Rio Tinto Group - Earnings Call - H1 2025
July 30, 2025
Transcript
Rachel Arellano (Head of Investor Relations)
A warm welcome to everyone, both here in the room and for those joining us remotely. We are pleased to be here today with our CEO, Jakob Stausholm, and CFO, Peter Cunningham, to present to you our 2025 half-year results. This will be followed by a Q&A session. Important: there are no planned fire evacuations today. If you hear the alarm, please follow instructions from the fire wardens here at the London Stock Exchange. With that, I would like to invite Jakob to the stage.
Jakob Stausholm (CEO)
Yes, thank you, Rachel. Good morning, good evening to everyone joining us in person or online. I'd like to start by acknowledging and paying my respect to all Traditional Owners and First Nations people who host our operations around the world. It's great to be in London today. I am so proud of the first half financial results we're presenting today. In my time with Rio Tinto, we have had periods with higher prices, but this set of results is the strongest, demonstrating real momentum in improving operational performance. Real value from a more diversified portfolio, and excellence in unlocking growth projects. This is allowing us to deliver fairly resilient financial performance despite lower iron ore prices and a tough start to the year with four cyclones in the Pilbara. Importantly, we are delivering on our strategy, which we set out at our investor seminar in December last year.
We remain on track for this year's guidance on production, projects, and investments, and on our strong midterm production growth. We now have a solid foundation in place to drive ongoing efficiency, and we have a diverse pipeline of growth options for the future. When I first started as Chief Executive, I said it would take time to build a stronger Rio Tinto. In February 2021, we introduced four objectives to unlock the potential of our business. Now, four and a half years later, we can see the positive impact of consistent progress against those objectives over time with strategic investments and best-in-class project execution driving profitable growth. Our copper-equivalent production was up 13% in the second quarter year-on-year, making a 6% increase in the first half. This is led by the strong ramp-up of Oyu Tolgoi. At last year's investor seminar, we indicated 50% growth.
I'm proud to report the team hit 54% in the first half year-on-year. Excitingly, our bauxite production also hit a new record for the half with 9% growth, with now Amrun consistently performing above its nameplate capacity. This has been driven by really good implementation of the Safe Production System. At Simandou, we are accelerating the first shipment of high-grade ore to November and will be focused on safely ramping up to full production over the following two and a half years. These are just some of the highlights across our diverse portfolio, showcasing our project-building expertise and the talent of our people. Of course, this progress would not be possible without a strong social license to operate. Just last month, I was fortunate to be in the Pilbara in Western Australia to officially open our new Western Range mine.
This is our first project with a co-designed social, cultural, and heritage management plan with the Yinhawangka Traditional Owners. Being on country together was yet another reminder for me about the importance of social license. This is a strong set of results for the first half year. Our strategy is delivering, and as Peter will share, we're growing while improving cost discipline. I'm proud that our cash generation is largely the same as last year, despite a drop of $14 per ton in the iron ore price. This demonstrates the strength of our diverse portfolio. We're much less dependent on iron ore price, with a growing contribution from our aluminum and copper businesses. It highlights the excellent work from our Pilbara operations to recover so strongly from the cyclones in the first quarter by delivering the best production for a second quarter since I joined the company.
Our financial performance is very resilient, with underlying EBITDA of $11.5 billion and an operating cash flow of $6.9 billion. Our net operating cash flow decreased by just 2%, while our production volume increased 6% and sales volume increased by 4% year-on-year. We achieved this growth while maintaining a strong balance sheet and attractive returns to shareholders, which Peter will talk about further. We can expect more global volatility, but our strategy, focus on our four objectives and our diverse set of tier-one assets enables us to be extremely resilient in an uncertain world and capture new opportunities as they arise. As you will be able to see, despite complex tariff issues in aluminum, the return on capital doubled. Converting opportunities into value, we are now building a track record of delivering projects on time and on budget. I'll now hand over to Peter to take you through the financials.
Peter Cunningham (CFO)
Thanks, Jakob. Good morning, everyone. Let's look at our very resilient financials. Once again, we've reported a clean set of results, with few differences between underlying and net earnings. I'd like to highlight three key points. Firstly, with our improving operational performance, we saw further productivity gains. We've been particularly focused on our highest cash-generating businesses, but I would like, in particular, to call out the progress made at Kennecott, which we spoke about in December last year. Secondly, we continue to see very stable operating cash flow, driven by good discipline on costs and tight control over working capital, despite the usual seasonality in the first half. Thirdly, our projects remain on track and are ramping up, in particular, OT. Overall, copper-equivalent production was up 6%. Let's look at the numbers.
In terms of underlying EBITDA, we offset the 13% lower iron ore price with a rising contribution from our copper and aluminum divisions. Bauxite was a particular highlight. Underlying earnings were down 16%, mainly due to the drivers of EBITDA, a higher interest charge following the Arcadium acquisition, and one-off increases in the effective tax rate. Cash flow from operations was very consistent at $6.9 billion, compared to $7.1 billion last first half and $7 billion in 2023 first half, while our share of capital investment rose to $4.5 billion. Following completion of the Arcadium acquisition in March, we ended the half with net debt of $14.6 billion. We've maintained our practice of paying out at 50% for the interim ordinary dividend, equating to $2.4 billion. Let's now take a look at commodity prices. I've talked about this before, but it's really important.
Taking a longer-term perspective, removing the noise of short-term volatility, and factoring in the impact of inflation, this chart shows rolling 12-month average prices for our key commodities, rebased to 2025 real terms. We've indexed these and showed the average of the 15 years as 100. In nominal terms, copper and aluminum may appear elevated, but in real terms, they're actually trading at around their averages since 2010. Iron ore and lithium are well below their historic averages. It's an important picture because it shows our financial results are not a product of elevated prices. In fact, demand is soft in a lot of traditional segments, particularly property, but is being offset by those driven by the energy transition.
Now, like Jakob said, we're really starting to see the benefits from our diversified portfolio, with higher volumes in copper, bauxite, and aluminum, together with improved pricing, offsetting the iron ore price decline. Now, of course, our Pilbara business continues to generate very strong margins and remains a stable foundation, comprising 58% of group EBITDA. The last first half, it was 73%. Over the next few years, we expect to increasingly see our financials driven by the entire portfolio as growth projects ramp up and productivity improvements flow through. We are intensely focused on cost discipline. Operational employee numbers across the group have decreased by 2% over the last 12 months, which is impressive when set against the context of production growth this half. In February, I talked about finding solutions to complex problems and how we can unlock value. Kennecott is a great case in point.
