Taxes Paid report

For more than 100 years, we have called Australia home. Today, from Bell Bay, Tasmania to Karratha, Western Australia to Weipa, Queensland, we work with partners across the country to produce the materials used in everyday life.

In 2020, we were one of Australia’s largest taxpayers, contributing $6.8 billion (A$9.8 billion) in taxes and royalties. Over the past 10 years, we have paid more than $54 billion (A$65 billion) in taxes and royalties to governments in Australia.

We also employ more than 20,000 people across the country, and in Western Australia, home to our iron ore business, we employ more than 13,000 – and support many more. In 2020, we spent A$8.2 billion with suppliers in Western Australia alone, and A$293 million with Indigenous suppliers across the country.

Last year, to keep our iron ore operations running, we redesigned rosters and changed our fly-in, fly-out (FIFO) travel schedules for thousands of employees – at times in a matter of days. We secured additional charter flights, ensuring compliance with social distancing guidelines by spacing workers appropriately on planes, and in airports. With the implementation of rapid screening at airports in Western Australia for our FIFO workforce, we were one of the first companies globally to implement large scale rapid screening.

We also continued to support communities across Australia during the global pandemic, including, in Western Australia, by expanding our support for the Royal Flying Doctor Service and in Queensland, by providing A$1.25 million to the organisation to improve emergency and remotely delivered health care services. In Melbourne, we provided A$670,000 to the Murdoch Children’s Research Institute to help scientists better understand how COVID-19 affects children. And to support our communities in the Pilbara, we contributed A$20 million to help fund a new hospital at Tom Price, a community near one of our iron ore mines.

However, 2020 was overshadowed by the destruction of two ancient rockshelters in the Juukan Gorge. This destruction should not have happened. It was a breach of our values – and today, we know we must change, grow and improve as a company. We apologise again and unreservedly to the Puutu Kunti Kurrama and Pinikura (PKKP) people.

As we look forward, our commitment to Australia will only intensify, with the appointment of a new Chief Executive, Australia, as well as other key roles, including communities and social performance leadership. We are a global company, but we recognise that as home to our largest operational footprint and some of our most important relationships, including those with the Traditional Owners of the land we mine, Australia deserves special focus – and our intent is to provide it.

Canada is home to approximately 15,000 of our employees and contractors, who work at about 35 sites across the country, including aluminium operations in Quebec and British Columbia.

Despite the global pandemic, thanks to our employees, contractors and partners, we were able to keep our operations in Canada running throughout 2020. In Quebec, we worked with the government when we were required to reduce our business activities to a minimum during the early stages of the pandemic. And at our Diavik Diamond Mine in the Northwest Territories, where many of our employees come from vulnerable, remote communities, we introduced measures to minimise the risk of transmission, including mandatory testing, calls with medical professionals prior to travel, enhanced hygiene and physical distancing measures, roster and flight changes, and the mandatory use of masks.

Globally, we pledged $25 million for COVID-19 preparedness and recovery initiatives in the communities where we operate, including a dedicated $10 million for Canada and the United States.

Through that investment, we supported many partners in Canada, including by providing 25,000 masks to the local health authority in Saguenay – Lac-St. Jean, Quebec; provided alternative housing support to those experiencing family and domestic violence or abuse in Labrador City, Newfoundland and Labrador; providing C$100,000 to four local food banks in Havre-St-Pierre and Sorel-Tracy, both in Quebec; and in British Columbia, donating C$50,000 to the Kitimat General Hospital Foundation for supplies and equipment.

Innovation also played an important role across our operations in Canada in 2020:

ELYSIS – our partnership with Alcoa, supported by Apple and the governments of Canada and Quebec – completed its Research & Development Centre in the Saguenay, in Quebec, where it will continue to develop smelting technology free of direct carbon emissions.

We also launched START Responsible Aluminium, the first sustainability label for aluminium. Delivered to customers using blockchain technology, it will provide key information like where and how the aluminium was produced, its carbon footprint and recycled content found in the aluminium.

At our metallurgical complex in Quebec – part of Rio Tinto Fer et Titane – we developed a new process to extract high-purity scandium oxide from waste generated by titanium dioxide production. Scandium oxide is used to improve the performance of solid oxide fuel cells, a new clean energy technology used as a power source for data centres and hospitals and to produce high-performance aluminium-scandium master alloys for the aerospace, defence and 3-D printing industries.

