Okay. Thanks, J-S. Let’s have a look at the numbers in a bit more detail. Let’s start with commodity prices. Chinese economic growth has been resilient during 2017, and global conditions have also improved, which has seen higher pricing in most of our products. We realized the strong first half iron ore price of $67.80 a tonne, 40% higher than the same period last year, reflecting the world-class product portfolio. Copper prices increased 23% compared to the first half of last year reflecting strong demand from China and there were some supply disruptions during the period. However, this was partially offset by continuous supply additions from Peru and increased scrap volumes. Aluminum prices improved compared to the first half of 2016 with an increase of 22%, reflecting strong demand. We believe this also had been driven by news flow around China supply side reforms that they have announced earlier in the year. Yet to take effect because they’re winter, actually, wintertime measures. The coking coal price spiked as a result for weather disruptions in Australia, and has now dropped back to prices seen in the first quarter. This chart shows the striking recovery in prices from the first half of last year. As you can see, inflation, energy cost and rates have remained relatively stable. Volumes were generally lower compared to the first half of 2016. In the Pilbara, shipments were impacted by wet weather in the first quarter and accelerated rail upgrade in the second. Hard coking coal also has suffered from adverse weather in the first half following Cyclone Debbie in late March, which impacted both rail and pit access at Hail Creek. These lower volumes were partially offset by record production in bauxite and increased production of TiO2. The 48.9 million tonnes of third-party sales of bauxite…

Menno at Morgan Stanley. You gave an outstanding first half. If I look at slide 11, on here where you showed the bridge, very helpful, if I combine volume, inflation and energy on one hand, and I combine the cost savings on the other hand, you basically stand still as a company. And that’s clearly not a bad outcome given where we are in the cycle. Is that going to be the Rio Tinto or the industry way to look at for the next 3 or 4, 5 years until more projects comes to fruition? Or can you actually do more? Jean-Sébastien Jacques: Now that’s a very good question. As we said, we will do more. The productivity, the mine-to-market productivity will give us some benefits. It will take some time to ramp up, but where we are today is those funds are fully embedded at the site of the project levels. And people are working on the [indiscernible]. What is absolutely clear and you saw it because you’ve done your homework already. You saw that there is some cost inflation coming back. And I think a good example is aluminum, where you see caustic soda cost picking up and so, and you see it in the margins, and so on and so forth, right? But as you said, I mean, all in all, our commitment to the shareholders is to deliver superior cash returns. And I think $3 billion of cash return, 75% of the earnings is a good illustration of what we’re winning there. And Chris, you want to add anything?

No, it’s fine. Jean-Sébastien Jacques: You’re fine? Okay.

It’s Liam Fitzpatrick from Deutsche Bank. Just one question, perhaps an obvious one, just from the dividend and the balance sheet policy. You’re clearly paying above the 40% to 60% range, you could be very close to a net cash position by the end of this year. So what sort of room is there for the policy to evolve from here? And do you think at some stage, there’s a possibility that we could see it progressive be reintroduced as part of the overall dividend policy? Jean-Sébastien Jacques: Go first, I’ll sit this one on. [indiscernible] So the second part...

[indiscernible] now to the second part? [indiscernible] What you’re seeing in these results is the benefit of the variable policy. And part of that on, in lower performance periods its obviously, it protects the balance sheet, in high performance periods it gives the shareholders a chance to participate more fully in the upside. So, and at it allows for a balance between allocations to growth and to returns. So I think the key is really around where, we do have, if you read the policy wording closely, you can see there’s scope for extras in any given period depending on the board’s view of the performance of the business, the cash generated in the business, the outlook for the future, the state of the balance sheet. So there’s scope for further returns. But I think if you, that $3 billion is really the key number. The dividend is 50% of underlying earnings, adding a $1 billion to the buyback makes it $1.5 billion for this year. So but you’re right, 75% of the year-to-date earnings is a great outcome. But there’s capacity for that within in the policy, but no returns of our progressive policy. This dividend actually, this interim is higher than any interim previously paid. The previous record for the interim. Jean-Sébastien Jacques: So if we have the progressive policy today, the cash return would be lower, by definition. So the policy is working as designed, which is, on the top of the cycle, where we have more cash than we were returning to the shareholder, which is I think the best thing we can do. And then we move to the people on the conference call.

