Good morning, and thank you for joining us today. First of all, I want to acknowledge and pay my respects to all Traditional Owners and First Nations peoples that host our operations around the world. As Chair of Rio Tinto, I once again have the privilege of welcoming you to our 2025 Annual General Meeting. It was devastating to begin last year with the plane crash near Fort Smith, Canada. At last year's AGM, we named and remembered our four colleagues and the two aircrew members who died in that tragic incident. It was with deep sadness that we experienced another fatality in 2024, as well as a missing seafarer. In October, Morley Camara tragically lost his life in an incident at the SimFer port site in Morabeya, Guinea. In December, Gel Aguaviva was reported missing from one of our bulk carrier ships in the Philippines.
Everyone has the right to go home safely every day. As we hold our colleagues and their loved ones in our thoughts, I want to assure you that we are learning from these events. They underscore why a relentless focus on safety is crucial. I encourage us to take a moment to reflect on this. Thank you. Now, let me introduce my fellow members of the Rio Tinto Board. I'll start with Kaisa Hietala, Susan Lloyd-Hurwitz , Martina Merz, Sam Laidlaw, Senior Independent Director and Chair of our People and Remuneration Committee, Simon Henry, Chair of our Audit and Risk Committee, Peter Cunningham, our CFO, Jakob Stausholm, our CEO, Dean Dalla Valle, Chair of our Sustainability Committee, Jennifer Nason, Joc O'Rourke, Sharon Thorne, Ngaire Woods, Ben Wyatt, and Andy Hodges, our Group Company Secretary. In the last two years, I've spoken of our plan to renew the Board's skills mix.
This has led to a temporarily larger board, while our more experienced directors have supported the handover to newer members. As we come to the end of this transitional period, there are a few changes to note. Kaisa Hietala and Sam Laidlaw will step down as directors at the conclusion of the Rio Tinto Limited AGM in May and are not seeking reelection today. Sam will be succeeded by Ben Wyatt as Chair of the People and Remuneration Committee and by Sharon Thorne as Senior Independent Director. Simon Henry will step down in October 2025. Simon will be succeeded as Chair of our Audit and Risk Committee by Sharon Thorne. It is my sincere thanks to Simon, Kaisa, and Sam for your incredibly valuable support and contributions, which are going to be greatly missed.
That said, I'm also happy about the breadth of experience that we currently do have on the Board. As a Board, we are very pleased to see Rio's progression over the last few years. Jakob and his executive team have been cultivating a mix of skills and knowledge, project growth, and social license. The newest members, Jérôme Pécresse in aluminum, Katie Jackson in copper, and Georgie Bezette in our people function, have all hit the ground running. We are also pleased to welcome Paul Graves as CEO of Rio Tinto Lithium, as we seek to build a world-class business off the back of the Arcadium acquisition, as Jakob will discuss later. We have an increasingly diverse portfolio of materials the world needs, including especially for the energy transition. This is supporting our finances and profitable growth journey. Our financial performance in 2024 was strong.
Sales volumes and net operating cash flow were both up 3% year on year, while overall production grew 1%. The financial performance, combined with strict capital allocation and our healthy balance sheet, has enabled us to return $6.5 billion of dividends to you, our shareholders, a 60% payout at the top of our range for the ninth year running. As Jakob and the team set out at our Investor Day in December, we have a clear path to a decade of stable, sustainable, profitable growth through our major projects. This is supported by continuous improvements to our existing operations. Last year, I told you how excited I was about these projects, which we are executing in challenging environments, on time, and on budget. They have not disappointed. We are on course for 4% production growth this year, largely underpinned by Oyu Tolgoi Underground, our copper mine.
Tolgoi has a 97.5% Mongolian workforce. We recently launched the South Gobi Underground Mass Mining Institute to help ensure that outstanding engineering, technological, and safety expertise continues to be developed locally. In Argentina, there's another example. The Rincón project went from greenfield to first lithium production in only 32 months. The Board was pleased to approve an investment late last year to expand the plant, where we will continue developing direct lithium extraction techniques, or DLE, that support water conservation and reduce waste. Next, there is Simandou, a one-of-a-kind high-grade iron ore project being delivered by a team that is over 80% Guinean. Simandou is complex, but we firmly believe it will be transformational for Guinea and its peoples. In the Pilbara of Western Australia, we are on track with the Western Range and Brockman Syncline 1 replacement projects, while studying Rhodes Ridge for the future.
In fact, we are executing more projects worldwide than ever before. The skills we are gaining as we do so are helping us to improve our organization overall. I'm also feeling good about the direction we are heading in when it comes to operational performance, as Jakob will outline shortly. The Safe Production System is yielding results. We are getting consistently stable operating performance. For example, last year, we delivered record bauxite production at Gove and Amrun. We have more work to do to drive improvements across all of our assets, but I'm confident we'll get there. Workplace culture is a key enabler of our performance.
My years in business have taught me that culture is not a nice-to-have or a fad. It's foundational, which is why we are determined to continue building a safe, respectful, and inclusive environment where people feel comfortable to share their ideas and make continuous improvements. A respectful culture, social license, and strong environmental, social, and governance credentials go hand in hand with delivering shareholder value. Actually, it tells you something about the culture. When I recently visited Richards Bay Minerals, or RBM, in South Africa, I was asked a lot of questions from our frontline colleagues on our culture and our performance. This was in November, around the time we published the Everyday Respect Progress Review. I was reassured that they felt free to speak up about any topic and wanted to see Rio succeed.
If you do not know, RBM supplies the raw materials for titanium metal used in advanced manufacturing and titanium dioxide. I do not think we realize how many everyday items rely on this mineral, from paint to toothpaste. The leadership at RBM is 100% South African. Many live in communities close to the mine and have progressed to management roles after first joining the company as graduates. Besides RBM, as a Board, we have been fortunate to visit a wide range of other sites over the last year, including Matalco and our primary aluminum business in Canada, Kennecott in the U.S., and Simandou in Guinea. Engaging with employees and communities where we operate deepens our understanding of our challenges and opportunities, as well as our societal role and responsibilities. We, of course, are by no means perfect.
While we focus on running our operations, a common thread is that we are providing jobs, training, and other opportunities while working on our environmental performance where we operate. However, we need good partnerships to do so. Last month, I had the privilege of spending time with the leaders of the Puutu, Kunti, Kurrama, and Binigura people on their country in the Pilbara. One of the topics we discussed was how a Traditional Owner Group and a mining company can most efficiently and effectively work together over the long term. We have relationships with over 60 indigenous and land-connected groups across the globe. Many of these, fortunately, are very positive relationships, but there are a small number that remain challenged. In any case, we are committed to working together to achieve positive long-term outcomes. Again, our business is growing, but we need to do this in a sustainable way.
That requires us to build solid and trusting relationships and be consistent in our approach. If anything I've said sounds familiar today, that's kind of my point, which is our aim is for us to be boringly consistent. That is not to say that the context that we find ourselves in is boring. We're a complex business operating in a complex world full of complex challenges: geopolitics, tariffs, community relations, industrial relations. While industries such as ours must be nimble and constantly build new capabilities and technologies to continue to grow productivity, when the world looks even more complex, a consistent approach can be powerful. We are a long-term company following a consistent strategy. The long-term picture is positive in terms of the demand for what we do.
The fundamental drivers of our demand are all in place: population growth, economic development, and a significantly increasing need for materials that support energy security. As the world grows, so does its energy demand, including electricity. From today, the International Energy Agency expects electricity to grow at six times the pace of overall energy demand by 2030. Overall energy demand is growing. This mass electrification requires more aluminum, more lithium, more copper, and more iron ore for steel, exactly the commodities we're focused on. For example, we expect that by 2040, the world will need three times more copper than today for end-use and renewable grid investment, energy storage, electric vehicles, and other parts of the global energy system. If this future world wants a stable supply of these materials, then it will have to build new mines and innovate and develop new technologies.
We are doing all that we can to support this future, lithium being a case in point, while ensuring we continue creating value for our shareholders. In short, there will be challenges in the years ahead, but we believe we are well placed to navigate them and make the most of the opportunities ahead of us. We are determined to consistently deliver sustainable production growth and shareholder value, even in a complex world. Thank you for listening to me. With that, I'll hand over to our CEO, Jakob.
Thank you, Dom. Hello, everyone. I would also like to acknowledge and pay my respect to all Traditional Owners and First Nations people that host our operations around the world. Dom has made my job easy today because he has already set out how we are delivering our plan for a decade of sustainable, profitable growth and our ability to create further shareholder value. We're making really good progress. Our financial performance is strong. The portfolio is evolving. Production is growing. We are honing our technical and leadership skills and are becoming ever more disciplined in cost management. Meanwhile, the world is growing. Its energy use is rising, and therefore, so is demand for the materials we produce. Yes, there are uncertainties. While we are engaged with the short-term horizon, we tend to think 20, 30, even 40 years ahead. The long-term outlook is positive. I'm confident that we have the right strategy and objectives to deliver value today and into the future.
With that in mind, I have spent much of 2025 visiting our operations across the world, learning more about our challenges and opportunities, and listening to our employees and external stakeholders about how we can find better ways to provide these materials. Allow me to give you an impression of where we are from my perspective based on these visits. The best place to start is with our lithium business. Completing the acquisition of Arcadium Lithium last month was a significant moment in our history and a clear example of how we are evolving the portfolio in line with commodities where demand growth is the strongest. The picture for lithium is very attractive. I was in South America when the transaction closed, getting to know our new colleagues and learning more about our sites in Argentina.
There was a strong shared commitment to ensure the success of Rio Tinto Lithium. The new business has the combined scale, technical, operational, and commercial expertise to be a truly world-leading business. It was also impressive to see the progress we are making to expand the Rincón Lithium Plant, which demonstrates our deepening project building and technical expertise. As you have heard, 2025 is a pivotal year for our major projects. Simandou in Guinea is on track for first iron ore at the mine gate by the end of the year. Production at the Mongolian Oyu Tolgoi Copper Mine is expected to grow by more than 50% this year. Just over a week ago, the Mongolian president and I stood 1.3 kilometers below the surface in the Gobi Desert, on the same spot where the start of the underground production was announced exactly two years ago.
