Rio Tinto 4Q15 Earnings Call Notes

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Sam Walsh

Signs of recovery in industrial demand are yet to emerge

“Signs of recovery in industrial demand are yet to emerge, and a prolonged downturn brings increased risk. Housing sales in China stabilized during the second half of 2015, but we are yet to see a turnaround in China’s construction activity. The transition to a less commodity-intensive and slower growth path, often referred as the, New Normal, is further compounded by these soft industrial trends.”

Assets for sale are distressed and for good reason

“Right now, there is distressed assets that are out there and they’re distressed for a good reason; high costs, low quality, no infrastructure, people trying to get rid of – I was going to say get rid of their trash, but I could never say that. But we are mindful that there could well be opportunities.”

We’d certainly be interested in copper

” Certainly in the area of copper, as Chris said, if there was an attractive project in that area, that could be of interest to us, at the right price or right value.”

Almost everything people use requires our materials

“As the world continues to develop, urbanize, industrialize, there is basically nothing that people use on an everyday basis that can be produced without using our materials, even down to the iPhone that’s in your pocket. All of these require us.”

We have confidence in the long term demand for iron ore

“In terms of long-term demand for iron ore, we still have confidence in this. As I mentioned, as the world continues to develop, urbanize, industrialize, whether it’s China, the ASEAN nations, India, Middle East, South America, Africa, all of these regions will require iron ore and steel as they urbanize.”

No one quite understands what Xi Jinping means by the new normal

“So we’re going through a transition period. Nobody quite understands what the new normal means when President Xi Jinping mentioned it, but I think he mentioned that – it means that things are not going to be quite as they were in the past and that we need to adjust to it, we need to be responsive to it.

Chris Lynch

There are some good assets on distressed balanced sheets but they’re not on the market yet

But the key issue really is around — there are some very good assets in what you’d probably describe as distressed balance sheets, and they’re not on the market as yet. But we’ve got a watching brief on a lot of things and we’ll continue to do that. Whether we get to pull the trigger on anything, we’ll always look at a hell of a lot more than we ever pull the trigger on. But we do have capacity in the event that we wanted to do that.