[Indiscernible] UBS. I mean, one of the questions we keep on getting asked, which was already asked a lot on the roadshows, around what you’re going to do with this $2.5 billion of cash you received in sort of a month’s time or so? Could you give us some sense, I mean, obviously, you have enough cash in the bank yet, so we’re not seeing it in a today’s results. Jean-Sébastien Jacques: That’s absolutely correct. So let’s -- the priority is to get the cash on the balance sheet. We are pretty confident about it, but until it’s there, until I can look in the eyes of Chris and I can see the cash -- don’t take it the wrong way, Chris.

[Indiscernible] Jean-Sébastien Jacques: [Indiscernible] No, it’s a very good question. We are very clear. When we’ve got the cash on the balance sheet, we will process it through the capital allocation framework. We’ll a conversation with the board, and the promises are very clear in terms of we did reconfirm our capital guidance for this year and the coming years. Shareholders should expect good returns, but we will declare anything until we’ve got the cash on balance sheet and we go through the process.

Will you consider out-of-cycle return? So once the cash arrives in September, could you then at the next Board Meeting decide to sort of step-up the buyback at that point? Or would you stick with the usual interims and final? Jean-Sébastien Jacques: The only thing I can say is, clearly, we will have a chat with the board when we got the cash on balance sheet, but I can’t give you an indication about the timetable on this one. But I can tell you for a fact that by February, when we have the Board Meeting to review the final results, we will have an answer to your question. I’m going to go to the people on the call and then I’ll come back to the room.

Thank you. Our first question comes from Lyndon Fagan from JP Morgan. Please go ahead.

Thanks very much. Couple of questions from me. The first one is just on aluminum costs, particularly for the primary metals segment. I noticed they’ve gone up about $0.10 a pound to around that $0.74-type level, half-on-half. I’m just wondering if you could sort of talk a bit more about that and whether that’s the new base going forward or whether there are some one-offs there? And then the next question is just on the lithium project. Could you talk a bit more about where the -- what the scope is, what the likely CapEx is? Is there anything more you can sort of shed some light on that given you put an announcement out but there really wasn’t a whole lot in there? Jean-Sébastien Jacques: Do you want to speak of the aluminum piece?

Do the second one first. Jean-Sébastien Jacques: Okay. I’ll do the lithium -- okay. so we made the announcement, we signed an MoU with the government of Serbia 10 days ago now. The assessment is underway. There are a couple of parts, which are pretty obvious. One is a marketing study about lithium, about the attractiveness of the lithium industry, clearly on the back of electrical vehicles, batteries and so on and so forth. The second part is really, could we have a world-class asset in Jeddah, in Serbia? The work is underway. We still have a couple of years to go, but we made the announcement because it’s important that we bring our partners with us on this project, and we had reached an important milestone with the government of Serbia. And it was important to recognize it at this point. But the only thing I can say today is the work is underway, no decision has been made yet, and we’ll inform the market as and when we’re ready. That’s where we are. You want to pick up the aluminum piece and the increasing costs, Chris?

Yes. So on that Jeddah, we had order, our order of magnitude is really where we’re at. So it’s very, very early in the process. On the [indiscernible] costs we’re -- the input costs into aluminum this half versus the same half last year are about $320 million higher. So that’s a significant headwind that’s all market related, but it goes to caustic soda, the coke and pitch inputs into the smelting system and also the energy costs, particularly in the Australian smelters. So basically, caustic is about $150 million, coke and pitch about $115 million and energy is the bulk of the remainder. So it actually accentuates the point about the power of those Quebec smelters in the hydro power, where we’re in the first [indiscernible] and that difference, also I get a bit of benefit for green aspect of aluminum in Quebec with the hydro as well. Jean-Sébastien Jacques: So we haven’t seen too much cost inflation coming back into our cost structure today. We’ve one major exception which is the aluminum and that’s what we have covered. So if we go back to another question from the conf call and then I’ll come back to the room.

Our next question now comes from Paul Young from Deutsche Bank. Please go ahead. Jean-Sébastien Jacques: Paul, are you there? Seems we’ve lost Paul.

We can move to the next question, one moment. So David Pleming from HSBC. Your line is open Mr. Pleming. Thank you.

