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Financial instruments and risk management (Tables) | 12 Months Ended
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Dec. 31, 2017
Disclosure Of Financial Instruments [Abstract] |
Summary of financial assets by categories | A (a) Financial assets and liabilities by categories
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Held to maturity |
|  |  |  |  |  |  |  |  | Available |  |  |  |  | assets/Other |
|  |  |  |  |  | Loans and |  | for sale |  | Held at |  | financial |
|  |  | Total |  | receivables |  | securities |  | fair value |  | liabilities |
At 31 December 2017 |  | Note | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 21 |  | 10,550 |  |  | 10,550 |  |  | - |  |  | - |  |  | - |
Trade and other receivables (a) |  |  |  | 2,985 |  |  | 2,895 |  |  | - |  |  | 90 |  |  | - |
Equity shares and quoted funds |  | 20 |  | 136 |  |  | - |  |  | 136 |  |  | - |  |  | - |
Other investments, including loans (b) |  | 20 |  | 1,152 |  |  | 15 |  |  | - |  |  | 1,125 |  |  | 12 |
Derivatives and embedded derivatives not related to net debt: not designated as hedges (c) |  | 20 |  | 168 |  |  | - |  |  | - |  |  | 168 |  |  | - |
Derivatives related to net debt (c) |  | 20,24 |  | 99 |  |  | - |  |  | - |  |  | 99 |  |  | - |
Loans to equity accounted units including quasi equity loans |  |  |  | 198 |  |  | 198 |  |  | - |  |  | - |  |  | - |
Total financial assets |  |  |  | 15,288 |  |  | 13,658 |  |  | 136 |  |  | 1,482 |  |  | 12 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables (d) |  |  |  | (5,922 | ) |  |  |  |  |  |  |  | (15 | ) |  | (5,907 | )
Short term borrowings and bank overdrafts |  | 22 |  | (552 | ) |  |  |  |  |  |  |  | - |  |  | (552 | )
Medium and long-term borrowings |  | 22 |  | (14,624 | ) |  |  |  |  |  |  |  | - |  |  | (14,624 | )
Derivatives related to net debt (c) |  | 22,24 |  | (276 | ) |  |  |  |  |  |  |  | (276 | ) |  | - |
Other derivatives and embedded derivatives: not designated as hedges (c) |  | 22 |  | (255 | ) |  |  |  |  |  |  |  | (255 | ) |  | - |
Other financial liabilities |  | 22 |  | (345 | ) |  |  |  |  |  |  |  | - |  |  | (345 | )
Total financial liabilities |  |  |  | (21,974 | ) |  |  |  |  |  |  |  | (546 | ) |  | (21,428 | )
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Held to maturity |
|  |  |  |  |  |  |  |  |  |  |  |  |  | assets/other |
|  |  |  |  |  | Loans and |  | Available |  |  |  | financial |
|  |  | Total |  | receivables |  | for sale |  | Held at |  | liabilities |
At 31 December 2016 |  | Note | US$m (Adjusted)(e)(f) |  | US$m (Adjusted)(e) |  | securities US$m |  | fair value US$m |  | US$m (Adjusted)(f) |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 21 |  | 8,201 |  |  | 8,201 |  |  | - |  |  | - |  |  | - |
Trade and other receivables (a)(e) |  |  |  | 3,047 |  |  | 2,904 |  |  | - |  |  | 143 |  |  | - |
Equity shares and quoted funds |  | 20 |  | 156 |  |  | - |  |  | 156 |  |  | - |  |  | - |
Other investments, including loans (b) |  | 20 |  | 454 |  |  | 14 |  |  | - |  |  | 431 |  |  | 9 |
Currency and commodity derivatives: designated as hedges (c) |  | 20 |  | 1 |  |  | - |  |  | - |  |  | 1 |  |  | - |
Derivatives and embedded derivatives not related to net debt: not designated as hedges (c) |  | 20 |  | 423 |  |  | - |  |  | - |  |  | 423 |  |  | - |
Derivatives related to net debt (c) |  | 20,24 |  | 108 |  |  | - |  |  | - |  |  | 108 |  |  | - |
Loans to equity accounted units including quasi equity loans |  |  |  | 202 |  |  | 202 |  |  | - |  |  | - |  |  | - |
Total financial assets |  |  |  | 12,592 |  |  | 11,321 |  |  | 156 |  |  | 1,106 |  |  | 9 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables (d) (f) |  |  |  | (5,209 | ) |  |  |  |  |  |  |  | (5 | ) |  | (5,204 | )
