Rio Tinto Group (RIO) Q2 2013 Earnings Report, Transcript and Summary

Well good morning everybody. And I am pleased to see all here and good afternoon to those of you in Australia and welcome to our 2013 interim results presentation. For those of you that don’t me, I am Sam Walsh, chief executive of Rio Tinto. And I am delighted to introduce my chief financial officer Chris Lynch will be presenting from Melbourne. He will come on the big screen at the appropriate moment. Chris joined my team in April and since then he’s been making a real difference, particularly bringing sharp focus to our capital allocation and cost reduction programs. It’s great to have him on board. Safety is one of our key core values. It brought me great sadness to learn of the two fatalities we had in our operations this year, one at La Granja in Peru in February and one at the [Elmus Velter] in Canada in April. I would also like to express my sympathy for all those impacted by the tragic incident at Grasberg in May. My goal is to make sure that all of our employees and contractors return home safely to their families, loved ones and friends at the end of every day. So I have challenged my team to deliver year-on-year improvements in safety performance. Doing so will remain a priority for the group for the remainder of this year and beyond. So let me make some comments about our performance this half. Overall I am pleased with our progress and we are seeing seriously good results from our business improvement initiatives. We delivered solid underlying earnings of $4.2 billion and a strong cash flow from operations of $8 billion. Cash flows were actually in line with last year despite the fact we’ve seen weaker commodity prices and it reflects the total cost improvements of $1.5 billion before tax across our operations and our evaluation exploration projects. Businesses are performing well. In particular we recorded first half production, record first half production and shipments of iron ore in the program. We reduced our capital expenditure by 9% during the first half of the year when compared to 2012 and we are making good progress in divesting non-core assets. As our interim dividend has been increased by 15% compared to last year, in line with the increase we made to our full year dividend six months ago. I believe that we’ve set ourselves firmly on the path forward to becoming a leaner might tightly run business in pursuit of greater value for shareholders. So back in February I set out my initial views of our immediate priorities. I made it clear that our focus would be on disciplined execution of our strategy. I set a clear direction for the business to bring greater focus, greater discipline and greater accountability to the west we will work. I set the expectation that our leaders and employees should act as business women and men running their part of the business as if I own it. My executive committee is now in place and they are clear about my vision for the group. In recent months we’ve taken in-depth look at the outlook for our markets, how we are traveling, the risk the opportunities that we face, the best plan to get the business back on track. We are seeing slightly slower growth in China but at least off a much bigger base. We are seeing continuing underlying structural issues in Europe and increasing uncertainty over the unwinding of the easing programs particularly in the USA. In China, the economy will evolve as it transforms to a consumption led growth. Sentiment will continue to be influenced by these global structural shifts creating volatility in our markets. This is likely to persist making it harder to predict overall growth. But importantly our long-term view of the Chinese economy remains unchanged. We expect to see continued robust growth in absolute demand for commodities. In terms of what does this mean for us? Well we need to build a stronger and more resilient business. And since February we’ve implemented significant restructuring and transformation across the group and you will hear more about our cost reduction when Chris shares some of the details with you shortly. We are taking the right decisions to improve performance to strengthen our balance sheet and to deliver results. And these efforts will continue. Our results are gathering pace and momentum and we can demonstrate solid progress. Those of you that know me and that's quite a number of you, I am single-minded in delivering results. Not just talking about what we intend to do. So let me share with our progress against the priorities that I set. We are showing good momentum to improve performance at all of our businesses by reducing costs and improving productivity. The cost reductions that we’ve realized in the first half across our operations and evaluation projects is clear evidence of the success that we are achieving. And we’ve been focused on improvements for some time as you know. We have simplified and improved the portfolio by divesting or curtailing of 15 assets -- 15 over the past five years. It’s now clear we can’t sell specific aluminium for value in the current market. So therefore we are bringing these assets back into our aluminium product group. We do have a way to go to improving the performance in the aluminium business and its returns. Let me be clear there is no straightforward easy solution here but we are making progress in aluminium, including continuing success in reducing our cost base where we achieved a cost improvement of around $200 million so far this year. In our iron ore business, well it continues to go from strength to strength. As we complete our 290 million ton a year expansion I particularly ask the team to aggressively pursue opportunities for productivity enhancements. This will allow us to maximize our return on our investment on this world class automated system. Productivity is at the top of my agenda. We’ve achieved a great deal to improve performance at all of our businesses and a greater focus on productivity across the entire group should lead to even better results. Strengthening our balance sheet continues to be our focal point of our efforts. Overall as you would have seen our net debt actually increased during the first half to $22.1 billion. This is quite frankly higher than Chris and I would like. We will reverse this trend and reduce net debt over time ensuring that our balance sheet is robust and allowing us to continue to deliver shareholder value whatever the economic environment. In the course of the last six months we’ve instilled greater discipline in our capital allocation processes as I promised and enhanced the systems and controls that govern our business. As a result we are prioritizing our projects, we are only investing those projects that have got the highest return. In the first half we reduced our capital by $668 million compared to last year. For the full year 2013 we expect our capital to be around $14 billion. This will be 20% less than last year’s peak capital. And finally we are delivering results by completing our major projects and divesting of non-core assets. So far this year we started the commissioning of four major projects including the open pit mine and concentrator at Oyu Tolgoi and we’re about to commission a major expansion of our Pilbara iron ore business to 290 million tons a year of annual capacity. These are significant milestones. And we’ve made good progress on our divestments with $1.9 billion of transactions announced or completed during the first half of this year. Simplifying our portfolio by divesting of non-core assets will bring greater focus to our business and allow us to realize value now. So in summary before I pass to Chris, we are making solid progress against our priorities to improve our business, to strength our balance sheet and to deliver results. I am confident that we will achieve our commitment to you pursuing and delivering greater value to shareholders. Chris will now take over and he will take you through some of the detail of our performance so far before I will return to update you on our major projects and to handle questions and answers. So over to you Chris.