Good morning. Thanks very much guys. Just two questions. Just with respect to the Coal & Allied sale, I wonder if you could give us some insights in terms of if there’s any tax payable on that sale and what is the actual book value, so one can ascertain the impact on the earnings. And then secondly, in terms of the share buybacks, I do recall you saying it’s going to be all plc. What will it do -- what will need to happen for you two guys to do buybacks on the ASX? Thank you. Jean-Sébastien Jacques: I can take the second one and you pick the first one, Chris. All plc for one reason is we buy the cheapest stock of the two. And then we look very carefully about the premium or the delta of discount that was spread whatever you want to call it between Limited and plc. And today, it’s cheaper to buy the plc stock. That’s one aspect. The second aspect is, on the $1 billion, if you do it on a proportional basis, if we were to do an off-market in Australia, we’d be so small it would not work from that perspective. So today, $1 billion of buyback in the next six months makes more sense to do it in the UK leg of the DLC. Take the other one now, Chris?

Yes. With regard to the Coal & Allied proceeds there, we do have carry forward losses in the Australian jurisdiction. So anticipate very, very low, if any, it may will be zero tax payable on that so it’s a -- it’ll be a pretty clean transaction, we’ll utilize pre-existing tax losses -- capital losses. Jean-Sébastien Jacques: Okay. Thank you. So we’ll go back to the room. Okay. Bank of America, what is your question today?

It’s Jason Fairclough of Bank of America Merrill Lynch. Just -- I think you’ve been quoted today in the press talking about how not all of your assets are world-class and one of your P’s here is world-class portfolio. Without sort of asking you to single out the naughty children, could you sort of just remind us, which ones you really think are world-class? Jean-Sébastien Jacques: Let me give you an example of what the world-class asset could look like. And I hope you will agree with me. Pilbara? I think that’s a world class asset. Do you agree?

Yes, yes. Jean-Sébastien Jacques: Yes, thank you. Amrun, bauxite, Queensland, that would be another one. Oyu Tolgoi, copper, Mongolia, that would be another one. The one we just mentioned about smelter in Canada, where -- the aluminum smelter, are not in the first quartile of the cost curve, but the first D side of the cost curve are world-class. I think I gave you already a pretty good sense of which assets we regard as world-class. Now to build on this one because the question is very good, so I’m not going to tell you which ones are for sale and which not -- are not for sale, you know that. But a couple of points is, we’re not going to do a fire sale, okay? We’ve sold $8 billion of assets in the last 4 years. And if you look at the evaluation, where you extract Northparkes or even Coal & Allied, we did extract more than full value for those assets. So for sure, I want to clean up the portfolio as quickly as I can, but at the same time, that will not be the fire sell, so that’s where we are. When we make progress, and I think you got -- your friend Peter talked at the back end of the room, when he makes progress with his team, we’ll disclose it to the market. So the direction of trouble is very clear, we want to build over time a portfolio of world-class asset by exiting some of our noncore assets, but at the same time building new world-class assets. And I think the 3 project that we’re pursuing today: Oyu Tolgoi, Mongolia, Amrun and Silvergrass that we will open in a few weeks now. That’s why in the few weeks are good examples of what we want to do in that space. Thanks for asking the question.

James Gurry from Credit Suisse. Maybe one for Chris again about the form of shareholder returns. You’re going to step up the buyback it seems in the second half of the year spending 4x what you spent so far. Implicitly, you’re taking a bet on the share price and the share price is probably a little bit higher because of commodity prices. So how has this progressed in terms of your thinking, in terms of potentially paying some special dividends in the future? And that way, you’re not really taking such a bet on commodity prices and particularly, the share price level at the time?

Okay. Well, it’s always an issue of debate around [indiscernible]. If there’s 3 people in the room, you’ve probably got 4 opinions about buybacks generally. But the issue really is around -- in terms of a special -- that’s part of the -- it’s one of the arrows in the quiver. It’s an option I opened to the board should they decide to go that path. So it’s not something that we’d exclude consideration of at all. But -- so I think the key really is around we still believe we’re buying value-accretive purchase, if you think about it that way. But the return of cash to shareholders is really the key. And it’s a -- an extra $1 billion this announcement, so there’s $1.2 billion to go within this year. But the specials are an option, but it’ll be considered. Jean-Sébastien Jacques: Any question from the conf call? So if you go back to the conf call [indiscernible] and just come back to the room.