It is remarkable how far Oyu Tolgoi has come in that time as it ramped up to peak production of 500,000 tons of copper a year. The president described it as one of the most exciting developments he has ever seen. Because Oyu Tolgoi is a modern, safe, and sustainable mining operation built by 20,000 Mongolians, it demonstrates best operator excellence in actions. We are determined to achieve this excellence everywhere to safely and sustainably realize the full potential of all our assets. As you heard from Dom, we have made good progress on our best operator objective last year, and we are moving further and faster this year. We still need to stabilize existing assets, including Kennecott, Rio Tinto Iron and Titanium, and the Iron Ore Company of Canada, which all represent huge opportunities to further unlock value.
IOC has been a leading producer of premium iron ore pellets and high-grade concentrate for over 70 years. Its history reflects a legacy of excellence, innovation, and enduring commitments to the region's communities and economy. When I visited IOC, I could tell that the spirit of excellence lives on. Like so many parts of Rio, the safe production system is simply helping us tap into our DNA. The dedicated teams at IOC are identifying and addressing issues essential to continuously improve safety and productivity. Moreover, they're welcoming the challenge. I saw excellent determination in Western Australia in the Pilbara, where the safe production system had helped stabilize our iron ore operations. I'm always impressed by the passion and professionalism of the people who work in our mines here, often in extreme weather conditions. There is no denying that we have been challenged by intense cyclones this year.
Still, we are proving resilient. I'll never forget my engagement with the Traditional Owners while I was in Western Australia. It is not up to us to judge our progress on social license. I will say that each time I am on country, I see the positive evolutions of these very important relationships. There's more to do, but we are committed to stay the course and continue rebuilding trust. Of course, social factors heavily influence our ability to operate. That is why we continue to move the dial on impeccable ESG in a way that simply makes good long-term economic sense. For example, decarbonizing our business is a very physical and complex work, but we had a record year for our emission reduction in 2024.
What I'm most proud of is that we are starting to deliver projects that reduce our emissions and provide us with a secure supply of energy while retaining and even creating value. The same goes for our culture. I'll echo what Dom said, that culture is foundational to how we realize the full value of our assets. That is because so much of our performance is about our mindsets and behavior. We will stay the course to create a culture where everyone feels safe, respected, seen, and empowered to bring their best every day. Everything I've seen so far tells me we are building on the considerable momentum we created heading into 2025. We have all the building blocks in place for an incredibly robust, diversified, and growing business.
We will continue to take actions that ensure we remain resilient in the short, medium, and long term while creating value for you, our shareholders, through our commitments to consistent returns and a strong balance sheet. We will achieve that by maintaining a laser focus as we go deeper with the Safe Production System, deliver improved cost management, and learn from executing complex projects. We will improve our culture, safety, and environmental performance as part of this accelerated drive towards best operator. That way, we know we can grow and build our portfolio of materials the world needs in a safe, sustainable, and competitive way. Thank you. Back to you, Dom.
Thank you, Jakob. J ust before we now move to the formal business of the meeting, where we hopefully will get lots of questions and have time to answer them, I wanted to make a couple of points in relation to the shareholder requisition resolution number 24, because I welcome James and the team here. I want to allow them to speak first. I'm just going to make a number of comments on it. After this, we will move into the broader set of questions, both from the floor and from Lumi, for the people that are joining us on the internet. I'll just say at the outset, and I'm sure James is going to have his views with the team on this, but as you are aware, the board does not support the resolution for the reasons that we've laid out in the notice of meeting.
The board is very focused on strong governance. This extends also to the work that the board's done on reviewing a unification of our DLC. We've considered this topic as a board regularly and objectively over the years. Actually, with James and the team's sort of push in May of last year, completed a further detailed review in 2024, but with the benefit of five expert third-party advisors. We looked into the benefits and the costs. Some could say that having two AGMs is a benefit. Others may have a different view on that. There are opportunities to consolidate headquarters and so forth. We looked at the benefits and the costs. All of this work showed us that a unification of the DLC would be value-destructive for the group and its shareholders.
Not to go into the detail, but just to highlight three areas where we had concerns, it's in the following. One, there would be significant one-off costs. We've said in the mid-single-digit U.S. Dollar billions, which is significantly above what the Palliser analysis shows. Two, given how our portfolio is shaping, we're having more and more of our profitability that will be coming outside of Australia. That's been identified in the December capital markets day that Jakob and the team provided. There would not be enough or sufficient franking credits for our Australian shareholders in the future. Three, we would not see an increase in the overall share price of Rio Tinto. Our financial advisors expect that a unified company's share price would move towards the weighted average of the PLC and Limited share prices.
Given the findings of our 2024 board review on the topic, the board unanimously believes that the resolution is duplicative and unnecessary, and there is no basis for expecting that an additional review would lead to a different conclusion. That said, I want to say we are open-minded. We want to maximize value for you, our shareholders, and that's the lens through which we look at it. This likely needs to continue to be looked at over time. We've also engaged widely with our shareholders, whose interests we are resolutely focused on. We've listened to those shareholders carefully, and the direction to us is clear. The group's priority should be on delivery against the widely supported strategy. That all said, this resolution has been validly requisitioned, and I want to give the requisitioners, James and his team, the opportunity to introduce it. I think we have a microphone here. James, if you please go ahead.
Good morning, everyone, and fellow shareholders. Thanks, first of all, to Dominic, our chairman, for letting us say a few words on this topic, which is kind of him. I'm pleased to have the opportunity to introduce our resolution that we've co-filed with other shareholders to you all. As the chair has alluded to, my name is James Smith. I'm the Founder and CIO of Palliser Capital. We're a global multi-strategy fund that adopts a broad range of investment strategies across the capital structure of companies and across the globe. We prefer to collaborate with management teams around the world to help improve the long-term value of the companies that we're invested in for the benefit of all shareholders.
We co-filed resolution 24 for a simple reason, not because we disagree with boring consistency, which is actually, I think, an excellent comment the chair made and one that we agree with, but because we feel very strongly that a thorough examination that is made public to shareholders and is independently put together will only help enhance transparency and move the ball forward, so to speak, on this particular topic. We take a different view to the chair without intending any disrespect to the chair of the board whatsoever. Sometimes it's difficult to be the activist. You have to kind of present a different view of things. You come to fora like this, you don't quite know whether you're going to get tomatoes or cheers, but that's just part of the job.
Our view is that the, we would say, high-level and fairly unsubstantiated analysis that's been presented to shareholders falls short of what we deserve. We think that it takes the position of entirely ignoring the very compelling rationale for unification that has been cited by almost every other DLC in the world. As folks here would probably know, there have been 12 precedent unifications already. DLCs are by this point very few and far between. Those unifications, on average, have received shareholder support of 98-99% on average, and the unanimous support of 136 company directors in those situations. Where global proxy advisors have offered a recommendation, including in this case, as people would be aware, both Glass Lewis and ISS proxy advisors to, I gather, 90% plus of institutional shareholders have also supported the resolution that we've put forward.
There's only one case which had a very narrow compensation-related concern where that support has not been there. The management tells us that it doesn't work in this case. The Chair has kindly outlined his views. I'm going to illustrate them in a slightly different way with a few quotes. Those quotes are as follows. The DLC is not an impediment, and management has the benefit of two acquisition currencies so long as the DLC remains in place. Second quote is that unification would be costly and with no material benefits. As the Chair has outlined, they see no value case whatsoever, apparently. Finally, that unification would result in a wastage of franking credits to Australian shareholders.
We take the view that can we really believe that this structure is actually the impediment, is not the impediment that we say and in fact is flexible and supportive, as management say, in particular when 100% of acquisitions across three decades have been done with cash. Peer group has used 68% equity and only 32% cash. The relevance of that won't be lost on anyone in the room, I'm sure, is that where you can use scrip, you're able to risk share the potential downside of an acquisition because they don't always work with the target company shareholders. I need not go into the example of Alcan, but that would be a great case study. Where having used scrip would have been greatly to the company and all of our benefit as shareholders.
Do we trust management that, again, looking through the capital allocation lens, there's not an impediment here to buybacks? The company hasn't launched a buyback program for nearly seven years. Is it the case that the inflexibility of the DLC and the inability to issue stock in acquisitions, for example, means that the Chinalco holding and the FIRB restriction on how big that can be creates an insoluble roadblock so long as the DLC is in place? As it relates to the disadvantages that have been cited, we commissioned and made public, it's on the unify-rio.com website we set up to explain and express our views to shareholders. We included an independent report from Grant Thornton Australia.
As many of you will know in the room, Grant Thornton is the eighth largest firm of its nature globally, the fifth largest in the U.K., and I believe the seventh or eighth largest in Australia. This is a real institution. We engage them on an independent basis. They only have the benefit of public information, but their review is there on the website if you want to take a look at it, all 116 pages of it alongside and as part of the hundreds of pages of empirical and analytical data that we've presented on this topic. One of the things that report concluded was that the unification would be value neutral, at least for Limited shareholders, and obviously very positive for PLC shareholders, and that franking credits would be distributed in a meaningfully greater absolute number to Australian domiciled shareholders.
We've tried to be as transparent as we can with all that information. I think there's a great contrast between what management have offered and what we have put out into the public domain. Just stepping back, the resolution is not a resolution to unify. I think this is a very, very important point, it is a resolution to do an independent review and make that information available for all shareholders. There's a famous saying, "Sunlight encourages good behavior," and we think that's of relevance here. In terms of the cost of unwind, we fundamentally disagree and have checked with counsel and tax advisors in every jurisdiction, and Grant Thornton has checked all of that work as well as part of their review. We think there is no massive one-off lump sum.
