The Diamonds & Minerals group comprises diamonds, borates, talc, titanium dioxide feedstock, high purity iron, metal powders, zircon and rutile mining and refining operations. Rio Tinto Diamonds (RTD) accounts for about six per cent of the world’s production of rough diamonds by value. Its business model is to be the preferred supplier of rough diamonds. The Minerals part of the group comprises Rio Tinto Minerals (RTM), a global leader in borates and talc supply and of the science behind their use, and Rio Tinto Iron & Titanium (RTIT), a market leader in titanium dioxide feedstock, high purity iron, zircon, rutile and metal powders production.
Harry Kenyon-Slaney, chief executive, Diamonds & Minerals. See biography
For more information see production and reserves
| US$ million | |
|---|---|
| Revenue | 2,618 |
| Operating cash flow | 528 |
| Underlying earnings | 800 |
| Capital expenditure | 519 |
| Net operating assets | 4,612 |
Operating cash flow contribution
Underlying earnings contribution*
2007-2009 US$m
- *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
- To safely and efficiently maximise shareholder value.
- To be the preferred supplier of natural rough diamonds, borates, talc and titanium dioxide.
- To be responsible and transparent in relations with neighbouring communities.
- To differentiate in the marketplace through superior service and technical support.
- To continue to invest in growth projects in the existing businesses and seek Tier 1 development opportunities in new mineral sectors.
Key achievements
- First shipments of ilmenite from QIT Madagascar Minerals (QMM).
- Broad Based Black Economic Empowerment restructuring completed at Richards Bay Minerals.
- EBITDA for RTM maintained at 2008 levels through strong cost reductions and positive pricing despite significantly lower volumes.
- Licences renewed for Jadar lithium-borate development project in Serbia.
- Potasio Rio Colorado (PRC) project in Argentina and a second potash project near Regina in Canada sold to Vale for a combined gain of US$797 million, included in underlying earnings.
- Construction of Diavik Diamonds underground mine in Canada substantially completed.
- Progressed the Bunder hard rock diamond discovery in India.
- Business improvement programmes delivered significant cost reductions in response to global economic conditions.
Key priorities
- Continue to strive for zero harm to people across all operations.
- Manage production and maximise cash flow in line with global economic recovery.
- Continue to operate in a responsible and sustainable manner.
- Continue to differentiate Rio Tinto from other diamond and industrial minerals suppliers by providing superior product quality, supply reliability and customer service.
- Retain and continue to develop the best people.
Outlook
- The diverse markets being served by the group’s operations continue to be affected by the health of the global economy.
- In Diamonds, rough prices are expected to improve during 2010 although this is dependent on the recovery in the US and consumption from emerging markets.
- Market weakness in the minerals business in 2009 is expected to slowly reverse in 2010, with more rapid recovery in Asia and emerging economies.
- Declines in the housing and automotive sectors will be offset to some degree by government incentive programmes, but will continue to affect sales.