BlueSmelting™ project in Sorel-Tracy

Annual report

2023 year in review

We are finding better ways to provide the materials the world needs. In 2023, our teams around the world sought opportunities to reduce our carbon footprint, to partner to develop technologies to decarbonise steel and aluminium production, to find more efficient ways to supply copper and critical minerals essential for the energy transition, and to create new products from waste.

We explore, we mine, we process, and our ambition continues to be a business with a commodity mix aligned with evolving customer demand in a decarbonising world. But we cannot do it on our own. So we strive to create partnerships that solve problems and create solutions with lower societal and environmental impact. The approach applies as much to large-scale, transformational innovation as it does to incremental everyday progress, such as our safety and operational performance.

0.37

All-injury frequency rate (2022: 0.40)

24.3%

Women in our workforce (2022: 22.9%)

32.6Mt

Scope 1 and 2 greenhouse gas emissions (equity CO2e) (2022: 32.7Mt)

28%

Increase in spend with Indigenous businesses in Australia (2023 A$725M increased from A$565M in 2022)

$54.0B

Consolidated sales revenues (2022: $55.6B)

$10.1B

Profit after tax attributable to owners of Rio Tinto (net earnings) (2022: $12.4B)

$15.2B

Net cash generated from operating activities (2022: $16.1B)

$23.9B

Underlying EBITDA (2022: $26.3B)

435 cents

Total dividend per share (2022: 492 cents)

2023

Annual report

Annual Report 2023
PDF
13.04 MB
Annual Report 2023 - Strategic Report
PDF
9.16 MB
Annual Report 2023 - ESEF Format
ZIP
38.03 MB
Remuneration Policy 2021
PDF
102 KB
  • Past reports

    Annual Report 2022
    Annual Report 2022
    PDF
    16.48 MB
    Annual Report 2022 - Strategic Report
    PDF
    5.75 MB
    Annual Report 2022 - ESEF Format
    ZIP
    59.13 MB
    Remuneration Policy 2021
    PDF
    102 KB
    Annual Report 2021
    Annual Report 2021
    PDF
    16.56 MB
    Annual Report 2021 - Strategic Report
    PDF
    14.78 MB
    Annual Report 2021 - ESEF Format
    ZIP
    44.85 MB
    Remuneration Policy 2021
    PDF
    102 KB
    Annual Report 2020
    Annual Report 2020
    PDF
    6.25 MB
    Annual Report 2020 - Strategic Report
    PDF
    2.75 MB
    Annual Report 2019
    Annual Report 2019
    PDF
    10.03 MB
    Annual Report 2019 - Strategic Report
    PDF
    6.21 MB
    Annual Report 2018
    Annual Report 2018
    PDF
    9.84 MB
    Annual Report 2017
    Annual Report 2017
    PDF
    5.14 MB
    Annual Report 2016
    Annual Report 2016
    PDF
    3.22 MB
    Annual Report 2015
    PDF
    3.93 MB
    Annual Report 2014
    PDF
    2.4 MB
    Annual Report 2013
    PDF
    5.03 MB
    Annual Report 2012
    PDF
    5.3 MB
    Annual Report 2011
    PDF
    8.7 MB
A look back on 2023

Progressing our strategy

Climate change and the low-carbon transition are at the heart of our strategy. We aim to strengthen our resilience to the physical effects of climate change and secure new opportunities and partnerships created by changing market fundamentals. Our strategy is designed to deliver strong returns and growth options while reducing the environmental and social impacts of our business and broader value chains.

Grow in materials essential for the energy transition

  • High-grade iron ore

    • Progressed the Simandou high-grade iron ore project in Guinea with our partners. We announced plans to invest $6.2 billion1 (Rio Tinto share) on mine, port and rail infrastructure development. Production is expected to ramp up over 30 months from 2025 to a capacity of 60 million dry tonnes2 annually (27 million dry tonnes Rio Tinto share).
    • Approved $77 million for a pre-feasibility study to progress the development of the Rhodes Ridge project in the East Pilbara in Western Australia, one of the world’s most attractive undeveloped iron ore deposits.

