Rio Tinto Group (RIO) Q2 2022 Earnings Call Transcript

Rio Tinto Group (NYSE:RIO) Q2 2022 Results Conference Call July 27, 2022 6:30 PM ET

Company Participants

Menno Sanderse - Head, IR

Jakob Stausholm - CEO & Executive Director

Peter Cunningham - CFO & Executive Director

Conference Call Participants

Liam Fitzpatrick - Deutsche Bank

Richard Hatch - Berenberg

Paul Young - Goldman Sachs

Alain Gabriel - Morgan Stanley

Danielle Chigumira - Crédit Suisse

Jatinder Goel - BNP Paribas Exane

Hayden Bairstow - Macquarie

Robert Stein - CLSA

Lyndon Fagan - JPMorgan

Myles Allsop - UBS

Alex Pearce - BMO

Amos Fletcher - Barclays

Tyler Broda - RBC Capital Markets

Glyn Lawcock - Barrenjoey

Lachlan Shaw - UBS

Jakob Stausholm

Good morning, and good evening to those of you listening in the Far East and Australia. It's a pleasure to present in person for the first time in London for 2.5 years.

Our world has certainly changed in that time. The short-term outlook remains truly unpredictable, from logistics and supply chain issues and ongoing COVID impact to the war in Ukraine and increasing geopolitical tensions. Lately, heightened inflation in the Western world is putting pressure on real incomes and spending power. This is forcing governments and central banks to take actions, which add to the risk of potential recessions. This clearly impacts us. However, it is worth noting that China isn't experiencing such inflationary pressures. Therefore, it has more room to maintain a supportive policy stance and introduce additional easing measures to stimulate growth. The ultimate impact of these measures will be balanced by the effect of the ongoing COVID-19 restrictions. Overall, this could provide the mining industry and Rio Tinto an advantage over other industries considering China's role in global commodity demand and particularly iron ore.

For Rio, China accounts for over half of our revenues. We remain convinced that the longer-term trends that we highlighted last October remain intact, underpinned by ongoing urbanization and additional demand created by the energy transition. This reinforces our belief that Rio Tinto is a mining company that is uniquely positioned for the future. While it is a time of continuing economic uncertainty, it is also one of opportunity. We have the portfolio to play a vital role in supplying materials for the energy transition, the ambition to decarbonize our business and the conviction that we are making the right investments in our culture and our partnership to unlock our full potential.