Jadar deposit was discovered
in 2004 by Rio Tinto Exploration
in 2004 by Rio Tinto Exploration
geologists during a regional
geologists during a regional
exploration program for borates in
exploration program for borates in
the Balkans. The deposit is in its
the Balkans. The deposit is in its
majority composed of a mineral
majority composed of a mineral
new to science named Jadarite
new to science named Jadarite
with high concentrations of
with high concentrations of
lithium and boron. Resource
lithium and boron. Resource
definition and processing
definition and processing
workflow development and
workflow development and
testing were conducted for over a
testing were conducted for over a
decade. The Pre-feasibility Study
decade. The Pre-feasibility Study
(PFS) completed in July 2020 has
(PFS) completed in July 2020 has
shown that the Jadar project has
shown that the Jadar project has
the potential to produce both
the potential to produce both
battery grade lithium carbonate
battery grade lithium carbonate
and boric acid. Based on current
and boric acid. Based on current
estimates and subject to receiving
estimates and subject to receiving
all relevant approvals, permits
all relevant approvals, permits
and licences, first saleable
and licences, first saleable
production is expected to be no
production is expected to be no
earlier than 2027 (previously
earlier than 2027 (previously
2026). In January 2022, the
2026). In January 2022, the
Government of Serbia cancelled
Government of Serbia cancelled
the Spatial Plan for the Jadar
the Spatial Plan for the Jadar
project and required all related
project and required all related
permits to be revoked. We remain
permits to be revoked. We remain
committed to exploring all options
committed to exploring all options
and are reviewing the legal
and are reviewing the legal
basis of the decision and the
basis of the decision and the
implications for our activities and
implications for our activities and
people in Serbia.
people in Serbia.
Mining commenced 1981. Interest
Mining commenced 1981. Interest
acquired through acquisition of
acquired through acquisition of
North 2000. Open pit mining
North 2000. Open pit mining
ended 2012, since then ERA has
ended 2012, since then ERA has
been processing ore stockpiles.
been processing ore stockpiles.
Processing of uranium ore
Processing of uranium ore
finished on 8 January 2021 with
finished on 8 January 2021 with
the expiry of the RPA authority to
the expiry of the RPA authority to
mine and process uranium ore.
mine and process uranium ore.
Remaining reserves and
Remaining reserves and
resources within the RPA
resources within the RPA
(including the Ranger 3 Deeps)
(including the Ranger 3 Deeps)
were extinguished in accordance
were extinguished in accordance
with JORC RPEEE guidelines,
with JORC RPEEE guidelines,
leaving only the Jabiluka resource
leaving only the Jabiluka resource
as ERA's remaining asset.
as ERA's remaining asset.
Activities are now focused on
Activities are now focused on
Closure and Rehabilitation of the
Closure and Rehabilitation of the
Ranger minesite. Since
Ranger minesite. Since
commencing processing in 1982,
commencing processing in 1982,
Ranger mine has produced over
Ranger mine has produced over
132,000 tonnes of uranium oxide.
132,000 tonnes of uranium oxide.
Underground
Underground
mine
mine
Connected to the
Connected to the
national electric
national electric
grid. Electricity
grid. Electricity
planned to be
planned to be
sourced from
sourced from
nearby
nearby
hydroelectrical
hydroelectrical
power plant.
power plant.
Jadarite
Jadarite
mineralisation is
mineralisation is
present in three
present in three
broad zones
broad zones
containing
containing
stratiform lenses of
stratiform lenses of
variable thickness.
variable thickness.
These units are
These units are
hosted in a much
hosted in a much
thicker gently
thicker gently
dipping sequence
dipping sequence
mainly composed of
mainly composed of
fine-grained
fine-grained
sediments affected
sediments affected
by syn and post
by syn and post
depositional
depositional
faulting.
faulting.
The planned site
The planned site
layout includes a
layout includes a
concentrator to
concentrator to
beneficiate the
beneficiate the
primary ore, a
primary ore, a
chemical plant to
chemical plant to
produce boric acid
produce boric acid
and lithium
and lithium
carbonate, paste
carbonate, paste
plant, water and
plant, water and
waste treatment
waste treatment
plants, surface
plants, surface
waste storage (dry
waste storage (dry
stack), railroad spur
stack), railroad spur
and warehouses for
and warehouses for
product storage and
product storage and
loading / unloading,
loading / unloading,
and office buildings.
and office buildings.
Hard rock Open
Hard rock Open
cut/ Stockpile
cut/ Stockpile
Paleo-Proterozoic,
Paleo-Proterozoic,
structurally-hosted
structurally-hosted
“unconformity-
“unconformity-
type” uraninite.
type” uraninite.
On-site diesel
On-site diesel
generation.
generation.
Crushing (primary,
Crushing (primary,
secondary and
secondary and
tertiary crushing
tertiary crushing
circuits); Grinding
circuits); Grinding
plant; Leaching
plant; Leaching
circuit; Counter
circuit; Counter
Current Decant
Current Decant
circuit; solvent
circuit; solvent
extraction circuit;
extraction circuit;
precipitation, drying
precipitation, drying
and packing circuit;
and packing circuit;
Neutralisation and
Neutralisation and
tailings disposal
tailings disposal
system.
system.
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397
Mines and production facilities continued
Group mines as at 31 December 2021
Aluminium
Production properties
Property
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
/ type of mine
mineralisation
Processing plants and other available facilities
Power source
Property description
Type of
CBG Sangaredi
La Compagnie
des Bauxites de
Guinée
Rio Tinto Group
22.95%,
Guinean
Government
49%, Alcoa
22.95%, Dadco
Investments
Limited 5.1%
Sangaredi, Guinea
Road, air and port.
Mining concession expires in 2040.
The obligations of CBG
CBG is a JV created in 1963 and is
Open cut
Bauxite
The Sangaredi site is an open cut mine
Sangaredi-Kamsar railway
(leasing rail infrastructure from
ANAIM, wholly-owned by
Government of Guinea).
Leases comprise 2,939 km2.
Gove
100% Rio Tinto
Gove, Northern
Territory, Australia
Road, air and port
Rio Tinto
through
Rio Tinto
Alumina Gove
P/L
All leases were renewed in 2011 for a further
period of 42 years. The residue disposal area is
leased from the Arnhem Land Aboriginal Land
Trust. The Northern Territory government is the
lessor of the balance of the leases; however, on
expiry of the 42-year renewed term, the land
subject to the balances of the leases will all
vest to the Arnhem Land Aboriginal Land Trust.
Leases comprise 233.5 km2.
Key permit conditions
Bauxite mining commenced in
Open cut
Bauxite
Crushing plant only to reduce oversize
including the following operations:
stripping, drilling, blasting, loading,
hauling. Then, the bauxite is transported by
railway cars approximately 135 km away
from Sangaredi to Kamsar. In Kamsar, the
installations include the following assets:
locomotive repair shop, railway cars
unloader, primary crusher, secondary
crusher, scrubbers, conveyors, stacker,
reclaimer, bauxite dryers, dry bauxite
storage, bauxite sampling tower, power
house, wharf, ship loader, etc.
The crushing plant is used only to reduce
oversize material – no screening required.
Four bauxite dryers are installed in order to
reduce the moisture content of the bauxite
before shipping.
material – no screening required.
On-site
generation
(fuel oil).
On-site diesel
fired power
station.
relative to health and
registered in US (Delaware).
safety of workers and to
Bauxite mining commenced in
the environment and to
1973. Shareholders are 51%
the rehabilitation of
mined out areas are
Halco and 49% Government of
Guinea. Rio Tinto holds a 45%
subject to the Mining
interest in Halco. Expansion of the
Code (2011) and
CBG bauxite mine, processing
Environmental Code of
plant, port facility and associated
the Republic of Guinea.
infrastructure is currently near
completion with ramp up to
18.5 million tonnes per annum
underway. In 2015, CBG entered
into an agreement to share the
rail infrastructure in Multi-User
Operation Agreement (MUOA)
with other bauxite companies,
GAC (EGA) and COBAD (RUSAL).
are prescribed by the
1970, feeding both the Gove
Northern Territory
refinery and export market,
Government in the form
capped at two million tonnes per
of a Mine Management
annum. Bauxite export ceased in
Plan (MMP). The current
2006 with feed intended for the
MMP runs for a period of
expanded Gove refinery. Bauxite
12 years, until 2031, and
exports recommenced in 2008
authorises all activities
and will increase in the coming
at the operation. Lease
years following the curtailment of
payments are prescribed
the refinery production in 2014
by the terms of the
and permanent shut decision
relevant leases.
made by the Board of Rio Tinto in
October 2017. Current annual
production capacity is 12.5 million
tonnes on a dry basis
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Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Aluminium
Aluminium
Production properties
Production properties
CBG Sangaredi
CBG Sangaredi
Rio Tinto Group
Rio Tinto Group
La Compagnie
La Compagnie
Sangaredi, Guinea
Sangaredi, Guinea
Road, air and port.
Road, air and port.
Mining concession expires in 2040.
Mining concession expires in 2040.
des Bauxites de
des Bauxites de
Guinée
Guinée
22.95%,
22.95%,
Guinean
Guinean
Government
Government
49%, Alcoa
49%, Alcoa
22.95%, Dadco
22.95%, Dadco
Investments
Investments
Limited 5.1%
Limited 5.1%
Sangaredi-Kamsar railway
Sangaredi-Kamsar railway
Leases comprise 2,939 km2.
Leases comprise 2,939 km2.
(leasing rail infrastructure from
(leasing rail infrastructure from
ANAIM, wholly-owned by
ANAIM, wholly-owned by
Government of Guinea).
Government of Guinea).
Gove
Gove
100% Rio Tinto
100% Rio Tinto
Rio Tinto
Rio Tinto
Gove, Northern
Gove, Northern
Road, air and port
Road, air and port
Territory, Australia
Territory, Australia
through
through
Rio Tinto
Rio Tinto
Alumina Gove
Alumina Gove
P/L
P/L
All leases were renewed in 2011 for a further
All leases were renewed in 2011 for a further
period of 42 years. The residue disposal area is
period of 42 years. The residue disposal area is
leased from the Arnhem Land Aboriginal Land
leased from the Arnhem Land Aboriginal Land
Trust. The Northern Territory government is the
Trust. The Northern Territory government is the
lessor of the balance of the leases; however, on
lessor of the balance of the leases; however, on
expiry of the 42-year renewed term, the land
expiry of the 42-year renewed term, the land
subject to the balances of the leases will all
subject to the balances of the leases will all
vest to the Arnhem Land Aboriginal Land Trust.
vest to the Arnhem Land Aboriginal Land Trust.
Leases comprise 233.5 km2.