Thanks Sam. Let me start by saying I am completely aligned with Sam’s vision to deliver greater value for our shareholders. We understand what we know to do and I will be working closely with Sam and my colleagues on the executive committee to deliver results. As chief financial officer my focus is particularly on strengthening the balance sheet. This will be achieved by three key actions, first we know to improve business performance through our cost reductions and I think we can demonstrate results in this area. Secondly, we have to improve our discipline in the way we allocate capital. We have been taking a hard look at the projects in our pipeline and I can assure that only projects of the highest quality will proceed. The third action we have to address is delivering real results from our divestment program. I will return to each of these but let me start off by reviewing how the businesses performed in the first half. It’s worth remembering that our underlying earnings in the first half of 2012 included some $246 million of one-off benefits. These were mainly from the disposal of various exploration properties, including interest in extract resources in Kalahari minerals. These benefits don’t repeat this year. Turning to prices, so far this year the iron ore spot price has ranged between $110 and $160 per ton delivered to China. On average our achieved prices were $137 a ton in the first half, $5 lower than the same period last year. Coking coal prices are breaking substantially due to strong supply growth from seaborne producers and ongoing weakness in import demand. And the copper market has been a modest surplus resulting in a 7% price decline. Overall lower average prices led to a $1.3 billion drop in underlying earnings compared with 2012. Volumes though was strong. Our volume increases enhanced earnings by $359 million, just under a third of this came from record first half iron ore sales following the re-writing of our operating in the Pilbara to 237 million tons of annual capacity. We achieved this by progressive debottlenecking and incremental productivity gains. And we will be seeking more of the same going forward. Aluminium volumes increased primarily as a result of production resuming in Alma following resolution of the lockout that occurred in 2012. Volumes declines mainly came from lower sales of gold and industrial minerals. The net volume variance increased earnings by $228 million. We also delivered good cost reductions with $1.5 billion in total pretax cost reductions leading to a $978 million boost to underlying earnings. These improvements are across both our operations and our exploration and evaluation spend. We are pleased with the momentum on our cost reductions and I will come back to these a little later. The effective corporate tax rate on underlying earnings, excluding equity accounted units was 38% for the half. This is higher than the rate last year due to utilization of the MRRT deferred asset and the other first half tax provisions. We expect the effective tax rate to be between 33 and 35% this year as a whole with the cash tax rate of around 30%. Finally a number of 2013 one-off items, including an iron ore royalty payment to joint-venture partners led to the other variance. So overall our underlying earnings were just over $4.2 billion. These results show the resilience of our business in the face of a weaker pricing environment. I also show the very tangible savings we realized from our cost reduction program which is flowing through to the bottom line. As Sam has said, we can expect the market volatility to continue and we will be planning for a broad range of economic scenarios as we look ahead. Our net earnings of $1.7 billion were lower than underlying earnings. This was mainly due to non-cash exchange losses on US dollar debt held in Australia dollar functional currency companies. These losses are largely offset by currency translation gains recognized through the equity section of the balance sheet. However all US dollar debt is not affected by these exchange movements. However at least they stay where they are, our reported costs will be lower in the future. Other items affecting net earnings included $340 million write-off of historical costs at Kennecott Utah Copper following the pit wall slide in April, primarily deferred stripping costs and some damage equipment. Let’s now focus on the cost savings. In the first half of this year we achieved overall pretax cost improvements of $1.5 billion against 2012. As you can see from the chart, $977 million of this amount was due to improvements in our operating costs where we have a full year target of $2 billion. Our exploration and evaluation expense on projects was $493 million lower on a pre-tax basis tracking well against our full year reduction target of $750 million. These results demonstrate the work we are doing to address this cost base. Let me give you some more detail. Firstly on our operational costs, I should point out these cost improvements are measured using our established variance analysis methodology and so can include some unit cost efficiency from increased volumes. But our focus is on reducing our dollar spend regardless of changes in volume. We currently have over 1500 discrete projected being implemented across the group. Clearly we don’t have time today to go into each and every one of these but we’ve prepared some case studies showing the work being done across the group to save money. For those of you in the room in London, these can be seen outside the current room and they are also available on our website. Let me make just a few comments about some of the good efforts. Starting with our aluminium division, a major cost driver for this business is raw materials where we have achieved cost reductions well ahead of market prices by renegotiating pricing mechanisms, securing new sources of supply and standardizing our product qualities. This has led the cost savings of $37 million across our raw materials spend in the first half compared to last year. Another example comes from our energy group where we are targeting a reduction of over 60% in the number of contracted companies we engage. In addition to negotiating reduced rates in order to drive the material reduction in contract spend levels. This is forecast to deliver over $100 million of cost savings for the full year of 2013. And across the business as a whole we’ve reduced total headcount by a net 2200 people in the last 12 months. We’ve achieved a gross reduction of 4000 rolls but this was offset in part by an additional 1800 rolls related to support our expansion program in iron ore. Work we are doing is leading to real improvement driving cost lower and flowing straight into our P&L. We’ve also seen a number of adverse influences on our costs. The major flood in the Gladstone area in Queensland, Australia severely disrupted operations at [QIL and Yawun] and we continued to incur additional operational readiness and ramp-up costs in the Pilbara as part of our growth plans. Despite these headwinds, we have delivered solid operating cost reductions of $977 million. Our exploration and evaluation spend was $483 million lower than the first half of last year. We are concentrating our efforts on projects which have the most potential to deliver value in the medium term. Longer term growth options are being maintained if they are on strategy but we are taking a much more disciplined approach about the value of each project. We have retained our high quality in-house exploration team, plus we have reduced our central exploration spend from $111 million to $85 million compared with the same period last year. We still view this as a vital activity for us throughout the cycle. This approach has been well rewarded. Over the past decade, our geologists have discovered nine tier 1 resources, which is an excellent achievement. Our investment in exploration will ensure that we continue to have an industry-leading pipeline of tier one growth options that we may choose to develop over the years to come. Turning now to cash flow, cash flows from our operations of $8 billion are actually slightly higher than this time last year despite lower prices. We achieved these results through our focus on exploration efforts, cost reductions and productivity improvements. Other cash inflows included a $130 million of proceeds from divestments. So far this year we have announced or completed $1.9 billion of divestments through eight different transactions. The majority of these are expected to complete in the second half. The Eagle and Palabora both closed in July and the cash proceeds of these are now both in the bank. We plan to pay down debt with these proceeds which will help strengthen our balance sheet. Our capital expenditure in the first half was $6.9 billion with much of this invested in our large projects in Pilbara. Other large outflows included tax and dividend with the 2012 final dividend paid in April of this year. Overall, our net debt increased during the half by $2.9 billion to $22.1 billion as anticipated. Returning to capital expenditure which peaked in 2012 at $79.6 billion, this year, we expect it to reduce to around $14 billion as we complete a number of major projects. So far we have started commissioning four major projects and Pilbara 290 million tons is due to ship first ore in September. To bring greater discipline to our capital allocation, we are changing the way we assess projects. Only the best will attract future investment. So we need to show that the best use of cash rather than just a good use of cash delivering the highest risk adjusted returns. This must be demonstrated not only when compared with other investment opportunities but also when compared with other competing uses of cash, including returning it to shareholders or paying down debt. A positive NPV alone is not an offer to attract investment. We will also consider a range of other metrics some of which include speed of payback, internal rate of return, return on capital employed as well as the overall risk profile of both the project and the company, including that project. But to be clear a more disciplined capital allocation process does not mean that we lack growth options in the short medium or long-term. As CFO, I am keen to see us reduced our net debt over time. A stronger balance sheet will ensure we're well placed to prosper in a much broader range of potential futures. We improved our liquidity in June when we issued $3 billion of short debt at U.S. dollar bonds. As you can see, we have a sensible debt maturity profile with no more than $3.2 billion of debt maturing in any calendar year. At the end of June, we had cash on hand of $7.3 billion and undrawn committed credit facilities of $8 billion. So we're taking a pragmatic approach to managing our balance sheet consistent with the savings to support a single A rating. Let me finish by saying again, we understand what we need to do to deliver greater value for our shareholders. We are improving the business and our performance in the first half was strong benefiting from $1.5 billion of total cost improvements across our operations and evaluation projects. We are driving greater discipline in our capital allocation, prioritizing our projects and reducing our overall CapEx. And we are delivering results from our investment programs. We’ve already announced or completed $1.9 billion of transactions this year. Getting our business in shape takes focus, discipline, hard work and some time. We're on the right path and are making good progress. Now I'd like to hand you back over to Sam in London.

