Karratha's Red Earth Arts Precinct, the Pilbara. Rio Tinto is a funding partner
Cautionary and supporting statements
This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (together with their subsidiaries, "Rio Tinto"). By accessing/attending this presentation you acknowledge that you have read and understood the following statement.
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When I presented our results in February, I set out a pathway to make Rio Tinto stronger, building on what are clearly fundamentally robust foundations.
To me, our performance this half reaffirmed the underlying qualities of Rio Tinto. It also highlighted the need to strengthen the business for the long term.
We again achieved a strong safety performance, despite challenging conditions. It remains our first priority and we will never be complacent.
Government stimulus to aid economic recovery in response to ongoing COVID pressures led to robust demand for our products, at a time of ongoing supply constraints. As a result, we saw significant and prolonged price spikes during the first half, leading to strong free cash flow.
As an industry, we benefited from host governments recognising mining as an essential business. It allowed us to focus on safely operating our world-class assets and delivering products to our customers, despite necessary COVID restrictions. This meant people remained employed, suppliers had our business, and taxes and royalties continued to be paid.
And our people once again demonstrated their agility, resilience, and commitment to Rio. This is particularly true in terms of dealing with COVID. In 2020, we scrambled to keep operations running. In 2021, COVID has been even more challenging, especially in terms of
our ability to get people to our assets. This is particularly true in Mongolia and Western Australia.
However our fundamentally strong foundations enabled us to achieve EBITDA of $21 billion and ROCE of 50%.
We recorded $7.3 billion of taxes and royalties, have invested $3.3 billion in growth and sustaining capex, leading to free cash flow in excess of $10 billion. As a result, we will return $9.1 billion to our shareholders. This is in line with our dividend policy and reflects a strong pricing environment. However, we remain cautious on the outlook and must ensure we remain resilient in all scenarios.
In June, I was very pleased to be able to travel to our Jadar project in Serbia, meet with some key stakeholders, and visit the team on the ground. This week, I'm proud that we have committed funding for Jadar. This is an important step forward, moving Rio Tinto into battery materials at scale. It also demonstrates our commitment to investing capital in a disciplined manner to shape our portfolio for the future.
Lithium is a key commodity for the electrification of transport, large scale batteries and energy storage. We have a critical role in supplying the metals and minerals required for the global energy transition.
Despite our outstanding financial performance, the past six months has confirmed there are clearly areas where we need to improve.
Firstly, to be the 'best operator'. In the first half we experienced too much operational instability. We are addressing this in a systemic manner and will sharpen the consistency of our performance.
Secondly, the 100 plus stakeholder meetings I had in the first half have strengthened my conviction that the foundation for our business is achieving impeccable ESG credentials. In order to sustainably deliver shareholder returns we must ensure all our stakeholders benefit from the success of Rio Tinto.
Thirdly, we must excel in development - both organically and inorganically. We will only pursue opportunities that create value. Jadar is a perfect example.
Finally, we must become a more outward-looking company, more in-tune with society. This is our social licence to operate. It is judged by others and essential for long-term success.
We are making tangible and lasting changes to the way we engage, interact and operate. This goes beyond my leadership team and is being embedded across the entire company, to ensure we're making sustainable changes.
Let me now hand over to Peter to take you through the financials.
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