22862_Cover 22/2/08 17:31 Page 7

Review Issue 85 March 2008

Brave new world in

London W2

Return to nickel

Special supplement
Introducing Rio Tinto Alcan
22862_IFC-p01 27/2/08 14:23 Page 6

Cover: brave new world in W2 – the

reception area of Rio Tinto’s new regional
centre in London. Story, pages 8-12. Back
cover: members of a Richards Bay
community weed their squash plots. Story,
pages 13-15.

Rio Tinto
is a leading international mining group
headquartered in the UK, combining Rio Tinto
plc, a London listed public company, and Rio
Tinto Limited, which is listed on the
Australian Securities Exchange. Rio Tinto’s
business is finding, mining and processing
mineral resources. Major products are
aluminium, copper, diamonds, energy (coal
and uranium), gold, industrial minerals
(borates, titanium dioxide, salt, talc), and iron
ore. Activities span the world but are strongly
represented in Australia and North America
with significant businesses in South America,
Asia, Europe and southern Africa. The Group’s
objective is to maximize the overall long term
return to shareholders through a strategy of
investing in large, cost competitive mines,
driven by the quality of each opportunity, not
the choice of commodity. Wherever Rio Tinto
operates, the health and safety of its
employees is the first priority. The Group
seeks to contribute to sustainable
development. It works as closely as possible
with host countries and communities,
respecting their laws and customs and
ensuring a fair share of benefits and
opportunities.

Views expressed in “Review” are not

necessarily those of Rio Tinto. For
convenience, the expression Rio Tinto is used
to describe both Rio Tinto plc and Rio Tinto
Limited and companies within the Group,
even though these companies are generally
separate and independently managed.
Review

Editorial office Important information

2 Eastbourne Terrace
London W2 6LG
Telephone +44 02(0)7781 2000
Editors:
Hugh Leggatt
(hugh.leggatt@riotinto.com)
Cherry DeGeer
(cherry.degeer@riotinto.com)
with John Makin
(john.makin@surreyhouseuk.com)
Design and art direction:
Lawrence Edwards
Printed by Beacon Press using its
environmental print technology.
© Rio Tinto.
Permission to reprint any
article will usually be given
on application to the editors.
This publication includes “forward-looking
statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of
1934, as amended. All statements other than
statements of historical facts included in this
publication, including, without limitation, those
regarding Rio Tinto’s financial position,
business strategy, plans and objectives of
management for future operations (including
development plans and objectives relating to
Rio Tinto’s products, production forecasts and
mineral positions), are forward-looking
statements. Forward-looking statements are
based on numerous assumptions and involve
known and unknown risks, uncertainties and
other factors which may cause the actual
results, performance or achievements of Rio
Tinto, or industry results, to be materially
different from any future results, performance
or achievements expressed or implied by such
forward-looking statements.
22862_IFC-p01 27/2/08 14:23
Contents
4 8 13
Return to nickel
In Indonesia and North
America, working towards a
market foothold for a metal
increasingly in demand.
By Ralph Mills.
16 21 22
A mountain to climb
Statistically, the task looks
truly awesome. And, Peter
Brigg discovers, Eric
Finlayson’s Exploration teams
need to strike it rich to
provide a flow of new projects
for the Group.
Page 61
Brave new world in
London W2
Helen Plummer explores a
new Rio Tinto regional centre.
At a moment in time
Chris Morrissey shows how
one publication enshrines the
state of scientific knowledge,
250 years ago.
One Rio Tinto
With this issue, Review takes
on a whole fresh appearance,
adopting the Group’s new
corporate identity and colours,
and using a new range of
specially designed typefaces.
The new look is being
introduced progressively
during this year, providing
instant recognition, under a
single identity, of all the many
businesses that belong to Rio
Tinto around the world.
We hope you like it.
Seven pillars of
transformation
David Bannister looks at how
Richards Bay Minerals is
responding as the winds of
change re-shape South
Africa’s industry.
+
Special supplement
Introducing Rio Tinto Alcan.
You write, we read
Browsing through the editors’
postbag.
Rio Tinto Review
22862_p04-07 22/2/08 13:55 Page 2

Rio Tinto’s interest in Sulawesi, a

roughly star shaped island about the
same size as the UK that lies to the east of
Borneo, follows exploration work in the
early 2000s that demonstrated the
presence of a huge nickel deposit in the
centre of the island, enough to support
between 40 and 100 years of production.
This project, together with another
nickel project – Eagle, in the US – mark a
return to nickel for Rio Tinto. Though in
the past the company mined nickel in
Brazil and Zimbabwe, the metal has not
recently featured in its mining portfolio.
But the ever increasing appetite for
quality steels in China and other
emerging economies will be ready to
devour the output from both projects and
transform Rio Tinto into a world leading
nickel supplier.
In Sulawesi, that same tropical rainfall
that today can cause flooding, has, over
eons, weathered the igneous rocks of the
high plateau, both physically and
chemically. The result is a mushy,
waterlogged deposit called a laterite, and
as the weathered rocks contained
significant proportions of nickel, so does
the laterite.
In Indonesia and Nickel has been mined from laterites,
notably in nearby New Caledonia, since
North America, the late nineteenth century. However in
the early twentieth century the discovery
working towards a of vast nickel sulphide deposits at
Sudbury, in Ontario, shifted the focus,
market foothold and so, paradoxically, while laterites
represent approximately 70 per cent of
for a metal the world’s nickel resources, at present
they form only about 40 per cent of nickel
increasingly in production.

demand. Nickel tolerant

The natural presence of nickel-rich
By Ralph Mills. laterite produces a fairly barren
landscape characterized by stunted

Return to nickel
In July 2007, torrential rain fell on
the steep slopes of Morowali Province
in central Sulawesi, Indonesia.
The downpour resulted in floods and
landslides that engulfed a number of
villages, killing more than 50 people
and forcing thousands to abandon
devastated homes.
It was a major disaster that was little
reported in the West, but triggered an
immediate reaction from Rio Tinto
Indonesia. The company swiftly
implemented a relief programme that,
as well as providing immediate aid,
gave damaged communities long
term assistance.
rainforest and a nickel tolerant flora.
Generally unsuitable for agriculture, the
La Sampala area covered by the proposed
Rio Tinto mining contract is sparsely
populated and environmentally
impoverished due to the naturally
occurring exposure of nickel laterites.
The initial exploration successes have
been followed by a long and drawn out
negotiation process. Contract discussions
have been complicated by the location,
which not only involves the national
government but also straddles two
regional administrations. Mike Jolley,
president director of Rio Tinto Indonesia,
explained that he and his team of
negotiators are engaged in a race to
complete Contract of Work agreements
before new legislation is introduced.
The proposed Sulawesi project, which
because of the nature of the deposit will
be a shallow open cut mining process,

4 Rio Tinto Review

22862_p04-07 22/2/08 13:55 Page 3

Return to nickel

with continuous rehabilitation, is which will re-house an entire village, will be the first time that nickel metal has
planned initially to produce about involves the construction of 46 houses been produced in Indonesia.”
46,000 tonnes of nickel per annum, but using traditional designs but modern
with potential to increase to about materials and techniques. I’m pleased Forests and lakes
100,000 tonnes. The project will involve that both projects have been well received For very different reasons, water is a
the construction of an access highway by local people and by local and national hugely important issue in a mining
and a new seaport on the east coast of governments. project on the other side of the globe, in
Sulawesi. “We consider the Sulawesi deposit to Marquette County, northern Michigan.
“Local communities in Sulawesi and be one of the best undeveloped nickel On the south shore of Lake Superior, this
Indonesian national political parties are, resources in the world,” concluded Mike is a gently rolling, densely forested, rocky
naturally, excited by the economic Jolley. “Once we have achieved a Contract environment dotted with lakes and laced
potential of a Rio Tinto project,” said Mike of Work we can proceed with a feasibility with innumerable streams that tumble
Jolley. “However they might have become study. The project is likely to involve over waterfalls and feed rivers inhabited
puzzled and not a little worried by a capital costs of around US$2 billion, but by game fish such as coaster brook trout.
perceived lack of activity on the ground. will result in significant flow-through With moose, deer, wolves and black
To keep the project ‘alive’ in people’s benefits to both the island and nation. It bears, it’s an environment about which
minds, but without raising unrealistic
expectations, Rio Tinto is committed to
investing US$500,000 in a long term,
broad based community development
programme that is currently being
planned and which will take place
whatever the outcome of negotiations.
“The Morowali disaster kick started
this concept in a meaningful way, and we
committed US$250,000 to providing relief
in the areas affected by the flooding. We

. . . the ever increasing

appetite for quality
steels in China and
other emerging
Devastation in Sulawesi. After torrential
economies will be rains (above), Rio Tinto implemented a relief
programme that provided immediate aid and
ready to devour the shelter (left and below) as well as long term
assistance.
output from both
projects and
transform Rio Tinto
into a world leading
nickel supplier.
began with an immediate contribution of
food, medicines, clothing and temporary
accommodation. Rio Tinto purchased the
materials and arranged shipment to
Sulawesi, where the aid was distributed
by teams from Tadulako University, with
whom we were already working closely
on the mining project.
“We then asked local communities and
the university what we should do next,
and together we created a scholarship
programme that will ensure that the
education of 50 children from flooded
communities is not adversely affected.
A second Rio Tinto funded project, again
managed by Tadulako University, and

Rio Tinto Review

5
22862_p04-07 22/2/08 13:55 Page 4
people care very much, whether they live
in its midst, or hunt, hike and fish
amongst its watercourses and woodlands.
Its rocks are ancient – the Porcupine
Mountains are the oldest in the US – and
below the surface in the sparsely pop-
ulated Michegamme township, north
west of Marquette city, lies a rich deposit
of nickel sulphide – Eagle – discovered in
2002 by Rio Tinto.
When I spoke to the Eagle project
general manager Jon Cherry in December
last year he was on tenterhooks, for later
that day the Michigan Department of
Environmental Quality (MDEQ) was due
to give its final decision on crucial mine,
air, and groundwater discharge permits. It
was to be the climax of several years of
6 Rio Tinto Review
effort that had resulted in an 8,000 page
submission from the operating company,
Kennecott Minerals. The MDEQ had also
received 1,000 pages of submissions from
local environmental organizations. If
granted, Eagle’s permit would be the first
issued by Michigan under its 2004
nonferrous metallic mine law, considered
to be the most stringent in the US.
Looking back on this hectic period, Jon
Cherry said: “I think it demonstrates
Kennecott’s concern for the environ-
mental aspects of the project that instead
of following tradition and appointing a
mining engineer to plan the mine, they
appointed me – an environmental
engineer.”
Environmentalists had argued that the
Because the mine
will have such a
small footprint, locals
can continue to use
the area
for
recreation,
and after
it is
exhausted,
nothing
will remain on the
surface.
Above, Jon Cherry, the environmental
engineer who heads the Eagle project.
Left, spawning streams for coaster brook trout
on the southern shores of Lake Superior are
protected under the mine plan.
Right, studying the hidden strata:
geophysicist Emil Mateicivc (far right top)
and geologist Andrew Ware (far right bottom),
use seismic methods to build a profile of the
mineralization below ground.
After drill samples have been taken (below
right), the holes are plugged with cement
grouting (right).
mine would endanger nearby water-
courses, asserting that “no sulphide mine
is ever safe”.
“We can easily demonstrate that that
isn’t so,” said Jon Cherry. “Over the border
in Wisconsin, Kennecott operated the 180
acre Flambeau copper mine right next to
the Flambeau River for five years without
a single environmental incident. That
mine has now been closed for ten years
without any further incident, and we’ve
just received a Certificate of Completion,
which means that we’ve fulfilled all our
obligations and have been refunded 80
per cent of our bond, the largest amount
allowed.”
The orebody at Eagle is approximately
300m from top to bottom, and Jon Cherry
22862_p04-07 22/2/08 13:56 Page 5
explained that it will be mined
underground using long hole stoping, a
process that involves infilling excavated
chambers with cement and waste rock as
mining proceeds, starting at the bottom
of the orebody. No waste rock will be left
at the surface after closure, as it will all be
consumed during the backfill process.
The orebody will be reached by a long
inclined tunnel that will minimize any
risk of interference with the nearby
watercourses. Extracted nickel ore will be
shipped to a local mill and then, in
concentrated form, to Canada for
smelting and refining.
Because the mine will have such a
small footprint, locals can continue to use
the area for recreation, and after it is
exhausted, nothing will remain on the
surface.
Jon chuckled as he explained that the
treated water from the mine will have to
be stored in holding tanks to prevent the
entry of rainwater before it is released
into the environment. “My treated water
is allowed to contain only two nanograms
of mercury per litre – that's parts per
trillion – but Michigan rainfall already
contains 20 nanograms of mercury per
litre – I can’t let them mix! The treated
water will be of better than drinking
water quality.”
Ironically, Eagle’s engineering
challenges are relatively simple from a
mining point of view, but complex
environmental issues have meant that Jon
Cherry has spent a lot of time and effort
liaising with local communities and
organizations. “It’s been important to us
that we’ve listened to and addressed
people’s concerns, and we will continue
our efforts to engage with residents as the
project moves forward.
“From a personal perspective I’ve been
involved with environmental issues for
the last 18 years. In my previous roles my
job involved the remediation of
environmental legacy issues at existing
mines. Eagle was an opportunity to take
on the design of a greenfield project and
to do it right from the outset, using what
we have learned from the past. It was an
opportunity I couldn’t pass up.”
Later that day the Michigan
Department of Environmental Quality
issued the three permits for which Jon
had been waiting. His reaction: “This is
good news not only for Kennecott, but
Return to nickel
Not just for nickelodeons
Nickel is almost always used in
alloys with other metals, the most
familiar of which is stainless steel.
While its most dramatic uses
include replacement joints,
surgical instruments and heart
stints, it has many more run of the
mill applications in pots and pans,
in aeronautics, in motor vehicles
and computers, and in hydrogen
fuel cells. Alongside the five cent
US “nickel” coin, the metal is also
used in other coinage, including
the Euro.
also for job creation, building a stronger
economy, and providing additional
opportunities for area businesses to grow.
We are very pleased that our efforts over
the last several years to work with
regulators and many parties in the
community to develop a good, environ-
mentally responsible project have been
realised. We look forward to getting the
project under way.”
Commenting that the public
involvement had been a positive factor
and had helped his organization “beef up”
some aspects of the permits, an MDEQ
spokesman pointed out that: “The reality
is that this review process is one of the
most rigorous that’s ever been done
probably in any state in the nation for a
project like this.”
Rio Tinto will invest some US$300m in
the Eagle mine, which will become the
only primary nickel mine operating in the
US. Construction work will begin this
year, with ore production starting in
2009. The mine is targeted to produce
about 16,000 tonnes of nickel per year for
seven years.
When he heard that the permits had
been granted, Bret Clayton, Rio Tinto’s
chief executive, Copper, commented:
“Eagle gives Rio Tinto a valuable
opportunity to enter the market for
nickel, demand for which is rising
strongly led by the development of new
infrastructure in developing economies.
“In ten years’ time, Rio Tinto could
rank among the top nickel producers
globally.”
Ralph Mills is a writer and archaeologist
based in Nottingham, England. For an
absorbing depiction of life in Upper Michigan
where the Eagle project is located, see the
crime novels of Henry Kisor – especially
“Venture into murder” which includes some
interesting mining background alongside
seedy goings on at a disused copper mine.
Rio Tinto Review
7
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Brave new world

in London W2
Helen Plummer
explores a new
Rio Tinto regional
centre.

