Prepared remarks
So now I'd like to extend a warm welcome to all of our guests today for the 2026 Half Year Results. Before I begin, I would like to acknowledge the Gadigal people of the Eora Nation on whose traditional lands we are gathered today, and I pay my respects to elders past and present. I extend that respect to all Indigenous peoples around the globe. I acknowledge they continue to play an important role within our communities and our businesses. We are here today with our CEO, Simon Trott; and CFO, Peter Cunningham, to present to you these financial results. This will be followed by a Q&A session. As a reminder, the usual cautionary statements apply. Now I'm very pleased to introduce Chairman Murray, Chairperson of the Metropolitan Local Aboriginal Land Council, who will deliver our welcome to country today before Simon commences the presentation. I now invite Chairman Murray to the stage.
A welcome to country, particularly in this country, has been subject to a lot of criticism, particularly on the right and particularly on the left. There is no middle ground. But if you are wanting to be welcomed by First Nations people, particularly here in Sydney, New South Wales and Australia, you do the right thing by acknowledging First Nation. I want to pay respects to the Gadigal people of the Eora Nation. I don't know if you understand when it comes to sunrise and sunset. Sunrise comes from the east, then the sunlight travels across, particularly in the Sydney region and then across New South Wales, then across all the different clans. There are something like 54 clans in New South Wales. Across Australia, there are over 500 different clans. We're not homogeneous; we're many. The purpose is that you would have a different relationship from neighboring clans, in particular here in Sydney. There are no single traditional owners here in Sydney. So the five local Aboriginal clans become, by default, the traditional custodians. It means a lot that you understand the respect. We've been here for thousands and thousands of years, and we want to continue to have that relationship with you and to make sure, if you can, there's good dialogue, understanding and commitment. One of the things about us as First Nations people is that we are the poorest Australians. We don't see wealth trends reflect or benefit us because of all the different legislative laws since colonization of Australia. I'm not going to dwell on that because I think you know what I'm saying. So with that, welcome to Sydney. Welcome to all the delegates. Welcome to all the investors. Welcome to Sydney, and I pay respects to the Gadigal people of the Eora Nation. Coming here, understanding the colonial aspects of Sydney is important — we still have the colonial effect. So welcome to Gadigal land, Aboriginal land: always was, always will be Aboriginal land. Thank you very much.
Thank you, Chairman Murray, for that welcome to Gadigal country. And good morning and good evening, and thanks very much for being here. As Rachel mentioned earlier, I'm joined today by Peter Cunningham, our CFO, together with two other Exco members in the audience, Jerome and Mark. I'll start with safety. In this half, we lost two of our colleagues, and I'll carry that with me. Nothing we report today means anything if our people do not go home safely. Safety is my first priority. It is Rio's first priority, and it will always be. Across the business, we are continuing to make the changes that we need to ensure our people stay safe. Now let me tell you where this business is heading. This has been a strong half with real momentum building month-on-month. We're running our assets harder and smarter. Moving fast, changing how we work. And today, it's showing through in the numbers. I said at Capital Markets Day last December that Rio was entering a new era and becoming stronger, sharper and simpler. Seven months on, I'm here to show the evidence. Two things drive everything we do: a relentless focus on both performance and on returns for you, our shareholders. Everything else follows from that. Let me take you through it. There are three reasons why Rio is the mining and metals business to own. Firstly, we have a leading exposure among diversified miners to the biggest trends of our time: electrification, AI and digital together with traditional demand. Our commodities — copper, aluminium, lithium and iron ore — sit right at the heart of these trends. These are the materials the world needs, and Rio is positioned to supply them at scale. Second, along with the right commodities, we also have world-class assets. They are large, low cost and scalable, and we've got the balance sheet and the skills to monetise them. What makes Rio distinctive is this combination with embedded growth, major projects tracking to plan and in several areas ahead. Simandou is now more than three quarters complete. OT continues to ramp up and is achieving record production. Lithium in-flight projects are advancing and the Rhodes Ridge study is progressing on track. This is a portfolio built for the decades ahead. Now we've talked about being more diversified. And today, we're delivering. Nearly 60% of EBITDA in the first half was delivered from copper, aluminium and lithium. Thirdly, and this is where I want to spend most of the time today, we are focused