##### Table of Contents



SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, DC 20549 FORM 20-F (Mark One)o
    Registration statement pursuant to
      Section 12 (b) or 12(g) of the Securities Exchange Act of 1934orþ
    Annual report pursuant to Section
      13 or 15(d) of the Securities Exchange Act of 1934For the financial year ended: 31
      December 2008oro
    Transition report pursuant to
      Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period
      from:________________
      to ________________oro
    Shell company report pursuant to
      Section 13 or 15(d) of the Securities Exchange Act of 1934Date of event requiring this shell
      company report________________  Commission file number:
      1-10533
    Commission file
      number: 0-20122Rio Tinto plc
    Rio Tinto
  LimitedABN 96 004 458
    404(Exact name of Registrant as
      specified in its charter)
    (Exact name of Registrant as
      specified in its charter)England and
Wales
    Victoria,
    Australia(Jurisdiction of incorporation or
      organisation)
    (Jurisdiction of incorporation or
      organisation)5 Aldermanbury
      Square
    Level 33, 120 Collins
      StreetLondon, EC2V 7HR, United
      Kingdom
    Melbourne, Victoria 3000,
      Australia(Address of principal executive
      offices)
    (Address of principal executive
      offices) Roger
Dowding, T: +44 (0)20 7781 1623, E: roger.dowding@riotinto.com(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact
Person) Securities registered
      or to be registered pursuant to Section 12(b) of the Act:Title of each class
    
    Name of each exchange
    
    Name of each exchange
    
    Title of each classon which registered
    
    on which registeredAmerican
Depositary Shares*
    
    New York Stock ExchangeOrdinary Shares of 10p each**
    
    New York Stock Exchange5.875% Notes due 2013
    
    New York Stock Exchange
    
    New York Stock Exchange
    
    5.875% Notes due 20136.500% Notes due 2018
    
    New York Stock Exchange
    
    New York Stock Exchange
    
    6.500% Notes due 20187.125% Notes due 2028
    
    New York Stock Exchange
    
    New York Stock Exchange
    
    7.125% Notes due 2028 *
    Evidenced by American Depositary Receipts.
      Each American Depositary Share Represents four Rio Tinto plc Ordinary
      Shares of 10p each.**
    Not for trading, but only in connection with
      the listing of American Depositary Shares, pursuant to the requirements of
      the Securities and Exchange Commission Securities registered or to be
      registered pursuant to Section 12(g) of the Act:Title of each class
    Title of each
  classNone
    Shares Securities for which there is a
      reporting obligation pursuant to Section 15(d) of the
Act:None
    None Indicate the number of
outstanding shares of each of the Issuers classes of capital or common stock as
ofthe close of the period covered by the annual
report: Title of each
    class
    
    Number
    
    Number
    
    Title of each
    classOrdinary Shares of 10p
    each
    
    1,004,103,375
    
    456,815,943
    
    SharesDLC Dividend Share of
10p
    
    1
    
    1
    
    DLC Dividend ShareSpecial Voting Share of
    10p
    
    1
    
    1
    
    Special Voting
  Share Indicate by check mark if the registrants
are well-known seasoned issuers, as defined in rule 405 of the Securities
Act.
 Yes
x
    
    No o If this report is an annual or
transition report, indicate by check mark if the registrants are not required to
file reports pursuant to Section 13or 15(d) of
the Securities Exchange Act of 1934.
 Yes o
    
    No
x Note  Checking the box above will not
relieve any registrant required to file reports pursuant to Section 13 or 15(d)
of the SecuritiesExchange Act of 1934 from their
obligations under those Sections.
 Indicate by check mark whether the
registrants: (1) have filed all reports required to be filed by Section 13 or
15(d) of the SecuritiesExchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrants
were required to file such reports), and(2) have
been subject to such filing requirements for the past 90 days:
 Yes
x
    
    No o Indicate by check mark whether the registrants
are large accelerated filers, accelerated filers, or non-accelerated filers. See
definition ofaccelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):
 Large accelerated filer
x
    
    Accelerated
      filer o
    
    Non-accelerated
      filer o Indicate by check mark which basis of
accounting the registrants have used to prepare the financial statements
included in this filing:
 US GAAPoInternational Financial Reporting
Standards as issued by the International Accounting Standards BoardxOthero
 If Other has been checked in response to the
previous question, indicate by check mark which financial statement item the
registrants haveelected to follow:
 Item 17 o
    
    Item 18o If this is an annual report, indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
 Yes o
    
    Nox




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##### 



EXPLANATORY NOTE
  TABLE OF CONTENTSPagePART IItem 1.
    
    Identity of Directors, Senior Management and Advisers
    
    
    4Item 2.
    
    Offer Statistics and Expected Timetable
    
    
    4Item 3.
    
    Key Information
    
    
    4Item 4.
    
    Information on the Company
    
    
    12Item 4A.
    
    Unresolved Staff Comments
    
    
    54Item 5.
    
    Operating and Financial Review and Prospects
    
    
    54Item 6.
    
    Directors, Senior Management and Employees
    
    
    131Item 7.
    
    Major Shareholders and Related Party Transactions
    
    
    176Item 8.
    
    Financial Information
    
    
    178Item 9.
    
    The Offer and Listing
    
    
    179Item 10.
    
    Additional Information
    
    
    181Item 11.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    191Item 12.
    
    Description of Securities other than Equity Securities
    
    
    191PART IIItem 13.
    
    Defaults, Dividend Arrearages and Delinquencies
    
    
    191Item 14.
    
    Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    191Item 15.
    
    Controls and Procedures
    
    
    191Item 16A.
    
    Audit Committee Financial Expert
    
    
    192Item 16B.
    
    Code of Ethics
    
    
    192Item 16C.
    
    Principal Accountant Fees and Services
    
    
    192Item 16D.
    
    Exemptions from the Listing Standards for Audit Committees
    
    
    192Item 16E.
    
    Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    193Item 16F.
    
    Change in Registrants Certifying Accountant
    
    
    193Item 16G.
    
    Corporate Governance
    
    
    193PART IIIItem 17.
    
    Financial Statements
    
    
    194Item 18.
    
    Financial Statements
    
    
    194Item 19.
    
    Exhibits
    
    
    194EXHIBIT 4.8EXHIBIT 4.15EXHIBIT 4.16EXHIBIT 4.17EXHIBIT 4.18EXHIBIT 8.1EXHIBIT 12.1EXHIBIT 13.1EXHIBIT 15.1EXHIBIT 15.2
  Form 20-F 3




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##### Table of Contents



Rio Tinto
 
 PART I
 
 Item 1.
    
    Identity of Directors, Senior Management and Advisers
  
 Item 2.
    
    Offer Statistics and Expected Timetable
  
 Item 3.
    
    Key Information
 SELECTED FINANCIAL DATA
 2008 Financial statements 2008 Financial statements 2008 Financial statements
 RIO TINTO GROUP
 Income Statement DataFor the years ending 31 December
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Amounts in accordance with IFRS
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mConsolidated revenue
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465
    
    
    
    19,033
    
    
    
    12,954Group operating profit (a)
    
    
    10,194
    
    
    
    8,571
    
    
    
    8,974
    
    
    
    6,922
    
    
    
    3,327Profit for the year from continuing operations
    
    
    5,436
    
    
    
    7,746
    
    
    
    7,867
    
    
    
    5,498
    
    
    
    3,244Loss after tax from discontinued operations
    
    
    (827
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Profit for the year
    
    
    4,609
    
    
    
    7,746
    
    
    
    7,867
    
    
    
    5,498
    
    
    
    3,244Basic earnings per shareProfit from continuing operations (US cents)
    
    
    350.8
    
    
    
    568.7
    
    
    
    557.8
    
    
    
    382.3
    
    
    
    239.1Loss from discontinued operations (US cents)
    
    
    (64.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Profit for the year per share (US cents)
    
    
    286.4
    
    
    
    568.7
    
    
    
    557.8
    
    
    
    382.3
    
    
    
    239.1Diluted earnings per share (US cents)Profit from continuing operations (US cents)
    
    
    349.2
    
    
    
    566.3
    
    
    
    555.6
    
    
    
    381.1
    
    
    
    238.7Loss from discontinued operations (US cents)
    
    
    (64.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Profit for the year per share (US cents)
    
    
    285.1
    
    
    
    566.3
    
    
    
    555.6
    
    
    
    381.1
    
    
    
    238.7
 Form 20-F 4




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##### Table of Contents



Dividends per share
    
    
    2008
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004Dividends declared during the yearUS cents interim
    
    
    68.0
    
    
    
    52.0
    
    
    
    40.0
    
    
    
    38.5
    
    
    
    32.0 final and special
    
    
    68.0
    
    
    
    84.0
    
    
    
    64.0
    
    
    
    151.5
    
    
    
    45.0UK pence interim
    
    
    36.25
    
    
    
    25.59
    
    
    
    21.42
    
    
    
    21.75
    
    
    
    17.54 final and special
    
    
    46.29
    
    
    
    43.13
    
    
    
    32.63
    
    
    
    85.24
    
    
    
    23.94Australian cents interim
    
    
    77.35
    
    
    
    60.69
    
    
    
    52.48
    
    
    
    50.56
    
    
    
    45.53 final and special
    
    
    101.48
    
    
    
    93.02
    
    
    
    82.84
    
    
    
    200.28
    
    
    
    58.29Dividends
paid during the year (US cents) ordinary and special
    
    
    152.0
    
    
    
    116.0
    
    
    
    191.5
    
    
    
    83.5
    
    
    
    66.0Weighted average number of shares basic (millions)
    
    
    1,283.5
    
    
    
    1,285.8
    
    
    
    1,333.4
    
    
    
    1,364.1
    
    
    
    1,379.2Weighted average number of shares diluted (millions)
    
    
    1,289.3
    
    
    
    1,291.3
    
    
    
    1,338.8
    
    
    
    1,368.5
    
    
    
    1,381.4Balance Sheet Data
    
    
    
    
    
    Restatedat 31 December
    
    
    2008
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004Amounts in accordance with IFRS
    
    US$m
    

    
    US$m
    

    
    US$m
    

    
    US$m
    

    
    US$mTotal assets
    
    
    89,616
    
    
    
    101,091
    
    
    
    34,494
    
    
    
    29,803
    
    
    
    26,308Share capital / premium
    
    
    5,826
    
    
    
    3,323
    
    
    
    3,190
    
    
    
    3,079
    
    
    
    3,127Total equity / Net assets
    
    
    22,461
    
    
    
    26,293
    
    
    
    19,385
    
    
    
    15,739
    
    
    
    12,591Equity attributable to Rio Tinto shareholders
    
    
    20,638
    
    
    
    24,772
    
    
    
    18,232
    
    
    
    14,948
    
    
    
    11,877
 Notes
 (a)
    
    Operating profit under IFRS includes the effects of charges and reversals resulting from
impairments and profit and loss on disposals of interests in businesses. IFRS operating profit
amounts shown above exclude equity accounted operations.(b)
    
    As a result of adopting IAS 32, IAS 39 and IFRS 5 on 1 January 2005, the Group changed its
method of accounting for financial instruments and non-current assets held for sale. In line
with the relevant transitional provisions, the prior period comparatives have not been
restated. Form 20-F 5




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Risk factors
 
 The recent significant reduction in commodity prices and global demand for the Groups products has
had, and are expected to continue to have, a material adverse impact on the Groups business,
financial condition and results of operations.
 China is an important source of demand for the Groups products and a reduction in the imports of
the Groups products by Chinese customers has had, and may continue to have, a material adverse
effect on the Groups results of operations.
 Failure to progress the divestment programme, complete the strategic partnership with Chinalco or
raise additional capital from alternative sources may lead to the renegotiation of the Groups
US$40 billion syndicated credit facilities on more onerous terms.
 Form 20-F 6




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##### Table of Contents



Adverse economic and credit market conditions have materially adversely affected, and may continue
to materially adversely affect, the Groups ability to raise additional debt or equity.
 
 The Groups borrowing costs and its access to the debt capital markets depend both on its long term
credit ratings, (which were recently downgraded), and on interest rate levels.
 
 Failure of the Group to make successful acquisitions and to effectively integrate its acquisitions
could have a material adverse impact on the Groups business and results of operations.
 The Groups results of operations could be materially adversely affected by the impairment of
assets and goodwill.
 Form 20-F 7




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##### Table of Contents



Rio Tinto is exposed to fluctuations in exchange rates that could have a material adverse impact on
the results of its operations.
 If the Group does not significantly reduce its business and operating costs, its business and
results of operations may suffer materially.
 The Groups business and growth prospects may be negatively impacted by reductions in its capital
expenditure programme.
 The Groups exploration and development of new projects might be unsuccessful, expenditures may not
be fully recovered and depleted ore reserves may not be replaced.
 Political, legal and commercial instability or community disputes in the countries and territories
in which the Group operates could affect the viability of its operations.
 Form 20-F 8




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##### Table of Contents



The Groups land and resource tenure could be disputed resulting in disruption and/or impediment in
the operation or development of a resource.
 The Groups operations are resource intensive and changes in the cost and/or interruptions in the
supply of energy, water, fuel or other key inputs could adversely affect their economic viability.
 Increased regulation of greenhouse gas emissions could adversely impact the Groups cost of
operations.
Rio Tintos smelting and mineral processing operations are energy intensive and depend heavily on
fossil fuels.
 Estimates of ore reserves are based on certain assumptions and so changes in such assumptions could
lead to reported ore reserves being restated.
 The Groups net earnings are sensitive to the assumptions used for valuing defined benefit pension
plans and post retirement healthcare plans.
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mExpected return on plan assets
    
    
    1,000
    
    
    
    550
    
    
    
    326
    
    
    
    306
    
    
    
    263Actual return on plan assets
    
    
    (2,910
    )
    
    
    442
    
    
    
    664
    
    
    
    529
    
    
    
    650Difference between the expected and
actual return on plan assets:(loss)/gain
    
    
    (3,910
    )
    
    
    (108
    )
    
    
    338
    
    
    
    223
    
    
    
    387Difference as a percentage of plan assets
    
    
    (37
    %)
    
    
    (1
    %)
    
    
    6
    %
    
    
    4
    %
    
    
    8
    %
  Form 20-F 9




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##### Table of Contents



Labour disputes could lead to lost production and/or increased costs.
 The Group is dependent on the continued services of key personnel.
  Some of the Groups technologies are unproven and failures could adversely impact costs and/or
productivity.
 The Groups mining operations are vulnerable to natural disasters, operating difficulties and
infrastructure constraints that could have a material impact on its productivity and not all of
which are covered by insurance.
    The Groups costs of close down and restoration, and for environmental clean up, could be higher
than expected due to unforeseen changes in legislation, standards and techniques. Underestimated or
unidentified costs could have a material adverse impact on the Groups reputation and results of
operations.
 Form 20-F 10




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##### Table of Contents



2008
Financial statements
 Joint ventures and other strategic partnerships may not be successful and non managed projects and
operations may not comply with the Groups standards and as a consequence may adversely affect its
reputation and the value of such projects and operations.
 
    
    have economic or business interests or goals that are inconsistent with or opposed to those
of the Group;
    
    exercise veto rights so as to block actions that the Group believes to be in its or the
joint ventures best interests;
    
    take action contrary to the Groups policies or objectives with respect to its investments;
or
    
    as a result of financial or other difficulties, be unable or unwilling to fulfil their
obligations under the joint venture or other agreements, such as contributing capital to
expansion or maintenance projects.
  Health, safety, environmental and other regulations, standards and expectations evolve over time
and unforeseen changes could have an adverse effect on the Groups earnings and cash flows.
 Cautionary statement about forward looking statements
    Form 20-F 11




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##### Table of Contents



Item 4.
    
    Information on the Company
 INTRODUCTION
 Rio Tinto
 2008 Financial statements
  Operational structure
 
    
    Aluminium
    
    Copper & Diamonds
    
    Energy & Minerals
    
    Iron Ore
    
    Exploration
    
    Technology & Innovation
  Nomenclature and financial data
 2008 Financial statements 2008
Financial statements
 2008 Financial statements 2008 Financial statements
  History
     Form 20-F 12




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##### Table of Contents



Contact details
 Public takeover offers
     Core objective and strategy
   
    
    The discovery of Tier 1 (large, low cost) orebodies that will safeguard our future cash
flow.
    
    The development of Group assets into safe and efficient large scale, long life and low cost
operations to ensure the Group can operate profitably at every stage of the commodity cycle.
    
    Operating in an ethical and socially responsible manner that maintains Rio Tintos
reputation and ensures ongoing access to people, capital and mineral resources.
    
    Putting long term sustainable development at the heart of everything the Group does.
 RIO TINTOS STRATEGIC PILLARS
  Health and safety
 Form 20-F 13




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##### Table of Contents



Operational and financial delivery
 Growth and innovation
 People
 Communities and environment
 Customers and markets
 Key
performance indicators
  
    
    To give senior management a means to evaluate the Groups overall performance from an
operational, growth and sustainable development perspective.
    
    To provide managers and their teams with clarity and focus on the areas that are critical
for the successful achievement of the Groups goals.
    
    To give guidance to the Remuneration committeefor short term incentive plan calculation
purposes.
 KPI trend data
 Form 20-F 14




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##### Table of Contents



THE GROUP KPIs
 All injury frequency rate (AIFR)
  Total shareholder return (TSR)
 Employee engagement
 Total greenhouse gas emissions efficiency
 Underlying earnings  2008 Financial statements
 Net debt
  Capital expenditure
 Form 20-F 15




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##### Table of Contents



Group overview
  Product groupsAluminium
ProductsBauxite 
alumina 
aluminium metal
    
    The Aluminium
product group, Rio
Tinto Alcan, is one
of the worlds
largest producers
of bauxite, alumina
and aluminium,
benefiting from a
sustainable, low
cost energy supply.
It operates mainly
in Canada and
Australia, with
interests in
Europe, New
Zealand, Africa,
South America and
the US. The group
is organised into
four business
units, Bauxite &
Alumina, Primary
Metal, Engineered
Products and
Packaging, the
latter two of which
are to be divested.
    
    Underlying
earnings
contribution *12%
    
    Number of employees39,326
Operating assets US$35,730 million
Gross sales revenueUS$23,839 million
Underlying earnings US$1,184 millionCopper &
Diamonds
Products:Copper in concentrate 
refined copper 
gold 
silver 
molybdenum 
magnetite, 
vermiculite 
diamonds
    
    The Copper group is
a world leader in
copper production,
comprising
Kennecott Utah
Copper in the US,
and interests in
some of the worlds
largest copper
mines and
development
projects, including
Escondida in Chile,
Grasberg in
Indonesia, the
Resolution and
Pebble projects in
the US, the Oyu
Tolgoi project in
Mongolia and the La
Granja project in
Peru.
The Diamonds group
is a leading
supplier of rough
diamonds,
comprising
interests in the
Diavik mine in
Canada, the Argyle
mine in Australia,
and the Murowa mine
in Zimbabwe, served
by a diamond sales
office in Belgium.
    
    Underlying
earnings
contribution *17%
    
    Number of employees 8,976
Operating assets US$5,536 million
Gross sales revenue US$6,669 million
Underlying earnings US$1,758 millionEnergy
&
Minerals
Products:Coking and thermal coal
uranium 
titanium dioxide 
feedstock 
borates 
talc
    
    The Energy group is
one of the biggest
suppliers in its
markets,
represented in coal
by Rio Tinto Coal
Australia and Coal
& Allied in
Australia, and by
Rio Tinto Energy
America in the US.
It also includes
uranium interests
in Energy Resources
of Australia and
the Rössing Uranium
mine in Namibia,
both among the
worlds largest
uranium operations. 
The industrial
minerals businesses
are global leaders
in the supply and
science of their
products,
comprising Rio
Tinto Minerals,
made up of borates
and talc operations
in the US, South
America, Europe and
Australia, as well
as Rio Tinto Iron &
Titanium which has
interests in North
America, South
Africa and
Madagascar.
    
    Underlying
earnings
contribution *28%
    
    Number of employees 14,278
Operating assets US$5,639 million
Gross sales revenue US$10,998 million
Underlying earnings US$2,887 millionIron Ore
Products:Iron ore pig iron 
salt 
gypsum
    
    The Iron Ore group
is the second
largest contributor
to the worlds
seaborne iron ore
trade with
interests that
comprise Hamersley
Iron and Robe River
in Australia, Iron
Ore Company of
Canada, Corumbá in
Brazil, and the
Simandou, Guinea,
and Orissa, India,
projects. The group
includes the
HIsmelt® direct
iron making plant
in Australia,
employing a new,
cleaner iron making
process developed
largely by Rio
Tinto. It also
includes the
Dampier Salt
operations at three
sites in Western
Australia.
    
    Underlying
earnings
contribution *58%
    
    Number of employees 11,109
Operating assets US$7,632 million
Gross sales revenue US$16,527 million
Underlying earnings US$6,017 millionBusiness support groupsExploration
    
    The Exploration
group is organised
into five teams
based in North
America, South
America, Australia,
Asia and
Africa/Europe and a
sixth project
generation team
that searches the
world for new
opportunities and
provides
specialized
geological,
geophysical and
commercial
expertise to the
regional teams.
    
    
    
    Number of employees694Technology
& Innovation
    
    Technology &
Innovation has
bases in Australia,
Canada, the UK and
the US. Its role is
to identify and
promote operational
technology best
practice across the
Group and to pursue
step change
innovation of
strategic
importance to the
development of
orebodies of the
future.
    
    
    
    Number of employees351
 *
    
    A reconciliation of the net earnings with underlying
earnings as determined under IFRS is set out on page 63. All amounts
presented by the product groups exclude net interest and other
centrally reported items. The  aggregate product group underlying earnings contribution of 115 per cent is reduced to 100 per
cent by these centrally reported items.
 Form 20-F 16




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##### Table of Contents



Product overview
  2008 Financial statements
 Gross revenue by commodity 2008
    
    US$bn
    
    
    %Aluminium
    
    
    23.8
    
    
    
    41.0Coal
    
    
    7.0
    
    
    
    12.0Copper
    
    
    4.5
    
    
    
    7.7Diamonds
    
    
    0.8
    
    
    
    1.4Gold
    
    
    0.4
    
    
    
    0.7Industrial minerals
    
    
    3.0
    
    
    
    5.2Iron ore
    
    
    16.2
    
    
    
    27.9Molybdenum
    
    
    0.7
    
    
    
    1.2Uranium
    
    
    1.0
    
    
    
    1.7Other
    
    
    0.7
    
    
    
    1.258.1
    
    
    
    100.0
 Bauxite, alumina, aluminium
 Silver
 Molybdenum
 Gold
 Coal
 Uranium
 Iron ore
 Copper
 Form 20-F 17




---



##### Table of Contents



Borates
 Diamonds
 Salt
 Talc
 Gypsum
 Titanium dioxide
 Sulphuric acid
 Form 20-F 18




---



##### Table of Contents



Market review
 Competitive environment
 Economic overview
 Form 20-F 19




---



##### Table of Contents



Marketing channels
 Governmental regulation
 Environmental regulation  Executive committee Committee on social and
environmental accountability
 
    
    Discharges of bauxite residue and also acid into the local river at Vaudreuil, Canada
    
    Loss of transformer oil into groundwater following a fire at Anglesey, Wales
    
    Discharge of mine water off site following the failure of a pipeline flange at Bengalla,
Australia
    
    Slow leakage of water from a drain point following failure of a valve that resulted in
unlicensed discharge from a dam at Mount Thorley Warkworth, Australia
    
    Oil leakage from a sump into surrounding soil at Richards Bay, South Africa
    
    Acid spray from a storage tank onto surrounding soil as a result of mechanical failure of
an inlet supply pipe at Rössing, Namibia
    
    Oil overflow from a truck onto soil during maintenance activities at an electrical
substation at Chute des Passes, Canada
    
    Processing liquor releases to a sea water channel from holding ponds at Gove, Australia
    
    Oily stormwater release from a light fuel tank farm which exceeded waste discharge license
limits at Gove, Australia
    
    Overflow of residue mud into a natural channel from holding ponds during a high rainfall
event at Gove, Australia
    
    Air emission concentrations of fluoride and particulates that exceeded monthly permit
limits at Kitimat, Canada
    
    Hydrocarbon leakage from an underground pipe at NZAS, New Zealand.
 Form 20-F 20




---



##### Table of Contents



Trend information
 Outlook for 2009
 
 Form 20-F 21




---



##### Table of Contents



Locations
 
 Note
 Form 20-F 22




---



##### Table of Contents



Locations (continued)
 North America activities
 Aluminium group
 AluminiumOperating sites1
    
    Alma2
    
    Alouette (40%)3
    
    Alucam (Edéa) (47%)4
    
    Anglesey Aluminium (51%)1
    
    Arvida5
    
    Awaso (80%)1
    
    Beauharnois1
    
    Bécancour (25%)6
    
    Bell Bay7
    
    Boyne Island (59%)8
    
    CBG Sangaredi (23%)9
    
    Dunkerque10
    
    Gardanne11
    
    Gove alumina refinery12
    
    Gove bauxite mine1
    
    Grande-Baie13
    
    ISAL1
    
    Jonquière (Vaudreuil)14
    
    Kitimat1
    
    Laterrière15
    
    Lochaber16
    
    Lynemouth17
    
    Porto Trombetas (MRN) (12%)7
    
    Queensland Alumina Limited (80%)18
    
    São Luis (Alumar) (10%)19
    
    Sebree1
    
    Shawinigan20
    
    Sohar (20%)21
    
    SORAL (50%)22
    
    St-Jean-de-Maurienne23
    
    Tiwai Point (79%)24
    
    Tomago (52%)25
    
    Weipa7
    
    Yarwun
 South America activities
 Copper & diamonds group
 Copper and GoldOperating sites26
    
    Bougainville (not operating) (54%)27
    
    Escondida (30%)28
    
    Grasberg joint venture (40%)29
    
    Kennecott Utah Copper30
    
    Northparkes (80%)31
    
    Palabora (58%)32
    
    RawhideProjects33
    
    La Granja34
    
    Oyu Tolgoi (10%)35
    
    Pebble (10%)36
    
    Resolution (55%)Nickel12
    
    Projects52
    
    Eagle53
    
    SulawesiDiamondsOperating sites37
    
    Argyle38
    
    Diavik (60%)39
    
    Murowa (78%)Projects40
    
    Bunder
   Form 20-F 23




---



##### Table of Contents



Locations (continued)
 Australia and Asia activities
  Energy & Minerals group
 CoalOperating sites41
    
    Antelope42
    
    Bengalla (30%)43
    
    Blair Athol (71%)44
    
    Colowyo41
    
    Cordero Rojo45
    
    Decker (50%)43
    
    Hail Creek (82%)46
    
    Hunter Valley Operations (76%)41
    
    Jacobs Ranch47
    
    Kestrel (80%)46
    
    Mt Thorley Operations (61%)45
    
    Spring Creek48
    
    Warkworth (42%)Projects43
    
    Clermont (50%)42
    
    Mt Pleasant (76%)UraniumOperating sites49
    
    ERA (68%)50
    
    Rössing (69%)Projects51
    
    Sweetwater
 BoratesOperating sites54
    
    Boron55
    
    Coudekerque Plant56
    
    Tincalayu57
    
    Wilmington PlantTalcOperating sites (only major sites are shown)58
    
    Ludlow59
    
    Talc de Luzenac60
    
    Three Springs61
    
    YellowstoneTitanium dioxide feedstockOperating sites62
    
    QIT-Fer et Titane Lac Allard63
    
    QIT-Fer et Titane Sorel Plant64
    
    QIT Madagascar Minerals (80%)65
    
    Richards Bay Minerals (50%)LithiumProjects66
    
    Jadar
   Form 20-F 24




---



##### Table of Contents



Locations (continued)
 Europe, Africa and Middle East activities
 Iron Ore group
 Iron oreOperating sites67
    
    Corumbá68
    
    Hamersley Iron mines:BrockmanChannar (60%)Eastern Range (54%)Hope Downs (50% joint venture)MarandooMt Tom PriceNammuldiParaburdooYandicoogina69
    
    HIsmelt® (60%)70
    
    Iron Ore Company of Canada (59%)68
    
    Robe River mines: (53%)PannawonicaWest AngelasProjects73
    
    Orissa (51%)74
    
    Simandou (95%)
 SaltOperating sites71
    
    Dampier (68%)72
    
    Lake MacLeod (68%)71
    
    Port Hedland (68%)
   Form 20-F 25




---



##### Table of Contents



Capital Projects
 Rio Tinto has committed to reduce net debt by US$10 billion in 2009
  
    
    Reduction of  capital expenditure for 2009 from US$8.5 billion in 2008 to US$4 billion,
while retaining future growth options.
    
    Capital expenditure to be reduced to sustaining levels in 2010 in the absence of an
improvement in commodity market conditions.
    
    Reduction of controllable operating costs by at least US$2.5 billion per annum in 2010.
    
    Reduction in global employment levels of 14,000 roles (8,500 contractor and 5,500
employees).
    
    Expanded scope of assets targeted for divestment including significant assets not
previously highlighted for sale.
  Rio Tinto share 100% unless stated
    
    Estimated cost
    
    Status/milestones100% basisUS$mOngoingIron ore Expansion of Pilbara iron ore mines and infrastructure to 220 mtpa
and beyond.
    
    3,600
* 900
    
    Expansion of Hope Downs from 22 mtpa to 30
mtpa (US$350 million on 100% basis  Rio
Tinto share is 50%) is expected to be
completed during the first quarter of 2009.
Further capital expenditure is required to
maintain the capacity of the Pilbara mines at
220 mtpa.Alumina Expansion of Yarwun alumina refinery from 1.4 to 3.4 mtpa.
    
    1,800
* 650
    
    The expansion of Yarwun will be reviewed in
light of the proposed strategic partnership
with Chinalco. Subject to a commercial
agreement with Chinalco (50% share), Yarwun is expected to  complete
the project and make its first shipment in the second
half of 2011.Alumina Expansion of the Gove alumina refinery from 2.0 to 3.0 mtpa
    
    2,300
* 100
    
    Gove is expected to reach a 3.0 mtpa operating
rate in 2009.Diamonds Argyle underground development and open pit cutback.
    
    1,500
* 78
    
    In January 2009 Rio Tinto announced that the
Argyle underground mining project will be
slowed to critical development activities.
Full production is expected to take place in
2013.Diamonds Diavik (Rio Tinto: 60%) underground development.
    
    787
* 88
    
    The project has been slowed with first
underground production expected to commence
in the fourth quarter of 2009.Coking coal Kestrel (Rio Tinto: 80%) extension and expansion.
    
    991
30
    
    The project has been slowed to critical
development activities. Coking coal
production at Kestrel is forecast to reduce
by 15 per cent in 2009 in response to the
slowdown in the global steel industry.Thermal coal Clermont (Rio Tinto: 50.1%) replacement of Blair Athol.
    
    1,290
* 300
    
    The project remains on track with first coal
expected in the first quarter of 2010,
ramping up to full capacity of 12.2 mtpa by
2013.Molybdenum Construction of a new Molybdenum Autoclave Process (MAP) facility
at Kennecott Utah Copper.
    
    270
* 20
    
    The project has been delayed but the option
to re-start development has been retained.Aluminium Modernisation of the Kitimat aluminium smelter in British Columbia,
Canada.
    
    300
* 100
    
    Further approval was given in October 2008
bringing the current project funding total to
over US$500 million. The overall project
timing has been prolonged.Aluminium Construction of a new 225MW turbine at the Shipshaw power station
in Saguenay, Quebec, Canada.
    
    228
* 100
    
    Approved in October 2008, the project remains
on track and is expected to be completed in
December 2012Aluminium Arvida pilot plant using groundbreaking AP50 smelting technology.
    
    444
* 100
    
    The overall project timing has been prolonged.Nickel Development of Eagle mine in Michigan, US.
    
    297
* 9
    
    The project has been deferred until market
conditions recover and local permitting is
completed.
 Note
 *
    
    Estimated capital spend in 2009 (100% basis) Form 20-F 26




---



##### Table of Contents



Capital projects
      Completed in 2008Aluminium Development
of the 360,000 tonne per
annum greenfield Sohar
smelter in Oman (Rio
Tinto: 20%).
    
    
    1,700
    
    
    Approved in February 2005, first hot
metal was produced in June 2008.Aluminium Aluminium
Spent potlining recycling plant in Quebec
    
    
    225
    
    
    Approved in September 2006, the
plant commenced operations in June
2008.Titanium dioxide
Construction by QMM (Rio
Tinto: 80%) of a
greenfield ilmenite
operation in Madagascar
and associated upgrade
of processing facilities
at QIT in Canada.
    
    
    1,000
    
    
    Construction is substantially
complete. First production of
ilmenite took place at the end of
2008.Iron ore Cape Lambert
port expansion (Rio
Tinto: 53%) from 55 to 80
million tones per annum
and additional rolling
stock and
infrastructure.
    
    
    952
    
    
    Approved in January 2007, the
project was completed at the end of
2008, ahead of time and within
budget. Progressive capacity will
ramp up in the first half of 2009.Completed in 2007Iron ore Expansion of
Hamersleys  Mount Tom
Price mine to 28 million
tonnes per annum
capacity.
    
    
    226
    
    
    Project completed in March 2007.Iron ore Brownfields
mine expansion of
Hamersleys (Rio Tinto
100%) Yandicoogina mine
from 36 million tonnes
per annum to 52 million
tonnes per annum.
    
    
    530
    
    
    First ore was produced in May 2007,
with the project completed at the
end of the third quarter of 2007 on
time and on budget.Iron ore Expansion of
Hamersleys  Dampier port
(Phase B) from 116
million tonnes per annum
to 140 million tonnes
per annum capacity and
additional rolling stock
and infrastructure.
    
    
    803
    
    
    This project was completed at the
end of 2007 on schedule and on
budget.Iron ore Hope Downs
development (Rio Tinto
share: 50% of mine and
100% of infrastructure).
Construction of 22
million tonnes per annum
mine and related
infrastructure.
    
    
    980
    
    
    First production occurred in
November 2007, three months ahead of
schedule. The first train load took
place in December 2007.Completed in 2006Iron ore Expansion of
Hamersley Irons  Tom Price
and Marandoo mines and
construction of new mine
capacity at Nammuldi.
    
    
    290
    
    
    The Marandoo and Nammuldi components
are complete and Tom Price was
completed during first quarter of
2007.Iron ore Expansion by
Robe River (Rio Tinto:
53%) of rail capacity
including completion of
dual tracking of 100 km
mainline section.
    
    
    200
    
    
    The project was completed on budget
and ahead of schedule.Copper Escondida
sulphide leach (Rio
Tinto: 30%). The project
is expected to produce 180,000
tonnes per annum of
copper cathode for more
than 25 years.
    
    
    925
    
    
    The first cathode production from
the sulphide leach plant occurred in
June 2006.Titanium dioxide
expansion of annual
capacity at UGS plant
from 325,000 tonnes to
375,000 tonnes.
    
    
    79
    
    
    The project was completed in October
three months ahead of schedule and
under budget.Boric acid Phase 2 of
Rio Tinto Minerals boric
acid expansion
    
    
    50
    
    
    The project was completed on
schedule and under budget.Coking coal Hail Creek
(Rio Tinto: 82%)
Expansion of annual
capacity from 6 million
tonnes to nameplate 8
million tonnes per
annum, with washing
plant increased to 12
million tonnes per
annum.
    
    
    223
    
    
    The new dragline was commissioned
early in the third quarter of 2006.
 Form 20-F 27




---



##### Table of Contents



Acquisitions
 Asset
    
    
    
    StatusCostUS$mAcquired in 2008None
    
    Acquired in 2007Aluminium Alcan Inc
    
    
    38,652
    
    Acquisition of Alcan Inc announced in July
2007 and completed in October 2007Energy Hydrogen Energy (Rio Tinto: 50%)
    
    
    35
    
    Joint venture with BPDiamonds & Industrial Minerals Dampier Salt (Rio
Tinto: 3%)
    
    
    19
    
    The purchase of a 3% interest in Dampier
Salt from a minority shareholder that
increased the Groups total interest to
68.4%.Acquired in 2006Copper Ivanhoe Mines (Rio Tinto: 9.9%)
    
    
    303
    
    Agreement to acquire a strategic stake
including, upon completion of satisfactory a
long term investment agreement with the
Mongolian government, a second tranche of
9.9% for US$338m.Copper Northern Dynasty Minerals (Rio Tinto: 9.9%)
    
    
    
    
    
    Increased stake to 19.8% during February 2007
 Divestitures
 Asset
    
    Proceeds
    
    StatusUS$mDivested in 2009Energy Jacobs Ranch
    
    
    761
    
    Sale, subject to completion, to Arch Coal, IncIron ore Corumbá mine
    
    
    750
    
    Sale, subject to completion, to ValePotash Projects in Argentina and Canada
    
    
    850
    
    Sold to ValeAluminium Ningxia smelter (Rio Tinto: 50%)
    
    
    125
    
    Sold to Qingtongxia Aluminium GroupDivested in 2008Titanium dioxide Richards Bay Minerals (Rio
Tinto: 12%)
    
    
    228
    
    Sale by Rio Tinto and BHP, subject to
completion, of a combined 24% stake to a
Black Economic Empowerment consortiumUranium Kintyre project
    
    
    495
    
    Sold to a joint ventureSilver, Zinc Greens Creek mine (Rio Tinto: 70%)
    
    
    750
    
    Sale completed to Hecla Mining, the Groups
minority partner.Gold Cortez Joint Venture (Rio Tinto: 40%)
    
    
    1,695
    
    Sold to Barrick Gold, the Groups partner,
for cash plus a deferred bonus payment and
contingent royalty interest.Divested in 2007Diamonds and Industrial Minerals Lassing and
Ennsdorf
    
    
    6
    
    Rio Tinto Minerals disposed of its operations
at Lassing and Ennsdorf for consideration of
$6m.Divested in 2006Aluminium Eurallumina SpA (Rio Tinto: 56.2%)
    
    
    n/a
    
    Sold to RUSALDiamonds Ashton Mining of Canada Inc (Rio
Tinto: 51.7%)
    
    
    n/a
    
    Sold to Stornaway Diamond Corporation for
US$26m plus shares representing an interest
of 17.7%.
 Form 20-F 28




---



##### Table of Contents



Metals and minerals production
  2008
    
    
    2007
    
    
    2006Production (a)
    
    
    Production (a)
    
    
    Production (a)Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto% share (b)
    
    
    
    
    
    
    share
    
    
    
    
    
    
    share
    
    
    
    
    
    
    shareALUMINA (000 tonnes)Eurallumina (Italy) (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    914
    
    
    
    513Gardanne (France) (d)
    
    
    100.0
    
    
    
    38
    
    
    
    38
    
    
    
    21
    
    
    
    21
    
    
    
    
    
    
    
    Gove (Australia) (d)
    
    
    100.0
    
    
    
    2,325
    
    
    
    2,325
    
    
    
    405
    
    
    
    405
    
    
    
    
    
    
    
    Jonquiere (Canada) (d)
    
    
    100.0
    
    
    
    1,370
    
    
    
    1,370
    
    
    
    252
    
    
    
    252
    
    
    
    
    
    
    
    Queensland Alumina (Australia) (d) (e)
    
    
    80.0
    
    
    
    3,842
    
    
    
    3,074
    
    
    
    3,816
    
    
    
    1,766
    
    
    
    3,871
    
    
    
    1,494Sao Luis (Alumar) (Brazil) (d)
    
    
    10.0
    
    
    
    1,504
    
    
    
    150
    
    
    
    288
    
    
    
    29
    
    
    
    
    
    
    
    Yarwun (Australia) (d)
    
    
    100.0
    
    
    
    1,293
    
    
    
    1,293
    
    
    
    1,260
    
    
    
    1,260
    
    
    
    1,240
    
    
    
    1,240Speciality Plants (Canada/France/Germany) (d)
    
    
    100.0
    
    
    
    759
    
    
    
    759
    
    
    
    144
    
    
    
    144
    
    
    
    
    
    
    
    Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    9,009
    
    
    
    
    
    
    
    3,877
    
    
    
    
    
    
    
    3,247ALUMINIUM (refined) (000 tonnes)Alma (Canada) (d)
    
    
    100.0
    
    
    
    424.1
    
    
    
    424.1
    
    
    
    80.1
    
    
    
    80.1
    
    
    
    
    
    
    
    Alouette (Sept-Iles) (Canada) (d)
    
    
    40.0
    
    
    
    572.1
    
    
    
    228.8
    
    
    
    108.9
    
    
    
    43.5
    
    
    
    
    
    
    
    Alucam (Edea) (Cameroon) (d)
    
    
    46.7
    
    
    
    91.1
    
    
    
    42.5
    
    
    
    18.8
    
    
    
    8.8
    
    
    
    
    
    
    
    Anglesey (UK) (f)
    
    
    51.0
    
    
    
    118.0
    
    
    
    60.2
    
    
    
    146.6
    
    
    
    74.7
    
    
    
    144.3
    
    
    
    73.6Arvida (Canada) (d)
    
    
    100.0
    
    
    
    172.2
    
    
    
    172.2
    
    
    
    31.8
    
    
    
    31.8
    
    
    
    
    
    
    
    Beauharnois (Canada) (d)
    
    
    100.0
    
    
    
    49.6
    
    
    
    49.6
    
    
    
    9.8
    
    
    
    9.8
    
    
    
    
    
    
    
    Becancour (Canada) (d)
    
    
    25.1
    
    
    
    414.5
    
    
    
    103.8
    
    
    
    80.1
    
    
    
    20.1
    
    
    
    
    
    
    
    Bell Bay (Australia) (f)
    
    
    100.0
    
    
    
    178.5
    
    
    
    178.5
    
    
    
    176.9
    
    
    
    176.9
    
    
    
    176.2
    
    
    
    176.2Boyne Island (Australia) (f)
    
    
    59.4
    
    
    
    556.4
    
    
    
    330.5
    
    
    
    547.6
    
    
    
    325.3
    
    
    
    546.5
    
    
    
    324.5Dunkerque (France) (d)
    
    
    100.0
    
    
    
    254.1
    
    
    
    254.1
    
    
    
    49.5
    
    
    
    49.5
    
    
    
    
    
    
    
    Grande-Baie (Canada) (d)
    
    
    100.0
    
    
    
    212.1
    
    
    
    212.1
    
    
    
    39.7
    
    
    
    39.7
    
    
    
    
    
    
    
    ISAL (Reykjavik) (Iceland) (d)
    
    
    100.0
    
    
    
    187.4
    
    
    
    187.4
    
    
    
    35.0
    
    
    
    35.0
    
    
    
    
    
    
    
    Kitimat (Canada) (d)
    
    
    100.0
    
    
    
    247.3
    
    
    
    247.3
    
    
    
    46.8
    
    
    
    46.8
    
    
    
    
    
    
    
    Lannemezan (France) (d)
    
    
    100.0
    
    
    
    5.2
    
    
    
    5.2
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    
    
    
    
    Laterriere (Canada) (d)
    
    
    100.0
    
    
    
    234.2
    
    
    
    234.2
    
    
    
    44.0
    
    
    
    44.0
    
    
    
    
    
    
    
    Lochaber (UK) (d)
    
    
    100.0
    
    
    
    42.9
    
    
    
    42.9
    
    
    
    8.3
    
    
    
    8.3
    
    
    
    
    
    
    
    Lynemouth (UK) (d)
    
    
    100.0
    
    
    
    164.6
    
    
    
    164.6
    
    
    
    33.3
    
    
    
    33.3
    
    
    
    
    
    
    
    Ningxia (Qingtongxia) (China) (d) (g)
    
    
    50.0
    
    
    
    162.9
    
    
    
    81.5
    
    
    
    30.9
    
    
    
    15.5
    
    
    
    
    
    
    
    Sebree (USA) (d)
    
    
    100.0
    
    
    
    197.4
    
    
    
    197.4
    
    
    
    36.8
    
    
    
    36.8
    
    
    
    
    
    
    
    Shawinigan (Canada) (d)
    
    
    100.0
    
    
    
    100.1
    
    
    
    100.1
    
    
    
    18.3
    
    
    
    18.3
    
    
    
    
    
    
    
    Sohar (Oman) (h)
    
    
    20.0
    
    
    
    48.8
    
    
    
    9.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    SORAL (Husnes) (Norway) (d)
    
    
    50.0
    
    
    
    171.3
    
    
    
    85.7
    
    
    
    32.0
    
    
    
    16.0
    
    
    
    
    
    
    
    St-Jean-de Maurienne (France) (d)
    
    
    100.0
    
    
    
    129.8
    
    
    
    129.8
    
    
    
    25.2
    
    
    
    25.2
    
    
    
    
    
    
    
    Tiwai Point (New Zealand) (f)
    
    
    79.4
    
    
    
    315.5
    
    
    
    250.4
    
    
    
    351.1
    
    
    
    278.7
    
    
    
    335.3
    
    
    
    266.1Tomago (Australia) (d)
    
    
    51.6
    
    
    
    523.3
    
    
    
    269.8
    
    
    
    97.4
    
    
    
    50.2
    
    
    
    
    
    
    
    Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    4,062.4
    
    
    
    
    
    
    
    1,473.2
    
    
    
    
    
    
    
    840.4BAUXITE (000 tonnes)Awaso (Ghana) (d) (i)
    
    
    80.0
    
    
    
    796
    
    
    
    637
    
    
    
    216
    
    
    
    173
    
    
    
    
    
    
    
    Gove (Australia) (d)
    
    
    100.0
    
    
    
    6,245
    
    
    
    6,245
    
    
    
    985
    
    
    
    985
    
    
    
    
    
    
    
    Porto Trombetas (MRN) (Brazil) (d)
    
    
    12.0
    
    
    
    18,063
    
    
    
    2,168
    
    
    
    3,392
    
    
    
    407
    
    
    
    
    
    
    
    Sangaredi (Guinea) (d)
    
    
    (j
    )
    
    
    13,181
    
    
    
    5,932
    
    
    
    2,502
    
    
    
    1,126
    
    
    
    
    
    
    
    Weipa (Australia)
    
    
    100.0
    
    
    
    20,006
    
    
    
    20,006
    
    
    
    18,209
    
    
    
    18,209
    
    
    
    16,319
    
    
    
    16,319Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    34,987
    
    
    
    
    
    
    
    20,900
    
    
    
    
    
    
    
    16,319BORATES (000 tonnes) (k)Rio Tinto Minerals  Boron (US)
    
    
    100.0
    
    
    
    591
    
    
    
    591
    
    
    
    541
    
    
    
    541
    
    
    
    538
    
    
    
    538Rio Tinto Minerals  Argentina (Argentina)
    
    
    100.0
    
    
    
    19
    
    
    
    19
    
    
    
    19
    
    
    
    19
    
    
    
    15
    
    
    
    15Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    610
    
    
    
    
    
    
    
    560
    
    
    
    
    
    
    
    553COAL  HARD COKING (000 tonnes)Rio Tinto Coal AustraliaHail Creek Coal (Australia)
    
    
    82.0
    
    
    
    6,049
    
    
    
    4,960
    
    
    
    5,012
    
    
    
    4,110
    
    
    
    4,544
    
    
    
    3,726Kestrel Coal (Australia)
    
    
    80.0
    
    
    
    3,089
    
    
    
    2,471
    
    
    
    2,586
    
    
    
    2,069
    
    
    
    2,729
    
    
    
    2,183Rio Tinto total hard coking coal
    
    
    
    
    
    
    
    
    
    
    7,431
    
    
    
    
    
    
    
    6,179
    
    
    
    
    
    
    
    5,909
 Form 20-F 29




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##### Table of Contents



Metals and minerals production (continued)
 2008
    
    
    2007
    
    
    2006Production (a)
    
    
    Production (a)
    
    
    Production (a)Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto% share (b)
    
    
    
    
    
    
    share
    
    
    
    
    
    
    share
    
    
    
    
    
    
    shareCOAL  OTHER* (000 tonnes)Rio Tinto Coal AustraliaBengalla (Australia)
    
    
    30.3
    
    
    
    5,357
    
    
    
    1,622
    
    
    
    5,155
    
    
    
    1,561
    
    
    
    5,544
    
    
    
    1,679Blair Athol (Australia)
    
    
    71.2
    
    
    
    10,194
    
    
    
    7,262
    
    
    
    7,924
    
    
    
    5,645
    
    
    
    10,190
    
    
    
    7,259Hunter Valley Operations (Australia)
    
    
    75.7
    
    
    
    10,751
    
    
    
    8,139
    
    
    
    10,094
    
    
    
    7,642
    
    
    
    12,024
    
    
    
    9,104Kestrel Coal (Australia)
    
    
    80.0
    
    
    
    929
    
    
    
    744
    
    
    
    1,035
    
    
    
    828
    
    
    
    863
    
    
    
    691Mount Thorley Operations (Australia)
    
    
    60.6
    
    
    
    2,949
    
    
    
    1,786
    
    
    
    2,924
    
    
    
    1,771
    
    
    
    3,895
    
    
    
    2,359Tarong Coal (Australia) (l)
    
    
    
    
    
    
    262
    
    
    
    262
    
    
    
    4,510
    
    
    
    4,510
    
    
    
    6,979
    
    
    
    6,979Warkworth (Australia)
    
    
    42.1
    
    
    
    6,039
    
    
    
    2,540
    
    
    
    5,775
    
    
    
    2,430
    
    
    
    7,342
    
    
    
    3,089Total Australian other coal
    
    
    
    
    
    
    
    
    
    
    22,356
    
    
    
    
    
    
    
    24,388
    
    
    
    
    
    
    
    31,159Rio Tinto Energy AmericaAntelope (US)
    
    
    100.0
    
    
    
    32,474
    
    
    
    32,474
    
    
    
    31,267
    
    
    
    31,267
    
    
    
    30,749
    
    
    
    30,749Colowyo (US)
    
    
    (m
    )
    