Short term borrowings and bank overdrafts |  | 22 |  | (717 | ) |  |  |  |  |  |  |  | - |  |  | (717 | )
Medium and long-term borrowings |  | 22 |  | (16,913 | ) |  |  |  |  |  |  |  | - |  |  | (16,913 | )
Derivatives related to net debt (c) |  | 22,24 |  | (516 | ) |  |  |  |  |  |  |  | (516 | ) |  | - |
Other derivatives and embedded derivatives: not designated as hedges (c) |  | 22 |  | (7 | ) |  |  |  |  |  |  |  | (7 | ) |  | - |
Other financial liabilities |  | 22 |  | (239 | ) |  |  |  |  |  |  |  | - |  |  | (239 | )
Total financial liabilities |  |  |  | (23,601 | ) |  |  |  |  |  |  |  | (528 | ) |  | (23,073 | )
(a) | Trade and other receivables exclude non-financial assets such as pension surpluses, prepayment of tolling charges to joint operations and other prepayments within other receivables and will therefore differ to the amounts shown in note 18.
(b) | Other investments, including loans comprise US$958 million (2016: US$250 million) of highly liquid financial assets in managed investment funds classified as held for trading.
(c) | These financial assets and liabilities in aggregate agree to total derivative financial instruments disclosed in notes 20 and 22.
(d) | Trade and other payables excludes non-financial liabilities such as deferred income, Government grants, royalties, mining taxes and employee entitlements within other payables and will therefore differ to the amounts shown in note 25. The trade and other payables held at fair value are valued using Level 2 inputs.
(e) | The 2016 comparative of trade and other receivables has been reduced by US$385 million to remove other receivables, which were incorrectly classified as financial assets.
(f) | The 2016 comparative of trade and other payables has been reduced by US$177 million to remove other payables, which were incorrectly classified as financial liabilities.
Summary of financial liabilities by categories | A (a) Financial assets and liabilities by categories
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Held to maturity |
|  |  |  |  |  |  |  |  | Available |  |  |  |  | assets/Other |
|  |  |  |  |  | Loans and |  | for sale |  | Held at |  | financial |
|  |  | Total |  | receivables |  | securities |  | fair value |  | liabilities |
At 31 December 2017 |  | Note | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 21 |  | 10,550 |  |  | 10,550 |  |  | - |  |  | - |  |  | - |
Trade and other receivables (a) |  |  |  | 2,985 |  |  | 2,895 |  |  | - |  |  | 90 |  |  | - |
Equity shares and quoted funds |  | 20 |  | 136 |  |  | - |  |  | 136 |  |  | - |  |  | - |
Other investments, including loans (b) |  | 20 |  | 1,152 |  |  | 15 |  |  | - |  |  | 1,125 |  |  | 12 |
Derivatives and embedded derivatives not related to net debt: not designated as hedges (c) |  | 20 |  | 168 |  |  | - |  |  | - |  |  | 168 |  |  | - |
Derivatives related to net debt (c) |  | 20,24 |  | 99 |  |  | - |  |  | - |  |  | 99 |  |  | - |
Loans to equity accounted units including quasi equity loans |  |  |  | 198 |  |  | 198 |  |  | - |  |  | - |  |  | - |
Total financial assets |  |  |  | 15,288 |  |  | 13,658 |  |  | 136 |  |  | 1,482 |  |  | 12 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables (d) |  |  |  | (5,922 | ) |  |  |  |  |  |  |  | (15 | ) |  | (5,907 | )
Short term borrowings and bank overdrafts |  | 22 |  | (552 | ) |  |  |  |  |  |  |  | - |  |  | (552 | )
Medium and long-term borrowings |  | 22 |  | (14,624 | ) |  |  |  |  |  |  |  | - |  |  | (14,624 | )
Derivatives related to net debt (c) |  | 22,24 |  | (276 | ) |  |  |  |  |  |  |  | (276 | ) |  | - |