We think transaction costs would be around $400 million relating to U.K. stamp duty, and that thereafter there would be an increase in corporate tax of $140 million or so. That's a less than 2% increase in actual tax currently. We feel that this pales in comparison to the value release that is illustrated by, we believe, based on our calculations, the $50 billion or so of value drag that has resulted from the inability to use scrip and M&A over the last 30 years. There are some other elements that have been mentioned. We gather potential taxes in assets in far-flung jurisdictions. We've checked all of that, and again, we don't credit and sort of credit those arguments. Stepping back again, we say unification could release $20 billion-$25 billion U.S. dollars of value here.
I think a conservative estimate of the cost of a public review that would be disseminated in shareholders might be $2.5 million from experience. There will be people who agree with us and people who disagree with us. If you think there's a more than 0.1% chance that we may be right, the cost of the exercise is easily justified by the potential value release. To take a position that the probability that we're right is less than 0.1%, we think is not a reasonable position to take. We think the board owes us a transparent and independent review. We've done a lot of work. The proxy specialists agree. The way Glass Lewis put it, again, if there is even a small chance that such a huge value will be unlocked, an independent review is a worthwhile endeavor.
Bloomberg published earlier this week their views on the situation. "There's truly little risk other than a few bruised egos and some trivial costs to hire bankers and lawyers to allow the independent review." They end with a quote from Reagan, "Trust, but verify," which we think is very apt in this situation. Let's think a bit about those bruised egos. The board argues it's a waste of resource, time, and money to conduct an enhanced investigation. They also don't wish to share publicly the work that they say they have done, and I'm sure they have done some.
When we look at the time and effort that has gone into the vigorous and robust defense of the resolution that was put forward and the vast internal team that's been mobilized and the cost of advisors that apparently are all unilaterally focused on squashing the views of a tiny shareholder, we have to wonder how many multiples of the cost of a review have actually gone into that process, and does that really make sense for shareholders? All of those resources obviously could have gone into furthering the review and making progress with us. It is concerning that management have chosen this course of action from our perspective. I'm going to end by turning back to those three quotes that I gave you at the beginning. I'll just repeat them again. The DLC is not an impediment, and management through it has the benefit of two acquisition currencies.
Number one. Number two, unification would be costly and with no material benefits. Number three, unification would result in a wastage of valuable franking credits to Australian shareholders. What I'll actually tell you is those aren't quotes from this process, from the engagement with Rio and what you've seen in the public domain. They're incredibly similar in nature to many of the things that have been said, but they are quotes from the initial response when myself and members of my team were at Elliott leading the same engagement with BHP. They're directly from BHP in response to the initial proposal as it related to unification.
As we all know, that case ended not too long ago and after not too many years in this very hall, in fact, in a general meeting on the 31st of January in 2022, by which point their Singapore tax structure upon which many of the cost arguments turn had been voluntarily disbanded. We assume the conclusion was reached that the cost of that structure outweighed the benefits. The aggregate costs, as if by magic at that point, had dwindled to $400 million or so. Concerns around limited price trading down had dissipated, and it went on to converge upwards and thereafter outperform its main peer, in this case, Rio Tinto. A very strong vote in favor from all shareholders. As ISS states, the BHP transaction really does set a precedent that is difficult to dismiss.
We remain committed to ensuring that Rio Tinto's board is focused on these issues, to collaborate with them and help move forward a process of best-in-class value release at the company. I want to thank everyone for listening to me today. I really do appreciate it. Thank you to the chair for letting me speak.
Thank you so much. Thanks, James, so much for that. I do not want to make this all about the debate. I think there are a couple of comments I would suggest. I might ask a couple of our board members on a number of the quotes that you mentioned, and then I would actually like to get to the broader discussion. The thing I would just say at the end of the day is, James, you are saying it is shareholders will vote on this, and that is what we will be looking to. Shareholders will have their chance to vote, and I look forward to seeing the results when we finish our AGMs in Australia. I might just pick on two of my fellow directors, Sharon Thorne, who used to be the chair of Deloitte, provided some of the oversight when we looked at the costing side of it. Maybe ask Ben on the franking credit side of it. Sharon.
Thanks, Dom. Thanks, James. The tax position is very complex, and we shouldn't underestimate it. You know Rio is a huge global company with operations in many countries around the world, and we've been investing significantly in countries outside Australia to provide future growth for our shareholders. Most of those assets outside Australia are owned by PLC. That is a very different structure to where BHP was, where most of their assets by the time of unification were in Australia. Unification creates significant tax events.
The board asked EY, one of the biggest professional services organizations in the world, to fully review our tax exposures. Now, the difference to what's been happening with Grant Thornton and with Palliser's review is that they had full access to our internal information. Their conclusion was very clear that this would result in mid-single-digit billions of U.S. dollars cost to Rio Tinto and therefore would impact the net asset value for shareholders. Just on the point around sharing this information publicly, this information is very commercially sensitive and would be prejudicial to your interests as shareholders for this to get into the public domain. Thanks, Dom.
Thank you. Ben, any comments? Yeah.
Thanks, Dom, and thanks, James, for your comments. For those who don't know, clearly I'm Australian. I used to be the state treasurer of Western Australia. The tax system within Australia is something I'm reasonably familiar with. Franking credits or the imputation system in Australia is uniquely Australian. It started under the Hawke-Keating governments in 1987. The purpose of it, of course, is to ensure that dividends paid to Australian tax residents aren't taxed twice. They are really a big part of the difference in valuation between the PLC stock and the limited stock. I suspect most people in this room have PLC stock, but no doubt there'll be people like me who hold the limited line.
For Australians, that is something of huge value because, in particular, self-funded retirees, etc., use the franking credit that's attached to dividends flowing through the Limited shareholding, which, of course, are fully franked because Limited earns its profits entirely from Australia and pays the appropriate corporate tax rate in Australia. That is a tax advantage to Limited shareholders provided you are, of course, Australian tax resident. A unified structure, and this is one of the points of disagreements that we have with James and Palliser, is that a unified structure would introduce into the Limited, the unified Limited structure, a lot of shareholders, a significant number of shareholders who aren't, of course, Australian tax residents. Those shareholders get the dividend with the franking credit, but of course, there's no value to those who aren't Australian tax residents.
The franking credit, which currently is at a very significant balance with Rio, would run down much faster and not be able to be distributed into the longer-term future of the company. That is the tax benefit, and I think explains a big part of why Limited does trade at a premium to the PLC stock.
Thank you, Ben. I do not want to be unfair and we are not having a chance on the other side if we can go on in this, but I just want to say that the board has looked at this very carefully. In the first review of this, it was done by management. Again, when Palliser came up with this idea, I think it was in a presentation in Hong Kong, we said, "Let's look at it." The people that we brought in from the outside were not there to defend.
They were actually there to examine and look at it, and let's just have a bit of a separate view on it. I can assure you that this board would be very happy to live in Greenland if that meant that we could get a better share price. There's zero bias in terms of where we want to be. Let's find out what is the right solution. I hope you just got a bit of a glimpse of that. I think the other element I want to say is that a board has a duty to be able to examine and push. There's going to be cases where there's information that is commercially sensitive, which is exactly the role of what a board should do.
We feel that from a governance principle point of view, this is extremely important to us, and that is why we oppose it. That does not mean that in the future we will not be looking at this and other options. That is, I think, the duty of our board. At the end of the day, James well knows the shareholders will vote, and we will see how it turns out after our AGM in Perth coming up. Anyhow, thanks again, James, for your interactions. Also, if I just might say, the professionalism with which you have interacted with us in this process. I would like to jump, if you will, to the broader set of the meetings for getting broad questions from everyone in the audience. I just want to say, first of all, that the required notice of the meeting, sorry, for the formality here, has been given.
With your consent, I propose that the notice of meeting should be taken as read. I am very keen that we get to broad questions from the group. We will be taking questions on any topics that you would like as it relates to Rio . If you are in the room, please raise your hand, and then we will have someone come to you, and the microphone will be brought to you, and we will hear you out. Please, before asking a question, could you say your name and if you are representing an organization, what that organization is? For those of you who are attending virtually, you can submit written questions or ask them through the Lumi platform, and we are already getting some questions online, so that is helpful. Please try and keep the questions short and to the point so we can take as many as possible.
With your indulgence, if we receive multiple questions on the same topic, we might just try and bundle the response to them. I would like to start with the people in the room first. I see number two.
Thank you. My name is Richard Solly. I'm a shareholder. My question concerns the company's legacy at the Panguna Mine in Bougainville. In December 2024, the results of phase one of the Panguna Mine Legacy Impact Assessment were released. This independent report, overseen by a committee that included representation from clan chiefs and landowners, found that the Panguna Mine and its environmental impacts pose major risks of death or serious injury to local people. We understand that the company has been on notice about some of the more extreme risks to life since August 2022 at the latest.
In response to the risks and impacts identified, Rio Tinto has described entering two memoranda of understanding with its former subsidiary, Bougainville Copper Limited, and the autonomous Bougainville government to address aging infrastructure and to establish a new round table, including to discuss a potential remedy framework. While positive intentions are noted, community leaders who have been part of the impact assessment have publicly raised concerns about being excluded from the new round table decision-making forum. Reputational, legal, and financial risks are created by slow responses to urgent risks to health and life and poor engagement with affected communities. In this context, could you outline what tangible steps have already been taken on the ground beyond the memoranda of understanding to promptly address the life-threatening risks identified in the report?
Could you explain how the company is responding to the request of community leaders to be part of decision-making again, noting the company's commitment to respecting the rights of indigenous peoples, which includes the right to free, prior, and informed consent?
Thank you very much for your question and your comments. I'm just going to start, and I may turn to Isabelle to provide more color on it. As you know, we're an active participant in the efforts to deal with the legacy issues of the Panguna Mine. Just for everyone's background, this mine, we stopped operating in 1989 when there was a civil war. We are operating with the previous mine operator, Bougainville Copper Limited, and the autonomous Bougainville government to address those legacy issues that you have identified fairly and equitably for local communities.
As you mentioned, last month in Port Moresby, we discussed a process for remedying the impacts, including additional investigations where required on some of the structures that are falling apart and dealing with some of the water issues. We are taking immediate action on imminent risks to life. As part of that, the autonomous Bougainville government has launched a program to inform local communities and small-scale miners about the potential risks. We are also, as I mentioned, supporting a water and sanitation project, and that is in central Bougainville in cooperation with the government. In terms of community involvement, that is actually allowed for through the oversight committee for the legacy process. I do not know, Isabelle, if you want to add anything to that. Isabelle is our General Counsel. Sorry.
