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portside trading and dampier salt total material m

Portside trading and dampier salt total material moved

2020
Full Year Results

This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this report, including, without limitation, those regarding Rio Tinto’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Rio Tinto’s products, production forecasts and reserve and resource positions), are forward-looking statements. The words “intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believes”, “expects”, “may”, “should”, “will”, “target”, “set to” or similar expressions, commonly identify such forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rio Tinto, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Rio Tinto’s present and future business strategies and the environment in which Rio Tinto will operate in the future. Among the important factors that could cause Rio Tinto’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, but are not limited to: an inability to live up to Rio Tinto’s values and any resultant damage to its reputation; the impacts of geopolitics on trade and investment; the impacts of climate change and the transition to a low-carbon future; an inability to successfully execute and/or realise value from acquisitions and divestments; the level of new ore resources, including the results of exploration programmes and/or acquisitions; disruption to strategic partnerships that play a material role in delivering growth, production, cash or market positioning; damage to Rio Tinto’s relationships with communities and governments; an inability to attract and retain requisite skilled people; declines in commodity prices and adverse exchange rate movements; an inability to raise sufficient funds for capital investment; inadequate estimates of ore resources and reserves; delays or overruns of large and complex projects; changes in tax regulation; safety incidents or major hazard events; cyber breaches; physical impacts from climate change; the impacts of water scarcity; natural disasters; an inability to successfully manage the closure, reclamation and rehabilitation of sites; the impacts of civil unrest; the impacts of the Covid-19 pandemic; breaches of Rio Tinto’s policies, standard and procedures, laws or regulations; trade tensions between the world’s major economies; increasing societal and investor expectations, in particular with regard to environmental, social and governance considerations; the impacts of technological advancements; and such other risks identified in Rio Tinto’s most recent Annual Report and accounts in Australia and the United Kingdom and the most recent Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the “SEC”) or Form 6-Ks furnished to, or filed with, the SEC. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this report. Rio Tinto expressly disclaims any obligation or undertaking (except as required by applicable law, the UK Listing Rules, the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority and the Listing Rules of the Australian Securities Exchange) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Rio Tinto’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Reference to consensus figures are not based on Rio Tinto’s own opinions, estimates or forecasts and are compiled and published without comment from, or endorsement or verification by, Rio Tinto. The consensus figures do not necessarily reflect guidance provided from time to time by Rio Tinto where given in relation to equivalent metrics, which to the extent available can be found on the Rio Tinto website.

By referencing consensus figures, Rio Tinto does not imply that it endorses, confirms or expresses a view on the consensus figures. The consensus figures are provided for informational purposes only and are not intended to, nor do they, constitute investment advice or any solicitation to buy, hold or sell securities or other financial instruments. No warranty or representation, either express or implied, is made by Rio Tinto or its affiliates, or their respective directors, officers and employees, in relation to the accuracy, completeness or achievability of the consensus figures and, to the fullest extent permitted by law, no responsibility or liability is accepted by any of those persons in respect of those matters. Rio Tinto assumes no obligation to update, revise or supplement the consensus figures to reflect circumstances existing after the date hereof.

2

Image supplied courtesy of Puutu Kunti Kurrama and Pinikura (PKKP) people

Strong performance overshadowed by Juukan Gorge

Fatality-free Second year in a row

$23.9bn
EBITDA

Scope 3
Goals, targets & objectives set

Reconciliation
& Collaboration

No room for complacency

Net debt of $0.7bn

communities at IOC

$6.3bn
paid to shareholders

announced for climate-related projects

©2021, Rio Tinto, All Rights Reserved

4

China’s crude steel production (Mt annualised) Nov

Iron Ore* (+17% YoY)

1150

1050

140

80

900

800 Jan Feb Mar Apr

May

Jun

Jul Aug
Jul 18 Jan 19
Jan 20 Jul 20 Jan 21
5 Yr Range 2019

2020

5 Yr avg Nov

Dec

Platts CFR index
Seaborne Iron Ore supply run rate (Mt annualised**)
− Major producers’ shipments rose

− Disruptions to scrap collection further supported iron ore
demand at a time when
weather events constrained iron ore supply

+2% YoY (~25Mt), while China lifted its domestic iron ore supply to meet record 2020 demand