8 Rio Tinto Review

22862_p08-12 22/2/08 14:01 Page 3
Walk through the glass doors of No. 2
Eastbourne Terrace, London W2 and you
are entering the bricks and mortar
embodiment of a new brand and working
ethos for the global business.
Significantly, the airy ground floor
reception area – and every floor of the
detached corner site building – is
transparent, with floor to ceiling windows
flanked by thin strips of pure white carera
limestone and aluminium. Frequent
visitors to the organization will not fail to
notice the contrast with the rather more
opaque, somewhat inscrutable, exterior
of the Group’s former long term London
home, 6 St James’s Square. Left behind is
the dark wood panelling and imposing
formality of the entrance hall to No. 6.
Instead, white flooring and natural light
provide emphasis for the polished
aluminium blades which rise up at angles
from the floor all over the double height
foyer and provide anchorage for
suspended glass boxes of artfully lit
mineral samples. On the far walls,
contrasting geometric strata panels
represent different metals – copper, zinc,
iron. The effect is dramatic and
contemporary, spelling out the message
that this office houses a thoroughly
modern mining company.
Here, the visitor is greeted by the smell
of freshly ground coffee and a sleek low
level reception desk, set back from the
entrance. The impact is of a professional
but unimposing welcome, with an array
of reception, work and social facilities.
To the right is a circular arrangement
of computer terminals that resembles the
control panel of Dr Who’s tardis, where
the first time guest is asked to run
through an audio visual presentation on
site health, safety and etiquette.
Over on the other side, relax with a
complimentary cappuccino from the
foyer’s high street style coffee shop on an
inviting mix of seating; choose from
stylish easy chairs in white leather or
noodle bar type benches and tables. Or
settle in to the red wifi visitors’ station –
arrive early for your meeting, plug in and
check on your emails.
This is Rio Tinto’s Paddington Regional
Brave new world in London W2
Centre, the Group’s new European base,
and workplace for 550 people brought
together under one roof from St James’s,
and offices in Chiswick, Guildford and
Bristol. The “brave new world”
description is that of Neil Usher, general
manager – Group Property. “We wanted
this to be a building that speaks to you,
that is lively and buzzy,” he says. “St
James’s was a very traditional office, a
corporate statement. This move has
allowed us to create a much more
accessible working environment that
encourages fully collaborative working
and reflects the new Rio Tinto brand.”
Gone are the hushed corridors,
individual offices and intimidating closed
doors of St James’s. Pass from reception to
the core of the building here in
Paddington and you are thrust into a
bustling, animated environment. Each
floor is completely open. Workstations –
not in rows, but with layouts that allow
for both collaborative and individual
working – are grouped together, with no
apparent delineation of status. These are
punctuated by curved wall meeting
“capsules”, designed for either one on one
discussions, or individual “telebooths”, for
confidential phone calls or quiet work
times. To avoid “camping out” in these
rooms, which are not bookable and
available on a spontaneous “drop in”
basis, there is no power source – so an
individual can only work in there for as
long as the battery on his or her phone
and laptop will last.
The open staircase (there are lifts, but
all are encouraged to use the stairs as
much as possible) passes through the
“mix area” of each floor. It is in these
sections, each kitted out with a
contemporary look kitchen area and café
style tables, where staff can prepare
drinks, catch up on newspapers and
professional journals, monitor the
fortunes of the FTSE on the plasma
screen, or hold informal meetings or
discussions with colleagues.
Outdoor work
And, British climate permitting, the
building offers Rio Tinto people with
something quite unusual for central
London — outdoor work space. Three of the
floors open out onto large, curved terraces,
attractively landscaped with ornamental
grasses, sustainable wooden seating and
tables.
There are also bigger, enclosed areas
for “meet ins” (internal meetings), “meet
outs” (external meetings) and
brainstorming (write-on white walls, bar
stools and easy chairs). Even the
reception area and the restaurant on the
sixth floor can be used as venues for
informal meetings.
Rio Tinto Review
9
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Brave new world in London W2

Everyone based in
the building has a
designated desk,
but the idea is that
anyone can work
anywhere in the
building. Wifi
access is everywhere,
even on the
outdoor terraces.
Workstations are
entirely flexible,
deliberately so.

“We have at least ten different types of
work space in the building,” explains Neil
Usher. “We wanted the environment to be
as flexible as possible, to allow
collaborative working and greater
communication, whilst accommodating
the need to be able to work quietly and
confidentially as well. People may choose
to move between different work spaces
according to the type of work they are
doing at any one time.”
Occupying a corner site and being
entirely detached, 2 Eastbourne Terrace is
roughly square shaped, but with five
rounded corners. The impact of this on
the interior, coupled with the layout, and
curved walls of the capsules and pods, is
that it feels like a circular space. This is
something which Neil believes
encourages “energy flow”. “Introduce
straight lines and you lose energy,” he
says. “And this way, we’ve avoided having
any corridors, circulation space is
integral.”
Circulation space is vital to the new
business culture; no one should feel
chained to their desk. It is intentional too
that the staircase is not tucked away to
one side, but that it threads through the
hub of the working areas, encouraging
people to meet in passing, to integrate,
communicate, collaborate. It’s what’s
known in the trade as “forced collision”.
Graphic reminder
Interior curved walls, stairwells and
meeting areas are decorated with giant,
dramatic images of Rio Tinto locations
and products, printed directly onto the
wall in vinyl for durability. There’s no
corporate art collection here, rather a
“graphic reminder of who we are”,
according to Neil. And with a number of
previously dispersed functions coming
together in one location, he believes that
it will bring people closer to the core
businesses. “It won’t be unusual here, for
example, to bump into a geologist
brandishing a mineral sample,” he says.
Everyone based in the building has a
designated workstation, but the idea is
that anyone can work anywhere in the
building. Wifi access is everywhere, even
on the outdoor terraces. Workstations are
entirely flexible, deliberately so. All
employees have laptops, which slide on to
a pedestal-mounted dock below the desk
top. Phones, also on a mounted shelf
above the desk, are on a “follow me”
system – work in any area of the building:
log in and the phone in front of you
becomes yours. Coats and jackets are
hung in central cupboards, not slung on

10 Rio Tinto Review

22862_p08-12 22/2/08 14:02 Page 5
the backs of chairs; desks are cleared at
the end of every day, with papers locked
away in pedestal units and filing
cabinets. The only items left out are
keyboard, monitor, mouse and phone.
The aim is not to create some sort of
“Big Brother” style regime, but to preserve
confidentiality at unattended work-
stations and to ensure usable spare desks
are available for visitors.
Reactions to working in this way have
been, so far, highly positive. People in the
building have embraced the new culture
readily and proved their adaptability. For
the switchover from St James’s Square in
December, packing took place on a Friday
before the weekend move; by 12 noon on
the Monday every crate was unpacked
and work had resumed.
The speed of the operation was
undoubtedly facilitated by a nine month
campaign led by Rio Tinto’s relocation
team before the move to reduce the
amount of paper used and stored by the
Group. Swathes of paper based material
were reviewed. Required data was stored
electronically before the paper itself was
recycled. All were encouraged to think
digitally wherever possible and change
habits where paper use was concerned.
The aim in the new workplace is for at
least a 25 to 30 per cent reduction in
paper use. There are no waste bins by
workstations; staff take all material to
colour coded recycling bins (confidential
paper; dry recycling including bottles,
cans and plastic; wet waste) in the mix
areas. The idea behind this is that if you
have to dump waste elsewhere, you will
think twice before generating it in the first
place.
All those who work in the building
Brave new world in London W2
Aldermanbury Square
The new working environment of
the Paddington regional centre is
mirrored in microcosm by Rio
Tinto’s corporate office at 5
Aldermanbury Square in the City
of London, whence a lean team of
50 people who work on corporate
development and strategy
relocated late last year.
This 1,450sq.m space is on the
twelfth floor of a brand new
landmark development and offers
all the same workplace amenities,
including a small restaurant and a
range of meeting and support
areas.
“The office at Aldermanbury
Square will provide a first class
platform for our interface with the
financial community and excellent
facilities for engaging with visiting
stakeholders,” said chief executive
Tom Albanese of the move.
have been issued with the OneCard,
which besides its function as a security
pass and eligibility for lunch in the in
house restaurant, acts as a licence to use
the shared multifunctional devices for all
print, copy, scanning and fax needs. Once
you’ve pressed “print” on your laptop, you
need to visit the nearest printer to use
your OneCard and release the paperwork.
Anything not printed out by midnight
that day is automatically cancelled –
doing away with those piles of documents
that often languish uncollected in the
printer tray. High speed quality scanners
are available in all the central resource
areas to help keep paper to a minimum.
Photocopiers are set by default to black
and white.
Saving paper
Nowhere was the drive to reduce paper
more key than in the new Information
and Resource Centre, a phone free haven
on the lower ground floor, where the
original five libraries spread across the
Bristol, Guildford and St James’s offices
have come together – a Herculean task
that involved reducing over 1,000 linear
metres of reference material by over half.
Now available to all UK employees, who
can chose to work inside, or outside in
its landscaped patio area, this is the
central resource for publications and
subscriptions in the region, thus
consolidating costs and cutting the
numbers of journals imported to the
organization.
“The new building has given us the
chance to challenge everything,” says
Sean Jones, Facilities manager. “We’ve
Rio Tinto Review
11
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Brave new world in London W2
looked at every aspect of office life and
rethought the environmental impact of
what we do.” This really does mean
everything: stationery, 63 per cent of
which is now from recycled materials;
corn starch coffee cups; the eco friendly
range of cleaning products used by the
contract cleaners; desk chairs and
flooring, made almost entirely from
recycled matter.
All unwanted furniture and equipment
from the old offices was either dispatched
for use in other Group locations or sent
to Greenworks, an organization which
recycles or resells ex-office furniture.
Nothing went to landfill.
Take lunch in the Clove restaurant on
the building’s top floor, a chic, light filled
space with views over the London skyline
and the option of an outdoor terrace, and
you could be forgiven for thinking you’d
wandered into some smart West End
eatery. On the menu here are healthy,
plated hot meals and sandwiches made as
far as possible from locally sourced
products, with “food miles” kept to a
minimum.
Transport links
Since transport links for the premises are
second to none – it’s a stone’s throw from
Paddington railway station, with its
Underground and bus connections, all
are encouraged to use public transport to
travel to and from work or between
meetings.
It goes without saying that the
workplace is fully geared up with state of
the art video conferencing, thus reducing
the requirement for air travel, but there
will inevitably still be some need for
overseas traffic. Rio Tinto visitors
landing at Heathrow can hop on the
Heathrow Express, which runs to and
from Paddington station. Those who
arrive long haul, jaded and jet lagged in
the early hours, can check into one of
the building’s two guest suites, open
between 5am and 11am and equipped as
well as any hotel room, to catch up on
some sleep and take a shower before
meetings.
“We’ve taken a holistic approach,” adds
Sean Jones. “It’s no good having an office
built and running to the highest of
environmental standards, if the people in
it are not operating in that way too.”
The building itself fulfils the most
stringent of environmental criteria.
“We’ve got very advanced building
management systems,” explains Neil
Usher, “making the office as efficient as
possible in terms of heating and cooling.
There are intelligent lighting systems, so
that lights do not stay on when there is
no need for them, energy efficient bulbs
and presence detectors on all the taps.”
12 Rio Tinto Review
Clove
It’s one of the first things visitors to
the Paddington Regional Centre will
notice – a 7m high abstract sculpture,
loosely based on a tree. The work of
sculptor Bryan Kneale, “Clove”
stands outside the building in a paved
area to the east, flanked by live
topiary. The choice of materials,
stainless steel in a combination of
highly polished and matt satin
finishes supported by a copper
“trunk”, is clearly no coincidence.
All new buildings in London are
obliged to display a piece of public
art, but the developer’s original
proposal of two glass statues to be
erected in the entrance did not
accurately reflect Rio Tinto’s
business, so the Group commissioned
its own work. Neil Usher explains,
“We wanted a landmark that would
be seen as a valuable addition to
public art in the capital and would
demonstrate our appreciation of
contemporary British sculpture.” Its
title has lent a brand name to the
building’s Clove coffee bar and
restaurant.
Despite the limited availability of
renewable energy on a commercial scale,
the building’s electricity is entirely
supplied by the energy company Npower
from renewable sources – wind power,
along with other means including the co-
firing of biomass and hydropower.
Energy efficient
Russell Durling of the building’s original
developer, Derwent London, explains
that the mix of stone and glass that
graces the exterior is carefully designed
to follow the path of the sun. “Because of
the structure’s prominent corner plot
position,” he says, “we designed it so that
it is about 40 per cent solid and the
patterning of stone versus glass varies
across the structure to mask the sun
where it is at its highest in mid summer.
This means less solar gain and is more
energy efficient.”
Down in the engine rooms of the
building is Sean Jones’ pride and joy – a
rainwater harvester tank. Water collected
from the roof is used to flush the
building’s toilets. As far as Sean knows,
there is only one other such in a
commercial property in central London –
at the O2, the former Millennium Dome.
Sean also has high hopes – yet to be
realized – of installing a wormery for
organic waste from the restaurant.
All this adds up to the high rating of
four out of five on the BREEAM scale – an
environmental assessment method that
can be applied to new and existing
buildings. “It’s pretty much as good as you
can get in central London,” explains Neil.
“If we were on a greenfield site, then we
might have been able to achieve an
‘excellent’ rating, that is five out of five,
but there are some limitations imposed
by our location – it’s just not practical to
have a bio-mass fuel boiler in central
London, for example. Getting a ‘very
good’ ranking is quite an achievement.”
It’s one of many achievements chalked
up at the Paddington Regional Centre,
but no one is resting on their laurels.
With this site and the new corporate
office at Aldermanbury Square in the City
of London up and running, there is now a
blueprint for other new Rio Tinto regional
centres around the world – Brisbane,
Perth, Salt Lake City, Montreal and
possibly other locations will all follow this
model. “Paddington has set a global
workplace standard and established a
very different business environment,”
says Neil. “This is the first in our global
‘brave new world’.”
Helen Plummer is a freelance writer based in
Oxfordshire, England.
22862_Cover Supplement 22/2/08 14:18 Page 7