    1Subject to the remaining conditions being met including receipt of regulatory approvals.
    2The estimated annualised capacity of approximately 60 million dry tonnes per annum iron ore for the Simandou life of mine schedule was previously reported in a release to the Australian Securities Exchange (ASX) dated 6 December 2023 titled Investor Seminar 2023. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.

  • Aluminium

    • Acquired a 50% equity stake in Matalco from Giampaolo Group for $738 million. The Matalco joint venture combines the strengths of North America's largest primary and secondary aluminium producers to meet growing demand for low-carbon products.
    • Announced we will invest $1.1 billion to expand our AP60 aluminium smelter equipped with low-carbon technology at the Complexe Jonquière with financial support from the Quebec government.
  • Copper

    • Started production from the Oyu Tolgoi underground mine in Mongolia, which will make Oyu Tolgoi one of the most important producers of copper in the world.
    • Approved investment to significantly increase production from underground mining at Kennecott. Production is expected to deliver around 250 thousand tonnes3 of additional mined copper over the next 10 years (2023–33).
    • Formed a joint venture with First Quantum Minerals to unlock the development of the La Granja project in Peru, one of the largest undeveloped copper deposits in the world.

    3The production target of around 250 thousand tonnes of additional mined copper over the next 10 years (2023 to 2033) at Kennecott was previously reported in a release to the Australian Securities Exchange (ASX) dated 20 June 2023 titled Rio Tinto invests to strengthen copper supply in US. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.
     

  • Minerals

    • Progressed development of a 3 thousand tonne per annum lithium carbonate starter plant at the Rincon lithium project with production expected by the end of 2024.
    • Acquired the high-grade Burra™ Scandium Project in New South Wales, Australia. The project could produce up to 40 tonnes of scandium oxide per year.

Accelerate the decarbonisation of our assets

  • Decarbonisation spend

    • Spent a total of $425 million on decarbonisation in 2023 (2022: $299 million). We estimate a total capital spend of $5-6 billion over the period 2022-30, including $1.5 billion cumulative spend over the period 2024–26.
  • Pacific Operations repowering

    • Signed a power purchase agreement (PPA) to buy 1.1GW of renewable energy from the Upper Calliope Solar Farm project which could provide part of a solution to repower our 3 Gladstone production assets.
  • Renewable energy

    • Constructed a 5MW solar plant pilot project at Kennecott Copper.
    • Approved, subject to regulatory approvals, a 12.4MW solar photovoltaic system and a 2.1Mwh battery storage system via long-term PPA for Amrun operations.
    • Signed a memorandum of understanding (MoU) with the Yindjibarndi Energy Corporation (YEC) to explore opportunities to collaborate on renewable energy projects on Yindjibarndi Country in the Pilbara.
  • Diesel transition

    • Advanced our diesel transition at Boron and Kennecott. Boron became the world’s first open-cut mine to fully transition 100% of its heavy machinery to renewable diesel.
  • Alumina processing

    • Approved the Yarwun Hydrogen Calcination Pilot Demonstration Program.
    • Progressed a double digestion pre-feasibility study at Queensland Alumina Limited (QAL).
  • Minerals processing

    • Commissioned the BlueSmelting™ demonstration plant at Rio Tinto Iron and Titanium Quebec Operations, with the first tonne of pre-reduced ore produced. The project is part of a partnership with the Government of Canada.
  • Nature-based solutions

    Continued to develop pilot projects in Madagascar and progressed pre-feasibility and feasibility work for opportunities in South Africa, Guinea, US and Argentina.