    
    4,446
    
    
    
    4,446
    
    
    
    5,077
    
    
    
    5,077
    
    
    
    5,754
    
    
    
    5,754Cordero Rojo (US)
    
    
    100.0
    
    
    
    36,318
    
    
    
    36,318
    
    
    
    36,712
    
    
    
    36,712
    
    
    
    36,094
    
    
    
    36,094Decker (US)
    
    
    50.0
    
    
    
    5,939
    
    
    
    2,970
    
    
    
    6,340
    
    
    
    3,170
    
    
    
    6,449
    
    
    
    3,225Jacobs Ranch (US) 
    
    
    100.0
    
    
    
    38,206
    
    
    
    38,206
    
    
    
    34,565
    
    
    
    34,565
    
    
    
    36,258
    
    
    
    36,258Spring Creek (US)
    
    
    100.0
    
    
    
    16,341
    
    
    
    16,341
    
    
    
    14,291
    
    
    
    14,291
    
    
    
    13,181
    
    
    
    13,181Total US coal
    
    
    
    
    
    
    
    
    
    
    130,755
    
    
    
    
    
    
    
    125,083
    
    
    
    
    
    
    
    125,260Rio Tinto total other coal
    
    
    
    
    
    
    
    
    
    
    153,111
    
    
    
    
    
    
    
    149,471
    
    
    
    
    
    
    
    156,419COPPER (mined) (000 tonnes)Bingham Canyon (US)
    
    
    100.0
    
    
    
    238.0
    
    
    
    238.0
    
    
    
    212.2
    
    
    
    212.2
    
    
    
    265.6
    
    
    
    265.6Escondida (Chile)
    
    
    30.0
    
    
    
    1,281.7
    
    
    
    384.5
    
    
    
    1,405.5
    
    
    
    421.6
    
    
    
    1,313.4
    
    
    
    394.0Grasberg  Joint Venture (Indonesia) (n)
    
    
    40.0
    
    
    
    521.2
    
    
    
    7.1
    
    
    
    569.4
    
    
    
    28.4
    
    
    
    115.5
    
    
    
    46.2Northparkes (Australia)
    
    
    80.0
    
    
    
    24.8
    
    
    
    19.8
    
    
    
    43.1
    
    
    
    34.5
    
    
    
    83.3
    
    
    
    66.6Palabora (South Africa) (o)
    
    
    57.7
    
    
    
    85.1
    
    
    
    49.1
    
    
    
    71.4
    
    
    
    41.2
    
    
    
    61.5
    
    
    
    31.1Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    698.5
    
    
    
    
    
    
    
    737.9
    
    
    
    
    
    
    
    803.5COPPER (refined) (000 tonnes)Escondida (Chile)
    
    
    30.0
    
    
    
    257.5
    
    
    
    77.3
    
    
    
    238.4
    
    
    
    71.5
    
    
    
    134.4
    
    
    
    40.3Kennecott Utah Copper (US)
    
    
    100.0
    
    
    
    200.6
    
    
    
    200.6
    
    
    
    265.6
    
    
    
    265.6
    
    
    
    217.9
    
    
    
    217.9Palabora (South Africa) (o)
    
    
    57.7
    
    
    
    75.9
    
    
    
    43.8
    
    
    
    91.7
    
    
    
    52.9
    
    
    
    81.2
    
    
    
    40.9Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    321.6
    
    
    
    
    
    
    
    390.0
    
    
    
    
    
    
    
    299.2DIAMONDS (000 carats)Argyle (Australia)
    
    
    100.0
    
    
    
    15,076
    
    
    
    15,076
    
    
    
    18,744
    
    
    
    18,744
    
    
    
    29,078
    
    
    
    29,078Diavik (Canada)
    
    
    60.0
    
    
    
    9,225
    
    
    
    5,535
    
    
    
    11,943
    
    
    
    7,166
    
    
    
    9,829
    
    
    
    5,897Murowa (Zimbabwe)
    
    
    77.8
    
    
    
    264
    
    
    
    205
    
    
    
    145
    
    
    
    113
    
    
    
    240
    
    
    
    187Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    20,816
    
    
    
    
    
    
    
    26,023
    
    
    
    
    
    
    
    35,162GOLD (mined) (000 ounces)Barneys Canyon (US)
    
    
    100.0
    
    
    
    5
    
    
    
    5
    
    
    
    11
    
    
    
    11
    
    
    
    15
    
    
    
    15Bingham Canyon (US)
    
    
    100.0
    
    
    
    368
    
    
    
    368
    
    
    
    397
    
    
    
    397
    
    
    
    523
    
    
    
    523Cortez/Pipeline (US) (p)
    
    
    
    
    
    
    72
    
    
    
    29
    
    
    
    538
    
    
    
    215
    
    
    
    444
    
    
    
    178Escondida (Chile)
    
    
    30.0
    
    
    
    144
    
    
    
    43
    
    
    
    187
    
    
    
    56
    
    
    
    170
    
    
    
    51Grasberg
 Joint Venture(Indonesia) (n)
    
    
    40.0
    
    
    
    
    
    
    
    
    
    
    
    2,689
    
    
    
    423
    
    
    
    238
    
    
    
    95Greens Creek (US) (q)
    
    
    
    
    
    
    18
    
    
    
    12
    
    
    
    68
    
    
    
    48
    
    
    
    63
    
    
    
    44Northparkes (Australia)
    
    
    80.0
    
    
    
    32
    
    
    
    26
    
    
    
    79
    
    
    
    63
    
    
    
    95
    
    
    
    76Rawhide (US) (r)
    
    
    100.0
    
    
    
    18
    
    
    
    9
    
    
    
    19
    
    
    
    10
    
    
    
    26
    
    
    
    13Others
    
    
    
    
    
    
    14
    
    
    
    8
    
    
    
    19
    
    
    
    11
    
    
    
    18
    
    
    
    9Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    501
    
    
    
    
    
    
    
    1,233
    
    
    
    
    
    
    
    1,003GOLD (refined) (000 ounces)Kennecott Utah Copper (US)
    
    
    100.0
    
    
    
    303
    
    
    
    303
    
    
    
    523
    
    
    
    523
    
    
    
    462
    
    
    
    462
 *
    
    Coal  other includes thermal coal, semi-soft coking coal and semi-hard coking coal.
 Form 20-F 30




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##### Table of Contents



Metals and minerals production (continued)
 2008
    
    
    2007
    
    
    2006Production (a)
    
    
    Production (a)
    
    
    Production (a)Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto
    
    
    Total
    
    
    Rio Tinto% share (b)
    
    
    
    
    
    
    Share
    
    
    
    
    
    
    share
    
    
    
    
    
    
    shareIRON ORE (000 tonnes)Corumbá (Brazil) 
    
    
    100.0
    
    
    
    2,032
    
    
    
    2,032
    
    
    
    1,777
    
    
    
    1,777
    
    
    
    1,982
    
    
    
    1,982Hamersley Iron (Australia)
    
    
    100.0
    
    
    
    95,553
    
    
    
    95,553
    
    
    
    94,567
    
    
    
    94,567
    
    
    
    79,208
    
    
    
    79,208Hamersley Iron  Channar (Australia)
    
    
    60.0
    
    
    
    10,382
    
    
    
    6,229
    
    
    
    10,549
    
    
    
    6,330
    
    
    
    9,798
    
    
    
    5,879Hamersley Iron  Eastern Range (Australia)
    
    
    (s
    )
    
    
    8,186
    
    
    
    8,186
    
    
    
    6,932
    
    
    
    6,932
    
    
    
    8,215
    
    
    
    8,215Hope Downs (Australia) (t)
    
    
    50.0
    
    
    
    10,936
    
    
    
    5,468
    
    
    
    64
    
    
    
    32
    
    
    
    
    
    
    
    Iron Ore Company of Canada (Canada)
    
    
    58.7
    
    
    
    15,830
    
    
    
    9,295
    
    
    
    13,229
    
    
    
    7,768
    
    
    
    16,080
    
    
    
    9,442Robe River (Australia)
    
    
    53.0
    
    
    
    50,246
    
    
    
    26,631
    
    
    
    51,512
    
    
    
    27,301
    
    
    
    52,932
    
    
    
    28,054Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    153,394
    
    
    
    
    
    
    
    144,707
    
    
    
    
    
    
    
    132,780LEAD (000 tonnes)Greens Creek (US) (q)
    
    
    
    
    
    
    4.6
    
    
    
    3.2
    
    
    
    17.0
    
    
    
    11.9
    
    
    
    16.9
    
    
    
    11.9MOLYBDENUM (000 tonnes)Bingham Canyon (US)
    
    
    100.0
    
    
    
    10.6
    
    
    
    10.6
    
    
    
    14.9
    
    
    
    14.9
    
    
    
    16.8
    
    
    
    16.8PIG IRON (000 tonnes)HIsmelt®(Australia)
    
    
    60.0
    
    
    
    144
    
    
    
    87
    
    
    
    115
    
    
    
    69
    
    
    
    89
    
    
    
    53SALT (000 tonnes)Dampier Salt (Australia) (u)
    
    
    68.4
    
    
    
    8,974
    
    
    
    6,135
    
    
    
    7,827
    
    
    
    5,242
    
    
    
    8,323
    
    
    
    5,405SILVER (mined) (000 ounces)Bingham Canyon (US)
    
    
    100.0
    
    
    
    3,414
    
    
    
    3,414
    
    
    
    3,487
    
    
    
    3,487
    
    
    
    4,214
    
    
    
    4,214Escondida (Chile)
    
    
    30.0
    
    
    
    6,167
    
    
    
    1,850
    
    
    
    7,870
    
    
    
    2,361
    
    
    
    6,646
    
    
    
    1,994Grasberg  Joint Venture (Indonesia) (n)
    
    
    40.0
    
    
    
    4,488
    
    
    
    220
    
    
    
    5,238
    
    
    
    477
    
    
    
    1,675
    
    
    
    670Greens Creek (US) (q)
    
    
    
    
    
    
    1,815
    
    
    
    1,275
    
    
    
    8,646
    
    
    
    6,075
    
    
    
    8,866
    
    
    
    6,230Others
    
    
    
    
    
    
    655
    
    
    
    417
    
    
    
    914
    
    
    
    602
    
    
    
    1,345
    
    
    
    861Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    7,176
    
    
    
    
    
    
    
    13,002
    
    
    
    
    
    
    
    13,968SILVER (refined) (000 ounces)Kennecott Utah Copper (US)
    
    
    100.0
    
    
    
    3,252
    
    
    
    3,252
    
    
    
    4,365
    
    
    
    4,365
    
    
    
    4,152
    
    
    
    4,152TALC (000 tonnes)Rio Tinto Minerals  talc
    
    
    100.0
    
    
    
    1,163
    
    
    
    1,163
    
    
    
    1,281
    
    
    
    1,281
    
    
    
    1,392
    
    
    
    1,392(Australia/Europe/North America) (v)TITANIUM DIOXIDE FEEDSTOCK (000 tonnes)Rio Tinto Iron & Titanium
(Canada/South Africa) (w)
    
    
    100.0
    
    
    
    1,524
    
    
    
    1,524
    
    
    
    1,458
    
    
    
    1,458
    
    
    
    1,415
    
    
    
    1,415URANIUM (000 lbs U3O8)Energy Resources of Australia (Australia)
    
    
    68.4
    
    
    
    11,773
    
    
    
    8,052
    
    
    
    11,713
    
    
    
    8,011
    
    
    
    10,370
    
    
    
    7,092Rössing (Namibia)
    
    
    68.6
    
    
    
    8,966
    
    
    
    6,149
    
    
    
    6,714
    
    
    
    4,605
    
    
    
    7,975
    
    
    
    5,469Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    14,200
    
    
    
    
    
    
    
    12,616
    
    
    
    
    
    
    
    12,561ZINC (mined) (000 tonnes)Greens Creek (US) (q)
    
    
    
    
    
    
    13.9
    
    
    
    9.8
    
    
    
    50.8
    
    
    
    35.7
    
    
    
    47.5
    
    
    
    33.4
 Form 20-F 31




---



##### Table of Contents



Metals
and minerals production (continued)
 Notes
 (a)
    
    Mine production figures for metals refer to the total quantity of metal produced in
concentrates or doré bullion irrespective of whether these products are then refined onsite,
except for the data for iron ore and bauxite (beneficiated and calcined) which represent
production of marketable quantities of ore.(b)
    
    Rio Tinto percentage share, shown above, is as at the end of 2008 and has applied over the
period 2006-2008 except for those operations where the share has varied during the year and
the weighted average for them is shown below. The Rio Tinto share varies at individual mines
and refineries in the others category and thus no value is shown.
 Rio Tinto Share %Operation
    
    Note
    
    
    2008
    
    
    2007
    
    
    2006Queensland Alumina
    
    
    (e
    )
    
    
    80.0
    
    
    
    46.3
    
    
    
    38.6Palabora
    
    
    (o
    )
    
    
    57.7
    
    
    
    57.7
    
    
    
    50.5Dampier Salt Limited
    
    
    (u
    )
    
    
    68.4
    
    
    
    67.0
    
    
    
    64.9
 (c)
    
    Rio Tinto sold its 56.2 per cent share in Eurallumina with an effective date of 31 October
2006 and production data are shown up to that date.(d)
    
    Rio Tinto acquired the operating assets of Alcan with effect from 24 October 2007; production
is shown as from that date. The Rio Tinto assets and the Alcan assets have been combined under
the Rio Tinto Alcan name.(e)
    
    Rio Tinto held a 38.6 per cent share in QAL until 24 October 2007; this increased to 80.0 per
cent following the Alcan acquisition.(f)
    
    Following a review of the basis for reporting aluminium smelter production tonnes, the data
reported now reflect hot metal production rather than saleable product tonnes.(g)
    
    Rio Tinto sold its 50 per cent interest in the Ningxia aluminium smelter with an effective
date of 26 January 2009.(h)
    
    Production at the Sohar smelter commenced in the third quarter of 2008.(i)
    
    Rio Tinto Alcan has an 80 per cent interest in the Awaso mine but purchases the additional 20
per cent of production.(j)
    
    Rio Tinto has a 22.95 per cent shareholding in the Sangaredi mine but receives 45.0 per cent
of production under the partnership agreement. Data have been restated to reflect a moisture
content adjustment.(k)
    
    Borate quantities are expressed as B2O3.(l)
    
    Rio Tinto sold its 100 per cent interest in Tarong Coal with an effective date of 31 January
2008; production data are shown up to that date.(m)
    
    In view of Rio Tinto Energy Americas responsibilities under a management agreement for the
operation of the Colowyo mine, all of Colowyos output is included in Rio Tintos share of
production.(n)
    
    Through a joint venture agreement with Freeport-McMoRan Copper & Gold (FCX), Rio Tinto is
entitled to 40 per cent of additional material mined as a consequence of expansions and
developments of the Grasberg facilities since 1998.(o)
    
    Rio Tintos shareholding in Palabora varied during 2006 due to the progressive conversion of
debentures into ordinary shares.(p)
    
    Rio Tinto sold its 40 per cent interest in the Cortez/Pipeline joint venture on 5 March 2008,
with an effective date end of February 2008. Production data are shown up to that date.(q)
    
    Rio Tinto sold its 70.3 per cent share in the Greens Creek joint venture with an effective
date of 16 April 2008. Production data are shown up to that date.(r)
    
    On the 28 October 2008, Rio Tinto increased its shareholding in the Rawhide Joint Venture
from 51 per cent to 100 per cent. The previous Joint Venture shareholder continued to be
entitled to 49 per cent of production until 31 December 2008; thereafter Rio Tinto will be
entitled to 100 per cent.(s)
    
    Rio Tintos share of production includes 100 per cent of the production from the Eastern
Range mine. Under the terms of the joint venture agreement (Rio Tinto 54 per cent), Hamersley
Iron manages the operation and is obliged to purchase all mine production from the joint
venture.(t)
    
    Hope Downs started production in the fourth quarter of 2007.(u)
    
    Rio Tinto increased its shareholding in Dampier Salt Limited to 68.4 per cent at the
beginning of July 2007.(v)
    
    Talc production includes some products derived from purchased ores.(w)
    
    Quantities comprise 100 per cent of QIT and 50 per cent of Richards Bay Minerals production.
    
    In March 2009, Rio Tinto announced the conditional sale of its 100 per cent interest in the
Jacobs Ranch mine.
    
    In January 2009, Rio Tinto announced the conditional sale of its 100 per cent interest in the
Corumbá mine.
 Form 20-F 32




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##### Table of Contents



Ore reserves (under Industry Guide 7)
  
    
    An Ore Reserve means that part of a mineral deposit that can be economically and legally
extracted or produced at the time of the reserves determination. To establish this, studies
appropriate to the type of mineral deposit involved have been carried out to estimate the
quantity, grade and value of the ore mineral(s) present. In addition, technical studies have
been completed to determine realistic assumptions for the extraction of the minerals including
estimates of mining, processing, economic, marketing, legal, environmental, social and
governmental factors. The degree of these studies is sufficient to demonstrate the technical
and economic feasibility of the project and depends on whether or not the project is an
extension of an existing project or operation. The estimates of minerals to be produced
include allowances for ore losses and the treatment of unmineralised materials which may occur
as part of the mining and processing activities. Ore Reserves are sub-divided in order of
increasing confidence into Probable Ore Reserves and Proven Ore Reserves as defined below.
    
    The term economically, as used in the definition of reserves, implies that profitable
extraction or production under defined investment assumptions has been established through the
creation of a mining plan, processing plan and cash flow model. The assumptions made must be
reasonable, including costs and operating conditions that will prevail during the life of the
project.
    
    Ore reserves presented in accordance with SEC Industry Guide 7 do not exceed the quantities
that, it is estimated, could be extracted economically if future prices were to be in line
with the average of historical prices for the three years to 30 June 2008, or contracted
prices where applicable. For this purpose, contracted prices are applied only to future sales
volumes for which the price is predetermined by an existing contract; and the average of
historical prices is applied to expected sales volumes in excess of such amounts. Moreover,
reported ore reserve estimates have not been increased above the levels expected to be
economic based on Rio Tintos own long term price assumptions.
    
    The term legally, as used in the definition of reserves, does not imply that all permits
needed for mining and processing have been obtained or that other legal issues have been
completely resolved. However, for reserves to exist, there is reasonable assurance of the
issuance of these permits or resolution of legal issues. Reasonable assurance means that,
based on applicable laws and regulations, the issuance of permits or resolution of legal
issues necessary for mining and processing at a particular deposit will be accomplished in the
ordinary course and in a timeframe consistent with the Companys current mine plans.
    
    The term proven reserves means reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are
computed from the results of detailed sampling; and (b) the sites for inspection, sampling and
measurement are spaced so closely and the geologic character is so well defined that size,
shape, depth and mineral content of reserves are well established. Proven reserves represent
that part of an orebody for which there exists the highest level of confidence in data
regarding its geology, physical characteristics, chemical composition and probable processing
requirements.
    
    The term probable reserves means reserves for which quantity and grade and/or quality are
computed from information similar to that used for proven reserves, but the sites for
inspection, sampling and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance, although lower than that for proven reserves, is high enough
to assume continuity between points of observation. This means that probable reserves
generally have a wider drill hole spacing than for proven reserves.
    
    The amount of proven and probable reserves shown below does not necessarily represent the
amount of material currently scheduled for extraction, because the amount scheduled for
extraction may be derived from a life of mine plan predicated on prices and other assumptions
which are different to those used in the life of mine plan prepared in accordance with
Industry Guide 7.
    
    The estimated ore reserve figures in the following tables are as of 31 December 2008.
Metric units are used throughout. The figures used to calculate Rio Tintos share of reserves
are often more precise than the rounded numbers shown in the tables, hence small differences
might result if the calculations are repeated using the tabulated figures. Commodity price
information is given in footnote (a).
    
    Where operations are not managed by Rio Tinto the reserves are published as received from
the managing company
 Form 20-F 33




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##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    
    Total ore reserves at end 2008mine(b)
    
    
    Tonnage
    
    
    Grade
    
    
    Interest
    
    
    Rio Tinto%
    
    
    shareRecoverableBAUXITE (c)
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    mineral millionsof tonnes
    
    
    %Al2O3
    
    
    
    
    
    
    of tonnesReserves at operating mineGove (Australia) (d)
    
    
    O/P
    
    
    
    175
    
    
    
    49.4
    
    
    
    100.0
    
    
    
    175Porto Trombetas (Brazil) (e)
    
    
    O/P
    
    
    
    205
    
    
    
    50.6
    
    
    
    12.0
    
    
    
    25Sangaredi (Guinea) (f)
    
    
    O/P
    
    
    
    133
    
    
    
    52.4
    
    
    
    23.0
    
    
    
    30Weipa (Australia) (g)
    
    
    O/P
    
    
    
    1,736
    
    
    
    52.4
    
    
    
    100.0
    
    
    
    1,736Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,966
 BORATES (h)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Marketable productmillions
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    of tonnesReserves at operating mineRio Tinto Minerals - Boron (US) mine
    
    
    O/P
    
    
    
    19.0
    
    
    
    100.0
    
    
    
    19.0 stockpiles (i)
    
    
    S/P
    
    
    
    2.3
    
    
    
    100.0
    
    
    
    2.3Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.3
 Coal type
    
    
    Marketable
    
    
    Marketable coal quality(j)
    
    
    reserves
    
    
    (k)
    
    
    (k)COAL (l)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Calorific
    
    
    Sulphur
    
    
    
    
    
    
    Marketable reservesmillions
    
    
    value
    
    
    content
    
    
    
    
    
    
    millionsof tonnes
    
    
    MJ/kg
    
    
    %
    
    
    
    
    
    
    of tonnesReserves at operating minesRio Tinto Energy AmericaAntelope (US)
    
    
    O/C
    
    
    SC
    
    
    296
    
    
    
    20.59
    
    
    
    0.24
    
    
    
    100.0
    
    
    
    296Colowyo (US) (m)
    
    
    O/C
    
    
    SC
    
    
    20
    
    
    
    23.84
    
    
    
    0.44
    
    
    
    100.0
    
    
    
    20Cordero Rojo (US) (n)
    
    
    O/C
    
    
    SC
    
    
    365
    
    
    
    19.54
    
    
    
    0.30
    
    
    
    100.0
    
    
    
    365Decker (US)
    
    
    O/C
    
    
    SC
    
    
    9
    
    
    
    21.98
    
    
    
    0.53
    
    
    
    50.0
    
    
    
    4Jacobs Ranch (US) 
    
    
    O/C
    
    
    SC
    
    
    346
    
    
    
    20.35
    
    
    
    0.43
    
    
    
    100.0
    
    
    
    346Spring Creek (US)
    
    
    O/C
    
    
    SC
    
    
    287
    
    
    
    21.75
    
    
    
    0.33
    
    
    
    100.0
    
    
    
    287Total US coal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,318Rio Tinto Coal AustraliaBengalla (Australia)
    
    
    O/C
    
    
    SC
    
    
    132
    
    
    
    28.21
    
    
    
    0.47
    
    
    
    30.3
    
    
    
    40Blair Athol (Australia)
    
    
    O/C
    
    
    SC
    
    
    29
    
    
    
    26.17
    
    
    
    0.31
    
    
    
    71.2
    
    
    
    21Hail Creek (Australia)
    
    
    O/C
    
    
    MC
    
    
    167
    
    
    
    32.20
    
    
    
    0.35
    
    
    
    82.0
    
    
    
    137Hunter Valley Operations
(Australia) (o)
    
    
    O/C
    
    
    SC + MC
    
    
    330
    
    
    
    28.78
    
    
    
    0.57
    
    
    
    75.7
    
    
    
    250Kestrel (Australia)
    
    
    U/G
    
    
    SC + MC
    
    
    131
    
    
    
    31.60
    
    
    
    0.59
    
    
    
    80.0
    
    
    
    105Mount Thorley Operations
(Australia)
    
    
    O/C
    
    
    SC + MC
    
    
    24
    
    
    
    29.41
    
    
    
    0.43
    
    
    
    60.6
    
    
    
    14Warkworth (Australia) (p)
    
    
    O/C
    
    
    SC + MC
    
    
    278
    
    
    
    30.67
    
    
    
    0.44
    
    
    
    42.1
    
    
    
    117Total Australian coal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    684Rio Tinto total reserves at operating mines
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,002Undeveloped reserves(q)Rio Tinto Coal AustraliaClermont (Australia)
    
    
    O/C
    
    
    SC
    
    
    189
    
    
    
    27.90
    
    
    
    0.33
    
    
    
    50.1
    
    
    
    95Mount Pleasant (Australia)
    
    
    O/C
    
    
    SC
    
    
    350
    
    
    
    26.73
    
    
    
    0.51
    
    
    
    75.7
    
    
    
    265Rio Tinto total undeveloped reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    360
 Form 20-F 34




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##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    

Total ore reserves at end 2008
    
    
    Averagemine
    
    
    
    
    
    mill(b)
    
    
    Tonnage
    
    
    Grade
    
    
    recovery
    
    
    Interest
    
    
    Rio Tinto%
    
    
    %
    
    
    shareRecoverableCOPPER
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Cu
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    555
    
    
    
    0.49
    
    
    
    86
    
    
    
    100.0
    
    
    
    2.364 stockpiles (i)
    
    
    S/P
    
    
    
    63
    
    
    
    0.30
    
    
    
    86
    
    
    
    100.0
    
    
    
    0.161Escondida (Chile) sulphide mine
    
    
    O/P
    
    
    
    1,687
    
    
    
    1.10
    
    
    
    85
    
    
    
    30.0
    
    
    
    4.745 sulphide leach mine
    
    
    O/P
    
    
    
    2,112
    
    
    
    0.53
    
    
    
    33
    
    
    
    30.0
    
    
    
    1.109 oxide mine (r)
    
    
    O/P
    
    
    
    56
    
    
    
    1.09
    
    
    
    68
    
    
    
    30.0
    
    
    
    0.124 sulphide stockpiles (i)
    
    
    S/P
    
    
    
    3
    
    
    
    1.52
    
    
    
    85
    
    
    
    30.0
    
    
    
    0.011 sulphide leach stockpiles (i)
    
    
    S/P
    
    
    
    91
    
    
    
    0.77
    
    
    
    33
    
    
    
    30.0
    
    
    
    0.069 oxide stockpiles (i)
    
    
    S/P
    
    
    
    81
    
    
    
    0.84
    
    
    
    68
    
    
    
    30.0
    
    
    
    0.140Grasberg (Indonesia)
    
    O/P + U/G
    
    
    
    2,665
    
    
    
    1.01
    
    
    
    89
    
    
    
    (s
    )
    
    
    7.201Northparkes (Australia) (t) mine
    
    
    U/G
    
    
    
    90
    
    
    
    0.80
    
    
    
    89
    
    
    
    80.0
    
    
    
    0.509 stockpiles (i)
    
    
    S/P
    
    
    
    0.5
    
    
    
    0.28
    
    
    
    85
    
    
    
    80.0
    
    
    
    0.001Palabora (South Africa) (u)
    
    
    U/G
    
    
    
    91
    
    
    
    0.62
    
    
    
    88
    
    
    
    57.7
    
    
    
    0.284Rio Tinto total reserves at operating mines
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16.718Undeveloped reserves (q)Eagle (US) (v)
    
    
    U/G
    
    
    
    3.6
    
    
    
    2.93
    
    
    
    95
    
    
    
    100.0
    
    
    
    0.102Oyo Tolgoi (Mongolia)
    
    
    O/P
    
    
    
    930
    
    
    
    0.50
    
    
    
    87
    
    
    
    9.9
    
    
    
    0.399Rio Tinto total undeveloped reserves
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.500
 DIAMONDS (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Recoverablecarats
    
    
    
    
    
    
    diamondsmillionsof tonnes
    
    
    per tonne
    
    
    
    
    
    
    millionsof caratsReserves at operating minesArgyle (Australia) AK1 pipe mine
    
    O/P + U/G
    
    
    
    87
    
    
    
    2.1
    
    
    
    100.0
    
    
    
    183.6 AK1 pipe stockpiles (i)
    
    
    S/P
    
    
    
    2.9
    
    
    
    1.8
    
    
    
    100.0
    
    
    
    5.0Diavik (Canada) (w)
    
    O/P + U/G
    
    
    
    20
    
    
    
    3.1
    
    
    
    60.0
    
    
    
    37.9Murowa (Zimbabwe) mine
    
    
    O/P
    
    
    
    21
    
    
    
    0.7
    
    
    
    77.8
    
    
    
    11.0 stockpiles (i)
    
    
    S/P
    
    
    
    0.1
    
    
    
    0.4
    
    
    
    77.8
    
    
    
    0.03Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    237.6
 RecoverableGOLD
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    grammes
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    per tonne
    
    
    
    
    
    
    
    
    
    
    of ouncesReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    555
    
    
    
    0.28
    
    
    
    64
    
    
    
    100.0
    
    
    
    3.190 stockpiles (i)
    
    
    S/P
    
    
    
    63
    
    
    
    0.16
    
    
    
    64
    
    
    
    100.0
    
    
    
    0.206Grasberg (Indonesia)
    
    O/P + U/G
    
    
    
    2,665
    
    
    
    0.89
    
    
    
    70
    
    
    
    (s
    )
    
    
    13.785Northparkes (Australia) (t) mine
    
    
    U/G
    
    
    
    90
    
    
    
    0.31
    
    
    
    73
    
    
    
    80.0
    
    
    
    0.534 stockpiles (i)
    
    
    S/P
    
    
    
    0.5
    
    
    
    0.18
    
    
    
    76
    
    
    
    80.0
    
    
    
    0.002Rio Tinto total reserves at operating mines
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17.717Undeveloped reserves (q)Oyo Tolgoi (Mongolia)
    
    
    O/P
    
    
    
    930
    
    
    
    0.36
    
    
    
    71
    
    
    
    9.9
    
    
    
    0.753
 Form 20-F 35




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##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    
    Total ore reserves at
    
    
    Averagemine
    
    
    end 2008
    
    
    mill(b)
    
    
    Tonnage
    
    
    Grade
    
    
    recovery
    
    
    Interest
    
    
    Rio Tinto%
    
    
    %
    
    
    shareMarketableIRON ORE (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    productmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Fe
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating mines
and mines under constructionCorumbá (Brazil)  mine
    
    
    O/P
    
    
    
    207
    
    
    
    67.0
    
    
    
    
    
    
    
    100.0
    
    
    
    207 stockpiles (i)
    
    
    S/P
    
    
    
    1.4
    
    
    
    66.5
    
    
    
    
    
    
    
    100.0
    
    
    
    1.4Hamersley (Australia) Brockman 2 (Brockman ore) (x)
    
    
    O/P
    
    
    
    20
    
    
    
    62.7
    
    
    
    
    
    
    
    100.0
    
    
    
    20 Brockman 4 (Brockman ore)
    
    
    O/P
    
    
    
    621
    
    
    
    62.0
    
    
    
    
    
    
    
    100.0
    
    
    
    621 Marandoo (Marra Mamba ore) (y)
    
    
    O/P
    
    
    
    59
    
    
    
    61.7
    
    
    
    
    
    
    
    100.0
    
    
    
    59 Mt Tom Price (Brockman ore) (z) mine
    
    
    O/P
    
    
    
    74
    
    
    
    64.4
    
    
    
    
    
    
    
    100.0
    
    
    
    74 stockpiles (i)
    
    
    S/P
    
    
    
    19
    
    
    
    64.5
    
    
    
    
    
    
    
    100.0
    
    
    
    19 Mt Tom Price (Marra Mamba ore)
    
    
    O/P
    
    
    
    34
    
    
    
    61.2
    
    
    
    
    
    
    
    100.0
    
    
    
    34 Nammuldi (Marra Mamba ore)
    
    
    O/P
    
    
    
    24
    
    
    
    61.3
    
    
    
    
    
    
    
    100.0
    
    
    
    24 Paraburdoo (Brockman ore) (aa)
    
    
    O/P
    
    
    
    14
    
    
    
    63.4
    
    
    
    
    
    
    
    100.0
    
    
    
    14 Paraburdoo (Marra Mamba ore)
    
    
    O/P
    
    
    
    0.9
    
    
    
    63.1
    
    
    
    
    
    
    
    100.0
    
    
    
    0.9 Western Turner Syncline (Brockman ore) (bb)
    
    
    O/P
    
    
    
    313
    
    
    
    61.9
    
    
    
    
    
    
    
    100.0
    
    
    
    313 Yandicoogina (Pisolite ore HG) (cc) mine
    
    
    O/P
    
    
    
    225
    
    
    
    58.5
    
    
    
    
    
    
    
    100.0
    
    
    
    225 stockpiles (i)
    
    
    S/P
    
    
    
    4.2
    
    
    
    58.5
    
    
    
    
    
    
    
    100.0
    
    
    
    4.2 Yandicoogina (Process product) (dd)
    
    
    
    
    
    
    146
    
    
    
    58.2
    
    
    
    
    
    
    
    100.0
    
    
    
    146 mine
    
    
    O/PHammersley  Channar (Australia) (ee) Brockman ore
    
    
    O/P
    
    
    
    89
    
    
    
    63.3
    
    
    
    
    
    
    
    60.0
    
    
    
    54Hammersley  Eastern Range (Aus) (ee) Brockman ore
    
    
    O/P
    
    
    
    85
    
    
    
    63.0
    
    
    
    
    
    
    
    54.0
    
    
    
    46Hope Downs (Australia) (Marra Mamba ore)
    
    
    O/P
    
    
    
    343
    
    
    
    61.4
    
    
    
    
    
    
    
    50.0
    
    
    
    172Iron Ore Company of Canada
(Canada) (ff)
    
    
    O/P
    
    
    
    571
    
    
    
    65.0
    
    
    
    
    
    
    
    58.7
    
    
    
    335Robe River (Australia) Pannawonica (Pisolite ore) mine
    
    
    O/P
    
    
    
    267
    
    
    
    57.2
    
    
    
    
    
    
    
    53.0
    
    
    
    141 stockpiles (i)
    
    
    S/P
    
    
    
    20
    
    
    
    56.9
    
    
    
    
    
    
    
    53.0
    
    
    
    11 West Angelas (Marra Mamba ore) mine
    
    
    O/P
    
    
    
    368
    
    
    
    61.8
    
    
    
    
    
    
    
    53.0
    
    
    
    195 stockpiles (i)
    
    
    S/P
    
    
    
    5.7
    
    
    
    58.0
    
    
    
    
    
    
    
    53.0
    
    
    
    3.0Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,720
 RecoverableMOLYBDENUM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Mo
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating mineBingham Canyon (US) (gg) mine
    
    
    O/P
    
    
    
    555
    
    
    
    0.047
    
    
    
    67
    
    
    
    100.0
    
    
    
    0.176 stockpiles (i)
    
    
    S/P
    
    
    
    63
    
    
    
    0.013
    
    
    
    67
    
    
    
    100.0
    
    
    
    0.006Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.182
 RecoverableNICKEL
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Ni
    
    
    
    
    
    
    
    
    
    
    of tonnesUndeveloped reserves (q)Eagle (US) (v)
    
    
    U/G
    
    
    
    3.6
    
    
    
    3.47
    
    
    
    84
    
    
    
    100.0
    
    
    
    0.106
 Form 20-F 36




---



##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    
    Total ore reserves at
    
    
    Averagemine
    
    
    end 2008
    
    
    mill(b)
    
    
    Tonnage
    
    
    Grade
    
    
    recovery
    
    
    Interest
    
    
    Rio Tinto%
    
    
    %
    
    
    shareRecoverableSILVER
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    grammes per
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    tonne
    
    
    
    
    
    
    
    
    
    
    of ouncesReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    555
    
    
    
    2.24
    
    
    
    73
    
    
    
    100.0
    
    
    
    29.384 stockpiles (i)
    
    
    S/P
    
    
    
    63
    
    
    
    1.47
    
    
    
    73
    
    
    
    100.0
    
    
    
    2.192Grasberg (Indonesia)
    
    
    O/P + U/G
    
    
    
    2,665
    
    
    
    4.26
    
    
    
    70
    
    
    
    (s
    )
    
    
    82.693Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    114.269
 MarketableTALC (h)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    productmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at
operating minesRio Tinto Minerals  talc (hh)Europe/N
America/Australia)
    
    
    O/P + U/G mine
    
    
    
    
    
    
    30.4
    
    
    
    
    
    
    
    
    
    
    
    100.0
    
    
    
    30.4 stockpiles (i)
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    
    
    
    
    100.0
    
    
    
    0.2Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30.6
 MarketableTITANIUM DIOXIDE FEEDSTOCK (h)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    productmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating minesQIT (Canada)
    
    
    O/P
    
    
    
    52.1
    
    
    
    
    
    
    
    
    
    
    
    100.0
    
    
    
    52.1QMM (Madagascar)
    
    
    D/O
    
    
    
    12.2
    
    
    
    
    
    
    
    
    
    
    
    80.0
    
    
    
    9.8RBM (South Africa)
    
    
    D/O
    
    
    
    24.3
    
    
    
    
    
    
    
    
    
    
    
    50.0
    
    
    
    12.1Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    74.1
 RecoverableURANIUM
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    metalmillions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %U308
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating minesEnergy
Resources of Australia (Australia) Ranger #3 mine
    
    
    O/P
    
    
    
    7.9
    
    
    
    0.234
    
    
    
    86
    
    
    
    68.4
    
    
    
    0.011 Ranger #3 stockpiles (i)
    
    
    S/P
    
    
    
    22.3
    
    
    
    0.114
    
    
    
    86
    
    
    
    68.4
    
    
    
    0.015Rössing (Namibia) (ii) mine
    
    
    O/P
    
    
    
    186.4
    
    
    
    0.034
    
    
    
    85
    
    
    
    68.6
    
    
    
    0.037 stockpiles (i)
    
    
    S/P
    
    
    
    3.9
    
    
    
    0.040
    
    
    
    85
    
    
    
    68.6
    
    
    
    0.001Rio Tinto total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.064
 Form 20-F 37




---



##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type ofmine
    
    
    

Proven ore reserves at end 2008
    
    

Probable ore reserves at end 2008(b)
    
    
    Tonnage
    
    
    Grade
    
    
    Drill hole
    
    
    Tonnage
    
    
    Grade
    
    
    Drill holeSpacing (jj)
    
    
    
    
    
    
    
    
    Spacing (jj)BAUXITE (c)
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Al2O3
    
    
    
    
    
    
    of tonnes
    
    
    %Al2O3Reserves at operating mineGove (Australia) (d)
    
    
    O/P
    
    
    
    111
    
    
    
    49.5
    
    
    
    50m x 100m
    
    
    
    64
    
    
    
    49.0
    
    
    
    200m x 200mPorto Trombetas (Brazil) (e)
    
    
    O/P
    
    
    
    147
    
    
    
    50.8
    
    
    
    200m x 200m
    
    
    
    59
    
    
    
    50.1
    
    
    
    400m x 400mSangaredi (Guinea) (f)
    
    
    O/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    133
    
    
    
    52.4
    
    
    
    75m x 75mWeipa (Australia) (g)
    
    
    O/P
    
    
    
    337
    
    
    
    51.5
    
    
    
    150m x 150m
    
    
    
    1,398
    
    
    
    52.6
    
    
    
    300m x 300m
 BORATES (e)
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating mineRio Tinto Minerals  Boron (US) mine
    
    
    O/P
    
    
    
    14.2
    
    
    
    
    
    
    
    61m x 61m
    
    
    
    4.8
    
    
    
    
    
    
    
    61m x 61m stockpiles (i)
    
    
    S/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.3
 Recoverable
    
    
    % Yield to
    
    
    Marketable Reservesreserves
    
    
    give
    
    
    Proventotal
    
    
    marketable
    
    
    
    
    
    
    Drill hole
    
    
    Probable
    
    
    Drill holereserves
    
    
    
    
    
    
    spacing(jj)
    
    
    
    
    
    
    spacing(jj)COAL (l)
    
    
    
    
    
    millions
    
    
    
    
    
    
    millions
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    of tonnes
    
    
    
    
    
    
    of tonnesReserves at operating minesRio Tinto Energy AmericaAntelope (US)
    
    
    O/C
    
    
    
    296
    
    
    
    100
    
    
    
    260
    
    
    
    350m
    
    
    
    36
    
    
    
    500mColowyo (US) (m)
    
    
    O/C
    
    
    
    20
    
    
    
    100
    
    
    
    17
    
    
    
    150m
    
    
    
    3
    
    
    
    300mCordero Rojo (US) (n)
    
    
    O/C
    
    
    
    365
    
    
    
    100
    
    
    
    300
    
    
    
    250m
    
    
    
    65
    
    
    
    400mDecker (US)
    
    
    O/C
    
    
    
    9
    
    
    
    100
    
    
    
    9
    
    
    
    250mJacobs Ranch (US) 
    
    
    O/C
    
    
    
    346
    
    
    
    100
    
    
    
    299
    
    
    
    300m
    
    
    
    47
    
    
    
    400mSpring Creek (US)
    
    
    O/C
    
    
    
    287
    
    
    
    100
    
    
    
    238
    
    
    
    300m
    
    
    
    49
    
    
    
    400mRio Tinto Coal AustraliaBengalla (Australia)
    
    
    O/C
    
    
    
    175
    
    
    
    75
    
    
    
    70
    
    
    
    350m
    
    
    
    62
    
    
    
    500mBlair Athol (Australia)
    
    
    O/C
    
    
    
    34
    
    
    
    87
    
    
    
    29
    
    
    
    150m
    
    
    
    0.3
    
    
    
    150mHail Creek (Australia)
    
    
    O/C
    
    
    
    247
    
    
    
    68
    
    
    
    93
    
    
    
    300m
    
    
    
    73
    
    
    
    400mHunter Valley Operations (Australia) (o)
    
    
    O/C
    
    
    
    484
    
    
    
    68
    
    
    
    267
    
    
    
    300m
    
    
    
    63
    
    
    
    500mKestrel (Australia)
    
    
    U/G
    
    
    
    158
    
    
    
    83
    
    
    
    49
    
    
    
    500m
    
    
    
    83
    
    
    
    1000mMount Thorley Operations (Australia)
    
    
    O/C
    
    
    
    37
    
    
    
    65
    
    
    
    21
    
    
    
    125m
    
    
    
    3
    
    
    
    500mWarkworth (Australia) (p)
    
    
    O/C
    
    
    
    426
    
    
    
    65
    
    
    
    157
    
    
    
    450m
    
    
    
    121
    
    
    
    1000mUndeveloped reserves(q)Rio Tinto Coal AustraliaClermont (Australia)
    
    
    O/C
    
    
    
    197
    
    
    
    96
    
    
    
    185
    
    
    
    220m
    
    
    
    4
    
    
    150m to 300mMount Pleasant (Australia)
    
    
    O/C
    
    
    
    459
    
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    350
    
    
    125m to 500m
 Form 20-F 38




---



##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type ofmine
    
    
    Proven ore reserves at end 2008
    
    
    Probable ore reserves at end 2008(b)
    
    
    Tonnage
    
    
    Grade
    
    
    Drill hole
    
    
    Tonnage
    
    
    Grade
    
    
    Drill holespacing (jj)
    
    
    
    
    
    
    
    
    
    
    spacing (jj)COPPER
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Cu
    
    
    
    
    
    
    of tonnes
    
    
    %CuReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    324
    
    
    
    0.55
    
    
    
    88m
    
    
    
    231
    
    
    
    0.49
    
    
    
    106m stockpiles (i)
    
    
    S/P
    
    
    
    35
    
    
    
    0.36
    
    
    
    
    
    
    
    28
    
    
    
    0.30Escondida (Chile) sulphide mine
    
    
    O/P
    
    
    
    729
    
    
    
    1.16
    
    
    
    55m x 55m
    
    
    
    958
    
    
    
    1.05
    
    
    
    85m x 85m sulphide leach mine
    
    
    O/P
    
    
    
    626
    
    
    
    0.52
    
    
    
    60m x 60m
    
    
    
    1486
    
    
    
    0.54
    
    
    
    95m x 95m oxide mine (r)
    
    
    O/P
    
    
    
    7
    
    
    
    1.21
    
    
    
    45m x 45m
    
    
    
    48
    
    
    
    1.07
    
    
    
    50m x 50m sulphide stockpiles (i)
    
    
    S/P
    
    
    
    3
    
    
    
    1.52 sulphide leach stockpiles (i)
    
    
    S/P
    
    
    
    91
    
    
    
    0.77 oxide stockpiles (i)
    
    
    S/P
    
    
    
    81
    
    
    
    0.84Grasberg (Indonesia)
    
    
    O/P + U/G
    
    
    
    823
    
    
    
    1.11
    
    
    13m to 47m
    
    
    
    1,842
    
    
    
    0.97
    
    
    42m to 97mNorthparkes (Australia) (t) mine
    
    
    U/G
    
    
    
    6.7
    
    
    
    0.54
    
    
    
    25 x 25 x 50m
    
    
    
    83
    
    
    
    0.82
    
    
    
    40 x 40 x 80m stockpiles (i)
    
    
    S/P
    
    
    
    0.5
    
    
    
    0.28Palabora (South Africa) (u)
    
    
    U/G
    
    
    
    91
    
    
    
    0.62
    
    
    
    76mUndeveloped reserves(q)Eagle (US) (v)
    
    
    U/G
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.6
    
    
    
    2.93
    
    
    
    25mOyo Tolgoi (Mongolia)
    
    
    O/P
    
    
    
    127
    
    
    
    0.58
    
    
    
    50m
    
    
    
    803
    
    
    
    0.48
    
    
    
    75m
 DIAMONDS (c)
    
    
    
    
    
    millions
    
    
    carats
    
    
    
    
    
    
    millions
    
    
    caratsof tonnes
    
    
    per
    
    
    
    
    
    
    of tonnes
    
    
    pertonne
    
    
    
    
    
    
    
    
    
    
    tonneReserves at operating minesArgyle (Australia) AK1 pipe mine
    
    
    O/P + U/G
    
    
    
    18
    
    
    
    1.1
    
    
    
    50m x 50m
    
    
    
    68
    
    
    
    2.4
    
    
    
    50m x 50m AK1 pipe stockpiles (i)
    
    
    S/P
    
    
    
    0.9
    
    
    
    3.8
    
    
    
    
    
    
    
    2.0
    
    
    
    0.8Diavik (Canada) (w)
    
    
    O/P + U/G
    
    
    
    7.0
    
    
    
    2.7
    
    
    27m to 34m
    
    
    
    13
    
    
    
    3.4
    
    
    30m to 34mMurowa (Zimbabwe) mine
    
    
    O/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    0.7
    
    
    
    50m stockpiles (i)
    
    
    S/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.4
 GOLD
    
    
    
    
    
    millions
    
    
    grammes
    
    
    
    
    
    
    millions
    
    
    grammesof tonnes
    
    
    per
    
    
    
    
    
    
    of tonnes
    
    
    pertonne
    
    
    
    
    
    
    
    
    
    
    tonneReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    324
    
    
    
    0.31
    
    
    
    88m
    
    
    
    231
    
    
    
    0.24
    
    
    
    106m stockpiles (i)
    
    
    S/P
    
    
    
    35
    
    
    
    0.20
    
    
    
    
    
    
    
    28
    
    
    
    0.11Grasberg (Indonesia)
    
    
    O/P + U/G
    
    
    
    823
    
    
    
    1.11
    
    
    13m to 47m
    
    
    
    1,842
    
    
    
    0.79
    
    
    42m to 97mNorthparkes (Australia) (t) mine
    
    
    U/G
    
    
    
    6.7
    
    
    
    0.41
    
    
    
    25 x 25 x 50m
    
    
    
    83
    
    
    
    0.31
    
    
    
    40 x 40 x 80m stockpiles (i)
    
    
    S/P
    
    
    
    0.5
    
    
    
    0.18Undeveloped reserves(q)Oyo Tolgoi (Mongolia)
    
    
    O/P
    
    
    
    127
    
    
    
    0.93
    
    
    
    50m
    
    
    
    803
    
    
    
    0.27
    
    
    
    75m
 Form 20-F 39




---



##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    
    Proven ore reserves at end 2008

    
    Probable ore reserves at end 2008mine(b)
    
    
    Tonnage
    
    
    Grade
    
    
    Drill hole
    
    
    Tonnage
    
    
    Grade
    
    
    Drill holespacing (jj)
    
    
    
    
    
    
    
    

spacing (jj)IRON ORE (c)
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    %Fe
    
    
    
    
    
    
    of tonnes
    
    
    %FeReserves at operating mines
and mines under constructionCorumbá (Brazil)  mine
    
    
    O/P
    
    
    
    100
    
    
    
    66.9
    
    
    
    100m x 100m
    
    
    
    107
    
    
    
    67.0
    
    
    
    200m x 400m stockpiles (i)
    
    
    S/P
    
    
    
    1
    
    
    
    66.5Hamersley (Australia) Brockman 2 (Brockman ore) (x)
    
    
    O/P
    
    
    
    14
    
    
    
    62.7
    
    
    
    50m x 50m
    
    
    
    6
    
    
    
    62.8
    
    
    
    Max 100m Brockman 4 (Brockman ore)
    
    
    O/P
    
    
    
    366
    
    
    
    62.2
    
    
    
    50m x 50m
    
    
    
    255
    
    
    
    61.9
    
    
    
    200m x 100m Marandoo (Marra Mamba ore) (y)
    
    
    O/P
    
    
    
    52
    
    
    
    62.0
    
    
    
    75m x 75m
    
    
    
    7
    
    
    
    59.6
    
    
    
    Max 150m Mt Tom Price (Brockman ore) (z) mine
    
    
    O/P
    
    
    
    41
    
    
    
    64.1
    
    
    
    30m x 30m
    
    
    
    33
    
    
    
    64.7
    
    
    
    60m x 30m stockpiles (i)
    
    
    S/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    64.5 Mt Tom Price (Marra Mamba ore)
    