Profile Supplement to Review magazine

March 2008

Rio Tinto Alcan:

we have lift off!
22862_IFC-p01 Supplement 27/2/08 16:52 Page 6

smelters clustered within easy reach of

Rio Tinto Alcan:
we have lift off!
Front cover: aircraft wing built
at Alcan’s Issoire plant in
France. Back cover: the new
power station completed at the
Weipa mine in Queensland.
Profile
Tom Albanese,
Rio Tinto’s chief
executive, welcomes
you aboard for this
special supplement
Welcome to this special supplement of Review,
covering our much enlarged aluminium
product group, Rio Tinto Alcan.
Shortly after Rio Tinto’s acquisition of Alcan
was completed last October, Dick Evans, the
chief executive of Rio Tinto Alcan who is
interviewed on pages 8-13, took me on a visit
to Alcan’s operational heartland north of
Montreal in Canada.
I was really impressed. The Saguenay-Lac-
St-Jean region is an area with a catchment
basin the size of Switzerland. Its network of
fast flowing rivers and man made lakes feeds
into a hydroelectric system of six power
stations whose maximum production capacity
reaches more than 2,680 megawatts of clean
electricity.
This sustainable power source is the key to
low cost production at four aluminium
tidewater on the St Lawrence seaway.
The region represents an industrial
complex that cannot be duplicated and
something which in anyone’s definition
makes it a first tier set of assets in the
aluminium industry today. And this is just
part of Rio Tinto Alcan’s strong set of
aluminium assets.
The integration with Alcan is going well. It
adds five bauxite deposits, five alumina
refineries, 22 aluminium smelters, and 12
power generating facilities to Rio Tinto’s
complement of one mine, two alumina plants,
four smelters and one power facility. We are
now confident in raising our target of
achieving synergies of US$940m a year in
operating cost savings, starting with the full
year 2009.
Besides giving you an in depth overview of
the largest and most exciting expansion of Rio
Tinto’s asset portfolio to date, this supplement
highlights opportunities created by bringing
Alcan into the Rio Tinto Group and the
potential for continued strong growth in the
aluminium sector.
In the following pages our writers give you a
profile of the original Alcan, its successor
Rio Tinto Alcan, an overview of the mineral
resources that underpin our production of
aluminium, the advanced technology involved
in producing it, and a gallery of pictures of the
operations that now form part of Rio Tinto’s
global outlook.
We hope you enjoy this first class seat for
your visit to the new Rio Tinto Alcan.

Rio Tinto Review Important information

Editorial office This publication includes “forward-looking
2 Eastbourne Terrace statements” within the meaning of Section 27A
London W2 6LG of the Securities Act of 1933, as amended, and
Telephone +44 02(0)7781 2000 Section 21E of the Securities Exchange Act of
1934, as amended. All statements other than
Editors: statements of historical facts included in this
publication, including, without limitation, those
Hugh Leggatt
regarding Rio Tinto’s financial position,
(hugh.leggatt@riotinto.com)
business strategy, plans and objectives of
Cherry DeGeer management for future operations (including
(cherry.degeer@riotinto.com) development plans and objectives relating to
with John Makin Rio Tinto’s products, production forecasts and
(john.makin@surreyhouseuk.com) mineral positions), are forward-looking
Design and art direction: statements. Forward-looking statements are
Lawrence Edwards based on numerous assumptions and involve
known and unknown risks, uncertainties and
Printed by Beacon Press using its
other factors which may cause the actual
environmental print technology.
results, performance or achievements of Rio
Tinto, or industry results, to be materially
© Rio Tinto. different from any future results, performance
Permission to reprint any or achievements expressed or implied by such
article will usually be given forward-looking statements.
on application to the editors.
22862_IFC-p01 Supplement 22/2/08 15:51 Page 61

Contents

4 8 14
Come fly with us
Hugh Leggatt is tour leader,
explaining how Rio Tinto
Alcan pushes out the Group’s
boundaries around the globe.
Meet the skipper
Peter Brigg talks to Dick
Evans, the man who heads Rio
Tinto Alcan, now the world’s
biggest aluminium business.
Down to earth
Chris Morrissey focuses on
bauxite, the underlying
compound from which
aluminium is derived.

18 21
Reach for the sky
Julian Cribb reports on how
Bird’s eye view
Stepping back to look across
the formation of Rio Tinto the years is Mike Reilly,
Alcan has united the world’s reflecting on over a century of
top metallurgical R&D teams Alcan history.
in a worldwide drive to make
aluminium the twenty first
century’s greenest metal.

Rio Tinto Alcan Profile

22862_p04-07 Supplement 27/2/08 15:14 Page 2
COME
FLY
WITH US
Hugh Leggatt
is tour leader,
explaining how Rio
Tinto Alcan pushes
out the Group’s
boundaries around
the globe.
Rio Tinto acquired Alcan Inc on 23
October, 2007, in the biggest mining
industry transaction so far, forming a
combined aluminium business now
known as Rio Tinto Alcan, one of Rio
Tinto’s five product groups.
Rio Tinto Alcan comprises a set of high
quality, integrated aluminium businesses
with a global reach encompassing every
continent. On a world map showing Rio
Tinto’s operating locations, Rio Tinto
Alcan brings more dots clustered in
eastern Canada, more mines and smelters
in the UK, Europe and Africa. From north
and south, Iceland and eastern Brazil join
the line up, and Rio Tinto has its first
operation in China, a smelter in
Qingtongxia.
Rio Tinto Alcan comprises 25
aluminium smelters in 13 territories
(including joint ventures), largely in
OECD countries. Crucially, the production
base contains many of the world’s most
modern and low cost smelters, fitted out
with Rio Tinto Alcan’s industry-leading
AP (Aluminium Pechiney) Series
technology.
In terms of production, Rio Tinto Alcan
is number one globally in the raw
material bauxite (capacity 34.8 million
tonnes per year) and aluminium (capacity
4.1 million tonnes per year). In alumina –
the intermediate product refined from
bauxite and smelted into aluminium –
4 Rio Tinto Alcan Profile
Rio Tinto (US$12.6bn)
Copper 40%
Aluminium 10%
Iron Ore 30%
Energy 11%
Diamonds
and Minerals 9%
Rio Tinto (US$23.4bn)
Canada 13%
Other 6%
Australia/NZ
58%
US 23%
Rio Tinto Alcan is number four globally
with a capacity of 9.1 million tonnes per
annum. With expansions in alumina
production under way, Rio Tinto is
expected to become the leader in this
commodity as well. There are plans to
double current alumina production by
2015.
Rio Tinto Alcan is also a leader in
aluminium industry technology which,
combined with access to large and
sustainable hydroelectric generating
capacity, constitutes a significant
competitive advantage of increasing
value in a world in which carbon
emissions are expected to be constrained
to combat global warming.
The combined group also has a strong
project development portfolio with six
Notes to the charts
Product analysis: Rio Tinto 2006 EBITDA
includes Rio Tinto’s share of equity accounted
units. Rio Tinto 2006 audited IFRS financials
from 2006 annual report. Alcan 2006 audited
US GAAP financials from 2006 10K. Rio Tinto
has not assessed the potential impact of
adjusting accounting policies of Alcan to those
of Rio Tinto. (a) Alcan upstream EBITDA
calculated as total Alcan EBITDA less Alcan
Packaging and Engineered Products Business
Group Profit. Source: Company information.
Rio Tinto & Alcan (US$6.5bn)
Copper 30%
Downstream
Aluminium 7%
Upstream
Aluminium 25%
Iron Ore 23%
Energy 8%
Diamonds
and Minerals 7%
Rio Tinto & Alcan (US$44.1bn)
Other 4%
Europe 14%
Canada 26%
US 16%
Australia/NZ 40%
projects planned or under way in bauxite
and alumina and eight more in
aluminium. Smelter upgrades are planned
in Quebec and British Columbia, Canada.
In addition, new greenfield developments
are at various stages in South Africa,
Oman, Abu Dhabi, Malaysia and Saudi
Arabia.
Rio Tinto Alcan is currently organized
into four business units: Bauxite &
Alumina based in Brisbane, Australia;
Primary Metal based in Montreal,
Canada; and Engineered Products and
Packaging, both based in Paris, France. At
the time of the acquisition, Alcan had
announced plans to divest the Packaging
division. Subsequently, Rio Tinto said it
would explore divestment of Engineered
Products to focus on upstream mining
Geographic analysis: Rio Tinto based on IFRS.
Alcan based on US GAAP. Rio Tinto has not
assessed the potential impact of adjusting
accounting policies of Alcan to those of Rio
Tinto. Alcan packaging and engineered
products divisions represent 14% of total assets
shown and are broken down: 59% Europe, 26%
US 4% Canada, 10% other. (a) Rio Tinto based
on PP&E, intangible assets and goodwill at 31
Dec. 2006, as provided by Rio Tinto. (b) Alcan
assets based on Gross PP&E as of 31 Dec. 2006
(c) Other includes South America, Africa, Asia
and other Pacific, and all other.
22862_p04-07 Supplement 22/2/08 15:42 Page 3

A thoroughly modern metal

Aluminium is a modern metal and one of

the most versatile and thus in demand
from all quarters. Almost every
aluminium product can be profitably
recycled repeatedly without loss of metal
quality. Recycling aluminium uses only
five per cent of the energy needed to
produce the primary metal from bauxite.
Its light weight and strength make it
ideal for automobile engines and
bodywork, as well as shipbuilding and
aircraft manufacture. In the home the
non corrosive properties and ductility of
aluminium make it ideal for doors,
window frames, roofing and insulation. It
makes convenient packaging material as
aluminium foil, drink cans and wrap.
Because it is a good conductor of
electricity, aluminium is used in the
manufacture of electrical wire and
transmission cable.

Rio Tinto Alcan Profile

5
22862_p04-07 Supplement 22/2/08 15:42 Page 4

6 Rio Tinto Alcan Profile

22862_p04-07 Supplement 28/2/08 15:00 Page 5
and processing activities.
The combined aluminium
business is expected to yield
US$940m a year in operating
synergies. For example, in Australia
complementary assets are being
combined, such as the giant
Weipa/Ely and Gove bauxite
deposits located on the Gulf of
Carpentaria, aligned with
processing facilities in Gladstone,
Queensland.
The alumina refinery at Gove in
Northern Australia is currently
powered by fuel oil. Leveraging Rio
Tinto’s experience at Yarwun in
Gladstone, where a gas fired
cogeneration facility will be
installed in the expanded refinery
under construction, Gove could be
converted to an alternative energy
source. Gove has limited reserves;
however, Weipa bauxite could
eventually be processed by the
refinery which could lengthen its
operating life.
The concentration of three
alumina refineries in north east
Australia presents significant
procurement opportunities for such
raw materials as caustic soda. There
are also savings available globally in
research and development,
procurement, financial and fiscal
integration and typical corporate
and other overheads.
Global aluminium demand is
growing strongly, at an expected
rate of five to six per cent each year
to 2011. In 2007 it increased by ten
per cent, its fastest rate in recent
history, with China accounting for
most of the growth. Besides strong
Chinese consumption, increased
marginal costs of Chinese supply
will continue to support prices.
Hugh Leggatt is one of “Review”
magazine’s senior editors, and
principal adviser, Editorial, Rio Tinto
Communications & External Relations,
based in London.
Come fly with us
The team leaders
In October last year, Rio Tinto Alcan
appointed its senior management
team when the product group was
formed. The leaders of its business
units were named as:
Steve Hodgson (formerly Rio Tinto
Aluminium): president and chief
executive officer, Bauxite & Alumina,
with responsibility for bauxite mines,
alumina refineries and specialty
alumina businesses worldwide,
headquartered in Brisbane.
Jacynthe Côté (formerly Alcan):
president and chief executive officer,
Primary Metal, with responsibility for
all primary metal facilities and power
generation installations worldwide,
headquartered in Montreal.
Christel Bories (formerly Alcan):
president and chief executive officer,
Engineered Products (to be divested).
The headquarters are in Paris, France.
Packaging (to be divested) is led by
Ilene Gordon (formerly Alcan) as
president and chief executive officer,
headquartered in Paris, France.
Executive staff functions are led by:
Phillip Strachan (formerly Rio Tinto
Aluminium), Finance, also
responsible for Business Planning
and Analysis, Information Systems &
Technology, and Business
Improvement, as well as being
co-leader of the Rio Tinto Alcan
integration team with Jean-
Christophe Deslarzes (formerly
Alcan) in Human Resources, who is
also responsible for Health, Safety
and Environment (HSE). As senior
vice president, Business
Development, Sandeep Biswas
(formerly Rio Tinto) is responsible for
business development in the
upstream business units, technology
sales, growth, and product group
strategic alliances and investments.
Corey Copeland (formerly Alcan),
Communications & External
Relations, will also be responsible for
Government Relations and
Sustainable Development. Pierre
Chenard (formerly Alcan) leads the
legal function as vice president and
senior counsel. Oscar Groeneveld,
who was previously chief executive of
Rio Tinto Aluminium in Brisbane, is
leaving the role after being an adviser
on integration through the transition
period.
Rio Tinto Alcan Profile
7
22862_p08-13 Supplement 22/2/08 15:52 Page 2

MEET
Born and raised on a cattle ranch in Oregon, Dick Evans might
easily have become a cowboy. With his tall, rangy frame and Lee
Van Cleef moustache he would certainly have looked the part
roping steers and riding herd. But instead he elected to follow a

THE very different career path, taking an engineering degree and then
joining the aluminium industry. Now, after nearly 40 years in the
business, Evans finds himself heading Rio Tinto Alcan, the world’s
biggest aluminium business.

