Rio Tinto : 2024 AGM – Transcript

Rio Tinto Limited Annual General Meeting

2 May 2024, 9.30am (AEST), Brisbane

Disclaimer: This transcript has been prepared by a third party on Rio Tinto's behalf. Rio Tinto cannot guarantee that it is accurate or complete nor that all or any errors it may contain have been corrected. You should not, therefore, rely on any of the information in this transcript. Anyone seeking to clarify content discussed in this transcript or the event to which it pertains should contact Rio Tinto's Investor Relations team.

Dominic Barton:	Good morning to everyone in Brisbane, and to those of you joining virtually. It's
	wonderful to be back here in Australia. As Chair of Rio Tinto, I have the privilege of
	welcoming you to our 2024 Annual General Meeting.
	First, I'd like to acknowledge the Traditional Custodians on whose Lands I am
	speaking from today, in Brisbane, and pay my respect to Elders past and present. I
	extend that respect to all Indigenous peoples that host our operations around the
	world. And then in that vein, it gives me great pleasure to introduce Jahmarley
	Dawson, one of Australia's leading didgeridoo players. Jahmarley is a proud Turrbal,
	Waanyi, Kabi Kabi, and Gomeroy man, and an emerging Aboriginal leader. He lives
	here in Brisbane and is linked to the Turrbal people through bloodline connection
	and kinship ties.

[Welcome to Country by Jahmarley Dawson]

Dominic Barton:	Thank you so much, Jahmarley. I have a feeling we may get a call from the Telstra
	Chair for some input. And Jakob, you may want to think about someone else in the
	commercial side of the business that we could move it through. But anyhow, we
	really thank Jahmarley for that amazing welcome and the wonderful didgeridoo
	playing, and for opening our AGM meeting today.
	On a different note, before we start proceedings, I also think it's right that we take a
	moment to remember six people who were killed in a plane crash near Fort Smith in
	Canada this year. We lost four colleagues from our Diavik diamond mine: Diane
	Balsillie, Howard Benwell, Joel Tetso, and Shawn Krawec. We also lost Paszolo Alba
	and another airline crew member, who is not being named publicly.
	We at Rio Tinto are completely devastated. We continue to be in touch with the
	families and the community at Fort Smith as they grieve for their relatives, their
	colleagues and friends. As we know this tragedy will affect them for years to come.
	Our colleagues are deeply missed, and our thoughts remain with their families, with
	everyone at Fort Smith, and our team at Diavik.
	And I suggest we pause to reflect, and to remember.
	[Silence]
	Thank you.

It's a privilege to be here and to introduce my fellow members of the Rio Tinto Board, and just starting from my right to my left:

• Kaisa Hietala
• Susan Lloyd-Hurwitz
• Simon McKeon, Senior Independent Director of Rio Tinto Limited

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• Martina Merz
• Simon Henry, who is the Chair of our Audit and Risk Committee
• Peter Cunningham, our CFO
• Jakob Stausholm, our CEO
• Sam Laidlaw, Senior Independent Director of Rio Tinto plc and Chair of our People and Remuneration Committee
• Dean Dalla Valle, Chair of our Sustainability Committee
• Jennifer Nason
• Joc O'Rourke
• Ngaire Wood
• And Ben Wyatt.

We are also joined by our Australian Company Secretary, Tim Paine.

And in the front row, we have with us Trevor Hart, our external auditor from KPMG.

We've made more changes to the Board since last year's AGM, reflecting again our desire to address the skill mix and experience needs that we identified in the review we did in June 2022. And I'm pleased to say that since our last meeting, Joc O'Rourke and Martina Merz have joined our Board, and Sharon Thorne will join us in July. And together they will deepen our mining, project building, downstream customer and audit experience, as well as our approach to sustainability and organisational culture.

And as part of our phased transition, Simon McKeon will step down as a Director at the end of today's meeting. We are extremely grateful to Simon for his invaluable contributions and leadership, particularly after Juukan Gorge, and we wish him well for the future. And I just want to say I'm going to personally miss you, you've been wonderful to work with, Simon.

I'm excited to lead a Board that shares such a commitment to help Rio Tinto achieve its full potential.

The AGM is an opportunity for us to have an open conversation about Rio Tinto's progress and opportunities, as well as our challenges.

