2010 Annual report

Investing for the future

The Group has had a sustained commitment to exploration since 1946 and considers exploration to be one of its core competencies. Mature Group operations, such as Weipa, the Pilbara and Rössing, were Tier 1 greenfield discoveries by Rio Tinto. The value of these discoveries is still being realised after more than 40 years by both mine production and successful brownfield exploration.

Continuing this legacy, the Exploration group has since 2000 identified two of the largest copper opportunities in the world at Resolution in Arizona, US and La Granja in Peru. Exploration has also delivered one of the world’s largest known high grade iron ore deposits, at Simandou in Guinea, as well as the Caliwingina channel iron deposits in the Pilbara, Australia. Exploration identified the potash deposits at Potasio Rio Colorado, which Rio Tinto sold to Vale in 2009; the Sulawesi nickel laterite deposit in Indonesia; the Mutamba titanium deposit in Mozambique; and the lithium borate deposits at Jadar in Serbia.

A significant proportion of the Exploration group’s expenditure is returned to Rio Tinto through the sale of Tier 2 discoveries. Over the period 2000 to 2010, divestment of Exploration group projects has returned US$1,291 million for a net pre tax spend of approximately US$128 million. Over the period this translates to an average Tier 1 discovery cost of less than US$16 million per deposit.

The following table shows the Exploration group’s Tier 1 discoveries since 2000:

At the end of 2010, the Exploration group was actively exploring in 16 countries, and assessing opportunities in a further seven, for a broad range of commodities including bauxite, copper, coking coal, iron ore, diamonds, nickel, uranium and potash.