The Aluminium product group, Rio Tinto Alcan, is a global leader in the aluminium industry. Its operations are closely integrated across the globe, and include mining high quality bauxite, refining alumina for both primary aluminium production and specialty alumina markets, and producing primary aluminium at some of the lowest cost, most technologically advanced smelters in the industry. Rio Tinto Alcan is renowned for its technology leadership as well as its advantaged position among aluminium producers in generating clean, renewable hydroelectricity.
Jacynthe Côté, chief executive, Rio Tinto Alcan. See biography
For more information see production and reserves
| US$ million | |
|---|---|
| Revenue | 12,038 |
| Operating cash flow | 688 |
| Underlying earnings | (578) |
| Capital expenditure | 1,690 |
| Net operating assets | 35,992 |
Operating cash flow contribution
Underlying earnings contribution*
2007-2009 US$m
- 2007 comparatives have beeen restated to remove Engineered Products.
- * A reconciliation of the net earnings with underlying earnings for 2008 and 2009 as determined under EU IFRS is set out in the Group financial performance. All amounts presented by the product groups exclude net interest and other centrally reported items.
Strategy
- Deliver on our baseline commitments including customer service, sustainable development, and ensuring the safety of our employees.
- Continue our journey of transformation and deliver on cost improvements.
- Surpass our synergy target and complete the integration process, which includes accelerating our cultural integration.
- Protect and enhance our superior growth options while preserving cash.
Achievements
- Reduction of 22 per cent in the all injury frequency rate from 2008 to 2009.
- Delivered after tax synergy benefits of US$924 million during 2009 with an annualised sustainable run rate of US$1.1 billion at the end of 2009.
- Transformational change to both administrative and production costs drove further efficiencies across the entire organisation.
- Strategically managed sustaining capital expenditure allocations, and completed value improvement exercises at major capital project sites to improve long term costs.
- Adjusted production of bauxite, alumina and aluminium to align with the downturn in market demand.
Key priorities
- Improve safety performance towards the objective of zero harm.
- Maintain focus on transformational change to enhance margins, reduce operating costs and optimise efficiencies at all operations worldwide.
- Continue to align production levels with market requirements.
- Drive additional value growth initiatives such as capital efficiency projects and research and development programmes.
- Strategically progress key projects including the Yarwun 2 expansion project (Australia), Kitimat Modernisation Project, AP50 pilot plant and Shipshaw optimisation (Canada).
Outlook
- Rio Tinto Alcan remains committed to delivering on operational efficiencies and improving its baseline cost structure.
- Major cost reduction measures and further aligning production with market demands are expected to position Rio Tinto Alcan to continue to lead the restructured global aluminium industry going forward.
- To build stronger margins and remain long in bauxite and alumina, the group holds the world’s largest bauxite reserves and a competitive position in the alumina sector.
- Carbon trading and emissions regulations will factor strongly in the coming years, particularly in OECD countries, and the group’s AP technology and clean energy sources are expected to provide advantages in a carbon constrained marketplace.