Other derivatives and embedded derivatives: not designated as hedges (c) |  | 22 |  | (255 | ) |  |  |  |  |  |  |  | (255 | ) |  | - |
Other financial liabilities |  | 22 |  | (345 | ) |  |  |  |  |  |  |  | - |  |  | (345 | )
Total financial liabilities |  |  |  | (21,974 | ) |  |  |  |  |  |  |  | (546 | ) |  | (21,428 | )
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Held to maturity |
|  |  |  |  |  |  |  |  |  |  |  |  |  | assets/other |
|  |  |  |  |  | Loans and |  | Available |  |  |  | financial |
|  |  | Total |  | receivables |  | for sale |  | Held at |  | liabilities |
At 31 December 2016 |  | Note | US$m (Adjusted)(e)(f) |  | US$m (Adjusted)(e) |  | securities US$m |  | fair value US$m |  | US$m (Adjusted)(f) |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 21 |  | 8,201 |  |  | 8,201 |  |  | - |  |  | - |  |  | - |
Trade and other receivables (a)(e) |  |  |  | 3,047 |  |  | 2,904 |  |  | - |  |  | 143 |  |  | - |
Equity shares and quoted funds |  | 20 |  | 156 |  |  | - |  |  | 156 |  |  | - |  |  | - |
Other investments, including loans (b) |  | 20 |  | 454 |  |  | 14 |  |  | - |  |  | 431 |  |  | 9 |
Currency and commodity derivatives: designated as hedges (c) |  | 20 |  | 1 |  |  | - |  |  | - |  |  | 1 |  |  | - |
Derivatives and embedded derivatives not related to net debt: not designated as hedges (c) |  | 20 |  | 423 |  |  | - |  |  | - |  |  | 423 |  |  | - |
Derivatives related to net debt (c) |  | 20,24 |  | 108 |  |  | - |  |  | - |  |  | 108 |  |  | - |
Loans to equity accounted units including quasi equity loans |  |  |  | 202 |  |  | 202 |  |  | - |  |  | - |  |  | - |
Total financial assets |  |  |  | 12,592 |  |  | 11,321 |  |  | 156 |  |  | 1,106 |  |  | 9 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables (d) (f) |  |  |  | (5,209 | ) |  |  |  |  |  |  |  | (5 | ) |  | (5,204 | )
Short term borrowings and bank overdrafts |  | 22 |  | (717 | ) |  |  |  |  |  |  |  | - |  |  | (717 | )
Medium and long-term borrowings |  | 22 |  | (16,913 | ) |  |  |  |  |  |  |  | - |  |  | (16,913 | )
Derivatives related to net debt (c) |  | 22,24 |  | (516 | ) |  |  |  |  |  |  |  | (516 | ) |  | - |
Other derivatives and embedded derivatives: not designated as hedges (c) |  | 22 |  | (7 | ) |  |  |  |  |  |  |  | (7 | ) |  | - |
Other financial liabilities |  | 22 |  | (239 | ) |  |  |  |  |  |  |  | - |  |  | (239 | )
Total financial liabilities |  |  |  | (23,601 | ) |  |  |  |  |  |  |  | (528 | ) |  | (23,073 | )
(a) | Trade and other receivables exclude non-financial assets such as pension surpluses, prepayment of tolling charges to joint operations and other prepayments within other receivables and will therefore differ to the amounts shown in note 18.
(b) | Other investments, including loans comprise US$958 million (2016: US$250 million) of highly liquid financial assets in managed investment funds classified as held for trading.
(c) | These financial assets and liabilities in aggregate agree to total derivative financial instruments disclosed in notes 20 and 22.
(d) | Trade and other payables excludes non-financial liabilities such as deferred income, Government grants, royalties, mining taxes and employee entitlements within other payables and will therefore differ to the amounts shown in note 25. The trade and other payables held at fair value are valued using Level 2 inputs.
(e) | The 2016 comparative of trade and other receivables has been reduced by US$385 million to remove other receivables, which were incorrectly classified as financial assets.
(f) | The 2016 comparative of trade and other payables has been reduced by US$177 million to remove other payables, which were incorrectly classified as financial liabilities.