1300

1200

1100 Jan Feb Mar Apr
Jul Aug
2016-19 Range 2016-19 Avg 2019 2020

*Platts CFR index for 62% iron fines **Major suppliers annualised, reported at 100%. Sources: Rio Tinto, Mysteel, World Steel Association, Bloomberg, Baltic Exchange, Wood Mackenzie

YoY change reflects change in average annual price

6

Aluminium* (-5% YoY)

Copper (+3% YoY)

600

2600

500

360

400

800

300

300
200

700

260

100

220

1200
Jan 18

Jul 18 Jan 19 Jul 19 Jan 20 Jul 20
Jul 18

Jan 20

Jul 20 Jan 21

600
Jan 18

Jul 18
LME Aluminium HY Average MWP

(RHS)

CP slag

HY Average

Price (c/lb)
Recovery in global demand, led by China
Strong primary imports into China and lower scrap usage

Supply moderated in response. Inventory increase in high-grade products

Product mix has shifted back from commodity grades to Value Added Product (VAP)

2020 supply disruptions tightened market. Lowest mine supply growth in 30 years

©2021, Rio Tinto, All Rights Reserved

7

Very strong financial results

2020 2019 Comparison
44.6 43.2 +3%
23.9 21.2 +13%
27% 24%

Cash flow from operations

15.9 14.9* +6%

Free cash flow

9.4 9.2* +3%
12.4 10.4 +20%
7.70 6.36 +21%
9.8 8.0 +22%
5.57 4.43 +26%

Net debt

0.7 3.7

*Includes capital gains tax paid on divestments of $0.9bn in 2019

8

Underlying EBITDA

$bn

3.4 +3.3
0.5 0.3 24.7
0.4 0.1 0.2
Iron Ore
Aluminium

-0.3

Exchange

Energy
Flexed 2019 Underlying
EBITDA
Volumes & Mix Unit cash costs Non-cash costs &
E&E*/other
One offs
Copper +0.4
2019
Underlying EBITDA

©2021, Rio Tinto, All Rights Reserved

9
Return on invested capital*, post tax

Average ROCE 2001 to 2009 of 21%

30%
25%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Range for key diversified mining peers**

Rio Tinto

10

…which we continue to translate into strong cash flows

Cash flow in $bn

18.3 20.0
7.7 9.4
New

13.9

14.9 15.9
returns policy 11.8
6.9 9.4 8.5 9.5 7.0
5.8
4.8

2.1

9.4
2010 2011 (8.1) 2013 2014 2015 2016 2017 2018 2019 2020
2012

©2021, Rio Tinto, All Rights Reserved

11
2020

Continue to review mine plans to protect sites of exceptional cultural value and

Average realised price1, 3

$98.9/t + 15%
+ 1%

activities

Unit cost2, 3

$15.4/t + 7%

Revenue

27.5 + 14%

Underlying unit cost flat in 2020. YoY

18.8 + 17%
74% + 2 pp

Operating cash flow

13.2 + 16%

Tying in c.90mt of replacement mine

1.3 + 16% 1.2-1.6
1.6 + 174%
10.2 + 7%

ROCE

74% + 7pp

1Dry metric tonne, FOB basis | 2Unit costs are based on operating costs included in EBITDA and exclude royalties (state and third party), freight, depreciation, tax and interest. Operating cost guidance based on A$:US$ FX rate of 0.77 | 3Pilbara only. All other figures reflect Pilbara operations, portside trading and Dampier Salt.

12

0.4 17.2 Commissioning of Gudai-Darri in 2021 to drive the

0.3 system towards sustainably higher production if

15.4 1.6 16.0
14.4 0.6 0.4 14.4
− Gudai-Darri commissioning costs

− FX effects of $1.60/t with A$/US$ of 0.77 versus
0.69 in 2020. A significant majority of operating costs
(ex freight and royalties) are A$ denominated

In 2022 and 2023, the ramp-up of Gudai-Darri and
replacement mines will benefit unit costs

exchange rate of 0.695 in 2019, 0.691 in 2020.