Thank you. Thank you for recognizing the efforts. This is a complex situation, and there's a lot of efforts by all the parties. I think Dom has explained the actions that have been taken, but in terms really of the engagements of the clans and the communities, this is really done through this oversight committee. Just to realize, actually, the oversight committee has met 14 times already to discuss the actions that need to be taken, but also some of the additional investigations that should be done in relation to this legacy impact assessments to really understand and go to the root causes. They're meeting again this week, the engagement is ongoing and going in the right direction. Thank you for the question.
Thank you. I think the key point is that consultation alone is rarely adequate and that local people need decision-making power. Thank you.
Thank you. I'll take another question from the floor. We'll wait here. I'll swing this way and then back that way.
Good morning. Thank you. Roger Higgins, private shareholder. Two brief questions, if I may, possibly for Jakob. First of all, does the board have a view on the possible impact of Donald Trump's tariffs on the business? And secondly, if he manages to normalize relations with Russia, do you see business opportunities there? Thank you.
I think it's very important to remind ourselves that we're just a company. Tariffs is between nations, and we can all form our own views on this. We operate as a global company, and we can navigate on that. Obviously, there's quite a lot of news overnight, and we're trying to see what it means. If you look at it, you shouldn't be too worried as a shareholder. We have big, big operations in the U.S., and we are also exporting products into the U.S. There might be certain things that go in our favor. There might be certain things that do not go in our favor. I think fundamentally it is important we do not take views on tariffs. We are obviously, when you are in mining, you realize that geology and demand are not in the same place. We are an obvious place for international trade. We work with every nation and try to meet their needs. I will say to you, no matter how much disruptions you might see, we are able to operate.
I might, Jakob, there was a question online that I am going to try and bundle in, I think, on it. It was a question from Philip Clark. How much of our Canadian production, primarily aluminum, goes to the U.S. and what impact it might have? Yeah.
I should say, I forgot, sorry, we are not having any business with Russia as we speak. There is a lot of limitations on that. The way I would express it is we have so many great opportunities elsewhere, so we're not really looking towards Russia at this point in time. The question online, yes, the reality is that the U.S. is a major producer and miner on many things. We have major copper production in the U.S., but it only produces around 15% of its needs for aluminum. Therefore, since the Second World War until today, the U.S. has heavily imported aluminum from Canada. We are the Western world's largest producer of aluminum, primarily out of Canada. We are exporting a significant amount of aluminum into the U.S., and there will be an impact, but it's manageable.
I think the other thing, just adding to what Jakob said, we've talked about is trying to help our customers who are going to be bearing the price, these increased prices as we go through it. I think very good plans in place. I hope, Philip, that answered your question online. I guess I'll hear from you if it didn't. I wouldn't mind just, again, swinging this way, right at the edge to hear with the scarf, sorry, with the woman.
Hi. Thank you. My name is Sofia, and I'm from Čačak in Western Serbia. I am going to take some time giving information about a project that was not mentioned, actually, at all so far in the presentations, which is Rio Tinto's attempt to open a lithium mine in Western Serbia. Also, in this country, I am completing my research and teaching at the University of Cambridge. I will start with some context to inform you of what is going on. As Rio Tinto's attempts have not been mentioned, I would like to update you since, as of last year, what has happened. I need to ground us in the reality of those who are daring to oppose the other project, which is a story of struggle that is repeated across the globe. We are already hearing some of that in this Q&A. For years now, the locals opposing the mine have faced pressures and intimidation, including through arrests, arbitrary interrogations, and smear campaigns in tabloid media.
This is on top of a near constant vigilance in their own homes and essentially doing extra full-time jobs, which is what it takes to challenge a giant multinational corporation. All because they stay living in their homes in Gornje Nedeljice, which is the name of the village in the other valley. In the past year, the number of arrests over Rio Tinto protests has increased. I want to be clear that I see Rio Tinto as complicit in the harm that is being done. As long as they continue pushing for a project that people in Jadar and in Serbia have rejected on multiple occasions and for years, this violence against those who oppose is going to continue. My phone. Yeah. The violence is not always overt. It is coupled with countless instances of propaganda.
Rio Tinto officials have participated in and promoted a shameful documentary called Not in My Country that was premiered in the European Parliament. At this event, even though locals were invited, they were not allowed to speak to reflect at all on the film that was being shown and share their views and their side of the story. The documentary also continues touring around Europe as we speak and is met with opposition wherever it goes because there are friends and comrades around Europe and in other places who share our struggle. The experience of many friends who live locally and have participated in Rio Tinto's public meetings for years is that of manipulation, coercion, and distortion of reality. Most of us in this room would probably agree to call this an abusive relationship if we were talking about two people.
In fact, there is no such thing as dialogue between a multi-billion dollar corporation with the backing of the police and the wider state, as well as the international legal apparatus, such as through the investment court system and the rest of us. Such a thing does not exist. The dialogues that are meaningful and have been meaningful for the broad coalition that I'm delegated to speak on behalf of today are with communities around the country, the region, and the globe who are part of the same struggle to protect life, whether that's in Homolje or around Novi Pazar in Serbia, Lopare and Ozren in Bosnia and Herzegovina, Northern Portugal in Barosso, the Ecuadorian Amazon, or our friends who are here from Oak Flat in Arizona.
Jadar has been a site of building solidarity at all these levels for years, and the resistance to the project is grounded in the knowledge of what has happened and is happening to those who are further down this arc of violence and dispossession. There may be differences, but our struggle is not separate from any community resisting corporate grabs, primarily of their land and water. Of course, the harm happens on so many different levels. Finally, what I'm happy to inform you about is the resistance to the project is only strengthening. In case you haven't been following the news, Serbia is in the midst of probably the largest and certainly the most powerful student and youth-led movement in recent history.
The bad news for the company is that an entire generation of passionate and dignified young people has formed a strong opinion about Jadar and Rio Tinto. In their open letter to the European Commission, which I'm also going to add some more details about, submitted on the 1st of April, so just two days ago, they write, I quote, "The students unequivocally oppose the realization of the Jadar project for multiple reasons," which they then go on to detail, and the letter is freely available online. Thousands of professors and scientists from across the country submitted their demands to the European Commission as well to reject Rio Tinto's application for Jadar to become a strategic project for the European Union on behalf of the academic community in Serbia on that same day and supported the students.
I am just naming some of the events that happened this week to illustrate. In the language of money, which is spoken here, investment in Jadar is a terrible investment for you. My question is related to the application by Rio Tinto for Jadar to become a strategic project for the EU in an open call by the European Commission, which your officials recently confirmed in a statement to the European Western Balkans. Serbia is not part of the EU, and the European Commission is not a place where any of our voices are represented, even on paper. How is this application consistent with your claims that the people of Serbia are going to decide about the project? To that, I will just add a broader reflection around the entire narrative of Rio Tinto being the savior of the world for the energy and green transition.
These are more rhetorical questions. Development for whom and for what? Are we asking where the minerals and materials are going? I'm increasingly seeing how decarbonization is becoming a weapon in the hands of the corporation. If you're sitting here thinking about sustainable investments, this should definitely concern you. The movements in this country, the climate justice movements, are definitely catching up with this. It's about time that everyone who's thinking about this seriously also caught up. Thank you.
Thank you very much for that overview of the situation. I'm going to make a couple of comments. Jakob may want to jump in as well. The first thing I would say just at the outset is that nothing is going to happen with this project proceeding unless the Serbian government and the people want to do it. That's going to be that's where it is. We believe there's a lot of misinformation that is out there. We are trying everything we can do to provide the perspectives that we have. We believe that there is a way to operate that site in a very environmentally friendly way. We would like to have the discussions on that. At the end of the day, it's the Serbian people and government that will decide it. One comment I would just make is in terms of trying to get that information out there. Jakob, I think it was a six or seven-hour town hall with the president in the actual location where I don't think it was you couldn't go to the bathroom, whatever.
It was just sort of straight discussion with people who could come in and give their point of view, challenge Jakob directly, which I think, and that's, again, the engagement we would like to have to be able to do it so we can get real facts on the table. At the end of the day, it's not going to happen if the Serbian people and the Serbian government don't want to do it. Jakob.
No, thank you for coming here today. I have, because we have explored and looked for lithium for a long time in Serbia, I've now visited your beautiful country many, many times. I wanted to just highlight a couple of things. First of all, we don't want to portray ourselves as saviors of the planet. We are acutely aware that extracting materials has an impact. That is why it is a big obligation to do things to the highest ESG standards. That is why we always want to have a strong social license. We have struggled in Serbia. I am acutely aware of that. I believe that we have an amazing project that really comes to the highest standard and that can create a lot of wealth to the Serbian nation. Now, people can have different views on it. I am traveling often there, and I like to talk to people. Maybe we can talk after the AGM as well. What are the things that really concern people around the project? We believe we have really, really good technical solutions.
As Dom alluded to, last time I traveled to Serbia, I spent six hours talking to the local population. Anyone could ask questions. We had a really good dialogue. Sometimes people have different views, but at least if we could just have factual discussions on what we like and what we don't like. In that regard, I appreciate you coming here today. I hope the dialogue can continue. Sorry, just one second.
You didn't actually answer my question. What about your application to the European Commission for Jadar to become a strategic project for the EU? That was my question. Please answer.
That's not Rio Tinto. That's EU. This is between nations. We're just the ones who happen to have discovered the lithium deposit in Serbia.
Let me just run you through your logic. You are saying that it is up to the people in Serbia and the government to decide whether or not this mine opens. The people clearly reject this, like exhausting legal avenues, protesting the street, et cetera, up until last August when the court in Serbia decided that this was an unlawful cancellation. What we had is a situation where there was clearly a rejection of the project. You still went to the EU, to the European Commission, to apply for Jadar to be a strategic project. The vote still hasn't happened. We are expecting in the next couple of weeks. If it is up to the people of Serbia, why go to an institution where the Serbian people have zero representation to make Jadar a strategic project? Serbia is not part of the EU. The European Commission is not an elected body, even if Serbia were part of the EU. The logic does not hold.