Our next question is from Paul Young from Deutsche Bank. Please go ahead.

First question, Chris, is on CapEx. Just looking at your 2017 CapEx guidance, the P is pretty conservative considering you only spent $1.5 billion in the half. I know that the sustaining CapEx is roughly double in the second half based on your revised guidance of $2 billion to $2.5 billion. And there was the normal timing variances and seasonality in Mongolia and Weipa et cetera. But I’m struggling to see how you actually spent $3.5 billion of cash CapEx in the second half? And also considering you’ve come in under guidance, CapEx guidance the past three years, so obviously you’re performing well. So wondering if you can add some color on just how you’ll spend $5 billion in 2017? And the second question is on the Pilbara and probably to you, J-S, I’m sure you will agree that the June half performance in the Pilbara wasn’t one of your better halves, and part of that was due to the rail maintenance program. So can you just provide some more information on that program? And what is actually going wrong there? And secondly, I know your strategy is to maximize margin, but can you provide some guidance as to where you think you can take your Pilbara unit cost over the medium term? Thanks.

Yes, well, I think, yes, I think the CapEx year-to-date spend is relatively low versus the full year target. So I think there’s a SKU for variance from where we are, is probably at or below the 5. I don’t think there’s much chance of it going beyond the 5. So I think the risk really is to an underspend rather than sort of overspend. But it’s not clear enough to give you different guidance than the 5. So -- and part of that will shift into -- some of it could slide into 2017 -- 2018. So I wouldn’t get too excited about exactly where it will be. It will be at or around 5. I don’t think it’ll be -- I don’t think there’s much chance that it could go over 5. Jean-Sébastien Jacques: But I think just to build on this one before I pick up the second question, Paul, is and you know better than anybody else that the weather was pretty bad this year. And in Queensland, where we are building Amrun during the wet seasons, you can’t do anything at all. That’s pretty simple. The mud is pretty significant. So we were there a couple of weeks ago now, three weeks ago? Two weeks ago with Chris. Now you can see clearly, physically a pickup in thermal activity. So I’m very confident that the ramp up of activities in Amrun will translate into additional CapEx in the second half. And the second element as an example, it’s clearly Oyu Tolgoi is still ramping up, and therefore, commitment -- capital commitment will translate into cash expenditures and so on and so forth. So we won’t get to the 5 maybe, but I think there will be a clear step-up of CapEx between H1 and H2.…

Fraser Jamieson from JP Morgan. Two questions. Firstly, quick one on Simandou back in October, I think you talked about trying to get or a hoping to get a finalized deal done within six months. We’re obviously a bit beyond that. Could you talk through what the stumbling blocks are there? And what the updated time line is? And then, secondly, return on capital employed has obviously been something that you guys had focused on a lot over the past year or so improving that base. Looking at the numbers, it doesn’t look like Rio has been improving its return on capital, really, any significantly any faster than the peer group. So where do you feel Rio is ahead of the peers in terms of the focus around return on capital? Obviously, everybody is trying very hard to improve that. What are the competitive advantages that you have? Jean-Sébastien Jacques: I think [indiscernible] Chris? Simandou is, discussions are still underway. It’s a complex set of negotiation because we have three parties, good progress are being made. And we will inform the market when the deal is signed and so and so forth. That’s where we are on Simandou. But everybody is committed to make it happen, two governments, 1 companies, takes some time. It’s not easy peasy, as they say. So we’ll inform the markets but the momentum is still there. [indiscernible]