Leases comprise 233.5 km2.
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
The obligations of CBG
The obligations of CBG
relative to health and
relative to health and
safety of workers and to
safety of workers and to
the environment and to
the environment and to
the rehabilitation of
the rehabilitation of
mined out areas are
mined out areas are
subject to the Mining
subject to the Mining
Code (2011) and
Code (2011) and
Environmental Code of
Environmental Code of
the Republic of Guinea.
the Republic of Guinea.
Key permit conditions
Key permit conditions
are prescribed by the
are prescribed by the
Northern Territory
Northern Territory
Government in the form
Government in the form
of a Mine Management
of a Mine Management
Plan (MMP). The current
Plan (MMP). The current
MMP runs for a period of
MMP runs for a period of
12 years, until 2031, and
12 years, until 2031, and
authorises all activities
authorises all activities
at the operation. Lease
at the operation. Lease
payments are prescribed
payments are prescribed
by the terms of the
by the terms of the
relevant leases.
relevant leases.
CBG is a JV created in 1963 and is
CBG is a JV created in 1963 and is
registered in US (Delaware).
registered in US (Delaware).
Bauxite mining commenced in
Bauxite mining commenced in
1973. Shareholders are 51%
1973. Shareholders are 51%
Halco and 49% Government of
Halco and 49% Government of
Guinea. Rio Tinto holds a 45%
Guinea. Rio Tinto holds a 45%
interest in Halco. Expansion of the
interest in Halco. Expansion of the
CBG bauxite mine, processing
CBG bauxite mine, processing
plant, port facility and associated
plant, port facility and associated
infrastructure is currently near
infrastructure is currently near
completion with ramp up to
completion with ramp up to
18.5 million tonnes per annum
18.5 million tonnes per annum
underway. In 2015, CBG entered
underway. In 2015, CBG entered
into an agreement to share the
into an agreement to share the
rail infrastructure in Multi-User
rail infrastructure in Multi-User
Operation Agreement (MUOA)
Operation Agreement (MUOA)
with other bauxite companies,
with other bauxite companies,
GAC (EGA) and COBAD (RUSAL).
GAC (EGA) and COBAD (RUSAL).
Bauxite mining commenced in
Bauxite mining commenced in
1970, feeding both the Gove
1970, feeding both the Gove
refinery and export market,
refinery and export market,
capped at two million tonnes per
capped at two million tonnes per
annum. Bauxite export ceased in
annum. Bauxite export ceased in
2006 with feed intended for the
2006 with feed intended for the
expanded Gove refinery. Bauxite
expanded Gove refinery. Bauxite
exports recommenced in 2008
exports recommenced in 2008
and will increase in the coming
and will increase in the coming
years following the curtailment of
years following the curtailment of
the refinery production in 2014
the refinery production in 2014
and permanent shut decision
and permanent shut decision
made by the Board of Rio Tinto in
made by the Board of Rio Tinto in
October 2017. Current annual
October 2017. Current annual
production capacity is 12.5 million
production capacity is 12.5 million
tonnes on a dry basis
tonnes on a dry basis
Property description
Property description
/ type of mine
/ type of mine
Type of
Type of
mineralisation
mineralisation
Open cut
Open cut
Bauxite
Bauxite
Processing plants and other available facilities
Processing plants and other available facilities
Power source
Power source
On-site
On-site
generation
generation
(fuel oil).
(fuel oil).
The Sangaredi site is an open cut mine
The Sangaredi site is an open cut mine
including the following operations:
including the following operations:
stripping, drilling, blasting, loading,
stripping, drilling, blasting, loading,
hauling. Then, the bauxite is transported by
hauling. Then, the bauxite is transported by
railway cars approximately 135 km away
railway cars approximately 135 km away
from Sangaredi to Kamsar. In Kamsar, the
from Sangaredi to Kamsar. In Kamsar, the
installations include the following assets:
installations include the following assets:
locomotive repair shop, railway cars
locomotive repair shop, railway cars
unloader, primary crusher, secondary
unloader, primary crusher, secondary
crusher, scrubbers, conveyors, stacker,
crusher, scrubbers, conveyors, stacker,
reclaimer, bauxite dryers, dry bauxite
reclaimer, bauxite dryers, dry bauxite
storage, bauxite sampling tower, power
storage, bauxite sampling tower, power
house, wharf, ship loader, etc.
house, wharf, ship loader, etc.
The crushing plant is used only to reduce
The crushing plant is used only to reduce
oversize material – no screening required.
oversize material – no screening required.
Four bauxite dryers are installed in order to
Four bauxite dryers are installed in order to
reduce the moisture content of the bauxite
reduce the moisture content of the bauxite
before shipping.
before shipping.
Open cut
Open cut
Bauxite
Bauxite
Crushing plant only to reduce oversize
Crushing plant only to reduce oversize
material – no screening required.
material – no screening required.
On-site diesel
On-site diesel
fired power
fired power
station.
station.
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399
Mines and production facilities continued
Group mines as at 31 December 2021
Aluminium continued
Property
Ownership
Operator
Location
Access and Infrastructure
Title/lease/acreage
Key permit conditions
History
Property description
Processing plants and other
/ type of mine
Type of mineralisation
available facilities
Power source
Porto Trombetas,
Para, Brazil
Air or port
MRN is a
non-managed
JV. All
decisions are
approved by
shareholders
BoD
Mining concession granted by Brazilian Mining
Agency (ANM), following the Brazilian mining
code with no expiration date.
The current 44 MRN mining leases cover
22 major plateaus, which spread across
143,000 hectares and all of them have the
status of a mining concession.
With the exception of
Mineral extraction commenced in
Open cut
Consists of a series of
The beneficiation
On-site
concessions from Amazonas
1979. Initial production capacity
State, the MRN mining leases are
3.4 million tonnes annually.
within the Saracá-Taquera
From 2003, production capacity
National Forest, a preservation
up to 16.3 million tonnes per
environmental area. However,
year on a dry basis.
bauxite tabular deposits
process is formed by a
generation fuel
with 2 mining plan
primary crusher,
oil + diesel).
sequencing: East Zone
conveyors, scrubbers,
(1979 – 2026) and West
secondary crushers,
Zone (2027-2048)
screenings,
MRN Porto
Trombetas
MRN’s shareholders are:
Rio Tinto (12%), Vale
(40%), Hydro (5%),
South 32 (14.8%),
CBA (Companhia
Brasileira de Alumínio
10%) and Alcoa
(18.2%).
*Alcoa’s 18.2% is
comprised of Alcoa
Alumínio (8.58%), AWA
Brasil (4.62%) and AWA
LLC (5%), each a
subsidiary of Alcoa
(10%).
Weipa/Ely
100% Rio Tinto
Weipa, Queensland,
Australia
Road, air and port
Rio Tinto
through
Rio Tinto
Alumina Weipa
P/L
The Queensland Government Comalco
(ML7024) lease expires in 2042 with an option
of a 21-year extension, then two years’ notice of
termination; the Queensland Government Alcan
lease (ML7031) expires in 2048 with a 21-year
right of renewal with a two-year notice period.
Leases comprise 2,716.9 km2 ML7024 = 1340.8
km2; ML7031 = 1376.1 km2.
This property with the associated 2 leases,
includes the deposits known as Andoom,
East Weipa, Amrun, Norman Creek and North
of Weipa.
The respective leases are subject
Bauxite mining commenced in
Open cut
Bauxite
Due to market and tailings
facilities restrictions, the planned
production 12.5Mtpa on dry
basis (up to 2038). The planned
production from 2039 to 2048 is
15Mtpa.
the right of mining is preserved
initially by the Federal law which
created the National Forest (that
is subsequent to mining
concessions), as well by the
management plan, which
acknowledges a formal mining
zone within the confines of the
National Forest.
Environmental licensing is
granted by Brazilian
Environmental Agency (IBAMA)
up to 2026 for East Zone. For
West Zone it will require new
licensing from 2027 to 2048.
to the Comalco Agreement Act
1961 at Weipa. Major upgrade
(Comalco Agreement) and Alcan
completed in 1998. Rio Tinto
Agreement Act (Alcan
interest increased from 72.4% to
Agreement); the relevant State
100% in 2000. In 1997, Ely
Agreements for the Weipa
Bauxite Mining Project
operations. Key permit
Agreement signed with local
conditions are prescribed by the
Aboriginal land owners. Bauxite
Queensland Government in the
Mining and Exchange Agreement
relevant Environmental Authority
signed in 1998 with Comalco to
applicable to each lease
(ML7024 and ML7031,
allow for extraction of ore at Ely.
The Western Cape Communities
respectively). Lease payments
Co-Existence Agreement, an
are subject to the terms of the
Indigenous Land Use Agreement,
leases and the respective State
was signed in 2001. Following
Agreements.
the ramp up to full production of
Amrun the current annual
production of the Weipa mine is
35.5 million tonnes.
hydrocyclones and
vacuum filters. The
superfines tailings are
pumped to a tailing
system facility.
Andoom, East Weipa and
On-site
Amrun – wet crushing
generation
and screening plants to
(diesel)
remove ultra fine
supplemented by
proportion.
a solar
generation
facility.
400
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Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group mines as at 31 December 2021
Group mines as at 31 December 2021
Aluminium continued
Aluminium continued
MRN Porto
MRN Porto
Trombetas
Trombetas
MRN’s shareholders are:
MRN’s shareholders are:
MRN is a
MRN is a
Porto Trombetas,
Porto Trombetas,
Air or port
Air or port
non-managed
non-managed
Para, Brazil
Para, Brazil
JV. All
JV. All
decisions are
decisions are
approved by
approved by
shareholders
shareholders
BoD
BoD
Rio Tinto (12%), Vale
Rio Tinto (12%), Vale
(40%), Hydro (5%),
(40%), Hydro (5%),
South 32 (14.8%),
South 32 (14.8%),
CBA (Companhia
CBA (Companhia
Brasileira de Alumínio
Brasileira de Alumínio
10%) and Alcoa
10%) and Alcoa
(18.2%).
(18.2%).
*Alcoa’s 18.2% is
*Alcoa’s 18.2% is
comprised of Alcoa
comprised of Alcoa
Alumínio (8.58%), AWA
Alumínio (8.58%), AWA
Brasil (4.62%) and AWA
Brasil (4.62%) and AWA
LLC (5%), each a
LLC (5%), each a
subsidiary of Alcoa
subsidiary of Alcoa
(10%).
(10%).