Develop products and technologies that help our customers decarbonise

  • Steel value chain decarbonisation

    • Progressed partnerships on various low-carbon pathways, including our collaboration with the world’s largest steel producer – Baowu.
    • Completed a feasibility study for the BioIron™ Continuous Pilot Plant and secured a location, completed an Electric Melter concept study with BlueScope, and progressed design of the Baowu Meishan microwave lump drying pilot plant.
  • Shipping decarbonisation

    • Lowered shipping emissions intensity by 37% (relative to 2008 baseline) and introduced 5 liquified natural gas vessels into the fleet in 2023.
    • Completed a 12-month biofuel trial.
  • Aluminium value chain decarbonisation

    • ELYSIS started commissioning activities following completion of construction work and expects to start the first 450 kA cell in 2024.
    • Defined potential areas of collaboration to help decarbonise alumina refining with customers, representing [47%] of global bauxite sales.
  • Procurement

    Completed a study to understand the sources of our procurement-related emissions.

Progressing our four objectives

Our strategy is centred around our four objectives: to be the best operator, to achieve impeccable ESG credentials, to excel in development and to strengthen our social licence. These essential components will help improve our productivity, reduce capital intensity and assist us in becoming a partner of choice for a range of stakeholders globally.

Best operator

Focus

Safety and operational performance.

  • Progress in 2023

    Safety

    Safety is our top priority. Our focus is on eliminating fatalities, preventing catastrophic events and reducing injuries. While we had zero fatalities at our managed operations in 2023, tragically 4 colleagues died in a plane crash while travelling to our Diavik mine in January 2024. Our all-injury frequency rate (AIFR) was 0.37 in 2023 (compared to 0.40 in 2022). We are strengthening our safety maturity model (SMM) by including health and environment risks, and we are gaining greater insight into the culture at each site so we can take actions to improve.

    Operational performance

    We continued rolling out the Safe Production System (SPS) across our assets, engaging our people to identify issues and improvement opportunities and develop and share best practices across the Group.

    We have deployed SPS at 56% of our sites to date, with implementation at various stages of maturity. Key performance highlights include a 5 million tonne uplift in iron ore production and a 25% improvement in AIFR globally in the second half of 2023 (when compared to the first half), at sites where SPS has been deployed.

    In 2023, we announced plans to increase annual iron ore capacity at Gudai-Darri in Australia by 7 million tonnes to 50 million tonnes at a cost of $70 million through incremental productivity gains.

    We also initiated a number of projects designed to improve the Group’s asset management performance. These included building up capabilities in our Asset Management Centre of Excellence, improving critical risk maintenance plans and spare parts programs and bolstering shutdown support.

  • Future priorities

    Safety

    In 2024, we will strengthen the way we manage our Critical Risks, our primary fatality elimination tool which helps ensure that controls are in place and working where there is a fatal risk. We will continue to enhance the understanding and impact of Critical Risk Management by focusing on quality conversations and verifications at our global operations.

    We have strong standards and processes to approve air operators, including regular audits and engagements to make sure aviation safety systems match our expectations of safety and care for our people. In 2024, we will continue to work with all our sites to actively review compliance with aviation safety tools and controls to provide further assurance on top of our existing processes.

    We will also evolve SMM and evaluate its impact on individuals’ mindsets, rather than simply verifying safety systems and processes. This will be strengthened through assessor training, and how we perform SMM assessments at our sites.

    Operational performance

    The rollout of the SPS will continue in 2024. Our focus will be on working with our product groups to double down on impacts at existing high-value sites, rather than new deployment launches. We will also work on significant maturity uplift of best practices, specifically problem solving, and completion of site-wide deployment and end-to-end systems. We will continue to work with asset management to integrate efforts to rapidly bring assets back to health so they can deliver industry-best performance.

  • Relevant KPIs

    • All-injury frequency rate
    • Underlying earnings & underlying EBITDA
    • Net cash generated from operating activities
    • Underlying return on capital employed
    • Free cash flow
    • Net (debt)/cash
    • Scope 1 and 2 greenhouse gas emissions
    • Gender diversity
    • Total shareholder return

Impeccable ESG

Focus

Decarbonisation, nature, water and waste management, closure, communities, workforce diversity, culture and leadership.