Well, that’s an interesting conversation because we got the recency of all the Pilbara spend and all that type of thing. But the key and as you rightly point out absolutely everybody, if they’re not, well they are. Everyone’s trying to do exactly the same thing. So that’s there. It’s not something you’re going to change overnight other than via volatility in price, which isn’t really the measure you’re after. But if you just think about some of the issues that we’ve gotten out with the, we got out of the 40 trucks parked up in the Pilbara. So they’re, the heavy haul trucks that were seen as requirements, no longer seen as required based on other improvement and other sort of shifts. So you’ve got Silvergrass now coming through, which is going to be a conveyor rather than trucks. So it takes the costs down, but there’s a CapEx involvement [indiscernible]. We’ll probably expend more on retrofitting some of the trucks for AutoHaul or new AutoHaul trucks, notwithstanding we’ve got trucks parked up. There is a few of those sort of complexions, but we’ll get further down the path on that as we get further into the productivity program. We’re talking about the Capital Markets Day in November, December, yes. So we’ll go a bit broader on that in that time frame. Jean-Sébastien Jacques: I mean, obviously, Fraser, I mean, that’s -- we’re clear that we need to improve our road sheet, okay? No doubt about it. And productivity is a key element of it. And if you think about it in simple terms, our capital base of $50 billion and an initial $5 billion give you a sense of the direction of trouble. But it is hard work. It is not easy in that sense. But as I…

Certainly. Our next question then is from Clarke Wilkins from Citi. Please go ahead. Your line is open.

Just a couple of questions on the unloved children, so to speak. Do you strain now in your [indiscernible], but we’re seeing a lot of pressure on electricity prices here in Australia. Understand you have long-term contract with power supply, but we’re already seeing curtailment of some capacity. Have you looked at the sort of the longer-term implications of that and retesting the [indiscernible] assets? Or is that something that’s typically done at the sort of full year results? And also just in regards to the sort of on your titanium business, in terms of, I think, you’re restarting one of the furnaces at QIT. Given the low utilization rate of those assets, what’s the strategy behind restarting a furnace? Is it product-driven? Or is it an indication that there is a further improvement in the bands seen on the horizon? Jean-Sébastien Jacques: I’ll pick up the energy one. I mean, I’m on probably 3 calls saying that there is serious situation in relation to energy in Australia. It’s not really about Rio Tinto, it’s across the patch, all right? What we want as a company is the source which is, affordable and reliable of power in Australia and today that is not the case. And it’s not because of the lack of capacity, it’s about the regulatory framework and how it’s working at the state level. So the only thing I can say is, please fix the problem because otherwise, when I look at the plan either at the state level or at the federal level in Australia, where people wants to develop more manufacturing activities. If the industry can’t have access to reliable and affordable source of power, that will not work. The model is broken today. Everybody is in agreement with that. It has to be fixed. So -- I mean, three weeks ago, I was with the PM, and we made the Point again and again and we’ll continue to fight for this one. Because we want Australia t to be competitive in that space and they need to fix their problem and the government needs to step in on this one. You want to take the other one?

The other part of that first one was around the carrying values. And I think the key there is that, in order to address the carrying value, you need a trigger or a catalyst. And we haven’t seen a catalyst that would challenge the valuations of those assets. So that’s one. I sort of glazed over on the second part of the question because I was answering the first part. So could you repeat the second part of the question?

Oh, it was just in regards to the QIT assets in terms of, I think now operating eight of the nine furnaces. But with utilization, [indiscernible] the capacity [indiscernible] like 2 million tonnes across those assets but producing 1.2 to 1.3 this year doesn’t seem like a cost effective strategy to restart a furnace. So is there a product strategy behind that? Or is it an indication of a potential improvement in the demand? Jean-Sébastien Jacques: No, I’ll take care of this one. That’s okay, Chris. So on TiO2, yes, there is plenty of spare capacity, and remember it was about value over volume. We took the decision to restart the furnace, not only because of product but because of the conditions of the market were slightly better. And we believe it was the right time in order to maximize cash flow to restart the furnace. But each decision is taken very, very carefully. And we believe it’s the right decision. So we’re not going to flood the market. That’s not what we’re doing at all, but we came to a point where an incremental volume was the right thing to do. So if I go back to the room. There is one question at the back. Tom O’Hara: Thank you, guys. Tom O’Hara from Exane BNP Paribas. J-S, you talked in the media about an aspiration to see Rio trading on the premium, to peers. The first question being, what was your preferred measure of that? And the second would be over what time frame do you think you can achieve that? And what levers do you think will be most rewarded by the market in achieving that? Jean-Sébastien Jacques: Thank you very much for the question. Yes. The aspiration is absolutely clear. I’m not going to walk away…