on driving outstanding performance. This is where we have a real opportunity to unlock our potential. These three strengths set us apart. And together, these are why we continue to deliver both industry-leading returns as well as growth. That means consistent shareholder payments, resilience through the cycle and capturing market upsides. Outstanding performance is what turns a great asset base into a great business. Today, I'll flip things around in the pack because I want to talk more about our performance first before then coming to the macro. Across the business, we're changing how we operate. This goes well beyond taking out costs, although we're doing that as well. We're building a more agile Rio Tinto, pushing decisions closer to the assets where our people have the accountability to act. Our momentum is broad-based, and you can see it in our first half numbers. We grew copper-equivalent production by 3% and free cash flow rose by 75%. The strength of this performance meant we could deliver a 43% higher interim dividend worth $3.4 billion. Let's focus on what's underpinning these operational results. When I launched our program to build a stronger, sharper, simpler Rio Tinto at Capital Markets Day last December, I told you I'd deliver $650 million in productivity benefits, and we've delivered. We've already banked $870 million to the end of June. I also told you that we would continue to grow the program. Again, we've delivered. Today, I can announce we are targeting a year-end run rate of $1.8 billion, almost triple where we were just seven months ago. And there is substantially more to go as our momentum grows. This is all consistent with creating an operating culture that underpins the strongest and most valued metals and mining business and maintaining that into the future. I'll give you a bit more sense of what we've been doing. This is not a top-down exercise where we simply squeeze budgets. It's a structural change with more than 80 large initiatives running at every level of the business. This is about how we manage contractors, how we source raw materials, how we invest in digital and innovation, how we structure our teams. It is about the people closest to the work finding better ways of doing it. This is the culture of excellence I want to embed at Rio, codified through our new management operating system. Let me walk you through a few examples. At OT, we have redesigned the way we approach underground development, harnessing data and speeding drawbell construction. This has accelerated production, helping to generate around $80 million in productivity improvements. In the Pilbara, we've generated around $55 million in annual benefits by removing redundant capacity through stronger system resilience, building on the changes we made to product strategy. And we've delivered around $40 million in annual savings across our Atlantic aluminium operations with a sharpened focus on contractor management. This followed a focused Kaizen looking to remove bottlenecks across all sites. To me, this is what operational excellence looks like in practice. It's not about slogans. It's about thousands of people making better decisions every day. Our results-driven operating model gives us the right structure to maintain that momentum. Our drive to raise performance is unlocking our copper portfolio's potential. Since 2020, we've achieved industry-leading EBITDA growth while maintaining one of the lowest cost positions in the sector. There is more to come as we target 1 million tonnes of copper by 2030. OT continues to ramp up towards 500,000 tonnes a year, while Kennecott is targeting 40% to 50% production growth. Beyond 2030, we have a compelling pipeline of high-quality opportunities, including both brownfield and greenfield sites. We have industry-leading copper growth today, a clear path to 1 million tonnes by 2030, and an exceptional portfolio of options to continue creating value well into the next decade. I've talked about how we're changing the way we work to drive outstanding performance across our assets. Let's look at the power of applying those principles across our full portfolio. We have large, low-cost assets in all the right commodities. Each has exceptional frontline teams with unique abilities. We're a leading low-cost copper producer at scale, the number one global iron ore producer, a leading integrated western aluminium producer and we have the best pipeline of Tier 1 lithium options, targeting 200,000 tonnes of capacity by 2028. Together, these Tier 1 assets are the engines of our business, and they generated around 85% of our product group EBITDA last year. As we continue to improve performance, these advantages only strengthen. Let me now go back to the macro and tell you about the markets we operate in. Our portfolio gives us leading exposure among diversified miners to the biggest trends of our time: electrification, AI & digital together with traditional demand. Starting with electrification, up to 60% of the value of raw materials in an electric vehicle comes from our commodities. Of particular note is the ramp-up in battery electric storage, critical for grid firming and managing the power demands of renewables and hyperscalers. On AI & digital, up to 70% of the value of materials that goes into a data centre comes from our