In order to make today's proceedings as efficient as possible, I want to declare that voting on all resolutions are now open. As usual, all resolutions will be decided by poll.

Last year, we continued to stabilise our operations - particularly in the iron ore business - and we are carrying that momentum with us in 2024. We are maintaining a focus on the four strategic objectives that Jakob laid out three years ago: to become best operator, to strive for impeccable ESG credentials, to excel in development, and to deepen our social licence.

Our strong results in 2023 demonstrate progress towards these objectives and financial discipline. This discipline has enabled us to invest in the future of our business, while also delivering more attractive returns to you, our shareholders - with total dividends declared of $7.1 billion US dollars.

Our strong balance sheet also allows us to invest in improving the health of our existing assets, while also shaping our portfolio for the long term. I am excited about our growth, particularly as we execute projects at scale, even in the most challenging of conditions.

For example, we are ramping up copper production at Oyu Tolgoi underground, and that's an orebody, an ore deposit equivalent to the area of Manhattan in New York, but at a depth of 1.3 kilometres below the Gobi Desert in Mongolia - and connected by around 200 kilometres of tunnels.

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At Simandou in Guinea, we're working with our partners to build a mine and 600 kilometres of new rail to unlock incredibly high-grade iron ore, which will enable low carbon steel making.

And, at the Rincon Lithium Project in Argentina, we've made progress developing a small starter battery-grade lithium carbonate plant, where production is expected to start by the end of this year. That project has involved building an airstrip in a region that stands 3.8 kilometres above sea level.

I hope that gives you a sense of how physically and operationally demanding it is to provide the vast quantities of metals and materials that the world needs to grow and transition to renewable energy. But I believe we are more than ready for this challenge, and it's very much in the company's DNA.

We are fortunate to have an incredible exploration team with a wealth of expertise and data, supported by one of the largest multi-commodity exploration budgets, a budget that has been consistent throughout the cycle over the last 15 years.

In fact, we have one of the best exploration pipelines in years, totalling more than 100 projects across our commodities of interest.

As we prepare for the future, we are working hard to embed our commitment to ESG and deepen our social licence in all aspects of our decision making. I and other board members have had the chance to visit 16 Rio Tinto sites in the last 12 months, and we've been encouraged to see how this commitment extends throughout the mining lifecycle - from exploration, right through to closure.

Technology and innovation are also key to how we are driving progress, creating safer and more efficient operations while decarbonising our processes and value chains. And we're serious about what it takes to reduce our carbon footprint. We are no longer just setting targets; we are taking action to deliver them.

We hit a major milestone at the beginning of the year, signing two agreements to purchase wind and solar power - totalling 2.2 gigawatts for our aluminium assets here in Queensland.

Electricity usage for our Pacific Operations accounts for about 26% of our carbon emissions, so re-powering these assets with renewables - sun and wind - instead of coal is essential to meet our overall commitments.

But still, the challenge of decarbonising the world's economy and the activities of societies across the world is immense. There is a large gap between what current technology can deliver and what is needed for the global energy transition. This will require a significant research and development effort to find new technologies and better ways of doing things. Let alone the sheer quantity of materials - the metals, to enable the energy transition that's required.

Rio Tinto has a strategic role to play in closing these gaps and to help societies resolve some of their most urgent issues. This includes tackling climate change and helping customers to secure the supply of the materials they need, which also contributes to national and global economic growth.

As a Board, we have spent considerable time with governments, customers, NGOs and partners around the world to better understand how combining our knowledge and capabilities can create win-win opportunities. However, to make the most of these opportunities, we believe we need to do three things: achieve consistent performance; get better at making the argument for our industry; and navigate the underlying tension between environment and societal needs.

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So first, on our operational performance: we need to keep striving for greater consistency and reliability across all our assets. Our strategy and four objectives provide a roadmap to build a stronger Rio Tinto for the long term. But we don't always get it right, and we're still learning how to build upon our successes and failures to continuously improve. This applies to Rio Tinto's ongoing culture change journey, which is fundamental to financial performance, and our long-term performance and success.

Two years since we started learning from the findings, and implementing the recommendations of the Everyday Respect Report, the positive momentum continues. But creating and maintaining a culture where everyone can be at their best requires time and constant effort.