    
    O/P
    
    
    
    31
    
    
    
    61.4
    
    
    
    60m x 30m
    
    
    
    3
    
    
    
    59.4
    
    
    
    60m x 30m Nammuldi (Marra Mamba ore)
    
    
    O/P
    
    
    
    21
    
    
    
    61.4
    
    
    
    50m x 50m
    
    
    
    3
    
    
    
    60.0
    
    
    
    100m x 50m Paraburdoo (Brockman ore) (aa)
    
    
    O/P
    
    
    
    10
    
    
    
    63.6
    
    
    
    30m x 30m
    
    
    
    4
    
    
    
    62.9
    
    
    
    60m x 30m Paraburdoo (Marra Mamba ore)
    
    
    O/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.9
    
    
    
    63.1
    
    
    
    60m x 60m Western Turner Syncline
(Brockman ore) (bb)
    
    
    O/P
    
    
    
    222
    
    
    
    62.5
    
    
    
    60m x 60m
    
    
    
    92
    
    
    
    60.6
    
    
    
    60m x 60m Yandicoogina (Pisolite ore HG) (cc) mine
    
    
    O/P
    
    
    
    225
    
    
    
    58.5
    
    
    
    50m x 50m stockpiles (i)
    
    
    S/P
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    58.5 Yandicoogina (Process product) (dd)
    
    
    O/P
    
    
    
    146
    
    
    
    58.2
    
    
    
    50m x 50mHamersley  Channar (Australia) (ee) (Brockman ore)
    
    
    O/P
    
    
    
    67
    
    
    
    63.4
    
    
    
    60m x 60m
    
    
    
    22
    
    
    
    63.0
    
    
    
    Max 120mHamersley  Eastern Range (ee) (Brockman ore)
    
    
    O/P
    
    
    
    63
    
    
    
    63.0
    
    
    
    60m x 60m
    
    
    
    22
    
    
    
    63.0
    
    
    
    Max 120mHope Downs (Australia) (Marra Mamba ore)
    
    
    O/P
    
    
    
    28
    
    
    
    61.8
    
    
    
    50m x 50m
    
    
    
    315
    
    
    
    61.4
    
    
    
    50m x 50mIron Ore Company of Canada
(Canada) (ff)
    
    
    O/P
    
    
    
    394
    
    
    
    65.0
    
    
    
    122m x 61m
    
    
    
    176
    
    
    
    65.0
    
    
    
    122m x 122mRobe River (Australia) Pannawonica (Pisolite ore) mine
    
    
    O/P
    
    
    
    246
    
    
    
    57.3
    
    
    

    max 70m x 70m
    

    
    
    20
    
    
    
    56.4
    
    
    
    max 100m x 100m stockpiles (i)
    
    
    S/P
    
    
    
    3
    
    
    
    57.0
    
    
    
    
    
    
    
    17
    
    
    
    56.9 West Angelas (Marra Mamba ore) mine
    
    
    O/P
    
    
    
    178
    
    
    
    62.1
    
    
    
    max 50m x 50m

    
    
    
    190

    
    

    
    61.6
    
    
    
    max 200m x 50m stockpiles (i)
    
    
    S/P
    
    
    
    0.4
    
    
    
    59.7
    
    
    
    
    
    
    
    6
    
    
    
    58.0MOLYBDENUM
    
    
    
    
    
    

    millions
    

    
    
    
    
    
    
    
    
    
    

    millionsof tonnes



    
    

    %Mo
    

    
    
    
    
    


    of tonnes



    
    

    %MoReserves at operating mineBingham Canyon (US) (gg) mine
    
    
    O/P
    
    
    
    324
    
    
    
    0.047
    
    
    
    88m
    
    
    
    231
    
    
    
    0.048
    
    
    
    106m stockpiles (i)
    
    
    S/P
    
    
    
    35
    
    
    
    0.016
    
    
    
    
    
    
    
    28
    
    
    
    0.009NICKEL
    
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes

    
    
    
    %Ni
    
    
    
    
    
    
    of tonnes

    

    
    
    %NiUndeveloped reserves(q)Eagle (US) (v)
    
    
    U/G
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.6
    
    
    
    3.47
    
    
    
    25m
 Form 20-F 40




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##### Table of Contents



Ore reserves (under Industry Guide 7)
 Type of
    
    
    Proven ore reserves at end 2008

    
    Probable ore reserves at end 2008mine(b)
    
    
    Tonnage
    
    
    Grade
    
    
    Drill hole
    
    
    Tonnage
    
    
    Grade
    
    
    Drill holespacing (jj)
    
    
    
    
    
    
    
    
    
    

spacing (jj)SILVER
    
    
    
    
    
    millions
    
    
    grammes
    
    
    
    
    
    
    millions
    
    
    grammesof tonnes
    
    
    per tonne
    
    
    
    
    
    
    of tonnes
    
    
    per tonneReserves at operating minesBingham Canyon (US) mine
    
    
    O/P
    
    
    
    324
    
    
    
    2.50
    
    
    
    88m
    
    
    
    231
    
    
    
    2.24
    
    
    
    106m stockpiles (i)
    
    
    S/P
    
    
    
    35
    
    
    
    1.73
    
    
    
    
    
    
    
    28
    
    
    
    1.47Grasberg (Indonesia)
    
    
    O/P + U/G
    
    
    
    823
    
    
    
    4.30
    
    
    13m to 47m
    

    
    
    1,842
    
    
    
    4.25
    
    
    42m to 97mTALC (h)
    
    
    
    
    


    millions
    
    
    
    
    
    
    
    
    
    


    millionsof tonnes
    
    
    
    
    
    
    
    
    
    


    of tonnesReserves at operating minesRio Tinto Minerals - talc (hh)
(Europe/N.America/Australia) mine
    
    
    O/P + U/G
    
    
    
    24.1
    
    
    
    
    
    
    10m to 60m
    

    
    
    6.2
    
    
    
    
    
    
    15m to 100m stockpiles (i)
    
    
    S/P
    
    
    
    0.2TITANIUM DIOXIDE FEEDSTOCK (h)
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    
    
    
    
    
    
    
    of tonnesReserves at operating minesQIT (Canada)
    
    
    O/P
    
    
    
    28.6
    
    
    
    
    
    

    < 60m x 60m
    
    
    
    23.5
    
    
    
    
    
    

    > 60m x 60mQMM (Madagascar)
    
    
    D/O
    
    
    
    11.8
    
    
    
    
    
    

    200m x 100m
    
    
    
    0.5
    
    
    
    
    
    

    400m x 100mRBM (South Africa)
    
    
    D/O
    
    
    
    5.7
    
    
    
    
    
    
    
    50m x 50m
    
    
    
    18.6
    
    
    
    
    
    

    800m x 100mURANIUM
    
    
    
    
    
    millions
    
    
    
    
    
    
    
    
    
    
    millionsof tonnes
    
    
    
    %U308
    
    
    
    
    
    
    of tonnes
    
    
    
    %U308Reserves at operating minesEnergy Resources of Australia
(Australia) Ranger #3 mine
    
    
    O/P
    
    
    
    4.7
    
    
    
    0.236
    
    
    
    25m x 25m
    
    
    
    3.2
    
    
    
    0.232
    
    
    
    50m x 50m Ranger #3 stockpiles (i)
    
    
    S/P
    
    
    
    22.3
    
    
    
    0.114Rössing (Namibia) (ii) mine
    
    
    O/P
    
    
    
    30.3
    
    
    
    0.035
    
    
    
    20m x 20m
    
    
    
    156.1
    
    
    
    0.034
    
    
    
    60m x 60m stockpiles (i)
    
    
    S/P
    
    
    
    3.9
    
    
    
    0.040
 Form 20-F 41




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##### Table of Contents



Ore reserves (under Industry Guide 7)
 Notes
 (a)
    
    Commodity prices (based on a three year average historical price to 30 June, 2008) used to
test whether the reported reserve estimates could be economically extracted, include the
following benchmark prices:
 Ore reserve
    
    
    Unit

    
    
    
    US$Aluminium
    
    pound
    
    
    
    1.15Copper
    
    pound
    
    
    
    3.01Gold
    
    ounce
    
    
    
    663Iron OreAustralian benchmark (fines)
    
    dmtu*
    
    
    
    0.79Atlantic benchmark (fines)
    
    dmtu*
    
    
    
    0.82Molybdenum
    
    pound
    
    
    
    28.5Nickel
    
    pound
    
    
    
    12.5Silver
    
    ounce
    
    
    
    12.5
  Prices for all other commodities are determined by individual contract negotiation. The
reported reserves for these commodities have been tested to confirm that they could be
economically extracted using a combination of existing contract prices until expiry and
thereafter three year historical prices.(b)
    
    Type of mine: O/P = open pit, O/C = open cut, U/G = underground, D/O = dredging operation(c)
    
    Reserves of iron ore, bauxite and diamonds are shown as recoverable reserves of marketable
product after accounting for all mining and processing losses. Mill recoveries are therefore
not shown(d)
    
    Following completion of drilling, economic and technical studies at Gove, reserves have
increased.(e)
    
    The increase in reserves at Porto Trombetas operations results from updated models
incorporating additional drilling.(f)
    
    Following the completion of technical and economic studies Sangaredi reserves are presented
for the first time.(g)
    
    Following economic and technical studies at Weipa, reserves have increased.(h)
    
    Reserves of industrial minerals are expressed in terms of marketable product, i.e. after all
mining and processing losses. In the case of borates, the marketable product is
B2O3.(i)
    
    Stockpile components of reserves are shown for all operations.(j)
    
    Coal type: SC = steam/thermal coal; MC = metallurgical/coking coal.(k)
    
    Analyses of coal from the US were undertaken according to American Standard Testing Methods
(ASTM) on an As Received moisture basis whereas the coals from Australia have been analysed
on an Air Dried moisture basis according to Australian Standards (AS). MJ/kg = megajoules
per kilogramme. 1 MJ/kg = 430.2 Btu/lb.(l)
    
    Coal reserves are shown as both recoverable and marketable. The yield factors shown reflect
the impact of further processing, where necessary, to provide marketable coal. All reserves at
operating mines are assigned, all undeveloped reserves are unassigned. By assigned and
unassigned, we mean the following: assigned reserves means coal which has been committed by
the coal company to operating mine shafts, mining equipment, and plant facilities, and all
coal which has been leased by the company to others; unassigned reserves represent coal which
has not been committed, and which would require new mineshafts, mining equipment, or plant
facilities before operations could begin in the property.(m)
    
    During 2008, Rio Tinto acquired a 100 per cent interest in the Colowyo mine, having
previously held a partnership interest. The decrease in reserves follows production.(n)
    
    Reserves at Cordero Rojo have increased following the acquisition of a federal lease,
drilling and technical studies.(o)
    
    Hunter Valley reserves increased commensurate with technical and economic studies, followed
by pit redesigns.(p)
    
    Updated economic studies have led to an increase in reserves at Warkworth.(q)
    
    The term undeveloped reserves is used here to describe material that is economically viable
on the basis of technical and economic studies but for which construction and commissioning
have yet to commence.(r)
    
    Changes in the Escondida reserves resulted from technical studies.(s)
    
    Under the terms of a joint venture agreement between Rio Tinto and FCX, Rio Tinto is entitled
to a direct 40 per cent share in reserves discovered after 31 December 1994 and it is this
entitlement that is shown.(t)
    
    Open pit reserves at Northparkes have increased as a result of converting mineralised
material to reserves. Underground reserves at Northparkes have increased after updated models
following additional drilling, techincal studies and the application of new economic
parameters.(u)
    
    Production, combined with technical updates have led to a reduction of reserves at Palabora.(v)
    
    Additional drilling, mine design changes and upgrading of mineralised material to reserves
have increased reserves at Eagle.(w)
    
    Production depletion and technical studies have resulted in a slight decrease in grade of the
remaining reserve at Diavik.(x)
    
    Hamersley  Brockman 2 reserves decreased commensurate with production and pit redesigns.(y)
    
    An increase in Marandoo reserves resulted from upgrading mineralised material to reserves, a
new geological model and pit redesign.(z)
    
    A model update followed by pit redesign led to decreased Mt Tom Price (Brockman ore)
reserves.(aa)
    
    A decrease in Paraburdoo (Brockman ore) reserves followed from production depletion and a pit redesign.(bb)
    
    Following completion of technical and economic studies the reserve at Western Turner Syncline is reported for the first time.(cc)
    
    Yandicoogina (Pisolite ore HG) reserves reduced as a result of production and technical studies.(dd)
    
    Remodelling and technical studies led to reserve increases for Yandicoogina (Process Product).(ee)
    
    Channar and Eastern Range reserve depletions result from production, technical studies and pit redesign.(ff)
    
    Reserves at Iron Ore Company of Canada are reported as marketable product, using process
upgrade factors derived from current IOCC concentrating and pellet operations. The mined
material equivalent is 1,393 million tonnes at 38 per cent iron.(gg)
    
    Molybdenum grades reflect reconciliation of model and plant grades.(hh)
    
    Rio Tinto Minerals  Talc reserves declined with production and mine redesigns.(ii)
    
    Reserves at Rossing have increased as a result of conversion of mineralised material to
reserves and the development of a new pit design incorporating a new mineralisation model and
results from additional drilling.(jj)
    
    Drill hole spacings are either average distances, a specified grid distance (a regular
pattern of drill holes - the distance between the drill holes along the two axes of the grid
will be aligned to test the size, shape and continuity of the mineral deposit; as such there
may be different distances between the drill holes along the two axes of a grid) or the
maximum drill hole spacing that is sufficient to determine the reserve category for a
particular deposit. As the continuity of mineralisation varies from deposit to deposit, the
drill hole spacing required to categorise a reserve varies between and within deposit types.
    
    In March 2009, Rio Tinto announced the conditional sale of its 100 per cent interest in the
Jacobs Ranch mine.
    
    In January 2009, Rio Tinto announced the conditional sale of its 100 per cent interest in
the Corumba mine. Form 20-F 42




---



##### Table of Contents



Group Mines
  Mine
    
    Location
    
    Access
    
    Title/leaseALUMINIUMCBG Sangaredi(23%)
    
    Conakry, Guinea
    
    Road and air
    
    Lease expires in 2038Ely
    
    Weipa, Queensland,
Australia
    
    Road and air
    
    Alcan Queensland
Pty. Limited
Agreement Act 1965
expires in 2048 with
21 year right of
renewal with a two
year notice periodGBC Awaso(80%)
    
    Awaso, Ghana
    
    Road
    
    Lease expires in
2022, renewable in
25 year periodsGove
    
    Gove, Northern
Territory, Australia
    
    Road, air and port
    
    100% Leasehold (held
in trust by the
Commonwealth on
behalf of the
Traditional Owners
until end of mine
life)MRN Porto Trombetas
(12%)
    
    Porto Trombetas, Brazil
    
    Air or port
    
    Mineral rights
granted for
undetermined period
 Form 20-F 43




---



##### Table of Contents



Group mines (continued)
 Mine
    
    History
    
    Type of mine
    
    Power sourceALUMINIUMCBG Sangaredi (23%)
    
    Bauxite mining
commenced in 1973.
Shareholders are
51% Halco and 49%
Guinea. Alcan holds
45% of Halco since
2004 and off-takes
45%. Current annual
capacity is 13
million tonnes.
    
    Open cut
    
    On site generation
(fuel oil)Ely
    
    Discovered in 1957;
100% secured in
1965. In 1997, Ely
Bauxite Mining
Project Agreement
signed with the
local Aboriginal
land owners.
Bauxite Mining and
Exchange Agreement
signed in 1998 with
Comalco to allow
for extraction of
the ore by Comalco.
Mining commenced in
2006, first ore
extracted in 2007.
    
    Open cut
    
    Supplied by WeipaGBC Awaso (80%)
    
    Bauxite mining
commenced in 1940
(100% British
Aluminium). From
1974 to 1997, Ghana
held 55%, Alcan
45%; since 1998
Alcan 80% Ghana
20%. Annual
capacity is one
million tonnes,
currently limited
to 750,000 tonnes
by rail
infrastructure.
    
    Open cut
    
    Electricity grid
with on site
generation back upGove
    
    Bauxite mining
commenced in 1970
feeding both the
Gove refinery and
export market
capped at two
million tonnes per
annum. Bauxite
export ceased in
2006 with feed
intended for the
expanded Gove
Refinery. Current
production capacity
about ten million
tonnes per annum
with mine life
estimated to 2025.
    
    Open cut
    
    Central power
station located at
the Gove refineryMRN Porto Trombetas
(12%)
    
    Mineral extraction
commenced in April
1979. Initial
production capacity
3.4 million tonnes
annually. From
October 2003,
production capacity
up to 16.3 million
tonnes per year.
Capital structure
currently: Vale
(40%), BHP-Billiton
(14.8%), Rio Tinto
Alcan (12%), CBA
(10%), Alcoa/Abalco
(18.2%) and Hydro
(5%). Production
17.8 million tonnes
of wet and dry
bauxite annually.
    
    Open cut
    
    On site generation
(heavy oil, diesel)
 Form 20-F 44




---



##### Table of Contents



Group mines (continued)
 Mine
    
    Location
    
    Access
    
    Title/leaseALUMINIUM
(continued)Weipa
    
    Weipa, Queensland,
Australia
    
    Road, air and port
    
    Queensland Government
lease expires in 2041
with option of 21 year
extension, then two
years notice of
terminationCOPPEREscondida(30%)
    
    Atacama Desert, Chile
    
    Pipeline and road to
deep sea port at
Coloso
    
    Rights conferred by
Government under
Chilean Mining CodeGrasberg joint
venture(40%)
    
    Papua, Indonesia
    
    Pipeline, road and port
    
    Indonesian Government
Contracts of Work
expire in 2021 with
option of two ten year
extensionsKennecott Utah
CopperBingham
Canyon
    
    Near Salt Lake City,
Utah, US
    
    Pipeline, road and rail
    
    OwnedNorthparkes(80%)
    
    Goonumbla, New South
Wales, Australia
    
    Road and rail
    
    State Government mining
lease issued in 1991
for 21 yearsPalabora(58%)
    
    Phalaborwa, Limpopo
Province, South
Africa
    
    Road and rail
    
    Lease from South
African Government
until deposits
exhausted. Base metal
claims owned by
PalaboraDIAMONDSArgyle Diamonds
    
    Kimberley Ranges,
Western Australia
    
    Road and air
    
    Mining tenement held
under Diamond (Argyle
Diamond Mines Joint
Venture) Agreement Act
1981-1983; lease
extended for 21 years
from 2004Diavik(60%)
    
    Northwest
Territories, Canada
    
    Air, ice road in winter
    
    Mining leases from
Canadian federal
government expiring in
2017 and 2018Murowa(78%)
    
    Zvishavane, Zimbabwe
    
    Road and air
    
    Claims and mining leasesENERGYEnergy Resources of
Australia(68%)
Ranger
    
    Northern Territory,
Australia
    
    Road
    
    Leases granted by State
 Form 20-F 45




---



##### Table of Contents



Group mines (continued)
 Mine
    
    History
    
    Type of mine
    
    Power sourceALUMINIUM
(continued)Weipa
    
    Bauxite mining
commenced in 1961.
Major upgrade
completed in 1998.
Rio Tinto interest
increased from
72.4% to 100% in
2000. In 2004 a
mine expansion was
completed that has
lifted annual
capacity to 16.5
million tonnes.
Mining commenced on
the adjacent Ely
mining lease
in 2006, in
accordance with the
1998 agreement with
Alcan. A second
shiploader that
increases the
shipping capability
was commissioned in
2006
    
    Open cut
    
    On site generation; new
power station
commissioned in 2006COPPEREscondida(30%)
    
    Production started
in 1990 and
expanded in phases
to 2002 when the
new concentrator
was completed;
production from
Norte commenced in
2005 and the
sulphide leach
produced the first
cathode during 2006
    
    Open pit
    
    Supplied from SING grid
under various contracts
with Norgener, Gas
Atacama and EdelnorGrasberg joint
venture(40%)
    
    Joint venture
interest acquired
in 1995. Capacity
expanded to over
and 200,000 tonnes
of ore per day in
1998 with addition
of underground
production of more
than 35,000 tonnes
per day in 2003,
with an expansion
to a sustained rate
of 50,000 tonnes
per day by mid 2007
    
    Open pit and
underground
    
    Long term contract with
US-Indonesian
consortium operated,
purpose built, coal
fired generating
stationKennecott Utah
CopperBingham
Canyon
    
    Interest acquired
in 1989.
Modernisation
includes smelter
complex and
expanded tailings
dam
    
    Open pit
    
    On site generation
supplemented by long
term contracts with
Utah Power and LightNorthparkes(80%)
    
    Production started
in 1995; interest
acquired in 2000
    
    Open pit and
underground
    
    Supplied from State gridPalabora(58%)
    
    Development of 20
year underground
mine commenced in
1996 with open pit
closure in 2003
    
    Underground
    
    Supplied by ESKOM via
grid networkDIAMONDSArgyle Diamonds
    
    Interest increased
from 59.7%
following purchase
of Ashton Mining in
2000. Underground
mine project
approved in 2005 to
extend mine life to
2018
    
    Open pit with
underground expected in
future
    
    Long term contract with
Ord Hydro Consortium
and on site generation
backupDiavik(60%)
    
    Deposits discovered
1994-1995.
Construction
approved 2000.
Diamond production
started 2003.
Second dike closed
off in 2005 for
mining of
additional orebody.
The underground
mine is expected to
start production in
late 2009, ramping
up to full
production in 2012.
    
    Open pit with
underground expected in
future
    
    On site diesel
generators; installed
capacity 27MW with an
upgrade under wayMurowa(78%)
    
    Discovered in 1997.
Small scale
production started
in 2004
    
    Open pit
    
    Supplied by ZESA with
diesel generator backup
 Form 20-F 46




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##### Table of Contents



Group Mines (continued)
 Mine
    
    Location
    
    Access
    
    Title/leaseENERGYEnergy Resources of
Australia(68%)
Ranger
    
    Northern Territory,
Australia
    
    Road
    
    Leases granted by StateRio Tinto Coal Australia
Bengalla (30%) 
Blair Athol (71%) 
Hail Creek (82%) 
Hunter Valley 
Operations (76%) 
Kestrel (80%) 
Mount Thorley 
Operations (61%) 
Warkworth (42%)
    
    New South Wales and
Queensland, Australia
    
    Road, rail,
conveyor and port
    
    Leases granted by StateRio Tinto Energy America
Antelope 
Colowyo 
Cordero Rojo 
Decker (50%) 
Jacobs Ranch 
Spring Creek
    
    Wyoming, Montana and
Colorado, US
    
    Rail and road
    
    Leases from US and
State Governments and
private parties, with
minimum coal
production levels, and
adherence to permit
requirements and
statutesRössing Uranium(69%)
    
    Namib Desert, Namibia
    
    Rail, road and port
    
    Federal leaseINDUSTRIAL
MINERALSRio Tinto Minerals:
Boron
    
    California, US
    
    Road, rail and port
    
    OwnedRio Tinto Minerals: Talc
    
    Trimouns, France (other
smaller operations in
Australia, Europe and
North America)
    
    Road and rail
    
    Owner of ground
(orebody) and long
term lease agreement
to 2012QIT-Fer et Titane Lac Tio
    
    Havre-Saint-Pierre,
Quebec, Canada
    
    Rail and port (St
Lawrence River)
    
    Mining covered by two
concessions granted by
State in 1949 and 1951
which, subject to
certain Mining Act
restrictions, confer
rights and obligations
of an ownerQIT Madagascar Minerals
(80%)
    
    Fort-Dauphin, Madagascar
    
    Road and port
    
    Mining leaseRichards Bay Minerals
(50%)
    
    Richards Bay,
KwaZulu-Natal, South
Africa
    
    Rail, road and port
    
    Long term renewable
mineral leases; State
lease for Reserve 4
initially runs to the
end of 2022; Ingonyama
Trust lease for
Reserve10 runs to
2022. Both mineral
leases are required to
be converted to new
order mining rights by
30 April 2009 in terms
of South African
legislation. An
application for
conversion was made in
2006 for the Ingonyama
Trust mineral lease,
and an application
was made in
2008 for the
conversion of the
State mineral lease
 Form 20-F 47




---



##### Table of Contents



Group Mines (continued)
 Mine
    
    History
    
    Type of mine
    
    Power sourceENERGYEnergy Resources of
Australia(68%)
Ranger
    
    Mining commenced in
1981. Interest
acquired through
North in 2000. Life
of mine extension
to 2020 announced
in 2007
    
    Open pit
    
    On site diesel/steam power
generationRio Tinto Coal Australia
Bengalla (30%) 
Blair Athol (71%) 
Hail Creek (82%) 
Hunter Valley 
Operations (76%) 
Kestrel (80%) 
Mount Thorley 
Operations (61%) 
Warkworth (42%)
    
    Peabody Australian
interests acquired
in 2001. Production
started for export
at Blair Athol and
adjacent power
station at Tarong
in 1984. Kestrel
acquired and
recommissioned in
1999. Hail Creek
started in 2003
    
    Open cut and
underground (Kestrel)
    
    State owned gridRio Tinto Energy America
Antelope 
Colowyo 
Cordero Rojo 
Decker (50%) 
Jacobs Ranch 
Spring Creek
    
    Antelope, Spring
Creek, Decker and
Cordero acquired in
1993, Cordero Rojo
in 1997, Colowyo in
1995, Caballo Rojo
in 1997, Jacobs
Ranch in 1998 and
West Antelope in
2004
    
    Open cut
    
    Supplied by IPPs and
Cooperatives through
national grid serviceRössing Uranium(69%)
    
    Production began in
1978. Life of mine
extension to 2016
approved in 2005
    
    Open pit
    
    Namibian National PowerINDUSTRIAL
MINERALSRio Tinto Minerals: Boron
    
    Deposit discovered
in 1925, acquired
by Rio Tinto in
1967
    
    Open pit
    
    On site co-generation unitsRio Tinto Minerals: Talc
    
    Production started
in 1885; acquired
in 1988.
(Australian mine
acquired in 2001)
    
    Open pit
    
    Supplied by Atel and on
site generation units.
Australian mine power
supplied by Western PowerQIT-Fer et Titane Lac Tio
    
    Production started
in 1950; interest
acquired in 1989
    
    Open pit
    
    Long term contract with
Hydro-QuebecQIT Madagascar Minerals
(80%)
    
    Began as
exploration project
1980s; construction
approved 2005;
ilmenite production
started end of 2008
    
    Mineral sands dredging
    
    On site diesel generatorsRichards Bay Minerals
(50%)
    
    Production started
in 1977; interest
acquired in 1989.
Fifth dredge
commissioned in
2000
    
    Beach sand dredging
    
    Contract with ESKOM
 Form 20-F 48




---



##### Table of Contents



Group Mines (continued)
 Mine
    
    Location
    
    Access
    
    Title/leaseIRON OREHamersley Iron
Brockman 
Marandoo 
Mount Tom Price 
Nammuldi 
Paraburdoo 
Yandicoogina 
Channar (60%) 
Eastern Range (54%)
    
    Hamersley Ranges, Western
Australia
    
    Railway and port
(owned by Hamersley
Iron and operated
by Pilbara Iron)
    
    Agreements for life
of mine with
Government of
Western AustraliaHope Downs Joint
Venture(50% mine,
100%
infrastructure)
Hope Downs 1
    
    Pilbara region, Western
Australia
    
    Railway owned and
operated by Rio
Tinto
    
    Agreements for life
of mine with
Government of
Western AustraliaIron Ore Company of
Canada(59%)
    
    Labrador City, Province of
Newfoundland and Labrador
    
    Railway and port
facilities in
Sept-Iles, Quebec
(owned and operated
by IOC)
    
    Sublease with the
Labrador Iron Ore
Royalty Income Fund
which has lease
agreements with the
Government of
Newfoundland and
Labrador that are
due to be renewed
in 2020 and 2022Rio Tinto Brasil
Corumbá
    
    Matto Grosso do Sul, Brazil
    
    Road, air and river
    
    Government licence
for undetermined
periodRobe River Iron
Associates(53%) 
Mesa J 
West Angelas
    
    Pilbara region, Western
Australia
    
    Railway and port
(owned by Robe
River and operated
by Pilbara Iron)
    
    Agreements for life
of mine with
Government of
Western AustraliaDampier Salt(68.4%)
    
    Dampier, Lake Macleod and
Port Hedland, Western
Australia
    
    Road and port
    
    State agreements
(mining leases)
expiring in 2013 at
Dampier, 2018 at
Port Hedland and
2021 at Lake
MacLeod with
options renew in
each case
 Form 20-F 49




---



##### Table of Contents



Group mines (continued)
 Mine
    
    History
    
    Type of mine
    
    Power sourceIRON OREHamersley Iron
Brockman 
Marandoo 
Mount Tom Price 
Nammuldi 
Paraburdoo 
Yandicoogina 
Channar (60%) 
Eastern Range (54%)
    
    Annual capacity
increased to 68
million tonnes
during 1990s.
Yandicoogina first
ore shipped in 1999
and port capacity
increased. Eastern
Range first shipped
ore in 2004
    
    Open pit
    
    Supplied through
the integrated
Hamersley and Robe
power network
operated by Pilbara
IronHope Downs Joint
Venture(50% mine,
100%
infrastructure) 
Hope Downs 1
    
    Joint venture
venture between Rio
Tinto and Hancock
Prospecting Pty
Limited.
Construction of
Stage 1 to 22
million tonnes per
annum commenced
April 2006 and
first production
occurred November
2007. Stage 2 to an expected 30
million tonnes per
annum has been
approved and is
to be
completed by Q1
2009
    
    Open pit
    
    Supplied through
the integrated
Hamersley and Robe
power network
operated by Pilbara
IronIron Ore Company of
Canada(59%)
    
    Current operation
began in 1962 and
has processed over
one billion tonnes
of crude ore since.
Annual capacity now
17.5 million tonnes
of concentrate of
which 13.5 million
tonnes can be
pelletised
    
    Open pit
    
    Supplied by
Newfoundland Hydro
under long term
contractRio Tinto Brasil
Corumbá
    
    Iron ore production
started in 1978;
interest acquired
in 1991
    
    Open pit
    
    Supplied by ENERSULRobe River Iron
Associates(53%) 
Mesa J 
West Angelas
    
    First shipment in
1972. Annual sales
reached 30 million
tonnes in late
1990s. Interest
acquired in 2000
through North
acquisition. West
Angelas first ore
shipped in 2002 and
mine expanded in
2005
    
    Open pit
    
    Supplied through
the integrated
Hamersley and Robe
power network
operated by Pilbara
IronDampier Salt(68.4%)
    
    Construction of the
Dampier field
started in 1969;
first shipment in
1972. Lake MacLeod
was acquired in
1978 as an
operating field.
Port Headland was
acquired in 2001 as
an operating field
    
    Solar evaporation
of seawater
(Dampier and Port
Headland) and
underground brine
(Lake MacLeod);
dredging of gypsum
from surface of
Lake MacLeod
    
    Dampier supply from
Hamersley Iron Pty
Ltd; Lake MacLeod
from Western Power
and on site
generation units;
Port headland from
Western Power
 Form 20-F 50




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##### Table of Contents



Group power stations
  Smelter/refinery
    
    Location
    
    Title/lease
    
    Plant type/product
    
    Capacity as of
31 December 2008ALUMINIUMGladstone Power 
Station(42%)
    
    Gladstone, Queensland,
Australia
    
    100% Freehold
    
    Thermal power station
    
    1,680 megawattsHighlands Power 
Stations
    
    Lochaber, Kinlochleven, UK
    
    100% Freehold
    
    Hydro-electric power
    
    80 megawattsLynemouth Power Station
    
    Lynemouth, UK
    
    100% Freehold
    
    Thermal power station
    
    420 megawattsKemano Power Plant
    
    Kemano, British Columbia,
Canada
    
    100% Freehold
    
    Hydro-electric power
    
    896 megawattsQuebec Power Stations
    
    The Saguenay, Quebec,
Canada
(Chute-a-Caron, Chute a
la Savanne, Chute-
des-Passes, Chute du
Diable, Isle-Maligne,
Shipshaw)
    
    100% Freehold
    
    Hydro-electric power
    
    2,687 megawattsVigelands Power Station
    
    Nr Kristiansand, Norway
    
    100% Freehold
    
    Hydro-electric power
    
    26 megawattsGroup smelters and refineriesRio Tinto
share 100% unless statedSmelter/refinery
    
    Location
    
    Title/lease
    
    Plant type/product
    
    Capacity as of
31 December 2008ALUMINIUMAlma
    
    Alma, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
rod, t-foundry,
sow, molten metal
    
    423,000 tonnes per
year aluminiumAlouette(40%)
    
    Sept-Iles, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
ingot, sow
    
    590,000 tonnes per
year aluminiumAlucam(47%)
    
    Edea, Cameroon
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, ingot
    
    100,000 tonnes per
year aluminiumAnglesey(51%)
    
    Anglesey, Wales, UK
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, block, sow
    
    147,000 tonnes per
year aluminiumArvida
    
    Arvida, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, molten
metal
    
    173,000 tonnes per
year aluminiumBeauharnois
    
    Beauharnois, Quebec,
Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
ingot foundry
    
    52,000 tonnes per
year aluminiumBecancour(25%)
    
    Becancour, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, slab,
t-foundry, t-bar
    
    421,000 tonnes per
year aluminiumBell Bay
    
    Bell Bay, Northern
Tasmania, Australia
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
ingot, block, t-bar
    
    180,000 tonnes per
year aluminiumBoyne Smelters(59%)
    
    Boyne Island,
Queensland, Australia
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
ingot, billet,
t-bar
    
    557,000 tonnes per
year aluminiumDunkerque
    
    Dunkerque, France
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, t-foundry,
t-bar
    
    261,000 tonnes per
year aluminiumGardanne
    
    Gardanne, France
    
    100% Freehold
    
    Refinery producing
specialty aluminas
and smelter grade
aluminas
    
    635,000 tonnes per
year specialty
aluminas (including
133,000 tonnes of
smelter grade
aluminas)
 Form 20-F 51




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##### Table of Contents



Group smelters and refineries (continued)
 Smelter/refinery
    
    Location
    
    Title/lease
    
    Plant type/product
    
    Capacity as of
31 December 2008ALUMINIUM (continued)Gove
    
    Gove, Northern Territory,
Australia
    
    100% Leasehold.
(Commonwealth land
held in trust on
behalf of
Traditional
Owners). Numerous
lots with varying
expiry dates
starting 2011
    
    Refinery producing
alumina
    
    2,325,000 tonnes
per year aluminaJonquiere (Vaudreuil)
    
    Jonquiere, Quebec, Canada
    
    100% Freehold
    
    Refinery producing
speciality aluminas
and smelter grade
aluminas
    
    1,500,000 tonnes
per year aluminasGrande-Baie
    
    Saguenay, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, sow, molten
metal
    
    212,000 tonnes per
year aluminiumISAL
    
    Reykjavik, Iceland
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, t-bar
    
    188,000 tonnes per
year aluminiumKitimat
    
    Kitimat, British Columbia, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, slab, ingot
    
    252,000 tonnes per
year aluminiumLaterriere
    
    Saguenay, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, t-bar, molten
metal
    
    234,000 tonnes per
year aluminiumLochaber
    
    Fort William, Scotland, UK
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, t-bar
    
    43,000 tonnes per
year aluminiumLynemouth
    
    Lynemouth, Northumberland, UK
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
slab, t-bar
    
    178,000 tonnes per
year aluminiumQueensland Alumina
(80%)
    
    Gladstone, Queensland,
Australia
    
    73.3% Freehold
26.7% Leasehold (of
which more than 80%
expires in 2026 and
after)
    
    Refinery producing
alumina
    
    3,953,000 tonnes
per year aluminaSao Luis (Alumar)
(10%)
    
    Sao Luis, Maranhao, Brazil
    
    100% Freehold
    
    Refinery producing
alumina
    
    1,400,000 tonnes
per year of alumina
which will increase
to 3,500,000 tonnes
per year after expansion in
2009St-Jean-de-Maurienne
    
    St-Jean-de-Maurienne, France
    
    100% Freehold
    
    Refinery producing
alumina
    
    138,000 tonnes per
year aluminiumSebree
    
    Robards, Kentucky, US
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, ingot
foundry, t-bar
    
    196,000 tonnes per
year aluminiumShawinigan
    
    Shawinigan, Quebec, Canada
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, sow
    
    100,000 tonnes per
year aluminiumSohar(20%)
    
    Sohar, Oman
    
    100% leasehold
expiring in 2035
    
    Aluminium smelter
producing small
ingot and low
profile sow
products
    
    230,000 tonnes per
year aluminiumSORAL(50%)
    
    Husnes, Norway
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet
    
    170,000 tonnes per
year aluminiumTiwai Point (New 
Zealand Aluminium 
Smelters)(79%)
    
    Invercargill, Southland,
New Zealand
    
    19.6% Freehold
80.4% Leasehold
(expiring in 2029
and use of certain
Crown land)
    
    Aluminium Smelter
producing aluminium
ingot, billet t-bar
    
    365,000 tonnes per
year aluminiumTomago(52%)
    
    Tomago, New South Wales,
Australia
    
    100% Freehold
    
    Aluminium smelter
producing aluminium
billet, slab, ingot
    
    527,000 tonnes per
year aluminiumYarwun
    
    Gladstone, Queensland,
Australia
    
    97% Freehold
3% Leasehold
(expiring in 2101
and after)
    
    Refinery producing
alumina
    
    1,400,000 tonnes
per year alumina
 Form 20-F 52




---



##### Table of Contents



Group smelters and refineries (continued)
 Smelter/refinery
    
    Location
    
    Title/lease
    
    Plant type/product
    
    Capacity as of
31 December 2008COPPERKennecott Utah Copper
    
    Magna, Salt Lake City,
Utah, US
    
    100% Freehold
    
    Flash smelting
furnace, Flash
convertor furnace
copper refinery
    
    335,000 tonnes per
year refined copperPalabora(58%)
    
    Phalaborwa, South Africa
    
    100% Freehold
    
    Reverberatory
Pierce smith copper
refinery
    
    130,000 tonnes per
year refined copperINDUSTRIAL MINERALSBoron
    
    California, US
    
    100% Freehold
    
    Borates Refinery
    
    565,000 tonnes per
year boric oxideQIT-Fer et Titane 
Sorel Plant
    
    Sorel-Tracy, Quebec, Canada
    
    100% Freehold
    
    Ilmenite smelter
    
    1,100,000 tonnes
per year titanium
dioxide slag,
900,000 tonnes per
year ironRichards Bay Minerals
(50%)
    
    Richards Bay, South Africa
    
    100% Freehold
    
    Ilmenite smelter
    
    1,060,000 tonnes
per year titanium
dioxide slagIRON OREHismelt(60%)
    
    Kwinana, Western Australia
    
    100% Leasehod
(expiring in 2010
with rights of
renewal for further
25 year terms)
    
    HIsmelt ironmaking
plant producing pig
iron
    
    800,000 tonnes per
year pig ironIOC Pellet Plant(59%)
    
    Labrador City,
Newfoundland and Labrador,
Canada
    
    100% Leaseholds
(expiring in 2020,
2022 and 2025 with
rights of renewal
for further terms
of 30 years)
    
    Pellet induration
furnaces producing
multiple iron ore
pellet types
    
    13,500,000 tonnes
per year pellet
 Form 20-F 53




---



##### Table of Contents



Item 4A.
    
    Unresolved Staff Comments
  
 Item 5.
    
    Operating and Financial Review and Prospects
     
    
    Chairmans statement providing a high level review of the Group
    
    Chief executives message providing a high level review of the Groups operations
    
    Recent developments  Chinalco strategic partnership
    
    Group financial performance
    
    Operating reviews for each of the principal product groups and global support groups
    
    Financial review of the Group
 Chairmans statement
 Despite a sharp reversal in prices, the strong medium to long run outlook for commodity markets has
not fundamentally changed
 
    
    At the end of 2008 many metals and minerals prices remained well above the historical
trend.
    
    Subdued conditions are expected in early 2009.
    
    Chinese investment is expected to start gaining strength in the second half of 2009.
    
    Marginal producers are expected to curtail supply.
      Form 20-F 54




---



##### Table of Contents



Results and dividends
 BHP Billitons approach
  Proposed transaction with Chinalco
 Value creation strategy
    Board and governance*  The way we work
 Audit committee
  Sustainable development
 Form 20-F 55




---



##### Table of Contents



Outlook
    Our people
  Paul Skinner
 Note
 Chief executives message
 An extraordinary year
  Form 20-F 56




---



##### Table of Contents



How we manage for value
         ®
  A stable financial position
   Form 20-F 57




---



##### Table of Contents



Market conditions
       Looking to future growth
       A new reality
    Tom Albanese
 Form 20-F 58




---



##### Table of Contents



Recent developments  Chinalco strategic partnership
     Transaction overview
 
    
    An investment by Chinalco in certain aluminium, copper and iron ore joint ventures
totalling US$12.3 billion; and
    
    The issue of subordinated convertible bonds in two tranches with conversion prices of US$45
and US$60 in each of Rio Tinto plc and Rio Tinto Limited for a total consideration of US$7.2
billion. If converted, the subordinated convertible bonds would increase Chinalcos current
shareholding to 19.0 per cent in Rio Tinto plc and 14.9 per cent in Rio Tinto Limited,
equivalent to an 18.0 per cent interest in the Group.
     
    
    A link to Chinalcos strong relationships within China, which Rio Tinto believes will
continue to be the main driver of commodity market growth over the longer term.
    
    The strategic alliance creates the opportunity for joint ventures and project development
in emerging economies. The two groups bring complementary skills including Chinalcos
capabilities to deliver infrastructure projects, and Rio Tintos leadership in operational
excellence and sustainable development.
    
    Rio Tinto will enter into a landmark joint venture for exploration in China in partnership
with Chinalco.
    
    The Chinalco relationship will facilitate access for Rio Tinto to funding from Chinese
financial institutions for project development.
   Strategic partnership investments
   Form 20-F 59




---



##### Table of Contents



Business
    
    Strategic
    
    
    Rio Tintos
    
    
    Chinalcos proposed
    
    
    Rio Tintospartnership
    
    
    existing
    
    
    share of Rio
    
    
    resultingeconomic
    
    
    Tintos
    
    
    economicinterest
    
    
    economic interest
    
    
    interestWeipa
    
    Aluminium
    
    
    100
    %
    
    
    30
    %
    
    
    70
    %Yarwun
    
    Aluminium
    
    
    100
    %
    
    
    50
    %
    
    
    50
    %Boyne
    
    Aluminium
    
    
    59.4
    %
    
    
    49
    %
    
    
    30
    %Gladstone
Power Station
    
    Aluminium
    
    
    42.1
    %
    
    
    49
    %
    
    
    21.5
    %Escondida
    
    Copper
    
    
    30
    %
    
    
    49.75
    %
    
    
    15
    %Grasberg
    
    Copper
    
    
    40
    %
    
    
    30
    %
    
    
    28
    %La Granja
    
    Copper
    
    
    100
    %
    
    
    30
    %
    
    
    70
    %Kennecott
Utah Copper
    
    Copper
    
    
    100
    %
    
    
    25
    %
    
    
    75
    %Hamersley Iron
    
    Iron Ore
    
    
    100
    %
    
    
    15
    %
    
    
    85
    %Development
Fund *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50
    %
  Product group strategic alliances
      Exploration
 Project development fund
 Secondment policy
 Relationship agreement
 Form 20-F 60




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##### Table of Contents




    
    Rio Tinto is capable of carrying on its business independently of Chinalco as a significant
shareholder.
    
    Transactions and relationships between Chinalco (or any of its associates) and Rio Tinto
are at an arms length and on normal commercial terms.
    
    Chinalco shall be entitled to nominate up to two directors (one of whom shall be an
independent director) to the Rio Tinto board as long as it continues to have the right to hold
at least 14.9 per cent of the aggregate publicly held share capital of Rio Tinto (assuming
conversion of the convertible bond). Should Chinalcos shareholding entitlement in Rio Tinto
fall below 14.9 per cent, (but remain above 9.9 per cent) Chinalco shall be entitled to
nominate one director to the Rio Tinto board.
    
    Directors of Rio Tinto nominated by Chinalco shall not be permitted to vote on any board
resolution on any matter involving Chinalco or where the board determines in accordance with
the boards policy that there is a conflict of interest.
  Convertible bonds
   
    
    107 per cent for Tranche A and 176 per cent for Tranche B to the Rio Tinto plc closing
price on 30 January 2009.
    
    68 per cent for Tranche A and 124 per cent for Tranche B to the Rio Tinto Limited closing
price on 30 January 2009.
   Financial impact
 Implementation agreement
 Break fee obligations
 
    
    The Rio Tinto board withdraws or adversely changes its recommendation that Rio Tinto
shareholders approve the resolutions necessary for the transaction.
    
    The Rio Tinto board recommends a competing proposal.
  
    
    Despite a triggering event as defined in the agreement, Rio Tinto shareholders approve the
resolutions necessary for the
 Form 20-F 61




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##### Table of Contents



transaction.
    
    The Rio Tinto board has not withdrawn or adversely changed their recommendation and Rio
Tinto shareholders do not approve the resolutions necessary for the transaction, or all or
part of the transaction does not complete because a condition precedent is not satisfied.
    
    An independent expert determines that the transaction is not fair and reasonable.
    