SKIPPER The period leading up to and immediately following the

completion of Rio Tinto’s acquisition of Alcan in November was a
particularly demanding time for Alcan’s former CEO, but the
months ahead look no less challenging, as he plans and imple-
ments the integration of the two companies’ aluminium interests.
The integration process is not an activity Evans comes to as a
Peter Brigg talks to stranger. In his days at Alcan he was responsible for overseeing the
merging of the company with the Swiss based Algroup, acquired in
Dick Evans, the 2000, and then, in 2003, for Alcan’s acquisition of the French
company Pechiney, the world’s fourth largest producer of
man who heads aluminium products.
Even before the ink was dry on the Rio Tinto deal, Evans was
Rio Tinto Alcan, shuttling between the various plants in the expanded Aluminium
group, familiarizing himself with Rio Tinto’s facilities and meeting
now the world’s the people who would help form his new team. Likewise, Rio Tinto
people have been getting to know their new Alcan colleagues, with
biggest aluminium teams of six to eight people from both sides visiting each smelter
and refinery, exchanging ideas and discussing best practice. There
business. has already been a lot of movement between Montreal and
Brisbane, in both directions, and Evans expects this cross
fertilization to continue and intensify.
“I have become a great believer in the people side of
management,” he avers. “In my early days as a manager, my
approach probably echoed my training as an engineer – it tended
to be analytical and numbers oriented. Over the years, though, my
management style has evolved and mellowed. Nowadays I’m much
more informal, participative and, I hope, ‘transparent’.
“When I say ‘My door is always open’ I really mean it. I welcome
people stopping by to give me the benefit of their thinking,
regardless of their position in
. . . first is the organization. And, thanks to
email, employees now have
to develop a access to the chief executive no
matter where they may be in the
transition plan world.”
Evans explains that to help
that will bring him direct the merging of the
two companies’ aluminium
the two interests he has set up a top
level integration office,
organizations composed of one senior
executive from Rio Tinto and
together one from Alcan. This office
oversees the activities of as
successfully. many as 40-50 teams made up
of talented experts from both
sides, and there are seven or
eight broader teams with the balance being more specialized.
“Each team has been charged with looking at a particular aspect
that we need to get right in order to make the integration
successful,” he says. “For example, there’s a bauxite-alumina team
and a smelting team. And we have a finance team, a technology
team, a business resources team – then within each broad team
there are special teams.
“Basically, all of them have two main tasks. The first is to
develop a transition plan that will bring the two organizations
together successfully. This covers everything from making sure that
the two email systems hook up correctly to being clear about who’s
calling on customers. They’re looking at the organizational

8 Rio Tinto Alcan Profile

22862_p08-13 Supplement 22/2/08 15:53 Page 3

Meet the skipper

structure and how it should be staffed and at how we close the

books. Really, all the basics of running the business, making sure
we have a slick, smooth running operation from day one.
“Their second task is to identify the synergies that can be
harvested from the merger. Before the deal went through, Rio Tinto
estimated that some US$600m a year of benefits would be
achievable. Now that all the books are open and we’ve been able to
take a closer look, we think that figure will be at least 50 per cent
better. In other words, well over US$900m after tax should be
possible, perhaps more. So there’s a huge prize to be won and the
integration teams have the job of making sure we claim it.”
Dick Evans speaks interestingly about the similarities, and the
differences, between Rio Tinto and Alcan. “Seen at a high level, the
culture in the two companies is very similar,” he says. “Both set
high standards in terms of their values, ethics and code of conduct.
Both strive to be leaders globally in sustainable development and
business practices. Both have excellent reputations and over the
past few years have worked hard to enhance their performance.”
Such differences as there are, says Evans, stem from the two
companies’ distinctly different roots. “Rio Tinto’s corporate culture
owes much to the company’s origins as a mining company,
whereas the aluminium business is more of a high tech processing
industry. You have only to look at the exploration function to see
the truth of this. Rio Tinto has about 950 people on the
exploration side. In Alcan we had five. Conversely, Alcan had well
over 1,000 people involved in processing technology; Rio Tinto has
far, far fewer.”
Evans also points to the aluminium industry’s heavy
dependence on electricity. “At Alcan we generate more than half
of our electricity needs, often operating where there are trapped
‘pockets’ of electricity – places like Iceland, which is rich in hydro
and geothermal energy but, because it’s stuck in the middle of
the North Atlantic, can’t export the electricity directly. So it
imports alumina and exports finished aluminium. In fact you
can think of aluminium as solidified electricity.”
In amalgamating the Rio

. . . second is Tinto and Alcan aluminium

businesses there have been few,

to identify if any, surprises. “Huge though

the aluminium industry is in

the synergies terms of capital invested and

volumes mined and processed, it

that can be is dominated by a relatively

small number of players,” Evans

harvested from says. “When you’ve spent a

lifetime in the business, as I

the merger. . . have, you get to know not only

your competitors’ physical assets

there’s a huge but the people too.

“And at Alcan we had

prize to especially close links with Rio

Tinto, both through our sale to

be won! them of our smelting

technology and also through
our joint ownership of
Queensland Alumina in Australia. Not only that, I spent 27 years
with Kaiser Aluminum, which was the original co-owner of
Comalco with Rio Tinto, so I was already familiar with many of
Rio Tinto’s aluminium assets.
“All this makes bringing the two aluminium businesses together
easier than you might think – though that, of course, is not to
minimize the many hurdles we have to get over.”
Hurdles, however, have never been a problem for Dick Evans. In
his younger days he was for several years ranked in the top 20
nationally in the 400 metre hurdles and attended college on a
sports scholarship.
“I’ve always been keen on sport,” he says. “I played a lot of

Rio Tinto Alcan Profile

9
22862_p08-13 Supplement 22/2/08 15:53 Page 4

Meet the skipper

basketball and tennis at college and over the years I have enjoyed
playing squash and golf at a fairly competitive level. Nowadays, I
don’t have as much time as I’d like for those two games and I
mainly get my exercise through cycling and walking.”
In such leisure time as he does get, Evans enjoys fly fishing and
at one time he held the world record for the largest Dolly Varden
trout ever landed (19lb 8oz). He is also something of a collector – of
antique prints and also of archaeological artefacts such as
arrowheads.
In the last five years he has rekindled his interest in
photography. “My work takes me
to some fabulous places for
outdoor photography,” he says.
“Brazil, Australia, Iceland, Oman
and Africa, for example. So my
camera is never far from my side
and I hope soon to publish a
book of my work.”
Looking back on his career to Operations in progress at the
date, Evans has particularly Alma Works, Quebec, Canada,
good memories of the four years pictured above from the air.
he and his wife, Gretchen, and The potroom (right) is where
their two daughters spent in the aluminium is produced.
Ghana in the late seventies and
early eighties. It was, he says,
quite a contrast going directly
from the rarefied academic
. . . you can atmosphere of Stanford
Graduate Business School in
establish world California, where he had just
taken a masters degree, to
class undertaking his first line
management job with Kaiser
operations Aluminum, running a large
smelter in the steamy heat of
without West Africa.
“These were troubled times
compromising in Ghana,” he recalls. “We saw
three military coups during our
your standards. time there. And the smelter was
beset by a host of problems –
If you set a power outages, maintenance
and security problems, high
leadership expatriate turnover – in fact just
about every operating problem
example, you can think of. On top of that,
there was intense political
people will pressure to push ahead with the
programme of advancing Ghana
follow . . . nationals within the
management structure.
“But it was a fantastic experience and I learned one thing in
Ghana which has been important throughout my career: namely
that in developing countries you can establish world class
operations without compromising your standards. If you set a
leadership example, people will follow – in some cases better than
in the developed countries. In Ghana we took the most troubled
plant in the Kaiser Aluminum smelting system from bottom of the
heap to ‘Best in Class’ – best not just on operating efficiency but
best on safety too.”
In fact, so highly regarded was Dick Evans by the Ghanaians
that they twice made him an honorary tribal chief – once when he
left the country in 1982, and again in 2005.
Evans resigned from Kaiser in 1996 because he was convinced
the company was on the wrong course financially after a highly
leveraged buy out: he thought that sooner or later it would go belly
up. And so it proved when Kaiser eventually went into bankruptcy

10 Rio Tinto Alcan Profile

22862_p08-13 Supplement 22/2/08 15:53 Page 5

An integrated production chain for aluminium

With five bauxite deposits, five alumina refineries, 22 aluminium smelters

and 12 power generating facilities added to Rio Tinto’s complement of one
mine, two alumina plants, four smelters and one power station, Rio Tinto
Alcan is the world’s largest producer of bauxite and aluminium. It plans to
expand its refineries to become number one in alumina production as well.

Rio Tinto Alcan Profile

11
22862_p08-13 Supplement 22/2/08 15:53 Page 6

Above, cable storage, Lapointe Works, Jonquiere, Quebec, Canada.

Right, cable plant, Saint-Jean-de-Maurienne, France.

12 Rio Tinto Alcan Profile

22862_p08-13 Supplement 27/2/08 15:10 Page 7

Meet the skipper

just over five years later in 2002.

“The decision to uproot from California and leave, after 27
years, what had been a great company, staffed by outstanding
people, was a tough one,” he adds. “In the end, though, it turned
out well for me.
“I joined Alcan because I thought it had great potential which
had not yet been fully exploited. I caught the company on the cusp
of dramatic change, just as it was about to triple in size through
the acquisition of Algroup and then Pechiney.”
Left and below, aluminium rolling mill, Ravenswood,
Dick Evans made rapid progression through Alcan’s ranks and
West Virginia, US.
in 2006 was appointed its CEO.
Now, as chief executive of Rio
Tinto Alcan, he is responsible for
an even bigger aluminium
portfolio.
What are his current
priorities? “First I want to
maintain the momentum,” he
says. “Both companies were
operating well before the merger
and it’s vital we don’t lose that
forward impetus. My second
priority is to bring about a rapid
and successful integration of the
two companies so that we
maximize the value created
from the merger, both through
short term synergies and longer . . . both
term strategic advantage.”
Evans speaks optimistically companies
about the future of the
aluminium industry, pointing to were operating
the steady year on year increase
in the metal’s usage around the well before
world. As with so many other
primary commodities, China the merger and
has played a key role in the
aluminium demand surge, going it’s vital we
from about five per cent in
global consumption and don’t lose
production 11 years ago to more
than 30 per cent today. that forward
Bright though Rio Tinto
Alcan’s future may be, one of impetus.
the serious constraints Evans
and his senior management team are having to grapple with is the
shortage of qualified technical people, a skills shortage which
today plagues the entire minerals sector. However, bringing the
two companies together has meant there are some manpower
overlaps, and this in turn will allow engineers and other technical
experts to be freed up and redeployed into areas where the skills
shortage is particularly acute.
Additionally, the enlarged company should prove even more
attractive as an employer. “Talented, qualified people will naturally
want to join, and stay with, the industry leader,” Evans argues. “We
are the world’s leading bauxite and aluminium producer and we
are on track to be number one in alumina as well. We have the best
pipeline of new projects coming through.”
It is a potent combination of assets and one that Dick Evans and
his colleagues in Rio Tinto Alcan are determined to exploit.

Peter Brigg is a freelance business writer based in Surrey, England.

Rio Tinto Alcan Profile

13
22862_p14-17 Supplement 22/2/08 15:55 Page 2

DOWN
TO
EARTH
Chris Morrissey
focuses on bauxite,
the ore from which
aluminium is
derived.
22862_p14-17 Supplement 29/2/08
In our hands: Rio Tinto Alcan’s business is
grounded in the giant Weipa bauxite resource
in northern Queensland.
09:50 Page 3
A detailed world atlas will show you
several places called Alum, after a group
of minerals from which Humphry Davy
reasoned (in 1808) that the metal we
know as aluminium must exist. But it has
to be very detailed indeed to show the
little town of Bauxite in Arkansas, US
(pop. 432), named after a material that is
the only important ore of that metal and
forms major deposits right around the
world. Another town named after it is
Boksitogorsk in western Russia, situated
about 200 miles east of St Petersburg and
just below latitude 60N. The location is
surprising, as bauxite results from an
intense form of tropical weathering and
most known deposits lie much closer to
the equator.
It is because the Russian deposits are
so extraordinarily old – about 350 million
years, compared with less than 100
million for most bauxite deposits – that
they are so far north. When they formed,
western Russia lay within 25 degrees of
the contemporary equator. Presumably it
had a tropical climate marked by
alternating dry and wet seasons –
conditions that promote chemical
weathering. Over much of the
intervening time, however, the continent
of Africa has been shunting northwards,
pushing ancestral Europe, including what
is now western Russia, ahead of it.
Alumina rich
Bauxite actually gets its name from a
delightful and gastronomically noted
village in southern France, Les Baux-de-
Provence, where alumina rich red clays
(see panel, right) were discovered in 1822
– three years before aluminium itself was
first isolated in the laboratory.
Early production of bauxite was
entirely for non metallurgical uses, which
today account for only about five per cent
of total usage. The French discovery was
followed by others in a number of other
countries in a broadly defined
Mediterranean bauxite province that
continues to make a small contribution to
world mine production (roughly three
million tonnes out of a total approaching
140 million).
Six countries, with Australia way out
Down to earth
in front, supply about 90 per cent of that
last figure. Next in importance are
Guinea, Brazil and Jamaica; then, where
metallurgical material and market
economies are concerned, India and
Venezuela. China surpasses the last two
in tonnage terms, but its output has a
high proportion of non metallurgical
material. In several cases the national
output comes almost entirely from just
one or two giant, district-sized deposits.
Giant deposits have taken millions of
years to reach their present size and
composition. The processes involved are
slow, so such deposits tend to be found in
parts of the tropics where nothing has
happened to reverse their effects or
destroy their products. So called
Precambrian Shield areas, which form the
stable nuclei of most continents, are
clearly favourable when they lie at low
latitudes. On the other hand, basalt is
clearly favourable as a parent rock, and
that is not a sign of geological stability.
The huge Weipa deposit on Cape York
Peninsular in remote northern
Queensland provides an example of scale.
The laterite spread it relates to, clearly
visible in satellite photographs, extends
over at least 80,000sq.km. Within that,
the main bauxite resources, those of
actual or probable economic value, make
up an irregular area amounting to some
5,000sq.km. The bauxite averages about
3m thick, reaching up to 10m in some
places. At the end of 2007 there were 1.2
billion tonnes of reserves and 2.2 billion
tonnes of resources with an annual
production capacity of 18.2 million
tonnes of bauxite.
Dwarfing the nation’s entire bauxite
stock as it was known at the time, it was
the Weipa discovery in 1955 that started
What’s in a name?
Alumina is the simple oxide of aluminium,
expressed by the chemical formula Al2O3.
Conventionally the aluminium content of rocks and
minerals is given in terms of alumina, implying that
the metal accounts for just under 53 per cent of
the stated content.
A synthetic oxide with the same name and
formula is used as a feedstock in aluminium
smelting by the Hall-Héroult process. It is normally
yellowish white and sandy or floury in texture. It
has a wide range of other uses, for instance in
abrasives, ceramics and refractories, as a filler and
catalyst, and in glass making and water treatment.
Rather confusingly, the plural word “aluminas”
is sometimes used as a collective term for natural
aluminium oxides, which include corundum and its
gem forms ruby and sapphire. And to add to the
complications, aluminium becomes aluminum in
the US.
Rio Tinto Alcan Profile
15
22862_p14-17 Supplement 27/2/08 15:17 Page 4
Down to earth
Australia’s climb to dominance of world
bauxite production. It happened, said
pioneer geologist Haddon King, with
“minimal” recourse to geological
reasoning. “Sudden” is another word he
used about it.
It was a search for oil that first took
Harry Evans to the Weipa area. When he
made a second trip later in the same year
to follow up sightings of bauxite it only
took him a few days to examine 84km of
coastline from a perilously small boat,
recognize a major bauxite resource and
get a measure of its size. At least 250
million tons was his estimate in a report
to Consolidated Zinc CEO “Maurie”
Mawby. “I think we may have to knock a
nought off that figure,” was Maurie’s
initial reaction.
Eye in the sky
The days when an enormous bauxite
deposit could be found by eyeballing a
remote area from a small boat are
Below: the Gove bauxite mine and alumina
refinery with loadout on northern Australia’s
Gulf of Carpentaria. Right: across the Gulf,
a stacker operating at Weipa.
16 Rio Tinto Alcan Profile
probably past. Nowadays exploration is
more likely to start in the office, by
examining old reports, data and maps.
Travel around the field area may be by
helicopter, which can also be used for
making closer range observations of an
area’s landform and vegetation as
indicators of the presence of laterites. In
forested regions with a network of
navigable waterways it may be largely by
boat, with some possibility of spotting
bauxite in the riverbank.
In any case, bauxite exploration
usually involves a great deal of legwork,
to cover the ground adequately and take
enough samples. Pitting is often
necessary, or shallow drilling, to reach the
bauxite through overlying materials.
However typical it looks in colour and
texture, its potential as a source of
aluminium or for some non metallurgical
use can only be guessed at until key
aspects of its mineralogy and chemistry
have been determined in a specially
equipped laboratory. Crude measures of a
bauxite’s quality are its content of
alumina and reactive silica, and the
identity of the main ore mineral(s).
Together, they are a pointer to its likely
yield of alumina using the Bayer caustic
leach process.
Mineralogy matters from early on
because diaspore does not respond to the
Bayer process without pre heating, and
with boehmite the process has to be run at
a higher temperature than with gibbsite
(see panel, facing page). Impurity levels
matter also, to the extent that they affect
the efficiency of the Bayer process and its
unit cost in terms of such key variables as
energy and caustic soda consumption.
Process efficiency and cost set the intrinsic
value of bauxite, though many other things
have to be factored in before deciding
whether or not it is worth mining.
Chris Morrissey is a former chief geologist
of the Rio Tinto Group.
22862_p14-17 Supplement 22/2/08 15:55 Page 5

