25 July 2012

Mozambique: Presentation of Rio Tinto, Member of the National Council of Enterprises in the CTA

Andrew Woodley, Executive Director of Operations and Development at Rio Tinto Coal Mozambique, presented "The approach of Rio Tinto to develop the coal trading in Mozambique at a world level" during the 3rd annual international conference on coal in Mozambique held on July 3, 2012 in Maputo.

Brief presentation of Rio Tinto:

Rio Tinto is an international leading mining group that began operations in 1873. Its main products are aluminum, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore.

Today, about 70,000 people are working in over 40 countries on five continents. Over 8,000 people work in Africa. The 40-year presence of Rio Tinto in Africa is a key growth strategy.

In Mozambique, Rio Tinto acts in four sectors: aluminum, exploitation, mineral sands and coal.

Benga mine:

The Benga coal mine and other projects are located in Tete province, in northern Mozambique. Benga mine officially opened on May 3, 2012. In early June, the official inauguration of the new coal terminal in Beira was celebrated, and last week, Benga shipped its first cargo of coal, 34,000 tons of high quality coking coal to be exported to India.

When the mine reach its full capacity, the production potential of Benga will be around 5.3 Mtpa of untreated coal, 1.5 Mtpa of coking coal for export and 0.9 Mtpa of thermal coal, in the first phase of production.

In the second phase to begin in 2015, the time is strongly dependent on the availability of the capacity of the coal chain, potential growth could reach 20Mtpa of untreated coal. Mozambique is ideally located to meet the growing demand for metallurgical coal from Brazil, India, China and Europe, and the strong demand for thermal coal from India and the Middle East.

Other projects in Mozambique:

In a few weeks, we will open a business center in Tete to help local businesses understand how they can become a supplier of Rio Tinto.

At Rio Tinto, our goal is to achieve a mutually beneficial approach and help them develop prosperous economies.

al from India and the Middle East.

Other projects in Mozambique:

The Rio Tinto Iron and Titanium is currently evaluating projects of heavy sands in Mutamba and Chilubane, located in the provinces of Inhambane and Gaza, respectively.

Studies on mines, ports, railways and power plants are underway to test the viability of four large mines. One of these mines, the Zambezi project, is at an advanced stage, coal could be produced from 2016. We believe that the Zambezi has a very strong profile of production growth, which could reach more than 30 million tons of untreated coal per year.

We are currently coring throughout our areas of operation in Minjova and Tete and in order to evaluate the coal resources and quality.

Benga power plant:

We also carry out studies for a power plant at Benga, which will supply electricity to Rio Tinto mining operations, as well as to Mozambique and to South Africa. The project will create significant local economic benefits, creating over 1,500 jobs during the construction phase.

The proposed plant will use coal from Benga and future mining operations from Rio Tinto in Mozambique. The initial capacity is estimated at between 400 and 600 MW, with a design that will allow future expansion.

The environmental approval was given for up to 2000 megawatts.

Infrastructure: Current production and future growth is limited by the infrastructure.

The transport capacity of coal is insufficient to meet the needs of the current and future production from Rio Tinto and other coal mines.

Mozambique needs significant new investment in the coal chain, including ports and rail infrastructure.

As a whole, the future production of coal in Moatize Basin could reach 100 million tons per year.

To date, the railway line from Beira can carry about 2 million tonnes per year. The remodeling in progress and further work is necessary to enable the railway line to reach a capacity of 6 million tonnes per year.

We want to work with the government to optimize the infrastructure the industry needs, and help develop the social infrastructure also needed in Mozambique.

Our operations will be more efficient and productive, this will create more value for the host country and its people.

Building a culture of safety:

Wherever we operate, we aim to achieve zero accidents. From our first days in Mozambique, our challenge has always been to build a secure, efficient and sustainable coal company in Mozambique.

The security awareness is a key priority.

Form a local workforce:

Hire locally and develop the skills of Mozambicans is at the heart of the Rio Tinto approach.

During the construction of Benga mine, over 6,700 Mozambicans were employed, which 3200 belonged to the local community. The operations employ over 3,000 people (employees and subcontractors) and nearly 2700 of them are Mozambicans. In human resources, the Rio Tinto approach focuses on training and skill development to develop future talent.

In our training centre in Tete, 32,000 people are registered to date and more than 2,500 people have received training in various fields and at different levels.

A graduate program was also designed.

Today we are pleased to see that the economic benefits are already being felt in local communities.

We make an extra effort to reach the local business community. In collaboration with the CTA, the Centre for Investment Promotion and the Development Agency of the Zambezi, we held seminars in Zambezi, Sofala, Tete and Manica, where our acquisitions team presented our wide range of business needs and provided information to businesses on how to register in our database of suppliers.

In a few weeks, we will open a business center in Tete to help local businesses understand how they can become a supplier of Rio Tinto.

At Rio Tinto, our goal is to achieve a mutually beneficial approach and help them develop prosperous economies.

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