Rio Tinto financial information by business unit

12 Months Ended

Dec. 31, 2019

Disclosure Of Financial Information By Business Unit [Abstract]

Rio Tinto financial information by business unit



		Gross revenue^(a) for the year ended 31 December						EBITDA^(b) for the year ended 31 December						Net earnings^(c) for the year ended 31 December
Rio Tinto interest %		2019 US$m		2018 US$m		2017 US$m		2019 US$m		2018 US$m		2017 US$m		2019 US$m		2018 US$m		2017 US$m
Iron Ore
Pilbara	(d)	23,681		18,359		18,143		15,936		11,267		11,383		9,619		6,460		6,576
Dampier Salt	68.4	271		246		215		75		56		27		27		18		3
Evaluation projects/other		123		126		108		87		55		137		(8	)	53		116
Total Iron Ore		24,075		18,731		18,466		16,098		11,378		11,547		9,638		6,531		6,695

Aluminium	(e)
Bauxite		2,459		2,324		2,019		969		790		804		441		412		463
Alumina		2,657		3,340		2,661		628		1,137		454		301		634		180
Intrasegment		(825	)	(861	)	(790	)	(10	)	(7	)	(25	)	(7	)	(5	)	(17	)
Bauxite & Alumina		4,291		4,803		3,890		1,587		1,920		1,233		735		1,041		626
Primary Metal		4,940		6,468		5,808		755		1,418		1,762		40		595		778
Pacific Aluminium		2,204		2,541		2,305		(22	)	148		453		(137	)	—		176
Inter-segment and other		(2,256	)	(3,226	)	(2,321	)	36		(88	)	(19	)	26		(67	)	(12	)
Integrated operations		9,179		10,586		9,682		2,356		3,398		3,429		664		1,569		1,568
Other product group items		1,065		1,479		1,214		(202	)	(440	)	(132	)	(161	)	(344	)	(100	)
Product group operations		10,244		12,065		10,896		2,154		2,958		3,297		503		1,225		1,468
Evaluation projects/other		96		126		109		131		137		126		96		122		115
Total Aluminium		10,340		12,191		11,005		2,285		3,095		3,423		599		1,347		1,583

Copper & Diamonds
Rio Tinto Kennecott	100.0	1,879		1,862		1,352		843		785		539		397		293		78
Escondida	30.0	2,136		2,274		1,811		1,034		1,301		1,030		325		506		325
Grasberg joint venture	(g)	—		457		33		—		281		(3	)	—		217		(169	)
Oyu Tolgoi and Turquoise Hill	(h)	1,166		1,180		940		357		375		256		25		69		36
Diamonds	(i)	619		695		706		151		301		287		(21	)	118		92
Product group operations		5,800		6,468		4,842		2,385		3,043		2,109		726		1,203		362
Evaluation projects/other		15		—		—		(312	)	(267	)	(205	)	(172	)	(149	)	(99	)
Total Copper & Diamonds		5,815		6,468		4,842		2,073		2,776		1,904		554		1,054		263

Energy & Minerals
Rio Tinto Coal Australia	(j)	—		989		2,829		—		893		1,223		—		591		716
Iron Ore Company of Canada	58.7	2,189		1,583		1,867		1,024		586		770		332		166		235
Rio Tinto Iron & Titanium	(k)	1,938		1,782		1,763		611		510		546		254		174		201
Rio Tinto Borates	100.0	593		622		630		180		197		244		96		111		126
Uranium	(l)	375		415		417		55		18		15		25		(4	)	(26	)
Product group operations		5,095		5,391		7,506		1,870		2,204		2,798		707		1,038		1,252
Simandou iron ore project	(m)	—		—		—		(12	)	(15	)	(13	)	(5	)	(7	)	(6	)
Evaluation projects/other		55		60		43		(96	)	(49	)	(9	)	(91	)	(36	)	(7	)
Total Energy & Minerals		5,150		5,451		7,549		1,762		2,140		2,776		611		995		1,239

Other operations	(n)	18		9		10		(77	)	(70	)	(116	)	(89	)	(102	)	(138	)

Inter-segment transactions		(31	)	(15	)	(15	)	(9	)	—		—		(3	)	—		—

Product group total		45,367		42,835		41,857		22,132		19,319		19,534		11,310		9,825		9,642