    The implementation agreement has been terminated or Rio Tinto is unilaterally entitled to
terminate the implementation agreement.
  Exclusivity arrangements
   Liquidated damages
 Shareholder approvals
 Form 20-F 62




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##### Table of Contents



Group financial performance
  KPI
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mUnderlying earnings
    
    
    10,303
    
    
    
    7,443
    
    
    
    7,338
    
    
    
    4,955
    
    
    
    2,272Net debt
    
    
    38,672
    
    
    
    45,191
    
    
    
    2,437
    
    
    
    1,313
    
    
    
    3,809Capital expenditure
    
    The Groups capital projects are listed on pages 26 to
27.Total shareholder return (TSR)
    
    
    (71.3
    )%
    
    
    91.8
    %
    
    
    7.6
    %
    
    
    78.4
    %
    
    
    3.0
    %
 Acquisition of Alcan
 Net earnings and underlying earnings
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mProfit for the year from continuing operations
    
    
    5,436
    
    
    
    7,746
    
    
    
    7,867Loss after tax from discontinued operations
    
    
    (827
    )
    
    
    
    
    
    
    Profit for the year
    
    
    4,609
    
    
    
    7,746
    
    
    
    7,867Less: attributable to outside equity shareholders
    
    
    (933
    )
    
    
    (434
    )
    
    
    (429
    )Attributable to equity shareholders of Rio Tinto (net earnings)
    
    
    3,676
    
    
    
    7,312
    
    
    
    7,438Exclusions from underlying earnings
    
    
    6,627
    
    
    
    131
    
    
    
    (100
    )Underlying earnings attributable to shareholders of Rio Tinto
    
    
    10,303
    
    
    
    7,443
    
    
    
    7,338
 2008 financial performance compared with 2007
 Underlying
    
    
    Netearnings
    
    
    earningsChanges in underlying earnings and net
earnings 2007  2008
    
    
    
    
    
    US$m
    
    
    US$m2007 Underlying earnings and net earnings
    
    
    
    
    
    
    7,443
    
    
    
    7,312Effect of changes in:Prices
    
    
    4,983Exchange rates
    
    
    299Volumes
    
    
    233General inflation
    
    
    (336
    )Energy
    
    
    (219
    )Other cash costs
    
    
    (882
    )Exploration and evaluation costs (net of disposals of exploration properties)
    
    
    (47
    )Interest/tax/other
    
    
    (1,171
    )Total change in Underlying earnings
    
    
    
    
    
    
    2,860
    
    
    
    2,860Profits on disposal of interests in businesses
    
    
    
    
    
    
    
    
    
    
    1,469Impairment (charges) less reversals
    
    
    
    
    
    
    
    
    
    
    (8,293
    )Exchange differences and gains/(losses) on derivatives
    
    
    
    
    
    
    
    
    
    
    653Other, including divestment and takeover defence costs
    
    
    
    
    
    
    
    
    
    
    (325
    )2008 Underlying earnings and net earnings
    
    
    
    
    
    
    10,303
    
    
    
    3,676
  Form 20-F 63




---



##### Table of Contents



Year end price
    
    
    Average price
    
    
    Average priceCommodity
    
    2008
    
    
    2008
    
    
    2007Copper (USc/lb)
    
    
    131.6
    
    
    
    319.5
    
    
    
    323.7Aluminium (USc/lb)
    
    
    66.0
    
    
    
    117.7
    
    
    
    119.8Gold (US$/oz)
    
    
    865
    
    
    
    872
    
    
    
    691Molybdenum (US$/lb)
    
    
    9.5
    
    
    
    30.8
    
    
    
    29.9
        2007 financial performance compared with 2006
 Underlying
    
    
    Netearnings
    
    
    earningsChanges in underlying earnings and net
earnings 2006  2007
    
    
    
    
    
    US$m
    
    
    US$m2006 Underlying earnings and net earnings
    
    
    
    
    
    
    7,338
    
    
    
    7,438Effect of changes in:Prices
    
    
    1,364Exchange rates
    
    
    (403
    )Volumes
    
    
    516General inflation
    
    
    (218
    )Cash costs
    
    
    (442
    )Non-cash costs
    
    
    (201
    )Exploration, evaluation and technology costs (net of disposals of exploration properties)
    
    
    (309
    )Tax/other
    
    
    (202
    )Total change in Underlying earnings
    
    
    
    
    
    
    105
    
    
    
    105Impairment (charges) less reversals
    
    
    
    
    
    
    
    
    
    
    (157
    )Exchange differences and gains/(losses) on derivatives
    
    
    
    
    
    
    
    
    
    
    176Other, including non recurring consequences of Alcan acquisition
    
    
    
    
    
    
    
    
    
    
    (250
    )2007 Underlying earnings and net earnings
    
    
    
    
    
    
    7,443
    
    
    
    7,312
 Form 20-F 64




---



##### Table of Contents



Exclusions from underlying earnings 20062008
 2008
    
    
    2007
    
    
    2006Exclusions from underlying earnings 20062008
    
    US$m
    
    
    US$m
    
    
    US$mProfit less losses on disposal of interests in businesses
    
    
    1,470
    
    
    
    1
    
    
    
    3Impairment
(charges) less reversals
    
    
    (7,579
    )
    
    
    (113
    )
    
    
    44Impairment of discontinued operations
    
    
    (827
    )
    
    
    
    
    
    
    Exchange
gains/(losses) on external debt and intragroup balances
    
    
    960
    
    
    
    156
    
    
    
    (14
    )Gains/(losses) on currency and interest rate derivatives not
qualifying for hedge accounting
    
    
    (22
    )
    
    
    34
    
    
    
    30Losses on commodity derivatives not qualifying for hedge accounting
    
    
    (95
    )
    
    
    
    
    
    
    Other exclusions
    
    
    (534
    )
    
    
    (209
    )
    
    
    37Total excluded in arriving at underlying earnings
    
    
    (6,627
    )
    
    
    (131
    )
    
    
    100
     Form 20-F 65




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##### Table of Contents



Group financial results by product group 2006  2008
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mIron Ore
    
    
    6,017
    
    
    
    2,664
    
    
    
    2,265Aluminium
    
    
    1,184
    
    
    
    1,097
    
    
    
    746Copper & Diamonds
    
    
    1,758
    
    
    
    3,751
    
    
    
    3,737Energy & Minerals
    
    
    2,887
    
    
    
    687
    
    
    
    899Other operations
    
    
    (52
    )
    
    
    15
    
    
    
    33Other items
    
    
    (337
    )
    
    
    (526
    )
    
    
    (241
    )Exploration and evaluation
    
    
    (124
    )
    
    
    20
    
    
    
    (84
    )Net interest
    
    
    (1,030
    )
    
    
    (265
    )
    
    
    (17
    )Group underlying earnings
    
    
    10,303
    
    
    
    7,443
    
    
    
    7,338Exclusions from underlying earnings
    
    
    (6,627
    )
    
    
    (131
    )
    
    
    100Net Earnings
    
    
    3,676
    
    
    
    7,312
    
    
    
    7,438
 Form 20-F 66




---



##### Table of Contents



Aluminium
 The aluminium product group, Rio Tinto Alcan, is the global leader in the aluminium industry. Its
operations, which are closely integrated across the world, include mining high quality bauxite,
refining alumina for both primary aluminium production and specialty markets, and producing primary
aluminium at some of the lowest cost, most technologically advanced aluminium smelters in the
industry.
 Rio Tinto shareMined bauxite
    
    million tonnes2004
    
    
    12.82005
    
    
    15.62006
    
    
    16.32007
    
    
    20.92008
    
    
    35.0
 Rio Tinto shareBauxite reserves
    
    million tonnes2004
    
    
    1,1462005
    
    
    1,2112006
    
    
    1,1932007
    
    
    1,3872008
    
    
    1,966
 Rio Tinto shareAlumina production
    
    000 tonnes2004
    
    
    2,2312005
    
    
    2,9632006
    
    
    3,2472007
    
    
    3,8772008
    
    
    9,009
 Rio Tinto shareAluminium production
    
    000 tonnes2004
    
    
    8372005
    
    
    8542006
    
    
    8452007
    
    
    1,4732008
    
    
    4,062
 Aluminium group underlying earnings contribution*
    
    US$m2004
    
    
    3312005
    
    
    3922006
    
    
    7462007
    
    
    1,0972008
    
    
    1,184
 Underlying earnings contribution* 2006-2008
    
    US$m2006 Underlying earnings
    
    
    746Effect of changes in:Prices and exchange
    
    
    (12
    )Inflation
    
    
    (37
    )Volumes
    
    
    11Costs
    
    
    (36
    )Tax and other
    
    
    4252007 Underlying earnings
    
    
    1,097Effect of changes in:Prices and exchange
    
    
    (207
    )Inflation
    
    
    (55
    )Volumes
    
    
    930Costs
    
    
    (86
    )Tax and other
    
    
    (495
    )2008 Underlying earnings
    
    
    1,184
 *
    
    A reconciliation of the net earnings with underlying earnings for 2006, 2007 and 2008 as
determined under IFRS is set out on page 63.All amounts presented by the product groups exclude net interest and other centrally reported
items.
 Form 20-F 67




---



##### Table of Contents



STRATEGY
 
    
    Maximising shareholder return and value generated from the groups high quality assets.
    
    Improving the groups relative position on the global cost curve of aluminium assets.
    
    Achieving excellence in health, safety and environmental performance, including in relation
to climate change.
    
    Continuing excellence in operations and industry leading technology.
    
    Attaining preferred supplier status with responsiveness to customer needs and market
dynamics.
    
    Becoming an employer of choice.
 KEY ACHIEVEMENTS
 
    
    Record bauxite and alumina production levels, and 57 per cent of aluminium smelters
achieved record hot metal production levels.
    
    On target delivery of announced synergies, with the integration of Alcan achieving an after
tax saving of US$585 million.
    
    Commissioning of the Sohar smelter in Oman and first production of aluminium.
    
    Investment of an additional US$300 million to further the modernisation of the Kitimat
aluminium smelter in British Columbia, Canada.
    
    Pre-feasibility study for two additional phases of a new AP50 smelting technology pilot
plant to evaluate the addition of another 150,000 to 170,000 tonnes of capacity.
    
    Official inauguration of the newly commissioned pilot plant for the treatment of spent
potlining in Saguenay, Quebec.
    
    Significant progress on the construction of the expansion of the Yarwun alumina refinery in
Australia.
    
    Continuing expansion of capacity at the Gove alumina refinery in Australia.
    
    Effective transition of Lannemezan workforce to new employment following closure of
smelter.
    
    Successful financial and cultural integration between Rio Tinto Aluminium and Alcan with
minimum loss of key resources.
    
    New effective global leadership structure in place.
 KEY PRIORITIES FOR 2009
 
    
    Delivering commitments to health, safety and environmental objectives, and to customers and
stakeholders, while adjusting to current market conditions.
    
    Increasing efficiency and speed of execution throughout the organisation.
    
    Maintaining focus on growth opportunities and strategic capabilities.
    
    Maximising free cash flow.
 OVERVIEW OF SUSTAINABLE DEVELOPMENTSafety
 Form 20-F 68




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##### Table of Contents



All injury frequency rate
    
    Per 200,000  hours worked2004
    
    
    1.462005
    
    
    1.412006
    
    
    1.452007
    
    
    1.672008
    
    
    1.24
 Greenhouse
Gas Emissions
  Total greenhouse gas emissions
    
    Million tonnes carbon dioxide equivalent2004
    
    
    10.72005
    
    
    11.42006
    
    
    11.92007
    
    
    32.72008
    
    
    32.5
  INTEGRATION OF ALCAN
  FINANCIAL PERFORMANCE2008 compared with 2007 (combined)
 Form 20-F 69




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##### Table of Contents



2007 compared with 2006 (not combined)
 BAUXITE
& ALUMINA OPERATIONSBauxite
  
    
    The largest reserves and mineralised material
inventory in the industry, which are expected to ensure sufficient bauxite supply to sustain Rio
Tinto Alcans long term growth strategy.
    
    Annual production capacity that supports both internal alumina production and significant
sales to third parties.
    
    Scope for expansion of annual production in the long term.
    
    Interests in three of the four largest bauxite mines in the world (Weipa, Porto Trombetas
and Sangaredi), located in the top three bauxite reserve countries (Australia, Brazil and
Guinea).
    
    Regional concentration of reserves (Weipa, Ely, Gove), which is expected to provide the
basis for future optimisation opportunities based on their geographical proximity.
    Alumina
  
    
    Recognised technological capability backed by a strong research and development team.
    
    Deployment of leading technology in expansion projects under way or planned at Gove and Yarwun.
    
    Modern, best in class assets with expansion optionality.
    
    Procurement synergies through ownership of the north eastern Australia alumina refineries
at Gove, Yarwun and QAL. Their proximity to the Weipa and Gove bauxite mines provides
opportunities for operational optimisation as experience, best practices and supply chain
benefits are shared.
  Form 20-F 70




---



##### Table of Contents



2008 operating performance
     PRIMARY
METAL OPERATIONS
 Smelting facilities
  
    
    Ownership and progressive implementation of industry leading, proprietary Aluminium
Pechiney (AP) series pre-bake cell technology, one of the most efficient aluminium smelting
technologies in the world from an energy and operating cost perspective.
    
    A modern smelter fleet, with over 70 per cent of overall smelting capacity being less than
30 years old, a significantly greater proportion than the industry average.
    
    Ownership of around half of its smelters electricity generation needs, compared to an
industry average of approximately 30 per cent.
    
    Continued industry leadership and operational expertise, demonstrated by safety
improvements and an ability to extract on average 1.1 per cent per annum production capacity
improvement.
  Form 20-F 71




---



##### Table of Contents



Power facilities
     Technology
     Other businesses
 Form 20-F 72




---



##### Table of Contents



2008 operating performance
  RIO TINTO ALCAN PROJECTS
 BAUXITE
& ALUMINA  Weipa
 Yarwun
   Gove
  São Luis  Alumar
 Guinea
 Madagascar
 Form 20-F 73




---



##### Table of Contents



Primary
Metal  Sohar
 Hydropower
 Spent potlining facility
 Kitimat
  AP50 pilot plant, Quebec
 Alma
 Cameroon
 Boyne Island Smelters Limited
 Form 20-F 74




---



##### Table of Contents



Coega
 Saudi Arabia
 Sarawak
 OUTLOOK
 Bauxite & Alumina outlook
     Primary Metal outlook
    ALCAN ENGINEERED PRODUCTS
 Form 20-F 75




---



##### Table of Contents



2008 operating performance
 ALCAN PACKAGING
    Form 20-F 76




---



##### Table of Contents



Copper and Diamonds
 The Copper & Diamonds portfolio comprises a diverse mix of operations and projects.
 Rio Tinto shareMined copper
    
    000 tonnes2004
    
    
    7532005
    
    
    7842006
    
    
    8032007
    
    
    7382008
    
    
    699Rio Tinto shareCopper reserves
    
    000 tonnes2004
    
    
    19,3122005
    
    
    18,8442006
    
    
    17,9892007
    
    
    17,2582008
    
    
    16,718Rio Tinto shareRefined copper
    
    000 tonnes2004
    
    
    3332005
    
    
    3142006
    
    
    2992007
    
    
    3902008
    
    
    322Rio Tinto shareMined diamonds
    
    000 carats2004
    
    
    25,2022005
    
    
    35,6352006
    
    
    35,1622007
    
    
    26,0232008
    
    
    20,816Rio Tinto shareDiamond reserves
    
    000 carats2004
    
    
    174,5002005
    
    
    313,3002006
    
    
    281,5002007
    
    
    255,4002008
    
    
    237,600Copper & Diamonds underlying earnings
contribution*
    
    US$m2004
    
    
    1,0482005
    
    
    2,2732006
    
    
    3,7452007
    
    
    3,7512008
    
    
    1,758Underlying earnings contribution* 2006-2008
    
    US$m2006 Underlying earnings
    
    
    3,745Effect of changes in:Prices and exchange
    
    
    357Inflation
    
    
    (44
    )Volumes
    
    
    362Costs
    
    
    (225
    )Tax and other
    
    
    (444
    )2007 Underlying earnings
    
    
    3,751Effect of changes in:Prices and exchange
    
    
    (117
    )Inflation
    
    
    (61
    )Volumes
    
    
    (1,038
    )Costs
    
    
    (679
    )Tax and other
    
    
    (98
    )2008 Underlying earnings
    
    
    1,758
 Form 20-F 77




---



##### Table of Contents



*
    
    A reconciliation of the net earnings with underlying earnings for 2006, 2007 and 2008 as
determined under IFRS is set out on page 63.
All amounts presented by the product groups exclude net interest and other centrally reported items.
      STRATEGY
Copper
    The way we work
 Diamonds
   KEY ACHIEVEMENTS
Copper
  Form 20-F 78




---



##### Table of Contents



Diamonds
    KEY PRIORITIES FOR 2009
 
    
    Safety will continue to be a paramount concern throughout 2009, particularly in light of
the natural disruption from planned redundancies. Copper & Diamonds intends to continue to
focus on safety improvements for employees and contractors at all sites. Specific areas to
focus on include contractor familiarity and adherence to Rio Tinto standards.
    
    To support the Groups debt reduction targets, Copper & Diamonds intend to optimise cash
management at all operations by implementing working capital initiatives and associated
reporting processes.
    
    Investigations will continue at KUC on the life of mine extension through local drilling
programmes.
    
    Copper Projects will maintain and maximise optionality around key projects despite reduced
capital spending. In particular, deferral periods will be utilised to improve orebody and
technological knowledge.
    
    Palabora Mining Company expects to complete its planned black economic empowerment
transaction.
 OVERVIEW OF SUSTAINABLE DEVELOPMENT
Safety
 Form 20-F 79




---



##### Table of Contents



All injury frequency rate
    
    Per 200,000 hours worked2004
    
    
    1.332005
    
    
    1.652006
    
    
    1.312007
    
    
    1.342008
    
    
    1.03
 Copper
    Diamonds
 Greenhouse gas emissions
 Total greenhouse gas emissions
    
    Million tonnes carbon dioxide equivalent2004
    
    
    2.92005
    
    
    3.02006
    
    
    3.02007
    
    
    3.32008
    
    
    3.3
 Copper
    Diamonds
 Form 20-F 80




---



##### Table of Contents



FINANCIAL PERFORMANCE2008 compared with 2007
         2007 compared with 2006
  Form 20-F 81




---



##### Table of Contents



OPERATIONSCopper  Kennecott Utah Copper
  2008 operating performance
     Principal
operating statistics at KUC
 2008
    
    
    2007
    
    
    2006Rock mined (000 tonnes)
    
    
    153,761
    
    
    
    142,297
    
    
    
    145,343Ore milled (000 tonnes)
    
    
    49,134
    
    
    
    47,525
    
    
    
    47,857Head grades:Copper (%)
    
    
    0.58
    
    
    
    0.53
    
    
    
    0.63Gold (g/t)
    
    
    0.35
    
    
    
    0.38
    
    
    
    0.49Silver (g/t)
    
    
    2.97
    
    
    
    3.00
    
    
    
    3.50Molybdenum (%)
    
    
    0.041
    
    
    
    0.050
    
    
    
    0.057Copper concentrates produced (000 tonnes)
    
    
    931
    
    
    
    889
    
    
    
    1,019Production of metals in copper concentrates:Copper (000 tonnes)
    
    
    238.0
    
    
    
    212.2
    
    
    
    265.6Gold (000 ounces)
    
    
    368
    
    
    
    397
    
    
    
    523Silver (000 ounces)
    
    
    3,414
    
    
    
    3,487
    
    
    
    4,214Molybdenum concentrates produced (000 tonnes)
    
    
    19.4
    
    
    
    26.6
    
    
    
    30.2Contained molybdenum (000 tonnes)
    
    
    10.6
    
    
    
    14.9
    
    
    
    16.8Concentrate smelted on site (000 tonnes)
    
    
    941
    
    
    
    1,103
    
    
    
    918Production of refined metals:Copper (000 tonnes)
    
    
    200.6
    
    
    
    265.6
    
    
    
    217.9Gold (000 ounces)
    
    
    303
    
    
    
    523
    
    
    
    462Silver (000 ounces)
    
    
    3,252
    
    
    
    4,365
    
    
    
    4,152
 Escondida
  2008 operating performance
  Form 20-F 82




---



##### Table of Contents



Principal
operating statistics for Escondida (100 per cent basis)
    
    2008
    
    
    2007
    
    
    2006Rock mined (000 tonnes)
    
    
    405,738
    
    
    
    345,377
    
    
    
    338,583Ore milled (000 tonnes)
    
    
    89,451
    
    
    
    90,697
    
    
    
    84,158Head grade:Copper (%)
    
    
    1.37
    
    
    
    1.64
    
    
    
    1.59Production of contained metalsCopper (000 tonnes)
    
    
    992
    
    
    
    1,247
    
    
    
    1,122Gold (000 ounces)
    
    
    144
    
    
    
    187
    
    
    
    170Silver (000 ounces)
    
    
    6,167
    
    
    
    7,870
    
    
    
    6,646Copper cathode (000 tonnes)
    
    
    258
    
    
    
    238.4
    
    
    
    134.4
    Grasberg joint venture
    2008 operating performance
  Principal
operating statistics for PTFI (100 per cent basis)
    
    2008
    
    
    2007
    
    
    2006Ore milled (000 tonnes)
    
    
    70,595
    
    
    
    77,593
    
    
    
    83,716Head gradesCopper (%)
    
    
    0.83
    
    
    
    0.82
    
    
    
    0.85Gold (g/t)
    
    
    0.66
    
    
    
    1.24
    
    
    
    0.85Silver (g/t)
    
    
    3.21
    
    
    
    3.53
    
    
    
    3.84Production of metals in concentratesCopper (000 tonnes)
    
    
    521.3
    
    
    
    569.4
    
    
    
    610.8Gold (000 ounces)
    
    
    1,199
    
    
    
    2,689
    
    
    
    1,880Silver (000 ounces)
    
    
    4,707
    
    
    
    5,238
    
    
    
    5,609
 Form 20-F 83




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##### Table of Contents



Palabora
    2008 operating performance
   Principal
operating statistics for Palabora
 2008
    
    
    2007
    
    
    2006Ore milled (000 tonnes)
    
    
    12,454
    
    
    
    12,915
    
    
    
    10,730Head grade:Copper (%)
    
    
    0.69
    
    
    
    0.70
    
    
    
    0.71Copper concentrates produced (000 tonnes)
    
    
    286.5
    
    
    
    239.2
    
    
    
    208.9Contained copper (000 tonnes)
    
    
    85.1
    
    
    
    71.4
    
    
    
    61.5New concentrates smelted on site (000 tonnes)
    
    
    261.3
    
    
    
    295.8
    
    
    
    288.5Refined copper produced (000 tonnes)
    
    
    75.9
    
    
    
    91.7
    
    
    
    81.2Magnetite concentrate (000 tonnes)
    
    
    1,951
    
    
    
    1,306
    
    
    
    1,127
 Northparkes Mines
  2008 operating performance
   Form 20-F 84




---



##### Table of Contents



Principal
operating statistics at Northparkes
 2008
    
    
    2007
    
    
    2006Ore milled (000 tonnes)
    
    
    5,244
    
    
    
    5,297
    
    
    
    5,789Head grade:Copper (%)
    
    
    0.54
    
    
    
    0.91
    
    
    
    1.53Gold (g/t)
    
    
    0.26
    
    
    
    0.62
    
    
    
    0.64Production of contained metalsCopper (000 tonnes)
    
    
    24.8
    
    
    
    43.1
    
    
    
    83.3Gold (000 ounces)
    
    
    32.3
    
    
    
    78.8
    
    
    
    94.7
 Kennecott Minerals
  2008 operating performance
 Diamonds  Argyle
 2008 operating performance
  Principal operating statistics at Argyle
 2008
    
    
    2007
    
    
    2006Ore processed (000 tonnes)
    
    
    6,809
    
    
    
    8,625
    
    
    
    8,441Carats produced (000 carats)
    
    
    15,076
    
    
    
    18,744
    
    
    
    29,078
 Diavik Diamonds
 2008 operating performance
 Form 20-F 85




---



##### Table of Contents



Principal
operating statistics at Diavik
 2008
    
    
    2007
    
    
    2006Ore processed (000 tonnes)
    
    
    2,414
    
    
    
    2,400
    
    
    
    2,331Carats produced (000 carats)
    
    
    9,225
    
    
    
    11,943
    
    
    
    9,829
 Murowa
 2008 operating performance
 Principal
operating statistics at Murowa
 2008
    
    
    2007
    
    
    2006Ore processed (000 tonnes)
    
    
    383
    
    
    
    203
    
    
    
    216Carats produced (000 carats)
    
    
    264
    
    
    
    145
    
    
    
    240
 COPPER & DIAMONDS GROUP PROJECTS
    Resolution
    Form 20-F 86




---



##### Table of Contents



Oyu Tolgoi
     La Granja
    Sulawesi Nickel
    Form 20-F 87




---



##### Table of Contents



Eagle
  Pebble
 Entrée Gold
 Argyle underground
 Diavik underground
  Murowa
 Bunder
 OUTLOOK
   Form 20-F 88




---



##### Table of Contents



Form 20-F 89




---



##### Table of Contents



Energy and Minerals
 The Energy & Minerals group comprises thermal coal, coking coal, uranium, borates, talc and
titanium dioxide feedstock operations. It is one of the largest suppliers of these products in its
key markets, the US and Asia. Its coal interests are located in Australia and the US and supply the
seaborne traded and Australian and US domestic markets.
 Rio Tinto shareMined coal
    
    million tonnes2004
    
    
    157.42005
    
    
    153.62006
    
    
    162.32007
    
    
    155.62008
    
    
    160.5Rio Tinto shareMined uranium
    
    000 pounds U3O82004
    
    
    13,1702005
    
    
    14,5112006
    
    
    12,5612007
    
    
    12,6162008
    
    
    14,200Rio Tinto shareCoal reserves
    
    million tonnes2004
    
    
    2,1842005
    
    
    2,1842006
    
    
    1,9752007
    
    
    1,9362008
    
    
    2,002Rio Tinto shareUranium reserves
    
    000 pounds U3O82004
    
    
    70,9832005
    
    
    117,8262006
    
    
    121,5942007
    
    
    136,0272008
    
    
    140,511Energy and minerals underlying earnings contribution*
    
    US$m2004
    
    
    6612005
    
    
    8692006
    
    
    8912007
    
    
    6872008
    
    
    2,887Underlying earnings contribution* 20062008
    
    US$m2006 Underlying earnings
    
    
    891Effect of changes in:Prices and exchange
    
    
    114Inflation
    
    
    (83
    )Volumes
    
    
    11Costs
    
    
    (203
    )Tax and other
    
    
    (43
    )2007 Underlying earnings
    
    
    687Effect of changes in:Prices and exchange
    
    
    1,901Inflation
    
    
    (90
    )Volumes
    
    
    197Costs
    
    
    129Tax and other
    
    
    632008 Underlying earnings
    
    
    2,887
 *
    
    A reconciliation of the net earnings with underlying earnings for 2006, 2007 and 2008 as
determined under IFRS is set out on page 63.All amounts presented by the product groups exclude net interest and other centrally reported
items. Form 20-F 90




---



##### Table of Contents



STRATEGY
      KEY ACHIEVEMENTS
      Form 20-F 91




---



##### Table of Contents



KEY PRIORITIES FOR 2009
 
    
    Continue to improve safety performance
    
    Maximise free cash flow
    
    Continue to operate in a responsible and sustainable manner during the global economic
downturn
    
    Meet customer needs to position the group as the supplier of choice when the global economy
begins to recover
    
    Retain and continue to develop the best people
 OVERVIEW OF SUSTAINABLE DEVELOPMENTSafety
    All injury frequency rate
    
    Per 200,000 hours worked2004
    
    
    1.792005
    
    
    1.292006
    
    
    0.892007
    
    
    0.872008
    
    
    0.65
 Greenhouse Gas Emissions
       Form 20-F 92




---



##### Table of Contents



Total greenhouse gas emissions
    
    Million tonnes carbon dioxide equivalent2004
    
    
    8.82005
    
    
    9.12006
    
    
    9.52007
    
    
    9.72008
    
    
    10.1
 FINANCIAL PERFORMANCE
 2008 compared with 2007
                Form 20-F 93




---



##### Table of Contents



2007 compared with 2006
      OPERATIONS
 Energy Rio Tinto Coal Australia
       2008 operating performance
     Rio Tinto Energy America
  Form 20-F 94




---



##### Table of Contents



2008 operating performance
  Energy Resources of Australia
       2008 operating performance
    Rössing Uranium
    Form 20-F 95




---



##### Table of Contents



2008 operating performance
    Minerals Rio Tinto Minerals
      2008 operating performance
  Rio Tinto Iron and Titanium Quebec Iron & Titanium  Richards Bay Minerals


Form 20-F 96




---



##### Table of Contents



2008 operating performance
    ENERGY & MINERALS GROUP PROJECTS
  Energy Resources of Australia
   Rössing Uranium
      Rio Tinto Coal Australia Clermont
   Rio Tinto Coal Australia Kestrel
  Form 20-F 97




---



##### Table of Contents



Coal & Allied Mount Pleasant
  Coal & Allied Lower Hunter Land
  Rio Tinto Energy America
  QIT Madagascar Minerals
      Kazan trona
  OUTLOOK
 Overview
    Energy
   Form 20-F 98




---



##### Table of Contents



Minerals
   Form 20-F 99




---



##### Table of Contents



Iron Ore
 Rio Tintos Iron Ore group is the second largest supplier to the worlds seaborne iron ore trade
based on 2008 production. It has a global supply capacity to serve both Pacific and Atlantic
markets. RTIO has established a global integrated platform of mines and rail and port
infrastructure, which is designed to respond rapidly to changes in demand for iron ore.
 Rio Tinto shareIron ore production
    
    million tonnes2004
    
    
    107.82005
    
    
    124.52006
    
    
    132.82007
    
    
    144.72008
    
    
    153.4
 Rio Tinto shareIron ore reserves
    
    million tonnes2004
    
    
    1,5122005
    
    
    2,3392006
    
    
    2,4302007
    
    
    2,4492008
    
    
    2,720
 Underlying earnings contribution*
    
    US$m2004
    
    
    5682005
    
    
    1,7362006
    
    
    2,2652007
    
    
    2,6642008
    
    
    6,017
 Changes in underlying earnings 2006
 2008
    
    US$m2006 Underlying earnings
    
    
    2,265Effect of changes in:Prices and exchange rates
    
    
    536General inflation
    
    
    (43
    )Volumes
    
    
    136Costs
    
    
    (255
    )Tax and other
    
    
    252007 Underlying earnings
    
    
    2,664Effect of changes in:Prices and exchange rates
    
    
    3,654General inflation
    
    
    (71
    )Volumes
    
    
    165Costs
    
    
    (446
    )Tax and other
    
    
    512008 Underlying earnings
    
    
    6,017
 *
    
    A reconciliation of the net earnings with underlying earnings for 2006, 2007 and 2008 as
determined under IFRS is set out on page 63. All amounts presented by the product groups exclude
net interest and other centrally reported items.    Form 20-F 100




---



##### Table of Contents



STRATEGY
     KEY ACHIEVEMENTS
      KEY PRIORITIES FOR 2009
      Form 20-F 101




---



##### Table of Contents



OVERVIEW OF SUSTAINABLE DEVELOPMENT
 Safety
    All injury frequency rate
    
    per 200,000 hours worked2004
    
    
    1.802005
    
    
    1.552006
    
    
    1.232007
    
    
    0.962008
    
    
    0.93
 Greenhouse gas emissions
      Total greenhouse gas emissions
    
    Million tonnes carbon dioxide equivalent2004
    
    
    2.42005
    
    
    3.12006
    
    
    3.42007
    
    
    3.52008
    
    
    4.2
 2008 IN REVIEW
     Form 20-F 102




---



##### Table of Contents



FINANCIAL PERFORMANCE
 2008 compared with 2007
    2007 compared with 2006
   OPERATIONS
 Iron ore Hamersley Iron
      Hamersleys total shipments of iron ore to major markets in 2008
    
    Million tonnesChina
    
    
    73.0Japan
    
    
    28.5Other Asia
    
    
    17.9Europe
    
    
    1.3Other
    
    
    0.4121.2
 Note
 Form 20-F 103




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##### Table of Contents



Robe River Iron Associates
     Robes total shipments of iron ore to major markets in 2008
    
    Million tonnesJapan
    
    
    23.2China
    
    
    19.6Europe
    
    
    4.5Other Asia
    
    
    3.050.3
 2008 operating performance
       Iron Ore Company of Canada
   Form 20-F 104




---



##### Table of Contents



IOCs total shipments of iron ore to major markets in 2008
    
    Million tonnesEurope
    
    
    6.0Asia Pacific
    
    
    3.5North America
    
    
    5.1Middle East
    
    
    0.515.1
 2008 operating performance
   Mineração Corumbaense Reunida (Corumbá)
    HIsmelt®  ®
 ®
 ®
 ® ® ®
 ®
 Minerals  Dampier Salt
  Form 20-F 105




---



##### Table of Contents



2008 operating performance
 IRON ORE GROUP PROJECTS
   Upgrade beyond 220 Mt/a
   Mesa A
 Brockman 4
 Western Turner Syncline
 Hope Downs 4
 Remote Operations Centre (ROC)
 Dampier power station
 Form 20-F 106




---



##### Table of Contents



Mine of the Future TM
 Iron Ore Company of Canada
  Simandou
      Orissa, India
 OUTLOOK
    Form 20-F 107




---



##### Table of Contents



Exploration
       Year
    
    Discovery
    
    Commodity
    
    Location2000
    
    Potasio Rio Colorado
    
    Potash
    
    Argentina2002
    
    Resolution
    
    Copper
    
    US2004
    
    Simandou
    
    Iron Ore
    
    Guinea2005
    
    La Granja
    
    Copper
    
    Peru2005
    
    Cailwingina
    
    Iron Ore
    
    Australia2007
    
    Cailwingina North
    
    Iron Ore
    
    Australia2008
    
    Sulawesi
    
    Nickel
    
    Indonesia2008
    
    Mutamba/Chilubane
    
    Titanium
    
    Mozambique
 STRATEGY
    SAFETY
 All injury frequency rate
    
    Per 200,000 hours worked2004
    
    
    0.952005
    
    
    0.552006
    
    
    0.882007
    
    
    1.252008
    
    
    0.97
 FINANCIAL PERFORMANCE
 Form 20-F 108




---



##### Table of Contents



2008 compared with 2007
 2007 compared with 2006
 2008 OPERATING PERFORMANCE
     OUTLOOK
   The next crop of potential discoveries
 Project
    
    Commodity
    
    Country
    
    StageTamarack
    
    Nickel/Copper
    
    US
    
    Order of MagnitudeCrowsnest
    
    Coking Coal
    
    Canada
    
    Project of MeritAmargosa
    
    Bauxite
    
    Brazil
    
    Project of MeritAltai Nuurs
    
    Coking Coal
    
    Mongolia
    
    Order of Magnitude
 Form 20-F 109




---



##### Table of Contents



Technology and Innovation
   
 STRATEGY
  
    
    Working with the business units to deploy technology solutions that increase earnings.
    
    Developing a pipeline of valuable new investment projects.
    
    Positioning the Group to develop orebodies that are likely to require innovative mining
solutions.
 KEY ACHIEVEMENTS
    FINANCIAL PERFORMANCE  2008 compared with 2007
 2007 compared with 2006
 Form 20-F 110




---



##### Table of Contents



2008 OPERATING PERFORMANCE  Safety
 Innovation
      Innovations
  Production Technology
   Asset Management
   Form 20-F 111




---



##### Table of Contents



Strategic Production Planning
   Project Development
 Technical Risk Evaluation
 Production Technology Services
 OUTLOOK
   Form 20-F 112




---



##### Table of Contents



Other operations
 MARKETING
        Incremental cash fow target vs actual
    
    2008
    
    
    2007US$m
    
    
    US$mTarget
    
    
    250
    
    
    
    129Actual
    
    
    716
    
    
    
    251
  RIO TINTO MARINE  Ocean freight
     Form 20-F 113




---



##### Table of Contents



Freight market
     LAND  Kennecott Land
   Form 20-F 114




---



##### Table of Contents



Financial review
 Cash flow
 2008 compared with 2007
     2007 compared with 2006
     Balance sheet  2008 Financial statements
   Form 20-F 115




---



##### Table of Contents



Financial risk management
   2008 Financial statements
   Capital resources and contractual obligations
  Gross debt maturity profile as at 31 December 2008
    
    US$m2009
    
    
    9,7822010
    
    
    9,7002011
    
    
    4492012
    
    
    10,6052013
    
    
    3,1242014
    
    
    5002015
    
    
    5092016
    
    
    1452017
    
    
    2502018 - 2035
    
    
    4,146
 Form 20-F 116




---



##### Table of Contents



**Net debt as a*Equity
    
    
    Net debt
    
    
    percentage ofNet debt and equity
    
    US$m
    
    
    US$m
    
    
    invested capital2005
    
    
    15,739
    
    
    
    1,313
    
    
    
    7.7
    %2006
    
    
    19,385
    
    
    
    2,437
    
    
    
    11.2
    %2007
    
    
    26,293
    
    
    
    45,191
    
    
    
    63.2
    %2008
    
    
    22,461
    
    
    
    38,672
    
    
    
    63.3
    %
 Notes
 *
    
    Includes minority interest share of net debt**
    
    Calculated as borrowings divided by total capital. Total capital is the sum of net debt and
equity, including minority interests.     Form 20-F 117




---



##### Table of Contents



Less than 1
    
    
    Between 1
    
    
    Between 3
    
    
    After 5Total
    
    
    year
    
    
    and 3 years
    
    
    and 5 years
    
    
    yearsContractual cash obligations
    
    US$ m
    
    
    US$ m
    
    
    US$ m
    
    
    US$ m
    
    
    US$ mExpenditure commitments in relation to:Operating leases
    
    
    1,561
    
    
    
    336
    
    
    
    565
    
    
    
    345
    
    
    
    315Other (mainly capital commitments)
    
    
    4,354
    
    
    
    3,568
    
    
    
    487
    
    
    
    228
    
    
    
    71Long term debt and other financial obligationsDebt (a)
    
    
    39,378
    
    
    
    10,079
    
    
    
    9,902
    
    
    
    13,637
    
    
    
    5,760Interest payments (b)
    
    
    8,024
    
    
    
    1,375
    
    
    
    2,053
    
    
    
    1,230
    
    
    
    3,366Unconditional purchase obligations (c)
    
    
    10,345
    
    
    
    1,245
    
    
    
    1,643
    
    
    
    1,153
    
    
    
    6,304Other (mainly trade creditors)
    
    
    6,628
    
    
    
    5,942
    
    
    
    344
    
    
    
    219
    
    
    
    123Total
    
    
    70,290
    
    
    
    22,545
    
    
    
    14,994
    
    
    
    16,812
    
    
    
    15,939
 Notes
 (a)
    
    Debt obligations include bank borrowings repayable on demand.(b)
    
    Interest payments have been projected using the interest rate applicable at 31 December 2008,
including the impact of currency and interest rate swap agreements where appropriate. Much of the debt is
subject to variable interest rates. Future interest payments are subject, therefore, to change
in line with market rates.(c)
    
    Unconditional purchase obligations relate to commitments to make payments in the future for
fixed or minimum quantities of goods or services at fixed or minimum prices. The future
payment commitments have not been discounted and mainly relate to commitments under take or
pay power and freight contracts. They exclude unconditional purchase obligations of jointly
controlled entities apart from those relating to the Groups tolling arrangements. Financial review 2008 Financial
statements
 2008 Financial statements
   Dividends and capital management
  Form 20-F 118




---



##### Table of Contents



Treasury management and financial instruments
   Off balance sheet arrangements
   Exchange rates, reporting currencies and currency exposure
  Effect on net andAverage
    
    
    underlying earningsexchange
    
    
    of 10% change inrate for
    
    
    full year averageEarnings sensitivities  exchange rates
    
    2008
    
    
    +/- US$mAustralian dollar
    
    US 86 cents
    
    
    502Canadian dollar
    
    US 94 cents
    
    
    214Euro
    
    US147 cents
    
    
    34Chilean peso
    
    US$1 = 522 pesos
    
    
    17New Zealand dollar
    
    US 71 cents
    
    
    29South African rand
    
    US 12 cents
    
    
    47UK sterling
    
    US 186 cents
    
    
    22
 Form 20-F 119




---



##### Table of Contents



Note
 The sensitivities in the Average exchange rate for 2008 column are based on 2008 prices,
costs and volumes and assume that all other variables remain constant.
   2008 Financial statements
 2008 Financial statements
  Effect onnet
    
    
    Of which
    
    
    Effect ofearnings of
    
    
    amount
    
    
    itemsClosing
    
    
    10%
    
    
    impacting
    
    
    impactingexchange
    
    
    strengthening
    
    
    underlying
    
    
    directly onEarnings sensitivities  exchange on financial
    
    rate
    
    
    of US$
    
    
    earnings
    
    
    equityassets/liabilities
    
    US cents
    
    
    US$m
    
    
    US$m
    
    
    US$mFunctional currency of business unit:Australian dollar
    
    
    69
    
    
    
    (12
    )
    
    
    78
    
    
    
    5Canadian dollar
    
    
    82
    
    
    
    159
    
    
    
    193
    
    
    
    56South African rand
    
    
    11
    
    
    
    13
    
    
    
    19
    
    
    
    Euro
    
    
    141
    
    
    
    249
    
    
    
    28
    
    
    
    2New Zealand dollar
    
    
    58
    
    
    
    21
    
    
    
    2
    
    
    
    
 Notes
 (a)
    
    The sensitivities show the net sensitivity of US dollar exposures in Australian dollar
functional currency companies, for example, and Australian dollar exposures in US dollar
functional currency companies.(b)
    
    The sensitivities indicate the effect of a ten per cent strengthening of the US dollar
against each currency.(c)
    
    Rio Tinto Alcan Inc., which has a US functional currency, has a significant amount of US
dollar denominated external and intragroup debt held in Canada and is taxed on a Canadian
currency basis. The above sensitivities as at 31 December 2008 for a ten per cent
strengthening of the US dollar do not include any tax benefit related to this debt because the
capital losses generated would not be recognised. If the US dollar weakened below 97 Canadian
cents then tax charges would begin to be recognised at 15 per cent.(d)
    
    The sensitivities include the Rio Tinto share of the sensitivities of equity accounted units.(e)
    
    Some US dollar functional currency companies are exposed to exchange movements on local
currency deferred tax balances. The only material exposure is to the Canadian dollar and a 10
per cent strengthening of the US dollar would reduce underlying earnings by US$115 million.
This would partially offset the US$193 million gain shown above.  Form 20-F 120




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##### Table of Contents



2008Effect on net assetsClosing
    
    
    of 10% change inexchange rate
    
    
    closing rateNet assets sensitivities  exchange on translation
    
    US cents
    
    
    +/- US$mAustralian dollar
    
    
    69
    
    
    
    1,264Euro
    
    
    141
    
    
    
    621Canadian dollar
    
    
    82
    
    
    
    180
 Interest rates
  Commodity prices
 2008
Financial statements
       Form 20-F 121




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##### Table of Contents



Average
    
    
    Effect on underlying 
and net earnings ofmarket price
    
    
    10% change infor 2008
    
    
    full year averageEarnings
sensitivities  commodity prices
    
    Unit
    
    
    US$
    
    
    +/- US$mCopper
    
    pound
    
    
    3.20
    
    
    
    389Aluminium
    
    pound
    
    
    1.18
    
    
    
    739Gold
    
    ounce
    
    
    872
    
    
    
    30Molybdenum
    
    pound
    
    
    31
    
    
    
    62Iron ore
    
    dmtu
    
    
    N/A
    
    
    
    829
 Notes
 (a)
    
    The above sensitivities are based on 2008 volumes.(b)
    
    Excludes impact of commodity derivatives.
    Effect of itemsimpacting directlyEffect on net
    
    
    on Rio Tinto shareearnings of
    
    
    of equity of 10%10% increase from
    
    
    increase fromEarnings sensitivities  commodity price on financial assets/liabilities
    

year end price
    
    
    year end priceProducts
    
    US$m
    
    
    US$mCopper
    
    
    
    
    
    
    (13
    )Coal
    
    
    
    
    
    
    (8
    )Aluminium
    
    
    (62
    )
    
    
    (16
    )Total
    
    
    (62
    )
    
    
    (37
    )
 Sales revenue
 2008
    
    
    2007
    
    
    2006Commodity
    
    Source
    
    Unit
    
    
    US$
    
    
    US$
    
    
    US$Aluminium
    
    LME
    
    Pound
    
    
    1.18
    
    
    
    1.20
    
    
    
    1.16Copper
    
    LME
    
    Pound
    
    
    3.20
    
    
    
    3.24
    
    
    
    3.06Gold
    
    LBMA
    
    Ounce
    
    
    872
    
    
    
    691
    
    
    
    602Iron ore
    
    Australian benchmark (fines) (a)
    
    (b) dmtu
    
    
    1.29
    
    
    
    0.79
    
    
    
    0.71Molybdenum
    
    Metals Week: quote for dealer oxide price
    
    Pound
    
    
    31
    
    
    
    30
    
    
    
    25
 Notes
 (a)
    
    average for the calendar year(b)
    
    dry metric tonne unit
   2008 Financial statements
  Form 20-F 122




---



##### Table of Contents



Form 20-F 123




---



##### Table of Contents



Critical accounting policies and estimates
 Dual listed company reporting
 2008 Financial statements
 2008 Annual report 2008 Financial statements 2008 Financial statements
  Ore reserve estimates
     Asset lives
  Acquisition accounting
  2007 Financial statements
 Form 20-F 124




---



##### Table of Contents



Asset carrying values
              Form 20-F 125




---



##### Table of Contents



Close down, restoration and clean up obligations
     Overburden removal costs
     Form 20-F 126




---



##### Table of Contents



Actual stripping ratio for year
    
    
    Life of mine stripping ratio2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Kennecott Utah Copper (2019) (a) (b)
    
    
    1.98
    
    
    
    1.99
    
    
    
    2.04
    
    
    
    1.24
    
    
    
    1.32
    
    
    
    1.36Grasberg Joint Venture (2015) (a)
    
    
    3.27
    
    
    
    3.47
    
    
    
    3.01
    
    
    
    2.87
    
    
    
    3.05
    
    
    
    2.63Diavik (2008) (c)
    
    
    1.23
    
    
    
    0.42
    
    
    
    0.89
    
    
    
    1.20
    
    
    
    0.91
    
    
    
    0.96Escondida (2041) (d)
    
    
    0.12
    
    
    
    0.07
    
    
    
    0.08
    
    
    
    0.10
    
    
    
    0.10
    
    
    
    0.12
 Notes
 (a)
    
    Stripping ratios shown are waste to ore.(b)
    
    Kennecotts life of mine stripping ratio decreased in 2006 as the latest mine plan included
higher metals prices, which made previously uneconomic material (waste) economic to mine as
ore.(c)
    
    Diaviks stripping ratio is disclosed as bench cubic metre per carat. The 2007 deferred
stripping ratio is based on single pit commercial production with a scheduled end in Q4 2008.
The 2008 deferred stripping ratio is based on a dual pit commercial production scheduled to
end in Q2 2009 and early Q3 2011 respectively.(d)
    
    Escondidas stripping ratio is based on waste tonnes to pounds of copper mined.
  Functional currency
     Form 20-F 127




---



##### Table of Contents



Deferred tax on fair value adjustments
   Post retirement benefits
        2008 Financial statements
    Form 20-F 128




---



##### Table of Contents



IFRSUS$mSensitivity of Groups 2008 net earnings to changes in:Expected return on assets increase of 1 percentage point
    
    
    90 decrease of 1 percentage point
    
    
    (90
    )Discount rate increase of 0.5 percentage points
    
    
     decrease of 0.5 percentage points
    
    
    2Salary increases increase of 0.5 percentage points
    
    
    (13
    ) decrease of 0.5 percentage points
    
    
    12Demographic  allowance for additional future mortality improvements participants assumed to be one year older
    
    
    15 participants assumed to be one year younger
    
    
    (15
    )
 2008
Financial statements
 Temporary differences related to closure costs and finance leases
       Deferred tax potentially recoverable on Group tax losses
    Form 20-F 129




---



##### Table of Contents



Exploration
  Audit committee
 Contingencies
 2008 Financial statements
 Underlying earnings
  Form 20-F 130




---



##### Table of Contents



Item 6.    Directors, Senior Management and Employees
 Chairman and executive directors
 Chairman
 Paul Skinner  Appointment and election: Nominations committee  Skills and experience:  External appointments (current and recent):
 Chief executive
 Tom Albanese  Appointment and election  Skills and experience:  External appointments (current and recent):
 Finance director
 Guy Elliott  Appointment and election:  Skills and experience  External appointments (current and recent):  Audit committee
 Executive director
 Dick Evans  Appointments and election  Skills and experience  External appointments (current and recent):
 Form 20-F 131




---



##### Table of Contents



Non Executive Directors
 Sir David Clementi  Appointment and election: Audit committee  Skills and experience:  External appointments (current and recent):
 Vivienne Cox  Appointment and election:  Skills and experience  External appointments (current and recent):
 Jan du Plessis  Appointment and election  Skills and experience  External appointments (current and recent):
 Sir Rod Eddington  Appointment and election:  Skills and experience  External appointments (current and recent):
 Form 20-F 132




---



##### Table of Contents



Michael Fitzpatrick  Appointment and election:  Skills and experience:  External appointments (current and recent):
 Yves Fortier  Appointments and election  Skills and experience  External appointments ( current and recent):
 Richard Goodmanson  Appointment and election: Committee on social and environmental
accountability  Skills and experience  External appointments (current and recent):
 Andrew Gould  Appointment and election: Remuneration committee  Skills and experience  External appointments (current and recent):
 Form 20-F 133




---



##### Table of Contents



Lord Kerr of Kinlochard  Appointment and election:  Skills and experience:  External appointments (current and recent):
 David Mayhew  Appointment and election:  Skills and experience:  External appointments (current and recent):
 Paul Tellier  Appointment and election  Skills and experience  External appointments (current and recent):
 Directors who left the Group during 2008 or 2009
 Sir Richard Sykes  Appointment and election: Remuneration committee  Skills and experience  External appointments (current and recent) upon
leaving the Group:
 Form 20-F 134




---



##### Table of Contents



Jim Leng  Appointment and election  Skills and experience  External appointments (current and recent):
 Notes
 (a)
    
    Audit committee
(Sir David Clementi, Vivienne Cox, Jan du Plessis, Michael Fitzpatrick, Lord Kerr and
Paul Tellier)(b)
    
    Remuneration committee
(Sir David Clementi, Michael Fitzpatrick, Richard Goodmanson, Andrew Gould, and Paul
Tellier)(c)
    
    Nominations committee
(Sir Rod Eddington, Yves Fortier, Andrew Gould, David Mayhew, Paul Skinner)(d)
    
    Committee on social and environmental accountability
(Sir Rod Eddington, Yves Fortier, Richard Goodmanson and Lord Kerr)(e)
    
    Independent
(Sir David Clementi, Vivienne Cox, Jan du Plessis, Sir Rod Eddington, Michael Fitzpatrick,
Yves Fortier, Richard Goodmanson, Andrew Gould, Lord Kerr and Paul Tellier) Form 20-F 135




---



##### Table of Contents



Executive Committee Members
 Hugo Bague  Skills and experience:  External appointments (current and recent):
 Preston Chiaro  Skills and experience  External appointments (current and recent):
 Bret Clayton  Skills and experience  External appointments (current and recent):
 Jacynthe Côté  Skills and experience:  External appointments (current and recent):
 Grant Thorne  Skills and experience:  External appointments (current and recent):
 Sam Walsh  Skills and experience
 Form 20-F 136




---



##### Table of Contents



External appointments (current and recent):
 Debra Valentine  Skills and experience  External appointments (current and recent):
  Executive
Committee Member During 2008 Who Leaves The Group In July 2009
 Keith Johnson  Skills and experience:  External appointments (current and recent):
 Company Secretaries
 Ben Mathews  Skills and experience  External appointments (current and recent):
 Stephen Consedine  Skills and experience  External appointments (current and recent):
 Employees
 2008
Financial statements.
 Form 20-F 137




---



##### Table of Contents



Remuneration
  REMUNERATION
REPORT
  
    
    description of the Remuneration committeeand its duties;
    
    description of the policy on directors, executives and the company secretaries
remuneration;
    
    summary of the terms of executives service contracts and non executive directors letters
of appointment;
    
    details of each executives remuneration and awards under long term incentive plans and the
link to corporate performance;
    
    details of executives interests in Rio Tinto shares; and
    
    graphs illustrating Group performance, including relative to the HSBC Global Mining Index.
 INTRODUCTION
     Remuneration committee
 
    
    Andrew Gould (chairman from 24 April 2008)
    
    Sir Richard Sykes (chairman until 24 April 2008)
    
    Sir David Clementi
    
    Michael Fitzpatrick
    
    Richard Goodmanson
    
    Paul Tellier
  
    
    recommending executive remuneration policy to the board;
    
    reviewing and determining the terms of service, including remuneration and any termination
arrangements, for the chairman, executive directors, product group chief executives and the
company secretary of Rio Tinto plc;
    
    reviewing and confirming the remuneration and conditions of employment strategy for other
senior managers;
    
    recommending share-based long term incentive plans to the board; and
    
    monitoring the effectiveness and appropriateness of executive remuneration policy and
practice.
  Form 20-F 138




---



##### Table of Contents



Corporate governance
 EXECUTIVE REMUNERATION
      Board policy
 
    
    to provide total remuneration which is competitive in structure and quantum with Global
comparator companies practices;
    
    to achieve clear alignment between total remuneration and delivered business and personal
performance, with particular emphasis on both short term business performance and long term
shareholder value creation and performance relating to health, safety and the environment;
    
    to link variable elements of remuneration to the achievement of challenging performance
criteria that are consistent with the best interests of the Group and shareholders over the
short, medium and long term;
    
    to provide an appropriate balance of fixed and variable remuneration; and
 Form 20-F 139




---



##### Table of Contents




    
    to provide internal equity between executives within Rio Tinto and to facilitate the
movement of executives within Rio Tinto to meet the needs of the Group.
   Remuneration components  Base salary
  Short term incentive plan (STIP)
 
    
    focusing participants on achieving calendar year performance goals which contribute to
sustainable shareholder value; and
    
    providing significant bonus differential based on performance against challenging
personal, business, and other targets, including safety.
    Long term incentives
 Share Option Plan (SOP)
   Form 20-F 140




---



##### Table of Contents



Mining Companies Comparative Plan (MCCP)
     Ranking in the remaining ten company comparator group
    
    1st
    
    2nd
    
    3rd
    
    4th
    
    5th
    
    6th-10thPercentage vesting
    
    
    150
    
    
    121.3
    
    
    92.5
    
    
    63.8
    
    
    35
    
    
    0
    Form 20-F 141




---



##### Table of Contents



Ranking of Rio Tinto versus comparator companiesPeriod
    
    Ranking1994  97
    
    4 out of 161995  98
    
    4 out of 161996  99
    
    2 out of 161997  00
    
    2 out of 161998  01
    
    2 out of 161999  02
    
    3 out of 162000  03
    
    7 out of 162001  04
    
    11 out of 162002  05
    
    10 out of 162003  06
    
    10 out of 162004  07
    
    5 out of 162005  08
    
    3 out of 10
  Management Share Plan (MSP)
   Post
employment benefits  executive directors
         Form 20-F 142




---



##### Table of Contents



Performance and non performance related remuneration
   Remuneration mix
    
    Fixed as %
    
    
    At-risk as %
    
    
    Options as %of 2008 total
    
    
    of 2008 total
    
    
    of totalTom Albanese
    
    
    32
    
    
    
    68
    
    
    
    16Guy Elliott
    
    
    37
    
    
    
    63
    
    
    
    13Dick Evans
    
    
    32
    
    
    
    68
    
    
    
    16Hugo Bague
    
    
    52
    
    
    
    48
    
    
    
    Preston Chiaro
    
    
    32
    
    
    
    68
    
    
    
    16Bret Clayton
    
    
    32
    
    
    
    68
    
    
    
    16Keith Johnson
    
    
    37
    
    
    
    63
    
    
    
    13Grant Thorne
    
    
    48
    
    
    
    52
    
    
    
    Debra Valentine
    
    
    50
    
    
    
    50
    
    
    
    Sam Walsh
    
    
    37
    
    
    
    63
    
    
    
    13
 Share based remuneration not dependent on performance
      Form 20-F 143




---



##### Table of Contents



Service
contracts
  Tom

    
    Guy

    
    Dick

    
    Hugo

    
    Bret

    
    Preston

    
    Keith

    
    Grant

    
    Debra

    
    SamAlbanese

    
    Elliott
    

    Evans

    
    Bague

    
    Clayton

    
    Chiaro

    
    Johnson

    
    Thorne

    
    Valentine

    
    Walsh2008 roles
held and role commencement date
    
    Group CEO (1/5/07)
    
    Finance Director (19/6/02)
    
    ED & CEO Rio Tinto Alcan (25/10/07)
    
    Global Head of Human Resources (1/8/07)
    
    CEO Copper & Diamonds (15/11/07)
    
    CEO Energy & Minerals (15/11/07)
    
    Group Executive Business Resources (1/6/07)
    
    Group Executive Technology & Innovation (1/6/07)
    
    Global Head of Legal (15/1/08)
    
    CEO Iron Ore (1/11/04)Contract date
(current contact)
    
    1/5/07 (contract disclosed 8/5/07)
    
    
    19/6/02
    
    
    25/10/07

    
    
    25/3/07

    
    
    1/6/06

    
    
    30/9/03

    
    
    12/3/04

    
    
    25/5/06

    
    
    12/11/07

    
    
    3/8/04Years of
service 
completed
    
    
    27

    
    
    28

    
    
    1

    
    
    1

    
    
    14

    
    
    17

    
    
    17

    
    
    33

    
    
    1

    
    
    17Standard
    
    Pension or superannuation fund participation.contract
    
    Salary subject to annual review.conditions
    
    Eligible for Rio Tinto Long Term Incentive Plans (LTIP).Eligible for employee car scheme in accordance with policy applicable in country of assignment.Eligible for medical benefits programmes applicable to employees generally in country of origin.Where applicable, receives expatriate secondment packages which may include a housing benefit, repatriation and tax equalization.Term
    
    It is the Groups policy that executives service contracts generally have no fixed term, but are capable of termination giving no less than the notice set out below. Dick Evans contract has a term of 27 months (not 24 months as incorrectly stated
in 2007) and ends on 31 December 2009.Notice
    
    12months
    
    12months
    
    12months or remaining term after 31/12/08
    
    12months
    
    12months
    
    12months
    

    12months
    

    6months
    
    
    12months
    
    
    12monthsResignation
    
    Outstanding Long Term Incentive
awards under the SOP, MCCP and MSP are forfeited as is any pro-rata STIP.Retirement
    
    Pro rata STIP paid based on portion of performance period worked. LTIPs subject to performance test at completion of normal performance period and options or performance shares may vest at that time to the extent provided by the performance
condition. Options or performance shares held for less than 12 months at date of termination are reduced pro rata. MSP awards vest pro-rata upon retirement.Termination by 
company  general 
including 

redundancy
    
    Rio Tinto has retained the right to pay executives in lieu of notice. Given the wide variety of circumstances leading to early termination, the executives service contracts do not provide explicitly for compensation but, in the event of early
termination, including redundancy, it is the Groups policy to act fairly in all circumstances. Pre-existing entitlements may apply under redundancy policies generally applicable to employees in particular regions. Notice may be worked or fully or
partly paid in lieu, at Company discretion, and additional capped
service-related payments may apply. Compensation would not provide reward for poor performance. In the event of termination except for cause, STIP would be paid based on the portion
of the performance period worked. LTIPs would be subject to a performance test at completion of the normal performance period. Options and performance shares may vest at that time to the extent provided by the performance condition. Options or
performance shares that have been held for less that 12 months at the date of termination would be reduced pro-rata. MSP awards vest pro-rata upon termination for reasons other than cause.Termination for 
cause
    
    Employment may be terminated by the
Company without notice and without payment of any salary or compensation in lieu of notice. Outstanding awards under the SOP, MCCP and MSP are forfeited as is any pro-rata STIP.Change of control
    
    Contractual entitlements to
severance are not triggered by a change of control. LTIP rules in the event of a change of control apply to all plan participants and are set out in the sections of the report on pages 140 to 143 that deal with each of
LTIP vehicle including the SOP, MCCP and MSP
 Form 20-F 144




---



##### Table of Contents



Performance evaluation
  
    
    Improve organisational effectiveness by creating alignment between the executives
objectives and Rio Tintos business strategy.
    