Elizabeth Broderick is returning this year to conduct a review. The Board spent some time with her yesterday in this. And we will again publicly release the review once she completes it.

By building an environment where everyone feels safe, respected and empowered, we believe we can become a home to even more talented people who drive innovation and operating performance, and also act as our biggest advocates to society.

And that brings me to our second challenge: we need to keep advocating our role in society. While we are imperfect as an industry, what we produce is essential. The World Economic Forum recently published a report which stated that "No generation of mining leaders has faced greater complexity, speed or scale of change than today."

For some key commodities, we're going to need to produce the equivalent of what humans have produced over the last 5,000 years, in the next decade. It's a massive amount that we need in a short period of time. There is a huge demand and a huge gap. And we need to innovate to grow and to close the supply and demand gaps in the coming decades.

We face a clear opportunity and challenge in the energy transition. The International Energy Agency, the IEA, says the world added 50% more capacity to generate renewable electricity in 2023 than in 2022 and predicts the next five years will see the fastest growth yet.

However, investment in renewable energy and infrastructure has been lagging. For the global energy system to reach net zero emissions by 2050, the IEA also predicts investment here will need to triple from current levels of just over $1 trillion a year to up to $4 trillion a year by the end of this decade.

All this infrastructure requires the materials we produce at Rio Tinto.

Meanwhile, we are still experiencing traditional drivers of demand, economic growth. Indeed, we are essential to so many aspects of daily life.

Before you arrived here, I hope you've seen the clips from our new podcast - "Things You Can't Live Without". I'm a big fan of this series because it helps do something we need, again, to do more of. It helps people understand what it takes to create the objects we rely on and that we may take for granted - our phones, cars, electric bikes, the paint on our walls - and it explores how we can find better ways to produce them.

People need our products. However, we know public perception of our industry does not always reflect the importance of the industry to society. Mining is needed but certainly not wanted by all. And we need to work to shape a better understanding of our industry and what we do.

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And thirdly, as society's ESG expectations evolve - and we are excited by that evolution - a tension remains between the environmental and the social elements of ESG.

At a global level, we know we need mining to help avert a climate disaster, but this reality is sometimes challenged at a local level. Even where governments are supportive, one of the biggest challenges isn't the mining operation itself, but the permitting process.

And it's a trend that we see across other sectors. For example, the renewable energy sector. Speaking to the World Economic Forum last year, wind turbine manufacturer, Vestas Wind Systems, said there is four times more wind generation capacity caught in permitting delays than under construction in Europe.

We know we need to keep deepening our connection with stakeholders to earn trust, to resolve conflicts and to strengthen our social licence. If we don't make progress on this, we won't be able to rise to the physical challenge of the energy transition.

An important part of this connection is our engagement with civil society organisations. I had the privilege of taking part in all our civil society roundtables in Australia, the US and the UK last year.

Dean, Ben and I also recently met with four civil society organisations in Guinea when we were there in early March of this year. They provided valuable feedback about our operations - what's working well, but more importantly, what we need to do better. For example, we've been encouraged to forge ahead on establishing nature and biodiversity targets. We are recognised as being able to bring international standards with us - wherever we work. Which we do, and which we will, adhere to.

We know we're not perfect. Where there are challenges, we need to continue to get around the table with our stakeholders, to develop better ways of working together to address these.

There's no doubt we are living in turbulent times. A volatile geopolitical landscape, rapid technology changes, increasing polarisation, and an uncertain economic backdrop.

This complex world requires complex solutions. But I look to the future with optimism. There has never been greater demand for what we do, and the quality of our people, partnerships, assets, and the technology that we have and are developing, give me great confidence that we can deliver for all our stakeholders.

Jakob, his team and all our 53,000 colleagues have been doing a terrific job steering us through the many challenges. We're at a point where we can reiterate that we will deliver what we say we will do. Hopefully to be boringly consistent.

Our operations are stabilising, our culture is improving, we are making progress against all four of our objectives, and we are continuing to learn so we can find better ways to deliver for the future.

Thank you for listening to me for so long.

I will now hand over to Jakob, who will provide his update on the business. And then we're going to hear from Sam Laidlaw, Chair of our People and Remuneration Committee, to say a few words on our proposed Remuneration policy.