Central pension costs, share-based payments and insurance								59		(128	)	(68	)	60		(90	)	(48	)
Restructuring, project and one-off costs								(183	)	(272	)	(177	)	(94	)	(190	)	(124	)
Central costs								(496	)	(552	)	(491	)	(550	)	(410	)	(311	)
Exploration and evaluation								(315	)	(231	)	(218	)	(231	)	(193	)	(178	)
Net interest														(122	)	(134	)	(354	)
Underlying EBITDA/earnings								21,197		18,136		18,580		10,373		8,808		8,627
Items excluded from underlying EBITDA/earnings		—		—		10		(722	)	5,127		1,912		(2,363	)	4,830		135
EBITDA/net earnings								20,475		23,263		20,492		8,010		13,638		8,762
Reconciliation to Group income statement
Share of equity accounted unit sales and
intra-subsidiary/equity accounted unit sales		(2,202	)	(2,313	)	(1,837	)
Depreciation and amortisation in subsidiaries
excluding capitalised depreciation								(4,272	)	(3,909	)	(4,302	)
Impairment charges								(3,487	)	(132	)	(796	)
Depreciation and amortisation in equity accounted units								(653	)	(650	)	(648	)
Taxation and finance items in equity accounted units								(296	)	(372	)	(272	)
Consolidated sales revenue/profit on ordinary activities before finance items and taxation		43,165		40,522		40,030		11,767		18,200		14,474



		Capital expenditure^(o) for the year ended 31 December						Depreciation and amortisation for the year ended 31 December						Operating assets^(p) as at 31 December						Employees for the year ended 31 December
	Rio Tinto interest %	2019 US$m		2018 US$m		2017 US$m		2019 US$m		2018 US$m		2017 US$m		2019 US$m		2018 US$m		2017 US$m		2019	2018	2017
Iron Ore
Pilbara	(d)	1,720		1,288		1,201		1,704		1,682		1,645		13,865		14,486		16,535		10,634	10,422	10,159
Dampier Salt	68.4	21		14		13		19		20		22		152		165		150		347	239	232
Evaluation projects/other		—		—		—		—		—		—		2		2		2		—	—	—
Total Iron Ore		1,741		1,302		1,214		1,723		1,702		1,667		14,019		14,653		16,687		10,981	10,661	10,391

Aluminium	(e)
Bauxite		387		953		825		286		165		123		2,597		2,494		1,897		2,940	2,676	2,534
Alumina		282		218		108		187		194		209		2,009		2,721		2,733		2,269	2,009	2,012
Intrasegment		—		—		—		—		—		—		(27	)	(20	)	(18	)	—	—	—
Bauxite & alumina		669		1,171		933		473		359		332		4,579		5,195		4,612		5,209	4,685	4,546
Primary Metal		658		595		389		682		615		665		9,674		9,306		9,946		6,357	6,497	6,404
Pacific Aluminium		129		115		109		154		149		196		970		1,156		1,016		2,356	2,278	2,173
Inter-segment and other		—		—		5		—		(1	)	6		807		789		772		127	180	222
Integrated operations		1,456		1,881		1,436		1,309		1,122		1,199		16,030		16,446		16,346		14,049	13,640	13,345
Other product group items	(f)	—		(508	)	—		—		—		—		—		—		—		—	—	—
Product group operations		1,456		1,373		1,436		1,309		1,122		1,199		16,030		16,446		16,346		14,049	13,640	13,345
Evaluation projects/other		—		—		—		3		—		—		—		—		—		—	—	—
Total Aluminium		1,456		1,373		1,436		1,312		1,122		1,199		16,030		16,446		16,346		14,049	13,640	13,345

Copper & Diamonds
Rio Tinto Kennecott	100.0	444		318		249		457		427		422		2,012		1,864		1,936		2,066	1,993	1,734
Escondida	30.0	315		302		248		508		518		507		2,871		3,057		3,369		1,068	1,087	1,079
Grasberg joint venture	(g)	—		171		138		—		30		42		—		—		1,137		—	1,615	1,642
Oyu Tolgoi and Turquoise Hill	(h)	1,289		1,284		901		208		219		344		6,780		6,072		4,725		3,152	2,863	2,835
Diamonds	(i)	38		64		85		144		118		132		195		267		441		940	967	922
Product group operations		2,086		2,139		1,621		1,317		1,312		1,447		11,858		11,260		11,608		7,226	8,525	8,212
Evaluation projects/other		1		11		1		3		5		5		152		129		135		150	146	142
Total Copper & Diamonds		2,087		2,150		1,622		1,320		1,317		1,452		12,010		11,389		11,743		7,376	8,671	8,354