    Provide a consistent, transparent and balanced approach to measure, recognise and reward
executive performance.
    
    Engage executives through regular two way communication on their performance.
    
    Build further capability through aligning development decisions with business and employee
needs.
  i)
    
    Set annual performance objectives as part of the annual planning process at the end and into
the beginning of the new calendar year;ii)
    
    Interim review  completed by end of August; andiii)
    
    Annual performance review  completed during early January of the following year.
  Remuneration Paid in 2008
 Performance of Rio Tinto and individual executives
  TSR (£) - Rio Tinto plc vs FTSE 100
    
    FTSE
    
    
    Rio TintoTotal return basis Index 2003 = 100
    
    100
    
    
    plc2003
    
    
    100
    
    
    
    1002004
    
    
    111
    
    
    
    1022005
    
    
    134
    
    
    
    1812006
    
    
    154
    
    
    
    1932007
    
    
    165
    
    
    
    3842008
    
    
    118
    
    
    
    109
 TSR (A$) - Rio Tinto Limited vs ASX All Share
    
    ASX
    
    
    Rio TintoTotal return basis Index 2003 = 100
    
    All Share
    
    
    Limited2003
    
    
    100
    
    
    
    1002004
    
    
    128
    
    
    
    1082005
    
    
    154
    
    
    
    1942006
    
    
    193
    
    
    
    2122007
    
    
    228
    
    
    
    3882008
    
    
    136
    
    
    
    112
 TSR (US$) - Rio Tinto Group vs HSBC Global Mining Index
    
    HSBC Global Mining
    
    
    Rio TintoTotal return basis Index 2003 = 100
    
    Index
    
    
    DLC2003
    
    
    100
    
    
    
    1002004
    
    
    112
    
    
    
    1112005
    
    
    159
    
    
    
    1782006
    
    
    220
    
    
    
    2132007
    
    
    349
    
    
    
    4362008
    
    
    145
    
    
    
    93
  Form 20-F 145




---



##### Table of Contents



Rio
Tinto shareholder return 2004-2008
 Year
    
    Dividends
    
    
    Share price 
    
    
    Share price 
    
    
    Total shareholder returnper share
    
    
    Rio Tinto plc
    
    
    Rio Tinto Limited
    
    
    (TSR)paid during
    
    
    £ (pence)
    
    
    A$the year(US cents
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    plc
    
    
    Ltd
    
    
    Groupper share)
    
    
    1 Jan
    
    
    31 Dec
    
    
    1 Jan
    
    
    31 Dec
    
    
    %
    
    
    %
    
    
    %2008
    
    
    152.0
    
    
    
    5.317
    
    
    
    1.490
    
    
    
    133.95
    
    
    
    38.0
    
    
    
    (71.5
    )
    
    
    (71.1
    )
    
    
    (71.3
    )2007
    
    
    116.0
    
    
    
    2,718
    
    
    
    5,317
    
    
    
    74.30
    
    
    
    133.95
    
    
    
    99.5
    
    
    
    82.9
    
    
    
    91.82006
    
    
    191.5
    
    
    
    2,655
    
    
    
    2,718
    
    
    
    69.00
    
    
    
    74.30
    
    
    
    6.3
    
    
    
    12.2
    
    
    
    7.62005
    
    
    83.5
    
    
    
    1,533
    
    
    
    2,655
    
    
    
    39.12
    
    
    
    69.00
    
    
    
    77.5
    
    
    
    81.3
    
    
    
    78.42004
    
    
    66.0
    
    
    
    1,543
    
    
    
    1,533
    
    
    
    37.54
    
    
    
    39.12
    
    
    
    1.7
    
    
    
    7.4
    
    
    
    3.0
  Share based awards
 
    
    SOP  Rio Tinto TSR growth over the three years ending 31 December 2008 achieved the level
required by the applicable performance condition for the 2006 award to vest 100 per cent. In
addition, TSR performance for the five year period ending 31 December 2008 for the 2004 option
re-test achieved the level required to vest 100 per cent. The vesting of the last option grant
subject to a re-test provision will occur in March 2009 based on performance for the
performance period ending 31 December 2008. Outstanding awards do not have a re-test provision
and there is no provision in the plan currently for a re-test on future awards.
    
    MCCP  Rio Tinto ranked third in the ten company comparator group at the completion of the
four year performance period ending 31 December 2008, resulting in 92.5 per cent vesting of
the conditional award made (61.6 per cent of the maximum opportunity) to executives who were
directors or product group chief executives at the date of the conditional award. This group
included Tom Albanese, Guy Elliott, Preston Chiaro, Keith Johnson and Sam Walsh. The vesting
shown in Table 4 on pages 157 to 161, is in accordance with the performance condition
applicable to the 2005 award and represents 92.5 per cent of the original awards for those who
were in executive director or product group chief executive roles at the time of grant of the
conditional award.
 Annual bonus (STIP)
     Form 20-F 146




---



##### Table of Contents



Performance level
    
    Threshold
    
    Target
    
    OutstandingExcellent
    
    No AIFR detorioraion
+ SQRA complete
    
    5% AIFR improvement
+ zero fatalities
+10% reduction In
critical risk score
    
    10% AIFR improvement
+ zero fatalities
+ 20% reduction in
critical risk scoreGood
    
    No AIFR detorioraion
+ SQRA complete
    
    10% AIFR improvement
+ zero fatalities
+10% reduction In
critical risk score
    
    20% AIFR improvement
+ zero fatalities
+ 20% reduction in
critical risk scoreFair
    
    No AIFR detorioraion
+ SQRA complete
    
    20% AIFR improvement
+ zero fatalities
+10% reduction In
critical risk score
    
    40% AIFR improvement
+ zero fatalities
+ 20% reduction in
critical risk score
    Business/financial threshold 67%,
    
    Personal threshold 25%,target 100%, outstanding 133%
    
    target 100%, outstanding 150%Group financial
    
    Product group
    
    Group/PG safety
    
    Personal performancefinancial
    
    
    
    
    
    objectives*Executive directors**,
    
    50% flexed earnings
    
    -
    
    
    25
    %
    
    
    75
    %Group executives,
    
    50% unflexed earningsglobal headsProduct group CEO
    
    20% flexed earnings
    
    30% flexed earnings
    
    
    25
    %
    
    
    75
    %20% unflexed earnings
    
    30% unflexed earnings
     Tom Albanese
  Form 20-F 147




---



##### Table of Contents



Guy Elliott
  Dick Evans
  Hugo Bague
  Preston Chiaro
  Bret Clayton
  Keith Johnson
  Grant Thorne
  Debra Valentine
  Form 20-F 148




---



##### Table of Contents



Sam Walsh
  Other payments during 2008
 Retention
  Integration bonus
    Long term incentives granted in 2008
    Bonuses and grants
  Bonuses and grants made during or in respect of 2008
 Bonus1
    
    
    SOP Options2
    
    
    MCCP Shares3
    
    
    MSP Shares% of
    
    
    % of
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    %maximum
    
    
    maximum
    
    
    vested
    
    
    forfeited
    
    
    vested
    
    
    forfeited
    
    
    vested
    
    
    forfeitedvested
    
    
    forfeitedTom Albanese
    
    
    42.9
    
    
    
    57.1
    
    
    
    100
    
    
    
    
    
    
    
    92.5
    
    
    
    7.5
    
    
    
    n/a
    
    
    
    Guy Elliott
    
    
    38.1
    
    
    
    61.9
    
    
    
    100
    
    
    
    
    
    
    
    92.5
    
    
    
    7.5
    
    
    
    n/a
    
    
    
    Dick Evans
    
    
    48.9
    
    
    
    51.1
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    Hugo Bague
    
    
    42.6
    
    
    
    57.4
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    100
    
    
    
    Preston Chiaro
    
    
    50.8
    
    
    
    49.2
    
    
    
    100
    
    
    
    
    
    
    
    92.5
    
    
    
    7.5
    
    
    
    n/a
    
    
    
    Bret Clayton
    
    
    14.3
    
    
    
    85.7
    
    
    
    100
    
    
    
    
    
    
    
    83.3
    
    
    
    16.7
    
    
    
    n/a
    
    
    
    Keith Johnson
    
    
    43.5
    
    
    
    56.5
    
    
    
    100
    
    
    
    
    
    
    
    92.5
    
    
    
    7.5
    
    
    
    n/a
    
    
    
    Grant Thorne
    
    
    47.9
    
    
    
    52.1
    
    
    
    100
    
    
    
    
    
    
    
    83.3
    
    
    
    16.7
    
    
    
    n/a
    
    
    
    Debra Valentine
    
    
    46.7
    
    
    
    53.3
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    n/a
    
    
    
    Sam Walsh
    
    
    53.3
    
    
    
    46.7
    
    
    
    100
    
    
    
    
    
    
    
    92.5
    
    
    
    7.5
    
    
    
    n/a
    
    
    
    
 Form 20-F 149




---



##### Table of Contents



Notes
 1.
    
    Cash paid and deferred shares granted in March 2009 in respect of 2008, including STIP and
integration bonus2.
    
    Vesting of the 2004 and 2006 SOP options in April and March 2009 respectively for the
performance period ending 31 December 20083.
    
    Vesting of 2005 conditional award in February 2009 for the performance period ending 31
December 2008 OTHER
DISCLOSURES
Significant award to a former director
  Shareholding policy for executives
  Share dealing policy
  Executives external and other appointments
  Company secretary remuneration
  CHAIRMAN AND NON EXECUTIVE DIRECTOR REMUNERATION
 Remuneration policy
   Letters of appointment
    Form 20-F 150




---



##### Table of Contents



Shareholding policy
  Remuneration components
   As at 
31 Dec 2008Base fees:Chairman
    
    
    £693,000Other directors
    
    
    £70,000A$160,000Additional fees:Senior independent director
    
    
    £35,000Audit committee chairman
    
    
    £30,000Audit committee member
    
    
    15,000$37,500Remuneration committee chairman
    
    
    £20,000Remuneration committee member
    
    
    £10,000A$25,000Nominations committee member
    
    
    £7,500Committee on social and environmental accountability chairman
    
    
    £20,000Committee on social and environmental accountability member
    
    
    £7,500A$18,750Overseas meeting allowances:Long distance (flights over
    
    
    £4,00010 hours per journey)
    
    
    A$10,000Medium distance (flights of
    
    
    £2,0005-10 hours per journey)
    
    
    A$5,000
 Note  Nominations committee
 Remuneration paid during 2008
  Auditable information
   Annual general meetings
   Ben Mathews
 Form 20-F 151




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##### Table of Contents



Table 1  Executives and non executive directors remuneration
 Short term employee benefits
    
    
    Other
    
    
    Long term employee benefitslongtermbenefitsValue of share based awards 5Base
    
    
    Cash
    
    
    Other
    
    
    Non
    
    
    Total
    
    
    
    
    
    
    Deferred
    
    
    MCCP 10
    
    
    MSP 11
    
    
    SOP 12
    
    
    Others 13salary
    
    
    bonus 4
    
    
    cash
    
    
    monetary
    
    
    
    
    
    
    
    
    
    
    shares 9based 5
    
    
    benefits 6Stated
in US$0001ChairmanPaul Skinner11
    
    
    2008
    
    
    
    1,310
    
    
    
    
    
    
    
    31
    
    
    
    197
    
    
    
    1,538
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    1,282
    
    
    
    
    
    
    
    34
    
    
    
    236
    
    
    
    1,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non executive directors12Ashton Calvert
    
    
    2007
    
    
    
    121
    
    
    
    
    
    
    
    42
    
    
    
    26
    
    
    
    189
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sir David Clementi
    
    
    2008
    
    
    
    196
    
    
    
    
    
    
    
    7
    
    
    
    2
    
    
    
    205
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    174
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivienne Cox
    
    
    2008
    
    
    
    158
    
    
    
    
    
    
    
    7
    
    
    
    21
    
    
    
    186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    154
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jan du Plessis15
    
    
    2008
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sir Rod Eddington
    
    
    2008
    
    
    
    155
    
    
    
    
    
    
    
    24
    
    
    
    11
    
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    133
    
    
    
    
    
    
    
    15
    
    
    
    2
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Michael Fitzpatrick
    
    
    2008
    
    
    
    175
    
    
    
    
    
    
    
    24
    
    
    
    2
    
    
    
    201
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    164
    
    
    
    
    
    
    
    46
    
    
    
    12
    
    
    
    222
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Yves Fortier
    
    
    2008
    
    
    
    158
    
    
    
    
    
    
    
    26
    
    
    
    37
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Richard
    
    
    2008
    
    
    
    186
    
    
    
    
    
    
    
    26
    
    
    
    15
    
    
    
    227
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Goodmanson
    
    
    2007
    
    
    
    184
    
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Andrew Gould
    
    
    2008
    
    
    
    231
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    242
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    204
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lord Kerr
    
    
    2008
    
    
    
    200
    
    
    
    
    
    
    
    11
    
    
    
    54
    
    
    
    265
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    174
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    David Mayhew16
    
    
    2008
    
    
    
    158
    
    
    
    
    
    
    
    7
    
    
    
    26
    
    
    
    191
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    150
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sir Richard Sykes
    
    
    2008
    
    
    
    99
    
    
    
    
    
    
    
    4
    
    
    
    54
    
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    236
    
    
    
    
    
    
    
    24
    
    
    
    25
    
    
    
    285
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Paul Tellier14
    
    
    2008
    
    
    
    177
    
    
    
    
    
    
    
    22
    
    
    
    41
    
    
    
    240
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Executive directorsTom Albanese3
    
    
    2008
    
    
    
    1,664
    
    
    
    
    
    
    
    10
    
    
    
    329
    
    
    
    2,003
    
    
    
    
    
    
    
    169
    
    
    
    (2,837
    )
    
    
    
    
    
    
    1,327
    
    
    
    52007
    
    
    
    1,494
    
    
    
    1,277
    
    
    
    49
    
    
    
    314
    
    
    
    3,134
    
    
    
    477
    
    
    
    
    
    
    
    6,556
    
    
    
    
    
    
    
    758
    
    
    
    8Leigh Clifford
    
    
    2007
    
    
    
    1,401
    
    
    
    1,008
    
    
    
    718
    
    
    
    608
    
    
    
    3,735
    
    
    
    1,582
    
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    911
    
    
    
    3Guy Elliott
    
    
    2008
    
    
    
    1,239
    
    
    
    
    
    
    
    28
    
    
    
    166
    
    
    
    1,433
    
    
    
    
    
    
    
    111
    
    
    
    (2,518
    )
    
    
    
    
    
    
    840
    
    
    
    92007
    
    
    
    1,213
    
    
    
    1,005
    
    
    
    30
    
    
    
    52
    
    
    
    2,300
    
    
    
    
    
    
    
    
    
    
    
    5,855
    
    
    
    
    
    
    
    625
    
    
    
    13Dick Evans
    
    
    2008
    
    
    
    1,500
    
    
    
    1,350
    
    
    
    
    
    
    
    413
    
    
    
    3,263
    
    
    
    
    
    
    
    139
    
    
    
    48
    
    
    
    
    
    
    
    621
    
    
    
    2007
    
    
    
    281
    
    
    
    
    
    
    
    25
    
    
    
    54
    
    
    
    360
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other key management personnelHugo Bague
    
    
    2008
    
    
    
    663
    
    
    
    462
    
    
    
    107
    
    
    
    216
    
    
    
    1,448
    
    
    
    
    
    
    
    32
    
    
    
    8
    
    
    
    835
    
    
    
    44
    
    
    
    3Preston Chiaro
    
    
    2008
    
    
    
    714
    
    
    
    
    
    
    
    21
    
    
    
    693
    
    
    
    1,428
    
    
    
    
    
    
    
    110
    
    
    
    (2,092
    )
    
    
    
    
    
    
    717
    
    
    
    22007
    
    
    
    650
    
    
    
    422
    
    
    
    21
    
    
    
    536
    
    
    
    1,629
    
    
    
    
    
    
    
    
    
    
    
    5,015
    
    
    
    
    
    
    
    557
    
    
    
    2Bret Clayton
    
    
    2008
    
    
    
    680
    
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    1,331
    
    
    
    
    
    
    
    30
    
    
    
    (698
    )
    
    
    
    
    
    
    484
    
    
    
    12007
    
    
    
    570
    
    
    
    541
    
    
    
    
    
    
    
    1,075
    
    
    
    2,186
    
    
    
    
    
    
    
    
    
    
    
    1,583
    
    
    
    
    
    
    
    199
    
    
    
    Oscar Groeneveld
    
    
    2007
    
    
    
    1,261
    
    
    
    877
    
    
    
    
    
    
    
    86
    
    
    
    2,224
    
    
    
    478
    
    
    
    
    
    
    
    5,292
    
    
    
    
    
    
    
    528
    
    
    
    4Keith Johnson
    
    
    2008
    
    
    
    774
    
    
    
    317
    
    
    
    24
    
    
    
    30
    
    
    
    1,145
    
    
    
    
    
    
    
    
    
    
    
    (1,655
    )
    
    
    
    
    
    
    551
    
    
    
    82007
    
    
    
    781
    
    
    
    558
    
    
    
    33
    
    
    
    23
    
    
    
    1,395
    
    
    
    
    
    
    
    
    
    
    
    3,730
    
    
    
    
    
    
    
    423
    
    
    
    11Andrew
Mackenzie17
    
    
    2007
    
    
    
    861
    
    
    
    111
    
    
    
    12
    
    
    
    28
    
    
    
    1,012
    
    
    
    
    
    
    
    
    
    
    
    3,575
    
    
    
    
    
    
    
    436
    
    
    
    13Grant Thorne
    
    
    2008
    
    
    
    773
    
    
    
    178
    
    
    
    4
    
    
    
    1
    
    
    
    956
    
    
    
    
    
    
    
    52
    
    
    
    (763
    )
    
    
    125
    
    
    
    136
    
    
    
    3Debra Valentine
    
    
    2008
    
    
    
    548
    
    
    
    146
    
    
    
    
    
    
    
    721
    
    
    
    1,415
    
    
    
    
    
    
    
    43
    
    
    
    18
    
    
    
    281
    
    
    
    
    
    
    
    Sam Walsh
    
    
    2008
    
    
    
    1,245
    
    
    
    
    
    
    
    77
    
    
    
    37
    
    
    
    1,359
    
    
    
    
    
    
    
    163
    
    
    
    (2,434
    )
    
    
    
    
    
    
    718
    
    
    
    42007
    
    
    
    1,108
    
    
    
    894
    
    
    
    
    
    
    
    83
    
    
    
    2,085
    
    
    
    
    
    
    
    
    
    
    
    4,816
    
    
    
    
    
    
    
    491
    
    
    
    4
 Form 20-F 152




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##### Table of Contents



Table
1  Executives and non executive directors remuneration (continued)
 Post employment
    
    
    Termin-
    
    
    Total
    
    
    
    
    
    
    Currencybenefits14
    
    
    ation
    
    
    remun-
    
    
    
    
    
    
    of actualbenefits
    
    
    eration
    
    
    
    
    
    
    paymentPension
    
    
    Otherand
    
    
    postsuperann
    
    
    employmentStated in US$000
    
    uation
    
    
    benefitsChairmanPaul Skinner13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,538
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    1,552
    
    
    
    2007
    
    
    
    £Non executive directors
    
    
    
    
    
    
    
    
    
    
    Ashton Calvert
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189
    
    
    
    2007
    
    
    
    A$Sir David Clementi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    2007
    
    
    
    £Vivienne Cox
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    186
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    2007
    
    
    
    £Jan du Plessis14
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    2008
    
    
    
    £Sir Rod Eddington
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    2008
    
    
    
    A$
    
    
    
    
    
    
    
    
    
    
    
    150
    
    
    
    2007
    
    
    
    A$Michael Fitzpatrick
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201
    
    
    
    2008
    
    
    
    A$
    
    
    
    
    
    
    
    
    
    
    
    222
    
    
    
    2007
    
    
    
    A$Yves Fortier
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    2007
    
    
    
    £Richard Goodmanson
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    212
    
    
    
    2007
    
    
    
    £Andrew Gould
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    242
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    212
    
    
    
    2007
    
    
    
    £Lord Kerr
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    265
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    2007
    
    
    
    £David Mayhew15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    158
    
    
    
    2007
    
    
    
    £Sir Richard Sykes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    285
    
    
    
    2007
    
    
    
    £Paul Tellier
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    240
    
    
    
    2008
    
    
    
    £
    
    
    
    
    
    
    
    
    
    
    
    35
    
    
    
    2007
    
    
    
    £Executive directorsTom Albanese
    
    
    1,443
    
    
    
    
    
    
    
    
    
    
    
    2,110
    
    
    
    2008
    
    
    
    £1,706
    
    
    
    
    
    
    
    
    
    
    
    12,639
    
    
    
    2007
    
    
    
    £Leigh Clifford
    
    
    364
    
    
    
    
    
    
    
    817
    
    
    
    7,515
    
    
    
    2007
    
    
    
    £Guy Elliott
    
    
    534
    
    
    
    
    
    
    
    
    
    
    
    409
    
    
    
    2008
    
    
    
    £560
    
    
    
    
    
    
    
    
    
    
    
    9,353
    
    
    
    2007
    
    
    
    £Dick Evans
    
    
    338
    
    
    
    
    
    
    
    
    
    
    
    4,409
    
    
    
    2008
    
    
    US$63
    
    
    
    
    
    
    
    
    
    
    
    423
    
    
    
    2007
    
    
    US$Other key management personnelHugo Bague
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    2,416
    
    
    
    2008
    
    
    
    £Preston Chiaro
    
    
    177
    
    
    
    8
    
    
    
    
    
    
    
    350
    
    
    
    2008
    
    
    US$190
    
    
    
    7
    
    
    
    
    
    
    
    7,400
    
    
    
    2007
    
    
    US$Bret Clayton
    
    
    79
    
    
    
    2
    
    
    
    
    
    
    
    1229
    
    
    
    2008
    
    
    US$82
    
    
    
    3
    
    
    
    
    
    
    
    4,053
    
    
    
    2007
    
    
    US$Oscar Groeneveld
    
    
    281
    
    
    
    
    
    
    
    
    
    
    
    8,807
    
    
    
    2007
    
    
    
    A$Keith Johnson
    
    
    384
    
    
    
    
    
    
    
    
    
    
    
    433
    
    
    
    2008
    
    
    
    £422
    
    
    
    
    
    
    
    
    
    
    
    5,981
    
    
    
    2007
    
    
    
    £Andrew Mackenzie
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    5,554
    
    
    
    2007
    
    
    
    £Grant Thorne
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    704
    
    
    
    2008
    
    
    
    A$Debra Valentine
    
    
    123
    
    
    
    8
    
    
    
    
    
    
    
    1,888
    
    
    
    2008
    
    
    US$Sam Walsh
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    137
    
    
    
    2008
    
    
    
    A$290
    
    
    
    
    
    
    
    
    
    
    
    7,686
    
    
    
    2007
    
    
    
    A$
 Form 20-F 153




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##### Table of Contents



Table 1  Executives and non executive directors remuneration (continued)
 Notes to Table 1
 1.
    
    The total remuneration is reported in US dollars. The amounts, with the exception of the
annual cash bonus, can be converted into sterling at the rate of US$1 = £0.5370 or
alternatively into Australian dollars at the rate of US$1 = A$1.1680, each being the average
exchange rate for 2008. The annual cash bonus is payable under the STIP and this may be
converted at the 2008 year end exchange rate of US$1 = £0.6923 to ascertain the sterling
equivalent or alternatively, US$1 = A$1.4469 to calculate the Australian dollar value.2.
    
    2008 base fees for Paul Skinner includes two months of backdated pay increase for November
and December 2007.3.
    
    Tom Albanese was appointed chief executive with effect from May 2007. The base salary paid to
him in 2008 reflects his first full year in that role.4.
    
    Cash bonus includes STIP and other special one-off bonuses as described on page 147. The
Committee has approved a 100 per cent bonus deferral for the executive directors and product
group chief executives and a 50 per cent bonus deferral for the other executives. All bonus
deferrals are in the form of Rio Tinto shares and are disclosed under Deferred Shares. In
the case of Keith Johnson, who leaves the Group on 31 July 2009, bonus deferral did not apply
and his STIP was paid in cash.5.
    
    The Other cash based benefits for non executive directors comprise overseas meeting
allowances only. Other cash based benefits for executives include cash in lieu of a car and
fuel. For Hugo Bague only, it also includes a cash supplement equal to 20 per cent of the
amount by which his Contributory Salary exceeds the Earning Cap as defined in the Rio
Tinto Pension Fund.6.
    
    Non monetary benefits includes for executives, as applicable, healthcare, the provision of
a car, and secondment costs, comprising housing, education, professional advice, tax
equalisation and relocation payments. For executives and non executive directors it also
includes the cost of accompanied travel in 2008 and the comparative figures for 2007 which
have been restated. In the cases of Tom Albanese, Paul Skinner and Guy Elliott, it also
includes the proportionate value of company provided transport. In the case of Sir Richard
Sykes, it includes the value of a retirement gift. For Guy Elliott, it includes the value of
personal tax advice received. For Paul Skinner, it includes medical insurance premiums. Rio
Tinto provides accident cover for employee members of the Rio Tinto Pension Fund. Some of the
executive directors and key management personnel are members of the Rio Tinto Pension Fund,
the total premium paid in 2008 was £7,000. Rio Tinto plc provides accident cover for non
executive directors; the total premium paid in 2008 was £3,000.7.
    
    Total short term benefits represents the short term benefits total required under schedule
7A of the UK Companies Act 1985 (UK) and total remuneration under the Australian Corporations
Act 2001 and applicable accounting standards.8.
    
    The value of share based awards has been determined in accordance with the recognition and
measurement requirements of IFRS2 Share based Payment. The fair value of awards granted
under the Share Option Plan (SOP), the Management Share Plan (MSP) and the Share Savings Plan
(SSP) have been calculated at their dates of grant using an independent lattice based option
valuation model provided by external consultants, Lane Clark and Peacock LLP. Some of these
awards will be settled in cash, rather than the transfer of shares, and so the fair value of
these cash settled awards has been calculated based on Rio Tintos share price at 31 December
2008. The fair value of awards granted under the Mining Companies Comparative Plan (the MCCP)
has been calculated using a Monte Carlo valuation model based on the market price of shares
and their relative TSR performance at 31 December 2008. Over 2008, the fall in Rio Tintos
share price combined with a reduction in Rio Tintos TSR performance relative to the
comparator group has led to a significant decrease in the value attached to the MCCP under the
IFRS2 accounting standard. The decrease in the fair values from 1 January to 31 December 2008
has contributed to the negative MCCP compensation amounts arising for certain individuals.
Further details of the valuation methods and assumptions used for these awards are included in
note 48 (Share Based Payments) in the 2008 Financial statements. The fair value of other share
based awards is measured at the purchase cost of the shares from the market. The non executive
directors do not participate in the long term incentive plans.9.
    
    Deferred shares represents the deferral of the 2008 bonus under STIP into Rio Tinto shares.10.
    
    The number of conditional shares awarded to executives under the MCCP for the twelve month
period ending 31 December 2008 is shown in Table 4 of this report. Other long term employee
benefits in 2007 have been restated to exclude company contributions under the 401k
arrangements for Preston Chiaro and Bret Clayton. This was already included in Pension and
superannuation.11.
    
    MSP values include regular awards and engagement awards made to Hugo Bague and Debra
Valentine as described on page 143.12.
    
    The award of options to executives under the SOP during the twelve month period up to 31
December 2008 is shown in Table 5 of this report.13.
    
    Under the Share Ownership Plan UK executives are beneficiaries of free shares up to a maximum
value of £3,000 (US$5,587) and may also contribute to purchase additional shares where the
Company will match their personal contributions up to a maximum of £1,500 (US$2,793) per
annum. Under these plans, Guy Elliott and Keith Johnson each received a total of £4,500
(US$8,380) and Tom Albanese a total of £3,000 (US$5,587).14.
    
    The costs shown for defined benefit pension plans and post retirement medical benefits are
the service costs attributable to the individual, calculated in accordance with IAS19. The
cost for defined contribution plans is the amount, or notional amount for Dick Evans,
contributed in the year by the Company. The 2007 cost for Dick Evans has been restated to
include the Alcan Employee Savings Plan. American product group chief executives enjoy a
Company matching of personal contribution for shares under the 401K arrangements up to a
maximum of US$13,800. The Company matched personal contributions to the following values:
Preston Chiaro US$13,800 and Bret Clayton US$13,800.15.
    
    Jan du Plessis was appointed director with effect from 1 September 2008.16.
    
    David Mayhews fees for the full year were paid to JPMorgan Cazenove. The fees disclosed
above include £15,000 (US$27,935) paid to JPMorgan Cazenove for David Mayhews attendance at
Audit committeemeetings in his capacity as adviser.17.
    
    Andrew Mackenzie commenced his notice period on 15 November 2007 and ceased employment on 15
November 2008. Form 20-F 154




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##### Table of Contents



Table
2  Directors pension entitlements
(as at 31 December 2008)
 Defined Benefit pensions
 Accrued benefits
    
    
    Transfer valuesAge
    
    
    Years of
    
    
    At 31
    
    
    At 31
    
    
    Change in
    
    
    Change in
    
    
    At 31
    
    
    At 31
    
    
    Change,
    
    
    Transferservice
    
    
    December
    
    
    December
    
    
    accrued
    
    
    accrued
    
    
    December
    
    
    December
    
    
    net of
    
    
    value ofcompleted
    
    
    2007
    
    
    2008
    
    
    benefits
    
    
    benefit
    
    
    2007
    
    
    2008
    
    
    personal
    
    
    change induring the
    
    
    net of
    
    
    
    
    
    
    
    
    
    
    contributi
    
    
    accruedyear
    
    
    inflation1
    
    
    
    
    
    
    
    
    
    
    ons
    
    
    benefitended 31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    net ofDecember
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    inflation12008£000 pa
    
    
    £000 pa
    
    
    £000 pa
    
    
    £000 pa
    
    
    £000
    
    
    £000
    
    
    £000
    
    
    £000pension
    
    
    pension
    
    
    pension
    
    
    pensionUK directorsTom Albanese2,3
    
    
    51
    
    
    
    27
    
    
    
    183
    
    
    
    286
    
    
    
    103
    
    
    
    102
    
    
    
    1,634
    
    
    
    2,836
    
    
    
    1,202
    
    
    
    1,496Guy Elliott2
    
    
    53
    
    
    
    28
    
    
    
    381
    
    
    
    434
    
    
    
    53
    
    
    
    49
    
    
    
    5,602
    
    
    
    6,728
    
    
    
    1,126
    
    
    
    764Defined Contribution pensionCompany contributionsAge
    
    
    Years of
    
    
    At 31
    
    
    At 31service
    
    
    December
    
    
    Decembercompleted
    
    
    2007
    
    
    2008US$000
    
    
    US$000pension
    
    
    pensionUK directorsDick Evans4
    
    
    61
    
    
    
    1
    
    
    
    63
    
    
    
    338
 Notes to Table 2
 1.
    
    Price inflation is calculated as the increase in the relevant retail or consumer price index over the year to 31 December 2008.2.
    
    Transfer values are calculated in a manner consistent with Retirement Benefit Schemes
-Transfer Values (GN11) published by the Institute of Actuaries and the Faculty of Actuaries.3.
    
    Tom Albanese became a director of Rio Tinto plc and Rio Tinto Limited with effect from 7
March 2006. He accrued pension benefits in the US plans for service up to 30 June 2006, and in
the UK fund for subsequent service. The transfer value of his benefits in the US plans is
represented by the Accumulated Benefit Obligation calculated on the accounting assumptions
used for the Groups post-retirement benefits disclosures.4.
    
    Dick Evans became a director of Rio Tinto plc and Rio Tinto Limited with effect from 25
October 2007 and has an unfunded notional defined contribution benefit. The 2007 company
contributions have been restated to include the Alcan Employee Saving Plan. Form 20-F 155




---



##### Table of Contents



Table
3  Executives and non executive directors beneficial interests in Rio Tinto shares
 Rio Tinto plc
    
    
    Rio Tinto Limited
    
    
    Movement1 Jan
    
    
    31 Dec
    
    
    20 Mar
    
    
    1 Jan
    
    
    31 Dec
    
    
    20 Mar
    
    
    Exercise of
    
    
    Compen-
    
    
    Other 52008 1
    
    

2008 2
    
    

2009 2
    
    
    2008 1
    
    

2008 2
    
    

2009 2
    
    
    options 3
    
    
    sation 4DirectorsTom Albanese6
    
    
    44,970
    
    
    
    57,079
    
    
    
    88,469
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,125
    
    
    
    374Sir David Clementi
    
    
    454
    
    
    
    454
    
    
    
    454
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vivienne Cox
    
    
    826
    
    
    
    826
    
    
    
    826
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jan du Plessis
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Sir Rod Eddington
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Guy Elliott
    
    
    49,024
    
    
    
    60,719
    
    
    
    62,192
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,431
    
    
    
    10,790
    
    
    
    947Dick Evans
    
    
    
    
    
    
    
    
    
    
    40,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,000Michael Fitzpatrick
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100
    
    
    
    2,100
    
    
    
    4,100
    
    
    
    
    
    
    
    
    
    
    
    2,000Yves Fortier
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Richard Goodmanson
    
    
    2,307
    
    
    
    2,307
    
    
    
    2,307
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Andrew Gould
    
    
    1,000
    
    
    
    1,000
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lord Kerr
    
    
    3,000
    
    
    
    3,000
    
    
    
    7,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000David Mayhew
    
    
    2,500
    
    
    
    2,500
    
    
    
    2,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Paul Skinner
    
    
    5,696
    
    
    
    5,795
    
    
    
    9,795
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,099Sir Richard Sykes
    
    
    2,614
    
    
    
    2,632
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Paul Tellier
    
    
    
    
    
    
    
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,000ExecutivesHugo Bague
    
    
    
    
    
    
    5,900
    
    
    
    5,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,900Preston Chiaro6,7
    
    
    64,755
    
    
    
    64,849
    
    
    
    64,922
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167Bret Clayton6
    
    
    8,096
    
    
    
    8,502
    
    
    
    11,863
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,767Keith Johnson
    
    
    18,924
    
    
    
    25,330
    
    
    
    25,358
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,434
    
    
    
    Grant Thorne
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,213
    
    
    
    16,096
    
    
    
    1,875
    
    
    
    14,114
    
    
    
    107Debra Valentine
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Sam Walsh
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,814
    
    
    
    43,033
    
    
    
    43,033
    
    
    
    
    
    
    
    
    
    
    
    219
 Notes to Table 3
 1.
    
    Or date of appointment if later.2.
    
    Or date of retirement, or resignation, if earlier.3.
    
    Shares obtained through the exercise of options under the Rio Tinto Share Savings Plan or the
Rio Tinto Share Option Plan. The number of shares retained may differ from the number of
options exercised.4.
    
    Shares obtained through the Rio Tinto Share Ownership Plan and/or vesting of awards under the
Mining Companies Comparative Plan.5.
    
    Share movements due to sale or purchase of shares, shares received under the Dividend
Reinvestment Plan, shares purchased/sold through the Rio into America Savings Plan or non
executive directors share purchase plan.6.
    
    The shareholdings of Tom Albanese, Preston Chiaro and Bret Clayton include Rio Tinto plc ADRs
held through the Rio Tinto America Savings Plan.7.
    
    Preston Chiaros 31 December 2007 balance was understated in the 2007 Remuneration report by
2,170 Rio Tinto plc shares.8.
    
    Trading restrictions due to close periods, the unsolicited pre-conditional offer from BHP
Billiton and the Chinalco strategic partnership have prevented executives from dealing for
most of 2008 and 2009. Form 20-F 156




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##### Table of Contents



Table 4  Executives awards under long term incentive plans
 Plan terms and conditionsConditional
    
    
    Market
    
    
    1 Jan
    
    
    Awarded
    
    
    Lapsed/
    
    
    Vested
    
    
    31 Dec
    
    
    Performance
    
    
    Date of
    
    
    Market
    
    
    Monetaryaward
    
    
    price at
    
    
    2008
    
    
    
    
    
    
    cancelled
    
    
    
    
    
    

2008 1
    
    
    period
    
    
    vesting
    
    
    price at
    
    
    value ofgranted
    
    
    award 2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    concludes
    
    
    
    
    
    
    vesting
    
    
    vestedawardUS$000Rio Tinto plc  Mining Companies Comparative PlanTom Albanese
    
    09 Mar 05
    
    £
    18.39
    
    
    
    55,951
    
    
    
    
    
    
    
    4,197
    
    
    
    51,754
    
    
    
    
    
    
    31 Dec 08
    
    17 Feb 09
    
    £
    18.97
    
    
    
    1,41807 Mar 06
    
    £
    26.30
    
    
    
    45,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,007
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    44,124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,124
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    49,040
    
    
    
    
    
    
    
    
    
    
    
    49,040
    
    
    31 Dec 11145,082
    
    
    
    49,040
    
    
    
    4,197
    
    
    
    51,754
    
    
    
    138,171Hugo Bague
    
    13 Mar 07
    
    £
    26.81
    
    
    
    6,035
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,035
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    11,672
    
    
    
    
    
    
    
    
    
    
    
    11,672
    
    
    31 Dec 116,035
    
    
    
    11,672
    
    
    
    
    
    
    
    
    
    
    
    17,707Preston Chiaro
    
    09 Mar 05
    
    £
    18.39
    
    
    
    42,351
    
    
    
    
    
    
    
    3,177
    
    
    
    39,174
    
    
    
    
    
    
    31 Dec 08
    
    19 Feb 09
    
    £
    20.00
    
    
    
    1,13207 Mar 06
    
    £
    26.30
    
    
    
    34,182
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,182
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    25,679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,679
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    19,569
    
    
    
    
    
    
    
    
    
    
    
    19,569
    
    
    31 Dec 11102,212
    
    
    
    19,569
    
    
    
    3,177
    
    
    
    39,174
    
    
    
    79,430Bret Clayton
    
    09 Mar 05
    
    £
    18.39
    
    
    
    11,539
    
    
    
    
    
    
    
    1,928
    
    
    
    9,611
    
    
    
    
    
    
    31 Dec 08
    
    17 Feb 09
    
    £
    18.97
    
    
    
    26307 Mar 06
    
    £
    26.30
    
    
    
    10,767
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,767
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    22,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,566
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    18,894
    
    
    
    
    
    
    
    
    
    
    
    18,894
    
    
    31 Dec 1144,872
    
    
    
    18,894
    
    
    
    1,928
    
    
    
    9,611
    
    
    
    52,227Guy Elliott
    
    09 Mar 05
    
    £
    18.39
    
    
    
    51,081
    
    
    
    
    
    
    
    3,832
    
    
    
    47,249
    
    
    
    
    
    
    31 Dec 08
    
    17 Mar 09
    
    £
    21.01
    
    
    
    1,43407 Mar 06
    
    £
    26.30
    
    
    
    40,670
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,670
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    30,837
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,837
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    25,552
    
    
    
    
    
    
    
    
    
    
    
    25,552
    
    
    31 Dec 11122,588
    
    
    
    25,552
    
    
    
    3,832
    
    
    
    47,249
    
    
    
    97,059Dick Evans
    
    10 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    40,489
    
    
    
    
    
    
    
    
    
    
    
    40,489
    
    
    31 Dec 11
    
    
    
    40,489
    
    
    
    
    
    
    
    
    
    
    
    40,489Keith Johnson
    
    09 Mar 05
    
    £
    18.39
    
    
    
    33,556
    
    
    
    
    
    
    
    2,517
    
    
    
    31,039
    
    
    
    
    
    
    31 Dec 08
    
    16 Feb 09
    
    £
    19.25
    
    
    
    86307 Mar 06
    
    £
    26.30
    
    
    
    26,508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,508
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    19,805
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,805
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    15,887
    
    
    
    
    
    
    
    
    
    
    
    15,887
    
    
    31 Dec 1179,869
    
    
    
    15,887
    
    
    
    2,517
    
    
    
    31,039
    
    
    
    62,200Debra
Valentine
    
    10 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    11,539
    
    
    
    
    
    
    
    
    
    
    
    11,539
    
    
    31 Dec 11
    
    
    
    11,539
    
    
    
    
    
    
    
    
    
    
    
    11,539Rio Tinto Limited  Mining Companies Comparative PlanGrant Thorne
    
    09 Mar 05
    
    
    A$47.39
    
    
    
    10,665
    
    
    
    
    
    
    
    1,782
    
    
    
    8,883
    
    
    
    
    
    
    31 Dec 08
    
    16 Feb 09
    
    
    A$50.80
    
    
    
    31207 Mar 06
    
    
    A$69.60
    
    
    
    14,568
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,568
    
    
    31 Dec 0913 Mar 07
    
    
    A$134.00
    
    
    
    13,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,037
    
    
    31 Dec 1010 Mar 08
    
    
    A$126.48
    
    
    
    
    
    
    
    16,658
    
    
    
    
    
    
    
    
    
    
    
    16,658
    
    
    31 Dec 1138,270
    
    
    
    16,658
    
    
    
    1,782
    
    
    
    8,883
    
    
    
    44,263Sam Walsh
    
    09 Mar 05
    
    
    A$47.39
    
    
    
    41,176
    
    
    
    
    
    
    
    3,089
    
    
    
    38,087
    
    
    
    
    
    
    31 Dec 08
    
    17 Feb 09
    
    
    A$50.07
    
    
    
    1,31807 Mar 06
    
    
    A$69.60
    
    
    
    33,655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,655
    
    
    31 Dec 0913 Mar 07
    
    
    A$134.00
    
    
    
    25,103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,103
    
    
    31 Dec 1010 Mar 08
    
    
    A$126.48
    
    
    
    
    
    
    
    21,366
    
    
    
    
    
    
    
    
    
    
    
    21,366
    
    
    31 Dec 1199,934
    
    
    
    21,366
    
    
    
    3,089
    
    
    
    38,087
    
    
    
    80,124
 Form 20-F 157




---



##### Table of Contents



Table
4  Executives awards under long term incentive plans
(continued)
 Plan terms and conditionsConditional
    
    
    Market
    
    
    1 Jan
    
    
    Awarded
    
    
    Lapsed/
    
    
    Vested
    
    
    20 Mar
    
    
    Performance
    
    
    Date of
    
    
    Market
    
    
    Monetaryaward
    
    
    price at
    
    
    2009
    
    
    
    
    
    
    cancelled
    
    
    
    
    
    
    20091
    
    
    period
    
    
    vesting
    
    
    price at
    
    
    value ofgranted
    
    
    award
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    concludes
    
    
    
    
    
    
    vesting
    
    
    vestedawardUS$000Rio Tinto plc  Mining Companies Comparative PlanTom Albanese
    
    07 Mar 06
    
    £
    26.30
    
    
    
    45,007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,007
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    44,124
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,124
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    49,040
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49,040
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    39,669
    
    
    
    
    
    
    
    
    
    
    
    39,669
    
    
    31 Dec 12138,171
    
    
    
    39,669
    
    
    
    
    
    
    
    
    
    
    
    177,840Hugo Bague
    
    13 Mar 07
    
    £
    26.81
    
    
    
    6,035
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,035
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    11,672
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,672
    