  • Progress in 2023

    Environment

    We continued to progress our 6 large carbon abatement programs focused on repowering our Pacific Aluminium operations, renewables, ELYSIS™, alumina process heat, minerals processing and diesel transition. We also formed new partnerships with our customers to reduce value chain emissions.

    We also identified several opportunities for investment in large-scale nature-based solutions with the potential to halt and reverse nature loss, support positive, sustainable change for communities and address climate change.

    In 2023, we progressed a number of innovative projects designed to reduce our environmental footprint and create new revenue streams through the adoption of more circular practices. These spanned the extraction of by-products, recycling and finding new life for our closure sites.

    Social

    Our work in 2023 focused on delivering our new communities and social performance strategy, underpinned by updated standards, targets and vision for the business. We continued to work on improving our approach to engage and partner with our host communities and better manage cultural heritage. In 2023, we completed an independent Cultural Heritage Audit, providing a systematic review of all the heritage sites that we manage worldwide.

    Governance

    In 2023, we continued to drive leadership, management and ethics and compliance improvements, with a focus on building a thriving culture, implementing the learnings from the Everyday Respect Report, and improving our transparency and practices.

    In 2023, the Business Conduct Office (BCO) launched Care Hub, an independent care unit providing support, care and resolution options to anyone affected by harmful behaviours. Care Hub currently supports matters reported through myVoice.

    72% of senior leaders have now completed Voyager, our senior leadership program. We also increased the offering of the Leading Sustainable  Corporations and Leader as Coach programs to further support development and our cultural journey.

  • Future priorities

    Environment

    We will define our next round of climate and nature targets in 2024, drawing on knowledge and experience from across the business and from our external partners, to develop more holistic commitments across these key areas. We will continue to progress our emissions reduction targets to build upon those currently in place, considering learnings from the approach we have taken with our water targets.

    Social

    Guided by our 2026 Communities and Social Performance Targets, a core 2024 focus is for our people in high human rights risk roles to complete job-specific and general human rights training. We will also continue to work together with communities to manage and protect heritage and find ways to deepen the impact of our social investment through strategic, outcomes-focused partnerships.

    Governance

    We will continue our cultural journey towards an inclusive and diverse workplace led by our values of care, courage and curiosity focusing in particular on safety, leadership and employee listening. In 2024, we will be working to clarify our measures to demonstrate progress.

  • Relevant KPIs

    • All-injury frequency rate
    • Total shareholder return
    • Scope 1 and 2 greenhouse gas emissions
    • Gender diversity

Excel in development

Focus

Project development, future options (pipeline projects, exploration and M&A), technology development and deployment.

  • Progress in 2023

    Project development

    We have continued to advance a number of projects across the business, including making significant progress at the Simandou iron ore project in Guinea in collaboration with our joint venture partners.

    In our iron ore business, Gudai-Darri reached nameplate capacity in the second quarter with the current wave of replacement mines like Robe Valley in production and Western Range commencing construction.

    In our aluminium business, we announced investment in a significant AP60 expansion. We also acquired a 50% equity stake in Matalco from Giampaolo Group for $738 million (subject to closing adjustments) to become a leader in recycled aluminium supply in North America.

    In our copper business, we achieved first sustainable production from the Oyu Tolgoi underground mine with associated infrastructure ramping up on schedule. Work has also progressed to expand underground operations at Kennecott.

    Pipeline projects

    We advanced studies and permitting at a range of greenfield projects including Resolution and Winu, and formed a joint venture with First Quantum to help unlock the La Granja copper project.

    Exploration

    We also continued to fill and progress our pipeline of exploration opportunities. We entered a joint venture (Nuevo Cobre) with Corporación Nacional del Cobre de Chile (Codelco) to explore and potentially develop copper assets in Chile’s prospective Atacama region.