Energy & Minerals
Rio Tinto Coal Australia	(j)	—		32		84		—		34		152		—		(837	)	1,040		—	1,005	1,924
Iron Ore Company of Canada	58.7	255		189		202		172		154		157		803		975		988		2,617	2,397	2,382
Rio Tinto Iron & Titanium	(k)	249		169		119		193		201		219		3,507		3,390		3,881		4,115	4,058	4,048
Rio Tinto Borates	100.0	43		44		28		60		62		65		525		518		523		924	980	936
Uranium	(l)	5		8		21		3		4		37		(363	)	(406	)	(327	)	857	1,324	1,307
Product group operations		552		442		454		428		455		630		4,472		3,640		6,105		8,513	9,764	10,597
Simandou iron ore project	(m)	(1	)	—		—		—		—		—		20		15		17		74	70	10
Evaluation projects/other		—		—		—		—		—		—		37		41		41		53	33	25
Total Energy & Minerals		551		442		454		428		455		630		4,529		3,696		6,163		8,640	9,867	10,632

Other operations	(n)	(4	)	12		(35	)	177		26		32		(83	)	(442	)	(328	)	159	187	203

Product group total		5,831		5,279		4,691		4,960		4,622		4,980		46,505		45,742		50,611		41,205	43,026	42,925

Inter-segment transactions														127		129		206
Net assets of disposal groups held for sale	(q)													—		440		370
Other items		64		65		70		77		43		42		(2,449	)	(2,880	)	(2,631	)	4,802	4,432	3,882
Less: equity accounted units		(456	)	(500	)	(417	)	(653	)	(650	)	(647	)	—		—		—		—	—	—
Total		5,439		4,844		4,344		4,384		4,015		4,375		44,183		43,431		48,556		46,007	47,458	46,807
Add back: Proceeds from disposal of property, plant and equipment		49		586		138
Total capital expenditure per cash flow statement		5,488		5,430		4,482
Less: Net (debt)/cash														(3,651	)	255		(3,845	)
Less: EAU funded balances excluded from net debt														—		—		—
Equity attributable to owners of Rio Tinto														40,532		43,686		44,711

Business units are classified according to the Group’s management structure. We have adjusted certain comparative amounts to represent changes in management responsibility. Effective from the first half of 2019, Dampier Salt has moved from the Energy & Minerals Product Group to the Iron Ore Product Group.


(a)	Gross sales revenue includes the sales revenue of equity accounted units on a proportionately consolidated basis (after adjusting for sales to subsidiaries) in addition to consolidated sales. Consolidated sales revenue includes subsidiary sales to equity accounted units which are not included in gross sales revenue.


(b)	EBITDA of subsidiaries and the Group’s share of EBITDA relating to equity accounted units represents profit before: tax, net finance items, depreciation and amortisation charged to the income statement in the period. Underlying EBITDA excludes the EBITDA impact of the same items that are excluded from underlying earnings.


(c)	Represents profit after tax for the period attributable to the owners of the Rio Tinto Group. Business unit earnings are stated before finance items but after the amortisation of discount related to provisions. Earnings attributed to business units do not include amounts that are excluded in arriving at underlying earnings.


(d)	Pilbara represents the Group’s 100% holding in Hamersley, 50% holding in Hope Downs Joint Venture and 65% holding in Robe River Iron Associates. The Group’s net beneficial interest in Robe River Iron Associates is 53%, as 30% is held through a 60% owned subsidiary and 35% is held through a 100% owned subsidiary.


(e)	Presented on an integrated operations basis, splitting activities between Bauxite & Alumina, Primary Metal, Pacific Aluminium and other integrated operations (which reflect the results of the integrated production of aluminium) and other product group items which relate to other commercial activities.


(f)	In 2018, Aluminium capital expenditure was reported net of US$508 million proceeds received from the sale of surplus land at Kitimat. These proceeds were not included in Aluminium’s free cash flow and the associated gain was excluded from business unit earnings and EBITDA.