No, there is a completely different logic, I am afraid to say. EU is not issuing any licenses at Serbia. The reason was that the Serbian government would like to have more industry surrounding the development of lithium, such as battery production, EV productions in Serbia. That is where Europe is very relevant. That is why the Serbian government has engaged with the EU. We are certainly not against that. We think that makes imminent sense. Ultimately, it is choices to be made by Serbia.
Okay. Can we continue on with the questions just to in front with the sweater, please? Sorry for not being just more descriptive.
Good morning. My name is Gabriel, and I am returning to your AGM this year on behalf of the Long-Term Investors in People's Health Program at Share Action. This is a coalition of 50 investors with over $6 trillion in AUM. We support investor action to encourage companies to improve people's health.
My question relates to your current action on air pollution. As ShareAction explained in its recent investor briefing Clearing the Air and during meetings with you and others, this is not only physically harmful to the global population, but it also places financial risk on companies and their shareholders. We note that air pollution has not been identified as a material risk in your annual report, which would be the first step towards corporate best practice on this topic. We do, however, note that you provide a breakdown of measurements over multiple years for air pollutants, including PM2.5, PM10, NOx, and SOx, and by source, which is a step ahead of some other mining companies. However, there's no stated reduction targets and a marked increase in particulate matter emissions between 2020 and 2024, while NOx emissions have remained at the same level during that period.
We would like to see Rio Tinto seize the opportunity to set the bar high amongst your peers and become a global leader on tackling air pollution, including by setting specific reduction targets and taking actions to reduce key health-harming pollutants over time. I'd like to thank you for meeting with ShareAction in the past to discuss this issue. My question today is, can you commit to setting air pollution reduction targets for these key health-harming pollutants and meet with us again to share an update on your plans regarding actions you'll take to move towards best practice on this critical topic? Thank you.
Thank you. Thank you very much for returning again. Air pollution, obviously, is something that we care a lot about. There's a couple of examples I might point to and what we're doing on the aluminum side, but also with dust. But I might ask Dean, as head of our Sustainability Committee, if any comments you'd want to make. Thank you for the push.
Thank you, Dom. Good afternoon, everyone. Yes, look, this is something we do take very seriously, obviously, as part of our overall approach to health and safety. Each site, as you rightly pointed out, has different emissions. If we're in the Pilbara, you have dust. If you're in our aluminum smelters, you have other releases. Each site actually understands what is the impact on their workers and work to targets locally. I know we just spoke to you very recently about overall targets. We are reviewing our nature plan and our emissions targets for the coming year. We actually have our next Sustainability Committee. We'll be looking at environmental targets, and that will form part of that. We're happy to keep the dialogue open to you. Please rest assured that each of our businesses understand what the issues are with emissions and are dealing with them at a local level. Thank you.
Okay. Yep. Sorry. In the white blouse.
Thank you so much. Good afternoon, all, and thank you for taking my question today. My name is Louisiana Salge. I'm returning for the second year, and I work at EQ Investors, which is a U.K.-based wealth manager focused on sustainable investing. I'm not here alone. I'm part of the largest climate collaborative investor initiative called Climate Action 100+. We're actually focusing on Rio Tinto in this group. The question today that I'm going to be asking is supported by other investors in this group, namely Robeco, M&G, CCLA, and Sarasin & Partners .
Firstly, I wanted to share thanks to the board for its commitment to net zero by 2050 and existing shorter-term targets and the greater detail provided, actually, in the climate action plan that was released earlier this year. I just want to reinstate this, given the global context in which we find ourselves, that it is key to our investment case that you continue decarbonization in your operations and the wider value chain because it is really part of our investment case. Just to reinstate that, that it continues to be on the front of our minds. Let's move on to the question. Today, I want to focus on Rio Tinto's scope 3 strategy. We're conscious that to drive scope 3, which is basically value chain emissions, there are many policy and technological barriers, and we totally respect that and understand that.
We do believe that articulating a comprehensive strategy would be beneficial for us as investors. We welcome the existing scope three sub-targets, which cover a little part of your existing scope three emissions, but we would like to encourage a greater footprint coverage. I would like to ask the board today, can you commit to providing investors with more transparency and timelines on how all of these little initiatives—not little, I'm sure they're very hard work, sorry—sub-targets cover and scale up to cover your entire scope three emissions more completely and thus Rio Tinto's scope three emissions reduction expectations going forward? Thank you very much.
Thank you so much for the commentary and the question. I might just make a couple of comments on that. One, as you mentioned on the climate action report, I hope you see how seriously we're trying to take the targets. We have a 2025 target. We have the 2030 target and the 2050 target. I think as a board, we feel very good about the granularity and actually the millions of tons of carbon that have actually come out of the system. We hope that you'll see that. The fact that with Sam and the other team's good work on the long-term incentive plan, 20% of senior executives' compensation is going to be based on delivering results on our decarb targets and what we're doing. I say that as background, not to say that we're saints or, as Jakob said, we've got lots of things to work on, but we're trying to take this very seriously in terms of measures and impact on what it has down even to the compensation system.
With scope three, our big challenge, and we've had debates on that, and we'll take your feedback in again to continue. We've had debates on that. Our concern, as you alluded to in setting a broad target, is we can't deliver on it, if you will. It takes our customers to be able to do it. On the iron ore side, that's the steel companies that we provide the iron ore to. A lot of that is in China. We believe they're very serious about wanting to hit their targets, if you will, but we can't control them in terms of where they are. That doesn't mean we don't do anything with them. I think, as you alluded to, we have 40 projects that are underway, looking at ways to deal with scope three.
Even though we don't have an overall target, we are working hard on that, and we are putting capital to work to try and deliver on that. That includes some efforts we're doing with Baowu, which is one of the largest steel companies in the world, a very good cooperative effort underway, one with BHP and BlueScope Steel. We're looking at bio iron. We've got R&D initiatives in Finland and other places like that to try and push it. As you mentioned, we also in our supply chain and shipping, we've been pushing hard. I just want to say we're very concerned about having an overall scope 3 target. In some ways, it'd be easy to put a 2050 target. We won't be around when that is there, but we don't think that fits with this accountability notion.
Just because we do not have that overall ,one does not mean we should not be working on how to improve on that front. I take your point about looking for ways to provide even more granularity, you are saying, on these projects that we have underway. Thank you for your question and comments. I go to it is behind, yeah, right here.
Hello. I am Roger Featherstone, Director Emeritus of the Arizona Mining Reform Coalition from Tucson, Arizona, in the United States. I am here to ask a question about your proposed Resolution Copper project that would destroy Oak Flat, a Native American sacred site that is a recreation and ecological haven located on public land. Oak Flat is vital for the survival of many plants and animals. Your proposed block cave mine would replace this delicate web of life with a crater 3.2 km wide and 305 m deep.
It would dump 1.5 billion tons of toxic waste on the ground behind a 150-meter-tall dam. It would damage over 60 sq km of land. The project would use the same amount of water as a city of 180,000 people. Arizona is in the 25th year of continuous drought and is in the worst drought we faced in 1,200 years, and that drought is worsening. This year, the city of Phoenix set a record for the most days without rain, nearly 200, since record-keeping began. There is not enough water for your proposed mine and for communities, farmers, and the environment. This project is a failed experiment. It is only a matter of time before you abandon the project. The question is how much damage you do before you make that decision. I've been attending your annual general meetings every year since 2013.
You've been pushing the Resolution Copper project for more than 20 years, and not much has changed on the ground. You've had some wins and losses. So have we. For the most part, the project has been stalled. In the past 78 days in the United States, our political climate has changed dramatically. We are already seeing the collapse of safeguards for our communities and the environment. Environmental justice and climate change are now forbidden topics in Washington, D.C. You are already taking advantage of our new political climate and are lobbying for an additional congressional exemption from both our Native American religious freedom laws and environmental laws. Your company is at a turning point regarding the Resolution Copper project. You have taken great pains to show that you adhere to international standards regarding environmental rights or human rights, transparency, and biodiversity.
Will you stand by your rhetoric, or will you cozy up to our wannabe dictator and his sycophants and take advantage of our current governmental instability? The former will keep your company clean, while the latter will not only drag you through the mud, but end up biting you in the butt. Thank you.
Thank you, Roger. I will not comment on the person you were referring to in my response, but I just say that we, as you know, in Resolution, we began investigating and looking at permitting over a decade ago, and we have been engaging deeply with all the stakeholders that are involved. There are, as you well know better than I do, 11 local Native American tribes that are involved in that, and we have engaged and are trying to engage with everyone that is there. When the U.S. Forest Service publishes the environmental impact statement, where a lot of work has gone into it on the water comments that you were making, it will demonstrate that there is adequate water supply for all cumulative uses for the next 100 years.
There are different, very much different views on that. I'd also point out that Resolution will be one of, if not the lowest water consumer in gallons per pound of copper compared to any other operating mine in Arizona. We are very diligently following the process. We are not jumping the gun on any. There is a process that is in place. It's been 10 years. We've had lots of pressure from other stakeholders in the U.S. to get moving, just given the size and scale of the copper asset, but we are sticking very much to the process.
We continue to wait for the U.S. Supreme Court's decision on whether to hear the case brought by the Apache Stronghold against the U.S. Forest Service. I don't know, Katie Jackson's new head of copper, if you want to make any comments or edit, change anything I said.
Thanks, Dom. No, I don't want to edit or change anything. I guess just a couple of comments maybe about water. I think it's just worth stressing that we actually use water from 7,000 feet below ground, below the bedrock. It's not water that's accessible by any other means. Actually, we currently supply that water to local farmers. We actually prevent them from using less sustainable sources of water. I think we have investigated very thoroughly how to do this in the most efficient way possible from a water perspective. That's all to add, Dom.