We're now seeing much more stable operational performance. We've made substantial efforts to lower the cost base, achieving a 10% headcount reduction, changing contractor engagement, and driving operational improvements. Kennecott is well positioned to benefit as a cathode producer, one of only two active US copper smelters. We've also launched a business transformation program with our iron and titanium operations in Quebec as part of our asset productivity drive. Functional support costs for the group are tracking below 2022, a trend we expect to continue. Now, let's unpack EBITDA through our standard waterfall. This underlines the operating strength and financial resilience I mentioned earlier. Commodity prices were the biggest driver, netting out to $800 million negative. Note, the iron ore price impact was $2 billion negative. In copper-equivalent terms, sales were up 4%, which gave rise to a $700 million volume uplift.
This was mostly driven by bauxite and copper, with a ramp-up at OT and higher grades at Escondida. It more than compensated for the modest decline in iron ore sales, which we expect to recover in the second half, given that Q2 shipments were constrained by port maintenance. Exploration and evaluation was $200 million lower, mainly a function of Rincón costs now being capitalized, with underlying spend slightly below $1 billion for the full year as we prioritize copper and lithium. Turning to cash unit costs, these were lower in aluminum and copper on a gross basis, with efficiencies from the higher volumes from OT and Escondida. C1 copper costs, which decreased by 34%, benefited further from the higher gold credits, which reflect in the price and volume variances for this analysis. Overall, we're continuously improving on our costs, with SPS giving us momentum and a safer operating environment.
After factoring in $600 million of other movements, mainly provision-related, this brings us to a very resilient EBITDA of $11.5 billion. Onto the product groups. Iron ore remains our cornerstone, delivering $6.7 billion of EBITDA. We saw good levels of productivity improvement, with the highest Q2 production since 2018 and first tons from Western Range. We're now implementing our new product strategy, aligning sales to our system as we continue to meet the needs of our customers. Unit costs were within guidance at $24.30 per ton, despite lower production and additional costs to recover from the four cyclones in Q1. As Jakob mentioned, aluminum continues its impressive record of stability, in particular for smelting and bauxite. We took full advantage of stronger markets, leading to a step change in financial performance.
Our commercial team were able to proactively flex the business to optimize our position in the wake of the changing tariff environment. Today, the Midwest premium is substantially offsetting the tariff. The main impact on our financials is the cancellation of the 10% Section 232 exemption Canada previously enjoyed. Copper was stronger still, with EBITDA driven by higher prices and rising volumes, up more than 50% at OT, where we've retained our longer-term guidance of 500,000 tons a year by 2028. Unit costs are now guided lower, driven by disciplined cost control and strong production. Lastly, minerals. We saw increasing operational stability at IOC. At iron and titanium, we're focused on improving plant performance, but TiO2 volumes remain weak, reflecting continued weak market conditions. The integration of Rio Tinto Lithium is proceeding well, following closure of the Arcadium transaction, with Rincón now an integral part of this business.
I'd now like to return to iron ore, as I'm often asked about the industry structure and the impact of Simandou, which will bring online about 120 million tons over the next few years from the two blocks. Now, it's helpful to show our view of the iron ore industry and how the cost curve has evolved. The red line shows the 2024 cost curve we forecasted back in 2018. It shows that we expected more production in the lower half of the cost curve. In reality, we've seen many more high-cost operators remaining in the market. The curve has therefore steepened relative to 2028 expectations, with a larger proportion of high-cost producers than anticipated, compounded by inflation. As Simandou comes online, some higher-cost production will probably be pushed out.
It's also important to note that going forward, over the next 10 years, we expect the 40% production from the majors needs to be replaced. Finally, note the size of the contestable iron ore market is around 1.9 billion tons. While China's steel consumption has plateaued, there is demand growth elsewhere in global steel markets, often supplied by Chinese exports. We therefore continue to expect an attractive industry structure into the future. Our approach to capital allocation remains very disciplined, with no change to our well-flagged CapEx guidance of around $11 billion in 2025 and $10-$11 billion thereafter. This includes growth of around $3 billion each year, with Arcadium now absorbed in our guidance. We're due to complete Salvavida and the Fénix Expansion next year as we work through the phasing of the various lithium growth options.
With the recent Pilbara replacement approvals, CapEx will be weighted to the second half of the year, with major commitments, including the ongoing delivery of Simandou and construction of Rincón. Net debt has risen to $14.6 billion following completion of the Arcadium transaction, a level comfortably in a range consistent with our commitment to a single-A credit rating. All our debt metrics are in a reasonable place. This remains a strong balance sheet. Since 2021, we've invested to grow our production base through productivity improvements and capital expenditure. You'll see on this chart how we have increased CapEx since 2019 and did it four consecutive years of production growth, following declines between 2018 and 2021. The rate of production growth gathered momentum in the first half of 2025.
This is strengthening our cash flows, allowing us to absorb the effect of a lower iron ore price over the last few years and grow our cash flows in the future. The growth has not been at the expense of shareholder returns. Our commitment is unwavering. In line with our usual practice, we've declared a 50% payout for the interim. We're now into the 10th year of our policy, which has proved to be highly successful and predictable. This has been achieved while both maintaining a strong balance sheet and the commitment to shareholder returns. To summarize, our operational performance is improving. Our projects are on track and ramping up. This is driving our copper-equivalent production, which was up 6% this half, and we're generating very stable operating cash flow.
Our consistent strategy and diverse portfolio will ensure Rio Tinto remains strong in the short, medium, and long term while continuing to pay attractive returns. With that, let me pass back to Jakob.
Jakob Stausholm (CEO)
Thank you, Peter. As Peter highlighted, while some prices are well below the long-term average, in aggregate, we have a very profitable business. We are still facing an opportunity-rich environment. The world is growing, and the energy transition, despite all what you might read in the newspapers, is moving us to electrification, is really happening. Electricity demand is growing around 1.6 times faster than energy demand right now. The International Energy Agency predicts this will accelerate up to six times by 2035. As you can see here, demand for iron ore is stable. Due to the energy transition, demand for copper and aluminum are rising.
There is major growth in lithium, where we see close to a 30% increase year on year. When we did our projections a year ago, before buying Arcadium, we knew there would be increasing demand for electrical vehicles. Despite less subsidies in various parts of the world, reality has actually exceeded our projections. The electrical vehicle is penetrating now on its own merit. Even more positive is the rather dramatic and, I have to say, unexpected development of the stationary battery demand. It's more than doubled over the last year as prices on those batteries have significantly reduced. Let's take a closer look at lithium. After a period of low prices, there has been a significant increase in the lithium price over the last months. Prices are still much below the 15-year average. As you can see, a large portion of the cost curve is still underwater.