Weipa/Ely
Weipa/Ely
100% Rio Tinto
100% Rio Tinto
Weipa, Queensland,
Weipa, Queensland,
Road, air and port
Road, air and port
The Queensland Government Comalco
The Queensland Government Comalco
Rio Tinto
Rio Tinto
through
through
Rio Tinto
Rio Tinto
Alumina Weipa
Alumina Weipa
P/L
P/L
Australia
Australia
Property
Property
Ownership
Ownership
Operator
Operator
Location
Location
Access and Infrastructure
Access and Infrastructure
Title/lease/acreage
Title/lease/acreage
Key permit conditions
Key permit conditions
History
History
Property description
Property description
/ type of mine
/ type of mine
Type of mineralisation
Type of mineralisation
Processing plants and other
Processing plants and other
available facilities
available facilities
Power source
Power source
Mining concession granted by Brazilian Mining
Mining concession granted by Brazilian Mining
Agency (ANM), following the Brazilian mining
Agency (ANM), following the Brazilian mining
code with no expiration date.
code with no expiration date.
The current 44 MRN mining leases cover
The current 44 MRN mining leases cover
22 major plateaus, which spread across
22 major plateaus, which spread across
143,000 hectares and all of them have the
143,000 hectares and all of them have the
status of a mining concession.
status of a mining concession.
(ML7024) lease expires in 2042 with an option
(ML7024) lease expires in 2042 with an option
of a 21-year extension, then two years’ notice of
of a 21-year extension, then two years’ notice of
termination; the Queensland Government Alcan
termination; the Queensland Government Alcan
lease (ML7031) expires in 2048 with a 21-year
lease (ML7031) expires in 2048 with a 21-year
right of renewal with a two-year notice period.
right of renewal with a two-year notice period.
Leases comprise 2,716.9 km2 ML7024 = 1340.8
Leases comprise 2,716.9 km2 ML7024 = 1340.8
km2; ML7031 = 1376.1 km2.
km2; ML7031 = 1376.1 km2.
This property with the associated 2 leases,
This property with the associated 2 leases,
includes the deposits known as Andoom,
includes the deposits known as Andoom,
East Weipa, Amrun, Norman Creek and North
East Weipa, Amrun, Norman Creek and North
of Weipa.
of Weipa.
With the exception of
With the exception of
concessions from Amazonas
concessions from Amazonas
State, the MRN mining leases are
State, the MRN mining leases are
within the Saracá-Taquera
within the Saracá-Taquera
National Forest, a preservation
National Forest, a preservation
environmental area. However,
environmental area. However,
the right of mining is preserved
the right of mining is preserved
initially by the Federal law which
initially by the Federal law which
created the National Forest (that
created the National Forest (that
is subsequent to mining
is subsequent to mining
concessions), as well by the
concessions), as well by the
management plan, which
management plan, which
acknowledges a formal mining
acknowledges a formal mining
zone within the confines of the
zone within the confines of the
National Forest.
National Forest.
Environmental licensing is
Environmental licensing is
granted by Brazilian
granted by Brazilian
Environmental Agency (IBAMA)
Environmental Agency (IBAMA)
up to 2026 for East Zone. For
up to 2026 for East Zone. For
West Zone it will require new
West Zone it will require new
licensing from 2027 to 2048.
licensing from 2027 to 2048.
The respective leases are subject
The respective leases are subject
to the Comalco Agreement Act
to the Comalco Agreement Act
(Comalco Agreement) and Alcan
(Comalco Agreement) and Alcan
Agreement Act (Alcan
Agreement Act (Alcan
Agreement); the relevant State
Agreement); the relevant State
Agreements for the Weipa
Agreements for the Weipa
operations. Key permit
operations. Key permit
conditions are prescribed by the
conditions are prescribed by the
Queensland Government in the
Queensland Government in the
relevant Environmental Authority
relevant Environmental Authority
applicable to each lease
applicable to each lease
(ML7024 and ML7031,
(ML7024 and ML7031,
respectively). Lease payments
respectively). Lease payments
are subject to the terms of the
are subject to the terms of the
leases and the respective State
leases and the respective State
Agreements.
Agreements.
Mineral extraction commenced in
Mineral extraction commenced in
1979. Initial production capacity
1979. Initial production capacity
3.4 million tonnes annually.
3.4 million tonnes annually.
From 2003, production capacity
From 2003, production capacity
up to 16.3 million tonnes per
up to 16.3 million tonnes per
year on a dry basis.
year on a dry basis.
Due to market and tailings
Due to market and tailings
facilities restrictions, the planned
facilities restrictions, the planned
production 12.5Mtpa on dry
production 12.5Mtpa on dry
basis (up to 2038). The planned
basis (up to 2038). The planned
production from 2039 to 2048 is
production from 2039 to 2048 is
15Mtpa.
15Mtpa.
Open cut
Open cut
Consists of a series of
Consists of a series of
bauxite tabular deposits
bauxite tabular deposits
with 2 mining plan
with 2 mining plan
sequencing: East Zone
sequencing: East Zone
(1979 – 2026) and West
(1979 – 2026) and West
Zone (2027-2048)
Zone (2027-2048)
On-site
On-site
generation fuel
generation fuel
oil + diesel).
oil + diesel).
The beneficiation
The beneficiation
process is formed by a
process is formed by a
primary crusher,
primary crusher,
conveyors, scrubbers,
conveyors, scrubbers,
secondary crushers,
secondary crushers,
screenings,
screenings,
hydrocyclones and
hydrocyclones and
vacuum filters. The
vacuum filters. The
superfines tailings are
superfines tailings are
pumped to a tailing
pumped to a tailing
system facility.
system facility.
Open cut
Open cut
Bauxite
Bauxite
Andoom, East Weipa and
Andoom, East Weipa and
Amrun – wet crushing
Amrun – wet crushing
and screening plants to
and screening plants to
remove ultra fine
remove ultra fine
proportion.
proportion.
On-site
On-site
generation
generation
(diesel)
(diesel)
supplemented by
supplemented by
a solar
a solar
generation
generation
facility.
facility.
Bauxite mining commenced in
Bauxite mining commenced in
1961 at Weipa. Major upgrade
1961 at Weipa. Major upgrade
completed in 1998. Rio Tinto
completed in 1998. Rio Tinto
interest increased from 72.4% to
interest increased from 72.4% to
100% in 2000. In 1997, Ely
100% in 2000. In 1997, Ely
Bauxite Mining Project
Bauxite Mining Project
Agreement signed with local
Agreement signed with local
Aboriginal land owners. Bauxite
Aboriginal land owners. Bauxite
Mining and Exchange Agreement
Mining and Exchange Agreement
signed in 1998 with Comalco to
signed in 1998 with Comalco to
allow for extraction of ore at Ely.
allow for extraction of ore at Ely.
The Western Cape Communities
The Western Cape Communities
Co-Existence Agreement, an
Co-Existence Agreement, an
Indigenous Land Use Agreement,
Indigenous Land Use Agreement,
was signed in 2001. Following
was signed in 2001. Following
the ramp up to full production of
the ramp up to full production of
Amrun the current annual
Amrun the current annual
production of the Weipa mine is
production of the Weipa mine is
35.5 million tonnes.
35.5 million tonnes.
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401
Mines and production facilities continued
Group smelters and refineries (Rio Tinto’s interest 100% unless otherwise shown)
Smelter/refinery
Location
Title/lease
Plant type / Product
Capacity (based on
100% ownership)
Aluminium
Alma
Alma, Quebec, Canada
100% freehold
Alouette (40%)
Arvida
Arvida AP60
Bécancour (25.1%)
Bell Bay
Sept-Îles, Quebec,
Canada
Saguenay, Quebec,
Canada
Saguenay, Quebec,
Canada
Bécancour, Quebec,
Canada
Bell Bay, Northern
Tasmania, Australia
100% freehold
100% freehold
100% freehold
100% freehold
100% freehold
Boyne Smelters (59.4%) Boyne Island,
100% freehold
Queensland, Australia
ELYSIS (48.24%)
Grande-Baie
Saguenay, Quebec,
Canada
Saguenay, Quebec,
Canada
100% freehold
100% freehold
ISAL
Reykjavik, Iceland
100% freehold
Aluminium smelter producing aluminium rod,
t-foundry, molten metal, high purity, remelt
473,000 tonnes
per year aluminium
Aluminium smelter producing aluminium high
purity, remelt
622,000 tonnes
per year aluminium
Aluminium smelter producing aluminium
billet, molten metal, remelt
174,000 tonnes
per year aluminium
Aluminium smelter producing aluminium high
purity, remelt
60,000 tonnes per
year aluminium
Aluminium smelter producing aluminium slab,
billet, t-foundry, remelt, molten metal
454,000 tonnes
per year aluminium
Aluminium smelter producing aluminium slab,
molten metal, small form and t-foundry,
remelt
195,000 tonnes
per year aluminium
Aluminium smelter producing aluminium
billet, EC grade, small form and t-foundry,
remelt
584,000 tonnes
per year aluminium
Aluminium zero-carbon smelting pilot cell
producing aluminium high purity
275 tonnes per
year aluminium
Aluminium smelter producing aluminium slab,
molten metal, high purity, remelt
233,000 tonnes
per year aluminium
Aluminium smelter producing aluminium
remelt, billet
212,000 tonnes
per year aluminium
Jonquière (Vaudreuil)
Jonquière, Quebec,
Canada
100% freehold
Smelter grade alumina
1,560,000 tonnes
per year alumina
Kitimat
Laterrière
Kitimat, British Columbia,
Canada
100% freehold
Aluminium smelter producing aluminium slab,
remelt, high purity
432,000 tonnes
per year aluminium
Saguenay, Quebec,
Canada
100% freehold
Aluminium smelter producing aluminium slab,
remelt, molten metal
257,000 tonnes
per year aluminium
Queensland Alumina
(80%)
Gladstone, Queensland,
Australia
73.3% freehold; 26.7% leasehold (of
which more than 80% expires in
2026 and after)
Refinery producing alumina
São Luis (Alumar) (10%) São Luis, Maranhão,
100% freehold
Refinery producing alumina
Brazil
3,950,000 tonnes
per year alumina
3,830,000 tonnes
per year alumina
Sohar (20%)
Sohar, Oman
100% leasehold (expiring 2039)
Aluminium smelter producing aluminium,
high purity, remelt
395,000 tonnes
per year aluminium
Tiwai Point (New
Zealand Aluminium
Smelters) (79.4%)
Tomago (51.6%)
Invercargill, Southland,
New Zealand
19.6% freehold; 80.4% leasehold
(expiring in 2029 and use of certain
Crown land)
Aluminium smelter producing aluminium
billet, slab, small form foundry, high purity,
remelt
373,000 tonnes
per year aluminium
Tomago, New South
Wales, Australia
100% freehold
Aluminium smelter producing aluminium
billet, slab, remelt
590,000 tonnes
per year aluminium
Yarwun
Gladstone, Queensland,
Australia
97% freehold; 3% leasehold
(expiring 2101 and after)
Refinery producing alumina
3,250,000 tonnes
per year alumina
Copper
Rio Tinto Kennecott
Magna, Salt Lake City,
Utah, US
100% freehold
Flash smelting furnace/Flash convertor
furnace copper refinery and precious
metals plant
335,000 tonnes
per year refined
copper
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Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Group smelters and refineries (Rio Tinto’s interest 100% unless otherwise shown)
Group smelters and refineries (Rio Tinto’s interest 100% unless otherwise shown)
Smelter/refinery
Location
Title/lease
Plant type / Product
Smelter/refinery
Location
Title/lease
Plant type / Product
Capacity (based on
100% ownership)
Aluminium
Minerals
Alma
Alma, Quebec, Canada
100% freehold
Boron
California, United States
100% freehold
Borates refinery
Aluminium smelter producing aluminium rod,
473,000 tonnes
t-foundry, molten metal, high purity, remelt
per year aluminium
Capacity (based on
100% ownership)
576,000 tonnes
per year boric
oxide
Alouette (40%)
Sept-Îles, Quebec,
100% freehold
Aluminium smelter producing aluminium high
622,000 tonnes
purity, remelt
per year aluminium
IOC Pellet plant (58.7%)
Labrador City, Province
of Newfoundland and
Labrador, Canada
100% freehold (asset), 100% freehold
(land) under sublease from Labrador
Iron Ore Royalty Corporation for life of
mine.
