Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 295

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 295
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stronger under supply and demand forward-pricing curves, which we

believe will be consistent with the Paris Agreement. It is possible

therefore, under certain conditions, that historical impairments

associated with these assets could reverse.

In the Aspirational Leadership scenario, the prices for lower-grade

iron ore are supported in the medium term by an assumed underlying

increase in GDP-driven demand. However, in the longer term, we

assume the pricing for lower-grade iron ore to be weaker than in our

Conviction scenario and will depend on the development of low-

carbon steel technology, the pace of which is uncertain, but is

expected to be offset by higher prices for higher-grade iron ore. As

was the case in the prior year, this is very unlikely to give rise to

impairment triggers in the short- to medium-term, due to the high

returns on capital employed in the Pilbara and the slow deployment of

low-carbon steel technology.

Use of Paris-aligned accounting

Forecast commodity prices, including carbon prices, incorporated into

our Conviction scenario are used to inform critical accounting

estimates included as inputs to impairment testing, estimation of

remaining economic life for units of production depreciation and

discounting closure and rehabilitation provisions. These prices

represent our best estimate of actual market outcomes based on the

range of future economic conditions regarding matters largely outside

our control, as required by IFRS. As the Conviction scenario does not

represent the Group’s view of the goals of the Paris Agreement, our

commodity price assumptions used in accounting estimates are not

consistent with the expectation of climate policies required to

accelerate the global transition to meet the goals of the Paris

Agreement. As described above, we use our Aspirational Leadership

scenario to help us better understand the pathways to meet the Paris

Agreement goal, and what this could mean for our business.

Closure dates and cost of closure are also sensitive to climate

assumptions, including precipitation rates, but no material changes

have been identified in the year specific to climate change that would

require a material revision to the provisions in 2024. For those

commodities with higher forward price curves under the Aspirational

Leadership scenario, it may be economical to mine lower mineral

grades, which could result in the conversion of additional Mineral

Resources to Ore Reserves and therefore longer dated closure.

We completed the divestments of our coal businesses in 2018 and no

longer mine