2010 Annual report

Strategy

• Continue to build the Pilbara operations as the leading iron ore supplier close to the world’s largest, fastest growing markets.
• Focus on implementing a major expansion programme while maintaining maximum production.
• Continue to develop and benefit from technology innovation to deliver supply chain efficiencies, maximising margins per tonne.

Key achievements

• Record global iron ore production of 239 million tonnes (Rio Tinto share 184.6 million tonnes), a ten per cent increase on 2009 global production.
• Full ramp up of the Operations Centre in Perth, including transition of ports and new mines.
• Opening of Brockman 4, Mesa A and Western Turner Syncline mines. Subsequent decision to expand Brockman 4 to 40 Mt/a capacity and Western Turner Syncline to 15 Mt/a.
• Approval to develop the US$1.6 billion Hope Downs 4 mine and linking rail spur (Rio Tinto share US$1.2 billion).
• Improving on an already sector leading safety record, in the context of high production levels and the complexities of expansion.
• The employment of more than 900 Aboriginal people in Western Australia through targeted recruitment and retention strategies.
• Resuming expansion programme at Iron Ore Company of Canada (IOC).
• Opening the US$503 million Yurralyi Maya power station (Rio Tinto share US$397 million), providing more environmentally efficient power to support Pilbara operations and communities.

Key priorities

• Maintaining production and sales at nameplate capacity.
• Advancing technological integration into the group’s operations through Mine of the Future™ initiatives.
• Further improving the product group’s safety record towards zero harm.
• Emphasis on operational efficiency, removal of bottlenecks and cost control measures.
• Progress studies of total system capacity to 333 million tonnes per year in 2015.
• Continued emphasis on brownfield developments, to leverage an unrivalled network of assets close to existing infrastructure.
• Advance new project development options outside of the Pilbara.

Outlook

• Market to remain tight for the short to medium term, with delays to new supply and strong demand driving prices.
• The Iron Ore group’s strategy and performance will continue to be driven by the rapid urbanisation and industrialisation in China, and the steady recovery in other major Asian markets.
• India is expected to continue emerging as a major market as it follows China’s lead in urbanisation. The group also remains confident in the longer term potential for other markets of South East Asia, Central Asia, the Middle East and Africa.