Pellet induration furnaces producing
multiple iron ore pellet types
13.5 million tonnes
per year pellet
Bell Bay
Bell Bay, Northern
Tasmania, Australia
100% freehold
Aluminium smelter producing aluminium slab,
195,000 tonnes
molten metal, small form and t-foundry,
per year aluminium
Rio Tinto Fer et Titane
Sorel Plant
Sorel-Tracy, Quebec,
Canada
100% freehold
Ilmenite smelter
Richards Bay Minerals
(74%)
Richards Bay, South
Africa
100% freehold
Ilmenite smelter
1,050,000 tonnes
per year titanium
dioxide slag,
565,000 tonnes
per year iron
1,300,000 tonnes
per year titanium
dioxide slag,
1,000,000 tonnes
per year iron
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Brazil
Arvida
Saguenay, Quebec,
100% freehold
Aluminium smelter producing aluminium
174,000 tonnes
billet, molten metal, remelt
per year aluminium
Arvida AP60
Saguenay, Quebec,
100% freehold
Aluminium smelter producing aluminium high
60,000 tonnes per
Bécancour (25.1%)
Bécancour, Quebec,
100% freehold
purity, remelt
year aluminium
Aluminium smelter producing aluminium slab,
454,000 tonnes
billet, t-foundry, remelt, molten metal
per year aluminium
Boyne Smelters (59.4%) Boyne Island,
100% freehold
Queensland, Australia
Aluminium smelter producing aluminium
584,000 tonnes
billet, EC grade, small form and t-foundry,
per year aluminium
ELYSIS (48.24%)
Saguenay, Quebec,
100% freehold
Grande-Baie
Saguenay, Quebec,
100% freehold
Aluminium zero-carbon smelting pilot cell
producing aluminium high purity
275 tonnes per
year aluminium
Aluminium smelter producing aluminium slab,
233,000 tonnes
molten metal, high purity, remelt
per year aluminium
ISAL
Reykjavik, Iceland
100% freehold
Aluminium smelter producing aluminium
212,000 tonnes
remelt
remelt
remelt, billet
Jonquière (Vaudreuil)
Jonquière, Quebec,
100% freehold
Smelter grade alumina
Kitimat
Kitimat, British Columbia,
100% freehold
Aluminium smelter producing aluminium slab,
432,000 tonnes
remelt, high purity
per year aluminium
Laterrière
Saguenay, Quebec,
100% freehold
Aluminium smelter producing aluminium slab,
257,000 tonnes
remelt, molten metal
per year aluminium
Queensland Alumina
Gladstone, Queensland,
73.3% freehold; 26.7% leasehold (of
Refinery producing alumina
(80%)
Australia
which more than 80% expires in
2026 and after)
São Luis (Alumar) (10%) São Luis, Maranhão,
100% freehold
Refinery producing alumina
Sohar (20%)
Sohar, Oman
100% leasehold (expiring 2039)
Aluminium smelter producing aluminium,
395,000 tonnes
high purity, remelt
per year aluminium
Tiwai Point (New
Zealand Aluminium
Smelters) (79.4%)
Invercargill, Southland,
19.6% freehold; 80.4% leasehold
Aluminium smelter producing aluminium
373,000 tonnes
New Zealand
(expiring in 2029 and use of certain
billet, slab, small form foundry, high purity,
per year aluminium
Crown land)
remelt
Tomago (51.6%)
Tomago, New South
100% freehold
Aluminium smelter producing aluminium
590,000 tonnes
Wales, Australia
billet, slab, remelt
Yarwun
Gladstone, Queensland,
97% freehold; 3% leasehold
Refinery producing alumina
Australia
(expiring 2101 and after)
Copper
Rio Tinto Kennecott
Magna, Salt Lake City,
100% freehold
Utah, US
Flash smelting furnace/Flash convertor
furnace copper refinery and precious
metals plant
335,000 tonnes
per year refined
copper
per year aluminium
1,560,000 tonnes
per year alumina
3,950,000 tonnes
per year alumina
3,830,000 tonnes
per year alumina
per year aluminium
3,250,000 tonnes
per year alumina
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403
Mines and production facilities continued
Group power plants (Rio Tinto’s interest 100% unless otherwise shown)
Power plant
Location
Title/lease
Plant type / Product
Capacity (based on
100% ownership)
Iron Ore
Cape Lambert power
station (67%)
Cape Lambert, Western
Australia, Australia
Paraburdoo power
station
Paraburdoo, Western
Australia, Australia
West Angelas power
station (67%)
West Angelas, Western
Australia, Australia
Lease
Lease
Two LM6000PS gas-fired turbines
80MW
Three LM6000PC gas-fired turbines
120MW
Miscellaneous licence
Two LM6000PF dual-fuel turbines
80MW
Yurralyi Maya
power station (84.2%)
Dampier, Western
Australia, Australia
Miscellaneous licence
Four LM6000PD gas-fired turbines
One LM6000PF gas-fired turbine
(dual-fuel potential)
200MW
Aluminium
Amrun power station
Amrun, Australia
100% leasehold
Diesel generation
Gladstone power station
(42%)
Gladstone, Queensland,
Australia
Gove power station
Nhulunbuy, Northern
Territory, Australia
100% freehold
Thermal power station
100% leasehold
Diesel generation
Kemano power station
Kemano, British Columbia,
Canada
100% freehold
Hydroelectric power
24MW
1,680MW
24MW
896MW
Quebec power stations
Saguenay, Quebec, Canada
(Chute-à-Caron, Chute-à-la-
Savane, Chute-des-Passes,
Chute-du-Diable, Isle-
Maligne, Shipshaw)
100% freehold (certain facilities
leased from Quebec Government
until 2058 pursuant to Peribonka
Lease)
Hydroelectric power
3,147MW
Weipa power stations
and solar generation
facility
Lorim Point, Andoom, and
Weipa, Australia
100% leasehold
Diesel generation supplemented by solar
generation facility
38MW
Yarwun alumina refinery
co-generation plant
Gladstone, Queensland,
Australia
100% freehold
Gas turbine and heat recovery steam
generator
160MW
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Mines and production facilities continued
Production, Ore Reserves, Mineral Resources and Operations
Two LM6000PS gas-fired turbines
80MW
Three LM6000PC gas-fired turbines
120MW
Iron Ore
Cape Lambert power
Cape Lambert, Western
Lease
station (67%)
Australia, Australia
Paraburdoo power
Paraburdoo, Western
Lease
station
Australia, Australia
station (67%)
Australia, Australia
power station (84.2%)
Australia, Australia
Aluminium
West Angelas power
West Angelas, Western
Miscellaneous licence
Two LM6000PF dual-fuel turbines
80MW
Yurralyi Maya
Dampier, Western
Miscellaneous licence
Four LM6000PD gas-fired turbines
200MW
One LM6000PF gas-fired turbine
(dual-fuel potential)
Amrun power station
Amrun, Australia
100% leasehold
Diesel generation
Gladstone power station
Gladstone, Queensland,
100% freehold
Thermal power station
(42%)
Australia
Gove power station
Nhulunbuy, Northern
100% leasehold
Diesel generation
Kemano power station
Kemano, British Columbia,
100% freehold
Hydroelectric power
Territory, Australia
Canada
24MW
1,680MW
24MW
896MW
Quebec power stations
Saguenay, Quebec, Canada
100% freehold (certain facilities
Hydroelectric power
3,147MW
(Chute-à-Caron, Chute-à-la-
leased from Quebec Government
Savane, Chute-des-Passes,
until 2058 pursuant to Peribonka
Chute-du-Diable, Isle-
Maligne, Shipshaw)
Lease)
Weipa power stations
Lorim Point, Andoom, and
100% leasehold
Diesel generation supplemented by solar
38MW
and solar generation
Weipa, Australia
facility
generation facility
Yarwun alumina refinery
Gladstone, Queensland,
100% freehold
Gas turbine and heat recovery steam
160MW
co-generation plant
Australia
generator
Group power plants (Rio Tinto’s interest 100% unless otherwise shown)
Group power plants (Rio Tinto’s interest 100% unless otherwise shown)
Power plant
Location
Title/lease
Plant type / Product
Power plant
Location
Title/lease
Plant type / Product
Capacity (based on
100% ownership)
Salt Lake City, Utah, US
100% freehold
Thermal power station
Steam turbine running off waste heat
boilers at the copper smelter
Capacity (based on
100% ownership)
75MW
31.8MW
Copper
Rio Tinto Kennecott
power stations
Minerals
Boron co-generation
plant
Boron, California, US
100% freehold
Energy Resources of
Australia (Rio Tinto:
86.3%)
Ranger Mine, Jabiru,
Northern Territory,
Australia
Lease
Combined heat and power plant supplying
steam to the copper refinery
6.2MW
Co-generation uses natural gas to generate
steam and electricity, used to run Boron’s
refining operations
48MW
Five diesel generator sets rated at 5.17MW;
one diesel generator set rated at 2MW; four
additional diesel generator sets rated at
2MW
35.8MW
IOC power station
QMM power plant
Sept-Îles, Quebec,
Canada
Fort Dauphin,
Madagascar
Statutory grant
Hydroelectric power
100% freehold
Diesel generation
22MW
24MW
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405
Additional information
Independent limited assurance report
Shareholder information
Metal prices and exchange rates
Contact details
Cautionary statement about forward-looking statements
407
410
418
419
420
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Additional information
Independent limited assurance report
Shareholder information
Metal prices and exchange rates
Contact details
Cautionary statement about forward-looking statements
407
410
418
419
420
Independent Reasonable and Limited Assurance Report
of KPMG (KPMG Australia) to the Directors of Rio Tinto plc and Rio Tinto Limited
CONCLUSION
a) Assured Sustainability Information – Limited assurance
Based on the evidence we obtained from the procedures performed, we are not aware of any material misstatements in the Assured Sustainability
Information presented in the Sustainability sections of the Rio Tinto Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability
Fact Book 2021 for the year ended 31 December 2021, which has been prepared by Rio Tinto plc and Rio Tinto Limited (together Rio Tinto) in accordance with
the Reporting Criteria.
b) GHG Emissions – Reasonable assurance
In our opinion, in all material respects, Rio Tinto’s total Greenhouse Gas (GHG) emissions (equity basis) of 31.1 MtCO2-e (Scope 1 and 2) presented in the
Sustainability sections of the Rio Tinto Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021 for the year
ended 31 December 2021, has been prepared by Rio Tinto in accordance with the Reporting Criteria.