commodities. The scale of investment is extraordinary — hyperscalers' CapEx is forecast to reach USD 1 trillion next year. And traditional demand: our commodities account for as much as 65% of the value of materials needed to build a modern office tower in a fast-growing city. As India and other economies continue to develop, we expect another construction wave as cities grow vertically. So if you want exposure to the major growth trends of our time, Rio Tinto is the business to own. And the question I ask myself every day is: how do we capture even more of the opportunities ahead? The answer is driving outstanding performance, having the right assets in the right commodities and ensuring we allocate capital with discipline, because ultimately capital efficiency and discipline is the bedrock of a resource business. We maintain a strong balance sheet with a Single A credit rating. Every asset must justify its spot in the portfolio. We rigorously allocate capital to projects that deliver value and returns to our shareholders. World-class projects like Simandou and OT showcase that we can execute at scale across commodities and countries. Among our peers and against the wider industry, we've demonstrated leading performance on capital and schedule adherence. We're now reaching an inflection point as those investments start to generate cash. Turning then to cash release: our work to progress opportunities this year to release up to $5 billion of cash from our asset base is advancing. Finally, before I hand to Peter, I want to revisit our interim payout of $3.4 billion. This 43% uplift illustrates how far we've come over the half. It reflects the benefits of previous investments and shows our continuing commitment to you, our shareholders, as we continue to build our momentum. Now over to you, Peter.
Thanks, Simon. We've delivered a step change in our financial performance this half, supported by stronger commodity markets, particularly copper and aluminium, which now represent almost 60% of our EBITDA. However, this was not just a price story. As Simon mentioned, our productivity program is delivering. We have strong momentum and see substantial opportunity ahead of us. The earnings uplift has translated directly into cash with free cash flow rising by 75%. Even with our increased capital investment, we were able to reduce net debt during the period. In line with our usual practice at the interims, we're declaring a 50% payout for the dividend, delivering a 43% increase to our shareholders. These results demonstrate that we can deliver growth and shareholder returns at the same time. Let's unpack EBITDA through our standard waterfall. Underlying EBITDA increased 28% to $14.8 billion. The improvement was driven by two distinct sources of value creation. Stronger commodity prices increased underlying EBITDA by $3.6 billion, with $2 billion from copper and $1.3 billion from aluminium. These more than offset $1.5 billion of external headwinds, namely foreign exchange, inflation and a rise in market-driven prices. It's important to distinguish between those that are persistent, such as general price inflation, and those that are more temporary in nature, such as higher diesel and raw material prices following Middle East supply disruptions. We would expect the latter to reverse over time and therefore class them as temporary and one-off. Turning to the controllables, these contributed a further $1.2 billion. As Simon outlined earlier, we have already banked $870 million of productivity benefits. These directly correlate to deliberate management actions to structurally lower our cost base and improve volumes consistent with the full potential of each asset. Each initiative, like the three Simon mentioned earlier, flows through from inception through to delivery into our financials and is built into our guidance. In addition to our productivity program, our results are also benefiting from our growth investments with higher copper and gold volumes from the ongoing ramp-up at OT and our Argentinian lithium operations. There were, however, some offsets. Mining performance at Kennecott is expected to recover in the second half as geotechnical management activities conclude and access to planned mining areas is restored. However, following the furnace breach in late June, some metal sales and associated cash flows will shift into 2027 while remediation work is completed. At IOC, production performance remained challenged by pit and asset health, resulting in reduced volumes. The broader point is that while commodity prices remain important, creating value for shareholders is increasingly within our control. It will be driven by improving operational performance, delivering our growth projects successfully and maintaining disciplined capital allocation. Let's look at the product groups. Copper was the standout: EBITDA increased 84% and free cash flow more than tripled, reflecting stronger pricing and the continued ramp-up of OT. We continue to advance our next wave of growth, reaching key milestones at Resolution and La Granja and expect to complete a feasibility study for Winu around year-end. We delivered an impressive iron ore result, achieving our highest first-half Pilbara production since the 2018 record and benefiting from resilient pricing. Productivity improvements offset