Summary of capital and liquidity risk management |
|  |  |  |  |  | 2017 |  |  | 2016 |
Total capital |  |  |  | Note | US$m |  | US$m |
Equity attributable to owners of Rio Tinto (see Group balance sheet) |  |  |  |  |  | 44,711 |  |  | 39,290 |
Equity attributable to non-controlling interests (see Group balance sheet) |  |  |  |  |  | 6,404 |  |  | 6,440 |
Net debt |  |  |  | 24 |  | 3,845 |  |  | 9,587 |
Total capital |  |  |  |  |  | 54,960 |  |  | 55,317 |
Summary of credit ratings | The table below summarises the credit ratings attributed to the Group by Standard and Poor’s and Moody’s investor services as at 31 December.
|  |  |  |  | 2017 |  |  | 2016 |
Long-term rating |  |  |  | (a)A-/A3 |  | A-/Baa1 |
Short-term rating |  |  |  | A-1/P-2 |  | A-1/P-2 |
Outlook |  |  |  | (a)Positive/Stable |  | Stable/ Stable |
(a) | On 12 February 2018, Standard and Poor's upgraded the Group's credit rating to A with a stable outlook.
Summary of maximum credit risk exposure of the Group's financial assets | The maximum credit risk exposure of the Group’s financial assets at the balance sheet date is as follows:
|  |  |  |  |  | 2017 |  |  | 2016 |
|  |  |  | Note | US$m |  | US$m (Adjusted)(a) |
Cash and cash equivalents |  |  |  | 21 |  | 10,550 |  |  | 8,201 |
Trade and other receivables (a) |  |  |  |  |  | 2,985 |  |  | 3,047 |
Investments |  |  |  | 20 |  | 1,152 |  |  | 454 |
Derivative assets |  |  |  | 20 |  | 267 |  |  | 532 |
Loans to equity accounted units |  |  |  |  |  | 39 |  |  | 39 |
Total |  |  |  |  |  | 14,993 |  |  | 12,273 |
Summary by currency, the Group's net debt, after taking into account relevant cross currency interest rate swaps and foreign exchange contracts |
Strategic report |  | Governance report |  | Financial statements |  | Production, reserves and operations |  | Additional information
|  | Cash and |  |  |  |  |  |  |  | Derivatives |  | Net funds/ |  | Net funds/ |
|  | cash |  | Other |  | Total borrowings |  | related to net |  | (debt) |  | (debt) |
|  | equivalents |  | investments |  | in note 22 |  | debt |  |  | 2017 |  |  | 2016 |
Net funds/(debt) by currency |  | US$m |  | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
US dollar |  |  | 9,950 |  |  | 958 |  |  | (14,359 | ) |  | (177 | ) |  | (3,628 | ) |  | (9,294 | )
Australian dollar |  |  | 332 |  |  | - |  |  | (540 | ) |  | - |  |  | (208 | ) |  | (313 | )
Euro |  |  | 49 |  |  | - |  |  | (107 | ) |  | - |  |  | (58 | ) |  | (62 | )
South African rand |  |  | 59 |  |  | - |  |  | - |  |  | - |  |  | 59 |  |  | 103 |
Canadian dollar |  |  | 18 |  |  | - |  |  | (166 | ) |  | - |  |  | (148 | ) |  | (155 | )
Other |  |  | 142 |  |  | - |  |  | (4 | ) |  | - |  |  | 138 |  |  | 134 |
Total |  |  | 10,550 |  |  | 958 |  |  | (15,176 | ) |  | (177 | ) |  | (3,845 | ) |  | (9,587 | )
1
Estimated retranslation effect on financial assets and financial liabilities of a ten per cent strengthening in the closing exchange rate of the US dollar against significant currencies | At 31 December 2017 Gains/(losses) associated with ten per cent strengthening of the US dollar
|  |  |  |  |  |  |  |  |  |  | Of which |
|  |  |  |  |  |  |  |  |  |  | amount |
|  |  |  |  | Closing |  | Effect on |  | impacting |
|  |  |  |  | exchange |  | net |  | underlying |
|  |  |  |  | rate |  | earnings |  | earnings |
Currency exposure |  |  |  |  | US cents |  | US$m |  | US$m |
Australian dollar |  |  |  |  |  | 78 |  |  | 608 |  |  | 47 |
Canadian dollar |  |  |  |  |  | 79 |  |  | (134 | ) |  | 3 |
Euro |  |  |  |  |  | 120 |  |  | 165 |  |  | (2) |
Notes to the 2017 financial statements continued 30 Financial instruments and risk management continued At 31 December 2016 Gains/(losses) associated with ten per cent strengthening of the US dollar
|  |  |  |  |  |  |  |  |  |  | Of which |
|  |  |  |  |  |  |  |  |  |  | amount |
|  |  |  |  | Closing |  | Effect on |  | impacting |