13

2019A 2020A COVID-19
Gudai-Darri commission-ing Study
costs,
resource
development
Other1 2021 mid point of guidance2 Further investment in productivity and automation will deliver improved effectiveness of our integrated system (pathway to around two-thirds autonomous trucks by end of 2021)

Aluminium
Stable operations and commercial flexibility

Operating metrics

2020

$1,946/t

- 9%

Average alumina price2

$ 271/t
56.1Mt + 2% 56-59Mt

Production – alumina

8.0Mt + 4%

7.8-8.2Mt

3.2Mt - %
Canadian smelters –hot metal cash costs3

- 12% Refer to p54

Operational stability & lower input prices enabled delivery of solid

9.3

reductions contributed to the

EBITDA

2.2 - 6%
26% - pp Agreement reached on NZAS to
1.9

extend life to 2024; improved power

Sustaining capex

0.8 - 8%
0.2
0.9 + 9%

START responsible aluminium –

ROCE4

3%

©2021, Rio Tinto, All Rights Reserved

14
2020

Strong recovery in copper price and tight cost control supported EBITDA

Copper realised price

283c/lb + 3%
528kt - 9%

Production – refined copper

155kt - 40%

210-250kt

- 14%

Unit cost1

111c/lb + 20%

60-75c/lb

5.4 - 7%

Progress on copper/gold projects

EBITDA

2.2 + 5%
47% + 6pp
1.1 - 29%

COVID-19 restrictions

Sustaining capex

0.4 - %
1.3 - 7%
(0.6) - 124%

milestones need to be met for
project to commence caving

ROCE3

6% + 1pp
15

Energy & Minerals
Solid operational delivery in face of significant COVID-19 restrictions

Operating metrics

2020

$127.6/t

- 7%

Commercial flexibility at IOC:

$790/t + 1%
10.4Mt - 1% 10.5-12.0Mt

Production – TiO2

1.1Mt - 7%

~1.1-1.3Mt

0.5Mt - 8% ~0.5Mt
pellet lines now in operation

– Shipped 8% higher volumes YoY,

Revenue

5.0 - 3%
1.6 - 7% Feasibility study at Jadar lithium-
35% - 2pp borate project to be complete by
1.1 - 24%

end 2021

Sustaining capex

0.3 - 14%
0.1 - 43%
0.6 - 26%

road works, has commenced

ROCE3

12% - 3pp
16

Disciplined allocation of capital

1

Essential
sustaining capex

2

Further cash returns to
shareholders

Compelling growth

17
3
2020 capex of $6.2bn comprised of $3bn sustaining and $3.2bn development and replacement

Depreciation

6.2

~7.5 ~7.5
Guidance for 2021 and 2022 is around $7.5bn (previously around $7bn). Cumulative capex of ~$21bn 2020-2022 versus $20bn previously
5.4 5.5 Increase is largely due to currency with around half of the capex exposed to A$ and exchange rate assumption of 0.77 versus 0.68 previously
2018A 2019A 2020A

2022F

2023F

Sustaining capex of $3.0-3.5bn per year including Pilbara Iron Ore sustaining capex at $1.2-1.6bn per year
Sustaining Pilbara replacement
18

Balance sheet strength adds to our resilience

Net debt $bn Balance sheet strength is an asset. Offers resilience and creates optionality
Gearing 1% and net debt to LTM^ EBITDA of 0.03x
11.3 Operating cash flow of $15.9bn after paying $7.8bn in taxes and royalties
9.6 10.0 9.3 9.3
Invested $6.2bn and distributed $6.3bn to shareholders
3.8

5.2

5.6 4.9

4.8

4.9

Jun-16

Dec-16 Jun-17 Dec-17 Jun-18 Dec-18

Jun-19

Reported net debt

*Pro-forma net debt adjusts for the remainder of previously announced buy-backs from operations, lags in shareholder returns from disposal proceeds, Australian tax lag and disposal-related tax lag

and the impact of IFRS 16 Leases accounting change for the prior periods. This lease accounting change is reflected in the June and December 2019 reported net debt ^LTM = Last Twelve Months

19

Our pay-out ratio has averaged 73%* over past five years

Full year total dividend of $9bn and a 72% pay-out ratio including 60% for the ordinary dividend in 2020

160

Policy of 40-60% of underlying earnings through the cycle

40

2016 2017 2018 2019
2020

Ordinary dividend

Additional return Return of disposal proceeds

*Excluding divestment proceeds returned to shareholders

20

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