Thanks for that Chris. And it's great to have Chris on board. I'd now like to give you an update on our major projects, starting with our recovery plant at Bingham Canyon. This is well underway and quite frankly is proceeding better than we’d originally expected. That said, a significant amount of work still remains to be done. The site was a defining moment in the 110-year history of the Bingham Canyon mine. And the employees at Kennecott have rallied as part of the recovery efforts. We are delivering approximately 100,000 tons of ore per day to the concentrator from the pit. And this is being supplemented by ore from low grade stockpiles. Concentrator throughput has recently been close to full capacity, which is a solid achievement after such a significant event. Clean-up of the site has begun, a major piece of work here is to reestablish the heavy equipment access road which we expect to have completed by the first quarter of 2014. This will enable additional ore production along with the remediation and waste removal. But it does remain a significant amount of site material to move which we expect to continue until the end of 2015. Replacement equipment importantly is already operating and four of the 13 damaged ore trucks have been recovered and they are back in service. As you would expect, our operating costs will also be affected in the second half of 2013, driven by recovery costs, the purchase of concentrate to meet customer commitments. However, the team continues to pull costs out of the business and align to the changed environment, including the removal of a number of rolls. The business interruption and equipment loss insurance process is also underway. Near and medium-term production is being limited by being able to physically access the ore. In 2013, we expect to produce around 150,000 tons of copper with further improvements as further slide in 2014 and 2015. At Oyu Tolgoi, we have reached a major milestone in July making the first delivery of concentrate to our customers. The completion of this $6 billion greenfield project, the largest ever private investment in Mongolia is truly a remarkable feat. Thousands of people who have contributed to our success here should all be proud of what's been achieved. Productions from the concentrator continues to ramp up with throughput rates now averaging over 80,000 tons of ore per day. We expect to be running at full capacity in the second half of this year. We continue to discuss a range of matters with the government of Mongolia but progress has been made on several fronts, including receiving ore permits to export concentrate, increasing Mongolian management numbers and resolving the concerns about the use of international bank accounts. There are still a number of substantive matters that remain unresolved, including uncertainty around project finance approval and other aspects of investment agreement. So we recently announced that we’d suspend further funding and work on the development of the underground mine until these matters are concluded and a new timeframe agreed. However, I strongly believe that both sides are committed to working through this, it is in everyone's interest that there is certainty that there is stability and that we and others can continue to invest with confidence in Mongolia bringing benefits to the country as well as our shareholders. In the meantime of course, the open pit mine and concentrator will continue to ramp up production. Now back to Australia, our Pilbara proper iron ore expansion program. We're making great progress towards the commissioning of the next phase of growth. What you will see is add 53 million tons to which 290 million tons a year of annual capacity. We remain on track to deliver first ore from the expansion in September in line with the accelerated schedule that we announced in February. In April, we achieved a key milestone with the delivery of the ship loader, which is now installed at Cape Lambert. All of the coastal infrastructure for 290 is now in place. And the first train was unloaded by the new car dumper on the 20th of July. Also between July and October of this year, four new trains will be delivered which will help us to steadily ramp up shipments over the next 12 months. This highly valuable project will deliver excellent returns for years to come. The phase 2 expansion of the port, rail and power infrastructure to 360 million tons a year, as you know was approved in June last year. And as I previously mentioned, there are multiple pathways for bringing on new mine capacity. We could choose to develop new mines to ramp up quickly and deliver tons or we could fill some capacity with incremental tons from existing mines at lower capital intensity before we bring the new mines on. But I can assure you that we'll always be focused on getting the most out of our existing and newly expanded business. And we've already demonstrated our ability to grow production through low-cost incremental productivity improvements. Our Pilbara expansion project, as you know, has grown from 320 million tons to 360 million tons a year as we progressively found bottlenecking opportunities. So we have options to grow from 290 to 360 with flexibility around the timescale and capital intensity. The decision on the which path we will actually choose will be made as we previously said at the end of the year. So in closing, let me sum up the key points for today. We have delivered solid results and we are making clear progress against our objectives. We are improving performance by reducing costs and improving productivity. We have reduced our capital expenditure and we are taking a much more disciplined approach to capital allocation and we're delivering results by completing approved projects while divesting of non-core assets for value. This will lead to a stronger balance sheet. We're on a journey here, but I am absolutely confident that we're moving in the right direction. Our efforts are and will continue to be driven by our relentless pursuit of greater value for you, our shareholders. So it's now time to take your questions. I'll start here in London and take three calls and then I'll move to the telephone. Before I do, I'll sit down. Okay, we've got a call here -- a question here. Rob Clifford – Deutsche Bank: Yeah, hi Sam, Rob Clifford, Deutsche Bank. Two questions, firstly, given your net debt is increasing and you have identified you are pulling back on a couple of sales. How your discussions with the ratings agencies going on your position with regard to your credit rating? And the second question is on your rate of cost savings so close to $1 billion saved in the first half. Is it true to say that those things that you're putting to save that $1 billion will carry on in the second half and therefore, another $1 billion in the second half is already in the bag. So you almost have to do nothing to achieve the 2 billion savings?