    
    31 Dec 1117,707
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,707Preston Chiaro
    
    07 Mar 06
    
    £
    26.30
    
    
    
    34,182
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,182
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    25,679
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,679
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    19,569
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,569
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    17,269
    
    
    
    
    
    
    
    
    
    
    
    17,269
    
    
    31 Dec 1279,430
    
    
    
    17,269
    
    
    
    
    
    
    
    
    
    
    
    96,699Bret Clayton
    
    07 Mar 06
    
    £
    26.30
    
    
    
    10,767
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,767
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    22,566
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,566
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    18,894
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,894
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    16,673
    
    
    
    
    
    
    
    
    
    
    
    16,673
    
    
    31 Dec 1252,227
    
    
    
    16,673
    
    
    
    
    
    
    
    
    
    
    
    68,900Jacynthe Côté
    
    10 Mar 08
    
    £
    52.58
    
    
    
    18,422
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,422
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    19,651
    
    
    
    
    
    
    
    
    
    
    
    19,651
    
    
    31 Dec 1218,422
    
    
    
    19,651
    
    
    
    
    
    
    
    
    
    
    
    38,073Guy Elliott
    
    07 Mar 06
    
    £
    26.30
    
    
    
    40,670
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,670
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    30,837
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,837
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    25,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,552
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    29,528
    
    
    
    
    
    
    
    
    
    
    
    29,528
    
    
    31 Dec 1297,059
    
    
    
    29,528
    
    
    
    
    
    
    
    
    
    
    
    126,587Dick Evans
    
    10 Mar 08
    
    £
    52.58
    
    
    
    40,489
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,489
    
    
    31 Dec 1117 Mar 09
    
    £
    19.52
    
    
    
    
    
    
    
    35,729
    
    
    
    
    
    
    
    
    
    
    
    35,729
    
    
    31 Dec 1240,489
    
    
    
    35,729
    
    
    
    
    
    
    
    
    
    
    
    76,218Keith Johnson
    
    07 Mar 06
    
    £
    26.30
    
    
    
    26,508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,508
    
    
    31 Dec 0913 Mar 07
    
    £
    26.81
    
    
    
    19,805
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,805
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    15,887
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,887
    
    
    31 Dec 1162,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    62,200Debra
Valentine
    
    10 Mar 08
    
    £
    52.58
    
    
    
    11,539
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,539
    
    
    31 Dec 1111,539
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,539Rio Tinto Limited  Mining Companies Comparative PlanGrant Thorne
    
    07 Mar 06
    
    
    A$69.60
    
    
    
    14,568
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,568
    
    
    31 Dec 0913 Mar 07
    
    
    A$134.00
    
    
    
    13,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,037
    
    
    31 Dec 1010 Mar 08
    
    
    A$126.48
    
    
    
    16,658
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,658
    
    
    31 Dec 1144,263
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,263Sam Walsh
    
    07 Mar 06
    
    
    A$69.60
    
    
    
    33,655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,655
    
    
    31 Dec 0913 Mar 07
    
    
    A$134.00
    
    
    
    25,103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,103
    
    
    31 Dec 1010 Mar 08
    
    
    A$126.48
    
    
    
    21,366
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,366
    
    
    31 Dec 1117 Mar 09
    
    
    A$52.01
    
    
    
    
    
    
    
    26,670
    
    
    
    
    
    
    
    
    
    
    
    26,670
    
    
    31 Dec 1280,124
    
    
    
    26,670
    
    
    
    
    
    
    
    
    
    
    
    106,794
 Form 20-F 158




---



##### Table of Contents



Table
4  Executives awards under long term incentive plans (continued)
 Plan terms and conditionsConditional
    
    
    Market
    
    
    1 Jan
    
    
    Awarded
    
    
    Lapsed/
    
    
    Vested
    
    
    31 Dec
    
    
    Performance
    
    
    Date of
    
    
    Market
    
    
    Monetaryaward
    
    
    price at
    
    
    2008
    
    
    
    
    
    
    cancelled
    
    
    
    
    
    
    20081
    
    
    period
    
    
    vesting
    
    
    price at
    
    
    value ofgranted
    
    
    award
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    concludes
    
    
    
    
    
    
    vesting
    
    
    vestedawardUS$000Rio Tinto plc Management Share PlanHugo Bague
    
    9 Sep 07
    
    £
    26.81
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    31 Jul 08
    
    1 Aug 08
    
    £
    50.47
    
    
    
    7299 Sep 07
    
    £
    26.81
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    31 Jul 0910 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    1,509
    
    
    
    
    
    
    
    
    
    
    
    1,509
    
    
    31 Dec 1020,000
    
    
    
    1,509
    
    
    
    
    
    
    
    10,000
    
    
    
    11,509Jacynthe
    
    10 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    11,987
    
    
    
    
    
    
    
    
    
    
    
    11,987
    
    
    25 Jan 09Côté
    
    10 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    17,982
    
    
    
    
    
    
    
    
    
    
    
    17,982
    
    
    25 Oct 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    6,028
    
    
    
    
    
    
    
    
    
    
    
    6,028
    
    
    31 Dec 1035,997
    
    
    
    
    
    
    
    
    
    
    
    35,997Debra Valentine
    
    10 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    1,504
    
    
    
    
    
    
    
    
    
    
    
    1,504
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    15 Jan 1110 Mar 08
    
    £
    52.58
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    15 Jan 1211,504
    
    
    
    
    
    
    
    
    
    
    
    11,504Rio Tinto Limited Management Share PlanGrant Thorne
    
    10 Mar 07
    
    
    A$134.00
    
    
    
    2,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    31 Dec 0910 Mar 08
    
    
    A$126.48
    
    
    
    
    
    
    
    2,056
    
    
    
    
    
    
    
    
    
    
    
    2,056
    
    
    31 Dec 102,750
    
    
    
    2,056
    
    
    
    
    
    
    
    
    
    
    
    4,806
 Plan terms and conditionsConditional
    
    
    Market
    
    
    1 Jan
    
    
    Awarded
    
    
    Lapsed/
    
    
    vested
    
    
    20 Mar
    
    
    Performance
    
    
    Date of
    
    
    Market
    
    
    Monetaryaward
    
    
    price at
    
    
    2009
    
    
    3,5
    
    
    cancelled
    
    
    
    
    
    
    20091
    
    
    period
    
    
    vesting
    
    
    price at
    
    
    value ofgranted
    
    

award
2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    concludes
    
    
    
    
    
    
    vesting
    
    
    vestedawardUS$000Rio Tinto plc  Management Share PlanHugo Bague
    
    9 Sep 07
    
    £
    26.81
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    31 Jul 0910 Mar 08
    
    £
    52.58
    
    
    
    1,509
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,509
    
    
    31 Dec 1017 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    13,853
    
    
    
    
    
    
    
    
    
    
    
    13,853
    
    
    31 Dec 1111,509
    
    
    
    13,853
    
    
    
    
    
    
    
    
    
    
    
    25,362Jacynthe
    
    10 Mar 08
    
    £
    52.58
    
    
    
    11,987
    
    
    
    
    
    
    
    
    
    
    
    11,987
    
    
    
    
    
    
    25 Jan 09
    
    25 Jan 09
    
    
    £15.23
    
    
    
    264Côté
    
    10 Mar 08
    
    £
    52.58
    
    
    
    17,982
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,982
    
    
    25 Oct 1010 Mar 08
    
    £
    52.58
    
    
    
    6,028
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,028
    
    
    31 Dec 1035,997
    
    
    
    
    
    
    
    
    
    
    
    11,987
    
    
    
    24,010Debra Valentine
    
    10 Mar 08
    
    £
    52.58
    
    
    
    1,504
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,504
    
    
    31 Dec 1010 Mar 08
    
    £
    52.58
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    15 Jan 1110 Mar 08
    
    £
    52.58
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    15 Jan 1217 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    15,785
    
    
    
    
    
    
    
    
    
    
    
    15,785
    
    
    31 Dec 1111,504
    
    
    
    15,785
    
    
    
    
    
    
    
    
    
    
    
    27,289Rio Tinto Limited  Management Share PlanGrant Thorne
    
    10 Mar 07
    
    
    A$134.00
    
    
    
    2,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    31 Dec 0910 Mar 08
    
    
    A$126.48
    
    
    
    2,056
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,056
    
    
    31 Dec 1017 Mar 09
    
    
    A$52.01
    
    
    
    
    
    
    
    14,293
    
    
    
    
    
    
    
    
    
    
    
    14,293
    
    
    31 Dec 114,806
    
    
    
    14,293
    
    
    
    
    
    
    
    
    
    
    
    19,099
 Form 20-F 159




---



##### Table of Contents



Table 4  Executives awards under long term incentive plans (continued)
 Plan terms and conditionsConditional
    
    
    Market
    
    
    1 Jan
    
    
    Awarded
    
    
    Lapsed/
    
    
    Vested
    
    
    20 Mar.
    
    
    Performance
    
    
    Date of
    
    
    Market
    
    
    Monetaryaward
    
    
    price at
    
    
    2009
    
    
    
    
    
    
    cancelled
    
    
    
    
    
    
    20091
    
    
    period
    
    
    vesting
    
    
    price at
    
    
    value ofgranted
    
    
    award
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    concludes
    
    
    
    
    
    
    vesting
    
    
    vestedawardUS$000Rio Tinto plc  Bonus Deferral PlanTom Albanese
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    23,361
    
    
    
    
    
    
    
    
    
    
    
    23,361
    
    
    31 Dec 11
    
    
    
    23,361
    
    
    
    
    
    
    
    
    
    
    
    23,361Hugo Bague
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    4,165
    
    
    
    
    
    
    
    
    
    
    
    4,165
    
    
    31 Dec 1017 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    4,166
    
    
    
    
    
    
    
    
    
    
    
    4,166
    
    
    31 Dec 11
    
    
    
    8,331
    
    
    
    
    
    
    
    
    
    
    
    8,331Preston Chiaro
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    15,764
    
    
    
    
    
    
    
    
    
    
    
    15,764
    
    
    31 Dec 11
    
    
    
    15,764
    
    
    
    
    
    
    
    
    
    
    
    15,764Bret Clayton
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    4,320
    
    
    
    
    
    
    
    
    
    
    
    4,320
    
    
    31 Dec 11
    
    
    
    4,320
    
    
    
    
    
    
    
    
    
    
    
    4,320Jacynthe
Côté
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    13,783
    
    
    
    
    
    
    
    
    
    
    
    13,783
    
    
    31 Dec 11
    
    
    
    13,783
    
    
    
    
    
    
    
    
    
    
    
    13,783Guy Elliott
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    15,402
    
    
    
    
    
    
    
    
    
    
    
    15,402
    
    
    31 Dec 11
    
    
    
    15,402
    
    
    
    
    
    
    
    
    
    
    
    15,402Dick Evans
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    19,925
    
    
    
    
    
    
    
    
    
    
    
    19,925
    
    
    31 Dec 11
    
    
    
    19,925
    
    
    
    
    
    
    
    
    
    
    
    19,925Debra Valentine
    
    17 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    5,192
    
    
    
    
    
    
    
    
    
    
    
    5,192
    
    
    31 Dec 1017 Mar 09
    
    £
    19.82
    
    
    
    
    
    
    
    5,193
    
    
    
    
    
    
    
    
    
    
    
    5,193
    
    
    31 Dec 11
    
    
    
    10,385
    
    
    
    
    
    
    
    
    
    
    
    10,385Rio Tinto Limited  Bonus Deferral PlanGrant Thorne
    
    17 Mar 09
    
    
    A$52.01
    
    
    
    
    
    
    
    4,911
    
    
    
    
    
    
    
    
    
    
    
    4,911
    
    
    31 Dec 1017 Mar 09
    
    
    A$52.01
    
    
    
    
    
    
    
    4,912
    
    
    
    
    
    
    
    
    
    
    
    4,912
    
    
    31 Dec 11
    
    
    
    9,823
    
    
    
    
    
    
    
    
    
    
    
    9,823Sam Walsh
    
    17 Mar 09
    
    
    A$52.01
    
    
    
    
    
    
    
    19,022
    
    
    
    
    
    
    
    
    
    
    
    19,022
    
    
    31 Dec 11
    
    
    
    19,022
    
    
    
    
    
    
    
    
    
    
    
    19,022
 Notes to Table 4
 1.
    
    Or the date of retirement or resignation if earlier.2.
    
    Awards denominated in sterling were for Rio Tinto plc ordinary shares of 10p each and awards
denominated in Australian Dollars were for Rio Tinto Limited ordinary shares.3.
    
    The weighted average fair value of conditional awards under the Mining Companies Comparative
Plan granted in 2008 was £48.07 for Rio Tinto plc and A$107.04 for Rio Tinto Limited. The
weighted average fair value of conditional awards under the Management Share Plan granted in
2008 was £55.15 for Rio Tinto plc and A$129.37 for Rio Tinto Limited.4.
    
    Conditional awards are awarded at no cost to the recipient and no amount remains unpaid on
any shares granted.5.
    
    The value of the vested awards have been based on share prices, being the respective closing
share prices for Rio Tinto plc and Rio Tinto Limited ordinary shares on the day of vesting.6.
    
    The amount in US dollars has been converted from sterling at the rate of 1US$ = £0.6923 and
Australian dollars at the rate of 1US$ = A$1.4469, being the year end exchange rate used
elsewhere in the annual report. Form 20-F 160




---



##### Table of Contents



Table
5  Executives options to acquire Rio Tinto shares
 Vestedand
    
    
    
    
    
    
    
    
    
    
    Value ofexercisable
    
    
    
    
    
    
    
    
    
    
    options
    
    
    MarketVested
    
    
    
    
    
    
    
    
    
    
    on
    
    
    
    
    
    
    
    
    
    
    exercised
    
    
    price on
    
    
    Date from1 Jan
    
    
    Granted
    
    
    during
    
    
    
    
    
    
    Lapsed8/
    
    
    31 Dec
    
    
    31 Dec
    
    
    Option
    
    
    during
    
    
    date of
    
    
    which first
    
    
    Expiry2008
    
    

2, 6
    
    
    2008
    
    
    Exercised
    
    
    Cancelled
    
    
    20085
    
    
    20081
    
    
    price4
    
    
    2008
    
    
    exercise
    
    
    exercisable
    
    
    dateRio Tinto plc -
Share Savings PlanTom Albanese
    
    
    791
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    791
    
    
    £
    20.68
    
    
    
    
    
    
    
    
    
    
    1 Jan 2012
    
    30 Jun 2012Hugo Bague
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238
    
    
    £
    32.17
    
    
    
    
    
    
    
    
    
    
    1 Jan 2012
    
    30 Jun 2012Preston Chiaro
    
    
    298
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    298
    
    
    £
    20.88
    
    
    
    
    
    
    
    
    
    
    1 Jan 2009
    
    6 Jan 2009
    
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    £
    20.50
    
    
    
    
    
    
    
    
    
    
    1 Jan 2011
    
    16 Jan 2011Bret Clayton
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163
    
    
    £
    35.57
    
    
    
    
    
    
    
    
    
    
    1 Jan 2010
    
    5 Jan 2010Guy Elliott
    
    
    1,431
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,431
    
    
    £
    11.07
    
    
    
    
    
    
    
    
    
    
    1 Jan 2009
    
    30 Jun 2009
    
    
    
    520
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    520
    
    
    £
    32.17
    
    
    
    
    
    
    
    
    
    
    1 Jan 2014
    
    30 Jun 2014Dick Evans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Keith Johnson
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456
    
    
    £
    20.68
    
    
    
    
    
    
    
    
    
    
    1 Aug 2009
    
    31 Jan 2010Debra Valentine
    
    
    
    
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    £
    20.50
    
    
    
    
    
    
    
    
    
    
    1 Jan 2011
    
    17 Jan 2011Rio Tinto plc -
Share Option PlanTom Albanese
    
    
    102,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102,718
    
    
    
    102,718
    
    
    £
    12.656
    
    
    
    
    
    
    
    
    
    
    6 Mar 2005
    
    6 Mar 2011125,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,336
    
    
    
    125,336
    
    
    £
    14.586
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 2012139,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139,165
    
    
    
    139,165
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201384,020
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,020
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201483,926
    
    
    
    
    
    
    
    83,926
    
    
    
    
    
    
    
    
    
    
    
    83,296
    
    
    
    83,926
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201567,511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,511
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201666,186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,186
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    73,561
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,561
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018Hugo
Bague
    
    
    8,835
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,835
    
    
    £
    34.506
    
    
    
    
    
    
    
    
    
    
    9 Sep 2010
    
    9 Sep 2017Preston
Chiaro
    
    
    37,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,160
    
    
    
    37,160
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201370,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,490
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201463,527
    
    
    
    
    
    
    
    63,527
    
    
    
    
    
    
    
    
    
    
    
    63,527
    
    
    
    63,527
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201551,274
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,274
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201638,519
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,519
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    29,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,354
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018Bret
Clayton
    
    
    13,315
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,315
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201411,539
    
    
    
    
    
    
    
    11,539
    
    
    
    
    
    
    
    
    
    
    
    11,539
    
    
    
    11,539
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201510,767
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,767
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201633,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,850
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    28,342
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,342
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
 Form 20-F 161




---



##### Table of Contents



Table
5  Executives options to acquire Rio Tinto shares (continued)
 Vestedand
    
    
    
    
    
    
    
    
    
    
    Value ofexercisable
    
    
    
    
    
    
    
    
    
    
    options
    
    
    MarketVested
    
    
    
    
    
    
    
    
    
    
    on
    
    
    
    
    
    
    
    
    
    
    exercised
    
    
    price on
    
    
    Date from1 Jan
    
    
    Granted
    
    
    during
    
    
    
    
    
    
    Lapsed8/
    
    
    31 Dec
    
    
    31 Dec
    
    
    Option
    
    
    during
    
    
    date of
    
    
    which first
    
    
    Expiry2008
    
    

2, 6
    
    
    2008
    
    
    Exercised
    
    
    Cancelled
    
    
    20085
    
    
    20081
    
    
    price4
    
    
    2008
    
    
    exercise
    
    
    exercisable
    
    
    dateRio Tinto plc -
Share Option PlanGuy
Elliott
    
    
    61,703
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,703
    
    
    
    61,703
    
    
    £
    14.586
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 201297,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,387
    
    
    
    97,387
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201373,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,700
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201472,972
    
    
    
    
    
    
    
    72,972
    
    
    
    
    
    
    
    
    
    
    
    72,972
    
    
    
    72,972
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201558,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,100
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201644,052
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,052
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    36,503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,503
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018Dick
Evans
    
    
    
    
    
    
    60,733
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,733
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018Keith
Johnson
    
    
    43,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,500
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    31 July 201047,937
    
    
    
    
    
    
    
    47,937
    
    
    
    
    
    
    
    
    
    
    
    47,937
    
    
    
    47,937
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    31 July 201037,869
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,869
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    31 July 201028,294
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,294
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2011
    
    
    
    22,696
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,696
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2012Debra Valentine
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Rio Tinto Limited -
Share Savings PlanGrant Thorne
    
    
    1,875
    
    
    
    
    
    
    
    1,875
    
    
    
    1,875
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    A$25.57
    
    
    
    A$203,306.25
    
    
    
    A$134.00
    
    
    1 Jan 2008
    
    30 Jun 2008567
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    567
    
    
    
    A$79.27
    
    
    
    
    
    
    
    
    
    
    1 Jan 2013
    
    30 Jun 2013Sam Walsh
    
    
    601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    601
    
    
    
    A$40.92
    
    
    
    
    
    
    
    
    
    
    1 Jan 2009
    
    30 Jun 2009
    
    
    
    505
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    505
    
    
    
    A$82.19
    
    
    
    
    
    
    
    
    
    
    1 Jan 2014
    
    30 Jun 2014Rio Tinto Limited -
Share Option PlanGrant Thorne
    
    
    939
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    939
    
    
    
    A$39.8708
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 201211,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,159
    
    
    
    A$33.3360
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201310,462
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,462
    
    
    
    A$34.4060
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201410,665
    
    
    
    
    
    
    
    10,665
    
    
    
    
    
    
    
    
    
    
    
    10,665
    
    
    
    10,665
    
    
    
    A$47.0420
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201514,568
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,568
    
    
    
    A$71.0600
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201613,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,037
    
    
    
    A$74.5880
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017Sam Walsh
    
    
    54,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,400
    
    
    
    A$34.4060
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201458,823
    
    
    
    
    
    
    
    58,823
    
    
    
    
    
    
    
    
    
    
    
    58,823
    
    
    
    58,823
    
    
    
    A$47.0420
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201548,079
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,079
    
    
    
    A$71.0600
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201635,861
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,861
    
    
    
    A$74.5880
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    30,523
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,523
    
    
    
    A$134.1760
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
 Form 20-F 162




---



##### Table of Contents



Table
5  Executives options to acquire Rio Tinto shares (continued)
 Vestedand
    
    
    
    
    
    
    
    
    
    
    Value ofexercisable
    
    
    
    
    
    
    
    
    
    
    options
    
    
    MarketVested
    
    
    
    
    
    
    
    
    
    
    on
    
    
    
    
    
    
    
    
    
    
    exercised
    
    
    price on
    
    
    Date from1 Jan
    
    
    Granted
    
    
    during
    
    
    
    
    
    
    Lapsed8/
    
    
    20 Mar
    
    
    20 Mar
    
    
    Option
    
    
    during
    
    
    date of
    
    
    which first
    
    
    Expiry2009
    
    

2, 6
    
    
    2009
    
    
    Exercised
    
    
    Cancelled
    
    
    20095
    
    
    20091
    
    
    price4
    
    
    2009
    
    
    exercise
    
    
    exercisable
    
    
    dateRio Tinto plc -
Share Savings PlanTom Albanese
    
    
    791
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    791
    
    
    £
    20.68
    
    
    
    
    
    
    
    
    
    
    1 Jan 2012
    
    30 Jun 2012Hugo Bague
    
    
    238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    238
    
    
    £
    32.17
    
    
    
    
    
    
    
    
    
    
    1 Jan 2012
    
    30 Jun 2012Preston Chiaro
    
    
    298
    
    
    
    
    
    
    
    298
    
    
    
    298
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    £
    20.88
    
    
    £
    (1,054.92
    )
    
    £
    17.34
    
    
    1 Jan 2009
    
    6 Jan 2009304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    £
    20.50
    
    
    
    
    
    
    
    
    
    
    1 Jan 2011
    
    16 Jan 2011Bret Clayton
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163
    
    
    £
    35.57
    
    
    
    
    
    
    
    
    
    
    1 Jan 2010
    
    5 Jan 2010Jacynthe Côté
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Guy Elliott
    
    
    1,431
    
    
    
    
    
    
    
    1,431
    
    
    
    1,431
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    £
    11.07
    
    
    £
    11,118.87
    
    
    £
    18.84
    
    
    1 Jan 2009
    
    30 Jun 2009520
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    520
    
    
    £
    32.17
    
    
    
    
    
    
    
    
    
    
    1 Jan 2014
    
    30 Jun 2014Dick Evans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Keith Johnson
    
    
    456
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456
    
    
    £
    20.68
    
    
    
    
    
    
    
    
    
    
    1 Aug 2009
    
    31 Jan 2010Debra Valentine
    
    
    304
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    304
    
    
    £
    20.50
    
    
    
    
    
    
    
    
    
    
    1 Jan 2011
    
    17 Jan 2011Rio Tinto plc -
Share Option PlanTom Albanese
    
    
    102,718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102,718
    
    
    
    102,718
    
    
    £
    12.656
    
    
    
    
    
    
    
    
    
    
    6 Mar 2005
    
    6 Mar 2011125,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,336
    
    
    
    125,336
    
    
    £
    14.586
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 2012139,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    139,165
    
    
    
    139,165
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201384,020
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,020
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201483,926
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,296
    
    
    
    83,926
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201567,511
    
    
    
    
    
    
    
    67,511
    
    
    
    
    
    
    
    
    
    
    
    67,511
    
    
    
    67,511
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201666,186
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66,186
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201773,561
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,561
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 201859,504
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59,504
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Hugo Bague
    
    
    8,835
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,835
    
    
    £
    34.506
    
    
    
    
    
    
    
    
    
    
    9 Sep 2010
    
    9 Sep 2017
    
    
    
    12,982
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,982
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Preston Chiaro
    
    
    37,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,160
    
    
    
    37,160
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201370,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,490
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201463,527
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,527
    
    
    
    63,527
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201551,274
    
    
    
    
    
    
    
    51,274
    
    
    
    
    
    
    
    
    
    
    
    51,274
    
    
    
    51,274
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201638,519
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,519
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201729,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,354
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
    
    
    
    25,903
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,903
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019
 Form 20-F 163




---



##### Table of Contents



Table
5  Executives options to acquire Rio Tinto shares (continued)
 Vestedand
    
    
    
    
    
    
    
    
    
    
    Value ofexercisable
    
    
    
    
    
    
    
    
    
    
    options
    
    
    MarketVested
    
    
    
    
    
    
    
    
    
    
    on
    
    
    
    
    
    
    
    
    
    
    exercised
    
    
    price on
    
    
    Date from1 Jan
    
    
    Granted
    
    
    during
    
    
    
    
    
    
    Lapsed8/
    
    
    20 Mar
    
    
    20 Mar
    
    
    Option
    
    
    during
    
    
    date of
    
    
    which first
    
    
    Expiry2009
    
    

2, 6
    
    
    2009
    
    
    Exercised
    
    
    Cancelled
    
    
    20095
    
    
    20091
    
    
    price4
    
    
    2009
    
    
    exercise
    
    
    exercisable
    
    
    dateRio Tinto plc
Share - Option PlanBret Clayton
    
    
    13,315
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,315
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201411,539
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,539
    
    
    
    11,539
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201510,767
    
    
    
    
    
    
    
    10,767
    
    
    
    
    
    
    
    
    
    
    
    10,767
    
    
    
    10,767
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201633,850
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,850
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201728,342
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,342
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
    
    
    
    25,010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,010
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Jacynthe Côté
    
    
    
    
    
    
    29,476
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,476
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Guy Elliott
    
    
    61,703
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,703
    
    
    
    61,703
    
    
    £
    14.586
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 201297,387
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,387
    
    
    
    97,387
    
    
    £
    12.630
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201373,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,700
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201472,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,972
    
    
    
    72,972
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201558,100
    
    
    
    
    
    
    
    58,100
    
    
    
    
    
    
    
    
    
    
    
    58,100
    
    
    
    58,100
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201644,052
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,052
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201736,503
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,503
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
    
    
    
    44,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,292
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Dick Evans
    
    
    60,733
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60,733
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
    
    
    
    53,594
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,594
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Keith Johnson
    
    
    43,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,500
    
    
    £
    13.290
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    31 July 201047,937
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47,937
    
    
    
    47,937
    
    
    £
    18.262
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    31 July 201037,869
    
    
    
    
    
    
    
    37,869
    
    
    
    
    
    
    
    
    
    
    
    37,869
    
    
    
    37,869
    
    
    £
    27.112
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    31 July 201028,294
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,294
    
    
    £
    27.012
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201122,696
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,696
    
    
    £
    57.232
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2012Debra Valentine
    
    
    
    
    
    
    11,201
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,201
    
    
    £
    20.010
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Rio Tinto Limited -
Share Savings PlanGrant Thorne
    
    
    567
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    567
    
    
    
    A$79.27
    
    
    
    
    
    
    
    
    
    
    1 Jan 2013
    
    30 Jun 2013Sam Walsh
    
    
    601
    
    
    
    
    
    
    
    601
    
    
    
    601
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    A$40.92
    
    
    
    A$3,804.33
    
    
    
    A$47.25
    
    
    1 Jan 2009
    
    30 Jun 2009505
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    505
    
    
    
    A$82.19
    
    
    
    
    
    
    
    
    
    
    1 Jan 2014
    
    30 Jun 2014
 Form 20-F 164




---



##### Table of Contents



Table
5  Executives options to acquire Rio Tinto shares (continued)
 Vestedand
    
    
    
    
    
    
    
    
    
    
    Value ofexercisable
    
    
    
    
    
    
    
    
    
    
    options
    
    
    MarketVested
    
    
    
    
    
    
    
    
    
    
    on
    
    
    
    
    
    
    
    
    
    
    exercised
    
    
    price on
    
    
    Date from1 Jan
    
    
    Granted
    
    
    during
    
    
    
    
    
    
    Lapsed8/
    
    
    20 Mar
    
    
    20 Mar
    
    
    Option
    
    
    during
    
    
    date of
    
    
    which first
    
    
    Expiry2009
    
    

2, 6
    
    
    2009
    
    
    Exercised
    
    
    Cancelled
    
    
    20095
    
    
    20091
    
    
    price4
    
    
    2009
    
    
    exercise
    
    
    exercisable
    
    
    dateRio Tinto Limited -
Share Option PlanGrant Thorne
    
    
    939
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    939
    
    
    
    A$39.8708
    
    
    
    
    
    
    
    
    
    
    13 Mar 2005
    
    13 Mar 201211,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,159
    
    
    
    A$33.3360
    
    
    
    
    
    
    
    
    
    
    7 Mar 2006
    
    7 Mar 201310,462
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,462
    
    
    
    A$34.4060
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201410,665
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,665
    
    
    
    10,665
    
    
    
    A$47.0420
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201514,568
    
    
    
    
    
    
    
    14,568
    
    
    
    
    
    
    
    
    
    
    
    14,568
    
    
    
    14,568
    
    
    
    A$71.0600
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201613,037
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,037
    
    
    
    A$74.5880
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 2017
    
    
    
    13,724
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,724
    
    
    
    A$49.56
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019Sam Walsh
    
    
    54,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,400
    
    
    
    A$34.4060
    
    
    
    
    
    
    
    
    
    
    22 Apr 2009
    
    22 Apr 201458,823
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,823
    
    
    
    58,823
    
    
    
    A$47.0420
    
    
    
    
    
    
    
    
    
    
    9 Mar 2008
    
    9 Mar 201548,079
    
    
    
    
    
    
    
    48,079
    
    
    
    
    
    
    
    
    
    
    
    48,079
    
    
    
    48,079
    
    
    
    A$71.0600
    
    
    
    
    
    
    
    
    
    
    7 Mar 2009
    
    7 Mar 201635,861
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,861
    
    
    
    A$74.5880
    
    
    
    
    
    
    
    
    
    
    13 Mar 2010
    
    13 Mar 201730,523
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,523
    
    
    
    A$134.1760
    
    
    
    
    
    
    
    
    
    
    10 Mar 2011
    
    10 Mar 2018
    
    
    
    40,005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,005
    
    
    
    A$49.56
    
    
    
    
    
    
    
    
    
    
    17 Mar 2012
    
    17 Mar 2019
 Notes to Table 5
 1.
    
    Or at date of retirement or resignation if earlier.2.
    
    All options granted over ordinary shares. Rio Tinto plc  ordinary shares of 10p each stated
in sterling; Rio Tinto Limited ordinary shares  stated in Australian dollars. Each option is
granted over one share. The date of grant was 10 March 2008. The performance conditions for
the SOP are detailed on pages 140 to 141.3.
    
    The closing price of Rio Tinto plc ordinary shares at 31 December 2008 was £14.90 (2007:
£53.17) and the closing price of Rio Tinto Limited shares at 31 December 2008 was A$38.00
(2007: A$133.95). The high and low prices during 2008 of Rio Tinto plc and Rio Tinto Limited
shares were £70.78 and £10.49 and A$156.00 and A$32.00 respectively.4.
    
    The option price represents the exercise price payable on the options. No amounts are unpaid
on any shares allocated on the exercise of the options.5.
    
    Under the plans no options would be vested and unexercisable at the reporting date. The
exercise of options is subject to restrictions contained in the Rules for dealing in Rio
Tinto Securities. Trading restrictions due to close periods, the unsolicited pre-conditional
offer from BHP Billiton and the Chinalco strategic partnership have prevented executives from
dealing for most of 2008 and 2009.6.
    
    The fair value per option, granted during 2008, at date of grant was as follows: Rio Tinto
plc Share Savings Plan two year contract £3.46; three year contract 94p; four year contract
£1.92 and five year contract 90p; Rio Tinto Limited Share Savings Plan three year contract
A$5.14 and five year contract A$5.17. Rio Tinto plc Share Option Plan £20.63; Rio Tinto
Limited Share Option Plan A$44.04.7.
    
    The value of options exercised is calculated by multiplying the number of options
exercised by the difference between the market price and the option price on date of exercise.8.
    
    No options lapsed for failure to satisfy a performance condition.
 Form 20-F 165




---



##### Table of Contents



Corporate governance
 GOVERNANCE OF RIO TINTO
   BOARD
 Membership  Nominations committee
 Role and responsibilities
       Board performance
 Form 20-F 166




---



##### Table of Contents



Independence
    Directors conflicts of interest
 Executive directors other directorships
 Election and re-election
 Form 20-F 167




---



##### Table of Contents



Chairman and chief executive
 Board committees  Audit committee Remuneration committee Nominations
committee Committee on social and environmental accountability Chairmans committee
 Board Committee membership
 Audit
    
    Remuneration
    
    Committee on social
    
    Nominations
    
    Chairmanscommittee
    
    committee
    
    and environmental
    
    committee
    
    committeeaccountabilityChairmen
    
    Sir David Clementi
    
    Andrew Gould
    
    Richard Goodmanson
    
    
    
    Paul SkinnerMembers
    
    Vivienne Cox
    
    Sir David Clementi
    
    Sir Rod Eddington
    
    Sir Rod Eddington
    
    Tom AlbaneseJan du Plessis
    
    Michael Fitzpatrick
    
    Yves Fortier
    
    Yves Fortier
    
    Guy ElliottMichael Fitzpatrick
    
    Richard Goodmanson
    
    Lord Kerr
    
    David MayhewLord Kerr
    
    Paul Tellier
    
    
    
    Sir Richard SykesPaul Tellier
 Notes
 1.
    
    Sir Richard Sykes was chair of the Remuneration committeeand a member of the Nominations
committeeuntil his retirement on 24 April 2008.2.
    
    Upon Sir Richard Sykes retirement on 24 April 2008, Andrew Gould was appointed senior
independent director, chairman of the Remuneration committeeand a member of the Nominations
committee.3.
    
    Sir David Clementi assumed the chairmanship of the Audit committeeon 24 April 2008 from
Andrew Gould.4.
    
    Jan du Plessis was appointed a non executive director on 1 September 2008 and also joined the
Audit committee.5.
    
    David Mayhew attends the Audit committeein an advisory capacity. Directors attendance at board and committee meetings during 2008
 Committee onsocial andBoard
    
    
    Board
    
    
    Audit
    
    
    Remuneration
    
    
    environmental
    
    
    Nominations
    
    
    ChairmansScheduled
    
    
    Short notice
    
    
    Committee
    
    
    committee
    
    
    accountability
    
    
    Committee
    
    
    CommitteeA
    
    
    B
    
    
    A
    
    
    B
    
    
    A
    
    
    A
    
    
    A
    
    
    B
    
    
    A
    
    
    B
    
    
    A
    
    
    B
    
    
    A
    
    
    BTom Albanese
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    17Sir David Clementi
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    7
    
    
    
    8
    
    
    
    8
    
    
    
    7
    
    
    
    7Vivienne Cox
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    9
    
    
    
    8
    
    
    
    7Jan du Plessis
    
    
    3
    
    
    
    3
    
    
    
    7
    
    
    
    5
    
    
    
    2
    
    
    
    2Sir Rod Eddington
    
    
    8
    
    
    
    7
    
    
    
    10
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    2
    
    
    
    6
    
    
    
    5Guy Elliott
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19
    
    
    
    15Dick Evans
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10Michael Fitzpatrick
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10
    
    
    
    8
    
    
    
    5
    
    
    
    7
    
    
    
    6Yves Fortier
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    4
    
    
    
    6
    
    
    
    6Richard Goodmanson
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    7
    
    
    
    4
    
    
    
    4Andrew Gould
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    8
    
    
    
    4
    
    
    
    3
    
    
    
    7
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    4Lord Kerr
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10
    
    
    
    8
    
    
    
    8
    
    
    
    
    
    
    



    
    
    

    
    4
    
    
    
    4David Mayhew
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6Paul Skinner
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    6
    
    
    
    19
    
    
    
    18Sir Richard Sykes
    
    
    3
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Paul Tellier
    
    
    8
    
    
    
    8
    
    
    
    10
    
    
    
    8
    
    
    
    8
    
    
    
    8
    
    
    
    7
    
    
    
    7
 Notes
 A =
    
    maximum number of meetings the director could have attendedB =
    
    Number of meetings attended
 Audit committee  Audit committee
 Audit committee
 
    
    The financial information that will be provided to shareholders and the public;
    
    The systems of internal control that the board and management have established;
    
    The Groups auditing, accounting and financial reporting processes.
 Form 20-F 168




---



##### Table of Contents




    
    Obtain independent professional advice in the satisfaction of its duties at the cost of
the Group;
    
    Have such direct access to the resources of the Group as it may reasonably require
including the external and internal auditors.
 Audit committee
   Report of the Audit committee  Audit committee
 Audit committee
       Audit committee  Sir David Clementi
 Remuneration committee  Remuneration committee
 Nominations committee  Nominations committee
 Form 20-F 169




---



##### Table of Contents



Nominations committee
  Nominations committee
 Report of the Nominations committee  Nominations committee
 Nominations committee
   Nominations committee  Paul Skinner
 *
    
    On 17 March 2009 Rio Tinto announced that Jan du Plessis will be appointed as Chairman of the
board on the retirement of Paul Skinner with effect from the conclusion of the Annual General
Meeting of Rio Tinto Limited on 20 April 2009. Committee on social and environmental accountability  Committee on social and environmental accountability
 The way we work
 Chairmans committee  Chairmans committee
 MANAGEMENT
   Executive committee
 Form 20-F 170




---



##### Table of Contents



Closure committee
 Continuous disclosure committee
 Disclosure and procedures committee  Audit committee Audit committee
 Finance committee
 Investment committee
 Ore reserves steering committee
 COMMUNICATION
      Form 20-F 171




---



##### Table of Contents



BUSINESS PRACTICE
 Statement of business practice  The way we work
  The way we work
 The way we work
 Whistle blowing programme
 Sustainable development  2008 Annual report
 Dealing in Rio Tinto securities
 Risk management
  Risk management policies and approach
 Roles and responsibilities
  Form 20-F 172




---



##### Table of Contents



Audit committee
  Internal risk control systems  2008 Annual report 2008 Financial statements
  Audit committee
  AUDITORS AND INTERNAL ASSURANCE
 Auditor independence
 Audit committee
 Audit committee Audit committee
 Audit committee
 2008
Financial statements
  Corporate Assurance
 Audit
committee Committee on social and environmental accountability (CSEA) Audit committee CSEA
  Form 20-F 173




---



##### Table of Contents



Audit committee CSEA
 Audit committee
 FINANCIAL REPORTING
 Internal control over financial reporting
 Financial statements
   2008 Financial statements
 Disclosure controls and procedures
 COMPLIANCE
STATEMENTS
 The Code
 Form 20-F 174




---



##### Table of Contents



ASX Principles
 NYSE Standards
 Nominations committee
 New Zealand Stock Exchange
 Form 20-F 175




---



##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 MAJOR SHAREHOLDERS
     SUBSTANTIAL SHAREHOLDERS
 Rio Tinto plc
    
    Date of
    
    
    Number of
    
    
    Percentagenotice
    
    
    shares
    
    
    of issuedshare capitalBarclays PLC
    
    12 Jul 2006
    
    
    42,129,019
    
    
    
    4.02The Capital Group Companies, Inc
    
    13 Jun 2006
    
    
    41,031,494
    
    
    
    3.90Legal & General plc
    
    6 Nov 2008
    
    
    45,879,555
    
    
    
    4.59AXA S.A.
    
    29 Jan 2008
    
    
    48,493,873
    
    
    
    4.86Shining Prospect Pte. Ltd
    
    2 Feb 2008
    
    
    119,705,134
    
    
    
    12.00Rio Tinto Limited
    
    Date of
    
    
    Number of
    
    
    Percentagenotice
    
    
    shares 1
    
    
    of issuedshare capital 1Shining Prospect Pte. Ltd
    
    4 Feb 2008
    
    
    
    
 Notes
 1.
    
    Shining Prospect Pte. Ltd, a Singapore based entity owned by Chinalco (Aluminum Corporation
of China) acquired 119,705,134 Rio Tinto plc shares on 1 February 2008. Through the operation
of Corporations Act as modified, this gives these entities and their associates voting power
of 9.32 per cent in the Rio Tinto Group on a joint decision matter, making them substantial
shareholders of Rio Tinto Limited as well as of Rio Tinto plc. As a result of the proposed
arrangements between Rio Tinto and Chinalco announced to the Australian Securities Exchange on
12 February 2009, Rio Tinto and Chinalco have become associates in relation to Rio Tinto
Limited, giving (by reason of that association) Rio Tinto the same voting power in Rio Tinto
Limited as Chinalco and Chinalco the same voting power as Tinto Holdings Australia Pty Limited
in Rio Tinto Limited and in the Rio Tinto Group on a joint decision matter. Tinto Holdings
Australia Pty Limited may only vote its shares in Rio Tinto Limited to give effect to the DLC
voting arrangements.2.
    
    As far as it is known, Rio Tinto is not directly or indirectly owned or controlled by another
corporation or by any government.3.
    
    Rio Tinto is not aware of any arrangement which may result in a change of control. Form 20-F 176




---



##### Table of Contents



ANALYSIS OF ORDINARY SHAREHOLDERS
 Rio Tinto plc
    
    
    Rio Tinto LimitedNo of
    
    
    %
    
    
    Shares
    
    
    %
    
    
    No of
    
    
    %
    
    
    Shares
    
    
    %accounts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    accounts1 to 1,000 shares
    
    
    38,598
    
    
    
    75.31
    
    
    
    13,488,485
    
    
    
    1.34
    
    
    
    128,356
    
    
    
    86.75
    
    
    
    35,841,324
    
    
    
    7.851,001 to 5,000 shares
    
    
    10,182
    
    
    
    19.87
    
    
    
    20,233,190
    
    
    
    2.01
    
    
    
    17,544
    
    
    
    11.86
    
    
    
    34,209,666
    
    
    
    7.495,001 to 10,000 shares
    
    
    894
    
    
    
    1.74
    
    
    
    6,172,276
    
    
    
    0.61
    
    
    
    1,317
    
    
    
    0.89
    
    
    
    9,116,233
    
    
    
    2.0010,001 to 25,000 shares
    
    
    491
    
    
    
    0.96
    
    
    
    7,736,949
    
    
    
    0.77
    
    
    
    496
    
    
    
    0.34
    
    
    
    7,286,784
    
    
    
    1.6025,001 to 125,000 shares
    
    
    552
    
    
    
    1.08
    
    
    
    32,770,291
    
    
    
    3.26
    
    
    
    171
    
    
    
    0.12
    
    
    
    8,466,040
    
    
    
    1.85125,001 to 250,000 shares
    
    
    196
    
    
    
    0.38
    
    
    
    36,161,229
    
    
    
    3.60
    
    
    
    27
    
    
    
    0.02
    
    
    
    4,909,048
    
    
    
    1.07250,001 to 1,250,000 shares
    
    
    228
    
    
    
    0.44
    
    
    
    124,470,597
    
    
    
    12.39
    
    
    
    30
    
    
    
    0.02
    
    
    
    16,839,418
    
    
    
    3.691,250,001 to 2,500,000
    
    
    47
    
    
    
    0.09
    
    
    
    86,323,754
    
    
    
    8.59
    
    
    
    6
    
    
    
    0.00
    
    
    
    11,106,971
    
    
    
    2.432,500,001 and over
    
    
    63
    
    
    
    0.12
    
    
    
    594,765,635
    
    
    
    59.21
    
    
    
    9
    
    
    
    0.01
    
    
    
    157,967,939
    
    
    
    34.58ADRs
    
    
    1
    
    
    
    0.00
    
    
    
    76,422,586
    
    
    
    7.61
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Publicly held shares
    
    
    51,252
    
    
    
    100
    
    
    
    998,544,992
    
    
    
    99.41
    
    
    
    150,547
    
    
    
    100
    
    
    
    285,743,423
    
    
    
    62.55Shares held in treasury
    
    
    
    
    
    
    
    
    
    
    5,884,513
    
    
    
    0.59Tinto Holdings Australia Pty Limited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    171,072,520
    
    
    
    37.451,004,429,505
    
    
    
    100.00
    
    
    
    
    
    
    
    100
    
    
    
    456,815,943
    
    
    
    100.00Number of holdings less than marketable parcel of A$500.
    
    
    
    
    
    
    
    4,709
 TWENTY LARGEST REGISTERED SHAREHOLDERS
  Rio Tinto Limited
 Number of
    
    
    Percentageshares
    
    
    of issuedsharecapital1
    
    Tinto Holdings Australia Pty Limited
    
    
    171,072,520
    
    
    
    37.452
    
    HSBC Custody Nominees (Australia) Limited
    
    
    57,490,473
    
    
    
    12.593
    
    JP Morgan Nominees Australia Limited
    
    
    36,636,832
    
    
    
    8.024
    
    National Nominees Limited
    
    
    31,621,128
    
    
    
    6.925
    
    Citicorp Nominees Pty Limited
    
    
    11,532,412
    
    
    
    2.526
    
    ANZ Nominees Limited
    
    
    10,358,360
    
    
    
    2.277
    
    Cogent Nominees Pty Limited
    
    
    4,108,261
    
    
    
    0.908
    
    AMP Life Limited
    
    
    3,592,056
    
    
    
    0.799
    
    HSBC Custody Nominees (Australia) Limited
    
    
    2,628,417
    
    
    
    0.5810
    
    UBS Wealth Management Australia Nominees Pty Ltd
    
    
    2,442,275
    
    
    
    0.5311
    
    Australian Foundation Investment Company Limited
    
    
    2,343,414
    
    
    
    0.5112
    
    UBS Nominees Pty Ltd
    
    
    1,651,458
    
    
    
    0.3613
    
    Queensland Investment Corporation
    
    
    1,589,473
    
    
    
    0.3514
    
    Argo Investments Limited
    
    
    1,569,534
    
    
    
    0.3415
    
    Citicorp Nominees Pty Limited
    
    
    1,510,817
    
    
    
    0.3316
    
    Perpetual Trustee Company Limited
    
    
    1,231,713
    
    
    
    0.2717
    
    RBC Dexia Investor Services Australia Nominees Pty Limited
    
    
    1,149,484
    
    
    
    0.2518
    
    Tasman Asset Management Ltd
    
    
    899,358
    
    
    
    0.2019
    
    RBC Dexia Investor Services Australia Nominees Pty Limited
    
    
    830,600
    
    
    
    0.1820
    
    Australian Reward Investment Alliance
    
    
    826,811
    
    
    
    0.18345,085,396
    
    
    
    75.54
 Notes
 1.
    
    Tinto Holdings Australia Pty Limited is a wholly owned subsidiary of Rio Tinto plc.2.
    