Ramping up existing developments and projects under construction will bring some supply to market. However, to meet demand in 2030 and even more so in 2035, a number of new investment decisions will need to be taken. The current price environment will not support this growth in production required to satisfy demand while allowing producers to recover their cost and justify the capital required. We are absolutely convinced that we are sitting right at the bottom of what will develop into a rather steep industry cost curve with the assets we are getting from our brine operations and projects in South America. With the strong DLE technology from our combined Arcadium and Rio Tinto teams, we believe we can both live our purpose of finding better ways to deliver the materials the world needs and create a sizable and very profitable business for decades to come.
To unlock our growth options, we need to be best in class in both business development and project execution. People are partnering with us because of what we stand for: our dedication to our four objectives and doing what we said we would be doing through our strategy. I'm particularly proud that we are now able to execute our major projects' project portfolio on time and on budget. Let's take a quick run-through. In the Pilbara, Western Range is officially open on time and on budget, and government approvals have been received, and construction is underway for Hope Downs 2 and Brockman 4. Oyu Tolgoi is ramping up strongly on schedule, and this year, it will produce 50% more copper than last year. AP60 is progressing well. Despite a small cost overrun, we are four months ahead of schedule.
Production is ramping up at the Rincón starter plant while we are progressing with the full-scale project. In March, we closed the Arcadium deal, and integration is progressing well under the leadership of Paul Graves, the former CEO of Arcadium. We deepened our strategic partnership with Codelco in the Atacama, first with a new collaboration agreement for our copper development in Nuevo Cobre, and then through a binding agreement for a high-grade lithium project in the Salar de Maricunca. As late as last week, we also signed a binding agreement with ENAMI on the Saladas Altoandinas project. In the United States, the administration has made the Resolution Copper Project a priority with the final environmental impact statement published. The federal land exchange is now imminent, which will unlock the next phase of this project. Now, let's zoom in on the world's largest mining project, Simandou.
It is progressing at breathtaking speed. The project was sanctioned just last year and will deliver its first shipment of high-grade iron ore in November. I'm so impressed with what our combined teams are doing at Simandou. Let's take a minute to watch a short video that brings the scale of the project to life.
An incredible engineering achievement. Perhaps more important, it is a significant role this project is playing for the Ghanaian government and people in building their economy. Our partnership here has the potential to create a lasting source of development for current and future generations. It's boosting the Ghanaian economy, improving infrastructure, and creating thousands of jobs. The high-grade iron ore can enable steelmakers to produce steel with less CO2 emissions. Our teams are continuing to learn and strive every day for impeccable ESG performance, from safety to biodiversity and in harmony with local communities.
As I said earlier, I'm very proud of these financial results. While we have had times when prices have been better, these results represent the best underlying performance from our business in the now 14 sets of results that I have been involved in disclosing. You're seeing improved operational efficiency with growing volumes and control on costs. At our investor seminar, I spoke about the three sites highlighted for improvement. You heard Peter earlier talk about great progress being made at Kennecott. At our iron and titanium operations in Quebec, while the market is currently really tough, the business is becoming more efficient. We are continuing to progress the Safe Production System implementation at the Iron Ore Company of Canada, IOC. We are seeing real momentum in improving operational performance, the increasing value from our diversified portfolio, and the excellence we're showing in unlocking growth projects.
My time as CEO of Rio Tinto is ending soon. I felt very privileged, and I'm very grateful for the wide support I've experienced internally and externally. It's been a tremendous journey. As I look ahead to the next chapter in Rio Tinto's 153 years' history, I believe we are facing an opportunity-rich world. I've been reflecting on the legacy our team will leave from our work over the last nearly five years. One thing that stuck with me is a conversation I had with one of our former CEOs, John Ralph. He told me that when he and his predecessor, Rod Carnegie, discussed how most value could be added to the company, they concluded it was about providing options for your successor. Rio Tinto is truly a long-term company, and I believe that the next chief executive had many options.
As beautifully symbolized by this photo, the focus will now be shifting to Simon, who is here today in listening mode, I should say. As the usual approach. As was the case for me when I was named CEO, Simon will be taking some time with the team to think about his approach. You can expect to hear from him throughout the rest of the year and not least at the upcoming investor seminar. I'm delighted that the board has chosen an internal successor, as I believe we have developed a very strong bench. I selected Simon to run our biggest business four and a half years ago. He has, in my view, done a great job, and I'm convinced he'll do very well as our next CEO. I now look forward to watching this incredible company continue to strive and deliver value for our shareholders, including myself. Thank you.
Rachel Arellano (Head of Investor Relations)
Thank you, Jakob. I'll just invite these guys back to the stage. Oh. And you might just need a bit of mic support. At the front.
Peter Cunningham (CFO)
The feeder, does that still work?
Jakob Stausholm (CEO)
I probably take the first question. Yeah.
Rachel Arellano (Head of Investor Relations)
There we go. We have about 45 minutes for the Q&A, and I do ask you to limit yourself to one question and one follow-up. We will start here with the audience in London, and then we'll switch to those online. Okay. We'll start here at the front.
Jakob Stausholm (CEO)
It's Jason Fairclough Bank of America. Thanks for the presentation, Jakob, and congrats. Good luck with the next step. Two, I guess, related questions on Simandou. One, you've brought forward the first production. How are you thinking now about the progress from here up to 120, or I guess for your share, the 60 million tons? How do we think about that ramp-up?
Beyond that. You do sound surprised when you talk about the project, like it's gone very, very quickly. I guess as an organization, what do you take away from that? What could you apply to some of your other projects?
Yeah. No, and the latter is the real big question. Look. We obviously have some limitations. We are already producing to stockpiles at the mine, etc. We are quite confident that we can convey the first shipment in November. There is a lot of work that has to be done. It is a ramp-up over two and a half years. You should be aware that the port is like two ports, and only the one port will be ready.
You can first, the first 60 million tons you can round up to, and then you get the second port in place, and then you can go up to the 120 million tons. It is a fairly long ramp-up period, but maybe not entirely bad in terms of penetrating the global market, etc. I hope you got good comfort from what Peter showed also on the cost curve, that there should be space for Simandou while other mines are hitting their normal decline. I think the real big question, which is fascinating, is the second part of your question. We have learned a lot from our Chinese partners in terms of the engineering capabilities of China. The whole ecosystem is just unbelievable. The Chinese have been very good at learning from the West over a couple of decades. We got to learn from the Chinese.