Assured Sustainability Information and GHG Emissions data
The Assured Sustainability Information is summarised below:
Rio Tinto’s assertion that it has incorporated the requirements of the International Council on Mining and Metals (ICMM) 10 Principles for sustainable
development, and the mandatory requirements set out in the ICMM Position Statements, into its own policies, strategies and standards.
Rio Tinto’s assertions regarding the approach it has adopted to identify and prioritise its material sustainable development risks and opportunities set out
in the Sustainability sections of the Rio Tinto Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021.
Rio Tinto’s assertions regarding the existence and status of implementation of systems and approaches used to manage the following selected sustainable
development risk areas:
- Health, safety and wellbeing
- Business integrity and governance
- Climate change
- Local community relations
- Cultural and heritage site management
- Water management
The following Rio Tinto performance data related to the selected sustainable development risk areas:
-
-
-
Fatalities at managed operations
All injury frequency rate (AIFR)
Lost time injury frequency rate (LTIFR)
- Number of lost time injuries (LTIs)
- New cases of occupational illness
- Number of cases reported to the Business Conduct Office
- GHG emissions intensity (equity basis)
-
-
-
-
-
Total energy (100% managed basis)
Total Scope 3 emissions (equity basis)
Community contributions
Cultural heritage disclosures
Tier 1 Water Target performance data and assertions
The GHG Emissions data is Rio Tinto’s total GHG emissions (equity basis) disclosed in the Sustainability sections of the Rio Tinto Annual Report 2021, the Rio Tinto
Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021.
Our assurance does not extend to information in respect of earlier periods or to any other information included in the Sustainability sections of the Rio Tinto Annual
Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021 for the year ended 31 December 2021.
Reporting Criteria
The Reporting Criteria used for the reporting of the Assured Sustainability Information and GHG Emissions data are the ICMM Sustainable Development
Framework: ICMM Principles (Revised 2015) and the definitions and approaches within the basis of reporting glossary presented on Rio Tinto’s website at
riotinto.com/reports.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation
406
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Annual Report 2021 | riotinto.com
407
Independent Reasonable and Limited Assurance Report
of KPMG (KPMG Australia) to the Directors of Rio Tinto plc and Rio Tinto Limited
Basis for Conclusion
We conducted our work in accordance with International Standard on Assurance Engagements ISAE 3000 (Revised) Assurance Engagements other than Audits
and Reviews of Historical Financial Information and in respect of greenhouse gas emissions, International Standard on Assurance Engagements ISAE 3410
Assurance Engagements on Greenhouse Gas Statements issued by the International Auditing and Assurance Standards Board (Standards). In gathering evidence
for our conclusions, our assurance procedures comprised:
enquiries with relevant Rio Tinto personnel to understand and evaluate the design and implementation of the key systems, processes and internal controls
relevant to the Assured Sustainability Information and GHG Emissions data;
analytical procedures over the Assured Sustainability Information and GHG Emissions data;
risk analysis to validate the completeness of Rio Tinto’s materiality assessment;
substantively tested performance data within the Assured Sustainability Information, on a sample basis at corporate and operational level, which included
testing a selection of six operations including Oyu Tolgoi Operations, Oyu Tolgoi Underground Project, Tom Price and Marandoo, Boyne Smelters Limited,
Quebec Operations (Grande Baie and Laterriere), and Rio Tinto Fer et Titane;
substantively tested the GHG Emissions data, on a sample basis at corporate and operational level, which included testing a selection of eleven operations
including Boyne Smelters Limited, Quebec Operations (Grande Baie, Laterriere, AP40, Avida, AP60 and Strathcona), Gladstone Power Station, Queensland
Alumina Limited, Tomago, Yarwun, Bell Bay, Kitimat and Kemano, New Zealand Aluminium Smelters, Escondida, and Richards Bay Minerals;
evaluated the design and effectiveness of controls implemented by the Rio Tinto Health, Safety and Environment (HSE) Services reporting function over
the Assured Sustainability Information and GHG Emissions data;
assessed Rio Tinto’s incorporation of the requirements of the ICMM 10 Principles for sustainable development, and the mandatory requirements set out in the
ICMM Position Statements, into its own policies, strategies and standards; and
reviewed the Rio Tinto Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021 in its entirety to ensure
they are consistent with our overall knowledge of Rio Tinto.
In accordance with the Standards we have:
used our professional judgement to plan and perform the engagement to obtain limited assurance that we are not aware of any material misstatements in the
Assured Sustainability Information, whether due to fraud or error;
used our professional judgement to plan and perform the engagement to obtain reasonable assurance that we are not aware of any material misstatements in
the GHG Emissions data, whether due to fraud or error;
considered relevant internal controls when designing our assurance procedures, however we do not express a conclusion on their effectiveness; and
ensured that the engagement team possess the appropriate knowledge, skills and professional competencies.
How the Standard Defines Reasonable Assurance, Limited Assurance and Material Misstatement
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been performed.
Reasonable assurance is a high level of assurance, but is not a guarantee that it will always detect a material misstatement when it exists.
Misstatements, including omissions, are considered material if, individually or in the aggregate, they could reasonably be expected to influence relevant decisions of
the Directors of Rio Tinto.
Use of this Assurance Report
This report has been prepared for the Directors of Rio Tinto for the purpose of providing an assurance conclusion on the Assured Sustainability Information and
GHG Emissions data and may not be suitable for another purpose. We disclaim any assumption of responsibility for any reliance on this report, to any person
other than the Directors of Rio Tinto, or for any other purpose than that for which it was prepared.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation
408
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Independent Reasonable and Limited Assurance Report
of KPMG (KPMG Australia) to the Directors of Rio Tinto plc and Rio Tinto Limited
Independent Reasonable and Limited Assurance Report
of KPMG (KPMG Australia) to the Directors of Rio Tinto plc and Rio Tinto Limited
Management’s responsibility
Management are responsible for:
determining that the Reporting Criteria is appropriate to meet their
needs;
preparing and presenting the Assured Sustainability Information and
GHG Emissions data in accordance with the Reporting Criteria;
establishing internal controls that enable the preparation and
presentation of the Assured Sustainability Information and GHG
Emissions data that is free from material misstatement, whether due to
fraud or error;
ensuring the basis of preparation in accordance with which the Assured
Sustainability Information and GHG Emissions data has been determined
and compiled is clearly and unambiguously set out in the Rio Tinto
Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio
Tinto Sustainability Fact Book 2021; and
telling us of any known and/or contentious issues relating to the Assured
Sustainability Information and GHG Emissions data.
Our Responsibility
Our responsibility is to perform a limited assurance engagement in relation
to the Assured Sustainability Information and reasonable assurance in
respect of the GHG Emissions data for 31 December 2021, and to issue an
assurance report that includes our conclusions.
Our Independence and Quality Control
We have complied with our independence and other relevant ethical
requirements of the Code of Ethics for Professional Accountants (including
Independence Standards) issued by the IFAC Ethical Standards Board, and
complied with the applicable requirements of International Standard on
Quality Control 1 to maintain a comprehensive system of quality control.
[signature]
KPMG
23 February 2022
[signature]
Adrian King
Partner
Melbourne, Australia
Basis for Conclusion
We conducted our work in accordance with International Standard on Assurance Engagements ISAE 3000 (Revised) Assurance Engagements other than Audits
and Reviews of Historical Financial Information and in respect of greenhouse gas emissions, International Standard on Assurance Engagements ISAE 3410
Assurance Engagements on Greenhouse Gas Statements issued by the International Auditing and Assurance Standards Board (Standards). In gathering evidence
for our conclusions, our assurance procedures comprised:
enquiries with relevant Rio Tinto personnel to understand and evaluate the design and implementation of the key systems, processes and internal controls
relevant to the Assured Sustainability Information and GHG Emissions data;
analytical procedures over the Assured Sustainability Information and GHG Emissions data;
risk analysis to validate the completeness of Rio Tinto’s materiality assessment;
substantively tested performance data within the Assured Sustainability Information, on a sample basis at corporate and operational level, which included
testing a selection of six operations including Oyu Tolgoi Operations, Oyu Tolgoi Underground Project, Tom Price and Marandoo, Boyne Smelters Limited,
Quebec Operations (Grande Baie and Laterriere), and Rio Tinto Fer et Titane;
substantively tested the GHG Emissions data, on a sample basis at corporate and operational level, which included testing a selection of eleven operations
including Boyne Smelters Limited, Quebec Operations (Grande Baie, Laterriere, AP40, Avida, AP60 and Strathcona), Gladstone Power Station, Queensland
Alumina Limited, Tomago, Yarwun, Bell Bay, Kitimat and Kemano, New Zealand Aluminium Smelters, Escondida, and Richards Bay Minerals;
evaluated the design and effectiveness of controls implemented by the Rio Tinto Health, Safety and Environment (HSE) Services reporting function over
the Assured Sustainability Information and GHG Emissions data;
assessed Rio Tinto’s incorporation of the requirements of the ICMM 10 Principles for sustainable development, and the mandatory requirements set out in the
ICMM Position Statements, into its own policies, strategies and standards; and
reviewed the Rio Tinto Annual Report 2021, the Rio Tinto Strategic Report 2021 and the Rio Tinto Sustainability Fact Book 2021 in its entirety to ensure
they are consistent with our overall knowledge of Rio Tinto.