Let me answer the cost saving and then I will ask Chris if he could handle the ratings because he has the detailed discussions there. But in relation to cost reduction, we promised that we’d deliver 2 billion of cost savings at halfway mark, we're at 977 pretax with a further 483 of exploration evaluation. And I'll put that together, because well it really makes sense for us to look at it as 1.5 billion of costs out of the business in the first six months of this year. Now it's true that some of the savings will be one-off, that's not a large percentage of it. And some of the savings have been there for the full six months, some have only actually been in there for one month, or two months, or three months. So the recent momentum there is -- momentum there is gathering. Importantly we have got the organization focused on it. We've got an organization that gets it, they understand what we're doing and this will lead to further developments. I wouldn't say that the second half we can all relax in our roles and let momentum just carry us. Because I am focused on the fact that next year we're expecting to deliver a further billion that will make a [claim] of 3 billion for next year over the two years, 5 billion. It is important that I keep the organization focused, that we don't relax. Remember that our costs did increase by 2 billion a year over the last three years. So there is a lot of opportunity there, it is hard work, it is difficult work. But I’ve got the organization focused on it. Chris, why don't you comment on net debt and the rating agencies?

Thanks Sam and thanks Rob for your question. The increase in net debt at the half was pretty much fully expected internally and in our briefings with the rating agencies. Just for completeness, I think everyone is aware that we are currently a single A, we are working toward [turning that], we've got actions in place that we believe will maintain that. The issue for S&P who have a some negative outlook is a longer term view about where do we think the cash flow come from and in simple terms the process from divestments will be used to pay down debt. We are making some changes to our CapEx profile in future years. And we are taking costs out of the business. But all I can point to is fact is the achievements in the first half. And as we have said, the net debt increased pretty much in line with expectations internally and in our conversations with the rating agencies. With regard to Moody's, the conversation there is that they've got us on a stable outlook and I believe we will be able to retain that. The progress on the divestments, we have talked about the $1.9 billion of proceeds. We haven't yet received the bulk of that money actually. So the high likelihood is that the bulk of the difference of that will come through in the second half and we are still proceeding on some other opportunities in that area. So I am pretty comfortable that we have got the right settings in place and we have launched the right actions but ultimately the actual rating obviously is outside of our hands, as that's in the judgement of other people. So but we think we're doing the right things for the company. I think we’re doing the right things that we have for our shareholders and we think we're doing things that would sustain and support single A. But ultimately the judgements for others.

Thanks Chris and thanks Rob for the question. Another question here we'll take the one beside Rob, you will all get a chance, so don't panic. Myles Allsop – UBS: It's Myles Allsop from UBS. Just a couple of questions as well maybe on 360. First of all, you're talking about the flexibility there and the focus on maximizing shareholder value across the group. Could we read into that if the market conditions are not as strong as you expect to be today that it may not be 360 and it maybe 340 or it may be 360 by 2017, not 2015? And just following up on the rating agency question with Chris, is there a target in net debt level that is set that after which you will start considering returning cash to shareholders?

Okay. Let me answer 360 and Chris if I can call you on the rating question. The beauty about 360 is that we do have a lot of flexibility in terms of how we bring it on. But I mentioned that, the organization, I, Chris, the organization is very focused on productivity improvements and what we can physically do there to squeeze more tons through the system. We did last year announce that the re-rating of our nameplate capacity in the Pilbara from 230 to 237. And there is going to be more there and part of the work that’s underway (inaudible) now is looking to see well what are the productivity improvements. Likewise with the 14 existing mines that we've got -- what are the opportunities for low capital investment there to get additional tons out and then of course the new mines. So there is a lot of work going on behind the scenes. Importantly, it's not impacting on the timing of the project, because the mines have got a shorter lead time than rail and port infrastructure. And you have to say that we've got endless flexibility because we do and we can play that accordingly as to how we see the market. But importantly the fundamentals in China continue to be strong, with slightly slower growth but a much larger base, India has -- there's been commentary there that they are going to have to start importing iron ore. Well that’s going to lead to -- well developments in the rest of Southeast Asia. Those assets are extremely well placed, being the lowest cost operations of iron ore in the world, on top of that being proximate to China. Chris, why don't you talk about net debt and the ratings?

Thanks Sam and thanks Myles for the question. We don't have a precise definitive target for net debt levels. And that's largely a function that we are looking to reduce our net debt at the moment but anything we can do to strengthen our balance sheet puts us in a position to be able return funds to shareholders in both larger volumes and a quicker time period. So our intent at this stage is to continue to be committed to the progressive dividend , that's number one. We will have --and the intent is to use the proceeds of disposals to pay down debt. The third thing is our capacity to reduce our debt also is bolstered by two other factors. One is any reduction in the capital expenditure and also any improvement in the cost structure. So as we can enhance our cash flows versus what they were previously been predicted to be, we can apply that to either paying down debt, addressing the balance sheet issue or returns to shareholders. So I think our focus is going to be the progressive dividend and reduction in net debt levels for the next probably six to 12 months. But ultimately the returns to shareholder are totally a function of board's decision-making. You are aware the interim dividend is largely in our settings as arithmetic outcome, it's half of last year's total dividend . And the bigger dividend decisions are made at the around the end of year results. So keep an eye in that one in there but the intent at the moment is to use the proceeds of disposals to pay down debt and the more we can enhance the business, the better capacity we have for both returns to shareholders and reduction of debt.

Thanks, Myles. One more question from the floor here and then we'll move to the telephone. Menno Sanderse – Morgan Stanley: Menno Sanderse at Morgan Stanley. Two questions. One on M&A and one on the capital allocation. It's good to hear that capital allocation is going to change and you mentioned a number of measures and metrics you are using, but the problem still remains garbage-in and garbage-out and clearly in Mozambique's case, you could argue that wasn't the best stuff that went in. So how have you changed the company to make sure the data going into this is not over optimistic as it has been for the industry as whole the last 10 years? And secondly on aluminium I take your point, there are no easier solutions but you would think that easier solution was to bring your own cost down, close to high cost assets. So why are you slowing down Kitimat which should be a very low cost asset when it's finished and not taking quicker action on the higher cost ones?