    Technology

    We continued to progress our technology roadmap while building our technical capabilities and partnership networks. In 2023, we progressed 130 priority research and development projects, including 32 growth-focused projects on discovering new ore bodies, reducing capital intensity and unlocking new revenue streams.

  • Future priorities

    We will continue to explore new approaches, technologies and partnership opportunities to discover, progress and develop projects to support future growth in close consultation with communities. We will manage our pipeline of opportunities to deliver high-quality growth options, with a strong focus on materials needed in a decarbonising world.

    Future priorities include development of the mine, rail and port infrastructure for Simandou in Guinea in collaboration with our partners, construction of the Rincon lithium starter plant in Argentina, management of key closure projects at Argyle and Gove and optimisation of the next tranche of replacement mines in the Pilbara.

    We will continue to explore and evaluate new mining, processing, technology and renewable energy opportunities to ensure we maintain a high-quality portfolio of short-, medium- and long-term growth options that can deliver strong and resilient cash flows throughout the cycle.

  • Relevant KPIs

    • Total shareholder return
    • Underlying return on capital employed
    • Free cash flow
    • Net (debt)/cash
    • Scope 1 and 2 greenhouse gas emissions

Social licence

Focus

Adopting a multi-stakeholder approach for external engagements to deepen connections and build mutually beneficial partnerships. Building cultural capability and competency across the Group to ensure we fully understand, value and partner with our host communities.

  • Progress in 2023

    Communities and partners

    In 2023, we piloted a Group-wide approach to community perception monitoring that brings the voices of communities into the business, supporting deeper, more effective and data-driven social performance.

    We also signed an MoU with the YEC to explore opportunities to collaborate on renewable energy projects on Yindjibarndi Country in the Pilbara region of Western Australia.

    The Iron Ore Company of Canada (IOC) and the Naskapi Nation of Kawawachikamach signed an agreement to establish a mutually beneficial relationship based on dialogue, collaboration and trust over the coming decades. This socio-economic agreement aims to create opportunities for greater participation by the Naskapi People in IOC’s activities through training and development, employment, collaboration on environmental projects, and procurement.

  • Future priorities

    Communities and partners

    Our future priorities are informed by our 2026 Communities and Social Performance (CSP) targets which help us monitor progress toward the core objectives of our CSP strategy. Our targets guide progress across the business as well as for individual assets, which will continue to maintain local targets and metrics, developed in consultation with local communities.

    In 2024, a core focus is on ensuring all employees in high human rights risk roles complete job-specific and general human rights training. We will also continue to progress longer term targets including by 2026 for:

    • all sites to co-manage cultural heritage with communities and knowledge holders
    • 70% of total community investment to be through strategic, outcomes-focused partnerships.

    Understanding and acting on the perceptions of communities who host our operations is essential. We will roll out our new community perception monitoring program that we piloted in 2023 to all our assets throughout 2024 and 2025.

    We continue to find better ways to work with communities and Indigenous Peoples, particularly in how we protect heritage. Our approach aims to enhance our understanding and appreciation of cultural heritage and ensure the voices of communities inform our planning and decision making.

  • Relevant KPIs

    • Total shareholder return
    • Scope 1 and 2 greenhouse gas emissions
    • Gender diversity
Barton, Board of Directors, Chair

Dominic Barton

Chair

Our focus in 2023, and as we move into 2024, has been on embedding an empowering culture and on delivering consistent operational performance to progress our four key strategic objectives."

Jakob Stausholm

Chief Executive

Nothing is more important than the safety of our employees, contractors and communities. We remain committed to evolving our culture and processes to ensure everyone goes home safely every day.”

Jakob Stausholm
Peter Cunningham

Peter Cunningham

Chief Financial Officer

In 2023, our financial results were resilient, driven by an improvement in our operational performance. As we shape our portfolio for the future, we will continue to allocate capital
with discipline."

Our key performance indicators

We use a range of financial and non-financial metrics to measure Group performance against our 4 objectives: to be best operator; to achieve impeccable environmental, social and governance (ESG) credentials; to excel in development; and to strengthen our social licence.

