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Other disclosures
 6 Months Ended
Jun. 30, 2020
Other Disclosures [Abstract]  
Other disclosures
Other disclosures

Capital commitments at 30 June 2020

Capital commitments, excluding the Group’s share of joint venture capital commitments, were US$3,649 million (31 December 2019: US$4,053 million). Capital commitments include open purchase orders for managed operations and expenditure on major projects authorised to date by the Rio Tinto Investment Committee for non-managed operations. On a legally enforceable basis capital commitments would be approximately US$1.3 billion (31 December 2019: US$0.9 billion) as many of the contracts relating to the Group’s projects have various cancellation clauses.

The Group’s share of joint venture capital commitments was US$85 million (31 December 2019: US$93 million).

Contingent liabilities (subsidiaries and joint operations)

Contingent liabilities, indemnities and other performance guarantees were US$155 million at 30 June 2020 (31 December 2019: US$204 million).

Indemnities and other performance guarantees represent the potential outflow of funds from the Group for the satisfaction of obligations including those under contractual arrangements (for example undertakings related to supplier agreements) not provided for in the balance sheet, where the likelihood of the guarantees or indemnities being called is assessed as possible rather than probable or remote. There were no material contingent liabilities arising in relation to the Group’s joint ventures and associates.

In October 2017, Rio Tinto announced that it had been notified by the U.S. Securities and Exchange Commission (SEC) that the SEC had filed a complaint in relation to Rio Tinto’s disclosures and timing of the impairment of Rio Tinto Coal Mozambique (RTCM). The impairment was reflected in Rio Tinto’s 2012 year-end accounts. The SEC alleges that Rio Tinto, a former chief executive, Tom Albanese, and a former chief financial officer, Guy Elliott, committed violations of the antifraud, reporting, books and records and internal control provisions of the federal securities law by not accurately disclosing the value of RTCM and not impairing it when Rio Tinto published its 2011 year-end accounts in February 2012 or its 2012 interim results in August 2012. In June 2019, the court dismissed an associated US class action on behalf of securities holders. The dismissal is being appealed by the securities holders.

In March 2018, the Australian Securities and Investments Commission (ASIC) filed civil proceedings in the NSW District Registry of the Federal Court of Australia against Rio Tinto Limited, Albanese, and Elliott. On 1 May 2018, ASIC expanded its proceedings. ASIC alleges that Rio Tinto committed violations of the disclosure, accounting, and misleading or deceptive conduct provisions of the Corporations Act by making misleading or deceptive statements related to RTCM in its 2011 Annual report and its 2012 interim financial statements, not complying with accounting standards in respect of its 2012 interim financial statements, and not disclosing an impairment of RTCM in its 2012 interim financial statements. ASIC further alleges Albanese and Elliott breached their duties as directors or officers, and failed to take all reasonable steps to comply with relevant accounting requirements.

Rio Tinto believes that the SEC case and the ASIC proceedings are unwarranted and will defend the allegations vigorously.

In addition, Rio Tinto continues to co-operate fully with relevant authorities in connection with their investigations in relation to contractual payments totalling US$10.5 million made to a consultant who had provided advisory services in 2011 on the Simandou project in Guinea. In August 2018, the court dismissed a related US class action commenced on behalf of securities holders.

The outcomes of these matters remain uncertain, but they could ultimately expose the Group to material financial cost. The board is giving these matters its full and proper attention and a dedicated board committee continues to monitor the progress of these matters, as appropriate.
Other disclosures (continued)

The Group has not established provisions for certain additional legal claims in cases where we have assessed that a payment is either not probable or cannot be reliably estimated. A number of Group companies are, and will likely continue to be, subject to various legal proceedings and investigations that arise from time to time. As a result, the Group may become subject to substantial liabilities that could affect our business, financial position and reputation. Litigation is inherently unpredictable and large judgements may at times occur. The Group may incur, in the future, judgements or enter into settlements of claims that could lead to material cash outflows. We do not believe that any of these proceedings will have a materially adverse effect on our financial position.

Related party matters

Purchases and sales relate largely to amounts charged by equity accounted units for toll processing of alumina and purchases of bauxite and aluminium. Details of the Group's principal equity accounted units are given in the 2019 Annual report.

Income statement itemsSix months ended 30 June 2020Six months ended 30 June 2019
US$mUS$m
Purchases from equity accounted units(519)(529)
Sales to equity accounted units119141
Cash flow statement items
Dividends from equity accounted units183318
Net funding of equity accounted units(14)(12)

30 June 202031 December 2019
Balance sheet itemsUS$mUS$m
Investments in equity accounted units(a)
3,8493,971
Loans to equity accounted units3939
Trade and other receivables: amounts due from equity accounted units231259
Trade and other payables: amounts due to equity accounted units(228)(271)

(a)Investments in equity accounted units include quasi equity loans.