Thanks for those two questions. Look in relation to capital allocation and investment decisions, I have mentioned that we have strengthened investment committee process and the inputs into that process from business evaluation group and our technical evaluation group. Quite frankly during the growth period, we had relaxed some of the checks and balances that those groups provided to our investment committee. We made a decision to bring all investments through to the investment committee. Well you need to have a check and balances in order to ensure that there is a filter process there. I think the best way I can describe it is that there are things that need to be worked through in the middle of an organization. You can't actually determine these from the top of the organization. You need the subject matter experts. The investment community can't make decisions as to whether there has been enough infill drilling. They can't make decisions as to whether the hydrology model rather the geo-technology. They've really got to rely on the middle level experts to do that. We had weakened that process. Chris and I have reinforced the basic systems that we operated really since the establishment of Rio Tinto, those systems work, we know that they work. The organization gets it to understand how they work. So that has helped us get the discipline there. Of course, we’ve created an environment of [inverted commerce], scarce capital and that also ensures that you are putting the priority on only the best projects, it's not every single project that gets through and pass muster. In relation to aluminium I think there has been some very good work in terms of reducing the costs in the aluminium business. If you compare our business to other western aluminium producers, we are doing pretty well. But of course the whole segment has been impacted by lower aluminium prices and the rate of growth of aluminium particularly in western China. So we have reduced that cost, we have taken off 600,000 tons of smelting capacity. We have either curtailed or sold 15 of aluminium assets. And you can see in our cost and our improved results in our aluminium business that we are making a difference there. And am I satisfied with where we are? No, I am not. There is clearly more work to be done. And we have got that business and we’ve got the broader business focused on improvement, focusing on costs. Some people have said why don't you spend your time traveling around the world whatever? The answer is no. I spend the majority of my time focusing on the contour of change that we need to make, focusing on the steps that we need put in place in terms of clear goals, clear vision, clear incentives, clear delivery rather than being administrator for tourism. I have visited our major operations around the world, Montreal, Perth, Sydney, Brisbane, Melbourne and so on. I have visited those to deliver the message. Then I step back and I know that I am looking at what they're doing, I know what they need to do and they are delivering. So is the journey to finish an element? No, it’s not but we've got the right steps in place and have a look at the results, we're delivering. Could I have a question from the telephone.

(Operator Instructions) We shall take our first question from Lyndon Fagan of JP Morgan. Please go ahead. Lyndon Fagan – JP Morgan: I've got a couple of specific questions on the iron ore business. Firstly, just with Tom Price, it's running at 24 million tons but according to your reserves statement, there is three years of reserves left. So I am just wondering can you perhaps give us some color on the mine lives there and is there upside to the three years? The second question is specifically on Silvergrass, I am just wondering does that come up for board approval in 2013?

Thanks very much Lyndon for your question. And people in this room, some of them are probably wondering what on earth we're talking about but these are two of -- one is an existing mine, one is the future mine, Tom Price was the original mine that started in 1966. And I can remember when I joined the iron ore business in 1994, people said Tom Price had seven years left, well the life continues as we find more deposits. Particularly what we have done at Tom Price and in fact Paraburdoo another long dated mine, we will be able to bring in satellite deposits and the most graphic example there is Western Turner Syncline which is on a ridge sort of over the back of Tom Price and there we have been able to build a conveyer that actually links those two mining operations, so they were actually using the Tom Price plant and facilities. I see that type of strategy continuing in relation to Tom Price. We've got a lot of good equipment there, it's being well looked after, well maintained, it has got a lot more life in it and that's how we'll extend the life there. In relation to Silvergrass, Silvergrass is one of our options, Silvergrass and Kodaideri are the two major options in relation to the new mines associated with 360 and that will be a part of the review that the board undertakes in the latter part of this year. We may or may not announce a Silvergrass at that point in time depending on what is the logical and most rational order to develop taking into account the productivity improvements I mentioned. Let's take the next call from the phone.

We shall take our next question from Paul McTaggart of Credit Suisse. Please go ahead. Paul McTaggart – Credit Suisse: Sam, I think you alluded to it earlier. You mentioned that FX rate hold in the second half of the year obviously that always come back $300. What potentially can you achieve and what rate underpinned the initial 5 billion, the 302 was put in place the four of those targets, what kind of FX rate were you assuming when you put those targets in place? I'm really trying to get a sense of can we get a positive surprise?

Thanks to that Paul. Look the exchange rate is outside of the targets that we set for the $5 billion. I can't recall exactly what the rate would have been at the time we set it but certainly as Chris alluded to if the Australian dollar and the Canadian dollar continue at their lower rates, then there will be a flow through in relation to improved costs. But the cost reduction work that we got underway and the evaluation and exploration, those are the 1,500 odd projects that Chris referred to, all projects aimed at physically reducing our cost base rather than perhaps looking on a lucky win of what may happen with an exchange rate.

We shall take our next question from Adrian Wood of Macquarie. Please go ahead Adrian Wood – Macquarie Securities: I have got a just a couple of questions. First of all on the 290 expansion, back at the second quarter result. You spoke of a steady ramp up for the facilities. You are now talking about an accelerated ramp up. Can you just talk through if there has been any change in management mindset over the last three weeks? And then just regarding Turquoise Hill and Oyu Tolgoi, you announced today another larger bridging facility. First of all what's changed over the last couple of weeks, let's assume that grows so significantly. And given that OT is now running at 80% of nameplate capacity and you expect it to ramp up in the second half, how much longer is it until OT revenues are going to cover the mine costs?

Look in relation to the 290 ramp up, on an acceleration there has relates to the fact that originally we're going to bring on that mine -- that process towards the latter part of this year, we’re now bringing it forward till September. And as I provided you some details, some granularity, it is getting very close, which you expect, if you’re going to start the full commissioning in September. In relation to that, look we'll bring it on those as quickly as we can. These are large systems, large pieces of equipment. Yes, most of it replicates equipment that we have got, that we are familiar with. But you are talking about major pieces of equipment that quite frankly we need to test through the systems and ramp up sensibly. In relation to Turquoise Hill and the bridging finance, there of course we have had the sale announced of Kazakhstan gold asset, that will assist with the cash flow. But we wanted to put enough certainty into Turquoise Hill so that there wasn’t a distraction, there has been a bit of commentary speculation if you like about that. The bridging finance is required to see Turquoise Hill through to moving to cash breakeven at Oyu Tolgoi which we expect to happen late this year and of course, to cover the fact that there is $1.8 billion of credit facility provided by Rio Tinto to Turquoise Hill. We need to provide that certainty so that, people are not distracted, we can get on with what we need to do, that is ramping up production of OT from 80% to 100%, resolving the issues with the government so that we can make an investment decision in relation to the underground. These are two very important aspects for that project. Let’s just move back into the room and if we could take the next question here. Jason Fairclough – Bank of America Merrill Lynch: Thanks Sam. It's Jason Fairclough, Bank of America, Merrill Lynch. Just a question or two around the disposal process. And I guess what's interesting to me is in a way, now what's happened what hasn't happened. So if we take something like diamonds you've agreed not to do it for the moment. If we look at what's happening with PacAl coming back into the Rio Tinto family. How do you take these orphan assets and look after them now that you've decided to keep them and make sure that value is maintained? And I guess a follow up on that. Before there has been a concept of what is a Rio Tinto asset and are you still asking yourself that question vis-à-vis aluminium?