  • All injury frequency rate (AIFR)
    Per 200,000 hours worked

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Impeccable ESG

    Definition

    We define AIFR as the number of injuries per 200,000 hours worked by employees and contractors at the operations that we manage. It includes medical treatment cases, restricted workday and lost-day injuries.

    Relevance to strategy

    The safety and wellbeing of our employees and contractors is our number one priority. We are committed to having a safe work environment and our focus is on eliminating fatalities, preventing catastrophic events and reducing injuries. We continue to implement our safety maturity model (SMM). By implementing our systems, including SMM, critical risk management (CRM) and the Safe Production System (SPS), we are ensuring we advance our safety culture and foster both physical and psychological safety.

    We continue to share learnings and strengthen our partnerships with industry and associated committees (such as the International Council on Mining and Metals), contracting partners and local communities to improve health, safety and wellbeing outcomes.

    Link to executive remuneration

    AIFR and SMM are included as performance metrics in the safety component of the short-term incentive plan (STIP).

    Our performance in 2023 and forward plan

    Our AIFR was 0.37 in 2023, an improvement from 2022 (2022: 0.40). While we had no fatalities at managed operations in 2023, tragically 4 colleagues died in a plane crash travelling to our Diavik mine in January 2024.

    We will renew focus on our critical risk management program. We will also work on embedding enhancements to the SMM.

  • Total shareholder return (TSR)1
    Measured over the preceding 5 years (using annual average share price)

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Impeccable ESG
    • Excel in development
    • Social licence

    Definition

    TSR is a combination of share price appreciation (using annual average share price) and dividends paid and reinvested to show the total return to the shareholder over the preceding 5 years.

    Relevance to strategy

    Our strategy aims to maximise shareholder returns through the commodity cycle, and TSR is a direct measure of that.

    Link to executive remuneration

    TSR is reflected in the long-term incentive plan (LTIP), measured equally against a mining based index (the EMIX Global Mining Index historically and from 1 August 2023 the S&P Global Mining Index) and a broader-based index of large global corporates (the MSCI World Index).

    Our performance in 2023 and forward plan

    TSR performance over the 5-year period was driven principally by movements in commodity prices and changes in the global macro environment. Rio Tinto significantly outperformed both the EMIX Global Mining Index and the MSCI World Index over the 5-year period.

    We will continue to focus on generating free cash flow from our operations. This allows us to return cash to shareholders (short-term returns) while investing in the business (long-term returns).

    1The TSR calculation for each period is based on the change in the calendar-year average share prices for Rio Tinto plc and Rio Tinto Limited over the preceding 5 years. This is consistent with the methodology used for calculating the vesting outcomes for Performance Share Awards (PSA). The data presented in this chart accounts for the dual corporate structure of Rio Tinto.

  • Underlying return on capital employed (ROCE)
    %

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Excel in development

    Definition

    Underlying ROCE is a non-IFRS measure defined as underlying earnings excluding net interest divided by average capital employed (operating assets). For more information and a reconciliation of underlying ROCE to the nearest comparable IFRS measure, see Alternative Performance Measures.

    Relevance to strategy

    Our portfolio of low-cost, long-life assets delivers attractive returns throughout the cycle and has been reshaped significantly in recent years. Underlying ROCE measures how efficiently we generate profits from investment in our portfolio of assets.

    Link to executive remuneration

    Underlying earnings, as a component of underlying ROCE, is included in the STIP. In the longer term, underlying ROCE also influences TSR, which is included in the LTIP.

    Our performance in 2023 and forward plan

    Underlying ROCE decreased 5 percentage points to 20% in 2023, reflecting the decrease in underlying earnings driven by lower commodity prices, and an increase in capital employed due to capital expenditure and acquisitions.

    We will continue to focus on maximising returns from our assets over the short, medium and long term. We will invest with discipline to strengthen our operations while delivering growth in a decarbonising world.