exchange rate and diesel price headwinds, and we're on track to deliver full-year unit costs within guidance. Simandou is progressing at pace. Construction of the Simfer mine and port is more than three quarters complete, and we're building inventory across the system as we ramp up. The project remains a key source of future volume growth and portfolio value. Aluminium sustained its strong operational resilience. Smelting performed particularly well, which together with stronger markets drove a 31% increase in EBITDA. Our commercial teams continue to navigate the evolving tariff environment. Finally, lithium market conditions continue to improve, supported by stronger demand from battery energy storage. On the growth front, we delivered Fenix 1B and Sal de Vida ahead of schedule. Rincon remains on track, and we continue to evaluate our attractive expansion options. Given our strong earnings and cash flow performance, it's important to remind you of our capital allocation framework. We expect our cash generation to keep improving as we deliver growth, productivity and cost reductions, and we remain on track for a 3% CAGR copper-equivalent production uplift to 2030 and a 4% CAGR reduction in unit cost. Our first priority is sustaining replacement and decarbonisation capital, which protects our strong cash flow base and strengthens the portfolio. We expect to spend around $7 billion to $8 billion a year here. Next, shareholder returns. We paid out 60% of underlying earnings for 10 years. This provides you with cash flow today while keeping us disciplined with how we deploy residual capital. As Simon mentioned, we are progressing around $5 billion of cash release opportunities in 2026 with a broader pipeline exceeding $10 billion. These options provide flexibility to further strengthen the balance sheet, invest in value-accretive growth and support shareholder returns. We will remain disciplined, pursuing only those opportunities that create value and align with our capital allocation priorities. In summary, we have a strong platform to deliver industry-leading returns while at the same time investing in growth. Our CapEx guidance is unchanged: up to $11 billion in 2026 and 2027 before a reduction from 2028 to $10 billion in real '25 terms. Sustaining capital is stable at around $4 billion a year. Replacement spend is fundamentally about strengthening the business, extending life and improving cash flows from our assets. Returns are high. We assess the current portfolio as delivering an average 26% IRR. By 2030, our plan includes delivery of a significant step-up in Pilbara mine and port capacity, including commencing Phase 1 of Rhodes Ridge; the upgrade of our bauxite system in Queensland; extension of Kennecott beyond 2040 and OT development; and the ongoing modernisation of our Canadian hydropower plants, which support our highly competitive aluminium smelters. Later this decade, we will benefit from a significant uplift from the performance of these world-class assets. For growth capital, copper dominates our future plans. For now, we'll spend about $1 billion a year on lithium and completing Simandou by the end of 2027. Turning to the balance sheet, we were able to reduce net debt while funding $5 billion of CapEx and paying the 2025 final dividend of $4.2 billion in the half. The balance sheet is in very good shape, and we have options to reduce net debt further. We are committed to our shareholder returns policy and have established a 10-year record of paying at the top of the range. In line with our usual practice at the interims, we're paying out at 50% with a 43% uplift in the absolute dividend given the rise in underlying earnings. So let me leave you with three key messages. First, this has been an outstanding half: with strong operational performance across the portfolio, we captured the benefit of stronger markets while continuing to improve the business. Second, we have real momentum: productivity, cost reductions and operating performance are translating into the financial results. Third, we have the financial strength to execute: the balance sheet is strong, cash flow generation is robust, and our portfolio is weighted towards the commodities where we see the greatest long-term opportunity. That gives us the confidence to invest in disciplined growth and continue delivering attractive returns to shareholders. And now back to Simon.
Thanks, Pete, and thank you to all for joining us. At Rio, we have a leading exposure to the biggest trends of our time, world-class assets in the right commodities providing volume, resilience and upside. Relentless drive for outstanding performance, and we're making the changes we need to our business to make sure everyone goes home safely at the end of each day. At Capital Markets Day, I told you there was much more to come. Today, you can see momentum and growing confidence in our results. Bank the $870 million in productivity benefits and almost tripling that run rate to $1.8 billion by the end of this year, advancing our growth projects at pace and paying an interim dividend of $3.4 billion to you, our shareholders. I'm single-minded about continuing to deliver returns and growth because that's how we'll become the most valued metals and mining business. Thanks for your attention and I look forward to your questions.