    Other large registered shareholders are nominees who hold securities on behalf of beneficial
shareholders. RELATED PARTY TRANSACTIONS  2008 Financial statements
 Form 20-F 177




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##### Table of Contents



Item 8. Financial Information
 LEGAL PROCEEDINGS   2008 Financial statements
 DIVIDENDS
 Dividend policy
 Dividend determination
 2008 dividends
 Rio Tinto Group  US cents per share
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Interim
    
    
    68.0
    
    
    
    52.0
    
    
    
    40.0
    
    
    
    38.5
    
    
    
    32.0Final
    
    
    68.0
    
    
    
    84.0
    
    
    
    64.0
    
    
    
    41.5
    
    
    
    45.0Special
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110.0
    
    
    
    Total
    
    
    136.0
    
    
    
    136.0
    
    
    
    104.0
    
    
    
    190.0
    
    
    
    77.0Rio Tinto plc  UK pence per share
    
    
    2008
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004Interim
    
    
    36.25
    
    
    
    25.59
    
    
    
    21.42
    
    
    
    21.75
    
    
    
    17.54Final
    
    
    46.29
    
    
    
    43.13
    
    
    
    32.63
    
    
    
    23.35
    
    
    
    23.94Special
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61.89
    
    
    
    Total
    
    
    82.54
    
    
    
    68.72
    
    
    
    54.05
    
    
    
    106.99
    
    
    
    41.48Rio Tinto Limited  Australian cents per share
    
    
    2008
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004Interim
    
    
    77.35
    
    
    
    60.69
    
    
    
    52.48
    
    
    
    50.56
    
    
    
    45.53Final
    
    
    101.48
    
    
    
    93.02
    
    
    
    82.84
    
    
    
    54.86
    
    
    
    58.29Special
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145.42
    
    
    
    Total
    
    
    178.83
    
    
    
    153.71
    
    
    
    135.32
    
    
    
    250.84
    
    
    
    103.82Rio Tinto plc  US cents per ADS
    
    
    2008
    
    
    
    2007
    
    
    
    2006
    
    
    
    2005
    
    
    
    2004Interim
    
    
    272
    
    
    
    208
    
    
    
    160
    
    
    
    154
    
    
    
    128Final
    
    
    272
    
    
    
    336
    
    
    
    256
    
    
    
    166
    
    
    
    180Special
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    440
    
    
    
    Total
    
    
    544
    
    
    
    544
    
    
    
    416
    
    
    
    760
    
    
    
    308
 Form 20-F 178




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##### Table of Contents



Dividend reinvestment plan (DRP)
 POST BALANCE SHEET EVENTS
 
 Item 9. The Offer and Listing
 MARKET
LISTINGS AND SHARE PRICES
 Rio Tinto plc
           Form 20-F 179




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##### Table of Contents



ADR holders
   Pence per
    
    
    US$ perRio Tinto plc share
    
    
    Rio Tinto plc ADSHigh
    
    
    Low
    
    
    High
    
    
    Low2004
    
    
    1,574
    
    
    
    1,212
    
    
    
    119.39
    
    
    
    86.422005
    
    
    2,657
    
    
    
    1,472
    
    
    
    183.29
    
    
    
    111.572006
    
    
    3,322
    
    
    
    2,352
    
    
    
    253.33
    
    
    
    176.092007
    
    
    5,784
    
    
    
    2,505
    
    
    
    478.35
    
    
    
    193.602008
    
    
    7,078
    
    
    
    1,049
    
    
    
    554.93
    
    
    
    60.72Aug 2008
    
    
    5,259
    
    
    
    4,535
    
    
    
    394.52
    
    
    
    346.76Sep 2008
    
    
    5,010
    
    
    
    3,310
    
    
    
    339.99
    
    
    
    226.50Oct 2008
    
    
    3,487
    
    
    
    2,050
    
    
    
    254.24
    
    
    
    138.69Nov 2008
    
    
    3,135
    
    
    
    1,550
    
    
    
    200.10
    
    
    
    98.50Dec 2008
    
    
    1,558
    
    
    
    1,049
    
    
    
    98.75
    
    
    
    60.72Jan 2009
    
    
    1,927
    
    
    
    1,380
    
    
    
    117.20
    
    
    
    79.17Feb 2009
    
    
    2,000
    
    
    
    1,506
    
    
    
    122.70
    
    
    
    88.91Mar 2009 (to
20 March)
    
    
    2,101
    
    
    
    1,619
    
    
    
    121.95
    
    
    
    89.612007First quarter
    
    
    2,940
    
    
    
    2,505
    
    
    
    230.60
    
    
    
    193.60Second quarter
    
    
    3,916
    
    
    
    2,888
    
    
    
    311.50
    
    
    
    230.60Third quarter
    
    
    4,228
    
    
    
    2,929
    
    
    
    343.40
    
    
    
    234.65Fourth quarter
    
    
    5,784
    
    
    
    4,050
    
    
    
    478.35
    
    
    
    334.302008First quarter
    
    
    5,850
    
    
    
    4,159
    
    
    
    464.00
    
    
    
    331.31Second quarter
    
    
    7,078
    
    
    
    5,233
    
    
    
    554.93
    
    
    
    419.75Third quarter
    
    
    5,764
    
    
    
    3,310
    
    
    
    468.24
    
    
    
    226.50Fourth quarter
    
    
    3,487
    
    
    
    1,049
    
    
    
    254.24
    
    
    
    60.72
 Rio Tinto Limited
    A$ perRio Tinto Limited shareHigh
    
    
    Low2004
    
    
    40.20
    
    
    
    31.982005
    
    
    69.10
    
    
    
    38.822006
    
    
    87.97
    
    
    
    65.382007
    
    
    146.90
    
    
    
    69.502008
    
    
    156.10
    
    
    
    32.00Aug 2008
    
    
    127.50
    
    
    
    110.79Sep 2008
    
    
    124.96
    
    
    
    84.50Oct 2008
    
    
    95.00
    
    
    
    62.62Nov 2008
    
    
    86.60
    
    
    
    42.01Dec 2008
    
    
    42.70
    
    
    
    32.00Jan 2009
    
    
    46.93
    
    
    
    37.25Feb 2009
    
    
    52.00
    
    
    
    42.15Mar 2009 (to
20 March)
    
    
    52.02
    
    
    
    43.472007First quarter
    
    
    80.11
    
    
    
    69.50Second quarter
    
    
    101.15
    
    
    
    77.20
 Form 20-F 180




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##### Table of Contents



A$ perRio Tinto Limited shareHigh
    
    
    LowThird quarter
    
    
    108.22
    
    
    
    81.16Fourth quarter
    
    
    146.90
    
    
    
    104.432008First quarter
    
    
    137.10
    
    
    
    101.00Second quarter
    
    
    156.10
    
    
    
    124.17Third quarter
    
    
    137.50
    
    
    
    84.50Fourth quarter
    
    
    95.00
    
    
    
    32.00
 Investment warning
 
 Item 10. Additional Information
 DUAL LISTED COMPANIES STRUCTURE
      Dividend rights
     Voting rights
 Form 20-F 181




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##### Table of Contents



Rio Tinto plc
  Rio Tinto Limited
  Capital distribution rights
  Limitations on ownership of shares and merger obligations
  Form 20-F 182




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##### Table of Contents



Guarantees
 MEMORANDUM
AND ARTICLES OF ASSOCIATION
  Introduction
   Objects
 Other objects of Rio Tinto plc include provisions:
    
    to carry on as an Investment Holding Company;
    
    to subscribe for, sell, exchange or dispose of any type of security or investment;
    
    to purchase any estate or interest in property or assets;
 Form 20-F 183




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##### Table of Contents




    
    to borrow and raise money to secure or discharge any debt or obligation of or binding on
the Company;
    
    to draw, make or deal in negotiable or transferable instruments;
    
    to amalgamate with and co-operate with or assist or subsidise any company, firm or person
and to purchase or otherwise acquire or undertake all or any part of the business property or
liabilities of any person, body or company carrying on any business which this Company is
authorised to carry on;
    
    to promote the Company;
    
    to lend money and guarantee contracts or obligations of the Company and to give all kinds
of indemnities;
    
    to sell, lease, grant licences and other rights over any part of the Company;
    
    to procure the registration of the Company outside England;
    
    to subscribe or guarantee money to any national, charitable, benevolent, public, general or
exhibition which may further the objects of the Company or the interest of its members;
    
    to grant pensions or gratuities to employees, ex-employees, officers and ex-officers;
    
    to establish any scheme or trust which may benefit employees;
    
    to lend money to employees to purchase Company shares;
    
    to purchase and maintain insurance for employees and to carry on the objects of the Company
in any part of the world either as principals, agents, contractors, trustees or otherwise.
  
    
    to prospect for, explore, quarry, develop, excavate, dredge for, open, work, win, purchase
or otherwise obtain all minerals, metals and substances;
    
    to carry on business as proprietors of and to purchase, take on, lease or in exchange or
otherwise acquire and control mineral and other properties, lands and hereditaments of any
tenure, mines and other rights or options thereon;
    
    to raise, win, get, quarry, crush, smelt, calcine, refine, dress, amalgamate, manipulate
and otherwise treat, prepare, sell and deal in ores, metals and other products of mines;
    
    to carry on business as ship owners, railway proprietors, motor car, lorry and coach
proprietors, and garage proprietors, carriers and hauliers, bankers, storekeepers,
wharfingers, cartage, storage, building and general contractors and to buy and sell or
otherwise deal in real or personal property of any kind;
    
    to carry on business as manufacturers of and dealers in and exporters and importers of
goods and merchandise of all kinds and merchants generally; and
    
    to guarantee the payment of premiums on any sinking fund or endowment policy or policies
taken out by any company having objects similar to the objects of the Company.
 Directors
 
    
    indemnify him or a third party in respect of obligations incurred by the director on behalf
of, or for the benefit of, the Company, or in respect of obligations of the Company, for which
the director has assumed responsibility under an indemnity, security or guarantee;
    
    relate to an offer of securities in which he may be interested as a holder of securities or
as an underwriter;
    
    concern another body corporate in which the director is beneficially interested in less
than one per cent of the issued shares of any class of shares of such a body corporate;
    
    relate to an employee benefit in which the director will share equally with other
employees; and
    
    relate to liability insurance that the Company is empowered to purchase for the benefit of
directors of the Company in respect of actions undertaken as directors (or officers) of the
Company.
   Remuneration committee
  Form 20-F 184




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##### Table of Contents



Rights attaching to shares
  Voting rights
 
    
    the chairman of the meeting;
    
    at least five shareholders entitled to vote at the meeting;
    
    any shareholder or shareholders representing in the aggregate not less than one tenth (Rio
Tinto plc) or one twentieth (Rio Tinto Limited) of the total voting rights of all shareholders
entitled to vote at the meeting;
    
    any shareholder or shareholders holding shares conferring a right to vote at the meeting on
which there have been paid-up sums in the aggregate equal to not less than one tenth of the
total sum paid up on all the shares conferring that right; or
    
    the holder of the Special Voting Share.
    
    
    an ordinary resolution, which includes resolutions for the election of directors, the
receiving of financial statements, the cumulative annual payment of dividends, the appointment
of auditors, the increase of authorised share capital or the grant of authority to allot
shares;
    
    a special resolution, which includes resolutions amending the Companys Memorandum and
Articles of Association of Rio Tinto plc or the Constitution of Rio Tinto Limited, disapplying
statutory pre-emption rights or changing the Companys name; and
    
    an extraordinary resolution, which includes resolutions modifying the rights of any class
of the Groups shares at a meeting of the holders of such class of shares or relating to
certain matters concerning the winding up of either Company.
    Form 20-F 185




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##### Table of Contents



Variation of Rights
  Rights in a Winding-up
 
    
    after the payment of all creditors including certain preferential creditors, whether
statutorily preferred creditors or normal creditors; and
    
    subject to any special rights attaching to any class of shares;
   Limitations on Voting and Shareholding
 MATERIAL
CONTRACTS
 Recent developments  Chinalco strategic partnership
  Facility Agreement
    Form 20-F 186




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##### Table of Contents



EXCHANGE CONTROLS  Rio Tinto plc
  Rio Tinto Limited
    TAXATION
 UK resident individuals shareholdings in Rio Tinto plc  Taxation of dividends
 Dividend reinvestment plan (DRP)
 Capital gains tax
  Australian resident individuals shareholdings in Rio Tinto Limited  Taxation of dividends
     Form 20-F 187




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##### Table of Contents



Dividend reinvestment plan (DRP)
  Capital gains tax
    US resident individuals
     US holders should consult their own tax adviser regarding the US federal, state and
local and foreign and other tax consequences of owning and disposing of the Groups ADSs and shares in their
particular circumstances.
   UK taxation of shareholdings in Rio Tinto plc  Taxation of dividends
 Form 20-F 188




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##### Table of Contents



Capital gains
 Inheritance tax
 Stamp duty and stamp duty reserve tax
  Australian taxation of shareholdings in Rio Tinto Limited  Taxation of dividends
 Capital gains
 Gift, estate and inheritance tax
 Stamp duty
 US federal income tax
  Form 20-F 189




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##### Table of Contents



ADRs, and ADRs for shares, generally will not be subject to US federal income tax. Taxation of dividends
    Taxation of capital gains
 Passive Foreign Investment Company (PFIC) rules
 DOCUMENTS ON DISPLAY
 Form 20-F 190




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##### Table of Contents



Item 11. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 12. Description of Securities other than Equity Securities
  
 PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure controls and procedures
 Managements report on internal control over financial reporting
     Form 20-F 191




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##### Table of Contents



Changes
in internal control over financial reporting
 
 Item 16A. Audit Committee Financial Expert
 Audit committee
 
 Item 16B. Code of Ethics
 The way we work
 The way we work
 
 Item 16C. Principal Accountant Fees and Services
 2008 Financial statements
 Audit committee
 Audit committee Audit committee
 Audit committee
 Audit committee Audit committee
 
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  Form 20-F 192




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##### Table of Contents



Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
 Rio Tinto plc
    
    
    Rio Tinto LimitedPeriod
    
    (a) Total
    
    
    (b) Average
    
    
    (c) Total number
    
    
    (a) Total
    
    
    (b) Average
    
    
    (c) Total number
    
    
    (d) Approximatenumber of
    
    
    price
    
    
    of shares
    
    
    number of
    
    
    price
    
    
    of shares
    
    
    dollar value ofshares
    
    
    paid per share
    
    
    purchased as part
    
    
    shares
    
    
    paid per share
    
    
    purchased as part
    
    
    shares that maypurchased
    
    
    
    
    
    of publicly
    
    
    purchased
    
    
    
    
    
    of publicly
    
    
    yet be purchasedannounced plans
    
    
    
    
    
    
    
    
    
    announced plans
    
    
    under the plansor programmes
    
    
    
    
    
    
    
    
    
    
    or programmes
    
    
    or programmesUS$
    
    
    
    
    
    
    
    
    
    
    US$
    
    
    
    
    
    
    US$m20081 Jan to 31 Jan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    283,994
    
    
    
    106.59
    
    
    
    
    
    
    
    1 Feb to 28 Feb
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    502,744
    
    
    
    121.19
    
    
    
    
    
    
    
    1 Mar to 31 Mar
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,041
    
    
    
    113.41
    
    
    
    
    
    
    
    1 Apr to 30 Apr
    
    
    215,855
    
    
    
    118.56
    
    
    
    
    
    
    
    597,963
    
    
    
    127.51
    
    
    
    
    
    
    
    1 May to 31 May
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    248,601
    
    
    
    143.77
    
    
    
    
    
    
    
    1 Jun to 30 Jun
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,842
    
    
    
    126.71
    
    
    
    
    
    
    
    1 Jul to 31 Jul
    
    
    8,795,496
    
    
    
    0.00
    
    
    
    
    
    
    
    4,575
    
    
    
    115.03
    
    
    
    
    
    
    
    1 Aug to 31 Aug
    
    
    17,535,221
    
    
    
    0.00
    
    
    
    
    
    
    
    17,887
    
    
    
    106.23
    
    
    
    
    
    
    
    1 Sep to 30 Sep
    
    
    10,890,294
    
    
    
    0.00
    
    
    
    
    
    
    
    8,752
    
    
    
    93.13
    
    
    
    
    
    
    
    1 Oct to 31 Oct
    
    
    24,794,875
    
    
    
    0.70
    
    
    
    
    
    
    
    341,130
    
    
    
    71.47
    
    
    
    
    
    
    
    1 Nov to 30 Nov
    
    
    6,155,870
    
    
    
    0.00
    
    
    
    
    
    
    
    14,806
    
    
    
    45.98
    
    
    
    
    
    
    
    1 Dec to 31 Dec
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,693
    
    
    
    27.75
    
    
    
    
    
    
    
    Total
    
    
    68,387,611
    
    
    
    0.63
    
    
    
    
    
    
    
    2,195,028
    
    
    
    114.78
    
    
    
    
    
    
    
    20091 Jan to 31 Jan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,530
    
    
    
    27.36
    
    
    
    
    
    
    
    1 Feb to 28 Feb
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175,937
    
    
    
    31.68
    
    
    
    
    
    
    
    1 Mar to 20 Mar
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,018
    
    
    
    31.48
    
    
    
    
    
    
    
    
 Notes
1.
    
    Rio Tinto plc ordinary shares of 10p each; Rio Tinto Limited shares.2.
    
    The average prices paid have been translated into US dollars at the exchange rate on the
day of settlement.3.
    
    The share buyback programme was suspended upon the announcement of the Alcan Inc acquisition
on 12 July 2007 and did not operate in 2008.4.
    
    Shares purchased by the Companies registrars in connection with the dividend reinvestment
plans and employee share plans are not deemed to form part of any publicly announced plan or
programme.5.
    
    Shares purchased by Rio Tinto plc in line with the Groups internal capital management
programme. These purchases do not form part of any publicly announced plan or programme. 
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
 Nominations committee
 Form 20-F 193




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##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
 2008 Financial statements
 
 Item 19. Exhibits
  INDEX
 ExhibitNumber
    
    Description1.1
    
    Memorandum and Articles of Association of Rio Tinto plc (adopted
by special resolution passed on 11 April 2002 and amended on 14
April 2005, 13 April 2007 and 17 April 2008) (incorporated by
reference to Exhibit 4.1 to the Registration statement on Form S-8
filed on 12 December 2008, File No. 333-156093)1.2
    
    Constitution of Rio Tinto Limited (ACN 004 458 404) (as adopted by
special resolution passed on 24 May 2000 and amended by special
resolution on 18 April 2002, 29 April 2005, 27 April 2007 and 24
April 2008) (incorporated by reference to Exhibit 4.2 to the
Registration statement on Form S-8 filed on 12 December 2008, File
No. 333-156093)2.1
    
    Facility Agreement, dated 12 July 2007, among Rio Tinto, Credit
Suisse, Deutsche Bank AG, London Branch, The Royal Bank of
Scotland plc, and Societe Generale (incorporated by reference to
Exhibit (b)(1) to the Schedule TO-T filed by Rio Tinto plc and Rio
Tinto Canada Holding Inc. on 24 July 2007, File No. 1-10533)2.2
    
    Cooperation and Implementation Agreement dated 12 Febrary 2009
between Rio Tinto and Aluminum Corporation of China (Chinalco),
a company incorporated in China (incorporated by reference to
Exhibit 99.1 to Form 6-K filed on 13 February 2009, File No.
1-10533)3.1
    
    DLC Merger Implementation Agreement, dated 3 November 1995 between
CRA Limited and The RTZ Corporation PLC relating to the
implementation of the DLC merger (incorporated by reference to
Exhibit 2.1 of Rio Tinto plcs Annual report on Form 20-F for the
financial year ended 31 December 1995, File No. 1-10533)3.2
    
    DLC Merger Sharing Agreement, dated 21 December 1995 and amended
on 29 April 2005 between CRA Limited and The RTZ Corporation PLC
relating to the ongoing relationship between CRA and RTZ following
the DLC merger (incorporated by reference to Exhibit 4.23 of Rio
Tinto plcs Annual report on Form 20-F for the financial year
ended 31 December 2004, File No. 1-10533)3.3
    
    RTZ Shareholder Voting Agreement, dated 21 December 1995 between
The RTZ Corporation PLC, RTZ Shareholder SVC Pty. Limited, CRA
Limited, R.T.Z. Australian Holdings Limited and The Law Debenture
Trust Corporation p.l.c. (incorporated by reference to Exhibit 2.3
of Rio Tinto plcs Annual report on Form 20-F for the financial
year ended 31 December 1995, File No. 1-10533)3.4
    
    CRA Shareholder Voting Agreement, dated 21 December 1995 between
CRA Limited, CRA Shareholder SVC Limited, The RTZ Corporation PLC
and The Law Debenture Trust Corporation p.l.c., relating to the
RTZ Special Voting Share (incorporated by reference to Exhibit 2.4
of Rio Tinto plcs Annual report on Form 20-F for the financial
year ended 31 December 1995, File No. 1-10533)
 Form 20-F 194




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##### Table of Contents



4.01
    
    Service Agreement dated 4 May 2007 between Mr T Albanese and Rio
Tinto London Limited (incorporated by reference to Exhibit 4.01 of
Rio Tinto plcs Annual report on Form 20-F for the financial year
ended 31 December 2007, File No. 1-10533)4.02
    
    Memorandum effective 1 March 2008 to Service Agreement dated 12
April 2006 between Mr T Albanese and Rio Tinto London Limited
(incorporated by reference to Exhibit 4.02 of Rio Tinto plcs Annual
report on Form 20-F for the financial year ended 31 December 2007,
File No. 1-10533)4.03
    
    Service Agreement dated 19 June 2002 between Mr G R Elliott and Rio
Tinto London Limited (incorporated by reference to Exhibit 4.31 of
Rio Tinto plcs Annual report on Form 20-F for the financial year
ended 31 December 2002, File No. 1-10533)4.04
    
    Memorandum effective 1 March 2008 to Service Agreement dated 19 June
2002 between Mr G R Elliott and Rio Tinto London Limited
(incorporated by reference to Exhibit 4.01 of Rio Tinto plcs Annual
report on Form 20-F for the financial year ended 31 December 2007,
File No. 1-10533)4.05
    
    Service Agreement dated 25 October 2007 between Mr R B Evans and Rio
Tinto plc (incorporated by reference to Exhibit 4.07 of Rio Tinto
plcs Annual report on Form 20-F for the financial year ended 31
December 2007, File No. 1-10533)4.06
    
    Novation dated 29 January 2008 of Service Agreement dated 25 October
2007 between Mr R B Evans and Rio Tinto plc to Rio Tinto London
Limited (incorporated by reference to Exhibit 4.08 of Rio Tinto
plcs Annual report on Form 20-F for the financial year ended 31
December 2007, File No. 1-10533)4.07
    
    Memorandum effective 1 March 2008 to Service Agreement dated 25
October 2007 between Mr R B Evans and Rio Tinto London Limited
(incorporated by reference to Exhibit 4.09 of Rio Tinto plcs Annual
report on Form 20-F for the financial year ended 31 December 2007,
File No. 1-10533)4.08*
    
    Termination Agreement  dated 30 March 2009 between Mr R B Evans and Rio Tinto.4.09
    
    Rio Tinto plc  Share Option Plan 2004 (incorporated by reference to
Exhibit 4.3 of Rio Tintos Registration statement on Form S-8, File
No. 333-147914)4.10
    
    Rio Tinto plc  Mining Companies Comparative Plan 2004 (incorporated
by reference to Exhibit 4.4 of Rio Tintos Registration statement on
Form S-8, File No. 333-147914)4.11
    
    Rio Tinto Limited  Share Option Plan 2004 (incorporated by
reference to Exhibit 4.6 of Rio Tintos Registration statement on
Form S-8, File No. 333-147914)4.12
    
    Rio Tinto Limited  Mining Companies Comparative Plan 2004
(incorporated by reference to Exhibit 4.7 of Rio Tintos
Registration statement on Form S-8, File No. 333-147914)4.13
    
    Medical expenses plan (incorporated by reference to Exhibit 4.67 of
Rio Tinto plcs Annual report on Form 20-F for the financial year
ended 31 December 2000, File No. 1-10533)4.14
    
    Pension plan (incorporated by reference to Exhibit 4.68 of Rio Tinto
plcs Annual report on Form 20-F for the financial year ended 31
December 2000, File No. 1-10533)4.15*
    
    Rules of The Rio Tinto plc  2008 Bonus Deferral Plan4.16*
    
    US Annex to the Rules of the Rio Tinto plc  2008 Bonus Deferral Plan4.17*
    
    Rules of The Rio Tinto Limited  2008 Bonus Deferral Plan4.18*
    
    US Annex to the Rules of the Rio Tinto Limited  2008 Bonus Deferral Plan8.1*
    
    List of subsidiary companies.12.1*
    
    Certifications pursuant to Rule 13a-14(a) of the Exchange Act.13.1*
    
    Certifications furnished pursuant to Rule 13a-14(b) of the Exchange
Act (such certifications are not deemed filed for purpose of Section
18 of the Exchange Act and not incorporated by reference in any
filing under the Securities Act).15.1*
    
    Consent of Independent Accountants to the incorporation of the audit
report relating to the Rio Tinto Group and effectiveness of internal
control over financial reporting of the Rio Tinto Group by reference
in registration statements on Form F-3 and Form S-8.15.2*
    
    Consent of Independent Accountants to the incorporation of the audit
report relating to Minera Escondida Limitada by reference in
registration statements on Form F-3 and Form S-8.
 Form 20-F 195




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##### Table of Contents



Signature
  Rio Tinto plc
(Registrant)
    
    
    
    Rio Tinto Limited
(Registrant)/s/ Ben Mathews
    
    
    
    /s/ Ben MathewsName: Ben Mathews
Title: Secretary
    
    
    
    Name: Ben Mathews
Title: Assistant SecretaryDate: 2 April 2009
    
    
    
    Date: 2 April 2009
 Form 20-F 196




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##### Table of Contents



Glossary
 NON MINING DEFINITIONS
   ADR
    
    American Depositary Receipt evidencing American Depositary Shares (ADS)Australian dollars
    
    Australian currency. Abbreviates to A$Australian GAAP
    
    Generally accepted accounting principles in AustraliaAIFRS
    
    International Financial Reporting Standards as adopted in AustraliaBillion
    
    One thousand millionCanadian dollars
    
    Canadian currency. Abbreviates to C$Company/Companies
    
    Rio Tinto plc and/or Rio Tinto Limited, as the context so requiresDLC merger
    
    Dual listed companies merger (1995)EU IFRS
    
    International Financial Reporting Standards as adopted by the European UnionIASB
    
    International Accounting Standards BoardIFRS
    
    International Financial Reporting Standards as issued by the IASBLBMA
    
    London Bullion Market AssociationLME
    
    London Metal ExchangePounds sterling
    
    UK currency. Abbreviates to £, pence or pPublic shareholders
    
    The holders of Rio Tinto plc shares that are not companies in the Rio Tinto
Limited Group and the holders of Rio Tinto Limited shares that are not companies
in the Rio Tinto plc GroupRand
    
    South African currency. Abbreviates to RRio Tinto Limited
    
    Rio Tinto Limited, and, where the context permits, its subsidiaries and
associated companiesRio Tinto Limited Group
    
    Rio Tinto Limited and its subsidiaries and associated companiesRio Tinto Limited shareholders
    
    The holders of Rio Tinto Limited sharesRio Tinto Limited share
    
    The ordinary shares in Rio Tinto LimitedRio Tinto Limited/RTL 
DLC Dividend Share
    
    The DLC Dividend Share in Rio Tinto LimitedRio Tinto Limited/RTL 
Special Voting Share
    
    The Special Voting Share in Rio Tinto LimitedRio Tinto plc
    
    Rio Tinto plc and its subsidiaries and associated companiesRio Tinto plc ADS
    
    An American Depositary Share representing the right to receive four Rio Tinto plc
ordinary sharesRio Tinto plc Group
    
    Rio Tinto plc and its subsidiaries and associated companiesRio Tinto plc ordinary shares
    
    The ordinary shares of 10p each in Rio Tinto plcRio Tinto plc shareholders
    
    The holders of Rio Tinto plc sharesRio Tinto plc shares
    
    Rio Tinto plc ordinary sharesRio Tinto plc/RTP 
DLC Dividend Share
    
    The DLC Dividend Share of 10p in Rio Tinto plcRio Tinto plc/RTP 
Special Voting Share
    
    The Special Voting Share of 10p in Rio Tinto plcShare/shares
    
    Rio Tinto Limited shares or Rio Tinto plc ordinary shares, as the context requiresSharing Agreement
    
    The agreement, dated 21 December 1995, as amended between Rio Tinto Limited and
Rio Tinto plc relating to the regulation of the relationship between Rio Tinto
Limited and Rio Tinto plc following the DLC merger.
 Form 20-F 197




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##### Table of Contents



NON MINING DEFINITIONS (continued)
 Underlying earnings
    
    An additional measure of earnings
reported by Rio Tinto with its IFRS results to provide greater
understanding of the underlying
business performance of its
operations. This measure is
explained in greater detail in the
financial statementsUS dollars
    
    United States currency. Abbreviates to dollars, $ or US$ and US cents or UScUS GAAP
    
    Generally accepted accounting principles in the United States
 MINING AND TECHNICAL DEFINITIONS
 Alumina
    
    Aluminium oxide. It is extracted from bauxite in a chemical refining process and is
subsequently the principal raw material in the electro-chemical process by which
aluminium is producedAnode and cathode copper
    
    At the final stage of the smelting of copper concentrates, the copper is cast into
specially shaped slabs called anodes for subsequent refining to produce refined
cathode copperBauxite
    
    Mainly hydrated aluminium oxides (AL2O3.2H2O).
Principal ore of alumina, the raw material from which aluminium is madeBeneficiated bauxite
    
    Bauxite ore that has been treated to remove waste material to improve its physical or
chemical characteristicsBioleaching
    
    The deliberate use of bacteria to speed the chemical release of metals from oresBlock caving
    
    An underground bulk mining method. It involves undercutting the orebody to induce ore
fracture and collapse by gravity. The broken ore is recovered through draw points
belowBorates
    
    A generic term for mineral compounds which contain boron and oxygenCathode copper
    
    Refined copper produced by electrolytic refining of impure copper or by electro-winningClassification
    
    Separating crushed and ground ore into portions of different size particlesCoking coal
    
    By virtue of its carbonisation properties, it is used in the manufacture of coke,
which is used in the steel making process. Also known as metallurgical coalConcentrate
    
    The product of a physical concentration process, such as flotation or gravity
concentration, which involves separating ore minerals from unwanted waste rock.
Concentrates require subsequent processing (such as smelting or leaching) to break
down or dissolve the ore minerals and obtain the desired elements, usually metalsCutoff grade
    
    The lowest grade of mineralised material considered economic to process. It is used in
the calculation of the quantity of ore present in a given depositFlotation
    
    A method of separating finely ground minerals using a froth created in water by
specific reagents. In the flotation process certain mineral particles are induced to
float by becoming attached to bubbles of froth whereas others, usually unwanted, sinkFOB
    
    Free on board.Grade
    
    The proportion of metal or mineral present in ore, or any other host material,
expressed in this document as per cent, grams per tonne or ounces per tonHead grade
    
    The average grade of ore delivered to the millIlmenite
    
    Mineral composed of iron, titanium and oxygenMetallurgical coal
    
    By virtue of its carbonisation properties, it is used in the manufacture of coke,
which is used in the steel making process. Also known as coking coalOre
    
    A rock from which a metal(s) or mineral(s) can be economically and legally extractedOre milled
    
    The quantity of ore processedPressure oxidation
    
    A method of treating sulphide ores. In the case of refractory gold ores, the object is
to oxidise the sulphides to sulphates and hence liberate the gold for subsequent
cyanide leaching. The technique involves reaction of the ore with sulphuric acid under
pressure in the presence of oxygen gas
 Form 20-F 198




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##### Table of Contents



MINING AND TECHNICAL DEFINITIONS (continued)
 Probable ore reserves
    
    Reserves for which quantity and grade and/or quality are
computed from information similar to that used for proven
reserves, but the sites for inspection, sampling and
measurement are farther apart or are otherwise less
adequately spaced. The degree of assurance, although lower
than that for proven reserves, is high enough to assume
continuity between points of observationProven ore reserves
    
    Reserves for which (a) quantity is computed from
dimensions revealed in outcrops, trenches, workings or
drill holes; grade and/or quality are computed from the
results of detailed sampling and (b) the sites for
inspection, sampling and measurement are spaced so closely
and the geologic character is so well defined that size,
shape, depth and mineral content of reserves are well
establishedRock mined
    
    The quantity of ore and waste rock excavated from the
mine. In this document, the term is only applied to
surface mining operationsRutile
    
    A mineral composed of titanium and oxygen (TiO2)Steam coal
    
    Also referred to as steaming coal, thermal coal or energy
coal. It is used as a fuel source in electrical power
generation, cement manufacture and various industrial
applicationsStripping ratio
    
    The tonnes of waste material which must be removed to
allow the mining of one tonne of oreSolvent extraction and
electrowinning (SX-EW)
    
    Processes for extracting metal from an ore and producing
pure metal. First the metal is leached into solution; the
resulting solution is then purified in the solvent
extraction process; the solution is then treated in an
electro-chemical process (electro-winning) to recover
cathode copperTailing
    
    The rock wastes which are rejected from a concentrating
process after the recoverable valuable minerals have been
extractedTitanium dioxide feedstock
    
    A feedstock rich in titanium dioxide, produced, in Rio
Tintos case, by smelting ores containing titanium
mineralsZircon
    
    Zirconium mineral (ZrSiO4)
 CONVERSION OF WEIGHTS AND MEASURES
 1 troy ounce = 31.1 grams1 kilogram = 32.15 troy ounces1 kilogram = 2.2046 pounds1 metric tonne = 1,000 kilograms1 metric tonne = 2,204.6 pounds1 metric tonne = 1.1023 short tons1 short ton = 2,000 pounds1 long ton = 2,240 pounds1 gram per metric tonne = 0.02917 troy ounces per short ton1 gram per metric tonne = 0.03215 troy ounces per metric tonne1 kilometre = 0.6214 miles
 Form 20-F 199




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##### Table of Contents



EXCHANGE RATES
  Pounds sterling
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Australian dollarsYear ended 31 December
    
    Period
    
    
    Average
    
    
    High
    
    
    Low
    
    
    Year ended 31 December
    
    
    Period
    
    
    Average
    
    
    High
    
    
    Lowend
    
    
    rate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    end
    
    
    rate2008
    
    
    1.44
    
    
    
    1.86
    
    
    
    2.03
    
    
    
    1.44
    
    
    
    2008
    
    
    
    0.698
    
    
    
    0.852
    
    
    
    0.983
    
    
    
    0.6072007
    
    
    1.99
    
    
    
    2.00
    
    
    
    2.11
    
    
    
    1.92
    
    
    
    2007
    
    
    
    0.878
    
    
    
    0.839
    
    
    
    0.937
    
    
    
    0.7722006
    
    
    1.96
    
    
    
    1.84
    
    
    
    1.98
    
    
    
    1.72
    
    
    
    2006
    
    
    
    0.788
    
    
    
    0.753
    
    
    
    0.791
    
    
    
    0.7062005
    
    
    1.73
    
    
    
    1.82
    
    
    
    1.93
    
    
    
    1.71
    
    
    
    2005
    
    
    
    0.734
    
    
    
    0.763
    
    
    
    0.799
    
    
    
    0.7272004
    
    
    1.93
    
    
    
    1.83
    
    
    
    1.95
    
    
    
    1.76
    
    
    
    2004
    
    
    
    0.783
    
    
    
    0.737
    
    
    
    0.798
    
    
    
    0.686
 Note
 FINANCIAL CALENDAR
 15
January 2009
    
    Fourth quarter 2008 operations review12 February 2009
    
    Announcement of results for 200818
February 2009
    
    Rio Tinto plc and Rio Tinto Limited shares and Rio Tinto plc ADRs
quoted ex-dividend for 2008 final dividend20
February 2009
    
    Record date for 2008 final dividend for Rio Tinto plc shares and ADRs24
February 2009
    
    Record date for 2008 final dividend for Rio Tinto Limited shares18
March 2009
    
    Plan notice date for election under the dividend reinvestment plan for
the 2008 final dividend8
April 2009
    
    Payment date for 2008 final dividend to holders of Ordinary shares9
April 2009
    
    Payment date for 2008 final dividend for holders of Rio Tinto plc ADR15 April 2009
    
    Annual general meeting for Rio Tinto plc16 April 2009
    
    First quarter 2009 operations review20 April 2009
    
    Annual general meeting for Rio Tinto Limited16 July 2009
    
    Second quarter 2009 operations review25 August 2009
    
    Announcement of half year results for 20092 September 2009
    
    Rio Tinto plc and Rio Tinto Limited shares and Rio Tinto plc ADRs
quoted ex-dividend for 2009 interim dividend4 September 2009
    
    Record date for 2009 interim dividend for Rio Tinto plc shares and ADRs8 September 2009
    
    Record date for 2009 interim dividend for Rio Tinto Limited shares10 September 2009
    
    Plan notice date for election under the dividend reinvestment plan for
the 2009 interim dividend1 October 2009
    
    Payment date for 2009 interim dividend to holders of Ordinary shares2 October 2009
    
    Payment date for 2009 interim dividend for holders of Rio Tinto plc ADRs14 October 2009
    
    Third quarter 2009 operations reviewJanuary 2010
    
    Fourth quarter 2009 operations reviewFebruary 2010
    
    Announcement of results for 2009
 Form 20-F 200




---



##### 



2008 Financial statements
 Contents
  PagePrimary financial statementsGroup income statement
    
    
    A-2Group cash flow statement
    
    
    A-3Group balance sheet
    
    
    A-4Group statement of recognised income and expense (SORIE)
    
    
    A-5Reconciliation with Australian IFRS
    
    
    A-6Outline of dual listed companies structure and basis of financial statements
    
    
    A-6Notes to the 2008 Financial statements
    
    
    A-7Note 1 - Principal accounting policies
    
    
    A-7Group income statementNote 2 - Reconciliation of net earnings to underlying earnings
    
    
    A-18Note 3 - Net operating costs
    
    
    A-18Note 4 - Employment costs
    
    
    A-19Note 5 - Impairment (charges)/reversals
    
    
    A-19Note 6 - Share of profit after tax of equity accounted units
    
    
    A-20Note 7 - Interest receivable and payable
    
    
    A-20Note 8 - Tax on profit
    
    
    A-20Note 9 - Earnings/(loss) per ordinary share
    
    
    A-22Note 10 - Dividends
    
    
    A-23Group balance sheetNote 11 - Goodwill
    
    
    A-23Note 12 - Intangible assets
    
    
    A-25Note 13 - Property, plant and equipment
    
    
    A-26Note 14 - Investments in equity accounted units
    
    
    A-27Note 15 - Net debt of equity accounted units
    
    
    A-27Note 16 - Inventories
    
    
    A-27Note 17 - Trade and other receivables
    
    
    A-28Note 18 - Deferred taxation
    
    
    A-29Note 19 - Assets held for sale
    
    
    A-30Note 20 - Other financial assets
    
    
    A-30Note 21 - Cash and cash equivalents
    
    
    A-30Note 22 - Borrowings
    
    
    A-31Note 23 - Capitalised finance leases
    
    
    A-31Note 24 - Consolidated net debt
    
    
    A-32Note 25 - Trade and other payables
    
    
    A-32Note 26 - Other financial liabilities
    
    
    A-32Note 27 - Provisions (not including taxation)
    
    
    A-33
  PageCapital and reservesNote 28 - Share capital  Rio Tinto plc
    
    
    A-34Note 29 - Share capital  Rio Tinto Limited
    
    
    A-34Note 30 - Changes in equity, share premium and reserves
    
    
    A-35Additional disclosuresNote 31 - Primary segmental analysis (by product group)
    
    
    A-37Note 32 - Secondary segmental analysis (geographical)
    
    
    A-39Note 33 - Financial risk management
    
    
    A-40Note 34 - Financial instruments
    
    
    A-45Note 35 - Contingent liabilities and commitments
    
    
    A-50Note 36 - Average number of employees
    
    
    A-51Note 37 - Principal subsidiaries
    
    
    A-52Note 38 - Principal jointly controlled entities
    
    
    A-53Note 39 - Principal associates
    
    
    A-54Note 40 - Principal jointly controlled assets and other proportionally consolidated units
    
    
    A-54Note 41 - Purchases and sales of subsidiaries, joint ventures, associates and other
interests in businesses
    
    
    A-55Note 42 - Directors and key management remuneration
    
    
    A-57Note 43 - Auditors remuneration
    
    
    A-58Note 44 - Related party transactions
    
    
    A-59Note 45 - Exchange rates in US$
    
    
    A-59Note 46 - Bougainville Copper Limited (BCL)
    
    
    A-59Note 47 - Events after the balance sheet date
    
    
    A-59Note 48 - Share based payments
    
    
    A-60Note 49 - Post retirement benefits
    
    
    A-65Note
50 - Rio Tinto Financial information by business unit
    
    
    A-69Australian Corporations Act  Summary of ASIC relief
    
    
    A-71Report
of independent registered public accounting firms
    
    
    A-72
   
 A-1




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##### Table of Contents



Group
income statement
  2008
    
    
    2007
    
    
    2006Note
    
    
    US$m
    
    
    US$m
    
    
    US$mContinuing operationsConsolidated sales revenue
    
    
    
    
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465Net operating costs (excluding items shown separately)
    
    
    3
    
    
    
    (37,641
    )
    
    
    (20,752
    )
    
    
    (13,655
    )Impairment charges net of reversals
    
    
    5
    
    
    
    (8,015
    )
    
    
    (58
    )
    
    
    396Profit on disposal of interests in businesses
    
    
    41
    
    
    
    2,231
    
    
    
    2
    
    
    
    5Exploration and evaluation costs
    
    
    12
    
    
    
    (1,134
    )
    
    
    (574
    )
    
    
    (283
    )Profit on disposal of interests in undeveloped projects (a)
    
    
    12
    
    
    
    489
    
    
    
    253
    
    
    
    46Operating profit
    
    
    
    
    
    
    10,194
    
    
    
    8,571
    
    
    
    8,974Share of profit after tax of equity accounted units
    
    
    6
    
    
    
    1,039
    
    
    
    1,584
    
    
    
    1,378Profit before finance items and taxation
    
    
    
    
    
    
    11,233
    
    
    
    10,155
    
    
    
    10,352Finance itemsNet exchange (losses)/gains on external debt and intragroup balances
    
    
    24
    
    
    
    (176
    )
    
    
    194
    
    
    
    46Net (losses)/gains on derivatives not qualifying for hedge accounting
    
    
    
    
    
    
    (173
    )
    
    
    57
    
    
    
    35Interest receivable and similar income
    
    
    7
    
    
    
    204
    
    
    
    134
    
    
    
    106Interest payable and similar charges
    
    
    7
    
    
    
    (1,618
    )
    
    
    (538
    )
    
    
    (160
    )Amortisation of discount
    
    
    
    
    
    
    (292
    )
    
    
    (166
    )
    
    
    (139
    )(2,055
    )
    
    
    (319
    )
    
    
    (112
    )Profit before taxation
    
    
    
    
    
    
    9,178
    
    
    
    9,836
    
    
    
    10,240Taxation
    
    
    8
    
    
    
    (3,742
    )
    
    
    (2,090
    )
    
    
    (2,373
    )Profit from continuing operations
    
    
    
    
    
    
    5,436
    
    
    
    7,746
    
    
    
    7,867Discontinued operationsLoss after tax from discontinued operations
    
    
    19
    
    
    
    (827
    )
    
    
    
    
    
    
    Profit for the year
    
    
    
    
    
    
    4,609
    
    
    
    7,746
    
    
    
    7,867- attributable to outside equity shareholders
    
    
    
    
    
    
    933
    
    
    
    434
    
    
    
    429- attributable to equity shareholders of Rio Tinto (Net earnings)
    
    
    
    
    
    
    3,676
    
    
    
    7,312
    
    
    
    7,438Basic earnings/(loss) per shareProfit from continuing operations
    
    
    9
    
    
    
    350.8c
    
    
    
    568.7c
    
    
    
    557.8cLoss from discontinued operations
    
    
    9
    
    
    
    (64.4c
    )
    
    
    
    
    
    
    Profit for the year
    
    
    9
    
    
    
    286.4c
    
    
    
    568.7c
    
    
    
    557.8cDiluted earnings/(loss) per shareProfit from continuing operations
    
    
    9
    
    
    
    349.2c
    
    
    
    566.3c
    
    
    
    555.6cLoss from discontinued operations
    
    
    9
    
    
    
    (64.1c
    )
    
    
    
    
    
    
    Profit for the year
    
    
    9
    
    
    
    285.1c
    
    
    
    566.3c
    
    
    
    555.6cDividends paid during the year (US$m)
    
    
    10
    
    
    
    1,933
    
    
    
    1,507
    
    
    
    2,573Dividends per share: paid during the year-regular dividend
    
    
    10
    
    
    
    152.0c
    
    
    
    116.0c
    
    
    
    81.5c-special dividend
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    110.0cDividends per share: proposed in the announcement of the results for the year
    
    
    10
    
    
    
    68.0c
    
    
    
    84.0c
    
    
    
    64.0c
 
 (a)
    
    Gains arising on the disposal of interests in undeveloped projects are stated net of charges
of US$156 million (2007 and 2006: nil), related to such projects. A-2




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##### Table of Contents



Group
cash flow statement
  2008
    
    
    2007
    
    
    2006Note
    
    
    US$m
    
    
    US$m
    
    
    US$mCash flow from consolidated operations (a)
    
    
    
    
    
    
    19,195
    
    
    
    10,805
    
    
    
    9,196Dividends from equity accounted units
    
    
    
    
    
    
    1,473
    
    
    
    1,764
    
    
    
    1,727Cash flows from operations
    
    
    
    
    
    
    20,668
    
    
    
    12,569
    
    
    
    10,923Net interest paid
    
    
    
    
    
    
    (1,538
    )
    
    
    (489
    )
    
    
    (128
    )Dividends paid to outside shareholders of subsidiaries
    
    
    
    
    
    
    (348
    )
    
    
    (168
    )
    
    
    (193
    )Tax paid
    
    
    
    
    
    
    (3,899
    )
    
    
    (3,421
    )
    
    
    (2,799
    )Net cash generated from operating activities
    
    
    
    
    
    
    14,883
    
    
    
    8,491
    
    
    
    7,803Cash flows from investing activitiesNet disposals/(acquisitions) of subsidiaries, joint ventures & associates
    
    
    41
    
    
    
    2,563
    
    
    
    (37,526
    )
    
    
    (279
    )Purchase of property, plant & equipment and intangible assets
    
    
    
    
    
    
    (8,574
    )
    
    
    (5,000
    )
    
    
    (3,992
    )Sales of financial assets
    
    
    
    
    
    
    171
    
    
    
    49
    
    
    
    293Purchases of financial assets
    
    
    
    
    
    
    (288
    )
    
    
    (273
    )
    
    
    (167
    )Other funding of equity accounted units
    
    
    
    
    
    
    (334
    )
    
    
    (216
    )
    
    
    (47
    )Other investing cash flows
    
    
    
    
    
    
    281
    
    
    
    224
    
    
    
    103Cash used in investing activities
    
    
    
    
    
    
    (6,181
    )
    
    
    (42,742
    )
    
    
    (4,089
    )Cash flows before financing activities
    
    
    
    
    
    
    8,702
    
    
    
    (34,251
    )
    
    
    3,714Cash flows from financing activitiesEquity dividends paid to Rio Tinto shareholders
    
    
    
    
    
    
    (1,933
    )
    
    
    (1,507
    )
    
    
    (2,573
    )Own shares purchased from Rio Tinto shareholders
    
    
    
    
    
    
    
    
    
    
    (1,648
    )
    
    
    (2,394
    )Proceeds from issue of ordinary shares in Rio Tinto
    
    
    
    
    
    
    23
    
    
    
    37
    
    
    
    55Proceeds from additional borrowings
    
    
    
    
    
    
    4,697
    
    
    
    39,195
    
    
    
    483Repayment of borrowings
    
    
    
    
    
    
    (12,667
    )
    
    
    (1,017
    )
    
    
    (1,085
    )Finance lease repayments
    
    
    
    
    
    
    (10
    )
    
    
    (17
    )
    
    
    (17
    )Receipts from close out of interest rate swaps
    
    
    
    
    
    
    710
    
    
    
    
    
    
    
    Other financing cash flows
    
    
    
    
    
    
    72
    
    
    
    54
    
    
    
    142Cash (used in)/from financing activities
    
    
    
    
    
    
    (9,108
    )
    
    
    35,097
    
    
    
    (5,389
    )Effects of exchange rates on cash and cash equivalents
    
    
    
    
    
    
    (101
    )
    
    
    (27
    )
    
    
    30Net (decrease)/increase in cash and cash equivalents
    
    
    
    
    
    
    (507
    )
    
    
    819
    
    
    
    (1,645
    )Opening cash and cash equivalents less overdrafts
    
    
    
    
    
    
    1,541
    
    
    
    722
    
    
    
    2,367Closing cash and cash equivalents less overdrafts
    
    
    21
    
    
    
    1,034
    
    
    
    1,541
    
    
    
    722(a) Cash flows from consolidated operationsProfit from continuing operations
    
    
    
    
    
    
    5,436
    
    
    
    7,746
    
    
    
    7,867Adjustments for:Taxation
    
    
    8
    
    
    
    3,742
    
    
    
    2,090
    
    
    
    2,373Finance items
    
    
    
    
    
    
    2,055
    
    
    
    319
    
    
    
    112Share of profit after tax of equity accounted units
    
    
    6
    
    
    
    (1,039
    )
    
    
    (1,584
    )
    
    
    (1,378
    )Profit on disposal of interests in businesses
    
    
    41
    
    
    
    (2,231
    )
    
    
    (2
    )
    
    
    (5
    )Impairment charges/(reversals)
    
    
    5
    
    
    
    8,015
    
    
    
    58
    
    
    
    (396
    )Depreciation and amortisation
    
    
    
    
    
    
    3,475
    
    
    
    2,115
    
    
    
    1,509Provisions (including exchange gains on provisions)
    
    
    27
    
    
    
    265
    
    
    
    308
    
    
    
    60Utilisation of provisions
    
    
    27
    
    
    
    (464
    )
    
    
    (162
    )
    
    
    (194
    )Utilisation of provision for post retirement benefits
    
    
    27
    
    
    
    (448
    )
    
    
    (121
    )
    
    
    (77
    )Change in inventories
    
    
    
    
    
    
    (1,178
    )
    
    
    130
    
    
    
    (454
    )Change in trade and other receivables
    
    
    
    
    
    
    658
    
    
    
    (385
    )
    
    
    (394
    )Change in trade and other payables
    
    
    
    
    
    
    951
    
    
    
    375
    
    
    
    116Other items
    
    
    
    
    
    
    (42
    )
    
    
    (82
    )
    
    
    5719,195
    
    
    
    10,805
    
    
    
    9,196
 A-3




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##### Table of Contents



Group
balance sheet
  Restated (a)2008
    
    
    2007Note
    
    
    US$m
    
    
    US$mNon-current assetsGoodwill
    
    
    11
    
    
    
    14,296
    
    
    
    21,105Intangible assets
    
    
    12
    
    
    
    6,285
    
    
    
    6,804Property, plant and equipment
    
    
    13
    
    
    
    41,753
    
    
    
    41,968Investments in equity accounted units
    
    
    14
    
    
    
    5,053
    
    
    
    5,744Loans to equity accounted units
    
    
    
    
    
    
    264
    
    
    
    267Inventories
    
    
    16
    
    
    
    166
    
    
    
    178Trade and other receivables
    
    
    17
    
    
    
    1,111
    
    
    
    1,784Deferred tax assets
    
    
    18
    
    
    
    1,367
    
    
    
    585Tax recoverable
    
    
    
    
    
    
    220
    
    
    
    147Other financial assets
    
    
    20
    
    
    
    666
    
    
    
    57871,181
    
    
    
    79,160Current assetsInventories
    
    
    16
    
    
    
    5,607
    
    
    
    5,397Trade and other receivables
    
    
    17
    
    
    
    5,401
    
    
    
    6,500Assets held for sale
    
    
    19
    
    
    
    5,325
    
    
    
    7,024Loans to equity accounted units
    
    
    
    
    
    
    251
    
    
    
    117Tax recoverable
    
    
    
    
    
    
    406
    
    
    
    206Other financial assets
    
    
    20
    
    
    
    264
    
    
    
    1,042Cash and cash equivalents
    
    
    21
    
    
    
    1,181
    
    
    
    1,64518,435
    
    
    
    21,931Current liabilitiesBank overdrafts repayable on demand
    
    
    21
    
    
    
    (147
    )
    
    
    (104
    )Borrowings
    
    
    22
    
    
    
    (9,887
    )
    
    
    (8,109
    )Trade and other payables
    
    
    25
    
    
    
    (7,197
    )
    
    
    (6,532
    )Liabilities of disposal groups held for sale
    
    
    19
    
    
    
    (2,121
    )
    
    
    (2,632
    )Other financial liabilities
    
    
    26
    
    
    
    (480
    )
    
    
    (932
    )Tax payable
    
    
    
    
    
    
    (1,442
    )
    
    
    (476
    )Provisions
    
    
    27
    
    
    
    (826
    )
    
    
    (766
    )(22,100
    )
    
    
    (19,551
    )Net current (liabilities)/assets
    
    
    
    
    
    
    (3,665
    )
    
    
    2,380Non-current liabilitiesBorrowings
    
    
    22
    
    
    
    (29,724
    )
    
    
    (38,656
    )Trade and other payables
    
    
    25
    
    
    
    (452
    )
    
    
    (487
    )Other financial liabilities
    
    
    26
    
    
    
    (268
    )
    
    
    (496
    )Tax payable
    
    
    
    
    
    
    (450
    )
    
    
    (361
    )Deferred tax liabilities
    
    
    18
    
    
    
    (4,054
    )
    
    
    (4,912
    )Provision for post retirement benefits
    
    
    27
    
    
    
    (3,601
    )
    
    
    (3,233
    )Other provisions
    
    
    27
    
    
    
    (6,506
    )
    
    
    (7,102
    )(45,055
    )
    
    
    (55,247
    )Net assets
    
    
    
    
    
    
    22,461
    
    
    
    26,293Capital and reservesShare capital- Rio Tinto plc
    
    
    28
    
    
    
    160
    
    
    
    172- Rio Tinto Limited (excluding Rio Tinto plc interest)
    
    
    29
    
    
    
    961
    
    
    
    1,219Share premium account
    
    
    30
    
    
    
    4,705
    
    
    
    1,932Other reserves
    
    
    30
    
    
    
    (2,322
    )
    
    
    2,416Retained earnings
    
    
    30
    
    
    
    17,134
    
    
    
    19,033Equity attributable to Rio Tinto shareholders
    
    
    30
    
    
    
    20,638
    
    
    
    24,772Attributable to outside equity shareholders
    
    
    30
    
    
    
    1,823
    
    
    
    1,521Total equity
    
    
    
    
    
    
    22,461
    
    
    
    26,293
 (a)
    
    The 31 December 2007 balance sheet has been restated for the revisions to Alcans fair value
accounting which was finalised in 2008, and accordingly all balance sheet notes have been
restated. See note 41.
 A-4




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##### Table of Contents



Group
statement of recognised income and expense
(SORIE)
  2008Attributable toshareholders
    
    
    Outsideof Rio Tinto
    
    
    interests
    
    
    TotalUS$m
    
    
    US$m
    
    
    US$mCurrency translation adjustment
    
    
    (4,943
    )
    
    
    (411
    )
    
    
    (5,354
    )Cash flow hedge fair value gains
    
    
    31
    
    
    
    6
    
    
    
    37Losses on available for sale securities
    
    
    (173
    )
    
    
    (1
    )
    
    
    (174
    )Cash flow hedge losses transferred to the income statement
    
    
    245
    
    
    
    107
    
    
    
    352Gains on revaluation of available for sale securities transferred to the income statement
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Actuarial losses on post retirement benefit plans
    
    
    (1,299
    )
    
    
    (20
    )
    
    
    (1,319
    )Tax recognised directly in equity
    
    
    299
    
    
    
    (36
    )
    
    
    263Net loss recognised directly in equity
    
    
    (5,841
    )
    
    
    (355
    )
    
    
    (6,196
    )Profit after tax for the year
    
    
    3,676
    
    
    
    933
    
    
    
    4,609Total recognised (loss)/income for the year
    
    
    (2,165
    )
    
    
    578
    
    
    
    (1,587
    )
 2007Attributable toshareholders
    
    
    Outsideof Rio Tinto
    
    
    interests
    
    
    TotalUS$m
    
    
    US$m
    
    
    US$mCurrency translation adjustment
    
    
    1,886
    
    
    
    135
    
    
    
    2,021Cash flow hedge fair value losses
    
    
    (201
    )
    
    
    (223
    )
    
    
    (424
    )Gains on available for sale securities
    
    
    49
    
    
    
    2
    
    
    
    51Cash flow hedge losses transferred to the income statement
    
    
    89
    
    
    
    76
    
    
    
    165Gains on revaluation of available for sale securities transferred to the income statement
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )Actuarial gains on post retirement benefit plans
    
    
    135
    
    
    
    6
    
    
    
    141Tax recognised directly in equity
    
    
    153
    
    
    
    40
    
    
    
    193Net income recognised directly in equity
    
    
    2,095
    
    
    
    36
    
    
    
    2,131Profit after tax for the year
    
    
    7,312
    
    
    
    434
    
    
    
    7,746Total recognised income for the year
    
    
    9,407
    
    
    
    470
    
    
    
    9,877
 2006Attributable toshareholders
    
    
    Outsideof Rio Tinto
    
    
    interests
    
    
    TotalUS$m
    
    
    US$m
    
    
    US$mCurrency translation adjustment
    
    
    824
    
    
    
    42
    
    
    
    866Cash flow hedge fair value losses
    
    
    (178
    )
    
    
    (200
    )
    
    
    (378
    )Gains on available for sale securities
    
    
    14
    
    
    
    5
    
    
    
    19Cash flow hedge losses transferred to the income statement
    
    
    63
    
    
    
    74
    
    
    
    137Gains on revaluation of available for sale securities transferred to the income statement
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Actuarial gains on post retirement benefit plans
    
    
    338
    
    
    
    35
    
    
    
    373Tax recognised directly in equity
    
    
    19
    
    
    
    83
    
    
    
    102Net income recognised directly in equity
    
    
    1,076
    
    
    
    39
    
    
    
    1,115Profit after tax for the year
    
    
    7,438
    
    
    
    429
    
    
    
    7,867Total recognised income for the year
    
    
    8,514
    
    
    
    468
    
    
    
    8,982
 A-5




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##### Table of Contents



Reconciliation
with Australian IFRS
 The Groups financial statements have been prepared in accordance with IFRS as adopted by the European Union (EU
IFRS), which differs in certain respects from the version of IFRS that is applicable in Australia (Australian IFRS).Prior to 1 January 2004, the Groups financial statements were prepared in accordance with UK GAAP. Under EU IFRS
goodwill on acquisitions prior to 1998, which was eliminated directly against equity in the Groups UK GAAP financial
statements, has not been reinstated. This was permitted under the rules governing the transition to EU IFRS set
out in IFRS 1. The equivalent Australian Standard, AASB 1, does not provide for the netting of goodwill against
equity. As a consequence, shareholders funds under Australian IFRS include the residue of such goodwill, which
amounted to US$752 million at 31 December 2008 (2007: US$736 million).Save for the exception described above, the Groups financial statements drawn up in accordance with EU IFRS are
consistent with the requirements of Australian IFRS.
 