The Oyu Tolgoi copper mine is a major contributor to the Mongolian economy and a large employer in the country with over 12,300 employees and contractors – approximately 95% of whom are Mongolian.

Since 2010, Oyu Tolgoi has paid $2.8 billion in taxes and royalties to governments in Mongolia. In 2020 Oyu Tolgoi paid $277 million taxes and royalties. This included corporate tax, royalties, fees and other payments totalling $82.4 million, employer payroll taxes of $23.4 million, $111.3 million of non-refundable VAT payments, $44.0 million of customs duties, $8.4 million of withholding taxes and $7.5 million in property taxes. Oyu Tolgoi also collected and remitted to Mongolian governments $22.1 million on behalf of its employees.

Between 2010 and 2020, Oyu Tolgoi spent $11.6 billion in-country in the form of salaries, payments to Mongolian suppliers, taxes and other payments to the Government of Mongolia.

Oyu Tolgoi – A Story of Growth

While Oyu Tolgoi’s open pit mine has been operating since 2011 and copper concentrate has been exported since 2013, more value lies deep underground. Construction of the underground mine will transform Oyu Tolgoi into the world’s fourth largest copper mine by 2030: together, the open pit and underground are expected to produce 480,000 tonnes of copper per year on average from 2028-2036 as well as gold, silver and molybdenum.

Our Kennecott copper operation, in Utah, delivers nearly 20% of US copper production and our borates business, in California, known as U.S. Borax, supplies roughly 30% of global demand.

Building on this strong legacy, in 2020, we continued to innovate and invest for future growth in the United States. We developed new processes to extract critical minerals for use in clean technologies. And we continued to invest in our communities – not only through the taxes and royalties we paid last year – but also through the support we provided for communities as a result of the global pandemic.

Continued Restoration and Reclamation Work in Arizona

In 2020, Resolution Copper  completed a $75 million restoration and reclamation project of 475 acres of land impacted by close to a century of previous mining activity. We also wrapped up a $200 million project to deepen the historic number nine shaft and connect it with the newer number ten shaft. We will now focus on the maintenance of the shafts and continuing the underground characterisation study to increase ore-body knowledge as the project continues to progress through a multi-year federal, state and county permitting process.

Resolution Copper, one of the world’s largest copper deposits, has the potential to supply up to 25% of the United States’ copper demand.

Pathway of Growth Projects at Kennecott

In 2019 we announced a $1.5 billion investment to extend operations to 2032. This project remains on track and we continue to explore projects to extend the life of mine. In 2020, Kennecott became the first producer to be awarded the Copper Mark™, the copper industry’s new independently assessed responsible production program, demonstrating it meets over 30 criteria for responsible environmental, social and governance practices.

And earlier this year, we announced plans to build a new plant that will recover tellurium, a critical mineral used in solar panels, from copper refining. Tellurium is an essential component of cadmium telluride, a semiconductor used to manufacture thin film photovoltaic solar panels. It can also be used as an additive to steel and copper to improve machinability, making the metals easier to cut. We expect production to begin later this year, with the capacity to produce approximately 20 tonnes of tellurium a year.

Lithium from Waste at U.S. Borax

Last year, we found a way to extract lithium – a critical mineral used in rechargeable batteries for electric vehicles and consumer electronics – from the waste rock at our borates operations in Boron, California. In December 2020, we commissioned a demonstration plant with the capacity to produce 10 tonnes of battery-grade lithium carbonate per year, enabling us to assess the feasibility of progressing to a production-scale plant.

Supporting Communities Where We Work

In the US, we worked with United Food and other partners in Arizona to distribute more than 100,000 cans of drinking water and donate more than 280,000 meals to the communities near our Resolution Copper project. In California, home to U.S. Borax, we donated $10,000 to offer learning support and food assistance to families living near our facility at the Port of Los Angeles, while our Kennecott copper operation partnered with the Natural History Museum of Utah to run a digital education hub pilot to improve access to technology for students.

We pay tax in eleven European countries: Belgium, France, Germany, Iceland, Luxembourg, Netherlands, Serbia, Spain, Sweden, Switzerland, and the UK.