Okay. So now we have around 45 minutes for Q&A. We will start with two here from the audience, and then we'll go to those online. So Paul?
Questions and answers
It's Paul Young from Goldman Sachs. Simon, Peter, well done on driving the productivity gains in the half, I commend you for that. Can we just talk about the gap between $870 million you've exited at the end of June and the $1.8 billion run rate? There's obviously three buckets here: there's OpEx, there's CapEx, and there's some productivity-related cost out as well. So of that $1 billion increase, how do we actually think about the breakdown of that $1 billion increase?
So it's important to distinguish between banked and the run rate. In some businesses where we've got a run rate, we need to see some of those benefits come through. There are obviously some transition costs as we make the changes that we need to our business. On the breakdown, do you want to talk to that, Pete?
Yes. Paul, on the slide in our waterfall, we set out that breakdown between costs and volume. Cost was about $530 million and then volume was the rest. I expect a very similar breakdown for the full year as we bring that through. But it is very dependent; this is bottom-up and being driven by the business, so it will change, but that broad profile will continue.
Okay. Great. Can I ask a question on the aluminium business? I know we've got Jerome here. Really, it's around how aluminium fits into the $5 billion to $10 billion of monetisation of non-core assets. The aluminium strategy has been growing the bauxite business, improving margins in Canada. You've got eight smelters in Canada and six outside of Canada. You could be adding two more, one in Brazil and potentially one in Finland if that decision gets made next year. Arguably, some of your smelters are now more valuable, like Sohar in Oman. But the aluminium business is fragmented; it doesn't seem to come up in conversations around simplification. Where does it fit in simplification strategy, considering it appears you're looking to grow the business?
As I moved into the role, we stepped back and really looked across our full business and the commodities we want to be in, and you've seen us simplify the business down to the three product groups and the four commodities. We chose those commodities because we see them as the strongest in terms of growth going forward and reflecting our own position in those assets. We have the best aluminium assets in our view in the industry. We've got a list of ways that we're looking to improve that business and improve its cost position, with Jerome and his team driving performance within the existing business as an example from the slide today. Earlier this year, the whole of Exco went out around different operations and did Kaizen, spending a week in the operations, rolling up our sleeves to underline the importance of focus. I spent my week with Jerome in the aluminium business and saw the system they have embedded for continuous operational improvement. Applying some of that elsewhere in the group is liberating advantages. We have a great position across bauxite, alumina and aluminium. The question for us, as you can see from the notes, is how do we further strengthen that and build on it, given particularly the cap in China and seeing some smelter capacity start to be built elsewhere.
James?
James Redfern from RBC. The first question is just on the Resolution Copper project. Can you please provide an update on that and what the next steps are for the project and catalyst that we should be looking for?
The next step for Resolution is drilling out the ore body. We have rigs on site and should be intersecting the ore body shortly. That's the next phase: to really characterise the ore body, which will allow us to make decisions around the development path for the project. We needed to get the land exchange to be able to get on the ground and do that work, and particularly learning from OT, we must really understand the ore body characterisation and geotechnical aspects to make the decisions we need on that project. That's what to watch as we move through this phase of the study.
Okay. And my follow-up question is just on the potential $5 billion to $10 billion of asset divestments. Any comment you can make on that, please?
We're progressing that program. You can see really strong cash generation today and the balance sheet is in a good place. Referencing my comments around capital discipline and efficiency, the divestment program is tracking. We'll make decisions and ensure we get full value. We're targeting $5 billion of announcements this year as part of that broader program.
Okay. I'd like to go to the operator, and also to explain for those on the line how to ask a question. Over to you, operator, please.
Back to you.
Thank you. I believe we do have one question on the line. If we could go to that next, please.
Congratulations on a strong first half. I wanted to start in the Pilbara. With the replacement mines progressing on track for first tonnes next year, how should we think about that in terms of characterising the impact on the portfolio Fe grade? I'll come back with my second question afterwards.