I think we are ahead of the game here. We certainly need to see how we can use that elsewhere as well. I'm proud that we are bringing projects on time on budget, but I actually still would like to see them being done faster and cheaper.
Jason Fairclough (Managing Director)
Is there any specific learnings that you can point to?
Jakob Stausholm (CEO)
It's a different commitment we see from the contractors. In terms of you actually agree at price, and you agree a schedule, and it's being delivered. I also think that the way you see the ecosystem working together on the standards, etc., has just worked extremely well. The best example I have is very often when we design things, we ask engineering firms to engineer everything, whereas very often the Chinese just have their manual and saying, that bridge fits there, that bridge fits there, etc.
Then you can do things at a completely different speed.
Jason Fairclough (Managing Director)
Okay. Thank you.
Good morning. My congratulations as well for your tenure here at Rio Tinto. Friday, in theory, copper tariffs kick in in the United States, a 50% premium. You have one of two operating smelters in the U.S. You have undeveloped mines in the U.S. Where do you think the tariff policy is going for copper, and how do you take advantage amidst that range of potential outcomes?
Jakob Stausholm (CEO)
Yeah. You are right. Copper tariffs represent an opportunity for us. Because, for reasons I do not entirely know from before my time, we have actually had a smelter that we have not made a lot of money on for a long period of time at Kennecott. It is the U.S. biggest and only one out of two.
As I said, we barely have made money, but it should become much more profitable from the tariffs immediately. That is one positive thing. The other thing in terms of copper opportunities is that, but that is not related to the tariffs. It is just that the administration is putting much more focus on developing mining opportunities both inside the U.S. and outside the U.S. They have made Resolution Copper a priority project. I think the evidence of finally getting published the environmental impact study and letting the clock start ticking is showing you that we will get to the next chapter for Resolution. May I remind you, it is an unbelievable ore body that should be able to produce a quarter of the copper consumption in the U.S. for decades to come.
That next chapter would be an updated feasibility study.
The chapter after that would be an FID potentially. How have you updated your probabilities of those chapters, given where we are?
We are going to learn a lot immediately. We will roll it as soon as we get the land exchange. We will immediately start drilling in what used to be federal land because we need to characterize the full ore body, also the part that is not part of our land today. Of course, depending on that characterization, you can start developing the mine method and the mine plan.
Rachel Arellano (Head of Investor Relations)
Okay. We will now go to on the line. Over to you, operator, please. Thank you. To ask a question via the phone, please press star one, one on your telephone, and wait for your name to be announced. To withdraw your question, please press star one, one again.
Operator (participant)
The first question comes from the line of Paul Young from Goldman Sachs. Please go ahead. Your line is open.
Paul Young (Analyst)
Thanks. Morning, Jakob and Peter. Jakob, first thing I know, this is your last set of results. Looking short, it has been an absolute pleasure. Jakob, the first question is on copper. A really good EBITDA beat from copper, the first we have seen in some time. Part of that was Oyu Tolgoi and the ramp-up, which is performing very well. We have seen there has been a bit of news flow on OT this half with regards to the delay in the transfer of the lease with Ontario Resources and also the ongoing tax dispute. We have also seen a change in Prime Minister there.
I just want to get your thoughts at the moment, just on where you think things are with the government and any comments you can make on the timing of that lease transfer and also the tax dispute. Thanks.
Jakob Stausholm (CEO)
Yeah. Yeah. First of all, you're right. It's a real highlight, the whole product group of copper. Peter mentioned the progress at Kennecott. Also, kudos to BSP for how Escondida has run in the first half. The biggest highlight is clearly Oyu Tolgoi from a technical and economic point of view. There is, of course, also the political view. I should say that I went with Katie Jackson to the mine two or three months ago, and we took, for the first time ever, the president underground. With him, he had his chief of staff, who later on has become the prime minister of the country.
We work very close with them. We have a very good relationship. I also had a very good relationship with the previous prime minister, but this is what is happening in politics. People are changing. We feel very comfortable with the people, and we have a good cooperation. Specifically on this entre issue, let's not make it a bigger issue than it is. Right now, we are mining in panel zero. We were planning to go to panel one, but we can instead go to panel two if we don't have the transfer. The mine will be mined exactly the same way. It might be the case that, apologies, it might be the case that there's slightly lower grade, and therefore there can be a little bit of time value or money lost, but that's about it, Paul. Don't get too worried about it.
I actually feel very good about the state of Oyu Tolgoi. You might not be able to see it, but Peter is nodding.
Paul Young (Analyst)
Yeah. I mean, without a doubt, Jakob, it seems like it's a impact metal production. On three years' time, understand that, but just want to understand the timing there. Just on the tax dispute, the fact that the Mongolian government's gone to international court of arbitration, in my view, is a positive road because they're trying to actually get a ruling on the tax. That in live international community and a lot of the foreign banks and World Bank, you can invest in Mongolia, that they do this properly. Is that your view as well?
Jakob Stausholm (CEO)
Look, the reality is I would have loved to have solved it in bilateral negotiations a long time ago. Politically, it's very difficult. I think you just have to respect that.
It's actually quite an impressive democracy that they have in Mongolia. We feel very confident because we have shared their views. We have shared our views. And now we go through a control process with a hearing here in September. It is progressing, and we feel very confident that we will also end up with a decent outcome.
Paul Young (Analyst)
Okay. Thank you, Jakob.
Rachel Arellano (Head of Investor Relations)
Thank you. We'll take a second call from online. Thanks.
Operator (participant)
Your next question comes from the line of Rahul Anand from Morgan Stanley. Please go ahead. Your line is open.
Rahul Anand (Analyst)
Oh, hi, Jakob, Peter and team. Thanks for the call. And great evenings, Jakob. Best wishes for all your future endeavors. Look, my question is on the iron ore business. Obviously, you've dropped the grade there. My question is, what are the impacts you're seeing on the revenue line?
Is the impact better or worse than a simple grade adjustment? And how much can you actually save on cost considering your supply chain is going to be much more simplified now with your product streams going from five to one? I'll come back with a follow-up. Thanks.