Our history in Europe stretches back to our founding in 1873: our first mines were along the banks of the Rio Tinto river in Andalusia, Spain. Today, we have working operations in Iceland, Serbia and France, with legacy sites elsewhere in Europe; our global headquarters are in London.

In Iceland, we operate the ISAL aluminium smelter. In February 2021, we reached an agreement on an amended power contract to allow ISAL to continue operating with an improved competitive position. ISAL produces some of the highest quality, lowest carbon footprint aluminium in the world and employs 500 workers on site.

And in Serbia, we continue to progress our Jadar project. Jadar is a world-class lithium borate deposit near the Serbian town of Loznica.

In 2020, we approved an additional investment of almost $200 million to fund a feasibility study and associated engineering, as well as permitting and land acquisition. An investment decision is due at the end of 2021, in line with the initial project schedule.

The deposit contains high-grade jadarite, a lithium sodium borosilicate mineral, with the potential to produce battery-grade lithium carbonate and supply the electric vehicle value chain for decades.

Our operations in Africa include mines, refineries and processing plants. We have mineral sands operations in South Africa and Madagascar, while in Guinea, we have an iron ore project and a non-managed interest in a bauxite mine. We also conduct exploration activities across the continent. In 2020, we paid tax in South Africa, Guinea and Madagascar - and hope to continue to play a positive role in local communities.

Supporting our communities in challenging times

We work hard to support our communities and ensure they benefit from our operations. At Richards Bay Minerals (RBM) in KwaZulu-Natal, South Africa, we have been contributing to the community for more than 40 years. RBM is a joint venture between Rio Tinto (74%) and Blue Horizon – a consortium of investors and our host communities - Mbonambi, Sokhulu, Mkhwanazi and Dube – which owns 24%. The remaining shares are held in an employee trust.

Among other things, QIT Madagascar Minerals (QMM), in the Anosy region of Madagascar, provides funding for business support to a honey co-operative in Ampasy Nahampoana. We also work with the Centre d’Affaires Régional Anosy (CARA), in a partnership that has to date provided finance, marketing and training to more than 4,500 people and supported around 200 businesses.

High-grade iron ore

Our Simandou iron ore joint-venture project in Guinea is one of the world’s largest untapped and richest high-grade iron ore deposits, and complements our existing world-class iron ore portfolio. With an increasing focus on emissions and decarbonisation across the global steel industry, demand for high-grade ores is expected to continue to grow – and Simandou can be a key pillar for our role in this transition. Work continues on the technical optimisation of the project, with preparatory activity for an update of the project’s Environmental and Social Impact Assessment under way. We continue to engage with the government of Guinea about potential mechanisms for collaboration on infrastructure development.

In Chile, Brazil and Peru, we own interests in copper and bauxite mines, as well as an alumina refinery. We own a 30% share in Escondida, in northern Chile, the world’s largest copper mine, which produces approximately 1.1 million tonnes of copper a year.

In Latin America, we have interests in three non-managed operations:

The Escondida copper mine, located in the northern Atacama Desert, is moving to 100% renewable power by tapping into Chile’s rich solar and wind resources. This supports the country’s “Energia 2025” power policy target for 20% of all Chilean energy to come from renewable sources by 2025. Starting in mid-2021, the power supply at Escondida will be largely sourced from renewable energy.

Alumar – the alumina refinery, in São Luís, Maranhão, north east Brazil – started operations in 1984 and has been an important economic driver in the region ever since. Expansions in 2009 more than doubled production and today, Alumar is the largest alumina refinery in South America.

The Alumar refinery is a joint venture, with 10% owned by Rio Tinto and the remaining 90% owned by Alcoa and South32 with the refinery operated by Alcoa on behalf of the joint venture.

The Mineração Rio do Norte (MRN) mine in Porto Trombetas, northern Brazil opened in 1979. Today, it is one of Brazil’s largest bauxite mines, and last year produced approximately 12.5 million tonnes of bauxite. MRN is a joint venture owned by Rio Tinto (12%), Vale (40%), Alcoa (18.2%), South32 (14.8%), Companhia Brasileira de Alumínio (10%), and Hydro (5%).