  • Underlying earnings and underlying EBITDA
    $ millions

    Alignment to our 4 objectives and associated risks

    • Best operator

    Definition

    Underlying earnings1 and underlying EBITDA are non-IFRS measures. Underlying earnings represents net earnings attributable to the owners of Rio Tinto, adjusted to exclude items that do not reflect the underlying performance of the Group’s operations. For more information on these exclusions and a reconciliation to the nearest IFRS measures refer to Alternative Performance Measures.

    Underlying EBITDA is a segmental performance measure and represents profit before tax, net finance items, depreciation and amortisation.

    Relevance to strategy

    These financial KPIs measure how well we are managing costs, increasing productivity and generating the most revenue from each of our assets.

    Link to executive remuneration

    Underlying earnings are reflected in the STIP. In the longer term, both measures influence TSR, which is the primary measure for the LTIP.

    Our performance in 2023 and forward plan

    Underlying earnings of $11.8 billion were $1.6 billion lower than in 2022. Underlying EBITDA of $23.9 billion was $2.4 billion lower than in 2022. The 9% decrease in underlying EBITDA resulted from lower commodity prices and higher operating unit costs partially offset by improvements in sales volumes across our portfolio.

    We remain focused on cost control, in particular maintaining discipline over fixed costs to drive attractive margins and returns across our portfolio.

    1Comparative information for year 2021 and 2022 has been restated to reflect the adoption of narrow scope amendments to IAS12 Income Taxes.

  • Net cash generated from operating activities
    $ millions

    Alignment to our 4 objectives and associated risks

    • Best operator

    Definition

    This KPI refers to cash generated by our operations after tax and interest, including dividends received from equity accounted units and dividends paid to non-controlling interests in subsidiaries.

    Relevance to strategy

    This KPI measures our ability to convert underlying earnings into cash.

    Link to executive remuneration

    Net cash generated from operating activities is included in the STIP. In the longer term, the measure influences TSR. In the longer term, the measure influences TSR, which is included in the LTIP.

    Our performance in 2023 and forward plan

    Net cash generated from operating activities of $15.2 billion was 6% lower than 2022. This was primarily driven by price movements for our major commodities and a modest rise in working capital.

    We continue to focus on effectively delivering strong and stable cash flows while optimising the health and performance of our assets.

  • Free cash flow
    $ millions

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Excel in development

    Definition

    Free cash flow is a non-IFRS measure defined as net cash generated from operating activities minus purchases of property, plant and equipment, intangibles, and payments of lease principal, plus proceeds from the sale of property, plant and equipment, and intangible assets.

    Relevance to strategy

    This KPI measures the net cash returned by the business after the expenditure of sustaining and growth capital. This cash can be used for shareholder returns, reducing debt and other investment.

    Link to executive remuneration

    Free cash flow is included in the STIP. In the longer term, the measure influences TSR, which is included in the LTIP.

    Our performance in 2023 and forward plan

    Free cash flow decreased by $1.4 billion to $7.7 billion in 2023, primarily due to the decrease in net cash generated from operating activities and increases in sustaining and growth capital expenditure.

    We continue to focus on effectively delivering strong and stable cash flows while optimising the health and performance of our assets.

  • Net cash/(net debt)
    $ millions

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Impeccable ESG

    Definition

    Net (debt)/cash is a non-IFRS measure defined as total borrowings plus lease liabilities less cash and cash equivalents and other liquid investments, adjusted for derivatives related to net (debt)/cash (see note 19 of the financial statements).

    Relevance to strategy

    This KPI measures how we are managing our balance sheet and capital structure. A strong balance sheet is essential for giving us the flexibility to take advantage of opportunities as they arise, and for returning cash to shareholders.

    Link to executive remuneration

    Net (debt)/cash is, in part, an outcome of free cash flow, which itself is reflected in the STIP. In the longer term, net (debt)/cash influences TSR, which is reflected in the LTIP.