It’s Alon Olsha from Macquarie. Just two questions. You’re obviously generating a lot of cash and returning quite a bit of that to shareholders. M&A though still doesn’t really feature as a priority in terms of your capital allocation framework. But as you look to kind of reposition the portfolio and you are more in divestment mode, but would you consider kind of recycling that cash into an acquisition as you’re thinking around that change at all? And then just a second question around Grasberg in Indonesia. You made a comment in the past that you would consider selling that option, what’s your latest thinking on that? Jean-Sébastien Jacques: Yes, no worries. So the answer will not change from what I said in the past. So I’m not going to disappoint you on this one. So on M&A, we have a watching brief on M&A, but we will pursue M&A only if it creates value for our shareholders, all right. And if I look at some of the recent transaction, and remember, we are pretty well placed because we sold $8 billion of assets in the last 4 years. So today, when we look at different options, I couldn’t see a way forward to create value for our shareholders because the valuation were fantastic for the sellers, I’m not quite sure for the buyers. So we’ll keep our watching brief. No doubt about it. But we’re not going to rush on an M&A for the sake of it, okay? Which brings back to the value over volume. We will not pursue growth for the sake of it. Now if there is something right value because of the synergies and so on and so forth, for sure we will look at it, no doubt about it. And the fact that we have a strong balance sheet give us the opportunity to do so, but we’re not in a rush. Second question on Grasberg. Grasberg is an option for us. There is no doubt that Grasberg is a world-class resource when you look at the copper and the gold content, no doubt about it. But there is a fundamental difference between the world-class resource and the world-class business for Rio Tinto. And depending on the conditions that a government would impose in the context of the contract of work negotiation, then Rio Tinto will take a decision. Are we in or out? But it will be on the back of what is going to be the outcome of the current negotiation between Freeport and the government of Indonesia as we speak? So no change from that perspective.

Now that the balance sheet restoration is pretty much complete, and you’ve achieved that largely, value over volume and still having a bigger growth profile. I guess, my question would be just around the confidence you have in the Chinese economy, and especially, some of those structural changes you alluded to earlier. Can I ask, do you think the industry as a whole is spending enough on growth CapEx at the moment? And then, is you’re thinking changing around that at all for Rio Tinto? Secondly, I just asked on the Pilbara, in terms of those early-stage deal, but it looks like potentially structural changes in the Chinese economy and that chart you showed with the low levels of the high-grade inventories in China in what’s still a very high level of output. Do you have any way of increasing your higher value product coming out of the Pilbara at this point in terms of sort of more short to medium-term projects? Jean-Sébastien Jacques: Lots of questions here. I’ve said from the start that I can’t make any comment about my peers or what they want to do. For this reason it’s a Rio Tinto result presentation today. So are we comfortable with the growth that we have in the portfolio and the CapEx of $5 billion, $5.5 billion? The answer is yes, absolutely yes. Because as I’ve said in the past, if you want to pursue lots of project at the same time, but you don’t have your A team working on each of those project, that’s not going to work. So I would rather pursue fewer projects and deliver them very, very well than pursuing many of those and delivering them in a very average way. Average being the definition as per Australia, on basically, so you understand…

Our next question is from Glyn Lawcock from UBS.

J-S, when Chris was out here six months ago for the last result, he said he wanted to pay down debt by another couple of billion, you’ve done that. You also said he didn’t see the need to become net cash. I was just wondering if that’s still your thoughts. And if so, could we see returns approximate $100 billion of cash flow? And then the second question, it’s just on Oyu Tolgoi, you’ve done a lot of travel, I wondered if you’ve been there lately. There’s been a few political changes in, I guess, in commentary from the new political personnel that is a little bit, I guess, worrying, but just wondering if you got any comments, please. Jean-Sébastien Jacques: I think the answer to your first question, Glyn, is no change. You agree, Chris?