The replacement projects are probably similar to the material we've got available to us at this point, Lachlan. The change in the Pilbara is really as we get into Rhodes Ridge. Rhodes Ridge is a significant ore body. We'd love to be mining it today, but in some ways it's better ahead of us than behind us. As we get into Rhodes Ridge, that's where some of the better grade material is. Related to your question, the changes we made to product strategy are putting the business in a much stronger position in terms of flows through the business and being able to stabilise. You can see that in the Pilbara unit cost and the work Matt and the team have been able to do.
Great. Related, and I guess this ties into the productivity work, but operating conditions in the Pilbara are undergoing change, with incremental unionisation coming into more sites. How do you think about this in terms of the potential to impact operations? How should we think about your ability to manage and mitigate these forces in the short and medium term?
In Australia and any jurisdiction we operate in around the world, we operate in accordance with local terms and conditions. Our focus has been and continues to be how we best work together with our employees to make sure we have safe, respectful workplaces, really listening to what people need in their day-to-day jobs to do them better. That focus has delivered for us in the past — for our business, our employees and the broader community — and it remains our focus. We'll need to work through that in the years ahead. That remains the focus of Matt and the team and Jerome and the team on this side.
Thank you, Lachlan. We have one more question online, so we'll take the second before coming back to the room.
A few updates in recent weeks around Section 232 tariffs in the U.S. I was interested in how you're thinking about investment into the AI sector off the back of that. How does it change your view on that market? Is it moving the dial at all? What would you need to see to increase investment into smelter capacity in the U.S.?
On trade policy more generally, we've seen increases in trade policy effects on flows through aluminium and across the commodity complex. We need to be good at navigating that because it's likely to continue. In the aluminium business specifically, Jerome working with commercial has done a strong job moving flows around to respond to policy changes. The impact on the business has been relatively modest, but we're mindful of it as we look ahead and need to be nimble to respond to those changes to maximise benefits and supply the customers we need. Looking forward to aluminium through to 2035, we see aluminium growing strongly. It's a great industry to be in, and we need to make sure we are set up to manage it the right way.
Thank you, Baden. Lyndon?
It's Lyndon Fagan from JPMorgan. Simon, I wanted to touch on iron ore. Very well run under your management recently, and now we've found an extra $400 million of productivity gains. Can you unpack exactly what that is?
Across the platform there are more than 80 initiatives, but at its heart it's about making sure people on the front line have the tools and systems they need and that accountability sits at the front line to make better decisions. Iron ore is better run today. We're making changes to empower and liberate the front line. The system flows I talked about in the Pilbara look from mine through to port: how do we maximise efficiency of those system flows? You saw iron ore have one or two of its best halves, and that's correlated. Matt and the team have been able to park up about 80 pieces of kit we don't need to operate, which flows through to safety and cost savings. When you get your system flows more consistent and stronger, you can liberate capacity. Part of the savings I outlined today is about stopping redundant plant as we stabilise feed into other plants.
Next, on Kennecott. Officially it ends in 2032, but work is underway on a life extension. What is needed to FID that project and can you share more details about what it looks like beyond 2032?
Progress is well underway. We're well into the work and that decision will be coming in the not-too-distant future and would extend it into the 2040s. It looks very promising. We have a bit more work to do on what the co-commitments look like. The deweighting of the wall and the geotechnical aspects are also supporting what it looks like moving forward.
Kate?
In the result, we had new disclosure around the tax dispute in Mongolia from prior years, and I think we're now up to about $900 million if we put everything together. How should we think about this moving forward? Optically, that's not a great place to be. Are there any more decision points to work through or anything you can talk to there?
Some of the changes we've announced around Mongolia were embedded as part of that investment decision, including revisiting the shareholder loan periodically. We continue to engage closely with the Mongolian government and will resolve what's needed as part of that project. I'm happy with the way that project continues to ramp up. It's going to be a fantastic asset for us for many decades. We need to ensure strong community support, including from the Mongolian government, and we'll continue those discussions as we go forward.