We'll continue to look at every aspect of our business and whether it fits our portfolio, whether if it is going to deliver value going forward. If I look at diamonds and PacAl I mean we tried hard over a period to sell these assets. I made a comment in our media interview that this is not market payer at bizarre and it's not, we're focused on value, we’re focused on delivering value and ticking a box by saying we sold an asset that we sell at it a huge discount, that doesn't make sense. I am very pragmatic, Chris is very pragmatic, we've given it a good shape, we've given it the time to say if we can deliver value. Here we had a number of offers they are not where we want them to be. So we are not about to do something silly. Just for the fact that we put them on the market. Bringing back into the organization, diamonds is a good business, it's very prospective, it is a good business, we are bringing on the Argyle underground that was one of the four projects that we talked about. We've got good assets there. I've got a natural home within our diamond industrial minerals group. Quite frankly that group has received back (inaudible) and they are getting back down to business. In relation to PacAl , look there has been some very good work there by taking a private equity type approach to that part of the business. So you can pick it up in the press release and rather you can see the improvement in results there of that business. We will continue to run that as a separate entity within Rio Tinto Alcan so that we don't as you suggest we don't lose the values that we found. But also I have learned in my career, if you want to transfer technology, if you want to transfer knowledge, the best way to do it is actually to transfer people. And that way you can principally keep people working side by side and see closely what's going on and how you can get the same sort of benefits really flowing through, it's not the concept – we all, private equity, yeah we don't know what they do. The trick is how you actually implement it, implementation is hard and you need to have the knowledge and experience and you always need to have done it do it. The other aspect in relation to PacAl, I was running two aluminium businesses. That's not a healthy situation to be in. We've got one group sitting on the edge of their chairs waiting and wondering if they are going to be disposed of, that's not a productive way. You need to stabilize the business. It's a little bit counterintuitive but bringing it back into the business will actually save more money because we had to set up two management structures. I'm making two phone calls instead of one sorry I am joking but there are benefits there for us in terms of bringing it back in. You are – did right, we need to make sure that we don't jeopardize the cost reductions we have achieved. We are very focused on ensuring that we don't. Tony Robson – Bank of Montreal: Tony Robson, Bank of Montreal. Sorry if I move back to Oyu Tolgoi, any vague timeframe possible please in terms of discussions with the government over those 22 points of contention. And what happens actually if you can't deliver what the government wants that you say is outside of investment agreements on what you signed up for. What's your resolution there please? Thank you.

I am very optimistic that we will work through the issues and we have seen some encouraging signs after the press release that we put out last week stating that we are putting the projects on hold as we worked through. We are in discussion with the banks on extending the project finance deadline. So we are aligned, we want to see the project move forward. The government of Mongolia wants to see the project forward. It's just a complicated base and we just need to work through these fundamentals to get on right. And these are things that we've been doing in jurisdictions all around the world. For us it might have seen sort of easy and simple and what have you. We are doing it for the first time and need to get it right and need it to get it right for future generations of Mongolia. We need to get it right, so that we've got the stability and a firm platform to go forward. So if it takes -- as longer the result but less what it will take, that would be a much more solid project going forward. James Gurry – Credit Suisse: Hi, Sam, it's James Gurry here from Credit Suisse. You did mention I think during the presentation you were -- there is reviews going on of CapEx in the outer years. I think the increase today not expected but we're not quite sure exactly which projects we can attribute it to. But with the benefits of Aussie dollar moving considerations for the 360 and potential to debottleneck there, can you just give us an indication of how you see CapEx moving around from I think it was 11 billion and 7 billion that you indicated that you had already approved for '14 and '15?

Let me ask Chris to handle that. Chris is dealing this very closely and as you could imagine. Chris, why don't you comment?

Thanks James for the question. I guess the key, the first thing to talk about are the facts. The first fact is that we are about 9% down this half versus the same half last year. And that's about the end of the facts. Then we go into versus what do we think, we are going to finish the year with and where that might be. Our current projections are about 14 billion. That may get some assistance from lower Aussie dollar, but it's a little bit early to be too prescriptive about that, and it's also a function about how much of the spend has already been committed for this year versus and including in which currency it is committed for and so. So we'll flush that out over the coming weeks and we'll have a better view of that internally. With regard to this year, I think the announcements that were made in February talked about 13 billion of approved as at that stage. So I have to say from my own experience and as an executive in the company our plan -- our plan which includes both approved and as yet to be approved, was always a much higher number than that and we have actually slightly reduced the plan for CapEx of all sources in 2013 marginally. We started doing that work in the middle of the year. With regard to the full year we expect it to be about a 20% reduction on last year. Last year is definitely our peak for the foreseeable future. And we think that reductions in that sort of timeframe, with that sort of order of magnitude are possible for next year also. So that's about as definitive as I can be and as I said earlier what Sam and I both are keen to avoid is sort of getting too prescriptive about what we are going to do. We'd like to talk more about do things and then talk about what we have done and give you the intent about where we are going. But certainly our intent is to take some value out, take some money out of the capital expenditure over the coming years. That's got to be very well managed. It will be done on a prioritized basis. So our intent there is to make sure that we have only the best projects, not any use of cash, that's a good use of cash is not quite enough, it's going to be the best use of cash and that's where our focus will be. And that decision will be taken amongst other considerations like paying down debt like returns to shareholders and so on. So the best we can do is improve the business, we are going to strengthen our balance sheet and part of that prices will be making sure that we've got a very, very healthy attitude to how we allocate capital.

I should just add Chris is doing a great job here. We are also focused on obviously working capital and sustaining CapEx in that process. And look at it's all under the microscope. Why don't you move to telephones for some calls there.

We shall take the next question from Clarke Wilkins of Citi. Please go ahead. Clarke Wilkins – Citi: Hi Sam. Just in terms of the asset sales, you sort of mention taking specific element back into the following, can you just sort of clarify what assets just to actively looking at divestment all of them, any potential timeframe? And also maybe one for Chris, just in terms of the rating credits, you have the balanced capability here in Australia, is there active sort of looking at ways, so that can be released in carrying value for shareholders through that mechanism?