Jakob Stausholm (CEO)
Okay. I'll leave that for Peter. I just want to tee it off and say one thing. What I've really been pleased about is that we have seen deep analysis, good cooperation between the product group and commercial, and the part that I have been involved in, namely engagement with the customers as well. We had choices to be made, and we have consulted, and we have found and made choices that are aligned with our customers. It has actually been quite well received in that regard. Economic impact, Peter?
Peter Cunningham (CFO)
I think right now we've started making the first shipments under the new specification. It is early days, but I think so far all the work we did with the customers so they understood our system and that really to meet what they needed is working out well. I think we're pretty comfortable with the initial shipments and where they're landing from a revenue perspective. I mean, in terms of cost, clearly the near-term impact is just simplification of the product because we're going down mostly to one blend rather than having sort of the degree of SP10 we've had. SP10, you can expect to come down in the second half of the year. If I really look at the benefits, more of them for the rest of the business are long-term. It is about actually increasing the amount of production capacity in our mines.
It is about then the capital intensity of the business in the long term and about managing closure liabilities as well. It's that package which is all longer-term benefits which are really part of this, I think, solution to meet the needs of our customers, but also to maximize the value from our system.
Rahul Anand (Analyst)
Thanks, Peter. And my follow-up is to someone else's question earlier on the tariff situation. Obviously, copper are positive, but obviously, I think more than offset by the aluminum business shipping tons from Canada to the U.S. So could you perhaps help me understand sort of what the strategy is under the current circumstances? Are you looking to reroute volumes to other geographies, or is that not an option in size given logistics? Thanks.
Jakob Stausholm (CEO)
I mean, we have spent a lot of time on this. First of all, tariffs is not. It's between nations.
And there are many other aspects than just the tariffs in this part here. The beauty that you can see today with our results is that we are actually able to navigate that with very limited impact. Do we like all this? Do we like a 50% tariff on aluminum? Not really. But it's not for us to. Make much statements around that. We're demonstrating that we can actually manage it. I think it's much more the final consumer that will have to pay. We are able to. Pass on things. I think the good example, you got the data very clearly in our disclosures today. The aluminum unit price or unit revenue is up 14%. But if you deduct the impact of tariffs, it's still up around 6%. So. How have we doubled the profitability in aluminum?
Great operational experience, good pricing in bauxite, and actually retaining the margin in the aluminum business as well. Pretty good. Now, that doesn't guarantee you that there couldn't come up something tomorrow. I cannot promise you anything. But the reality is, when we started the year, we had absolutely no experience. We have now learned a lot over the first six months and conclude that we can actually manage the aluminum situation. And if you then take the copper that's positive and aluminum is slightly negative, then overall, the impact is actually not very significant.
Rachel Arellano (Head of Investor Relations)
Fantastic.
Jakob Stausholm (CEO)
Thank you very much.
Rachel Arellano (Head of Investor Relations)
Thank you. We'll go back here in the room. We'll go a bit to the left of the room.
Thank you. Thank you very much, particularly, Jakob. Great evening, as the others point out. Just you always remain convinced that lithium is going to be a bottom quartile cost curve.
Can you just give us where the confidence comes? Is that grades? Is that the technology with DLE? Is it rationalization of the Arcadium business that you've bought? Just which combination of those?
Jakob Stausholm (CEO)
It's everything. If I should carve it out and make it very simple. We now know with Rincón that we can run that operation around $4,500 per ton of OpEx. We have also told you that the capital intensity of Rincón is $43,000 per ton. You take a capital charge of $43,000, whatever you use of your compensation, five and a half. That means that as soon as you get $10,000, you create NPV. That's because it's amazing reservoirs. On top of that, I think you have to think about what is the impact to nature.
This DLE is actually a way where you can just suck up the brine and find ways to reinject it as well and have very little environmental footprint. We are not able to see anything that has so little impact to nature that can be done at that price. That brings us at the bottom of the cost curve. On top of that, you then take the Arcadium organization and the Rio Tinto, you bring the technologies together, and you start a learning journey. How can we make this better and cheaper? I'm very optimistic that we are competitive today, and we will become even more competitive tomorrow. The beauty of that industry is that a lot needs to be built. This is not a static one. It's one of those that as soon as you don't build something, you lack supply.
The implications for the hard rock assets that came along with Arcadium, I mean, would they have to stand out by themselves, or would you like to keep the market share?
Look, it's still early days. I think it's fair to say, Peter and Simon and others, there will, of course, be much more details around a more master plan for lithium at the capital market stage later in the year. So far, we have attached most value to the Latin American assets. We are very proud, on top of Arcadium, to add the two assets in Chile. We're also finding ways and means to progress the Nemaska project in Canada. We only closed the deals four months ago.
Rachel Arellano (Head of Investor Relations)
Let's go to the end of the line.
Hi, Jakob. Two questions for me. The first is we're starting to see some of your competitors talk about broader cost savings.
Jakob Stausholm (CEO)
I'm just wondering if you see opportunities for cost savings within the Rio Tinto group that are not just productivity-led? A couple of things on that because you're asking for future, and I realize, as you can imagine, I've been a little bit busy this morning, but I do have seen that Rincón has reported results as well. What I'd like to say is the journey we are at with the four objectives, particularly best operator, has taken a long time. It's a continuous improvement. I think what you see with the half-year results, there's real benefit coming out of it. We are growing. It's not so much about cutting costs. It's more about can we control the cost while we are growing the volume and become more efficient. It's for Simon's heart to answer the question, but at a later date.
I just hope and believe, as a shareholder, that we will continue this continuous improvement journey because I think we are only at the foothill of the mountain here. That's why I also, at the year-end, said the thing about doubling down on operational performance, and our Chairman repeated that not long ago.
Thank you. Second question. It comes up very frequently. So Chinalco, is there any update that you can provide us with on conversations or progress with respect to the Chinalco?
Look, the dialogue for Peter and for myself, I'm going there shortly, is ongoing. The one thing I want to say to you as shareholders is we take it very serious. We want to find a pathway where we can buy back shares as well. Absolutely. I don't have a solution today.
Rachel Arellano (Head of Investor Relations)
We'll now go back to those on the line. Two from the line, please, operator.
Please just remind her to announce your name and where you're from.
Operator (participant)
Thank you. Your next question comes from the line of Rob Stein from Macquarie. Please go ahead. Your line is open.
Rob Stein (Research Analyst)
Thank you very much, and congratulations, Jakob, again. Just on the iron ore market. It's interesting that you've been so deliberate in your conversation around the iron ore market today. You make a comment that you see a lot of production capacity coming out from the majors via depletion. Can you potentially highlight where you think that's going to come? If not, can you provide a view on what your depletion rates will be from the Pilbara and whether Simandou will replace any of that? If that's okay.