Rio Tinto plc has provided a number of guarantees in relation to various pension funds. Subject to certain conditions, Rio Tinto plc would pay any contributions due from Group companies participating in these funds in the event that the companies fail to meet their contribution requirements.
Other disclosures (continued)

Summary financial information for subsidiaries that have non-controlling interests that are material to the Group

This summarised financial information is shown on a 100% basis. It represents the amounts shown in the subsidiaries’ financial statements prepared in accordance with IFRS under Group accounting policies, including fair value adjustments, and before intercompany eliminations


Iron Ore
Company of
Canada		Iron Ore
Company of
Canada		Energy
Resources of
Australia		Energy
Resources of
Australia
Turquoise
Hill (a)(b)(c)
Turquoise
Hill (a)(b)(c)
202020192020201920202019
Income statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$mUS$mUS$m
Revenue1,0111,027108118409735
Profit/(loss) after tax2572602736(23)(2,054)
– attributable to non-controlling interests106108611(89)(1,413)
– attributable to Rio Tinto151152212566(641)
Other comprehensive (loss)/income(91)51221(2)1
Total comprehensive income/(loss)1663114937(25)(2,053)
30 June 202031 December 201930 June 202031 December 201930 June 202031 December 2019
Balance sheet summary as at:US$mUS$mUS$mUS$mUS$mUS$m
Non-current assets2,3972,5853937610,1559,589
Current assets7416102702581,7932,449
Current liabilities(394)(532)(131)(127)(457)(493)
Non-current liabilities(847)(927)(428)(462)(4,375)(4,405)
Net assets/(liabilities)1,8971,736104(255)7,1167,140
– attributable to non-controlling interests78771819—2,2402,369
– attributable to Rio Tinto1,1101,01885(255)4,8764,771
202020192020201920202019
Cash flow statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$mUS$mUS$m
Cash flow from operations403509172329287
Dividends paid to non-controlling interests—(52)————

(a)Turquoise Hill Resources Ltd holds a controlling interest in Oyu Tolgoi LLC ("OT").

(b)Under the terms of the project finance facility held by OT, there are certain restrictions on the ability of OT to make shareholder distributions.

(c)Since 2011, Turquoise Hill has funded common share investments in OT on behalf of Erdenes Oyu Tolgoi LLC ("Erdenes"). In accordance with the Amended and Restated Shareholders Agreement dated 8 June 2011, such funded amounts earn interest at an effective annual rate of LIBOR plus 6.5% and are repayable to them via a pledge over Erdenes' share of future OT common share dividends. Erdenes also has the right to reduce the outstanding balance by making payments directly to Turquoise Hill. Common share investments funded on behalf of Erdenes are recorded as a reduction to the net carrying value of non-controlling interests. As at 30 June 2020, the cumulative amount of such funding was US$1,327 million (31 December 2019: US$1,241 million), excluding accrued interest of US$734 million (31 December 2019: US$655 million) relating to this funding.
Other disclosures (continued)

Summary financial information for subsidiaries that have non-controlling interests that are material to the Group (continued)


Robe River
Mining Co
Pty		Robe River
Mining Co
Pty
Other
companies
and
eliminations(d)
Other
companies
and
eliminations(d)
Robe RiverRobe River
202020192020201920202019
Income statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$mUS$mUS$m
Revenue7346148517161,5851,330
Profit after tax403344424338827682
– attributable to non-controlling
interests		158134——158134
– attributable to Rio Tinto245210424338669548
Other comprehensive loss(88)(18)(38)(11)(126)(29)
Total comprehensive income315326386327701653
Adjusted(e)
Adjusted(e)
Adjusted(e)
30 June 202031 December 201930 June 202031 December 201930 June 202031 December 2019
Balance sheet summary as at:US$mUS$mUS$mUS$mUS$mUS$m
Non-current assets(e)
2,9792,9453,6733,6876,6526,632
Current assets(e)
1,1241,1612,6682,5313,7923,692
Current liabilities(e)
(705)(204)(859)(303)(1,564)(507)
Non-current liabilities(e)
(365)(376)(3,495)(4,050)(3,860)(4,426)
Net assets3,0333,5261,9871,8655,0205,391
– attributable to non-controlling
interests		1,2101,404——1,2101,404
– attributable to Rio Tinto1,8232,1221,9871,8653,8103,987
202020192020201920202019
Cash flow statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$mUS$mUS$m
Cash flow from operations6655281,0669201,7311,448
Dividends paid to non-controlling interests(211)———(211)—

(d)"Other companies and eliminations" includes North Mining Limited (a wholly-owned subsidiary of the Group which accounts for its interest in Robe River) and goodwill of US$342 million at 30 June 2020 (31 December 2019: US$349 million) that arose on the Group's acquisition of its interest in Robe River.

(e)The 31 December 2019 comparative has been adjusted to more appropriately classify certain intercompany balances.
Other disclosures (continued)

Summary information for joint ventures that are material to the Group

This summarised financial information is shown on a 100% basis. It represents the amounts shown in the joint ventures’ financial statements prepared in accordance with IFRS under Group accounting policies, including fair value adjustments and amounts due to and from Rio Tinto.


Minera Escondida LtdaMinera Escondida LtdaSohar Aluminum Co. L.L.C.Sohar Aluminum Co. L.L.C.
2020201920202019
Income statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$m
Revenue3,1373,537325325
Depreciation and amortisation(797)(790)(55)(60)
Other operating costs(1,243)(1,640)(225)(220)
Operating profit1,0971,1074545
Finance expense(70)(80)(15)(15)
Income tax(370)(387)(5)(5)
Profit after tax6576402525
Other comprehensive loss(27)———
Total comprehensive income6306402525
30 June 202031 December 201930 June 202031 December 2019
Balance sheet summary as at:US$mUS$mUS$mUS$m
Non-current assets12,00412,4502,9903,045
Current assets2,3932,250250290
Current liabilities(1,547)(1,827)(185)(205)
Non-current liabilities(4,540)(4,670)(745)(845)
Net assets8,3108,2032,3102,285
Assets and liabilities above include:
– cash and cash equivalents5336032020
– current financial liabilities(783)(807)(110)(110)
– non-current financial liabilities(2,217)(2,380)(575)(675)
2020201920202019
Cash flow statement summary for six months ended 30 JuneUS$mUS$mUS$mUS$m
Dividends received from joint venture (Rio Tinto share)183315——