But before we hear from Jakob, we're going to play a short video, which we think encapsulates the spirit of where we're going on our culture journey as a company.

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	Thank you.
	[Video plays]
Jakob Stausholm:	Thank you, Dom.
	I would also like to acknowledge the Traditional Custodians on whose Lands I am
	speaking from today and to pay my respect to Elders past and present.
	As you saw in the video, our values of care, courage and curiosity are at the core of
	our culture journey.
	Over the last few years, we have been embedding culture change and shaping Rio
	Tinto's strategy. We introduced our four objectives, underpinned by the values and
	our purpose: finding better ways to provide the materials the world needs.
	As time goes on, our strategy makes - in my view - even more sense.
	Rio Tinto is at the heart of the energy transition and therefore facing an opportunity-
	rich world. We are still seeing powerful traditional drivers of long-term demand, and
	our core markets are growing.
	At the same time, emerging trends are opening up new opportunities for us to deliver
	value for you, our shareholders. As both a mining company and a processing
	company with a global footprint, we are well-positioned to realise those opportunities,
	working alongside our partners.
	We can help countries grow their economies and secure supplies of materials critical
	for renewables. We can also provide customers with the sustainable and traceable
	materials that they increasingly demand.
	As Dom said, we still need to strengthen our foundations for success. But we are
	confident in our strategy. By following our four objectives, we are putting Rio Tinto in
	a stronger position for the long-term.
	We have a lot to do - but that is the exciting bit. There is so much ahead of us.
	Our 2023 results are proof we are on the right track. Our business is very robust.
	Last year we delivered a 20% return on capital employed, despite a $1.5 billion
	negative impact from lower commodity prices.
	I'm pleased we are delivering stable, profitable growth. Overall production grew 3%
	and we achieved underlying earnings of $11.8 billion.
	Even as we stepped up capital expenditures, made acquisitions and paid out a large
	dividend to you, our shareholders, net debt was unchanged from 2022. It shows we
	are investing with discipline to ensure our success over the long term, while
	delivering consistently through the year.
	To succeed over the long-term, we are investing in the health of our people, our
	assets, and our orebodies. This is how we can create the conditions for consistent
	performance, to get us back to our DNA as best operator.
	Evolving our culture is key to how we unlock performance. We are only a couple of
	years into what is a long and complex journey. But having visited nearly a dozen
	sites in recent months, I can see that the culture is changing.
	We are also embedding best practices and empowering our people by deepening
	the rollout of the Safe Production System. The Safe Production System has already
	helped deliver real improvements in our iron ore business.
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And we can see an example of what best operator looks like at Oyu Tolgoi in Mongolia. Just over a year since we started underground productions, we are now on course to become one of the world's leading suppliers of copper.

For me, one of the key differences I have seen in Rio Tinto is how we are moving from strategy to real action. We are finding an economic pathway to reach our targets on decarbonisation, in partnership with governments, customers and communities. Shifting to renewables is a core part of that journey, including repowering our Pacific aluminium operations.

At the same time, we are re-imagining manufacturing through the development of low-carbon technologies.

And we are providing more options for our customers through the circular economy. Last month, I visited the Ontario site of our new Matalco joint venture, which produces high-grade recycled aluminium at scale.

More broadly, our approach to ESG is informing our decision making at every level.

We are working closely with communities to improve in areas such as biodiversity and water management, and to help countries realise the full opportunities for economic development.

We will never be perfect, but we will keep setting the bar high. We are committed to listening, to learning, and striving to do better.

We are applying this commitment to ESG as we grow in the materials essential for the energy transition. We have an attractive pipeline and considerable momentum in developing projects.

With our Oyu Tolgoi underground going from strength to strength, I believe we can repeat this success at the Simandou project in Guinea - where we are at an earlier phase.

Simandou has really matured over the last year. This is a unique project, both in its challenges and opportunities. It can be a country-maker for the people of Guinea and provide the world with high-grade iron ore needed for green steel.

And in March I visited our Rincon lithium project in Salta, Argentina. It was super insightful to see how our team is laying the groundwork for our first lithium production by the end of the year.

As Dom mentioned, we also have an incredible exploration team. It was great for me to visit Chile as well, to learn more about our joint venture to explore for copper in the country.

