Rio Tinto_Nirio Mendoza_UofA 2009.pdf

7/29/2019 Rio Tinto_Nirio Mendoza_UofA 2009.pdf

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Nirio Mendoza GEOS 543C

Best Practices and Projects StagesFall 2009

University of Arizona

Geosciences Department


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Nirio Mendoza GEOS 543C

Best Practices and Projects StagesFall 2009


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Outline

Rio Tinto history Analysis of strengths

Analysis of weaknessesCurrents facts

Assessment and conclusions


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Making profit selling fools gold?


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1 Minas deRio Tinto

2 Rhodesiancopper belt

A broad geographic spread of operations


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HistoryThe Rio Tinto Company founded at 1873 by HughMatheson when acquired Minas de Rio Tinto

At the end of 1880s leading the World market for sulfur and copper.In 1925 Sir Aucklan Geddes nominated as chairman.

At 1920s decided take part of newly-discovered NorthernRhodesian copper belt .

At 1930 established American subsidiary Pyrite CompanyIncorporated to produce Cu, Zn, Pb, iron sinter.

At 1954, two-third of the Spanish business was sold. At 1962, created The Rio Tinto-Zinc Corporation (RTZ), asthe result of a merger British The Rio Tinto Company andthe Australian The Consolidated Zinc Corporation.


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History (cont.)Between 1962 and 1968, discoveries and development of many projects were executed: Palabora (Cu) in SA, Rossing(U) in Namibia, etc., also acquires Borax Group.

At 1995, the RTZ Corporation PLC and CRA (Conzinc RioTinto of Australia Limited) unify as a dual listed company.

At 1997, again changed name: The RTZ Corporation PLCbecame Rio Tinto plc (based in the UK) , and CRA Limitedbecame Rio Tinto Limited (based in Australia).Between 2000 and 2007: coal, aluminium, iron ore, diamondswas acquired, added further strength to Rio Tintos alreadyexceptional resource base.The last acquisition for $ 38B was the Canadian aluminiumproducer Alcan Inc., becoming the global leader inaluminium .


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Initial Strengths (from 1873 to 1954) Landscape with huge ore resource

Oligopoly, market power Strategic operational engineer to survive during the pyrites world introduction of railroadsteam shovels

Strategic alliances in Iberia (1878), America Pyrites Producers (1884?),and European Pyrites Producers (1928), also with the chemical and

fertilizer producersStrategic renegotiation of term of purchase, although they had paidless the real costHighly capitalized international firm, with borrowing low costStrategic boards changes , after Matheson and Fielding , Geddes stage characterized by high-order entrepreneurial

ability to perceive new productivity opportunities Delegation responsabilities , attractive promotion, bonus to hire highskilled crew.Diversification; as consequence of necessity?

Recovery sulfur from smelter was gasIron contaminated with Pb, Zn

Opportune adventure in Rhodesian copper belt


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Initial Weakness (from 1873 to 1925)

Matheson-Fielding era: Low-order entrepreneurial,focused to exploit full potential of the Minas de RioTinto. No single executives had scientific or engineer trainingLow cost open- air calcinations teleras method to

recovery low grade copper: First anti-smoke leagueExtravagant initial production by human and mulesspower Staff concentrated on improving existent methods

instead of look for alternatives Activities totally centralized or diffuse

When they decided to enter into a large scale production, but with notsupported human resource


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Open- air calcinations teleras heap roasting method Rio Tinto Mine (1890)
http://upload.wikimedia.org/wikipedia/commons/4/47/Teleras.jpg


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Currents facts


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A consistent and successful strategy

www.riotinto.com

Always looking for themaximization of shareholder value

Diverse and high operationalexperienced boards

Strategic international and localmulti-team group working sinceinitial stage: Case of Madagascar

Landscape with high potential

High standard: health, safety,environments and communityresponsibilities

Ready to satisfied the growingmetal consumptions


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Recent earnings strength continues Strength in diversity

Positive finance


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Rio Tinto has a strongpipeline of Greenfieldopportunities for the nextgeneration of projects

Future operations

1st Expansion Brownfield

2nd Greenfield exploration


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Assessment and Conclusions

Multicommodities

Value based on its landscape

Multitask international teamHigh operational experiencedboards

Viable collaborative relationswith the community

Rio Tinto_Nirio Mendoza_UofA 2009.pdf

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