|  |  |  |  | exchange |  | net |  | underlying |
|  |  |  |  | rate |  | earnings |  | earnings |
Currency exposure |  |  |  |  | US cents |  | US$m |  | US$m |
Australian dollar |  |  |  |  |  | 72 |  |  | 369 |  |  | 37 |
Canadian dollar |  |  |  |  |  | 74 |  |  | (159 | ) |  | 15 |
Euro |  |  |  |  |  | 105 |  |  | 172 |  |  | - |
Maturity analysis for non-derivative financial liabilities and derivative financial liabilities | A (c) Financial liability analysis The table below analyses the Group’s financial liabilities by relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. As the amounts disclosed in the table are the contractual undiscounted cash flows, these balances will not necessarily agree with the amounts disclosed in the balance sheet. At 31 December 2017
| Within 1 |  | Between |  | Between |  | Between |  | Between |  |  |  |  |  |  |
| year or on |  | 1 and 2 |  | 2 and 3 |  | 3 and 4 |  | 4 and 5 |  | After |  |  |  |
| demand |  | years |  | years |  | years |  | years |  | 5 years |  | Total |
(Outflows) / inflows | US$m |  | US$m |  | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables |  | (5,488 | ) |  | (434 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | (5,922 | )
Borrowings before swaps |  | (552 | ) |  | (148 | ) |  | (1,011 | ) |  | (916 | ) |  | (1,283 | ) |  | (11,387 | ) |  | (15,297 | )
Expected future interest payments (a) |  | (679 | ) |  | (673 | ) |  | (670 | ) |  | (638 | ) |  | (606 | ) |  | (4,553 | ) |  | (7,819 | )
Other financial liabilities |  | (302 | ) |  | (43 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | (345 | )
Derivative financial liabilities (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives related to net debt - net settled |  | 10 |  |  | 10 |  |  | 14 |  |  | 11 |  |  | 7 |  |  | 36 |  |  | 88 |
Derivatives related to net debt - gross settled (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– gross inflows |  | 62 |  |  | 62 |  |  | 958 |  |  | 44 |  |  | 44 |  |  | 1,493 |  |  | 2,663 |
– gross outflows |  | (82 | ) |  | (82 | ) |  | (1,051 | ) |  | (55 | ) |  | (55 | ) |  | (1,741 | ) |  | (3,066 | )
Derivatives not related to net debt - net settled |  | (43 | ) |  | (36 | ) |  | (33 | ) |  | (24 | ) |  | (21 | ) |  | (138 | ) |  | (295 | )
Derivatives not related to net debt - gross settled: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– gross inflows |  | 795 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 795 |
– gross outflows |  | (802 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (802 | )
Total |  | (7,081 | ) |  | (1,344 | ) |  | (1,793 | ) |  | (1,578 | ) |  | (1,914 | ) |  | (16,290 | ) |  | (30,000 | )
At 31 December 2016
| Within 1 |  | Between |  | Between |  | Between |  | Between |  |  |  |  |  |  |
| year or on |  | 1 and 2 |  | 2 and 3 |  | 3 and 4 |  | 4 and 5 |  | After |  |  |  |
| demand |  | years |  | years |  | years |  | years |  | 5 years |  | Total |
(Outflows) / inflows | US$m (Adjusted)(c) |  | US$m (Adjusted)(d) |  | US$m |  | US$m |  | US$m |  | US$m |  | US$m (Adjusted)(c)(d) |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other payables (c)(d) |  | (4,814 | ) |  | (395 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | (5,209 | )
Borrowings before swaps |  | (704 | ) |  | (191 | ) |  | (1,330 | ) |  | (1,347 | ) |  | (1,317 | ) |  | (12,806 | ) |  | (17,695 | )
Expected future interest payments (a) |  | (783 | ) |  | (779 | ) |  | (722 | ) |  | (667 | ) |  | (620 | ) |  | (5,056 | ) |  | (8,627 | )
Other financial liabilities |  | (199 | ) |  | (41 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | (240 | )
Derivative financial liabilities (b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives related to net debt - net settled |  | 29 |  |  | 29 |  |  | 27 |  |  | 25 |  |  | 23 |  |  | 25 |  |  | 158 |