Of course, we cannot realise the full potential of these assets without a strong social licence. Our understanding of this is deepening across our teams. How we are progressing with social licence is difficult to say, as it's not judged by us, but society at large. However, as I engage with stakeholders, my overwhelming feeling is that we are more and more finding mutual ground.

We are embedding our approach to co-management and co-development throughout the business, while continuing to work closely with Traditional Owners to ensure better outcomes for everyone.

This includes partnering for prosperity, such as working with the Yindjibarndi Energy Corporation to explore renewable energy projects in the Pilbara in Western Australia.

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	We know we need to continue listening to voices from the communities where we
	operate, and work very closely with civil society to understand what we can do better.
	If we keep listening, stick to our values and find better ways to work together and
	build trust, I believe we can be a miner that people, communities, governments and
	customers choose to work with.
	I am super optimistic about Rio Tinto's future. I believe the best opportunities are
	ahead of us. I am also optimistic about what we are achieving today to capture those
	opportunities.
	Our focus is on securing the enduring health and success of our business, with an
	emphasis on disciplined, stable growth. We are moving from strategy to action on
	decarbonisation and shaping our portfolio with an eye to the future.
	And we are changing the culture of our company. While there's still much to do, it is
	leading to a workplace where everyone can feel safe, respected and empowered.
	This is what will drive our performance and enable us to deliver for our shareholders
	- and all stakeholders - in 2024 and beyond.
	Thank you.
	I will now hand over to Sam Laidlaw, Chair of our People and Remuneration
	Committee.
Sam Laidlaw:	So, thank you very much, Jakob. And good morning. And let me also pay my respect
	to Traditional Owners and Elders, both past and present. As you've just heard from
	Jakob, 2023 was another year of really solid operational performance and strong
	financial results. As well as stabilising our production, we did make steadfast
	progress developing our culture, and diversifying in the materials that are needed for
	the energy transition.
	While there were no fatalities at our managed operations last year, as you heard, in
	January 2024 we tragically lost four colleagues from our Diavik mine and two airline
	crew members in an aircraft accident. Now, we are continuing to support the
	authorities as they investigate what happened. And the findings will form part of the
	Remuneration and People Committee's consideration for the outcomes at the end of
	this year.
	In the second half of 2023, I engaged with many of our largest shareholders, as well
	as the key UK and Australian advisory bodies, on the review of our next
	Remuneration Policy. And thank you to everyone who took part in the consultation.
	When the committee last reviewed our Policy in 2021, it made no material
	amendments. Since then, however, there have been considerable shifts in the
	market for executive compensation, particularly among companies that Rio
	competes with for talent, as well as an increased strategic emphasis on
	decarbonisation.
	And this is why we've proposed more substantive changes in the Policy than in
	previous triennial reviews. However, before I explain our Policy in further detail, I will
	address the remuneration outcomes for 2023.
	2023 was the first year of our new Short-Term Incentive Plan. This is how we
	determined the bonuses of more than 26,000 eligible employees, as well as
	members of our Executive Committee. At its heart, the Short-Term Incentive Plan
	scorecard is focused on collective group goals and success.
	Half of the scorecard is based on financial measures of underlying earnings and free
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cash flow. The other half addresses broader strategic goals related to safety, carbon reduction, diversity and inclusion, ESG credentials, excelling in development, and strengthening our social licence.

After assessing each component of the scorecard, the committee determined the overall outcome was 56% of maximum. Within this outcome, the financial component performed just below target, while the strategic measures performed slightly above target.

An individual multiplier is also in place, to be used sparingly in cases of exceptional or inadequate individual performance. The committee did not apply the individual multiplier for either of the Executive Directors, but it was selectively applied to some members of the Executive Committee.

For our Long-Term Incentive Plan, our sustained share price performance and strong dividend yield delivered a total shareholder return of over 100% for the five- year period to 2023. Now, this exceeded that of the two indices that we measure our performance against - one made up of mining companies, and the other an index of over 1,000 large global corporates.

Achievement against these measures delivered an overall vesting outcome of 94% of maximum. We remain committed to relative total shareholder return as a key performance measure for our Long-Term Incentive Plan, as it does provide close alignment to the experience of you, our shareholders.

Now turning back to the proposed Policy, by seeking feedback at early stages of 2023, the committee received a helpful range of perspectives from our shareholders, allowing us to refine and better shape our proposal.