Jakob Stausholm (CEO)
It's actually a really tough question because it's like every mine goes towards depletion. It's not kind of one place.
I think the most evident thing is you can see that all the producers in the Pilbara are facing lower grade. It's a good indicator. You just don't have mines, unfortunately, in eternity. I think you just need to look at the numbers. The numbers is that you've got 1.9 billion tonnes of congestible iron ore a year, and Simandou is only 120 million tons. That's kind of like 6% ramping up over two and a half years. You only need to kind of have a depletion rate of around 3% to be back to status quo. It looks quite attractive.
Rachel Arellano (Head of Investor Relations)
Thanks, Rob. Your second question?
Rob Stein (Research Analyst)
Just on cost out, obviously, there's been quite a theme here in the recent quarterly reporting season in Australia of CapEx deferrals and aggressive cost out given some of the market conditions in some of the commodities.
Can you perhaps comment on what you're seeing more globally, where the productivity and inflation is starting to bite in your different regions and how you can address that going forward?
Jakob Stausholm (CEO)
I think all the teams from the various product groups has, and the biggest challenge we had was probably a little while ago in Western Australia, but they're actually managing inflation very, very well. As you've seen, Peter gave a good example of that we're actually reducing manpower in a number of places. Not about, I wouldn't call it cost cutting. It's just about continuous improvement, becoming more efficient. Every day you go to work, you have to be a little bit more efficient. I think that's what we are seeing. We are blessed with Rio Tinto with not having big loss-making assets. A number of other parts of the mining industry have got that.
There's a couple of assets that have very, very low profitability, and we've got to improve that. The reality is three out of four, the three biggest product groups, have double-digit return on capital employed. You've got to be careful of actually protecting that profitability rather than destroying that profitability.
Peter Cunningham (CFO)
I think operationally, when you look at the big product groups that are really driving the profits at the moment, I mean, it is that continuous improvement where you need to make corrections. We're making them. I mean, Kennecott, I talked about in terms of Kennecott's cost base. RTIT, again, is a very challenging market. Again, they really are working very hard to take out costs. It's that reflection that each business has its own context. Really, it's about being consistent in how you really drive costs over time.
Rachel Arellano (Head of Investor Relations)
Thank you. One more from the operator, please.
Thanks, Rob.
Operator (participant)
Thank you. Your next question comes from the line of Lyndon Fagan from JPMorgan. Please go ahead. Your line is open.
Rachel Arellano (Head of Investor Relations)
Just one moment. Yeah.
Lyndon Fagan (Research Analyst)
I just wanted to ask about the lithium slide on slide 17. I'm just wondering if Rio believes in that demand profile, which still shows over 3 million tonnes in 2030. I guess potentially 20% higher than some of the market estimates out there. Is that a number that Rio is gearing its own business up to produce into? I guess the follow-up is, can you perhaps talk to some of the ways to expansions that Arcadium had and when they might be sort of maturing in the project pipeline? Thanks.
Jakob Stausholm (CEO)
Yeah. No, thank you. I thought I did a bit. For sure, the stuff I've just presented, we do believe in. I think there's a couple of things.
We spent a lot of time with our economists last year to really, really try to understand the drivers behind the lithium demand. As I said to you, EVs have actually overshoot it, but EVs will always go a little bit up and down. One year is faster than the next year is a little bit less. It's happening. I think the other thing that no economist, no one had seen, was that stationary batteries, because they have become so cheap. Just look at it now where we are repowering Boyne Smelter. We thought we would do it with gas peakers to firm the electricity, and then suddenly we realized the battery is cheaper. Has doubled in just 12 months. That's a whole new significant stream of lithium demand. Yes, we do believe in the lithium demand.
We are working, and Peter is not more than a week ago, Peter and I with the whole team was going through a master plan on projects. You know what? We need to reiterate that many times because we're bringing Paul is very well bringing two organizations together. We're learning from each other, and every time we meet, we mature that. We're going to give you a real good run-through at the Capital Markets Day on the priorities. The one thing I can say to you is we have a lot of options here. Anything you want to add, Peter?
Peter Cunningham (CFO)
Yeah, I was going to just say, I mean, the immediate priority is delivering the sort of Fénix Expansion in Sal de Vida stage one, which will be in 2026. The other implied is Nemaska hydroxide and spodumene project, which is in flight.
But everything else, as you say, I mean, we need to now work through the plethora of options we have, how best to deliver those, and how best to deliver value for shareholders in the context of the market. I think well set up, but lots of thinking going on there.
Thank you.
Lyndon Fagan (Research Analyst)
Thanks. Just to.
Rachel Arellano (Head of Investor Relations)
You still have to.
Lyndon Fagan (Research Analyst)
Just a quick follow-up on Simandou. Are you able to talk to the ramp-up profile there? Is that essentially straight line from November? Or can you maybe give a bit of color on how that looks over the 30 months?
Peter Cunningham (CFO)
Yeah. I mean, I think we said, I mean, first shipment will be November this year, but then it's really a fact of how infrastructure comes in and how then we can ramp up.
Within the context of sort of sharing initially port capacity with the sort of blocks one and two developers. I mean, it is over 30 months. I think it will be probably we'll try and optimize that as we work through the infrastructure coming online.
Rachel Arellano (Head of Investor Relations)
Great. We'll move back here to the room, please.
Alain Gabriel (Analyst)
Thanks. It's Alain Gabriel at Morgan Stanley. Jakob, your portfolio includes businesses that are not material enough in the context of the group profits. Do you see an opportunity there to simplify the portfolio? And if so, in which businesses does this opportunity bucket sit.
Jakob Stausholm (CEO)
Yeah. You should always try to simplify, and you're never simple enough in that regard. As I said just a moment ago, the good news is we don't have big loss-making assets. There's no assets that we have put on care and maintenance, etc.
That shows about the quality of the Rio Tinto portfolio. I would call it second to none in that regard. That shouldn't stop us from asking ourselves crucial questions about who is the best owner of certain assets, etc. You have to be careful of it's not just a matter of size. If you have an asset that you're the best operator of and it's very profitable and generates a lot of cash, it's fine to have it. You should always ask yourself those questions. It's not different from asking yourself the question, should you buy something? We've just this half closed the deal of Arcadium because, yes, we wanted to have more exposure to lithium.