Derivatives related to net debt - gross settled (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– gross inflows |  | 55 |  |  | 55 |  |  | 55 |  |  | 842 |  |  | 40 |  |  | 1,377 |  |  | 2,424 |
– gross outflows |  | (73 | ) |  | (73 | ) |  | (73 | ) |  | (1,045 | ) |  | (51 | ) |  | (1,785 | ) |  | (3,100 | )
Derivatives not related to net debt - net settled |  | (2 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (2 | )
Derivatives not related to net debt - gross settled: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
– gross inflows |  | 29 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 29 |
– gross outflows |  | (29 | ) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (29 | )
Total |  | (6,491 | ) |  | (1,395 | ) |  | (2,043 | ) |  | (2,192 | ) |  | (1,925 | ) |  | (18,245 | ) |  | (32,291 | )
(a) | Interest payments have been projected using interest rates applicable at the end of the applicable financial year. Where debt is subject to variable interest rates, future interest payments are subject to change in line with market rates.
(b) | The maturity grouping is based on the earliest payment date.
(c) | The 2016 comparative of trade and other payables due within 1 year or on demand has been reduced by US$111 million to remove other payables, which were incorrectly classified as financial liabilities.
(d) | The 2016 comparative of trade and other payables due between 1 and 2 years has been reduced by US$66 million to remove other payables, which were incorrectly classified as financial liabilities.
Summary of derivative financial instruments | The Group’s derivatives, including embedded derivatives, as at 31 December 2017, are summarised below:
|  |  |  | Total fair value |
|  |  |  | 2017 | 2016
|  |  |  | Asset |  | Liability |  | Asset |  | Liability |
Derivatives designated as hedges |  |  |  | US$m |  | US$m |  | US$m |  | US$m |
Interest rate swaps (a) |  |  |  |  | 99 |  |  | (127 | ) |  | 108 |  |  | (134 | )
Cross currency interest rate swaps (b) |  |  |  |  | - |  |  | (149 | ) |  | - |  |  | (382 | )
Currency forward contracts, options and swaps |  |  |  |  | - |  |  | - |  |  | 1 |  |  | - |
Total derivatives designated as hedges |  |  |  |  | 99 |  |  | (276 | ) |  | 109 |  |  | (516 | )
Derivatives not designated as hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency forward contracts, options and swaps |  |  |  |  | 7 |  |  | (2 | ) |  | 1 |  |  | - |
Aluminium forward contracts (c) |  |  |  |  | 21 |  |  | (9 | ) |  | 6 |  |  | (2 | )
Aluminium embedded derivatives (d) |  |  |  |  | 140 |  |  | (238 | ) |  | 411 |  |  | (3 | )
Other embedded derivatives |  |  |  |  | - |  |  | (5 | ) |  | 5 |  |  | - |
Other commodity contracts |  |  |  |  | - |  |  | (1 | ) |  | - |  |  | (2 | )
Total derivatives not designated as hedges |  |  |  |  | 168 |  |  | (255 | ) |  | 423 |  |  | (7 | )
Total derivative instruments |  |  |  |  | 267 |  |  | (531 | ) |  | 532 |  |  | (523 | )
Analysed by maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less than 1 year |  |  |  |  | 29 |  |  | (50 | ) |  | 24 |  |  | (6 | )
Between 1 and 5 years |  |  |  |  | 31 |  |  | (233 | ) |  | 110 |  |  | (194 | )
More than 5 years |  |  |  |  | 207 |  |  | (248 | ) |  | 398 |  |  | (323 | )
Total |  |  |  |  | 267 |  |  | (531 | ) |  | 532 |  |  | (523 | )
Total net derivative instruments |  |  |  |  | (264 | ) |  |  |  |  | 9 |  |  |  |
|  |  |  |  | 2017 |  |  |  | 2016 |  |
Reconciliation to balance sheet |  |  | Note | US$m |  |  | US$m |  |
– non-current assets |  |  | 20 |  | 238 |  |  |  | 508 |  |
– current assets |  |  | 20 |  | 29 |  |  |  | 24 |  |
– current liabilities |  |  | 22 |  | (50 | ) |  |  | (6 | ) |
– non-current liabilities |  |  | 22 |  | (481 | ) |  |  | (517 | ) |
Total net derivatives instruments, detailed above |  |  |  |  | (264 | ) |  |  | 9 |  |
(a) | The interest rate swaps are used to convert certain fixed rate borrowings to a floating rate. For further details, see note 22.