    Our performance in 2023 and forward plan

    Net debt remained stable at $4.2 billion. This included free cash flow of $7.7 billion, offset by dividends of $6.5 billion and the $0.7 billion acquisition of Matalco1.

    We continue to focus on effectively delivering strong and stable cash flows while optimising the health and performance of our assets.

    1. Subject to usual closing adjustments.
  • Scope 1 and 2 greenhouse gas emissions
    (equity Mt CO2e)

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Impeccable ESG
    • Excel in development
    • Social licence

    Definition

    We measure our Scope 1 and 22 greenhouse gas emissions on an equity basis. It includes the equity share of Scope 1 and 2 emissions from managed and non-managed operations expressed in million metric tonnes of carbon dioxide equivalent.

    Relevance to strategy

    Climate risks and opportunities have formed part of our strategic thinking and investment decisions for over 2 decades. The low-carbon transition is at the heart of our business strategy. We focus on growth in the materials that enable the transition, decarbonising our operations and partnering with our customers to decarbonise our value chains.

    Link to executive remuneration

    Climate change is included in our ESG metrics for executive remuneration with a weighting of 10% of the STIP. The carbon abatement target set for 2023 was 10Mt CO2e.

    A total of 29 projects progressed though a development stage during the year, leading to an above target performance of 12Mt CO2e abatement expected by 2030. We have put forward proposals to incorporate decarbonisation related performance measures into our LTIP as part of our 2024 Remuneration Policy.

    Our performance in 2023 and forward plan

    Our Scope 1 and 2 emissions were 32.6Mt CO2e in 2023. This is 6% below our adjusted 2018 baseline of 34.5Mt CO2e and slightly below our 2022 adjusted emissions of 32.7Mt CO2e (adjusted for acquisitions). Abatement delivered by our projects in 2023 exceeded emissions growth from higher production giving a slight reduction in emissions on a like for like basis.

    Our 2023 emissions were slightly higher than our actual 2022 emissions total of 32.3Mt CO2e due to the recent acquisitions of additional equity in OT and MRN.

    By 2025, we expect to have made financial commitments to abatement projects that will achieve more than 15% of Group emissions. However, it is expected our actual emissions abatement will lag this.

    2In 2023, we improved our carbon emissions reporting and now use the market-based method as our primary measure for assessing performance against our emissions targets. Further detail on this change in reporting and the implications for our emissions baseline is available in our 2023 Addendum - Scope 1, 2 and 3 Emissions Calculation Methodology.

  • Gender diversity
    Representation of women within our workforce

    Alignment to our 4 objectives and associated risks

    • Best operator
    • Excel in development
    • Social licence

    Definition

    Includes our total workforce based on managed operations (excludes the Group’s share of non-managed operations and joint ventures)4.

    Relevance to strategy

    Inclusion and diversity are imperative for the sustainable success of the business. Our sustained performance and growth rely on having workforce diversity that is representative of the communities in which we operate and having a workplace where people are valued for who they are and encouraged to contribute to their full potential.

    Link to executive remuneration

    In 2023, we set a target to increase the proportion of women in our workforce by 2 percentage points. This target is included in our ESG metrics for executive remuneration, with a weighting of 5% of the STIP.

    Our performance in 2023 and forward plan

    In this first year of the target, our representation of women at Rio Tinto increased from 22.9% to 24.3%, a 1.4 percentage point increase. We saw improvements across all levels of the organisation with senior leaders increasing from 28.3% to 30.1%, and operations and general support increasing from 16.2% to 17.7%.

    Our target to increase the proportion of women in our workforce year-on-year creates an important focus.

    We are focused on implementing the recommendations from the Everyday Respect Report and we are confident that this will improve both the attraction and retention of women and other diverse groups to Rio Tinto.

    3In 2020, we updated our definition of our total workforce to include those employees who were unavailable for work (eg on parental leave) and temporary contractors. Note: less than 1% of the workforce gender is undeclared.

    4Baseline reset with definition for 2020 to 2023 gender diversity.

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