Bauxite - the material

You could say that in bauxite Nature makes a meal of its own leftovers. As
Haddon King put it in “The Rocks Speak”, the ore minerals in bauxite are not so
much concentrated by addition as left behind when almost everything else is
subtracted. The result is an alumina rich residue that may be any colour from
white through shades of yellow and red to deep brown, and any texture from
earthy and clayey to compact and bouldery.
It is related to the much more common tropical weathering product called
laterite, which has many of the same constituents but a higher proportion of
iron. A variety called aluminium laterite bridges the compositional gap
between the two but generally falls short of making ore.
Bauxite deposits may be pockety, blanket like, or interlayered with solid
rock. The bauxite may have formed where it is or been moved there by some
combination of water and gravity. Its parent could have been almost any rock
or earlier weathering product that contained aluminium, including fairly pure
limestone. Limestone derived deposits, best developed in Jamaica, tend to be
pockety. More important are laterite related deposits, which can spread
continuously over thousands of square kilometres.
Fossil bauxites may be sandwiched between solid rocks and are sometimes
worked underground, but most economic deposits lie under nothing but
laterite, soil and vegetation and can be worked in open pits.
The ore minerals are hydrated oxides of aluminium – two called diaspore
and boehmite (or böhmite) with an alumina content of 85 per cent, and a third
called gibbsite with 65 per cent alumina. They form at the expense of
aluminous precursor minerals such as feldspars and clay minerals, usually as
microscopic grains and coatings. The coatings give small (say 0.5-1cm
diameter) spherical concretions called pisoliths, and even smaller ones called
ooliths.
Other typical constituents are iron oxides and hydroxides, kaolinite, quartz
and small amounts of titanium and zirconium minerals. They have no
commercial value in themselves, though several of them have a definite
bearing on how the bauxite is used and how it responds to processing.
There have been attempts at co-producing bauxite and the high grade
kaolin that sometimes lies above or below it. In some regions there are clear
geological links between bauxite and gold. Systematic assaying of bauxite
exploration drill cores helped to delineate the Boddington laterite hosted gold
orebody in Western Australia.
22862_p18-23 Supplement 27/2/08 17:03 Page 2
REACH
The latest Audi, Jaguar and Chevrolet
Corvette supercars and the giant Airbus
380 rely on aluminium for their
outstanding performances, fuel efficiency
FOR and low greenhouse emissions,
highlighting it as the structural metal of
the future.
In the first decade of the twenty first
THE SKY century, the aluminium production process
is being reinvented within Rio Tinto Alcan,
the world’s largest producer since the
merger of Rio Tinto with Alcan in late
2007. Plans are far advanced to slash
Julian Cribb reports greenhouse gas emissions, cut energy per
tonne of metal and shrink ecological
on how the footprints – while maintaining fierce price
competitiveness against rising metals
formation of Rio giants such as China and Russia.
Once worth more than its weight in pure
Tinto Alcan has gold, aluminium was chosen in 1855 to
create a royal dinner service for Napoleon
united two top III because of its very rarity. Today, thanks
to Messrs Hall and Héroult, who in 1886
metallurgical R&D simultaneously invented an electrolytic
process for extracting the metal from its
teams in a world- oxides, it is the world’s most popular non
ferrous metal, with production now in the
wide drive to realm of 40 million tonnes a year – over a
tenth of which is produced by Rio Tinto
make aluminium Alcan.
Global state of the art aluminium
the twenty first production is due to start shortly in the
Saguenay region of Quebec, Canada, where
century’s greenest construction is under way on a pilot plant
producing 60,000 tonnes of metal a year.
metal. This plant will pioneer Rio Tinto Alcan’s
18 Rio Tinto Alcan Profile
much anticipated AP 50 aluminium
extraction technology, designed to send a
sizzling 500,000 amperes through the melt
in the name of more metal at benchmark
specific energy consumption. The fact that
the energy source will be green hydro-
electric power with zero carbon emissions
gives the plant an even more futuristic feel.
Breakthrough technologies
“The pressures from climate change are
omnipresent,” says Don Macmillan, vice
president, Technology and Operational
Excellence for Rio Tinto Alcan Primary
Metal, in his soft Scots burr. “We’ve been
facing up to them for some years and have
already had notable successes, such as all
but eliminating fluorocarbon emissions.
There are a number of breakthrough
technologies, which we’ve been quietly
working on, that will be channelled into
the AP 50 platform.
“In smelting,” he declares, “the big
challenge is to pump as much current as
you can through the melt while reducing
unit energy consumption as much as
possible.” AP 50 is designed to do just that,
increasing current intensity to the highest
level ever achieved in the industry – with
spectacular scope for productivity gain, a
smaller footprint, reduced capital and
labour costs and a cleaner, greener, more
price competitive product.
AP 50 is the progeny of a dynasty of
leading edge technologies developed by Rio
Tinto Alcan and its forebears such as Alcan,
22862_p18-23 Supplement 27/2/08 17:03
Pechiney and Alusuisse. Evolved over three
decades through the AP 18 and AP 30
systems – today deemed the “gold
standard” in aluminium production
efficiency and employed or emulated in
plants around the world – AP 50 will
outshine previous performances, with an
anticipated output of around four tonnes of
metal a day per cell, an advance over the
still widely used AP 18.
For the same number of pots, an AP 50
potline will produce 67 per cent more
metal than a 300kA potline and 40 per
cent more than a 360kA potline. The
medium-to-longer-term goal is to cut
overall energy use per unit of aluminium
produced by up to about a fifth, with an
ultimate target of 11kWh per kilo of metal.
These concepts will be developed and
proved at Rio Tinto Alcan’s facility at St-
Jean-de-Maurienne, France, and will
undergo further development and “road
testing” in Quebec.
What goes on inside an AP 50
aluminium production cell is akin to the
processes at the heart of a star – and the
physics no less complex and elegant. A
swirling maelstrom of heat, electrical
currents, molten elements and immensely
powerful magnetic forces must be
modelled, dissected and fine tuned using
the latest computational techniques to
optimize the process of producing more
metal for less energy.
“The finessing of that process lies in
very careful pot and electrical network
Far left: ALPSYS platform development work
in progress. Left: lab testing at Ravenswood
rolling mill in the US. Above: semi-quantitative
surface analysis of a polished aluminium
sample at the Arvida research and
development centre in Canada.
Page 3
design,” Macmillan says. “An awful lot of
energy goes in, and only about half of it
produces metal. The rest generates heat. So
a major challenge is to get the thermal
balance right. This involves a lot of finite
element analysis and numerical
modelling.”
The second major challenge is to control
what goes on inside the cell with fingertip
precision – the plane of the anode, the gap
between the electrodes, the flow of
alumina into the cell. Here Rio Tinto Alcan
has notched up one of its stellar advances
in the “greening” of aluminium,
overcoming the so called “anode effect” in
which voltage surges cause the release of
highly greenhouse-genic perfluorocarbon
(pfc) gases, an environmental challenge
that has bedevilled the world aluminium
industry for decades. The group’s ALPSYS
pot control system is poised to banish it for
good, Macmillan says, besides boosting
overall current efficiency.
There remains, however, one soaring
scientific peak which Rio Tinto Alcan’s
researchers are determined to scale:
eliminating greenhouse gas emissions from
smelting overall. Currently, with
hydropower, the main emissions arise from
the burning of the carbon anodes which
supply power to the melt – about a tonne
and a half of CO2 for each tonne of
aluminium produced.
Where fossil fuels are used to generate
the energy for aluminium production, 91
per cent of the total greenhouse emissions
are typically in the smelting process, three
per cent in mining the bauxite and six per
cent in refining the alumina. This
highlights the importance of tackling the
emissions from power generation in
countries where hydroelectricity and other
“clean” energy options are not available.
Clean coal
As a business that produces more than half
of its own energy, Rio Tinto Alcan finds
itself in a leading position to hasten the
introduction of new “clean coal”
generation technologies such as integrated
gasification combined cycle (IGCC) and
carbon capture and storage (CCS), and
much effort is now going into this.
Between 1990 and 2005, Rio Tinto Alcan
managed to drop its total GHG emission
intensity by 25 per cent, with a further ten
per cent targeted by 2010. The long term
dream is to zero the greenhouse
contribution of aluminium smelting
altogether.
Such vaulting ambition is of central
importance in today’s climate sensitive
market. The average car’s aluminium
content has jumped from 240lbs to 357lbs
in the quest for fuel efficiency. Peak oil and
the higher fuel costs it ushers in will only
accelerate that trend, and while resins,
Reach for the sky
plastics and titanium compete at the
margins, the car of the future is likely to be
substantially built from aluminium. If the
aluminium can come without greenhouse
penalty, it will be doubly attractive to
motorist and manufacturer alike.
“The Holy Grail for aluminium
production is greater energy conservation
and lower environmental impact at lowest
full economic cost,” Don Macmillan states.
And, like knights of old, he keeps the Grail
clearly in view, knowing the formula of
competitive price plus green status will be
sovereign in fending off the challenge from
rising metals powers such as those of China
and Russia.
Rio Tinto Alcan’s present technological
ascendancy is an amalgam of the wisdom
from several “tribes” of researchers, each in
its unique way at the cutting edge of its
field – Alcan, Pechiney, Alusuisse, Comalco
and Rio Tinto being the main contributors.
Today these once competing teams have
been forged into one of the world’s most
potent and forward looking metallurgical
research enterprises – a global organization
of some 500 staff who together represent
the undisputed industry leaders in
aluminium smelting technology, declares
Don Macmillan, “We are all dedicated to
making aluminium the world’s green metal
of choice,” he says.
Rio Tinto Alcan Applied Engineering
Centres cover the full chain from exploring
for high yield bauxite deposits to the
development of superior packaging for
gourmet foods or medical devices, novel
aerospace alloys, electrical cables that don’t
catch fire, flat TV screens and clean water
solutions for developing countries. Their
strength lies in the ability to network
leading minds in real time into virtual
research teams which span the globe and
can crash tackle even the biggest
challenges. Their spear point is the proof of
concept facility at St-Jean-de-Maurienne,
where the best ideas become reality.
The philosophy that impels all this is
articulated by Jacynthe Côté, president and
CEO of Rio Tinto Alcan Primary Metal, who
says: “Today’s globalized world is a world
confronted with environmental and social
challenges, but we are convinced that
there is an increasingly close relationship
between the protection of the environ-
ment, socio-economic progress and
competitive advantage.
“Definitions of sustainability abound
but the common denominator among all of
them is that sustainability is about making
decisions and taking actions to create
economic, environmental and social
conditions that generate the most value for
everyone, today and for generations to
come,” she adds.
The same drive for sustainability and
cost efficiency permeates the upstream
Rio Tinto Alcan Profile
19
22862_p18-23 Supplement 27/2/08 17:03 Page 4
tasks of mining bauxite and refining
alumina, where the aim is to position Rio
Tinto Alcan in the first quartile of the
industry cost curve.
The Bayer process for extracting
alumina from bauxite – which fathered
modern hydrometallurgy – has mainly seen
incremental change since its discovery in
1887, says Vincent Christ, Rio Tinto Alcan’s
general manager of Technology. In view of
the fact that energy accounts for a quarter
of today’s production costs, the goal is a
step change in energy efficiency along
with enhanced recovery of the caustic soda
used in the process.
Rio Tinto Alcan is in the pilot plant stage
of improving solid liquid separation. This
generates gains in washing efficiency and
results in both better soda recovery and a
thicker bauxite residue stream, which is
easier to neutralize. At the same time major
improvements are being made to liquor
yield and productivity, leading to lower
energy demand.
Expansion
Other measures taken by Rio Tinto Alcan
to improve the efficiency of alumina
production include using a pre-assembled
module strategy for its huge alumina
expansion project at its Gove site in
Australia. The strategy entailed major
equipment components being fabricated
and fitted offsite and shipped to Gove
ready for installation, which not only
heightens cost savings and construction
efficiency but is also a solution perfectly
tailored to remote resource development
projects.
This strategy formed part of a plan to
almost double Gove’s production capacity
from two to 3.8 million tonnes a year in
2009.
At the same time, says Vincent Christ,
plans are on the drawing board for a novel,
more compact style of alumina refinery –
20 Rio Tinto Alcan Profile
Two members of the ALPSYS team, Benoît
Sulmont and Stephane Prodent, working on
the project.
one that is lower in capital, energy and
labour costs and has a smaller
environmental footprint. This has become
feasible thanks to the world’s soaring
appetite for light metal which is creating
the opportunity for Rio Tinto Alcan to build
a new aluminium smelter at least every
three years. “To feed these smelters we
need to build a new alumina refinery at
least every five or six years, and this gives
us the opportunity to rework the design,”
he says.
The other big environmental question
hanging over the global alumina industry is
what to do with the 50 million tonnes of
bauxite residue it produces each year as a
by product of extraction – one of the
world’s larger residue management
challenges. On average, a tonne of alumina
generates 0.6 to 0.9 tonnes of bauxite
residue. An innovative approach to
managing this challenge has been
developed at Rio Tinto Alcan’s laboratory at
Gardanne, France, where residue is filtered,
dewatered and transformed into a
commercially viable product known as
Bauxaline®, suitable for use as a ground
cover layer to seal, protect and rehabilitate
waste landfill, or as a fill and foundation
material in civil engineering projects such
as road embankments.
In bauxite mining the main challenges
are to increase the efficiency of the mining
and blending operations, says Oscar
Groeneveld, former CEO of Rio Tinto
Aluminium and now strategic adviser to Rio
Tinto’s CEO, Tom Albanese. This is essential
for driving down energy consumption and
greenhouse emissions in the mining
process and accelerating the restoration of
the landscape to native forest.
He explains: “Most bauxite mines will
continue to be open cut because most
orebodies are close to the surface and the
tonnages of material involved are so vast,
but we now have decades of experience in
restoring the site to a condition very close
to its original state.”
This involves careful handling of the
topsoil so as not to lose precious fertility,
insightful management of site conditions,
hydrology and soil biology and replanting
with the keystone native species that will
regenerate the ecosystem. Such knowledge,
pioneered by bauxite miners, may have a
powerful role to play in the future by
helping to restore the world’s tropical
forests from the clearing of recent decades
Restoration
Reducing the footprint of such large
operations as bauxite mining, which
cover thousands of hectares, is
challenging, but can be achieved by
ensuring that restoration follows the
mining as closely as possible.
“The main areas for cost efficiencies in
bauxite production lie in minesite design –
disposition of hubs and spokes that
minimize materials haulage and handling,
strategic use of rail and, where appropriate,
automation for safety and operational
efficiency,” says Groeneveld. “In addition to
this, an organization must address the
shortage of skilled labour in remote
locations. All this combined will contribute
towards lower overall greenhouse
emissions from the aluminium sector.
“We’ve seen smelting emissions come
down significantly due to vastly improved
process control – similar opportunities and
challenges apply to bauxite mining and
refining. There are also prospects for
improving the dissolution and
crystallization processes at lower
temperatures that could lead to big
savings.”
The Grail here, in Groeneveld’s view, is a
method that immobilizes reactive silica
present in bauxite and prevents it from
locking up precious soda, which would
reduce the waste associated with one of the
industry’s biggest inputs.
Like Vincent Christ, Groeneveld sees
bauxite residue to be a major challenge for
the industry. In populated regions it may be
turned into bricks and tiles, used to build
roads or to line irrigation channels. And
there is some evidence it can be used to
amend agricultural soils which have
become too acidic or are contaminated by
heavy metals; but, for now, it remains a
conundrum.
Julian Cribb is adjunct professor of science
communication at the University of
Technology, Sydney, and was previously science
editor of “The Australian”.
22862_p18-23 Supplement 22/2/08 16:00 Page 5
BIRD’S
EYE
VIEW
Stepping back to
look across the
years is Mike Reilly,
reflecting on over
a century of
Alcan history.
Above, Paul L T Héroult, who
discovered the electrolytic
reduction process at the
same time as Charles M Hall.
Left, first Shawinigan smelter
rises, brick by brick, leading
to the first aluminium
production in Canada,
October 1901. Below,
construction begins on the
Shipshaw hydroelectric
project near Jonquiere
in 1930.
Alcan’s proud history stretches back to
1902, when it was created as a northern
arm of the predecessor of the US based
Alcoa. Canadian operations expanded
on the back of enormous
hydroelectric potential across the
lower eastern edge of the
Canadian Shield, home to a
spidery network of snow and
rain fed rivers in Quebec
province.
Power generation and
smelting operations came
rolling in to what had been
small sleepy towns on the edge
of miles of wilderness and
barren ground. The dam and
generator construction activities,
close to where many rivers pour
into the St Lawrence with its
deepwater shipping capacity,
harnessed massive amounts of power,
especially from Quebec’s Lac St-Jean
and the Saguenay River gorge.
Alcan lost no time establishing itself.
Buying the Roberval and Saguenay
Railway, the firm took control of a vital
transport link between port and plant not
far from Quebec, downriver from its
Montreal headquarters. In the 1920s,
plants to produce wire and cable, cooking
utensils and other end products were
established in Toronto and Quebec
locations in parallel with the growing
alumina production facilities.
Demands for infrastructure where
none existed brought the company into
housing. Thus, in the same decade, the
city of Arvida (now part of Ville de
Saguenay) was established near the power
and alumina production facilities on the
Saguenay River, to become over the next
decades a principal location of several
production facilities and power houses,
including the largest in the world at the
time on Isle-Maligne.
Model city
The name Arvida came from the first two
letters of the three names of Arthur
Vining Davis, president of the parent
company Alcoa. It was a model city,
designed to accommodate up to 40,000
people, anticipating everything they
would need from schools to churches.
Davis went on to be one of the best
known names in America, promoting
aluminium use and fighting US
governmental controls even as he won
plaudits from the same government for
his work with aluminum during the war
years.
Meanwhile, capitalizing on its
profitability and business prowess,
Alcoa’s Canadian subsidiary, the
Northern Aluminum Company, either
bought into or created a wide range of
Rio Tinto Alcan Profile
21
22862_p18-23 Supplement 22/2/08 16:00 Page 6
aluminum companies across northern
Europe, beginning early in 1909 with the
establishment of a UK subsidiary,
Northern Aluminium Company, later to
become part of British Alcan Aluminium.
Moving quickly in the first decades of
the twentieth century, the company’s
footprint extended into France, Norway,
Denmark, Germany and Italy. Other non
American operations were added in 1928
when Alcoa decided to divest into a single
vehicle most of its primary overseas
businesses. By then, Alcan was so large
that its home country, Canada, could only
absorb 15 per cent of its production
output. Globalization, while not a
common term at the time, was what
Alcan was all about.
During the 1930s, Alcan was a full
blown world aluminium provider with its
hand in everything from pit to (frying)
pan. To deal with its now sprawling
business the company embarked on a
programme of shaping and trimming
around the world. Various elements were
sold, reduced or closed down. But even as
consolidation was the general watchword,
Asia came into sharper focus. The
company established businesses in Japan,
India, and finally Australia, where it
founded the Australian Aluminium
22 Rio Tinto Alcan Profile
Company in 1939 with two other
partners. Already buying its bauxite from
Australia as well as other offshore
sources, direct participation in the
industry locally was long overdue.
Critical contributions
The demands of World War II amplified
aluminium use, especially as air power
rose to prominence well beyond any
previous conflicts. The breadth and depth
of aircraft use, and losses, pushed output
to levels no one could have imagined. A
major factor in aeronautical development
in Canada and the UK in the early years,
Alcan’s contributions to the industry also
were critical when the US joined the war
effort later on.
During the period Alcan pushed
forward with its already planned
expansion of installed smelter capacity at
Canadian facilities, crossing the 500,000
tonne mark in 1943. That may seem less
than impressive by today’s standards, but
more than half a century ago the number
was eye popping and, as in the rest of the
industrialized West, the escalating war
effort brought even more remarkable
capability. By March of 1944 the company
hit a wartime peak at all Quebec smelters
of 1,400 tonnes per day.
Left: 1939, Northern Aluminium begins
managing the Rogerstone factory in Wales
producing aluminium components for aircraft.
Below left: the Soderberg potroom at Arvida,
Canada, 1945.
The war by no means impaired the
growth of Alcan on a global scale: it may
even have helped. South America was
particularly important. Rolling capacity
was built in Mexico, bauxite was the
target in Jamaica and Alcan set up
Alumínio do Brasil SA in the continent’s
southern cone.
Across the Pacific there was more
expansion with the beginning of rolling
and smelting operations in Granville,
Australia and, to the north, start up of a
new smelter in Alupuram in Kerala state,
India.
There were six iterations of the
company name through its history before
the merger with Rio Tinto, but it was not
until the end of World War II that the
name Alcan actually appeared, registered
in 1945 as a trade name when the final
connections with Alcoa were declared
severed after a protracted legal battle
(during which, among other things, Alcoa
argued that no one else should use the
word “aluminium” in business). It took a
couple more decades to give the Alcan
name to the full enterprise – the
corporate name changed from
Aluminium Limited to Alcan Aluminium
Limited in 1966.
The postwar years were a blur of
22862_p18-23 Supplement 22/2/08 16:00
Below: feedstock for the production of
secondary alloys arriving at Alcan Enfield
Alloys, London, 1960.
Right: fabrication starts at Utinga, Brazil, 1948.
Below right: sand casting operations in 1943 at
the Etobicoke works near Toronto.
additions and modifications to Alcan’s
global presence. There were expanding
power projects, new bauxite operations
and dozens of new refining plants and
downstream businesses created or
bought, either in part or in full, between
1950 and the late 1990s. In addition to
other locales, the company’s presence
appeared in Colombia, Venezuela,
Uruguay and Argentina in parallel with
large expansions in Brazil.
Acquisitions
Jumping finally into the US market in
1960, Alcan teamed with three partners
to create a big new rolling mill in
Oswego, New York. More than a dozen
acquisitions and expansions followed –
many, like Oswego on the shores of Lake
Ontario, along the newly opened St
Lawrence Seaway which at completion
ran to well over 2,000 miles long.
In Asia and Oceania, China, Malaysia,
Indonesia and New Zealand were new
names in Alcan’s geographical roster and
expansion moved dramatically in
Australia and India with rolling mills,
extrusion plants and aluminium smelters
building capacity.
While much of the concentration was
on rolling mill operations, the postwar
Page 7
expansion brought the company into
nearly all types of processing and
products ranged from wire and cable to
foils, powder and paste, among many
others.
It was time to take a breath and
consolidate.
Once more, trimming and shaping was
applied to the business. Divestment and
restructuring are recorded as the main
actions in the company archives, but as
before, new opportunities were not long
to be ignored.
The outstanding growth in the early
part of the twentieth century
notwithstanding, the 1990s soon became
an era of even larger growth. Among
other things, Alcan became the main
supplier of aluminium to General Motors,
the world’s largest auto producer. Its
aerospace business, based on the
company’s vital role in wartime
production, moved to new levels as the
industry grew. By 2006 for instance, the
engineered products group at Alcan was
the number one aerospace supplier of
value added sheet, plate and extruded
aluminium products in Europe. In overall
size, the decade’s expansion was the
greatest ever for the company,
culminating with the acquisition of
Alusuisse and the laying of groundwork
for the acquisition of the French group
Pechiney.
The three way combination did not go
as smoothly as first envisioned in the late
1990s. The European Union stepped in
with concerns over competition, and
rather than comply with some of its
demands, Pechiney withdrew from the
merger. However, within a few years,
Alcan formulated an approach to
Pechiney that was to be successful and
the formal acquisition was completed in
December 2003. A year later the company
spun out much of its rolled product into a
new company, Novelis. This left Alcan
with operations firmly focused upstream;
more than half its assets were in bauxite,
alumina and primary metals.
Now at a size just about even with its
founding former owner Alcoa, Alcan
nonetheless found itself a target of an
unsolicited offer from Alcoa. This move,
early in 2007, was soon countered by Rio
Tinto’s bid. Alcoa backed away and the
rest, as they say, is history. Rio Tinto
Alcan was born.
Mike Reilly is a former Reuters correspondent
and executive who writes on business,
technology and travel from Long Island, NY.
Rio Tinto Alcan Profile
23
22862_Cover Supplement 22/2/08 14:18 Page 6
22862_p13-15 22/2/08 14:06 Page 1