(b) | The cross currency interest rate swaps are used to convert non US dollar denominated borrowings to either fixed or floating US dollar borrowings. For further details see note 22.
(c) | The aluminium forward contracts are entered into to convert aluminium sales made at a fixed price to market price (LME cash). In 2016 and 2017 these contracts were not designated as hedges.
(d) | Aluminium embedded derivatives (forward contracts and options) are contained within certain aluminium smelter electricity purchase contracts. These contracts reduce the Group’s margin exposure to movements in the aluminium price.
Summary of fair value of financial instruments |
Strategic report |  | Governance report |  | Financial statements |  | Production, reserves and operations |  | Additional information
The carrying amounts and fair values of all of the Group’s financial instruments which are not carried at an amount which approximates their fair value at 31 December 2017 and 31 December 2016 are shown in the following table. The fair values of the Group’s cash equivalents and loans to equity accounted units approximate their carrying values as a result of their short maturity or because they carry floating rates of interest.
|  |  |  | 31 December 2017 | 31 December 2016
|  |  |  | Carrying |  | Fair |  | Carrying |  | Fair |
|  |  |  | value |  | value |  | value |  | value |
|  |  | Note | US$m |  | US$m |  | US$m |  | US$m |
Short-term borrowings |  |  | 22 |  | (552 | ) |  | (552 | ) |  | (717 | ) |  | (706 | )
Medium and long-term borrowings |  |  | 22 |  | (14,624 | ) |  | (16,385 | ) |  | (16,913 | ) |  | (18,437 | )
C (b) Valuation hierarchy The table below shows the financial instruments carried at fair value by valuation method at 31 December 2017:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Not held |
|  |  | Total |  | Level 1(a) |  | Level 2(b) |  | Level 3 (c) |  | at fair value |
|  | Note | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity shares and quoted funds |  | 20 |  | 136 |  |  | 88 |  |  | - |  |  | 3 |  |  | 45 |
Other investments, including loans (d) |  | 20 |  | 1,152 |  |  | 1,037 |  |  | - |  |  | 88 |  |  | 27 |
Trade and other receivables(e) |  |  |  | 2,985 |  |  | - |  |  | 90 |  |  | - |  |  | 2,895 |
|  |  |  | 4,273 |  |  | 1,125 |  |  | 90 |  |  | 91 |  |  | 2,967 |
Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts and option contracts, not designated as hedges (f) (Section B) |  |  |  | (87 | ) |  | - |  |  | 11 |  |  | (98 | ) |  | - |
Derivatives related to net debt (Section B) (g) |  |  |  | (177 | ) |  | - |  |  | (177 | ) |  | - |  |  | - |
|  |  |  | 4,009 |  |  | 1,125 |  |  | (76 | ) |  | (7 | ) |  | 2,967 |
The table below shows the financial instruments carried at fair value by valuation method at 31 December 2016:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Not held |
|  |  | Total |  | Level 1(a) |  | Level 2(b) |  | Level 3(c) |  | at fair value |
|  | Note | US$m |  | US$m |  | US$m |  | US$m |  | US$m |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity shares and quoted funds |  | 20 |  | 156 |  |  | 94 |  |  | - |  |  | 3 |  |  | 59 |
Other investments, including loans (d) |  | 20 |  | 454 |  |  | 363 |  |  | - |  |  | 68 |  |  | 23 |
Trade and other receivables(e) |  |  |  | 3,047 |  |  | - |  |  | 143 |  |  | - |  |  | 2,904 |
|  |  |  | 3,657 |  |  | 457 |  |  | 143 |  |  | 71 |  |  | 2,986 |
Derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward contracts: designated as hedges (Section B) |  |  |  | 1 |  |  | - |  |  | 1 |  |  | - |  |  | - |
Forward contracts and option contracts, not designated as hedges (f) (Section B) |  |  |  | 416 |  |  | - |  |  | 8 |  |  | 408 |  |  | - |
Derivatives related to net debt (Section B) (g) |  |  |  | (408 | ) |  | - |  |  | (408 | ) |  | - |  |  | - |
|  |  |  | 3,666 |  |  | 457 |  |  | (256 | ) |  | 479 |  |  | 2,986 |
(a) | Valuation is based on unadjusted quoted prices in active markets for identical financial instruments. This category includes listed equity shares and other quoted funds.