In accordance with the Standards we have:
used our professional judgement to plan and perform the engagement to obtain limited assurance that we are not aware of any material misstatements in the
Assured Sustainability Information, whether due to fraud or error;
used our professional judgement to plan and perform the engagement to obtain reasonable assurance that we are not aware of any material misstatements in
the GHG Emissions data, whether due to fraud or error;
considered relevant internal controls when designing our assurance procedures, however we do not express a conclusion on their effectiveness; and
ensured that the engagement team possess the appropriate knowledge, skills and professional competencies.
How the Standard Defines Reasonable Assurance, Limited Assurance and Material Misstatement
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been performed.
Reasonable assurance is a high level of assurance, but is not a guarantee that it will always detect a material misstatement when it exists.
Misstatements, including omissions, are considered material if, individually or in the aggregate, they could reasonably be expected to influence relevant decisions of
the Directors of Rio Tinto.
Use of this Assurance Report
This report has been prepared for the Directors of Rio Tinto for the purpose of providing an assurance conclusion on the Assured Sustainability Information and
GHG Emissions data and may not be suitable for another purpose. We disclaim any assumption of responsibility for any reliance on this report, to any person
other than the Directors of Rio Tinto, or for any other purpose than that for which it was prepared.
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation
©2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the
independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation
408
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Annual Report 2021 | riotinto.com
409
Shareholder information
Organisational structure
Dual listed companies structure
The Rio Tinto Group consists of Rio Tinto plc (registered in England and
Wales as company number 719885 under the UK Companies Act 2006
and listed on the London Stock Exchange), and Rio Tinto Limited
(registered in Australia as ABN 96 004 458 404 under the Australian
Corporations Act 2001 and listed on the Australian Securities Exchange).
In 1995, Rio Tinto shareholders approved the terms of the dual
listed companies’ merger (the DLC structure). The aim was to put
shareholders of both companies in substantially the same position they
would be in if they held shares in a single entity owning all assets of
both companies.
Following the approval of the DLC structure, both companies entered
into a DLC Merger Sharing Agreement (the Sharing Agreement). As
part of this both companies agreed to be managed in a unified way, to
share the same Board of Directors, and to put in place arrangements to
provide shareholders of both companies with a common economic
interest in the DLC structure.
To achieve this third objective, the Sharing Agreement fixed the ratio of
dividend, voting and capital distribution rights attached to each
Rio Tinto plc share and each Rio Tinto Limited share at an Equalisation
Ratio of 1:1. This has remained unchanged ever since, although the
Sharing Agreement makes clear this can be revised in special
circumstances, for example where certain modifications are made to
the share capital of one company (such as rights issues, bonus issues,
share splits and share consolidations) but not to the other.
Outside the circumstances specified in the Sharing Agreement, the
Equalisation Ratio can only be altered with the approval of shareholders
under the class rights action approval procedure, described in the
Voting arrangements section below. Any adjustments must be
confirmed by the Group’s external auditors.
Consistent with the DLC structure, the directors of both companies aim
to act in the best interests of Rio Tinto as a whole. The class rights
action approval procedure exists to deal with instances where there
may be a conflict of interest between the shareholders of the
two companies.
To ensure that the Boards of both companies are identical, resolutions
to appoint or remove directors must be put to shareholders of both
companies as Joint Decisions, described in the Voting arrangements
section below. The Articles of Association of Rio Tinto plc and the
Constitution of Rio Tinto Limited make clear that a person can only be a
director of one company if he or she is also a director of the other.
This means that if a person were removed as a director of Rio Tinto plc,
he or she would also cease to be a director of Rio Tinto Limited.
One consequence of the DLC merger is that Rio Tinto is subject to a
wide range of laws, rules and regulatory reviews across multiple
jurisdictions. Where these rules differ, Rio Tinto will comply with the
requirements in each jurisdiction at a minimum.
Rio Tinto is headquartered in London with a corporate office
in Melbourne.
Rio Tinto plc has a sponsored American Depositary Receipts (ADR)
facility, with underlying shares registered with the SEC and listed on the
New York Stock Exchange.
The London Stock Exchange ticker for Rio Tinto plc is RIO.L,
the Australian Securities Exchange ticker for Rio Tinto Limited is RIO.
AX and the New York Stock Exchange ticker for the ADR is RIO.N.
Nomenclature and financial data
Rio Tinto plc and Rio Tinto Limited operate together and are referred to
in this report as Rio Tinto, the Rio Tinto Group or the Group. These
expressions are used for convenience, since both companies, and other
companies in which they directly or indirectly own investments, are
separate and distinct legal entities. Likewise, the words “we”, “us”,
“our” and “ourselves” are used in some places to refer to the
companies of the Rio Tinto Group in general. These expressions are also
used where no useful purpose is served by identifying any particular
company or companies. We usually omit “Limited”, “plc”, “Pty”, “Inc.”,
“Limitada”, “L.L.C.”, “A.S.” or “SA” from Group company names, except
to distinguish between Rio Tinto plc and Rio Tinto Limited. Financial
data in US dollars ($) is derived from, and should be read in conjunction
with, the 2021 financial statements. In general, where we have provided
financial data in pounds sterling (£) and Australian dollars (A$), it has
been translated from the consolidated financial statements, and is
provided solely for convenience; exceptions arise where data has been
extracted directly from source records. Certain key information has
been provided in US dollars, pounds sterling and Australian dollars in
the 2021 financial statements.
History
Rio Tinto plc was incorporated on 30 March 1962 (then called
The Rio Tinto-Zinc Corporation Limited (RTZ)) and was formed by
the merger of The Rio Tinto Company Limited and The Consolidated
Zinc Corporation Limited. The Rio Tinto Company was incorporated in
1873 to reopen ancient copper workings in Spain. The Consolidated
Zinc Corporation Limited began operations in the early twentieth
century as part of the Australian mining industry. Based at Broken Hill
in New South Wales, it began mining silver, lead and zinc deposits and
later expanded into lead and zinc smelting.
Rio Tinto Limited was incorporated on 17 December 1959 (then called
The Rio Tinto Mining Company of Australia Pty Limited). In 1962 the
Australian interests of The Consolidated Zinc Corporation Limited and
The Rio Tinto Company Limited were merged to form Conzinc Riotinto
of Australia Limited, a limited liability company under the laws of the
State of Victoria, Australia. In 1980, Conzinc Riotinto of Australia
Limited changed its name to CRA Limited.
Between 1962 and 1995, both RTZ and CRA discovered important
mineral deposits, developed major mining projects and grew
through acquisition.
RTZ and CRA began operating in 1995 through a dual listed companies
structure. In 1997, RTZ became Rio Tinto plc and CRA became
Rio Tinto Limited.
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Shareholder information
Organisational structure
Dual listed companies structure
Dividend arrangements
The Rio Tinto Group consists of Rio Tinto plc (registered in England and
In 1995, Rio Tinto shareholders approved the terms of the dual
Wales as company number 719885 under the UK Companies Act 2006
listed companies’ merger (the DLC structure). The aim was to put
and listed on the London Stock Exchange), and Rio Tinto Limited
shareholders of both companies in substantially the same position they
(registered in Australia as ABN 96 004 458 404 under the Australian
would be in if they held shares in a single entity owning all assets of
Corporations Act 2001 and listed on the Australian Securities Exchange).
both companies.
Rio Tinto is headquartered in London with a corporate office
Following the approval of the DLC structure, both companies entered
in Melbourne.
Rio Tinto plc has a sponsored American Depositary Receipts (ADR)
facility, with underlying shares registered with the SEC and listed on the
New York Stock Exchange.
The London Stock Exchange ticker for Rio Tinto plc is RIO.L,
the Australian Securities Exchange ticker for Rio Tinto Limited is RIO.
AX and the New York Stock Exchange ticker for the ADR is RIO.N.
Nomenclature and financial data
Rio Tinto plc and Rio Tinto Limited operate together and are referred to
in this report as Rio Tinto, the Rio Tinto Group or the Group. These
expressions are used for convenience, since both companies, and other
companies in which they directly or indirectly own investments, are
separate and distinct legal entities. Likewise, the words “we”, “us”,
“our” and “ourselves” are used in some places to refer to the
into a DLC Merger Sharing Agreement (the Sharing Agreement). As
part of this both companies agreed to be managed in a unified way, to
share the same Board of Directors, and to put in place arrangements to
provide shareholders of both companies with a common economic
interest in the DLC structure.
To achieve this third objective, the Sharing Agreement fixed the ratio of
dividend, voting and capital distribution rights attached to each
Rio Tinto plc share and each Rio Tinto Limited share at an Equalisation
Ratio of 1:1. This has remained unchanged ever since, although the
Sharing Agreement makes clear this can be revised in special
circumstances, for example where certain modifications are made to
the share capital of one company (such as rights issues, bonus issues,
share splits and share consolidations) but not to the other.
Outside the circumstances specified in the Sharing Agreement, the
Equalisation Ratio can only be altered with the approval of shareholders
under the class rights action approval procedure, described in the
companies of the Rio Tinto Group in general. These expressions are also
Voting arrangements section below. Any adjustments must be
used where no useful purpose is served by identifying any particular
confirmed by the Group’s external auditors.
Consistent with the DLC structure, the directors of both companies aim
to act in the best interests of Rio Tinto as a whole. The class rights
action approval procedure exists to deal with instances where there
may be a conflict of interest between the shareholders of the
two companies.
To ensure that the Boards of both companies are identical, resolutions
to appoint or remove directors must be put to shareholders of both
companies as Joint Decisions, described in the Voting arrangements
section below. The Articles of Association of Rio Tinto plc and the
Constitution of Rio Tinto Limited make clear that a person can only be a
director of one company if he or she is also a director of the other.
This means that if a person were removed as a director of Rio Tinto plc,
he or she would also cease to be a director of Rio Tinto Limited.
One consequence of the DLC merger is that Rio Tinto is subject to a
wide range of laws, rules and regulatory reviews across multiple
jurisdictions. Where these rules differ, Rio Tinto will comply with the
requirements in each jurisdiction at a minimum.
company or companies. We usually omit “Limited”, “plc”, “Pty”, “Inc.”,
“Limitada”, “L.L.C.”, “A.S.” or “SA” from Group company names, except
to distinguish between Rio Tinto plc and Rio Tinto Limited. Financial
data in US dollars ($) is derived from, and should be read in conjunction
with, the 2021 financial statements. In general, where we have provided
financial data in pounds sterling (£) and Australian dollars (A$), it has
been translated from the consolidated financial statements, and is
provided solely for convenience; exceptions arise where data has been
extracted directly from source records. Certain key information has
been provided in US dollars, pounds sterling and Australian dollars in
the 2021 financial statements.