And Kate, on the tax issue there's a formal arbitration process to solve it. That is moving forward through that formal process.
Glyn next, please.
Glyn Lawcock with Barrenjoey. Simon, Peter, you chose your words carefully today. Simon, you said significantly more to come post the end of this decade on the $1.8 billion cost-out run rate. Peter said you have real momentum. Can you give a little more insight into what lies beyond '26? I know you have the 3% volume growth, 4% unit cost reduction targets, but can you help us think where this journey gets us to? I know you've been reluctant to give numbers.
There's a plethora of numbers today, and I do try to choose words carefully. This isn't just about squeezing budgets or cutting necessary work. We've thought carefully about programs in the past that did good things but sometimes stopped work we needed for the business. Asset management is one of those trade-offs. What we've got to do is drive a culture of continuous improvement and embed it so it's codified and systemised. That's why we're talking about the management operating system: a way to simplify people's work and make clear the distinctive requirements for how we run businesses within Rio. That's the work we've been doing and seeing huge benefits from. We need to embed that in each business. The run rate you've seen today we're confident in through this year. You've seen the money we've banked. I say there's significantly more to go because behind these numbers are all the projects flowing through, some visible now and some that will flow through in the years ahead. This isn't a six- or twelve-month project. It's a change in how we do our work.
To be direct: $1.2 billion this year versus last year is the target. Can that momentum be sustained — another $1.2 billion the following year — or does it start to get harder?
The program will mature, so inevitably you start with some of the easier decisions. For us there are two parts: continuing to increase momentum and, crucially, sustaining and maintaining it going forward. If you embed it in the way people work and the culture, our people — and we have fantastic people across the business — will find better ways of doing things. We just need to remove the barriers that prevent them from doing so.
Rahul?
Rahul Anand, Morgan Stanley. Two parts on the copper business. Firstly, you've had some unpredictability at some assets, and Apex is the next one beyond 2030. How can you de-risk that to ensure a more predictable production profile? The smelter perhaps needs some work in terms of predictability. Secondly, are there brownfield opportunities within the portfolio the market doesn't see for copper, or do you need inorganic moves to have a clearer path beyond 2030?
Tier 1 assets give us optionality, and that's true in copper. We're building off the ramp-up at OT and targeting 40% to 50% production growth at KUC. On Kennecott, I want to start with safety: the fatality earlier in the year had a significant impact on the business and team and was a moment to reflect. The teams responded and you can see that in underlying performance. They need to build on that as we look to near-term decisions like the Apex extension of life, which would extend it into the 2040s — an amazing ore body. We'll look for ways to supplement that. The underground project is also progressing. Having a smelter in the U.S. is strategic — one of only two in the U.S. — so we're thinking about ways to best monetise that. In terms of derisking Apex and other developments, much of it is geotech, ore characterisation and ensuring the right studies are in place to make informed development decisions. That is the pathway to more predictable production.
Are there brownfield opportunities within other assets that you'd like to call out? Does OT have flexibility in the mine plan to bring forward some copper from later years? Or do you need inorganic moves to solidify the path beyond 2030?
The focus for OT needs to remain squarely on continuing the ramp-up. That singular focus is key. I spoke about examples today on harnessing data to drive drawbell development, and that's flowing through in the ramp-up. That's where the team's primary focus is. We're looking beyond that to what the next sequence of development looks like, but right now the priority is successful ramp-up at OT.
Fantastic. Any further questions here in the room? I believe we have no further questions online. Lyndon, second round — we'll go with that for a few more minutes.
Just back to Resolution: to what extent do you think you'd have to build a smelter as part of that project given the current administration's focus?
That's one of the things we'll assess as part of the study. We expect that material to be processed in the U.S. Clearly, smelter builds is one of the options we'll consider as part of the assessment. We have the Kennecott smelter as well, so that's all ahead of us in terms of making a decision on which path to take.
Any final questions here in the room? Okay. Thank you all for joining us today. For those online, we conclude our time with you now. For those here in Sydney, I welcome you back to the room where you entered for light refreshments with us today. Thank you again. With that, we conclude the presentation.
Thanks all.