(b) | Valuation is based on inputs that are observable for the financial instruments which include quoted prices for similar instruments or identical instruments in markets which are not considered to be active, or inputs, either directly or indirectly based on observable market data.
(c) | Valuation is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(d) | Other investments, including loans, comprise: cash deposits in rehabilitation funds, government bonds, managed investment funds and royalty amounts receivable. The royalty receivables are valued based on an estimate of forward sales subject to the royalty agreement.
(e) | Trade receivables includes provisionally priced receivables relating to sales contracts where selling price is determined after delivery to the customer, based on the market price at the relevant quotation point stipulated in the contract. Revenue is recognised on provisionally priced sales based on the forward selling price for the period stipulated in the contract. At the end of December 2017, US$90 million (2016: US$143 million) of provisional priced receivables were recognised.
(f) | Level 3 derivatives consist of derivatives embedded in electricity purchase contracts linked to the LME with terms expiring between 2018 and 2030 (2016: 2017 and 2030). The embedded derivatives are measured using discounted cash flows and option model valuation techniques. Long-term embedded derivatives with a fair value of US($98) million at 31 December 2017 (2016: US$408 million) are valued using significant unobservable inputs as the term of the derivative extends beyond the forward curve for aluminium. In valuing these derivatives, aluminium prices are flatlined beyond the market forward curve and increased by projected inflation up to the date of expiry of each contract. The range of market prices are US$2,679 per metric tonne in 2028 to US$2,848 in 2030 (2016: US$2,136 per metric tonne in 2027 to US$2,300 in 2030).
(g) | Interest rate and currency interest rate swaps are valued using applicable market quoted swap yield curves adjusted for relevant basis and credit default spreads. Currency interest rate swap valuations also use market quoted foreign exchange rates. A discounted cash flow approach is applied to the cash flows derived from the inputs to determine fair value.
1
Summary of changes in fair value of Level 3 financial assets and financial liabilities | The table below shows the summary of changes in the fair value of the Group’s Level 3 financial assets and financial liabilities.
|  |  |  | 2017 | 2016
|  |  |  | Level 3 financial assets | Level 3 financial assets
|  |  |  | and financial liabilities | and financial liabilities
|  |  |  |  | US$m |  |  | US$m |
Opening balance |  |  |  |  |  | 479 |  |  |  | 456 |
Currency translation adjustments |  |  |  |  |  | 8 |  |  |  | (2 | )
Total realised gains/(losses) included in: |  |  |  |  |  |  |  |  |  |  |
– Consolidated sales revenue |  |  |  |  |  | 1 |  |  |  | 1 |
– Net operating costs |  |  |  |  |  | (5 | ) |  |  | (28 | )
Total unrealised (losses)/gains included in: |  |  |  |  |  |  |  |  |  |  |
- Consolidated sales revenue |  |  |  |  |  | 17 |  |  |  | - |
– Net operating costs (a) |  |  |  |  |  | (508 | ) |  |  | 11 |
Additions |  |  |  |  |  | - |  |  |  | 43 |
Impairment |  |  |  |  |  | - |  |  |  | (2 | )
Disposals/maturity of financial instruments |  |  |  |  |  | (5 | ) |  |  | - |
Transfers |  |  |  |  |  | 6 |  |  |  | - |
Closing balance |  |  |  |  |  | (7 | ) |  |  | 479 |
Total (losses)/gains for the year included in the income statement for assets and liabilities held at year end |  |  |  |  |  | (491 | ) |  |  | 11 |

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