I would just point out again on the water that you talk about it being the lowest water producer and all of this, but your mining plan shows exactly the opposite. Your mining plan shows the same old technology that everybody else is using. It is kind of like the Einstein quote. You are doing the same thing over and over and expecting different results. Your rhetoric just does not match what the reality is. Unless you have got a new mining plan that we have not seen, it is the same old technology that would create the same old waste that we just do not have enough water for.
Yeah. We should follow up perhaps after the session or with our team on that. I would disagree with you. We've learned a lot in our work in Mongolia with Oyu Tolgoi, where there's similar water challenges, and have learned a lot from that that we're trying to bring to bear. I'm happy to follow up afterwards on that. Could I move, yeah, continuing over?
Thank you, Mr. Chairman. Andy Whitmore, shareholder. I've previously raised issues around the activities of Rio Tinto's subsidiary Energy Resources Australia, or ERA, in the Kakadu National Park in Australia. I want to do a quick follow-up this year. Rio Tinto has stated that you respect the traditional owners, the Mirarr people, and their wish to see an end to uranium mining on their land. Rio has further stated you do not support any future mining at Jabiluka or an extension of the Jabiluka mineral lease. These comments are definitely very much welcome. However, ERA, a company 98% owned by Rio Tinto, is continuing a deeply divisive legal action seeking to force an extension of the Jabiluka lease explicitly against the wishes of the Mirarr people. Therefore, why is Rio Tinto tolerating this? If you remain committed to respecting the Mirarr's clear wishes, can you please confirm the legal action will be stopped? Thank you.
I'm going to start and then may ask Jakob to say a few words. I had the privilege to be able to visit last year and spend time with the leadership on that. I just want to say right up front, we acknowledge and respect the longstanding and intergenerational opposition of the Mirarr people to the development of Jabiluka. That is very, very—I don't know how I want to make that very clear. We totally respect that, and we oppose that. We have no intention, no intention to invest in mining or in the development of the Jabaluca deposit. Our focus is ensuring that the Ranger mine is properly rehabilitated. That is a very clear view, unanimous view from our board. Jakob, you may want to make some other comments.
No, absolutely. In connection with what Dom just said, and back to your question, we have shown with our wallet that we are committed to that. We are injecting more money into ERA, and other investors have not been prepared to do that. That means the likelihood is that we will take over ERA. There are some legal proceedings right now, so I cannot—we just have to let that go in. The answer to your question is we have to let go through those legal proceedings. If things go as it should be, there will be no ERA. There will be Rio Tinto, and there will be forever the Mirra people. We are very aligned on how to proceed.
Okay, thanks. Yeah, it's good to hear that. I mean, I'd say it just seems kind of crazy that you have this position, and yet the legal proceedings are continuing. I think it's doing you no good. Let us hope they'll finish soon. Thank you.
Thank you. I'll keep going to the right. Yes, please.
Okay. Hello. My name's Patrick Scott. I'm from the London Mining Network. I just want to return to the Jadar project in Serbia. Only fairly recently, i.e., within the last couple of weeks or so, approximately 3,000 members of the Serbian scientific and academic community have sort of given their names to a statement opposing the Jadar project on the basis of the environmental damage and the damage to communities that will live in the vicinity of the mine. We're not just talking about sort of ordinary common peasants. We're talking about, you know, serious people in academia who know what they're talking about. My question to Jakob or to Dom, or to any member of the board is, these are people actually on the ground in Serbia. Do you actually think that you know better than them when you say it is possible to proceed with the Jadar project?
Thank you. There are multiple views of that, that we very much respect perspectives from people on the ground. There are other academic perspectives in terms of what's happening. I might go at Sinead if I don't know if you want to make any comments on it.
Yeah, thank you. Look, thanks for the question. I think we're very clear with Jadar, as has already been stated, that the deposit was found decades ago, and there's been a lot of study being done to develop the project. You know, where we sit right now, we're very clear that there's been an extensive, and the most extensive environmental impact assessment ever done in Serbian history on the project. There's a huge amount of work. We recognize there are environmental impacts. We also recognize there's a lot of concerns in the region. What we're doing right now is continuing to work through the process where we can provide further information to people, and we do extensive engagement locally.
As Jakob has already said, he also has answered any question that's been asked of him publicly. We continue to work through and evaluate what the impacts could be. We're clear that we want to produce a project outcome that allows us to meet the highest of environmental standards that we can internationally, and also based on EU standards, to be able to develop the project. We need further data to do that, and we continue to work through the data gathering process. We're not doing any of that right now because we don't have the permit to do that in Serbia. We do believe this is a world-class project. It's on the edge of Europe. We believe that we can develop it to international standards. We also recognize that the final say on this is not us, and we need to do everything we can diligently to work through environmental impact and understand what that could be. Thank you.
I should have introduced Sinead, by the way, Sinead Kaufman, who's the CEO of the Minerals Group, and I believe is going to Serbia tomorrow on it. Can we have any more questions from the floor over here? Two?
Good morning, Mr. Chairman. Two brief comments, Monica Rednum, shareholder, and two questions actually about mining. Comment number one, my father grew up in the Far East, and quite frankly, a company your size having two AGMs is no problem because when you get out to Australia, the worldview will be completely different from the shareholders. Trying not to be rude, the little Englander syndrome does hit some meetings. Comment number two, thanks to Mr. Clark for his question about aluminum in Canada because now I won't have to ask it.
Right, question number three. In your mines, you use a lot of electricity. You've obviously assessed the future demand. You're no doubt aware, and I hope you weren't caught up in it, the recent problem at Heathrow with backup supply not being there. Water and electricity are both going to become national issues, and local governments are going to start wanting to tax you on all sorts of things. How are you progressing with independent electricity supply at as many mines as possible worldwide so that if you have breakdowns, you don't actually stop work? Also, you can be a bit independent of the government. The second question is about lithium in Argentina. At what altitude is your mining operation?
Is it in the Lithium Triangle, and does it impinge on the Chinese operations against which you might come up at some point? What are the potential operations for AI and automated equipment if you are having to operate at altitude because people are useless above a certain level?
Thank you for that very broad range of interesting questions on it. I think I might start, and I'm definitely going to have to draw on colleagues on this. On the electricity and water usage, actually we are pushing more on the renewable side. We're doing it not just because it's the right thing from a climate point of view, it's actually very good for the shareholder as well. If you can see that happening. I would point out one particular place there, which is in Canada.
You know, I think we think about the hydro dams and the opportunity for hydro in Canada is very significant. That is a low-cost, sustainable system that we're very excited about continuing to expand on as we look forward. We do think about that. We do think about it in terms of our renewables. As I mentioned in my comments, the demand just on the electrification side is massive, just even over the next five years. That is something that we are using ourselves, but also keen to provide the materials to be able to enable that. I think on lithium, I might go to Paul Graves, who's the new CEO of Rio Tinto Lithium, to talk about that. Then maybe on AI, who would like to talk about AI? On that, I just, who volunteers? While you're, while Paul, you're handling that, we'll figure out who will deal with the AI question.
Hi everybody. Yeah, Paul Graves my name. I'm 27 days into my employment by Rio Tinto, so good to be here. Our lithium operations are at about 4,000 meters above sea level. They are all in the Lithium Triangle. That's correct. We are adjacent to one active Chinese-controlled operation there, but there is plenty of space. We do not impinge on each other and actually do get to share some infrastructure, which is helpful to both of us. It is difficult to work at 4,000 meters above sea level. We do lose about one in three of our hires within a few days because it is just too difficult for them to adapt. Most people do. We have a lot of automation on those sites. We obviously have pretty strong processes with regard to health and protecting people's health up there. I think that was the bulk of the questions.
Yeah. Thank you. Maybe on AI, Jakob, and Martina, I might drag you in on that too, but maybe Jakob first.
AI is going to be the next big thing for Rio Tinto. I do not want to claim success yet because why is it big for Rio? Rio Tinto is probably the world's largest user of industrial automation. We got autonomous trucks, autonomous drilling rigs, we got autonomous trains, etc. We got all this data, and we need to use the latest technology. We have good examples of it. We work on a lot of tech development.
For example, the big Oyu Tolgoi copper mine in Mongolia, we use what you would call a digital twin, where we really can use all the information we get, seismic data, to steer the block cave. That's really cutting-edge technology. To claim that we have AI all over the place, absolutely not. See it as a great opportunity, another good reason for being a shareholder of Rio Tinto. Thank you.
Yeah. Martina.
I can only add to what Jakob said. From my perspective as a board member, seeing many companies in the industrial space and their speed of application with AI, I think Rio is in this industry definitely a front-runner. I think what we're doing in using our data in order to make this world a more efficient and a better place is definitely, I would say, at least better than competition. Thank you.
Far corner. Number two.
Mr. Barton, I'm very aware that I have a Malagasy colleague who's been sitting on the line in Madagascar for about an hour now. I'd be very grateful if you would take his question and then if you would also extend me the courtesy with a follow-up question.
Very happy to. I don't see the question on our screen.
He is online, I thin k, waiting to speak.
If they're online, please speak to us.
It's very difficult for people in Madagascar to ring into this.
Hi. Hi everyone.
We can hear you well. Thanks for calling. All right. Okay.
Thank you for receiving me. I'm from Madagascar, working at Transparency International Initiative Madagascar. We've been following the QIT Madagascar Minerals case for several years right now, extracting ilmenite in the south part of Madagascar. Following other kinds of research and a lot of investigation, there have been detected some serious environmental and human health risks to approximately several 15,000 villagers, depending on water in the south part of Madagascar. Even some independent experts supported that the evidence that they could pose some risk on local villagers living near the QMM mine. Even Rio Tinto right now is facing legal action regarding potential health impact of QMM water contamination, especially regarding the level of lead detected in the blood of community members. We have complaints.