1 Ownership. Mining companies are

required to sell a voting share of their
operations to corporate entities that are owned
also requires that companies increase their
employment of women, aspiring to a workforce
comprising ten per cent women by 2009.
or controlled by Historically Disadvantaged
South Africans (HDSAs).
5 Housing and living conditions. Mining
operations must work to improve the

2 Preferential procurement. Where

possible, operations are required to give
preferred supplier status to black owned
standard of employee housing, by upgrading
existing accommodation and by promoting home
ownership options.
companies.

3 Human resource development deals with

requirements for mining companies to
6
Beneficiation. In partnership with the
government, mining companies are
expected to identify opportunities to increase
formulate skills development strategies, the local beneficiation of their products: from
provide scholarships to promote mining related secondary refinement to the production of final
education, and train existing employees. consumer products.

4 The employment equity pillar establishes

targets for the equitable representation 7
Community and rural development.
Mining stakeholders are required to formulate
of HDSAs at management level. Operations are development plans for those communities
required to have a black management affected by mining, and to ensure there is no
participation of 40 per cent by 2009. This pillar discrimination against foreign migrant labour.

Seven pillars of transformation

David Bannister
looks at how It was more than five years ago that the
management of Richards Bay Minerals
the South African government, outlining
a plan for the sale of a 26 per cent stake
Richards Bay (RBM) first sat down to begin a trans-
formation of their company. In a
in the company, in addition to further
proposals concerned with social
Minerals is reformed South Africa, with new legis-
lation and a focus on the empowerment
development, employment equity, and
local beneficiation.
responding as of those who had suffered under
apartheid, RBM’s team set out to plan
Following South Africa’s first demo-
cratic elections, in 1994, the government
the winds of how the company should meet these new
conditions.
passed a range of legislation aimed at
redressing the historic imbalance
change re-shape Tackling issues of great depth and
subtlety, they have considered how best
between a largely white owned economy
and those peoples who were disadvan-
South Africa’s to adapt to new laws, how RBM can work
as a force for empowerment in the
taged under apartheid. A number of far
reaching laws have come into effect,
industry. country, and how to achieve these goals
whilst maintaining RBM’s excellent
covering such areas as skills development,
economic ownership, and demographic
economic and commercial record. As a representation within the workforce.
leading global producer of titanium slag, In 2002, the government passed the
pig iron, rutile and zircon, RBM is a Minerals and Petroleum Resources
significant asset in Rio Tinto’s portfolio Development Act (MPRDA), giving
(owned 50:50 with BHP Billiton). ownership of all mineral rights to the
Now, the five years of planning are state. The MRPDA gave rise to the Mining
coming to fruition. In June the company Charter – a comprehensive roadmap for
will submit a conversion application to broad based economic empowerment

Rio Tinto Review

13
22862_p13-15 22/2/08 14:07 Page 2

Seven pillars of transformation

within the mining industry.