Alain Gabriel (Analyst)
Thank you.
A follow-up question is, what is the one thing that is still on your bucket list that you wish you had done at Rio Tinto had you had more time and that you confidently give on to your successor?
Jakob Stausholm (CEO)
No, look, I'm very, very happy to leave a lot of options to Simon. Also happy to see it as a shareholder from the side, seeing it happening. Because I also have to remember myself. First of all, it is not me, but we as a team that have created a lot of things. Most of the things are things we have inherited from our predecessors. Many of the things go back from not just previous predecessors, but actually 20 years, 25 years back. The key thing is when you have those options, what are you going to do about it? What was I missing in my time?
Peter Cunningham (CFO)
I think it is just a simple thing. Always you would like to have done things, done more of it faster. Things take time. I tell you, on the four objectives, some of the things I felt went very fast. It is only now that you really see crystallizing that the operational performance towards best operator and the excellent development in terms of project execution is really coming through. Of course, it is frustrating that it takes four and a half years, but it is a big company. Those things just take time.
Alain Gabriel (Analyst)
Thank you.
Rachel Arellano (Head of Investor Relations)
Okay. Go back.
Amos Fletcher (Director of Equity Research)
Thanks. I am Amos Fletcher from Barclays. Just one question, actually, for Peter. Gearing levels are slightly high now post the Arcadium Lithium acquisition. Are you happy with them remaining at that sort of level, or do you want to look to bring them down over time?
Peter Cunningham (CFO)
We have always said that we are very happy with the balance sheet, being strong, being at a credit rating. That gives us flexibility. I mean, high, it is a 19% gearing ratio right now. We feel that the balance sheet is in really good shape, and we have flexibility going forward at these sorts of levels. It will go up and down. I mean, this is a cyclical industry. Cash flows will go up and down. What we have got to do is use the balance sheet to really make sure we can deliver against the strategy and also deliver shareholder returns.
Matt Greene (Mining Analyst)
Hey, Jakob. Peter. Mett Greene from Goldman Sachs. Maybe just to follow on the lithium question earlier. And your incentive curve. You have announced Maricunga and Saladas Altoandinas this half. Jakob, you have just walked through the incentive price on Rincón.
With these new projects, what is your expectation on the incentive pricing for those Chilean projects? Is it higher or lower?
Jakob Stausholm (CEO)
Chile and Argentina are slightly different in terms of their royalty schemes versus the WIGI legislation. You could also say they have slightly different risk profiles as countries, etc. We feel quite confident with both of them all-inclusive. We're very happy that we kind of have a little bit of diversifying brines of having it both in Argentina and in Chile because you can never predict exactly how things are developing. If you take something like Maricunga, the plants we're doing, the DLEs, are very much the same. Every reservoir is different. It is a matter of getting in and understanding the reservoir and then repeat what you already have done. We need to learn, like the Chinese, every time you repeat building a plant, you do it cheaper.
How do you get on that continuous improvement? If you get on that, you will get some very competitive lithium in the future.
Matt Greene (Mining Analyst)
Thanks. My follow-up is, I mean, you touched on it slightly, but Rio has not sold any assets since 2018. You've added more commodities, more jurisdictions, more costs into the business. You've mentioned titanium quite a few times in this presentation today. I guess just taking a step back, and I probably can't comment on that, but is Rio actively looking to streamline and potentially reshape the business to recycle capital and streamline it?
Jakob Stausholm (CEO)
I've seen that there are some articles around that. I can't comment on rumors. If you were actively doing anything, I could not make a presentation without talking about that. We are streamlining things. By the way, as you can see, we are slightly going out of diamonds. We closed Argyle.
Diavik is coming to an end at the end of the year. We took out the complexity of TRQ. We have sold a number of gold streams, etc., with good profit, etc. We are streamlining the company. There might be more to come. RTIT had low profitability in the first half. They had very difficult conditions. The question is still, are we the best owner of it? Are we not? I happily leave that for my successor.
Rachel Arellano (Head of Investor Relations)
Thanks so much. Just return to the line. We have another one on the line, please, operator.
Operator (participant)
Thank you. Your question comes from the line of Glyn Lawcock from Barrenjoey. Please go ahead. Your line is open.
Glyn Lawcock (Founding Partner)
Good morning, Jakob. Jakob, to the extent you can comment, I'm just interested in your comments around the Glencore discussions. What was the attraction? Were they actually serious or just simply in passing?
Can I take that to mean Rio as a company is contemplating a return to coal as well? Thanks.
Thank you very much. First of all, I can't comment on rumors. But it's amazing how much that has been written about something which we don't really know whether has happened or not happened. It's very difficult. I will say to you right now, I don't think we've just, in the previous question, talked about simplification. I would be surprised that we are actively looking at going into coal at this point in time. Yeah. I'm sorry. There's not much more I can say about that. I do think you have to think about this is not about. Are we for M&A or are we against M&A? No, the point is just very simple.
There are good deals and there are bad deals, and we are trying to pursue the good deals. I believe that the deals that we have done, like TRQ, like Metalco, like Rincón, and like Arcadium, that they are good deals. But time will tell.
All right. Thanks, Jakob. All the best for the future.
Jakob Stausholm (CEO)
Thank you.
Rachel Arellano (Head of Investor Relations)
Okay. Here at the front, please.
Myles Allsop (Mining Research Analyst)
Myles Allsop at UBS. Just to clarify a couple of things, Peter, first on the net debt and leverage. We are just shy of $15 billion. It's relatively high compared to what you've enjoyed for the last decade or two. Are we right to assume that you would rather have lower leverage given the CapEx and the obvious cyclicality of the commodities on a look-forward basis? Is this the high end of the range as we look at it?
Peter Cunningham (CFO)
I think it's kind of a set of levels we feel comfortable with. If you look at our balance sheet, the debt might be high, but the balance sheet is much bigger than it has been previously, and the cash flows are much bigger. As Jakob says, it's a very comfortable level of gearing for the size of the company now. I just think sometimes looking back over decades to say net debt was lower is not probably the most useful sort of comparison. We feel very comfortable. I think an A credit rating gives us flexibility to manage up from where we are and to absorb whatever cycles throw at us and to maintain doing our business. What I've learned is just being very consistent about how you invest and how you sort of run our business is the way you deliver most value for shareholders.
We'll use the balance sheet to enable that.
Myles Allsop (Mining Research Analyst)
We should assume it's kind of reset at this sort of level and it was undergeared historically. It's the right way of thinking about it?