We have reports on negative impacts. We have water quality issues, loss of livelihood, health concerns, and inadequate compensation and human rights violations that have resulted in local protests and sometimes criminalization, arrest, and detention. We have always asked for this independence or an audit of the environmental and human rights impact assessment in QMM mines. My first question is, how can Rio Tinto engage or why hasn't Rio Tinto engaged yet or agreed to an independent environmental and human rights assessment impact in QMM here in Madagascar? Given also the expansion that is planned, how will Rio Tinto ensure that it doesn't harm local population in the next coming years? We have also this conflict resolution that is still an issue here. What mechanism has Rio Tinto put in place to engage in good faith negotiations with affected communities? We also require transparency in responsible mining from Rio Tinto. Thank you very much.
Thank you very much for your questions and for being patient and being on the line with us. I think we heard it. Yvonne, do you want to ask, make your comments, and then we'll try and answer?
I think the first thing to say is that we already know your answer because QMM published their response to an open letter signed by 27, sorry, my name is Yvonne Orengo. It is 30 years since I came to my first AGM, and that was all about the QMM mine in Madagascar. I have been following the mine for 30 years. I have been working on a lot of the research under my role as the director of Andrew Lees Trust and the board. Sinead, thank you very much for the work that you have done over the last five years to respond to some of the research that we have given you, raising all of the water quality issues, the human rights issues.
I think what I want to add to what Valéry is saying, having observed the mine and lived and worked in the region for seven years and visited the area for more than 14 years in the south and continued with civil society relationships for the last 15 years since then, is that I understand you have very good top-line commitments to human rights, to ESG, to your social performance. I want to acknowledge here, Jakob, your kind and correct admittance in 2022 that the social program, the community social performance at QMM had not been working. Some of us had been trying to, waving, had been waving our arms for two decades trying to get that message across.
I think the question now, you will say almost certainly in your reply that there's $4 million now being put forward for the social programs that's separate to the water issues. I can't respond to your latest water report because we only got sent it yesterday, so we have no time to analyze it. On the social side, I would say that these $4 million that you want to spend, $2 million will go to the region, regional development. Not at all sure what monitoring and reporting you're going to have in place to show any due diligence about how that is spent because we all know, those of us who work in Madagascar, the levels of transparency around local government. The $2 million that you want to spend on the social programs also needs a lot more transparency.
I don't think since 2008 there's been any assessment of the social program of QMM. Including in that, I want to embrace the whole problem of the human rights issues that Valéry has mentioned because there have been many, many reports of human rights violations. We had three protesters shot dead in 2023 with absolutely no inquiry at all. Rio Tinto is still struggling to admit to two of those deaths actually having happened. As far as I know, in the 30 years that I've been following the mine, there's not been a single human rights impact assessment of QMM despite multiple conflicts, despite multiple arrests, despite multiple people being intimidated, fined, criminalized for trying to access the natural resources on which they depend because they can't survive without them.
I think the rejection of doing the impact assessment that was in the press release from QMM a few days ago, your absolute rejection of having any independent assessment is concerning. You know, and I'm going to echo the investors from the beginning of this, which is, you know, you can ask people to trust you, but I think you know already that the people in southern Madagascar around the QMM mine have had serious problems trusting you. So when you assure them with your reports or whatever else you put forward that everything is okay, that they don't need this assessment, I think you're stretching a lot to ask them that. I think they deserve a more transparent and inclusive process that will give them and help build you the trust that you need going forward.
Because if you extend your mine, which you're going to do very shortly, I think in 2026, either to St. Louis or Petriqui, you risk to replicate all of the same problems that you've had over the last 20 years. You've spent millions over the last 20 years on your social program for zero result. Why throw another $2 million at it if you haven't yet done an evaluation of what's already gone wrong, you know, what needs to be done better, how you're going to not replicate all of those mistakes all over again in St. Louis and beyond. I just want to support Valéry's questions with all of that background, and I'm happy to obviously talk more about that when we next are able to, you know, engage. Thank you.
Thank you, Yvonne, and thank you, Valéry, if you can still hear us on it for it. I'll make a couple of comments, and then again, Sinead Kaufman will make some comments on it. I think, first of all, you know, I understand the dedication and the passion and your following of this for many, many years. After the first AGM we had here, and I heard you, I went to visit Madagascar, visit the site. I'll just say that there's a very, very strong commitment and, I think, set of relationships in the communities that are there. From a mine site point of view, just to tell it, I mentioned our everyday respect report and where it is the most engaged employees in our organization are actually on that mine site, a lot of the innovations that are occurring and so forth.
There's a lot of work, as you mentioned, we've been doing on water to make sure it's there. A lot of things we're doing on the community. We have to recognize that we're working with the government. As you well know, there are tensions between the local and the national government in terms of what we do and how we work it. We are engaging with those communities. I think last year, the team hosted 500 stakeholders and met with 2,000 community members at our community kiosks. I think your push on how we make sure that that $2 million is spent effectively is a good one. Sinead, do you want to, Sinead Kaufman again, CEO of the Minerals, any further comments?
Yeah, thank you, Dom, and thank you, Valéry, for the question and Yvonne for the comments. I'll try and maybe talk about a couple of things. First of all, on water. I think Yvonne will certainly respect the concerns that you've raised over the years. If I have my history correct, in 2017, there was a serious concern raised at the AGM about radioactivity and the impact that radiation could have on people's lives around QMM. We commissioned an independent assessment from an Australian company. I think they are called JBS&G, which started in about 2019. They did five different seasonal sampling sessions over the next few years on dust, air, water, ingestion pathways for people, specifically looking for radiation increases. The study was published before the AGM last year, and they've done a follow-up since. They continue to do sampling in the area. We haven't found any evidence of increased levels of radiation in ingestion pathways for people in the region.
We continue to look at, now that we're, as we continue on with the work, how do we continue that data? We've also commissioned a further study on the receiving environment, which is much broader than the area around QMM. That has started with a company called WSP, sorry for all the acronyms, and they haven't completed yet. They've started their seasonal cycling. They've done three visits to Madagascar last year, and there's more work to continue. Their initial water samples have also concluded that there was no anomalous lead and uranium levels detected within the receiving environment around QMM. We will obviously continue to look going forward for how we can improve our standards and our systems as we move forward with the sampling. As always, we do publish the data. We're very trying to be as transparent as possible.
We publish the information on our website and our reports that we get on the website. On the community spend, when we concluded the fiscal agreement, which was a 25-year renewal of the fiscal agreement, the second agreement we've had since we started the mine last year, we committed to $100 million of community funding in that time, $4 million a year for the next 25 years. As you said, Yvonne, we share the concerns around making sure the money is actually going to the right people. We have a governance process, which is not a QMM governance process. It is a Rio Tinto standard on governance around where the money gets spent. To date, we had the projects agreed with the local community and also with stakeholders around what we want to spend it on for this year in September last year.
So far, I think we've provided medical assistance to about 20,000 people locally. We've provided education assistance to 11,000 students locally. What we're really trying to do with that money is make it very tangible and very physical support that we can provide to local communities. We need to continue to ensure and do the circle to make sure that that money is actually getting spent in the right locations. That does involve speaking to people and engaging locally. As Dom said, we have started, and again, based on feedback that we've had from Transparency International, Publish What You Pay, from the Andrew Lees Trust and others, we've tried to improve our engagement locally. We have got site visits. People are welcome to come and visit the site. A lot of people locally had never been inside the gate of QMM.
We had 500 people visit last year from local communities. We've also engaged with about 3,500 people through our community kiosks. I attended one of those recently when I was in Madagascar. It's essentially like a town hall style setting. People are allowed to ask us questions. It's not the only engagement tool. It's a way of trying to better share information. We also have the grievance process, which we have continued to improve again based on feedback over the last few years. Also, as part of that, hired additional community liaison officers to work with the community to provide that feedback, but also to use the formal grievance mechanism process, which complies with IFC standards, to ensure that people who have a genuine grievance or a concern or a question can come and ask us those.
I think we've already said we're certainly not suggesting that the site has always operated to the highest standards. We're very clear that we have lots of work to do to improve and continue to appreciate the feedback that we can get to get better each year.
Yvonne, yeah, please. I might, Dean, go to you.
I think that Valéry's question, which still needs answering by you, is why you will not do, why you will not allow an independent impact assessment, an environmental human rights impact assessment. I've looked back through just a few years of all of the documents I've got, and I've got hundreds, more than I can deal with.
I can find at least five different attempts by different civil society organizations in Madagascar, diaspora organizations who have absolutely put it in writing that they want some kind of independent audit, an independent assessment. When you mention like the grievance process, there's not been any independent review of your grievance process, even though you know, and I know, that it wasn't working and hasn't been working. I'm glad you're working on it now, but it hasn't been working for a long time, which means that, you know, hundreds of people who've been putting complaints in have not had their complaints properly answered. We do need, they do need an answer in Madagascar.
I find it very difficult as somebody who's worked with the Malagasy people for 30 years to actually have to, the embarrassment of having to explain that a British company of your standard with your money and your capacity will refuse them repeatedly something that they ask. They're your hosts. I just don't understand why you keep saying no to things that they ask for. This is not, given everything that's happened over God knows how many years and how many people have suffered. We're talking about, you know, villagers who've lost half their income. You know this. It's in the Publish What You Pay report. They've lost half their income. They've lost livelihoods. They've lost their land. They've lost access to natural resources on which they survive because they don't have jobs. You know, they have to go out and make their food, as you know.
They deserve, you know, to have some kind of process that recognizes their rights and is going to show them that you are very willing to open up your doors to third-party scrutiny. You must do it because you can't just ask people to trust you and then throw, you know, glossy brochures at them. It's not going to work, not in Madagascar.
Look, thank you, Yvonne. Again, we are not suggesting that. We certainly don't produce glossy brochures and share them with people. I don't have the budget for that. Look, I think a lot of our engagement and the reason why we do have a difference of opinion on the independent assessment is we strive for all of our information and reports and studies that we do to be shared publicly. The raw water data is published annually.
It's now, and thanks to your feedback again, it is now assessed and actually tested in international independent laboratories outside of Madagascar, which admittedly takes us a lot longer, but it is worth doing. We have clear assurance that our information is being tested internationally by independent experts. All of our water studies and analysis that we do is done by independent experts, not by us. We strive as much as possible to be as transparent as we can with what we have. Just as an example, and I'm going to read this because I'll get it wrong otherwise, the JBS&G study that we published and that's available on our website, we've actually now requested a peer review of that through the UN Radiation, sort of Natural Radiation Committee.