The Mining Charter presents “a shared
vision of a globally competitive mining
industry that draws on the human and
financial resources of all South Africa’s
people, and offers benefits to all South
Africans”. The charter recognizes that
women and black people (the term here
includes white women, Indian and
coloured peoples) were largely excluded
from participation in the mainstream
mining economy, and seeks to redress this
through a number of mandatory
requirements, to which all mining
operations must adhere.
The Mining Charter is based on a set of
seven “pillars” for transformation, each
dealing with a distinct facet of the process
(see previous page), requiring a scored
adjustment from all mining companies. In fact, RBM has long been a national security duties at RBM’s mine sites; and
All mining companies in South Africa leader in terms of corporate social North Safety Products, which has a 50 per
have been given a deadline of April 2009 responsibility and Black Economic cent BEE ownership comprised entirely of
for the submission of applications for Empowerment (BEE). Over 2005-2006, rural women. These and other initiatives
conversion. Each application will be RBM spent over one billion rand by RBM have worked to create over 1,800
scored according to how well its (US$146m) in procuring goods and jobs in the poorer communities which
transformation plan adheres to the services from BEE companies. It has also surround the mine. In 2006 the company
Mining Charter’s criteria, and a company helped the establishment of a number of received the Corporate Enterprise
will only be considered to hold “New BEE startups. Development Award at the respected
Order Mineral Rights” once the They include Ascent Mining Services, “Investing in the Future” ceremony, run
government’s Department of Minerals which has a dry mining contract at RBM’s by the Mail & Guardian newspaper.
and Energy (DME) has accepted its ponds worth millions of rand per year; It is with the benefit of these
application. Isolezwe Security, which performs achievements that RBM moves towards

14 Rio Tinto Review

22862_p13-15 22/2/08 14:07 Page 3
the submission of its conversion
application. In some areas the company is
already in compliance with, and
exceeding, the requirements of the
Mining Charter. It already provides its
employees with a housing and meal
subsidy, and has never accommodated
staff in the single sex hostels which
dominate some other operations. It is
already focused on the development of
skills for its employees and the local
community, and is presently investigating
the possibility of establishing a Faculty of
Engineering and Technology at the
University of KwaZulu Natal, to address
critical skills shortages.
The most significant changes at RBM
will come through the sale of an
ownership stake in the company. The
charter requires that a minimum share of
26 per cent be sold at fair market value to
Historically Disadvantaged South
Africans; this gives an exercisable vote in
the company. In some other BEE
conversions this requirement has resulted
in a large share of a company being sold
into the hands of a single individual or
corporate entity, creating an elite class of
the super wealthy, without bringing many
broader benefits.
General manager for Strategic Affairs
Thabi Shange, who is overseeing the
conversion plans, spoke about the steps
RBM has taken to ensure a broad
Top left, the sale of RBM shares to a consortium
of black community and business groups will
benefit local people such as these growers
showing off their crops. Left, a meeting of the
Broad Based Black Economic Empowerment
strategic partners. Above, rehabilitation of
mined land at RBM, undertaken by a local Black
Empowerment company. Right, RBM managers,
from left: Bruce Beath, general manager,
Finance, George Deyzel, retiring managing
director, Cameron McRae, incoming managing
director, and Themba Mkhwanazi, chief
operating officer.
Seven pillars of transformation
distribution of the 26 per cent stake. “We company to facilitate this funding.”
don’t want to take the old route, helping The empowerment of RBM’s two
only the select few,” says Shange. “With subsidiary companies (Tisand and
this in mind we’ve brought together a Richards Bay Iron & Titanium), also allows
consortium of interests, including black for the optimization of existing projects,
owned business, women’s groups, and the ensuring that they are brought online at
local communities, all of whom stand to the right stage. Bruce emphasizes that
benefit. We’ve also included our RBM is not giving away the 26 per cent
employees through an Employee Share share, contrary to some perceptions of
Ownership Plan.” BEE deals – the stake will be bought for
fair market value.
Selection process “RBM already exceeds the require-
A broad based consortium has been ments of legislation governing the mining
assembled to buy the 26 per cent stake industry,” says George Deyzel, RBM’s
in RBM. After a selection process outgoing managing director. “Our focus is
which started with 149 candidate BEE to ensure that the transaction is as broad
companies, six were selected to part- based as possible, to benefit people at
icipate in the ownership of equity. These grassroots level. This new partnership
six companies will join the South African reflects our commitment to trans-
Women’s Association, and four local formation and sustainable development
communities, in buying a 24 per cent in South Africa.”
stake in RBM. The remaining two per In the face of inevitable and necessary
cent will be made up of an Employee changes in South Africa, RBM’s proposed
Share Ownership Plan, paying dividends conversion presents an approach which
to RBM employees. offers all round gains. The existing
The four communities involved are shareholders will benefit from the
those located close to the mine – Dube, considerable long term opportunities
Mkhwanazi, Sokhulu, and Mbonambi. which compliance with the Mining
Their populations range from 25,000 to Charter will bring, in terms of continued
60,000 people, and they will each buy a operation and profit. The BEE consort-
2.5 per cent share of RBM, equivalent to ium, local communities, and the
ten per cent of the consortium’s overall employees themselves will certainly
stake. Each community will be repre- benefit from economic participation in a
sented by a trust, receiving dividends from highly successful mining enterprise.
the consortium which can then be used
for community development projects,
microfinance, and other initiatives.
In addition to the carefully selected
BEE companies, and the community
trusts, a further two per cent of the stake
will be purchased to found the Employee
Share Ownership Plan (ESOP). Each
employee who serves at RBM will receive
a share of the dividends which the ESOP
receives, representing a considerable
amount for each of the mine’s 1,750
employees.
The financial dimensions of the
transaction are complex, and much care
has been taken to create the best
arrangements for both the new
consortium and the existing
shareholders. RBM and its shareholders
are in the process of drafting optimal
voting agreements, defining when the
new consortium is able to exercise its
power of veto, and finessing certain
financial aspects of the transaction.
“There are few BEE transactions which
offer such a win win opportunity,” says
Bruce Beath, general manager for Finance
at RBM. “We are able to arrange financing
for the consortium by using RBM’s
balance sheet as surety, meaning that
local banks are comfortable with funding
the transaction. We are also able to David Bannister is a freelance writer and
restructure certain aspects of the journalist, based in South Africa.
Rio Tinto Review
15
22862_p16-20 22/2/08 15:48 Page 2

A
mountain
to
climb
22862_p16-20 22/2/08 15:49 Page 3

Facing page and left: iron ore exploration in

progress high in the interior of Guinea, west
Africa. Inset, global head of Exploration Eric
Finlayson.

mining industry. Indeed, as Finlayson

points out, a similar success rate has
emerged from studies of global research
and development across many industries.
In other words, whether it’s electronics,
pharmaceuticals, or mining, there seems
to be some deep, underlying connection in
the process of opportunity generation.
(The experts have dubbed this
phenomenon the Universal Success
Curve.)
But this doesn’t mean Finlayson is
content to accept the 0.03 per cent
industry norm. “In the past few years we’ve
achieved one in 2,500 or even 2,000,” he
says, “but we’re constantly striving to do
better still. That’s what exploration
performance improvement is all about:
reducing the number of misses before you
get your hit.”

Statistically, the
task looks truly
awesome. And,
Peter Brigg discovers,
Eric Finlayson’s
Exploration teams
need to strike it
rich to provide a
flow of new projects
for the Group.
Eric Finlayson, the 47 year old Scot
who has been in charge of Rio Tinto’s
Exploration group since the beginning of
last year, is nothing if not a realist. It’s a
quality much needed in his job. He has a
mountain to climb.
“The fact is, most exploration is
unsuccessful,” he admits. “A few years ago,
we analysed our performance and found
that for every 3,000 ideas which go in at
one end of the pipeline, only one discovery
pops out of the other end. And we’re not
talking hare brained ideas here but solid,
defensible targets.”
Before calling for the instant dismissal
of Finlayson and the entire 950 strong
Exploration team for converting a meagre
0.03 per cent of prospects into a successful
commercial outcome, we need to be aware
that this is very much the norm for the
Intersections
The Exploration group aims to bank, on
average, one discovery a year and over
time it has managed to hit this target
fairly consistently. However, as a measure
of success it is a rather crude one. A more
useful performance yardstick is the
number of “economic intersections” made
in a given year. Finlayson explains that an
economic intersection occurs when you
drill a hole and encounter mineralization
of such grade and width that if the
orebody were to extend beyond the drill
hole in any significant direction, it would
mean the deposit was economically viable.
“Historical analysis has shown that one
in ten economic intersections results in a
discovery,” he adds. “So, if we are aiming
for at least one discovery a year, we should
expect to be making about ten economic
intersections annually. On the other hand,
if you are working an exploration area that
has not turned up any economic
intersections for several years, it’s time to
think again.”
Eric Finlayson grew up in a coal mining
town in central Scotland but he says it was
not the local mining activity which made
him want to become a geologist but rather
a desire to escape from an unattractive
urban environment and see the world.
That desire for travel had originally been
kindled by a family holiday in Spain – still
in the 1960s an out of the ordinary
destination rather than the package tour
destination it later became – coupled with
a boyhood interest in philately and the
exotic places the stamps revealed.
A career in geology would, he thought,
offer him a passport to see the world, and

Rio Tinto Review

17
22862_p16-20 22/2/08 15:49 Page 4
A mountain to climb
so he took up the offer of a place at the
University of Strathclyde in Glasgow,
where he studied for a degree in Applied
Geology.
After graduating, he worked as an
exploration geologist in Ireland and
Turkey, before having a short spell as a
geochemist in Malawi, where he was
looking for uranium to fuel Britain’s
nuclear power stations.
Finlayson joined the Rio Tinto Group in
1989 when he was recruited into Kenne-
cott Exploration as a project geologist.
Based in Sydney, he was responsible for
copper and gold exploration in the
highlands of Papua New Guinea (PNG) –
an area with which he was very familiar
because he had just spent five years there,
helping conduct a national geological
survey for the PNG government.
Looking back on his time in PNG, he
says it was physically the most arduous but
probably the most enjoyable work of his
entire career. “I was meeting people from
isolated communities,” he recalls. “Dogs
would sometimes howl and children flee
in terror at the sight of their first
European.
“In 1984, I was on a two week exped-
ition, cutting through the rain forest and
hoping the helicopter would find me
again, when I bumped into a small group
18 Rio Tinto Review
of forest people. One of them had a bag
containing the smoked remains of his
grandmother. In PNG, eating dead
relatives is part of a religious process that
is believed to release the spirit of the
deceased. He kindly offered me a piece
of his grandmother in exchange for some
of the items I was carrying. I declined,
but to this day part of me regrets passing
up the opportunity, legitimately and
in a culturally acceptable way, to eat
someone!”
Fearsome fellow
On another occasion, this time searching
for gold deposits for Kennecott, Finlayson
found himself surrounded by several
...we’ve found four more
deposits close to the
original one, meaning
that instead of two billion
tonnes of mineralization
we could be looking at
eight billion.
thousand native prospectors who were
visibly disappointed and angry at their
lack of success in finding any of the gold
that was rumoured, falsely as it turned
out, to lie in the area.
“One fearsome looking fellow, who was
wearing a World War II Japanese helmet
and waving a bayonet under my nose, was
particularly incensed,” Finlayson recounts.
“I truly thought he was going to kill me.
Fortunately I was able to mollify him.
When the helicopter returned – it had left
me alone while it went to refuel – I jumped
aboard shaking like a leaf.”
After five years based in Sydney, during
which time he formally adopted Australian
citizenship, meaning he now has dual
British/Australian nationality, Finlayson
moved to Vancouver. Initially he was
Kennecott’s regional exploration manager
for western Canada but he subsequently
took on responsibility for the whole of
Canada.
In 2000 he transferred to Rio Tinto’s
London as assistant to the head of the
Exploration group, before being posted
two years later to Perth in Australia. There
he spent five years running the Group’s
exploration programme in Australia, India
and Indonesia.
Eric Finlayson likes to spend his leisure
time with his Korean partner, Kumju, and
22862_p16-20 22/2/08 15:49 Page 5

A mountain to climb

Pilbara in Western Australia we are

constantly turning up new iron ore
mineralization. In the past five years the
Exploration group has handed over about
2.2 billion tonnes of mineralization to
Pilbara Iron. For every two cents we spend
on exploration there, we are finding one
tonne of mineralization, which by any
measure is a tremendous return on
investment.
“At La Granja in Peru, we thought we
were evaluating a single copper deposit
but in the last 12 months the exploration
team has found four more deposits close to
the original one, meaning that instead of
two billion tonnes of mineralization we
could be looking at eight billion,” he says.
“Or take aluminium. We’ve obtained some
very interesting results from
reconnaissance exploration for bauxite in
Brazil and Colombia, including some from
areas where no bauxite had previously
been found.
“In Mozambique we’re working on a
couple of heavy mineral sands prospects.
Like the ilmenite deposits in Richards Bay
in South Africa, they’re right beside the
beach and their chemistry is identical to
what’s going currently into our Richards
Bay smelter, so it looks as if we shall have a
secure future feedstock for that plant.”