Yes. Jean-Sébastien Jacques: Okay, that’s the answer for the first question. No change. We want to have a robust balance sheet, but having a zero net debt is not what’s on the agenda. Now you can’t rule out anything at all in the sense of if the outlook was to change in dramatic way, then we’ll revisit the situation on a regular basis. That’s the only thing I can say. Our capital allocation framework is very clear. We gave you clear guidance. We did reconfirm the guidance in relation to CapEx for the next 3 years. The strength of our balance sheet is what it is. And we are very clear, and I think today is a good example of it this $3 billion of cash return for our shareholders, 75% of the earnings. We are doing what we said we are doing. And you know we’ll continue to do so. That’s the only answer I can say. So if I move to the second point of your question Glyn about the presidential election in Mongolia. Yes, we’ve been in Mongolia for 10 years. We are, Mongolia is Mongolia in a sense. It’s a challenging place and so on and so forth. But we are working very closely with the government. Oyu Tolgoi is progressing well. Oyu Tolgoi will have a very significant impact on the economy of Mongolia for the next 50 to 100 years. The recent statements by both the government, the Cabinet and the President is to attract further FDI. So today, we are comfortable where we are in relation to Mongolia. If I can take another question from the conf call, and I’ll come back to the room after.

[Operator Instructions]. So the next question now comes from Duncan Simmonds from Bank of America Merrill Lynch.

I’ve just got one question, getting back to our favorite subject of iron ore. If you guys gave yourselves a scorecard [indiscernible] in iron ore out of 10, where would you say versus your potential at the moment? And then, I guess, the follow on from that is, where would you be once AutoHaul is finished in 2018? And then just to go over importance of that program when you complete it? Jean-Sébastien Jacques: Okay. Thanks, Duncan. What is the KPI you’re looking at on the 1 to 10? Because I think you have a very detailed question here. It’s a general statement? Or is it very specific?

I guess I’m looking at the overall margin. I’m thinking about where the margin is and where costs are and where volume is and where you think your ideal place is and how critical is AutoHaul for that. Because I guess we’ve been hearing about margin improvement and portfolio, shrink to greatness and margin, and I guess, this is the critical part of your margin, when I think about the business. Jean-Sébastien Jacques: Yes, okay. I got the picture. I’m a tough headmaster according to the team. So I’m going to try to be fair on this one. I would say, 7 out of 10. I’m sure there are lots of people in Perth who are very upset with me as we speak. But I still believe there is lots of room for improvement across the Pilbara. And I think in the productivity roadmap, combination of consistency of practices plus automation and Big Data, I can see lots of upside. So I think 7 out of 10, I think is a good mark. I hope in 5 years down the road, we’d be closer to 9 out of 10. And to be honest, if we can get beyond 10, I’d be even more happy. But that’s where the people in Perth must be fuming as I’m having this conversation. Oyu Tolgo is progressing well. We gave you the metrics, completed a project, we have achieved massive improvements in the last 12 months. It’s one of those plus projects, you need to do them in a very phased and structured way, and we are getting there.

Okay. So I think the other one is the -- you referred to elsewhere is the bottlenecks currently the rail. So that leads to a lot of inefficiency in terms of how the mine and port can operate, et cetera. The ideal place for the bottleneck is the port. So you want to have rail capacity available. So that’s part of the challenge is really getting the AutoHaul, getting the rail to its most efficient such as we’re going to shift the bottleneck from the rail to the port. At that point, you’ve got a whole lot more operating flexibility. Jean-Sébastien Jacques: So what we ought to do -- the picture we have or the strategy is to have a funnel, where, as we said, the bottleneck is the port, which is not the case today, all right. So I’ll go back to the room for a couple of questions before we wrap up. And I go back to the room for couple of questions before we wrap up. Yes.