We are happy to share that information with other scientists and continue to focus on transparency, but also on the ability to engage. We do engage locally with civil society, governments, etc. I think we continue to work to make our information as transparent as possible and use as many independent experts rather than rely on telling people just to trust us. Thank you.
Okay. Any more questions? What number three?
Hi, good morning, Mr. Chairman. Joao Freitas, this is from HBK. I'd like to ask four questions on Resolution 24, please. You mentioned in your board's response presentation on page four that the current DLC provides clear benefits in terms of franking credits utilization. Can you please explain how that is the case? The reason I ask is because almost under any scenario that I can think of, the utilization of franking credits is higher under Unified Rio Tinto than under the current structure.
Why don't you list out your four and then we'll answer them? Yeah.
I think the next question would be, I think you mentioned that with the future growth of the company moving away from Australia and thus increasing the ability of the PLC line to fund its own dividend, please could the board explain what would happen to the then increasing balance sheet balance of franking credits that would be available in the balance sheet in the case of no unification? How was this factor in the analysis?
Number three, you mentioned that the unification of the DLC would result in the mid-single digit billions of tax costs and that you do not want to provide a full breakdown on a country-by-country basis due to being commercially sensitive. I understand and I appreciate that. However, can I please ask you if you could break down roughly that mid-single digit billions into three simple tax buckets, stamp duty, capital gains tax, and NPV of future higher tax rates? I see no reason why breaking it down in three generic tax buckets would have any detrimental impact in the future tax position of Rio Tinto. On page 18, fourth and final question, on page 18 of your presentation, you show the Comalco transaction back in 2000 as an example of your ability to use SCRIP.
Please correct me if I'm wrong, but wasn't that a cash transaction which had an inferior value to SCRIP alternative to reflect the fact that Australia had just introduced rollover relief of CGT on share deals? I believe that in that specific transaction, 90% of your shareholders accepted the cash offer and only 10% of shareholders elected for SCRIP. The majority ended up electing of those 10%, the majority ended up electing to receive Rio Tinto PLC shares because those at the time were trading at a premium to the limited line. Thank you.
Thank you. I didn't catch your name again. Sorry.
Joao Freitas .
Thank you. We're not sure what organization. What organization?
HBK Investments.
Thank you. Four questions. Let me try. I think on the franking credits, I might go back to, but let me just go to Ben. I think as it relates to the, and maybe bundle in two as well because that gets into how the portfolio might change. We're going to have more of our profits outside of Australia, if that's okay. On the unification one, I might go back to Sharon and I'll add something too as well on that. Maybe I'll close on the SCRIP piece as it relates to Comalco. Is that okay? Ben?
Yeah, thanks. Thanks, Dom. Just in respect of it, maybe the question you had about the balance of franking credits and the $9 billion and the assumptions, I might, I'm looking at you, Peter, you might need to make some comments on that because the balance is significant at the moment, but will change over time. The way I think your question was about the efficient utilization of the franking credits, there are a couple of components to it. Firstly, at the moment, you've got the best way to think of it is that Rio Tinto Limited has all the Australian assets within it and Rio Tinto PLC has all the rest of the globe's assets within it. There are some small exceptions, but that's kind of the best way to think about it, right? You saw at our capital markets day in December last year, between now and say 2030, the movement of EBITDA on the Rio balance sheet is moving in the direction of PLC. At the moment, say 70% is coming through Limited, primarily through iron ore.
Over now and between now and 2030, you'll see that movement, a combination of the movement of the iron ore price, but also increasing copper equivalents from other assets, whether it be OT or Simandou, etc., will move that closer to 50-50. What that means is that the internal sharing of the dividend currently moving from Limited through to PLC will decline, right? That's that first component, that height level component. Under that, which is I think the, hopefully I explained that this second component previously, is who can utilize the franking credits. Ultimately, you have to be an Australian tax resident to utilize the franking credits for tax benefits. If you have a unified structure, which clearly means you therefore have a significant increase in the Limited shareholding of non-tax resident Australian tax resident shareholders, then those franking cred its still pay to them.
They just can't utilize the tax benefit of them. That's not efficient if you are an Australian tax resident limited shareholder owner. I hope I've explained that to you.
Let's continue through and we can come back if needed.
Sorry, just on the balancing it, just the assumptions, I think you asked a question about the assumption of the decline of the balance. I just think the CFO might need to make some comments on that.
Yeah, I mean, one of the key points to notice is that, you know, 23% of our shareholders are in limited, 77% are in PLC. You're putting sort of three quarters of the register on unification into the Australian register. Only 15% of the whole DLC are Australian shareholders who can benefit from franking credits at this moment. That's why we say there is certainly an inefficiency in using franking credits for the long term because you have so many international investors under unification. We do have a balance. We talk about that and the balance sheet of about $9 billion of franking credits. That would certainly push out that when we fully utilize them. That is the dynamic, the mix of the international versus Australian shareholders as Ben explained.
On the cost side, Chair, I mean, basically our numbers on stamp duty and the transaction cost, as it will, is related to Palliser are not that much different. The issue is these potential tax liabilities and that's what Sharon discussed before, but I don't know if you want to make any more comments on that.
Just that, you know, management did a very detailed review of the change of control impact on long-arm capital gains tax, which EY came in, did an additional review, gave us their conclusions, which is the mid-single digits, you know, U.S. dollars potential tax that would be incurred if we had a change of control. The thing I would flag is that governments can change their position. There is actually, you know, additional risk around that, particularly when you think about how someone like Trump is behaving. I would say that that's the minimum exposure if we went for unification.
I think just on SCRIP, there were some comments before, for example, not just to Comalco, but also to Alcan, for example, and that we, you know, why didn't we use SCRIP versus and why did we use cash? I think the argument was, you know, that we could not use the SCRIP, so we used cash. It is obviously when you are in a deal, it is what the seller wants in that particular process. If I am going back on the Alcan side, that was an all cash deal. I think all of us, if we could go back in time over that period, would love to have done that with SCRIP and we believe we could have, but that is not what the seller wanted to do on that side of it. Google just bought, I think it is Wiz, so Google has very good SCRIP, but they bought them for cash for $30 billion a couple of weeks ago. That can happen. On the Comalco side, we did use that to say that there was actually a case where SCRIP was offered.
It obviously depends on what the seller wants to do and what the competition is in terms of where that is. We do not feel that that is a limit for us and we think it is erroneous to sort of say that that has ended up being a huge cost to Rio Tinto over time. It is what those particular transactions were done at. Maybe one comment and then we have, I think we have got to wrap up and we are very happy to spend time with you up in the Pickwick Lounge if you would like to go into the nitty-gritty.
Sure. Just basically going back to the franking credits, I think the question was slightly different because you say that you shouldn't go for the unification as things currently stand and because earnings are going to grow significantly at the PLC line and you are now able to fund the dividend at the PLC line. If there is no unification, it means that, and you have a higher amount of earnings in PLC, it means that your current balance of franking credits will balloon to probably $20 billion-$30 billion and use in the next few years because you are no longer burning those franking credits on your PLC line unless you find a way of rebalancing your two lines to have more Australian shareholders to use those franking credits. So far, all the different attempts that we have seen have not been effective. That's going to be the case. I was trying to understand how that was factored into your decision process.
It was factored. We have a different view than you and we should follow up on that. I might point out too another report, which we didn't commission from Goldman Sachs, which actually was released, I think, on Monday. It talked about the liabilities that Sharon mentioned, which they estimated is higher than what we put on it. They specifically focused on the franking credit cost as well, raising that issue. I suggest after the session with some sandwiches, we could get into that some more. Thank you for your questions.
Thank you.
There's no more questions I see online unless I give it two seconds. If anyone's been trying to call in, please yell. I'm assuming that's the case. I think we should wrap it up. Thank you, everyone. We've gone a bit over time, but I think there's been good questions. We've had a good discussion and now it's time for us to take a poll on the resolutions. There are 24 resolutions to be voted on today. The full text of each of the resolutions is set out in the notice of the meeting. Resolutions 1 to 20 are proposed as ordinary resolutions and resolutions 21 to 24 are proposed as special resolutions. Many of you have already sent in your proxy cards and you do not need to vote again unless you wish to change your vote. For anyone who wishes to vote now, please complete your voting card if you're in the room or if you're joining online, please vote through the Lumi platform.
For anyone in the room who's entitled to vote but does not have a card, please raise your hand and we'll bring one to you. Please hand your completed card to the registrar staff or post it into one of the ballot boxes at the exit as you leave the hall. If you need any assistance with completing or submitting your vote, one of our attendants will be happy to assist you. For those online, you can ask for technical support by using the messaging tab on the Lumi platform. The polls for holders of ordinary shares will close approximately 15 minutes after the end of the meeting.
The polls in respect of resolutions 1 to 19 and 24, as I mentioned at the outset, will remain open until after the Rio Tinto Limited meeting on the 1st of May to allow votes cast at the Rio Tinto Limited meeting to be aggregated as a combined electorate. The results of the polls and resolutions 20 to 23 will be announced after this meeting and will be posted on the Rio Tinto website. As I've mentioned, the results and the remaining resolutions will also be voted at the Rio Tinto Limited meeting on the 1st of May and they'll be published following the conclusion of that. That's why we're not releasing any interim ones. This brings us to the end of the meeting. I want to thank you all for your participation and continued support.
For those in the room, I hope you'll join us for some refreshments in the Pickwick Suite on the first floor. For those online, I wish you the best for the rest of the day or evening. Also, just to say there's a number of our Rio Tinto colleagues who will be wearing red badges. We also have our auditors who are with us, a range of different people from around the Rio Tinto organization who will be there. You can see them with the red buttons. Our auditors, would you maybe stand up just so people can see you. I don't think they have a badge, but you can talk to them as well, of course. I now declare the meeting closed. Thank you very much.