History
Rio Tinto plc was incorporated on 30 March 1962 (then called
The Rio Tinto-Zinc Corporation Limited (RTZ)) and was formed by
the merger of The Rio Tinto Company Limited and The Consolidated
Zinc Corporation Limited. The Rio Tinto Company was incorporated in
1873 to reopen ancient copper workings in Spain. The Consolidated
Zinc Corporation Limited began operations in the early twentieth
century as part of the Australian mining industry. Based at Broken Hill
in New South Wales, it began mining silver, lead and zinc deposits and
later expanded into lead and zinc smelting.
Rio Tinto Limited was incorporated on 17 December 1959 (then called
The Rio Tinto Mining Company of Australia Pty Limited). In 1962 the
Australian interests of The Consolidated Zinc Corporation Limited and
The Rio Tinto Company Limited were merged to form Conzinc Riotinto
of Australia Limited, a limited liability company under the laws of the
State of Victoria, Australia. In 1980, Conzinc Riotinto of Australia
Limited changed its name to CRA Limited.
Between 1962 and 1995, both RTZ and CRA discovered important
mineral deposits, developed major mining projects and grew
through acquisition.
RTZ and CRA began operating in 1995 through a dual listed companies
structure. In 1997, RTZ became Rio Tinto plc and CRA became
Rio Tinto Limited.
The Sharing Agreement ensures that dividends paid on Rio Tinto plc
and Rio Tinto Limited shares are equalised on a net cash basis
without taking into account any associated tax credits. Dividends are
determined in US dollars (with the exception of ADR holders, paid in
sterling and Australian dollars) and both companies are required to
announce and pay dividends and other distributions at the same time
or as close to this as possible.
The payment of dividends between companies and their subsidiaries,
including the payment of dividends on the DLC dividend shares,
provides the Group with flexibility to manage internal funds and
distributable reserves to enable the payment of equalised dividend
or equalised capital distributions.
If the payment of an equalised dividend would contravene the law
applicable to one of the companies, they can depart from the
Equalisation Ratio. In that situation, the relevant company must put
aside reserves for payment on the relevant shares at a later date.
Rio Tinto shareholders have no direct rights to enforce the dividend
equalisation provisions of the Sharing Agreement.
Voting arrangements
In principle, the Sharing Agreement enables the shareholders of
Rio Tinto plc and Rio Tinto Limited to vote as a joint electorate on any
matters that affect them in similar ways. These are referred to as Joint
Decisions, and include the creation of new classes of share capital, the
appointment or removal of directors and auditors, and the receiving of
annual financial statements. All shareholder resolutions that include
Joint Decisions are voted on a poll.
The Sharing Agreement also protects shareholders of both companies
by requiring joint approval for decisions that do not affect the
shareholders of both companies equally. These are known as class
rights actions, and are voted on a poll. For example, fundamental
elements of the DLC structure cannot be changed unless approved
separately by the shareholders of both companies.
Exceptions to these principles can arise in situations such as where
legislation requires the separate approval of a decision by the
appropriate majority of shareholders in one company, and where
approval of the matter by shareholders of the other company is
not required.
Where a matter has been expressly categorised as either a Joint
Decision or a class rights action, the directors cannot change that
categorisation. If a matter falls within both categories, it is treated as a
class rights action. In addition, if an issue is not expressly listed in either
category, directors can decide how it should be put to shareholders
for approval.
To support joint voting arrangements, both companies have entered
into shareholder voting agreements, where a Special Voting Share is
issued to a special purpose company (SVC) and held in trust for
shareholders by a common trustee. Rio Tinto plc (RTP) has issued its
Special Voting Share (RTP Special Voting Share) to Rio Tinto Limited
(RTL) Shareholder SVC, while Rio Tinto Limited has issued its Special
Voting Share (RTL Special Voting Share) to RTP Shareholder SVC.
The total number of votes cast on Joint Decisions by the shareholders
of one company are decided at a parallel meeting of the other company.
The exact role of these SVCs is described below.
Additional information
In exceptional circumstances, certain shareholders can be excluded
from voting at their respective company’s general meetings. For
example, they may have acquired shares in the other company in
excess of a given threshold without making an offer for all the shares in
the other company. In this situation, votes cast by these excluded
shareholders are disregarded.
Following the companies’ general meetings, the overall results of the
voting are announced to relevant stock exchanges and the media, and
published at riotinto.com.
At a Rio Tinto plc shareholders’ meeting during which a Joint Decision is
considered, each Rio Tinto plc share carries one vote. The holder of the
Special Voting Share has one vote for each vote cast by the public
shareholders of Rio Tinto Limited in their parallel meeting. The holder
of the Special Voting Share must vote in accordance with the votes cast
by public shareholders for and against the equivalent resolution at the
parallel Rio Tinto Limited shareholders’ meeting. The holders of
Rio Tinto Limited ordinary shares do not hold voting shares in Rio Tinto
plc by virtue of their holding in Rio Tinto Limited, and cannot enforce
the voting arrangements relating to the Special Voting Share.
Similarly, at a Rio Tinto Limited shareholders’ meeting during which a
Joint Decision is considered, each Rio Tinto Limited share carries one
vote and the holder of its Special Voting Share will have one vote for
each vote cast by the public shareholders of Rio Tinto plc in their
parallel meeting. The holder of the Special Voting Share must vote in
accordance with the votes cast for and against the equivalent resolution
at the parallel Rio Tinto plc shareholders’ meeting. The holders of
Rio Tinto plc ordinary shares do not hold any voting shares in Rio Tinto
Limited by virtue of their holding in Rio Tinto plc, and cannot enforce
the voting arrangements relating to the Special Voting Share.
Capital distribution arrangements
If either company goes into liquidation, the Sharing Agreement ensures
a valuation is made of the surplus assets of both companies. If the
surplus assets available for distribution by one company on each of the
shares held by its shareholders exceed the surplus assets available for
distribution by the other company on each of the shares held by its
shareholders, then an equalising payment must be made – to the
extent permitted by applicable law – such that the amount available for
distribution on each share held by shareholders of both companies
reflects the Equalisation Ratio.
The aim is to ensure the shareholders of both companies have
equivalent entitlements to the assets of the combined Group on
a per share basis, taking account of the equalisation ratio.
The Sharing Agreement does not grant any enforceable rights to the
shareholders of either company upon liquidation of either company.
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Guarantees
In 1995, each company entered into a deed poll guarantee in favour of
creditors of the other company. In addition, each company guaranteed
the contractual obligations of the other and the obligations of other persons
guaranteed by the other company, subject to certain limited exceptions.
Beneficiaries under deed poll guarantees can make demands on the
relevant guarantor without first having recourse to the company or
persons whose obligations are being guaranteed. The obligations of the
guarantor under each deed poll guarantee expire upon termination of
the Sharing Agreement and under other limited circumstances, but
only in respect of obligations arising after such termination and, in the
case of other limited circumstances, the publication and expiry of
due notice.
Markets
Rio Tinto plc
The principal market for Rio Tinto plc shares is the London Stock
Exchange, with shares trading through the Stock Exchange Electronic
Trading Service (SETS) system.
Rio Tinto plc American Depositary Receipts (ADRs) are listed on the
New York Stock Exchange.
Further details relating to Rio Tinto plc ADRs are available in Rio Tinto’s
Annual Report on Form 20-F.
Rio Tinto Limited
Rio Tinto Limited shares are listed on the Australian Securities
Exchange (ASX).
The ASX is the principal trading market for Rio Tinto Limited shares.
The ASX is a national stock exchange with an automated trading system.
Shareholder information continued
Limitations on ownership of shares and
merger obligations
The laws and regulations of the UK and Australia impose restrictions
and obligations on persons who control interests in publicly listed
companies in excess of defined thresholds. These can include an
obligation to make a public offer for all outstanding issued shares
of the relevant company. The threshold applicable to Rio Tinto plc
under UK law and regulations is 30% and to Rio Tinto Limited under
Australian law and regulations is 20% on both a standalone and a Joint
Decision basis.
As part of the DLC merger, the Articles of Association of Rio Tinto plc
and the Constitution of Rio Tinto Limited were amended with the aim
of extending these laws and regulations to the combined enterprise.
This amendment also ensures that a person cannot exercise control
over one company without having made offers to the public
shareholders of both companies.
This guarantees the equal treatment of both sets of shareholders, and
that the two companies are considered as a single economic entity.
The Articles of Association of Rio Tinto plc and the Constitution of
Rio Tinto Limited impose restrictions on any person who controls,
directly or indirectly, 20% or more of the votes on a Joint Decision.
If, however, such a person has an interest in either Rio Tinto Limited or
Rio Tinto plc only, then the restrictions only apply if they control,
directly or indirectly, 30% or more of the votes at that company’s
general meetings.
If one of these thresholds is exceeded, the person cannot attend or vote
at general meetings of the relevant company, cannot receive dividends
or other distributions from the relevant company, and may be divested
of their interest by the directors of the relevant company (subject to
certain limited exceptions and notification by the relevant company).
These restrictions continue to apply until that person has either made a
public offer for all the publicly held shares of the other company, has
reduced their controlling interest below the thresholds specified, or has
acquired through a permitted means at least 50% of the publicly held
shares of each company.
This arrangement ensures that offers for the publicly held shares of
both companies would be required to avoid the restrictions set out
above, even if the interests which breach the thresholds are held in just
one of the companies. The directors do not have the discretion to
exempt a person from the operation of these rules.
Under the Sharing Agreement, the companies agree to co-operate to
enforce the above restrictions contained in their Articles of Association
and Constitution.
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In 1995, each company entered into a deed poll guarantee in favour of
creditors of the other company. In addition, each company guaranteed
the contractual obligations of the other and the obligations of other persons
guaranteed by the other company, subject to certain limited exceptions.
Beneficiaries under deed poll guarantees can make demands on the
relevant guarantor without first having recourse to the company or
persons whose obligations are being guaranteed. The obligations of the
guarantor under each deed poll guarantee expire upon termination of
the Sharing Agreement and under other limited circumstances, but
only in respect of obligations arising after such termination and, in the
case of other limited circumstances, the publication and expiry of
due notice.
Markets
Rio Tinto plc
The principal market for Rio Tinto plc shares is the London Stock
Exchange, with shares trading through the Stock Exchange Electronic
Trading Service (SETS) system.
Rio Tinto plc American Depositary Receipts (ADRs) are listed on the
New York Stock Exchange.
Further details relating to Rio Tinto plc ADRs are available in Rio Tinto’s
Annual Report on Form 20-F.
Rio Tinto Limited
Exchange (ASX).
Rio Tinto Limited shares are listed on the Australian Securities
The ASX is the principal trading market for Rio Tinto Limited shares.
The ASX is a national stock exchange with an automated trading system.