Yeah, thanks Clarke, let me take the first one, Chris if you could pick up franking credits. In relation to asset sales, we had made public that PacAl and diamonds were on the market. Beyond that I have just commented that we’d significant divestments during this year. Chris has a team that, that's working on that. There are number of things that are in the pipeline. We're not going to weigh into that detail really simply because I have learned the hard way that when we do announce something every ten minutes we get a phone call saying what's happened now. And that's rather a situation we are going to determine whether these assets have a natural buyer where there are synergies where somebody values something at a greater value than us or they don't. And if they don't well let's get on with life rather than distracting every single person in the organization. There are further projects that are being worked on, all will be revealed if that comes to fruition. Importantly, we're focused on value and this is not a bad, chasing a tile delivering boxes but not delivering value. It makes sense to focus our business on our core assets, it makes focus, it makes sense to have a focused organization where we're delivering value. But it doesn't make sense to give things away just purely simply say you can take a box. I think $2 billion, $1.9 billion in the first half, I think there is credit will result in this market. Clearly the team are continuing to work on this. But Chris, why don't you talk about franking credits?

Okay. Thanks Sam, the obvious way of utilizing franking credits is via dividends and fully franked dividends and for the foreseeable future, I've got to really doubt that the dividend paid to limited shareholders will be fully franked. We do have a large stock of franking credits available. The other way that franking credits can be utilized is if you were to do a buyback of the limited stock, but the last time we were doing buybacks, there was a significant discount in the PLC stock to limited that we will then offset that franking credit advantage. So it didn't make sense for us to buyback the limited stock when the PLC stock which represents exactly the same economic interest was a checker option. So I think we'd love to find more creative way to extract this value, it's a challenging issue it's been there for a long time best way is dividends and we are doing our best on that with the 15% increase last year which flies through arithmetically into this interim dividend. But I think the likelihood is that there is not a sort of a bullet that sort of gets these out. And any action we take on dividend policy, any sort of capital management issue we have to make sure that we are cognizant of the equity in fairness for both sides of the deals. So whilst all Australian dividends will be fully franked that's part of the Australian law, while the Australian law permits the franking credit. Unfortunately we haven't yet found a way to utilize them any faster than we are currently.

Yeah. Thanks very much Chris, thanks Clarke. We are happy to receive any bright or brilliant ideas you might have on this. Now let's move forward to another question from the telephones.

We shall take our next question from Abhishek Shukla from Societe Generale. Please go ahead. Abhishek Shukla – Societe Generale: I would like to ask three set of questions. First on Pacific Aluminium roughly how much EBITDA and EBIT did you make in the last six months? And is there a good part and a bad part with a business, I mean is there half of the Pacific Aluminium which is nearly a free cash flow positive and other half which is negative? That will really help us understand the business better. Second on Bingham Canyon, how much money do you expect recover from insurance? And third on the titanium dioxide, when do you think the de-stocking will end and when do you expect pick up in the market? Thank you.

I think in relation to PacAl, I will let Chris answer those questions. The detail actually is in the press release and the pack. But I'll let Chris to make some comments on it in a moment. In relation to Bingham Canyon, we have business interruption and we have equipment asset loss insurance. We're working through that process as soon we've got any news there, we will reveal that. At this point in time, we are going through the due processes that you would expect in relation to that. In relation TiO2 market, they fairly in -- if you look at the medium to long-term, the market is good for this product and these projects are hard to bring on. They are not easy and there are not a lot of new projects that are in the (inaudible). So I think the prognosis for titanium dioxide is good going forward. At the moment we're going through adjustments at the moment, we're going through processes of uncertainty. And we're seeing with these products that they're on the different cycle to the rest of our portfolio. TiO2 used in paint and other applications it tends to be –well, you build a building, you are now going to go in and maintain it or repair it or whatever has a different cycle. But all of our products have a cycle and it will have its time in the sun. But perhaps with that, Chris if I could go back to you to answer that PacAl in relation to, say that EBITDA and make-up of the business?

Yeah, Sam we don't break it out in detail. As it's a part of -- in the press release it's part of other operations and is about $70 million, $80 million of EBIT in that area. With regard to weather and I guess the other thing say about Pac Al is the current state is less significant than the right of improvement in Pac Al. And there had been a lot of things put in place that are improving the outcomes on PacAl, which we want to make sure we retain and persevere with them and carry across into other aspects of the business. So there has been some great work done there and really want to compliment Sam and his team on that. With regard to other good and bad assets, yes and a capital return that as well. So in the mine this business right now the bit -- the closer to the dirt you are better and bauxite is probably the strongest part of the Pac Al assets. But the other assets are being dramatically improved and some really good work under there and you may have seen the announcements I have said in the announcements regarding the NZAS contract by the way of example which is a big change from what that contract would otherwise have delivered. So some very good value delivered there.

We shall take our next question from Glyn Lawcock of UBS. Please go ahead. Glyn Lawcock – UBS: Sam. Two questions, firstly just on the iron ore market just curious as to how you think about it when you come to the end of the year, you've got two decisions you can go ahead with 360, hopefully that puts a pressure on the market a little bit. And therefore you can keep... If you do go ahead you get the short-term gain of probably higher price but you run the risk of potentially destabilizing what has been a very, very good market historically high returns very consolidated. So just wondering how you think about that the benefits pros and cons. And then secondly this might be little bit granular and if it is, happy to take it offline. But just on the aluminum premium, clearly that's been a big benefit to the industry and for yourself. It now seems to me disappearing with what's happening with the warehousing debate. Just wondering in terms of premium, you obviously get that, but you also get a product premium. Just wondering if you could sort of split out how much is the benefit comes from LME premium and how much is the product premium? Thanks