(g)	Through a joint venture agreement with Freeport-McMoRan Inc. (Freeport), we were entitled to 40% of material mined above an agreed threshold as a consequence of expansions and developments of the Grasberg facilities since 1998 (until 21 December 2018). On 21 December 2018, we sold our entire interest in the Grasberg mine to PT Indonesia Asahan Aluminium (Persero) (Inalum).


(h)	Our interest in Oyu Tolgoi is held indirectly through our 50.8% investment in Turquoise Hill Resources Ltd (TRQ), where TRQ’s principal asset is its 66% investment in Oyu Tolgoi LLC, which owns the Oyu Tolgoi copper-gold mine.


(i)	Includes our interests in Argyle (100%) and Diavik (60%).


(j)	Includes our 82% interest in the Hail Creek coal mine (until 1 August 2018), our 80% interest in the Kestrel underground coal mine (until 1 August 2018) and interests in the Winchester South (until 1 June 2018) and Valeria development projects (until 1 August 2018).

On 1 June 2018, we sold our entire 75% interest in the Winchester South coal development project in Queensland, Australia, to Whitehaven Coal Limited for US$200 million.

On 1 August 2018, we sold our entire 82% interest in the Hail Creek coal mine and 71.2% interest in the Valeria coal development project in Queensland, Australia, to Glencore for US$1.7 billion.

On 1 August 2018, we sold our entire 80% interest in the Kestrel underground coal mine in Queensland, Australia, to a consortium comprising private equity manager EMR Capital (EMR) and PT Adaro Energy Tbk (Adaro), an Indonesian listed coal company, for US$2.25 billion.

On 1 September 2017, we sold our 100% shareholding in Coal & Allied Industries Limited to Yancoal Australia Limited for US$2.69 billion (before working capital adjustments).

Rio Tinto Coal Australia’s operating assets of US$(837) million at 31 December 2018 included provisions for onerous contracts in relation to rail infrastructure capacity and capital gains tax payable on the divestments announced in the year, partly offset by financial assets and receivables relating to contingent royalties and disposal proceeds. Following a change in management responsibility, at 31 December 2019, these amounts are now reported within Other operations, with no restatement of comparative amounts.


(k)	Includes our interests in Rio Tinto Fer et Titane (100%), QIT Madagascar Minerals (QMM, 80%) and Richards Bay Minerals (attributable interest of 74%).


(l)	Includes our interests in Energy Resources of Australia (68.4%) and, until 16 July 2019, Rössing Uranium Limited (Rössing) (68.6%). On 16 July 2019, we sold our entire 68.6% interest in Rössing to China National Uranium Corporation Limited (CNUC).


(m)	Simfer Jersey Limited, in which the Group has a 53% interest, has an 85% interest in Simfer S.A., the company that manages the Simandou project in Guinea. The Group therefore has a 45.05% indirect interest in Simfer S.A.. These entities are consolidated as subsidiaries and together referred to as the Simandou iron ore project.

(n)

Other operations include our 100% interest in the Gove alumina refinery, Rio Tinto Marine and, with effect from the first half of 2019, the remaining operating assets of Rio Tinto Coal Australia. As at 31 December 2019, these include provisions for onerous contracts in relation to rail infrastructure capacity, partly offset by deferred tax assets and financial assets and receivables relating to contingent royalties and disposal proceeds. Refer to note (j).


(o)	Capital expenditure is the net cash outflow on purchases less sales of property, plant and equipment, capitalised evaluation costs and purchases less sales of other intangible assets. The details provided include 100% of subsidiaries’ capital expenditure and Rio Tinto’s share of the capital expenditure of joint operations and equity accounted units.

(p)

Operating assets of subsidiaries is comprised of net assets excluding post-retirement assets and liabilities, net of tax, and before deducting net debt. Operating assets are stated after the deduction of non- controlling interests – these are calculated by reference to the net assets of the relevant companies (ie inclusive of such companies’ debt and amounts due to or from Rio Tinto Group companies).


(q)	Assets and liabilities held for sale at 31 December 2018 included our interest in Rössing Uranium Limited, the ISAL smelter, the Aluchemie anode plant, and the Alufluor aluminium fluoride plant. At 31 December 2017 it included our interest in the Dunkerque aluminium smelter and certain other separate assets.