Prospects
Among the many other interesting
prospects Finlayson and his Exploration
their two young children, Euain, three, and Opposite page: Exploration drilling at the team have in their locker are a couple of
Eumi, two. “We take them swimming and Resolution Copper project in Arizona. good zircon finds in Australia. Zircon, a high
walking every weekend,” he says. “And I Above: high tech geological investigation is value, heavy mineral used in the
have a 17 year old daughter, Morgan, who supported by experts on the spot – there is no manufacture of ceramics and TV screens, is
is a good lacrosse player, so on Saturdays substitute for geologists on the ground, says much in demand in China. Then there are
I’m often on the touchline supporting and Finlayson. Below: schematic of the Bingham several promising coking coal projects under
cheering her on.” Canyon pit where, after 100 years of mining, way around the world – notably in southern
A keen cook, he admits to being new deposits continue to be discovered. Africa. Meanwhile, in northern India, an
“infuriatingly slow in the kitchen”. He
enjoys reading but regrets that work and
family pressures mean he has less time for
that recreation than he’d like. He says his
favourite book would be either The Tin
Drum by Günter Grass or the notoriously
dark American Psycho by Bret Easton Ellis.
Finlayson’s move back to London at
the beginning of 2007 as head of the
Exploration group marked the start of a
new and exciting phase of his career and
he talks with enthusiasm about the host of
promising exploration developments now
in Rio Tinto’s portfolio, some of them close
to existing operations, others in totally
new areas.
“We’ve been mining copper at Bingham
Canyon in Utah for 100 years and thought
we knew it like the back of our hand,” he
says. “But to our surprise, right below the
open pit, exploration geologists at
Kennecott Utah Copper have discovered a
molybdenum-dominated orebody, about
1km high and 300m wide. Or again, in the

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order of magnitude study of a diamond
discovery should be completed later this
year. Although not a giant project, it’s
nevertheless one of the top three diamond
discoveries made anywhere in the world in
the last five years.
“There is no shortage of interesting
opportunities available to us,” Finlayson
says. “The trick is to make sure we
prioritize them correctly.” So, how is the
decision made as to whether to go looking
for, say, copper rather than iron ore, or for
bauxite rather than coal?
“In a nutshell, we aim for a multi
commodity portfolio that’s been built up by
putting together the best opportunities we
can find,” he explains. “That may mean
very little coal exploration and a lot of
Colourful mineral samples that provide
clues to the existence of ore deposits.
20 Rio Tinto Review
Hot on the trail: a rig on the road to a drill site
at the Simandou project.
copper in one year and the reverse a couple
of years later, and so on. But it would make
no sense to spend one quarter of our
exploration budget on copper simply
because one quarter of our net earnings in
that year happened to be coming from that
commodity. It would mean we were
spending on opportunities regardless of
how good they were. Because the success
rate is so low in exploration you can’t
afford to put money into second rate
opportunities. Only the best shots will do.”
Rio Tinto carries out most of its
exploration programme using in-house
resources. According to Finlayson the
outsourcing model has several drawbacks.
First, there can be a lack of alignment
between the objectives of the major
company sponsor and those of the junior
company proxy explorer. “At Rio Tinto
we’re interested in giant, world class ore
deposits,” he says. “A junior company
which stumbles across a small deposit
might get sidetracked onto a project that
was not material to us.
“Secondly, by keeping the programme
internal we can exercise control over the
management of important issues such as
business ethics, health, safety and the
environment. As other companies have
found to their cost, underperformance by a
proxy explorer on issues such as these can
lead to a good deal of corporate
embarrassment. So, from a governance
perspective, we think it’s better for us to be
in the driving seat.”
Flexibility
But this is not to say that Rio Tinto never
uses third party proxy explorers,
recognizing that their flexibility and
specialized local knowledge can
sometimes offer particular advantages.
“Rio Tinto’s decision to carry out its own
exploration programme has been vindicated
by our discovery successes,” Finlayson
argues. “Our record speaks for itself.”
Since 2002, minerals markets have
strengthened significantly and exploration
investment by the industry has gone up in
line with this. In 2002, global exploration
expenditure was in the region of US$2bn.
By 2007 it had risen fivefold, to more than
US$10bn.
Rio Tinto’s own exploration
expenditure has reflected this industry
growth trend, though not to quite such a
dramatic extent. In 2007, the Group spent
almost US$200m on pure exploration
compared with US$100m back in 2002.
These figures do not include the cost of
prefeasibility studies and other advanced
project work that is carried out by the
product groups, after an exploration
venture is handed over to them by the
Exploration group.
Finlayson is at pains to emphasize that
there is no good linear correlation between
spending and success. This is true of
industry as a whole and, within it, Rio
Tinto. “We’ve done the analysis,” he says.
“It’s not a case of the more dollars you
spend, the more you find. It just doesn’t
work that way.”
The reason, he says, is that every
organization has a limited capacity to
spend money effectively. If you go above
that capacity the law of diminishing
returns sets in. In other words, there is an
optimal expenditure for a given
organization’s size. So, getting the correct
balance between organizational capability
and budget is crucial.
The minerals exploration sector has
witnessed substantial cost inflation in
recent years, with prices rising steeply in
fields such as drilling services, aviation
and people. He therefore sees cost control
as one of his main priorities. Another is
finding and retaining the experienced,
highly skilled people who are needed to
translate his group’s ambitious exploration
plans into reality and to keep ahead of that
0.03 per cent Universal Success Curve.
“My group’s raison d’être is to increase
the value of the company by finding new
mineral resources,” Eric Finlayson says.
“That task is a lot harder today than it was
three or four years ago. In 2003 Rio Tinto
had a market capitalization of roughly
US$25bn. Today it is above US$100bn.
Adding significant value to a company
that's nearly four times as big is a whole
different ball game.
“But we’re not going to allow the
magnitude of the challenge to faze us,” he
adds with a smile.
Peter Brigg is a freelance business writer based
in Surrey, England.
22862_p21 22/2/08 17:29 Page 1

The world is shaped by the boundaries of people’s knowledge at There was a hunger for scientific knowledge at that time,
any one time. It is intriguing to discover, in a single capsule, a illustrated by huge popular interest in voyages of discovery that
snapshot of exactly how the world looked to our ancestors – Captain James Cook was making in the Pacific. Cook made his
around the year 1768, as it happens. first landfall on the Great Southern Continent he had been
It was at that time that the Encyclopedia Britannica was first seeking in April 1770, but he did not get back to Britain till the
published and the first edition is now available in a three volume following July so the encyclopedia does not mention Australia or
replica (Encyclopedia Britannica, £99). the strange deer sized, hare flavoured animals (kangaroos) that
The replica offers hours of fascinating study, but the volumes Cook’s party found there.
are as intriguing as much for what is not in them as for what is. Britain’s Industrial Revolution was in full swing, fuelled by the
There is very little about what we would nowadays call geology or products of many hundreds of British mines. The Parys Mountain
earth science, and even less about extractive sciences such as mine in North Wales (still making news in the twenty first
mining and mineral processing. But there are strands of truth that century) was getting into its stride as a major copper producer.
hold fast to this day, 250 years or so after publication. The North Pennines orefield was churning out lead, and one lead
mine distinguished itself by
producing over 2,000 tons of
contained metal in a single
year. It is an insignificant
amount now, but prodigious at
the time.
The first Encyclopedia
Britannica was scrambled into
print, a year behind schedule,
by three enterprising Scotsmen
(“a Society of Gentlemen in
Scotland”). Its editor was a
brilliant young polymath called
William Smellie whose
scholarship was matched by his
fondness for roistering in
Edinburgh drinking dens. The
other two were an engraver, and
a printer who doubled as chief
salesman. About 3,000 copies
were sold, at £12 for the
complete work – 2,659 pages
illustrated by 160 copperplate
engravings.

Framework
The aim was to summarize the
scientific knowledge of the day
in a framework of long essays
set out in alphabetical order by
discipline – Astronomy, Botany,
Chemistry and so on.
Supplementing the essays were
short dictionary style entries that

At a moment in dodged from one discipline to another. Typically, the long essay
on anatomy comes straight after an entry on Anatolia and an
engraving of a whistling duck.
Smellie compiled the text from over 150 existing publications

time Chris Morrissey (“the best books on every subject”). He acknowledged his sources
but suited himself on which to use and how much to extract.
Some of his choices seem rather odd now. Midwifery has more
explores how one pages than mechanics and electricity put together.
There is no entry for Geology – it had only just been invented
publication enshrines as a word and was yet to be born as a science. Mines, however,
were considered scientific enough to deserve a page of text. A
the state of scientific mine is defined as “a place underground where metals, minerals
or even precious stones are dug up”. Minerals are “all fossil bodies

knowledge, 250 . . . dug out of a subterraneous mine”.

The section headed Chemistry reflects a world in which only
six metals were recognized – gold, silver, lead, copper, tin and
years ago. iron, plus eight so called semi metals that included platinum,
nickel, cobalt and zinc. It was a hundred years before the Russian
scientist Mendeleyev proposed the system of elemental
classification that gave us the Periodic Table. There are some

Rio Tinto Review

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22862_p21 22/2/08 17:29 Page 2

At a moment in time

you write
telling absences, among them manganese (first isolated 1774),
chromium (identified 1797) and aluminium (named 1812 but
not isolated as a metal until 1825).
Notes on how metallic elements occur again reflect a
knowledge base that was tiny compared with today’s. Gold is
described as being found in ores of other metals but “there is
no proper ore of it”. Platinum and nickel both get the same
comment: “Of its ores we know nothing”. Most ores of copper
are said to be “a beautiful green or blue” (in other words,
coloured by malachite, azurite, and other minerals normally
produced by weathering). The chief ore mineral of zinc is given
as the carbonate calamine, which at that time was the main
source of the impure zinc metal (spelter) used in brass making.
The focus here is clearly on near surface mineral deposits,
though the encyclopedia mentions that in some places deep
mining had been going on for hundreds of years. Examples it
gives are the silver mines of Potosi (Bolivia) and Freiberg
(Saxony), the Kremnitz gold mine in Hungary, and the tin-
copper mines of Cornwall.

Wisdom
There is a curious mixture of wisdom and wackiness in what
the encyclopedia says about orebodies and how to find them.
It would be an odd geologist nowadays who reckoned that The postbag was pleasingly
orebodies mostly take the form of veins or lodes and are never fat after the December issue
perpendicular. On the other hand, many would agree that of “Review” appeared. Most
vein structures “. . . seem to be, or to have been, the channels letters were appreciative,
through which the waters pass within the earth”. although we did receive a
On what it takes to find ore, the work comes within hailing gentle rap on the knuckles
distance of modern views. First it says that there’s no point in (quite rightly) for our failure
waiting for “favourable accidents” like floods and earthquakes to include on the map of Rio
to expose ore. Instead, you have to go and look for it. To Tinto’s Australian railway
succeed in finding it requires “a particular sagacity, or acquired network all the places
habit of judging from particular signs, that metallic matters are mentioned in the article.
contained in certain parts of the earth”. Still on the trains, a reader
The chief signs of hidden mineral deposits are listed in wrote that he could see how
terms that foreshadow modern exploration techniques. iron ore was loaded onto the
Examples are “the discovery of certain mineral waters” trucks using gravity, but how
(anticipating hydrogeochemical techniques) and do we get it off again? Well,
“discolouration of trees or grass” (a prophetic reference to the wagons are locked in an
geobotany?). A more traditional sign is “finding of pieces of ore enormous barrel-shaped
on the ground”; so called float searches still play a key role in contraption called a car
discoveries. dumper, two at a time, which
What do you do when no such signs can be found? The then turns them upside down.
advice foreshadows a modern saying among explorationists – The ore shoots out on to a
“If you ain’t drilling, you ain’t looking”. conveyor belt which whisks it
It reads: “But when no evident marks of a mine appear, the to the shiploader, and so onto
skilful mineralist usually bores into the earth, in such places as the ships.
from some analogy of knowledge, gained by experience, or by We found two letters
observing the situation, course or nature of other mines, he especially intriguing, and both
judges to contain metal.” were triggered by our feature
There is much wisdom in those words, and in the advice by Dan England that looked at
about questions that had to be asked to assess a mineral mining through the eyes of
discovery. The most basic question was whether the mineral novelists over the years.
deposit could be “dug to advantage”, meaning mined at a The first is from a
profit. Others concerned the availability of wood and water, shareholder, Aline Puxley,
the healthiness of the place and its topographic position. The who lives near Newbury in
overall conclusion was that “the best situation for a mine is a Berkshire, England and writes
mountainous, woody, wholesome spot”. about one of the books
The questions have multiplied and become more mentioned: “Hungry Hill was
complicated since that was written, but with mineral based on my husband’s family
discoveries the big question is still the same as the one asked and Copper John was his
in 1768. Can it, realistically, be dug to advantage? great great great grandfather.
Daphne du Maurier was
billeted on Henry Puxley in
Hertfordshire and read the
Chris Morrissey is a former chief geologist of the Rio Tinto Group. papers relating to the copper

22 Rio Tinto Review

22862_p21 22/2/08 17:29 Page 3
mines at Allihies in County
Cork.”
The papers are now in a
new mining museum at
Allihies – but in them Du
we read
Maurier had found the
inspiration for her epic 100
year adventure story of
feuding men (Brodricks v
Donovans), voluptuous
women, fighting and death in
Ireland’s violent days.
The Cornish Mining
Heritage website tells how
the history of the mines is
inextricably bound up with the
Puxley family which was of
English origin with Galway
connections. John Lavallin
Puxley (“Copper John” in the
book) formed the Allihies
Mining Company in 1812 and
started work at Doneen where
“a quartz vein showing the
telltale green signs of
secondary copper staining
extends into the sea and may
still be seen today”.
The Brodrick’s home in the
book is Clonmore – in reality,
Dunboy Castle where the
Puxley family lived. One
journalist described it as
“probably the greatest house
in all Ireland, mixing the
styles of French chateaux and
the practical sturdiness of an
old English Manor”. Du
Maurier did not need to invent
the scenes at the end of the
book when it is burned down.
As in fiction, so in life: the
castle was torched by IRA
terrorists in 1921. It has now
Ghostly remains: Dunboy
Castle, destroyed by fire
in 1921.
been rebuilt and is reopening
as a luxury hotel.
There’s a further twist in
Mrs Puxley’s tale. In 1950 her
first cousin, Lorna Archer-
Houblin, married Rio Tinto
chairman Val Duncan, one of
the mainsprings of the
Group’s growth at that time.
The other letter that
caught our special attention
was from Michael West,
formerly chairman of Mining
Journal in the UK.
“I have read the December
‘Review’ with usual interest
but have been surprised by an
omission in the article by
Daniel England.
“There is a thriller about
mining in Australia by
Hammond Innes that should
merit inclusion. However,
more than that, it was all but
sponsored by Rio Tinto Zinc in
the early seventies at the
time when Val Duncan was
chairman. Hammond Innes
was encouraged to go to
Australia and was given
considerable help in travelling
around in the mining areas.
“I am aware of this as it
was my turn to be president
of the Royal School of Mines
Association in 1972 and Val
Duncan was the leading
speaker and Hammond Innes
replied on behalf of the
guests. Part of the amuse-
ment of the evening was that
Hammond Innes had port-
rayed a Royal School of Mines
graduate in Australia in a very
poor light; indeed he
presented him in the book as
a crook!”
The book is called Golden
Soak (Collins 1973, published
in paperback by Pan 1996). It
is a thriller set in the Pilbara
mining area at the time of the
great nickel adventures of the
early seventies. The plot
seems laboured by today’s
standards but there’s lots of
authentic mining detail and
the climactic scenes in the
scorching heat of the deserts,
as the narrator searches for a
missing miner, are vivid and
absorbing indeed.
Finally, how could we resist
publishing extracts from this
letter from a shareholder,
Rory Darling, who lives in
Oxfordshire, England?
“I receive a number of
similar publications which
are so dull by comparison
with your magazine . . .
“Rio Tinto is a company
that many in the UK know
little about as most of its
operations are abroad and
your magazine is the main
point of contact that small
shareholders have with the
organization – and your
articles are always access-
ible for those of us who are
not familiar with what the
company does.
“I am appreciative, and
thank you for the thoughtful
way you have produced a
diverse and comprehensive
review.”
Rio Tinto Review
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