At its core, our proposal has three aims:

• The first, to strengthen the alignment between our reward and our strategic priorities
• Second, to simplify our reward framework
• And finally, to ensure that the level of compensation is positioned appropriately to attract, motivate and retain the very best executive talent.

To continue to achieve superior total shareholder returns, we have a clear strategy to build a stronger Rio Tinto for the longer term through our four objectives. Delivering against these objectives will help improve productivity, reduce carbon intensity and assist us in becoming a global mining partner of choice.

Most notably, there have been no increases to our incentive opportunity since the Policy first came into effect in 2013. Indeed, as part of the 2021 renewal of our Policy, the maximum long-term and the target short-term award for the Chief Executive were reduced. Now, these changes, though appropriate during the pandemic years, did impact our positioning relative to competitors in the talent market.

And given the scale of the strategic ambition, it's really vital that Rio Tinto secures the talents required to achieve our goals. The market for talent is increasingly competitive.

Despite this competition, the committee are seeking to maintain a measured approach to pay. Although US-style pay practices continue to be materially higher than in other jurisdictions, we are not seeking to match these award levels. Instead, we're focused on ensuring our executives are aligned with similar sized and globally complex FTSE 10 and mining companies.

The overarching finding from our review was a widening gap in remuneration relative

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	to our major peers and competitors. In addressing this gap, the committee were firm
	in its belief that this should be delivered predominantly through the Long-Term
	Incentive Plan, with stretching performance hurdles.
	Hence, the committee have proposed that the future Long-Term Incentive Plan
	awards to Executive Directors and other Executive Committee members are capped
	at 500% of base salary, compared to 400% of salary under the current Policy. This
	would position award levels more in line with FTSE 10 peers, where actually the
	median Long-Term Incentive Plan maximum is in excess of 500%, yet still materially
	below US pay levels.
	The additional Long-Term Incentive increment of 100% is going to be directly linked
	to the achievement of our climate change strategy. The group's decarbonisation
	strategy is multi-faceted, with the additional Long-Term Incentive Plan opportunity
	aligned to robust decarbonisation measures, including residual emissions, project
	delivery, technology development, and our delivery of the overall transition strategy.
	The committee have proposed retaining our relative total shareholder return metric
	for the remaining Long-Term Incentive Program opportunity of 400% of salary. We
	also propose a rebalancing of the metric, with two-thirds measured against sector
	peers, and one-third measured against the broader market index.
	The committee also proposes moving to a three-yearLong-Term Incentive Plan
	performance period accompanied by a two-year holding period. Now, this follows the
	market mainstream practice in the UK to offer more tangible targets to participants,
	but with an overall five-year timeframe that remains towards the upper end of
	practice for all markets including Australia. This is better suited to setting long term
	performance targets for decarbonisation, in particular, where the landscape will
	continue to evolve at pace.
	Additionally, the committee have proposed an increase in shareholding requirements
	for executives to 500% of salary for the Chief Executive and 400% of salary for other
	executives.
	Now, the committee firmly believes that our proposed Policy is in the best interests
	of shareholders. It's going to strengthen the alignment between reward and our
	strategic priorities, simplify the reward framework and increase our competitiveness
	in attracting, motivating and retaining key executive talent.
	So once again, I want to thank all shareholders for their engagement and
	collaboration and active discussions during 2023. As always, I welcome feedback
	and comments on our 2023 Remuneration Report and the proposed Policy.
	So, thank you very much for listening.
Dominic Barton:	Thank you, Sam. And thank you, Jakob for your comments. We're now going to
	move to the formal business of the meeting.
	The Notice of Meeting containing the text of each resolution to be put to this meeting,
	was published on our website and made available to shareholders on the 21st of
	February. I will take that notice, as read.
	There are 24 resolutions to be voted on today. Resolutions 1 to 21 will be dealt with
	under the joint electorate procedure. Rio Tinto plc shareholders have cast their votes
	on these resolutions at the corresponding meeting in London on the 4th of April.
	The amendments to our constitution proposed by Resolution 22 requires that we call
	under our constituent's documents a "class rights action", which needs to be voted
	on by Rio Tinto plc and Rio Tinto Limited shareholders, voting as separate
	electorates.
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