Yes, firstly in relation to iron ore market and 360. There are more than two options in relation to 360, there is an option of moving ahead full steam, there is an option of not doing it of course, but there are other options in the middle as I've tried to describe in relation to productivity improvements, incremental mining, existing improvements and bringing on new mines. So I mean there we have got the ability of developing 360 in a range of ways lot of flexibility. 360 will happen. It will go ahead now. Now, the issue is timing, the issue is the way that we bring it ahead and so on. But it's a robust project, it's a good project and the market will need the iron ore that comes from this. Remembering that we are the lower cost producer. Remember that Pilbara is the closest delivery point for shipping point in relation to. There has been a lot of controversy, in fact there is lot of -- experts on iron ore and iron ore process and so on. In relation to trade off of the volume and price and there has been some people who are worried that in our analysis, we don't take into account our existing iron ore portfolio when we look at that the additional tons that we're bringing on what -- me to show you all. We look at the title picture, we look at the total valuation of the business in terms of our trade off there between price and volume. But importantly, what will drive that expansion will be what the market demands physically need. I can remember that came sort of the early 2000 where people said well, you are bringing on more than tonnes than the market needs. We relied on the very detailed analysis that our marketing people do on the ground looking at supply and demand, looking at potential steel projects, looking at what the demand for steel is going to be, looking at potential iron ore supply opportunities and so on. And by taking all that into account, we've made decisions with hindsight pretty darn good decisions. That process is still in place, that process will actually evaluate in great granularity as to what the market demand is going to be for the product and how we physically bring it forward. Let me just go back to say it. We are going to be very rational and logical about this in ensuring that we are actually delivering value to shareholders and not just proceeding with something because it's on the books. It will be a well thought through process. In relation to aluminum premium, is a very detailed question. I will ask team to come back to you. Clearly there are two premiums that we get, certainly we've got super high premium product that delivers a premium in right, you then have normal sort of market type premiums that are playing. Yes the change is to LME warehousing rules that will flow through in terms of the market for metal in particular and time will tell you where that actually takes us, I will ask the team if they can go back to you on that. Let me take another question or another three questions here in the room. So, we have one midway through the room. Ian Rossouw – Barclays: Hi, good morning. It's Ian Rossouw from Barclays. Just a bit of details on the cost saving targets you are talking and what you have achieved in the first half, the 977 million on the operating side. In waterfall chart, you gave some details on the grade. And I just wanted well, it's unclear how much you banked from unit cost reductions from volume improvements and I was just hoping if you could quantify that?

Look the vast bulk of savings are from the specific programs and alike we get grade comes both direction. So there is an offsetting there. It's totally consistent with how we have always planned to report this cost saving. One thing I will make a point about with regard to the cost savings is that in my school of mathematics, I think it's really a $3 billion target, it's 2 billion this year and a further billion next year. The five comes about from the fact that we retained the 2 billion that we achieved this year going through there. But I think the number that you are looking for it and it's probably in the order of a couple of hundred million dollars in this period.

Thanks Chris, thanks Ian. Another question here in the room, question at the back. Fraser Jamieson – JP Morgan: Hi, it's Fraser Jamieson from J.P. Morgan Just a question going back to competition from the capital discussion, that's been going on today. Obviously credit rating very important for you. So you will take cash flow and pay down debt to retain that. That's pretty obvious. But for us that's obvious is how you sort of weigh the competition between a project and returning capital to shareholders. So could you maybe just try and give just trying to get some context, is that purely a qualitative discussion or how do you make that more quantitative discussion and thinking particularly around kind of rates that you might apply to some NPV analysis and IRRs, et cetera?

Okay. Well Fraser the very first question there is a series of questions in and series of gates that any project has to get through before it actually gets in the field of competition if you like. Our first one is what's the strategic fit and it has to satisfy that equation second NPV while it's just not the only metric, it's still an important metric for us. Third internal rate of return, fourth will be the payback period over which we see when this cash start to come back to us. Fifth there is fits in the title --process of that potential options. The further consideration would be what does it do to the overall corporate, like a corporate impact of that project and so on. So there is never any one clear defining metric but I think what you'll determine and I think what you'll be observe over coming periods and is that projects that do get up will have a significant return, there is a much higher return hurdle that's now able to be asked for simply on the basis of the way that we're portioning capital. And we are not in a position, we do have a need to repay some debt. We have a need to make sure that's got good returns going to shareholders. And we have a need to fund our future growth. Now that is a process and have capacity to do any one of those three and all three combined is something that’s always on our agenda. But the few ideas that I've just rattled off there, some of the things that we consider. There is, there needs to be some form of form about the team that's bringing the project and do they have record of delivering, that factors into our equation. That's one of the more subjective thing perhaps in terms of your question. But that's a very important thing, how will this project be delivered. Who will be the people that deliver it? What's their track record in terms of delivering. Very important part of the process. So there is lot more separation of the independent review process. As part of the some of the changes that Sam referred to earlier, we're very, very diligent on this and we want to make sure we get it right. That might slowdown a the approval process, if that's the case, it would be better to get the right answer in later than the wrong one now.

Yeah, thanks very much Chris. So of course at the end of day, the board are the ones who make the ultimate decision in relation to whether they should be organic growth projects or in fact buyback or how we look at our capital management. What if we did question and perhaps if I take that from the phone.

We shall take our next question from the line of Paul Young of Deutsche Bank. Please go ahead. Paul Young – Deutsche Bank: Thanks gentlemen. Obviously questions on the LME restructure. Here’s most of it decided today from the efficiency gains rather than cost cutting and now that the divestment of -- closure three smelters during the half should benefit in the December half but clearly more work needs to be done on reducing overhead. And question specifically what progress have you made in reducing overhead in Canada and are the government agreements and commitments from 2007 an impediment? And lastly, are you reviewing the closure of the low margin small smelters --

Yeah, thanks very much Paul for that. In relation to aluminum we are looking at every area of the business whether it's efficiency, whether it's management overhead. Whether it's actually the day to day, how we operate what we are doing in house, what we are doing outside and so on. And reducing overheads is an important element of that. In relation to undertakings to the Canadian government that is something that we track very closely. We have made all of those undertaking in one way or another. And I believe we are at a stage now where we're beyond constraints of that. In relation to decisions regarding our aluminium assets and as recently as yesterday we made a decision to curtail 50,000 tons immediately and 50,000 tons in the latter part of this year, so it is an active process that we have under way. What we need to do is continue our improvement projects versus how prices are tracking, versus how actual operation is tracking. But we will not stop, we're going to continue to improve that business. And I think what you seen in the results for aluminium in the first six months, it has changed. We are injecting additional improvement and we'll see additional benefits to flow through. We are almost out of time but let me just quickly in closing some of the key points for today. These are solid results, they are and they are showing clear progress against our objectives. We are improving performance, we are reducing costs, we are reducing our capital, we are delivering results and we're completing our approved growth projects while divesting of non-core assets. There is a lot that I talked about in February, you are seeing the results today, you're seeing that we're an organization that's very focused, very disciplined. We're delivering on what we said that we would do. So I am confident we're moving in the right direction. I am confident that we're moving to deliver greater value to you, our shareholders. Thank you all very much for being here and taking the time to listen to this pretty good story. Thank you.