Peter Cunningham (CFO)
I wouldn't sort of even use that much. I would just say you're using the balance sheet to sort of enable strategy and to enable us to run the business as well as we could for shareholders. That's what we've done. I mean, we've used some of the capacity for Arcadium. We think that really builds a long-term business for the future of valued shareholders. I mean, that's what you can enable with a strong balance sheet.
Jakob Stausholm (CEO)
Maybe just on, you will see that there was not a lot of appetite from the shareholders for equity financing of Arcadium. You will also see, I think Peter's team have done a tremendous job of raising, what is it, 30-40 year bonds. We have long maturity on the debt. The interest cost is a fraction of our EBITDA. I feel very comfortable.
Myles Allsop (Mining Research Analyst)
Maybe just on the dividend as well, obviously the unwavering focus, as you say. I think Jakob, you did a great job at the capital markets day kind of hammering that home last year. There is still debate around, is it a 50% payout or a 60% payout when it comes to the final? You've been very consistent with the 60% for the full year with the final. How should we think about it with this transition now? Should we still, is this a board kind of resolute 60% for the full year, or could we see it kind of come down like we're seeing with BHP, for example?
Jakob Stausholm (CEO)
Sure. First of all, your CFO will continue to be Peter. Simon will not say anything right today. Ultimately, it's a board decision. The board has been unwavering in their support of the 60% as a practice. So far, it hasn't given us excessive leverage. I think the way to think about things is we are building a lot of dividend capabilities. Profitable growth means more earnings, means more dividend capability. You just see now what is all the money we have sunk into OT is coming back now. Very soon, we'll start seeing the money we're putting into Simandou coming back, etc.
Rachel Arellano (Head of Investor Relations)
Do you want to just hand it behind you?
Alan Spence (Executive Director)
Thanks for the presentation. Alan Spence, BNP Paribas. Thinking about portfolio simplification again, you talked about asking yourself, are you the best operator of it? Also, assets, of course, need to make a return.
Is it return on capital employed or another metric? What's the minimum level you need to see across the asset base as well as being the best operator?
Jakob Stausholm (CEO)
I mean, ultimately, it's about creating NPV. If you are having an asset that is not performing very well and you're able to make it much better, then you actually create value. It's probably not possible to get all our businesses to the incredible good profitability level of iron ore, but that's not the purpose of it. I mean. Step back, financial theory, it's about creating NPV to the company. If you can just improve things, you create value. Having said that. I'm very happy that three out of four product group have double-digit return on capital employed. What do you think, Peter?
Peter Cunningham (CFO)
No, I think that's exactly right.
I mean, yeah, I mean, aluminium had a very, very strong return on capital employed. A few years ago, that's grown massively over the last few years. That's what we like to see. That's improving our businesses and delivering for shareholders. Thanks.
Alan Spence (Executive Director)
The operational FTEs were down 2% year-on-year. I'm assuming that doesn't include contractors. Do you have a sense of if you included contractors, would it also be lower?
Peter Cunningham (CFO)
It's across the FTEs, so it's across the board of contractors as well.
Alan Spence (Executive Director)
Okay. Thank you.
Rachel Arellano (Head of Investor Relations)
Just hand over. Thank you.
Richard Hatch (Equity Research Analyst)
Good morning, Richard Hatch from Berenberg. Thanks for the time and congrats. First point, I note that your underlying earnings by business unit has been removed from the disclosure and just wondering if you might be able to add that back in just for the sell-side community to better understand your business.
Jakob Stausholm (CEO)
I agree.
Tell the story, Peter.
Peter Cunningham (CFO)
Yeah. You just simplified our reporting. I mean, there's various reasons maybe that's what you're saying. We've simplified our reporting, yeah, in line with Peers.
Richard Hatch (Equity Research Analyst)
Makes it more complicated for us to understand. Second point, I'm sorry, I'd have to challenge you on your comment on the aluminium business. Bauxite prices, aluminum prices have been very high. If you look at the North American aluminium business, margins have really deteriorated and you're cash flow negative. What's going on there? I appreciate there's a tariff element to it, perhaps, but what's going on with the cost base? The same goes for Pacific Aluminium. Secondly, just on IAC, I know I keep going on about IAC, but there's a step-changing cost in this business. It's gone up more. What's going on? Because it isn't getting better. Thanks.
Peter Cunningham (CFO)
Richard, I think the point on aluminium is just the transfer price because of the way aluminum prices are much higher. If you look at the profitability of the whole thing, then you have a much clearer picture of performance. Because effectively, we are transferring aluminum into our smelters at spot price with a quarterly lag. It is just that. That is what drives the lower profitability. It is purely aluminum prices. Underlying that, the businesses are performing better and better. In terms of IOC, it was down. I mean, I think EBITDA was down $540 million down to just over $200 million. A lot of that, again, was price. In fact, pellet price was more hit than the 62 price. It was down about 15% price. They also had an insurance claim last year.
They are also having to put more sort of work into the mine to really position the business for the future. It is that probably that you are seeing on costs that we really are very focused on. How do we really sort of put the mine in good shape so that we can see the full potential of this business? It is just a huge focus for the team. That really gives us a platform for the future.
Jakob Stausholm (CEO)
Thanks.
Rachel Arellano (Head of Investor Relations)
Okay. Perhaps one last, I am looking at the clock. We have literally 60 seconds.
Thank you. This will be on Simandou only. Firstly, the project is done. It is de-risked pretty much. Are you the best operator, or is it the Chinese, given they have been instrumental in building the project?
Secondly, could Simandou be used as a tool to get Chinalco to sell their stake, i.e., sell Simandou's stake to Chinalco and kind of get their stake down? Is that something that is on the table?
Jakob Stausholm (CEO)
We love the structure. It works well. The reality is the most competitive advantage that the Chinese have is in developing assets. We bring an awful lot in terms of knowing how to operate in a country like Guinea in terms of ESG standards, etc. I was just trying to play towards all the great things our partners are contributing. I will say to you, we are also bringing a lot to the table. I would find it very difficult to see that we would participate in developing an iron ore asset. We are the world's largest producer of iron ore just to retrench from that iron ore.
You should never say never, but it is certainly not something we are planning for.
Rachel Arellano (Head of Investor Relations)
Okay. Thank you. Thanks to everyone for joining us today. For those online, we conclude our time with you now. For those here in London, I welcome you to now join us for light refreshments just outside the theater. Thank you again. With that, I conclude our presentation today.
Thank you.