Yes, thank you. [Indiscernible] Just a couple of questions. First of all, on iron ore market in the context of your earlier remarks and your reconnections from China. The iron ore’s stock piles are growing, which means technically that the market remains in ore supply. An optimistic view is that some people support it is that, we shouldn’t be too worried about it, because as the stock piles are growing, the quality must be deteriorating in terms of grade and in terms of impurities. Now you’re supposed to know about iron ore market more than anybody else. Do you support this view? Or do you think that we shouldn’t be worried about iron ore stockpiles just because the quality is changing? Jean-Sébastien Jacques: So I’ll answer in 2 parts on this one. One is 2/3 of the stockpile is currently low-grade iron ore. That is correct, and it’s not moving. And you see the price volatility at the same time. I think our answer to a larger extent in the previous question is to say, I know it’s early days. I know it’s early days. But I believe there is a funnel for restructuring -- structural change in the way this industry is operating in China. And therefore, by having the right grade, then you’ll be fine, okay? Now at the same time, it’s -- you could have, I believe, in the short-term, volatility, because I [indiscernible], somebody must be sitting on massive losses here. I don’t know if it’s paper loss or what, and that sometime, this volume would be clear, okay? So if you step back and you say -- as we said earlier, there are 4 key drivers in the transformation of the iron ore. One is the underlying [indiscernible] change in the economy, and I would say it’s a tick, additional capacity in Brazil or in Australia well documented. So it’s well priced in the marketplace. The restructuring of this industry, my sense is moving in the right direction. The key source of all this uncertainty is really about 2 things, it’s the volume of domestic production in China. Remember, a few years ago they produced around 400 million tonnes, they are up to 235 last year first half, we believe they are back to 275. And as and when somebody is going to say, enough is enough, I’ve been sitting on the loss, I’m now going to clear the deck on the stockpile. So one way to look at it from our perspective is, we believe the fundamentals are good, but there is volatility. Now what can I do from the very practical standpoint as Rio Tinto is to make sure I’ve got the right cost structure, I’ve got the right grade, I’ve got the right relationship with the customers. And that’s what we’re doing.

And second question and very small, on your sense, a transaction deal with a share growth, where do we -- where should we expect any kind of a news about progress on this diamond project? Jean-Sébastien Jacques: Sorry, which transaction?

I don’t know the kind of the tie up with the share growth or regarding the diamond project? [indiscernible]

[indiscernible] Jean-Sébastien Jacques: [indiscernible] Yes, it’s -- so exploration, we’re always buying -- buy out all the time properties, we’re swapping properties, it’s part of our business model. So don’t think...

So nothing -- we should expect, obviously, knows kind of a secrets obviously of nothing like what we will… Jean-Sébastien Jacques: Let me answer it in a different way. We are very comfortable with the capital guidance of $5 billion, $5.5 billion, and I don’t think this way is going to change the guidance whatsoever to be honest. And I’ll have a chat with [indiscernible] I’d be in. We’ll have you both during the night. What -- maybe one last question here on this side.

It’s Hunter Hillcoat from Investec. This is just an observation, but if you look at your three growth projects, the high-value projects, that’s -- you’re spending about $7.7 billion over five years. You could almost return that this year in shareholder returns. So -- because you’ve already spent three in the first half. So do you feel that is a reasonable balance? It seems weighted more towards shareholders to me. And do you have a number of your engineers bringing a pipeline of projects to you that’s saying, We need money for this, we want this to be within this pipeline. So that you start to spread out in the years going ahead? Jean-Sébastien Jacques: I can answer the question very easily. There are lots of people with lots of ideas. That’s for sure, okay? The question is, and I think we touched on it earlier today. From my perspective, it’s all about delivery. It’s better to pursue few projects and deliver them very, very well than trying to do lots of things and having a big issue at the end of it, okay? That’s a fundamental principle here. So do we have the pipeline of project beyond Silvergrass, Amrun, I know you -- the answer is, yes. The answer is yes. And people -- I mean, we talked about Jeddah, we could have talked about resolution. Beyond Amrun we’ve got Amrun version 2.0, 3.0, 4.0. We’ve got multiple optionalities in relation to bauxite. We could grow the iron ore as well. We’ve got multiple optionalities. Remember, the discussion we had earlier today about the funnel. The funnel moves that -- you got the port railway capacity and the port capacity. So we have optionalities on this one. But what is important is to deliver them on time and on budget. And we can’t pursue too many things at the same time. So ideas, lots of ideas, including the one, I don’t know what details I’m doing tonight. But the question is about the delivery and don’t -- the way I look at it, you got the big white elephant, do it slice by slice, and don’t try to swallow the elephant in one go, otherwise, you have a problem. Now your comments about capital allocation, shareholder return versus growth. Today, we are very comfortable in the balance. And I think $3 billion is absolutely consistent with what we said, which is to deliver superior cash return to our shareholder, 75% of the earnings. I think that’s what we said we would -- will do, and we’re delivering on our promises. Jean-Sébastien Jacques: I see John saying, I should close this meeting. So I hope you got the message, $3 billion, 75% of earnings. Thanks a lot for coming. Thanks for your question. And then I’ll see you pretty soon. Thank you very much.