The laws and regulations of the UK and Australia impose restrictions
and obligations on persons who control interests in publicly listed
companies in excess of defined thresholds. These can include an
obligation to make a public offer for all outstanding issued shares
of the relevant company. The threshold applicable to Rio Tinto plc
under UK law and regulations is 30% and to Rio Tinto Limited under
Australian law and regulations is 20% on both a standalone and a Joint
Decision basis.
As part of the DLC merger, the Articles of Association of Rio Tinto plc
and the Constitution of Rio Tinto Limited were amended with the aim
of extending these laws and regulations to the combined enterprise.
This amendment also ensures that a person cannot exercise control
over one company without having made offers to the public
shareholders of both companies.
This guarantees the equal treatment of both sets of shareholders, and
that the two companies are considered as a single economic entity.
The Articles of Association of Rio Tinto plc and the Constitution of
Rio Tinto Limited impose restrictions on any person who controls,
directly or indirectly, 20% or more of the votes on a Joint Decision.
If, however, such a person has an interest in either Rio Tinto Limited or
Rio Tinto plc only, then the restrictions only apply if they control,
directly or indirectly, 30% or more of the votes at that company’s
general meetings.
If one of these thresholds is exceeded, the person cannot attend or vote
at general meetings of the relevant company, cannot receive dividends
or other distributions from the relevant company, and may be divested
of their interest by the directors of the relevant company (subject to
certain limited exceptions and notification by the relevant company).
These restrictions continue to apply until that person has either made a
public offer for all the publicly held shares of the other company, has
reduced their controlling interest below the thresholds specified, or has
acquired through a permitted means at least 50% of the publicly held
shares of each company.
This arrangement ensures that offers for the publicly held shares of
both companies would be required to avoid the restrictions set out
above, even if the interests which breach the thresholds are held in just
one of the companies. The directors do not have the discretion to
exempt a person from the operation of these rules.
Under the Sharing Agreement, the companies agree to co-operate to
enforce the above restrictions contained in their Articles of Association
and Constitution.
Shareholder information continued
Additional information
Limitations on ownership of shares and
Guarantees
merger obligations
Share ownership
Substantial shareholders in Rio Tinto plc
The following table shows holdings of 3% or more of voting rights in Rio Tinto plc’s ordinary shares as per the most recent notification of each
respective holder to Rio Tinto plc under the UK Disclosure and Transparency Rule 5. The percentage of voting rights detailed below was calculated
as at the date of the relevant disclosures. The shareholders who have provided this notice or an equivalent as of 4 February are:
Rio Tinto Plc
BlackRock, Inc.1
Shining Prospect Pte. Ltd
The Capital Group Companies, Inc.
Date of
notice
Number
of shares
Percentage
of capital
4 Dec 2009
127,744,871
7 Dec 2018
182,550,329
26 Nov 2021
62,266,422
8.38
14.022
4.99
1. On 7 February 2022, BlackRock, Inc. filed an Amendment to Schedule 13G with the SEC and disclosed beneficial ownership of 108,907,723 ordinary shares in Rio Tinto plc as of 31 December
2021, representing 8.7% of that class of shares.
2. In its notification of major holdings filed on 7 December 2018, Shining Prospect Pte. Ltd, a Singapore-based entity owned by Chinalco (Aluminium Corporation of China), disclosed that its
percentage of voting rights in Rio Tinto plc had increased to 14.02% on 18 October 2018. This was due to the on-market share buy-back programme of Rio Tinto plc shares and the number of
shares held by Shining Prospect Pte. Ltd has remained unchanged.
Substantial shareholders in Rio Tinto Limited
Under the Australian Corporations Act 2001, any person with 5% or more voting power in Rio Tinto Limited is required to provide the Company with
notice. The following table shows shareholders who have provided this notice or an equivalent as of 4 February 2022:
Rio Tinto Limited
BlackRock, Inc.
BlackRock, Inc.5
Shining Prospect Pte. Ltd
State Street Corporation
Date of
notice
Number
of shares
Percentage
of capital3
5 Jul 2021
See footnote4
See footnote4
14 Dec 2021
26,708,061
7.19
9 Feb 2018
See footnote6
See footnote6
8 Nov 2021
19,832,353
5.34
3. The percentage of voting rights detailed was as disclosed in the notice received by the company, calculated at the time of the relevant disclosure.
4. In its substantial holding notice filed on 5 July 2021, BlackRock, Inc. and its associates disclosed a holding of 116,075,672 shares in Rio Tinto plc and 25,292,271 shares in Rio Tinto Limited, which
gave BlackRock, Inc. and its associates voting power of 8.73% in the Rio Tinto Group on a Joint Decision Matter. Accordingly, in addition to being substantial shareholders of Rio Tinto Limited by
virtue of interests held in Rio Tinto Limited’s shares, through the operation of the Australian Corporations Act 2001 as modified to apply to the DLC structure, these entities disclosed voting power
of 8.73% in Rio Tinto Limited.
5. On 1 February 2022, BlackRock, Inc. filed an Amendment to Schedule 13G with the SEC and disclosed beneficial ownership of 24,143,271 ordinary shares in Rio Tinto Limited as of 31 December 2021,
representing 6.5% of that class of shares.
6. In its substantial holding notice filed on 9 February 2018 Shining Prospect Pte. Ltd disclosed that its holding of 182,550,329 Rio Tinto plc shares gave Shining Prospect Pte and its associates
voting power of 10.32% in the Rio Tinto Group on a Joint Decision Matter. Accordingly, through the operation of the Australian Corporations Act 2001 as modified to apply to the DLC structure,
these disclosed voting power of 10.32% in Rio Tinto Limited.
As far as is known, Rio Tinto plc and Rio Tinto Limited are not directly
or indirectly owned or controlled by another corporation or by any
government or natural person. Rio Tinto is not aware of any arrangement
that may result in a change in control of Rio Tinto plc or Rio Tinto Limited.
No shareholder possesses voting rights that differ from those attaching
to Rio Tinto plc’s and Rio Tinto Limited’s securities.
As of 4 February 2022 the total amount of the Group’s voting securities
owned by the directors and executives in Rio Tinto plc was 164,486
ordinary shares of 10p each or ADRs. There were 29,570 holders of
record of Rio Tinto plc’s shares. Of these holders, 362 had registered
addresses in the US and held a total of 299,086 Rio Tinto plc shares,
representing 0.02% of the total number of Rio Tinto plc shares issued
and outstanding as at such date. In addition, 141,020,443 Rio Tinto plc
shares were registered in the name of a custodian account in London
which represented 11.23% of Rio Tinto plc shares issued and
outstanding. These shares were represented by 141,020,443 Rio Tinto
plc ADRs held of record by 379 ADR holders. In addition, certain
accounts of record with registered addresses other than in the US hold
shares, in whole or in part, beneficially for US persons.
As of 4 February 2022 the total amount of the Group’s voting securities
owned by directors and executives in Rio Tinto Limited was 72,088
ordinary shares, in aggregate representing less than 1% of the Group’s
total number of ordinary shares in issue. There were 175,409 holders of
record of Rio Tinto Limited shares. Of these holders, 260 had registered
addresses in the US, representing approximately 0.04% of the total
number of Rio Tinto Limited shares issued and outstanding as of such
date. In addition, nominee accounts of record with registered addresses
other than in the US may hold Rio Tinto Limited shares, in whole or in
part, beneficially for US persons.
Unquoted equity securities in Rio Tinto Limited
As at 4 February 2022, there were Rio Tinto Limited unquoted equity
securities on issue, comprising 63,146 unvested Bonus Deferral Awards
held by 35 holders, 1,184,980 unvested Management Share Awards
held by 908 holders and 1,304,170 unvested Performance Share
Awards held by 190 holders, all of which were granted under the
Rio Tinto Limited Equity Incentive Plan, and 993,886 unvested matching
share rights were granted under the Rio Tinto Limited Global Employee
Share Plan held by 12,089 holders. This information is provided in
compliance with ASX Listing Rule 4.10.16.
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413
Shareholder information continued
Analysis of ordinary shareholders
As at 4 February 2022
1 to 1,000 shares
1,001 to 5,000 shares
5,001 to 10,000 shares
10,001 to 25,000 shares
25,001 to 125,000 shares
125,001 to 250,000 shares
250,001 to 1,250,000 shares
1,250,001 to 2,500,000 shares
2,500,001 shares and over1
Number of holdings less than
marketable parcel of A$500
1. Excludes shares held in Treasury.
No. of accounts
22,325
5,182
561
406
574
170
229
53
70
%
75.50
17.53
1.90
1.37
1.94
0.57
0.77
0.18
0.24
Shares
6,863,956
10,450,365
3,947,759
6,455,464
33,744,184
30,366,127
121,545,672
93,237,330
949,194,8292
1,255,805,6863
Rio Tinto plc
%
No. of accounts
0.55
0.83
0.31
0.52
2.69
2.42
9.68
7.42
75.58
100.00
151,046
21,852
1,749
592
123
11
23
5
8
2,583
%
86.11
12.46
1.00
0.34
0.07
0.01
0.01
0.00
0.00
Shares
39,242,167
43,299,861
11,954,629
8,662,183
5,427,581
2,030,329
11,370,649
9,494,678
239,734,137
371,216,2144
Rio Tinto Limited
%
10.57
11.66
3.23
2.33
1.46
0.55
3.06
2.56
64.58
100.00
2. This includes 141,020,443 shares held in the name of a nominee on the share register. The shares are listed on the NYSE in the form of American Depositary Receipts (ADRs).
3. The total issued share capital is made up of 1,248,222,187 publicly held shares: 7,583,499 shares held in Treasury.
4. Publicly held shares in Rio Tinto Limited.
Twenty largest registered shareholders
The following table lists the 20 largest registered holders of Rio Tinto Limited shares in accordance with the ASX listing rules, together with the
number of shares and the percentage of issued capital each holds, as of 4 February 2022.
Rio Tinto Limited
HSBC Custody Nominees (Australia) Limited
J. P. Morgan Nominees Australia Limited
Citicorp Nominees Pty Ltd
National Nominees Limited
BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C)
BNP Paribas Noms Pty Ltd (DRP)
BNP Paribas Nominees Pty Ltd (Six Sis Ltd DRP A/C)
Citicorp Nominees Pty Limited (Colonial First State Inv A/C)
Argo Investments Limited
BNP Paribas Noms Pty Ltd (Global Markets DRP)
HSBC Custody Nominees (Australia) Limited (NT-Comnwlth Super Corp A/C)
Australian Foundation Investment Company Limited
BNP Paribas Nominees Pty Ltd (ACF Clearstream)
Custodial Services Limited
Netwealth Investments Limited