DBRS Releases Report on Rio Tinto plc & Rio Tinto Limited

DBRS has today released a report on Rio Tinto plc & Rio Tinto Limited and related subsidiaries (collectively, Rio Tinto, the Group or the Companies) that provides support to the recent confirmation of the Group’s ratings at A (low) and R-1 (low) with Stable trends, as well as the discontinuation of DBRS’s rating of Rio Tinto Alcan Inc.’s preferred shares.

The confirmation reflects the Group’s solid business profile as a large, cost-competitive and diversified mining company and its ability to face expected growing volatility in mineral markets.

Rio Tinto’s business profile is within the “A” range, supported by its size and critical mass as one of the largest mining enterprises in the world. The Group’s financial profile is generally within the “A” range except for its debt-to-capitalization ratio, which reached 34.4% at June 30, 2013 (BBB range), as net debt increased by $10.7 billion in 2012 largely due to record capital expenditures and high shareholder payments during a period of a significant decline in operating cash flow as commodity prices retreated from high (often record) levels in 2011.

Rio Tinto has indicated it will continue to invest in a major increase in its iron ore production capacity, as well as in a broad range of other major projects while continuing its cost-reduction and asset-sales efforts. As fewer new projects are initiated, capital spending is expected to decline and debt growth to be reined in in 2014, with debt reduced in 2015, barring a further significant downturn in commodity prices. In the expected uncertain operating environment, the Group will have to carefully manage its cash outflows in order to reverse the recent deterioration to its balance sheet and financial metrics and to avoid any potential downgrade of its ratings.

Today’s report and the December 11, 2013, press release are available at www.dbrs.com or by contacting us at info@dbrs.com.