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Rio Tinto Appoints Simon Thompson As Chairman;cuts 2017 Capital Spending Outlook

Rio Tinto Plc. (RTPPF.PK,RIO.L,RIO,RTNTF.PK) said that it has appointed Simon Thompson as chairman. Thompson, who joined the Rio Tinto board as a non-executive director in 2014, will become chairman on 5 March 2018. He succeeds Jan du Plessis who will step down as chairman and from the Rio Tinto board on the same date after serving almost nine years as chairman.

Separately, Rio Tinto said it expects capital expenditure of less than $4.5 billion in 2017 down from prior outlook of $5 billion. It is targeting $5 billion in additional free cash flow from its five-year productivity programme from 2017-2021.

Thompson has over 20 years' experience working across five continents in the mining and metals industry. From 1995 to 2007, he worked for the Anglo American group, holding a number of senior positions, including executive director of Anglo American plc, chief executive of the Base Metals Division, chairman of the Exploration Division, and chairman of Tarmac. His experience as a non-executive director includes serving on the boards of AngloGold Ashanti, Rusal and Newmont Mining Corporation.

Mr Thompson has been chairman of 3i Group plc since 2015 and was chairman of Tullow Oil plc from 2012 to 2017. Earlier in his career, he held investment banking positions at S.G. Warburg and N M Rothschild.

Upon assuming the role of chairman, Mr Thompson will step down as chairman of the Rio Tinto remuneration committee and will also cease to be a member of the audit committee. Sam Laidlaw, who previously chaired the remuneration committee at HSBC Holdings plc, will succeed Mr Thompson as chair of the Rio Tinto remuneration committee with effect from 5 March 2018.

In a presentation to investors at a seminar in Sydney, Rio Tinto demonstrated how it leads the sector in delivering cash returns to shareholders, returning 40 per cent of cash generated to shareholders in the first half of 2017.

Rio Tinto said it reinforced its focus on delivering superior cash returns for shareholders over the short, medium and long term as it unveiled key features of its drive to generate $5 billion of additional free cash flow over the next five years.

Rio Tinto chief executive J-S Jacques said, "Our Group target of $1.5 billion of annual additional free cash flow from 2021 will ensure we can continue to lead the pack in delivering superior cash returns to our shareholders."

Rio Tinto is targeting $5 billion in additional free cash flow from its five-year productivity programme from 2017-2021. As part of the $5 billion target, the productivity programme will deliver additional free cash flow of ~$1.5 billion a year from 2021.

The company said it is on track to deliver additional free cash flow of $300 million from productivity improvements in 2017 (year one of the five-year programme), and a cumulative $900 million by the end of 2018.

Rio Tinto said it expects capital expenditure of less than $4.5 billion in 2017 down from prior outlook of $5 billion.

Rio maintained its capital spending forecast for 2018 at about $5.5 billion.

The company expects capital expenditure of $6 billion in both 2019 and 2020. Previously, the company expected capital expenditure of about $5.5 billion for 2019.

The company expects to ship 330 million to 340 million tonnes of iron ore from its Pilbara operations in 2018.

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