 Outline of dual listed companies structure and basis of financial
statementsThe Rio Tinto GroupThese are the financial statements of the Rio Tinto Group (the Group), formed through the merger of economic interests
(merger) of Rio Tinto plc and Rio Tinto Limited, and presented by both Rio Tinto plc and Rio Tinto Limited as their consolidated
accounts in accordance with both United Kingdom and Australian legislation and regulations.Merger termsOn 21 December 1995, Rio Tinto plc and Rio Tinto Limited, which are listed respectively on Stock Exchanges in the United
Kingdom and Australia, entered into a dual listed companies (DLC) merger. This was effected by contractual arrangements
between the companies and amendments to Rio Tinto plcs Memorandum and Articles of Association and Rio Tinto Limiteds
constitution.As a result, Rio Tinto plc and Rio Tinto Limited and their respective groups operate together as a single economic enterprise,
with neither assuming a dominant role. In particular, the arrangements:
     The merger involved no change in the legal ownership of any assets of Rio Tinto plc or Rio Tinto Limited, nor any change in the
ownership of any existing shares or securities of Rio Tinto plc or Rio Tinto Limited, nor the issue of any shares, securities or
payment by way of consideration, save for the issue by each company of one special voting share to a trustee company which
provides the joint electoral procedure for public shareholders. During 2002, each of the parent companies issued a DLC
Dividend Share to facilitate the efficient management of funds within the DLC structure.Accounting standardsThe financial statements have been drawn up in accordance with International Financial Reporting Standards as adopted by the
European Union (EU IFRS). The merger of economic interests of Rio Tinto plc and Rio Tinto Limited was accounted for as a
merger under UK GAAP. As permitted under the rules governing the transition to EU IFRS, which are set out in IFRS 1, the
Group did not restate business combinations that occurred before the transition date of 1 January 2004. As a result, the DLC
merger of economic interests described above continues to be accounted for as a merger under EU IFRS.The main consequence of adopting merger rather than acquisition accounting is that the balance sheet of the merged Group
includes the assets and liabilities of Rio Tinto plc and Rio Tinto Limited at their carrying values prior to the merger, subject to
adjustments to achieve uniformity of accounting policies, rather than at their fair values at the date of the merger. For
accounting purposes Rio Tinto plc and Rio Tinto Limited are viewed as a single public parent company (with their respective
public shareholders being the shareholders in that single company). As a result the amounts attributable to both Rio Tinto plc
and Rio Tinto Limited public shareholders are included in the amounts attributed to equity shareholders on the balance sheet,
income statement and statement of recognised income and expense.Australian Corporations ActThe financial statements are drawn up in accordance with an order, under section 340 of the Australian Corporations Act 2001,
issued by the Australian Securities and Investments Commission (ASIC) on 27 January 2006 (as amended on 22 December
2006). The main provisions of the order are that the financial statements are:
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Notes
to the 2008 Financial statements
 
 1
    
    PRINCIPAL ACCOUNTING POLICIESCorporate informationThe financial statements of the Group were authorised for issue in accordance with a directors resolution on 6 March 2009.
The financial statements in the 20-F were authorised for issue by the
board of directors on 2 April 2009. Rio Tinto plc and Rio Tinto Limited are listed and incorporated respectively on Stock Exchanges in the United Kingdom and
Australia. Rio Tinto plcs registered office is at 5 Aldermanbury Square, London, EC2V 7HR, United Kingdom (registered number:
719885). Rio Tinto Limiteds registered office is at 120 Collins Street, Melbourne, Australia, 3000.Rio Tintos business is finding, mining and processing mineral resources. Major products are aluminium, copper, diamonds, coal,
uranium, gold, industrial minerals (borax, titanium dioxide, salt, talc), and iron ore. Activities span the world but are strongly
represented in Australia and North America with significant businesses in South America, Asia, Europe and Africa.Basis of preparationThe basis of preparation and accounting policies used in preparing the financial statements for the year ended 31 December 2008
are set out below.The financial statements for the year ended 31 December 2008 have been prepared in accordance with International Financial
Reporting Standards both as adopted by the EU (EU IFRS) and as issued by the International Accounting Standards Board (IFRS),
Interpretations issued from time to time by the International Financial Reporting Interpretations Committee (IFRIC) adopted by the
European Union that are mandatory for periods ended 31 December 2008, and in accordance with applicable United Kingdom law,
applicable Australian law as amended by the Australian Securities and Investments Commission Order dated 27 January 2006
(as amended on 22 December 2006) and Article 4 of the European Union IAS regulation.The EU IFRS financial information has been drawn up on the basis of accounting policies consistent with those applied in
the financial statements for the year to 31 December 2007, except for the following:
 IFRIC 11  (IFRS 2)  Group and Treasury share transactions
 IFRIC 14 (IAS 19) The limit on a defined benefit asset, minimum funding requirements and their interaction.
 The Group has early adopted IFRIC 14. The effect of adopting
IFRIC 11 and IFRIC 14 is not material to Group earnings or to shareholders funds in the current or prior periods. Therefore, prior
period information has not been restated.IFRIC 12 Service concession arrangementsis mandatory for 2008. Adoption would not
be material to Group earnings or to shareholders funds in the current or prior periods.The Group has not applied the following pronouncements: those which are expected to be most relevant to the Group are IFRS 8 and
IAS 27 (revised).
 IFRS 8 Operating Segments
 IAS 1 Presentation of financial statements (revised)
 IFRS 2 (Amendment) Share based payment
 IFRIC 13 Customer Loyalty programmes
 IFRIC 15 Agreements for the construction of real estate
 IFRIC 16 Hedges of a net investment in a foreign operation
 Amendment to IAS 32 and IAS 1  Puttable financial instruments and obligations arising on liquidation
 Improvements to IFRSs
 IAS 27 (revised) Consolidated and separate financial statements
 IFRS 3 (Amendment) Business combinations
 Amendments To IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate
Financial Statements
 Eligible Hedged Items (an amendment to IAS 39 Financial Instruments: Recognition and Measurement)
 IFRIC 17 Non cash distributions to owners
 IFRIC 18 Transfers of assets from customers
 The Group is evaluating the impact of the above pronouncements. The revision to IAS 27 would have a material effect on the income
statement in 2009 if early adopted and if applied to the Chinalco
strategic partnership. The Chinalco strategic partnership is subject
to approval by the shareholders of Rio Tinto, governments and other regulators. The Group does not currently expect to early adopt the
revision to IAS 27. Otherwise, the above changes are not expected to be material to the Groups earnings or to shareholders funds.
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIES CONTINUEDJudgements in applying accounting policies and key sources of estimation uncertaintyMany of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and
estimates are based on managements best knowledge of the relevant facts and circumstances, having regard to previous
experience, but actual results may differ from the amounts included in the financial statements. Information about such
judgements and estimation is contained in the accounting policies and/or the Notes to the financial statements, and the key areas
are summarised below.Areas of judgement that have the most significant effect on the amounts recognised in the financial statements are:
 -

    Merger accounting for the 1995 merger of the economic interests of Rio Tinto plc and Rio Tinto Limited into the dual listed
companies (DLC) structure (page A-6).
           Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are:
      (a)
    
    Accounting conventionThe financial information included in the financial statements for the year ended 31 December 2008, and for the related
comparative period, has been prepared under the historical cost convention, except for derivative financial instruments, available
for sale investments and assets held for sale, which have been measured at fair value as set out in the notes below.(b)
    
    Basis of consolidationThe financial statements consist of the consolidation of the accounts of Rio Tinto plc and Rio Tinto Limited (together the Companies)
and their respective subsidiaries (together the Group).All intragroup balances, transactions, income and expenses and profits or losses, including unrealised profits arising
from intragroup transactions, have been eliminated on consolidation. Unrealised losses are eliminated in the same way
as unrealised gains except that they are only eliminated to the extent that there is no evidence of impairment.Subsidiaries:Subsidiaries are entities over which the Companies have the power to govern the financial and operating policies in
order to obtain benefits from their activities. Control is presumed to exist where the Companies own more than one half of the voting
rights (which does not always equate to percentage ownership) unless it can be demonstrated that ownership does not constitute
control. Control does not exist where other parties hold veto rights over significant operating and financial decisions. In assessing
control, potential voting rights that are currently exercisable or convertible are taken into account. The consolidated financial
statements include all the assets, liabilities, revenues, expenses and cash flows of the Companies and their subsidiaries after
eliminating intercompany transactions as noted above.For partly owned subsidiaries, the net assets and net earnings attributable to outside shareholders are presented as Amounts
attributable to outside equity shareholders in the consolidated balance sheet and consolidated income statement.Associates:An associate is an entity, that is neither a subsidiary nor a joint venture, over whose operating and financial policies the
Group exercises significant influence. Significant influence is presumed to exist where the Group has between 20 per cent and 50
per cent of the voting rights, but can also arise where the Group holds less than 20 per cent if it has the power to be actively involved
and influential in policy decisions affecting the entity. The Groups share of the net assets, post tax results and reserves of associates
are included in the financial statements using the equity accounting method. This involves recording the investment initially at cost to
the Group, which therefore includes any goodwill on acquisition, and then, in subsequent periods, adjusting the carrying amount of
the investment to reflect the Groups share of the associates results less any impairment of goodwill and any other changes to the
associates net assets such as dividends. Unrealised gains on transactions between the Group and its associates are eliminated
to the extent of the Groups interest in the associates.Joint ventures:A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control. Joint control is the contractually agreed sharing of control such that significant operating and financial
decisions require the unanimous consent of the parties sharing control. In some situations, joint control exists even though the
Group has an ownership interest of more than 50 per cent because of the veto rights held by joint venture partners. The Group has
two types of joint ventures:Jointly controlled entities (JCEs):A JCE is a joint venture that involves the establishment of a corporation, partnership or other
entity in which each venturer has a long term interest. JCEs are accounted for using the equity accounting method.
In addition, the carrying value will include any long term debt interests that in substance form part of the Groups net investment.Jointly controlled assets (JCAs):A JCA is a joint venture in which the venturers have joint control over the assets contributed to or
acquired for the purposes of the joint venture. JCAs do not involve the establishment of a corporation, partnership or other entity.
This includes situations where the participants derive benefit from the joint activity through a share of the production, rather than by
receiving a share of the results of trading. The Groups proportionate interest in the assets, liabilities, revenues, expenses and
cash flows of JCAs are incorporated into the Groups financial statements under the appropriate headings.The Group uses the term Equity accounted units to refer to associates and jointly controlled entities collectively.Where necessary, adjustments are made to the results of subsidiaries, joint ventures and associates to bring their accounting
policies into line with those used by the Group.
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinuedAcquisitionsOn the acquisition of a subsidiary, the purchase method of accounting is used whereby the purchase consideration is allocated to the
identifiable assets, liabilities and contingent liabilities (identifiable net assets) of the subsidiary on the basis of fair value at the date of
acquisition. Provisional fair values allocated at a reporting date are finalised within twelve months of the acquisition date.When part or all of the amount of purchase consideration is contingent on future events, the cost of the acquisition initially recorded
includes a reasonable estimate of the fair value of the contingent amounts expected to be payable in the future. The cost of the
acquisition is adjusted when revised estimates are made, with corresponding adjustments made to goodwill until the ultimate
outcome is known.The results of businesses acquired during the year are brought into the consolidated financial statements from the date on which
control, joint control or significant influence commences and taken out of the financial statements from the date on which control,
joint control or significant influence ceases.DisposalsIndividual non current assets or disposal groups (ie groups of assets and liabilities) to be disposed of, by sale or otherwise in a
single transaction, are classified as held for sale if the following criteria are met:
    Disposal groups held for sale are carried at the lower of their carrying amount and fair value less costs to sell and are
presented separately on the face of the balance sheet with the related assets and liabilities being presented as a single asset and
a single liability respectively. Comparative balance sheet information is not restated. Disposal groups acquired with a view to
resale are held at fair value determined at the acquisition date and no profits or losses are recognised between acquisition date and
disposal date.For a disposal group held for sale that continues to be carried at its carrying amount, the profit on disposal, calculated as net sales
proceeds less the carrying amount, is recognised in the income statement in the period during which control passes to the buyer.
Where the fair value less costs to sell of a disposal group is lower than the carrying amount at the time of classification as held for
sale, the resulting charge is recognised in the income statement in that period. On classification as held for sale, the assets are no
longer depreciated. When the fair value less costs to sell of a disposal group falls below the carrying amount during the period in
which it is classified as held for sale, the charge is included in the income statement at that time.If the disposal group or groups represent a separate major line of business or geographical area of operations, or are part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations, or are subsidiaries acquired
exclusively with a view to resale, they are classified as discontinued operations. The net results attributable to such discontinued
operations are shown separately and comparative figures in the income and cash flow statements are restated.(c)
    
    Sales revenueSales revenue comprises sales to third parties at invoiced amounts, with most sales being priced ex works, free on board (f.o.b.)
or cost, insurance and freight (c.i.f.). Amounts billed to customers in respect of shipping and handling are classed as sales
revenue where the Group is responsible for carriage, insurance and freight. All shipping and handling costs incurred by the Group
are recognised as operating costs. If the Group is acting solely as an agent, amounts billed to customers are offset against the
relevant costs. Revenue from services is recognised as services are rendered and accepted by the customer.Sales revenue excludes any applicable sales taxes. Mining royalties are presented as an operating cost or, where they are in
substance a profit based tax, within taxes. Co product revenues are included in sales revenue.A large proportion of Group production is sold under medium to long term contracts, but sales revenue is only recognised on
individual sales when persuasive evidence exists that all of the following criteria are met:
      These conditions are generally satisfied when title passes to the customer. In most instances sales revenue is recognised when
the product is delivered to the destination specified by the customer, which is typically the vessel on which it will be shipped, the
destination port or the customers premises.Sales revenue is commonly subject to adjustment based on an inspection of the product by the customer. In such cases, sales
revenue is initially recognised on a provisional basis using the Groups best estimate of contained metal, and adjusted
subsequently.Certain products are provisionally priced, ie the selling price is subject to final adjustment at the end of a period normally ranging
from 30 to 180 days after delivery to the customer, based on the market price at the relevant quotation point stipulated in the contract.Revenue on provisionally priced sales is recognised based on estimates of the fair value of the consideration receivable based on
forward market prices. At each reporting date provisionally priced metal is marked to market based on the forward selling price for the
quotational period stipulated in the contract. For this purpose, the selling price can be measured reliably for those products, such as
copper, for which there exists an active and freely traded commodity market such as the London Metals Exchange and the value of
product sold by the Group is directly linked to the form in which it is traded on that market.The marking to market of provisionally priced sales contracts is recorded as an adjustment to sales revenue.
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued(d)
    
    Currency translationThe functional currency for each entity in the Group, and for jointly controlled entities and associates, is the currency of the primary
economic environment in which it operates. For many entities, this is the currency of the country in which they operate. Transactions
denominated in other currencies are converted to the functional currency at the exchange rate ruling at the date of the transaction
unless hedge accounting applies. Monetary assets and liabilities denominated in foreign currencies are retranslated at year end
exchange rates.The US dollar is the currency in which the Groups Financial statements are presented, as it most reliably reflects the global business
performance of the Group as a whole.On consolidation, income statement items are translated from the functional currency into US dollars at average rates of exchange.
Balance sheet items are translated into US dollars at year end exchange rates. Exchange differences on the translation of the net
assets of entities with functional currencies other than the US dollar, and any offsetting exchange differences on net debt hedging
those net assets, are recognised directly in the foreign currency translation reserve via the statement of recognised income and
expense.Exchange gains and losses which arise on balances between Group entities are taken to the foreign currency translation reserve
where the intragroup balance is, in substance, part of the Groups net investment in the entity.The balance of the foreign currency translation reserve relating to an operation that is disposed of is transferred to the income
statement at the time of the disposal.The Group finances its operations primarily in US dollars but part of the Groups US dollar debt is located in subsidiaries having
functional currencies other than the US dollar. Except as noted above, exchange gains and losses relating to such US dollar debt
are charged or credited to the Groups income statement in the year in which they arise. This means that the impact of financing in
US dollars on the Groups income statement is dependent on the functional currency of the particular subsidiary where the debt is
located.Except as noted above, or in note (p) below relating to derivative contracts, all exchange differences are charged or credited to the
income statement in the year in which they arise.(e)
    
    Goodwill and intangible assets (excluding exploration and evaluation expenditure)Goodwill represents the difference between the cost of acquisition and the fair value of the identifiable assets, liabilities and
contingent liabilities acquired. Goodwill is initially determined based on provisional fair values. Fair values are finalised
within 12 months of the acquisition date. Goodwill on acquisition of subsidiaries is separately disclosed and goodwill on acquisitions
of associates and JCEs is included within investments in equity accounted units. For non wholly owned subsidiaries, minority
interests are initially recorded based on the minorities proportion of the fair values of the identifiable assets and liabilities
and contingent liabilities recognised at acquisition.In 1997 and previous years, goodwill was eliminated against reserves in the year of acquisition as a matter of accounting policy, as
was then permitted under UK GAAP. Such goodwill was not reinstated under subsequent UK accounting standards or on transition to
IFRS.Goodwill, including goodwill in equity accounted units is not amortised; rather it is tested annually for impairment. Goodwill is allocated
to the cash generating unit or group of cash generating units expected to benefit from the related business combination for the
purposes of impairment testing which is carried out in accordance with accounting policy note 1(i). Goodwill impairments
cannot be reversed.Intangible assets acquired as part of an acquisition of a business are capitalised separately from goodwill if the asset is separable
or arises from contractual or legal rights, and the fair value can be measured reliably on initial recognition.Purchased intangible assets are initially recorded at cost and finite life intangible assets are amortised over their useful economic
lives on a straight line or units of production basis, as appropriate. Intangible assets having indefinite lives and intangible assets that
are not yet ready for use are not amortised and are reviewed annually for impairment in accordance with accounting policy note 1(i).Intangible assets are considered to have indefinite lives when, based on an analysis of all of the relevant factors, there is no
foreseeable limit to the period over which the asset is expected to generate cash flows for the Group. The factors considered in
making this determination include the existence of contractual rights for unlimited terms; or evidence that renewal of the contractual
rights without significant incremental cost can be expected for indefinite periods into the future in view of the Groups future investment
intentions. The life cycles of the products and processes that depend on the asset are also considered.Where amortisation is calculated on a straight line basis, the following useful lives have been determined for classes of intangible
assets.Trademark, patented and non patented technology
Trademarks: 14 to 20 years
Patented and non patented technology: 10 to 20 yearsOther intangible assets
Internally generated intangible assets and computer software: 2 to 5 years
Other intangible assets: 2 to 20 yearsContract based intangible assets
Power contracts: 2 to 39 years
Other purchase and customer contracts: 5 to 15 years
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued(f)
    
    Exploration and evaluationExploration and evaluation expenditure comprises costs that are directly attributable to:
     Exploration expenditure relates to the initial search for deposits with economic potential. Evaluation expenditure arises from a
detailed assessment of deposits or other projects that have been identified as having economic potential.Expenditure on exploration activity is not capitalised.Capitalisation of evaluation expenditure commences when there is a high degree of confidence in the projects viability and hence it
is probable that future economic benefits will flow to the Group.The carrying values of capitalised exploration amounts are reviewed twice per annum by management and the results of these
reviews are reported to the Audit committee. In the case of undeveloped projects, there may be only inferred resources to form a
basis for the impairment review. The review is based on a status report regarding the Groups intentions for development of the
undeveloped project. In some cases, the undeveloped projects are regarded as successors to ore bodies, smelters or refineries
currently in production. Where this is the case, it is intended that these will be developed and go into production when the current
source of ore is exhausted or to replace the reduced output, which results where existing smelters and/or refineries are closed. It
is often the case that technological and other improvements will allow successor smelters and/or refineries to more than replace the
capacity of their predecessors.Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped project.
If a project does not prove viable, all irrecoverable costs associated with the project net of any related impairment provisions
are written off.(g)
    
    Property, plant and equipmentProperty, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses.
The cost of property, plant and equipment comprises its purchase price, any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management and the estimated close
down and restoration costs associated with the asset. Once a mining project has been established as commercially viable,
expenditure other than that on land, buildings, plant and equipment is capitalised under Mining properties and leases together with
any amount transferred from Exploration and evaluation.In open pit mining operations, it is necessary to remove overburden and other waste materials to access ore from which minerals
can be extracted economically. The process of mining overburden and waste materials is referred to as stripping. During the
development of a mine (or pit), before production commences, stripping costs are capitalised as part of the investment in
construction of the mine.Costs associated with commissioning new assets, in the period before they are capable of operating in the manner intended by
management, are capitalised. Development costs incurred after the commencement of production are capitalised to the extent they
are expected to give rise to a future economic benefit. Interest on borrowings related to construction or development projects is
capitalised until the point when substantially all the activities that are necessary to make the asset ready for its intended use are
complete.(h)
    
    Deferred strippingAs noted above, stripping costs incurred in the development of a mine (or pit) before production commences are capitalised as part
of the cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a units of production basis.Where a mine operates several open pits that are regarded as separate operations for the purpose of mine planning, stripping
costs are accounted for separately by reference to the ore from each separate pit. If, however, the pits are highly integrated for
the purpose of mine planning, the second and subsequent pits are regarded as extensions of the first pit in accounting for
stripping costs. In such cases, the intial stripping (ie overburden and other waste removal) of the second and subsequent pits
is considered to be production phase stripping relating to the combined operation.The Groups determination of whether multiple pit mines are considered separate or integrated
operations depends on each
mines specific circumstances. The following factors would point towards the stripping costs for
the individual pits being accounted
for separately:
 -
    
    If mining of the second and subsequent pits is conducted consecutively with that of the
first pit, rather than concurrently.-
    
    If separate investment decisions are made to develop each pit, rather than a single
investment decision being made at the outset.-
    
    If the pits are operated as separate units in terms of mine planning and the sequencing of
overburden and ore mining, rather than
as an integrated unit.-
    
    If expenditures for additional infrastructure to support the second and subsequent pits
are relatively large.-
    
    If the pits extract ore from separate and distinct ore bodies, rather than from a single
ore body.
 This additional factor would point to an integrated operation in accounting for stripping costs:
 -
    
    If the designs of the second and subsequent pits are significantly influenced by opportunities to
optimise output from the
several pits combined, including the co-treatment or blending of the output from the pits.
 The relative importance of each of the above factors is considered in each case to determine
whether, on balance, the stripping
costs should be attributed to the individual pit or to the combined output from the several pits.
As this analysis requires judgment,
another company could make the determination that a mine is separate or integrated differently
than the Group, even if the fact
pattern appears to be similar. To the extent the determination is different, the resulting
accounting would also be different.The Group defers stripping costs incurred subsequently, during the production stage of its operations, for those operations where
this is the most appropriate basis for matching the costs against the related economic benefits and the effect is material. This is
generally the case where there are fluctuations in stripping costs over the life of the mine (or pit). The amount of stripping costs
deferred is based on the ratio (Ratio) obtained by dividing the tonnage of waste mined either by the quantity of ore mined or by the
quantity of minerals contained in the ore. Stripping costs incurred in the period are deferred to the extent that the current period Ratio
exceeds the life of mine (or pit) Ratio. Such deferred costs are then charged against reported profits to the extent that, in subsequent
periods, the current period Ratio falls short of the life of mine (or pit) Ratio. The life of mine (or pit) Ratio is based on proved and
probable reserves of the mine (or pit).The life of mine (or pit) waste-to-ore ratio is a function of the pit design(s) and therefore changes to that design will generally
result in changes to the Ratio. Changes in other technical or economic parameters that impact on reserves will also have an impact
on the life of mine (or pit) Ratio even if they do not affect the pit design(s). Changes to the life of mine (or pit) Ratio are accounted for
prospectively.In the production stage of some mines (or pits), further development of the mine (or pit) requires a phase of unusually high
overburden removal activity that is similar in nature to preproduction mine development. The costs of such unusually high
overburden removal activity are deferred and charged against reported profits in subsequent periods on a units of production basis.
This accounting treatment is consistent with that for stripping costs incurred during the development phase of a mine (or pit), before
production commences.If the Group were to expense production stage stripping costs as incurred, there would be greater volatility in the year to year results
from operations and excess stripping costs would be expensed at an earlier stage of a mines operation.Deferred stripping costs are included in Mining properties and leases within property, plant and equipment or in investments in
equity accounted units, as appropriate. These form part of the total investment in the relevant cash generating unit, which is reviewed
for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. Amortisation of
deferred stripping costs is included in net operating costs or in the Groups share of the results of its equity accounted units, as
appropriate.
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued(i)
    
    Depreciation and impairmentDepreciation of non current assetsProperty, plant and equipment is depreciated over its useful life, or over the remaining life of the mine if shorter. The major
categories of property, plant and equipment are depreciated on a units of production and/or straight-line basis as follows:
 Units of production basisFor mining properties and leases and certain mining equipment, the economic benefits from the asset are consumed in
a pattern which is linked to the production level. Except as noted below, such assets are depreciated on a units of
production basis.Straight line basisAssets within operations for which production is not expected to fluctuate significantly from one year to another or which
have a physical life shorter than the related mine are depreciated on a straight line basis as follows:
 Land and BuildingsLand
    
    Not depreciatedBuildings
    
    5 to 50 yearsPlant and equipmentOther plant and equipment
    
    3 to 35 yearsPower assets
    
    25 to 100 yearsCapital work in progress
    
    Not depreciated
 Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Changes to the estimated
residual values or useful lives are accounted for prospectively. In applying the units of production method, depreciation is normally
calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be
extracted in current and future periods based on proved and probable reserves and, for some mines, other mineral resources.
Such non reserve material may be included in depreciation calculations in limited circumstances and where there is a high degree
of confidence in its economic extraction. Development costs that relate to a discrete section of an ore body and which only provide
benefit over the life of those reserves, are depreciated over the estimated life of that discrete section. Development costs incurred
which benefit the entire ore body are depreciated over the estimated life of the ore body.Impairment of non current assetsProperty, plant and equipment and intangible assets with finite lives are reviewed for impairment if there is any indication that the
carrying amount may not be recoverable. Impairment is normally assessed at the level of cash-generating units which, in accordance
with IAS 36 Impairment of Assets, are identified as the smallest identifiable group of assets that generates cash inflows, which are
largely independent of the cash inflows from other assets.In addition, an impairment loss is recognised for any excess of carrying amount over the fair value less costs to sell of a non current
asset or disposal group held for sale.Goodwill, including that related to equity accounted units, and indefinite-lived intangible assets are reviewed for impairment annually
or at any time during the year if an indicator of impairment is considered to exist. Goodwill acquired through business combinations
is allocated to groups of cash-generating units that are expected to benefit from the related business combination. The groups
of cash-generating units represent the lowest level within the Group at which goodwill is monitored for internal management purposes
and these groups are not larger than the reporting segments determined in accordance with IAS 14 Segment Reporting.When an impairment review is undertaken, recoverable amount is assessed by reference to the higher of value in use (being the net
present value of expected future cash flows of the relevant cash generating unit) and fair value less costs to sell (fair value). The best
evidence of fair value is the value obtained from an active market or binding sale agreement. Where neither exists, fair value is based
on the best information available to reflect the amount the Group could receive for the cash generating unit in an arms length
transaction. This is often estimated using discounted cash flow techniques.Where recoverable amount is assessed using discounted cash flow techniques, the resulting estimates are based on detailed mine
and/or production plans. For value in use, recent cost levels are considered, together with expected changes in costs that are
compatible with the current condition of the business and which meet the requirements of IAS 36.The cash flow forecasts are based on best estimates of expected future revenues and costs, including the future cash costs of
production, capital expenditure, close down, restoration and environmental clean up. These may include net cash flows expected to be
realised from extraction, processing and sale of mineral resources that do not currently qualify for inclusion in proved or probable ore
reserves. Such non reserve material is included where there is a high degree of confidence in its economic extraction. This expectation
is usually based on preliminary drilling and sampling of areas of mineralisation that are contiguous with existing reserves. Typically,
the additional evaluation to achieve reserve status for such material has not yet been done because this would involve incurring costs
earlier than is required for the efficient planning and operation of the mine.Where the recoverable amount of a cash generating unit is dependent on the life of its associated ore body, expected future cash flows
reflect long term mine plans, which are based on detailed research, analysis and iterative modelling to optimise the level of return from
investment, output and sequence of extraction. The mine plan takes account of all relevant characteristics of the ore body, including
waste to ore ratios, ore grades, haul distances, chemical and metallurgical properties of the ore impacting on process recoveries and
capacities of processing equipment that can be used. The mine plan is therefore the basis for forecasting production output in each
future year and for forecasting production costs.
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Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinuedThe Groups cash flow forecasts are based on estimates of future commodity prices, which assume market prices will revert to the
Groups assessment of the long term average price, generally over a period of three to five years. These long term commodity prices,
for most commodities, are derived from an analysis of the marginal costs of the producers of these commodities. These assessments
often differ from current price levels and are updated periodically.In some cases, prices applying to some part of the future sales volumes of a cash generating unit are predetermined by existing
sales contracts. The effects of such contracts are taken into account in forecasting future cash flows.The discount rates applied to the future cash flow forecasts represent an estimate of the rate the market would apply having regard to
the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. The
Groups weighted average cost of capital is used as a starting point for determining the discount rates, with appropriate adjustments
for the risk profile of the countries in which the individual cash generating units operate.For operations with a functional currency other than the US dollar, the impairment review is undertaken in the relevant functional
currency. The great majority of the Groups sales are based on prices denominated in US dollars. To the extent that the currencies
of countries in which the Group produces commodities strengthen against the US dollar without commodity price offset, cash flows
and, therefore, net present values are reduced.When calculating value in use, IAS 36 requires that calculations should be based on exchange rates current at the time of the
assessment.Non-financial assets other than goodwill that have suffered an impairment are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.(j)
    
    Determination of ore reserve estimatesThe Group estimates its ore reserves and mineral resources based on information compiled by Competent Persons as defined in
accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December
2004 (the JORC code). Reserves, and for certain mines, other mineral resources, determined in this way are used in the calculation
of depreciation, amortisation and impairment charges, the assessment of life of mine stripping ratios and for forecasting the timing
of the payment of close down and restoration costs and clean up costs.In assessing the life of a mine for accounting purposes, mineral resources are only taken into account where there is a high
degree of confidence of economic extraction.There are numerous uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may
change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates,
production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being
restated.(k)
    
    Provisions for close down and restoration and for environmental clean up costsClose down and restoration costs include the dismantling and demolition of infrastructure and the removal of residual materials
and remediation of disturbed areas. Estimated close down and restoration costs are provided for in the accounting period when
the obligation arising from the related disturbance occurs, whether this occurs during the mine development or during the
production phase, based on the net present value of estimated future costs. Provisions for close down and restoration costs do
not include any additional obligations which are expected to arise from future disturbance. The costs are estimated on the basis of
a closure plan. The cost estimates are updated annually during the life of the operation to reflect known developments,
eg revisions to cost estimates and to the estimated lives of operations, and are subject to formal review at regular intervals.Close down and restoration costs are a normal consequence of mining, and the majority of close down and restoration expenditure
is incurred at the end of the life of the mine. Although the ultimate cost to be incurred is uncertain, the Groups businesses estimate
their respective costs based on feasibility and engineering studies using current restoration standards and techniques.The amortisation or unwinding of the discount applied in establishing the net present value of provisions is charged to the income
statement in each accounting period. The amortisation of the discount is shown as a financing cost, rather than as an operating
cost.The initial closure provision together with other movements in the provisions for close down and restoration costs, including those
resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates
are capitalised within property, plant and equipment. These costs are then depreciated over the lives of the assets to which they
relate.Where rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure, provision is made
for the estimated outstanding continuous rehabilitation work at each balance sheet date and the cost is charged to the income
statement.
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##### Table of Contents



Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinuedProvision is made for the estimated present value of the costs of environmental clean up obligations outstanding at the balance
sheet date. These costs are charged to the income statement. Movements in the environmental clean up provisions are presented
as an operating cost, except for the unwind of the discount which is shown as a financing cost. Remediation procedures may
commence soon after the time the disturbance, remediation process and estimated remediation costs become known, but can
continue for many years depending on the nature of the disturbance and the remediation techniques.As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary in response to many
factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other
mine sites. The expected timing of expenditure can also change, for example in response to changes in ore reserves or
production rates. As a result there could be significant adjustments to the provision for close down and restoration and
environmental clean up, which would affect future financial results.(l)
    
    InventoriesInventories are valued at the lower of cost and net realisable value, primarily on a weighted average cost basis. Average costs are
calculated by reference to the cost levels experienced in the current month together with those in opening inventory. Cost for raw
materials and stores is purchase price and for partly processed and saleable products is generally the cost of production. For this
purpose the costs of production include:
    Stockpiles represent ore that has been extracted and is available for further processing. If there is significant uncertainty as to when
the stockpiled ore will be processed it is expensed as incurred. Where the future processing of this ore can be predicted with
confidence, eg because it exceeds the mines cut off grade, it is valued at the lower of cost and net realisable value. If the ore will not
be processed within the 12 months after the balance sheet date it is included within non current assets. Work in progress inventory
includes ore stockpiles and other partly processed material. Quantities are assessed primarily through surveys and assays.(m)
    
    TaxationCurrent tax is the tax expected to be payable on the taxable income for the year calculated using rates that have been enacted or
substantively enacted by the balance sheet date. It includes adjustments for tax expected to be payable or recoverable in respect of
previous periods.Temporary differences are the difference between the carrying value of an asset or liability and its tax base. Full provision is made for
deferred taxation on all temporary differences existing at the balance sheet date with certain limited exceptions. The main exceptions
to this principle are as follows:
    Deferred tax is provided in respect of fair value adjustments on acquisitions. These adjustments may relate to assets such as mining
rights that, in general, are not eligible for income tax allowances. In such cases, the provision for deferred tax is based on the
difference between the carrying value of the asset and its nil income tax base. The existence of a tax base for capital gains tax
purposes is not taken into account in determining the deferred tax provision relating to such mineral rights because it is expected that
the carrying amount will be recovered primarily through use and not from the disposal of mineral rights. Also, the Group is only
entitled to a deduction for capital gains tax purposes if the mineral rights are sold or formally relinquished.Current and deferred tax relating to items recognised directly in equity are recognised in equity and not in the income statement.(n)
    
    Post employment benefitsFor defined benefit post employment plans, the difference between the fair value of the plan assets (if any) and the present value of
the plan liabilities is recognised as an asset or liability on the balance sheet. Any asset recognised is restricted, if appropriate, to
the present value of any amounts the Group expects to recover by way of refunds from the plan or reductions in future contributions.
Actuarial gains and losses arising in the year are taken to the statement of recognised income and expense. For this purpose,
actuarial gains and losses comprise both the effects of changes in actuarial assumptions and experience adjustments arising
because of differences between the previous actuarial assumptions and what has actually occurred.Other movements in the net surplus or deficit are recognised in the income statement, including the current service cost, any past
service cost and the effect of any curtailment or settlements. The interest cost less the expected return on assets is also charged to
the income statement. The amount charged to the income statement in respect of these plans is included within operating costs or
in the Groups share of the results of equity accounted units as appropriate.The most significant assumptions used in accounting for pension plans are the long term rate of return on plan assets, the
discount rate and the mortality assumptions. The long term rate of return on plan assets is used to calculate interest income on
pension assets, which is credited to the Groups income statement. The discount rate is used to determine the net present value of
future liabilities. Each year, the unwinding of the discount on those liabilities is charged to the Groups income statement as the
interest cost. The mortality assumption is used to project the future stream of benefit payments, which is then discounted to arrive
at a net present value of liabilities.The values attributed to plan liabilities are assessed in accordance with the advice of independent qualified actuaries.The Groups contributions to defined contribution pension plans are charged to the income statement in the period to which the
contributions relate.
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##### Table of Contents



Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued(o)
    
    Cash and cash equivalentsFor the purposes of the balance sheet, cash and cash equivalents comprise cash on hand, deposits held on call with banks and
short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant
risk of changes in value. For the purposes of the cash flow statement, cash and cash equivalents are net of bank overdrafts that
are repayable on demand which are shown as current liabilities on the balance sheet.(p)
    
    Financial instruments
 (i) Financial assets
  (a)
    
    Financial assets at fair value through profit or loss
 Derivatives are included in this category unless they are designated as hedges. Assets in this category are classified as current
assets. Generally, the Group does not acquire financial assets for the purpose of selling in the short term.
Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed
in the income statement.
 (b)
    
    Loans and receivables
 Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are classified as current assets or non current assets based on their maturity date. Loans and receivables comprise
trade and other receivables, other financial assets and cash and cash equivalents in the balance sheet. Loans and receivables
are carried at amortised cost less any impairment.
 (c)
    
    Available-for-sale financial assets
 Available-for-sale financial assets are non derivatives that are either designated as available for sale or not classified in any of the
other categories. They are included in non-current assets unless the Group intends to dispose of the investment within 12 months
of the balance sheet date.Changes in the fair value of available-for-sale financial assets denominated in a currency other than the functional currency of the
holder other than equity investments, are analysed between translation differences and other changes in the carrying amount of
the security. The translation differences are recognised in profit or loss. Any impairment charges are also recognised in profit
or loss, while other changes in fair value are recognised in equity.When financial assets classified as available-for-sale are sold, the accumulated fair value adjustments recognised
in equity are included in the income statement within net operating costs.Dividends on available-for-sale equity instruments are also recognised in the income statement within interest receivable and
similar income when the Groups right to receive payments is established.Financial assets not carried at fair value through profit and loss are initially recognised on the trade date at fair value plus
transaction costs.Financial assets are derecognised when the investments mature or are sold, and substantially all the risks and rewards of
ownership have been transferred.
 (ii) Financial liabilities
 
 (iii) Derivative financial instruments and hedge accounting
     
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##### Table of Contents



Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued
 
    
    Fair value hedges:Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in
the income statement, together with any changes in the fair value of the hedged asset or liability or firm commitment that is
attributable to the hedged risk. Where derivatives are held with different counterparties to the underlying asset or liability or firm
commitment, the fair values of the derivative assets and liabilities are shown separately in the balance sheet as there is no legal
right of offset. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognised
in the income statement within interest payable and similar charges.
    
    Cash flow hedges:The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the
income statement within net operating costs. Amounts accumulated in equity are recycled in the income statement in the
period when the hedged item affects profit or loss, for example when the forecast sale that is being hedged takes place.
The realised gain or loss relating to the effective portion of forward foreign exchange or commodity contracts hedging sales
is recognised in the income statement within sales revenue. When the forecast transaction that is being hedged results in
the recognition of a non financial asset the gains and losses previously deferred in equity are transferred from equity and
adjust the cost of the asset. The gains and losses are recognised subsequently in the income statement within net
operating costs when the non financial asset is amortised.When a cash flow hedging instrument expires or is sold, or when a cash flow hedge no longer meets the criteria for hedge
accounting, although the forecasted transaction is still expected to occur, any cumulative gain or loss relating to the instrument
which is held in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in
the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported
in equity is immediately transferred to the income statement.When a fair value interest rate hedging instrument expires or is sold, or when a fair value interest rate hedge no longer meets
the criteria for hedge accounting, the fair value adjustments which have been made to the hedged item are amortised through
the income statement over its remaining life.
    
    Derivatives that do not qualify for hedge accounting:Any derivative contracts that do not qualify for hedge accounting, are
marked to market at the balance sheet date. In respect of currency swaps, the gain or loss on the swap and the offsetting gain
or loss on the financial asset or liability against which the swap forms an economic hedge are shown in separate lines in the
income statement within the line net gains on derivatives not qualifying for hedge accounting. In respect of other derivatives,
the mark to market may give rise to charges or credits to the income statement in periods before the transaction against which
the derivative is held as an economic hedge is recognised. These
charges or credits would be recognised in the line net (losses)/gains
on  derivatives not qualifying for hedge accounting.
    
    Embedded derivatives:Derivatives embedded in other financial instruments or other host contracts are treated as
separate derivatives when their risks and characteristics are not closely related to their host contracts. In some cases, the
embedded derivatives may be designated as hedges and will be accounted for as described above.
 (iv) Fair value
      (v) Impairment of financial assets
 Available-for-sale financial assets
   A-16




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##### Table of Contents



Notes to the 2008 Financial statements1
    
    PRINCIPAL ACCOUNTING POLICIEScontinued
 (vi) De-recognition of financial assets and liabilities
 Financial assets
  Financial liabilities
   (vii) Trade receivables
  (viii) Trade payables
  (q)
    
    Share based paymentsThe fair value of cash-settled share plans is recognised as a liability over the vesting period of the awards. Movements in that liability
between accounting dates are recognised as an expense. The grant date fair value of the awards is determined from the market
value of the shares at the date of award and adjusted for any market
based vesting conditions attached to the award e.g. relative Total Shareholder Return (TSR) performance. Fair values are subsequently remeasured at each accounting date to reflect the
market value of shares at the measurement date and, where relevant, the number of awards expected to vest based on the current
and anticipated TSR performance. If any awards are ultimately settled in shares, the liability is transferred directly to equity as part of
the consideration for the equity instruments issued.The Groups equity-settled share plans are settled either by the issue of shares by the relevant parent company, by the purchase of
shares on market or by the use of shares previously acquired as part of a share buyback. The fair value of the share plans is
recognised as an expense over the expected vesting period with a corresponding entry to retained earnings for Rio Tinto plc plans and
to other reserves for Rio Tinto Limited plans. If the cost of shares acquired to satisfy the plans exceeds the expense charged, the
excess is taken to the appropriate reserve. The fair value of the share plans is determined at the date of grant, taking into account any
market based vesting conditions attached to the award (eg Total Shareholder Return). The Group uses fair values provided by
independent actuaries calculated using a lattice based option valuation model.Non market based versting conditions (e.g. earnings per share targets) are taken into account in estimating the number of awards
likely to vest. The estimate of the number of awards likely to vest is reviewed at each balance sheet date up to the vesting date, at
which point the estimate is adjusted to reflect the actual awards issued. No adjustment is made after the vesting date even if the
awards are forfeited or not exercised.Further information about the treatment of individual share based payment plans is provided in note 48.(r)
    
    ContingenciesContingent liabilities are not recognised in the financial statements but are disclosed by way of note unless their occurrence is
remote.Contingent assets are not recognised in the financial statement but they are disclosed by way of note if they are deemed probable.(s)
    
    Share capitalOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.Where any group company purchases the Groups equity share capital (treasury shares), the consideration paid, including
any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to Rio Tintos equity shareholders.
Where such shares are subsequently reissued, any consideration received, net of any
directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to Rio Tintos
equity shareholders.
 A-17




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##### Table of Contents



Notes to the 2008 Financial statements
 
 2
    
    RECONCILIATION OF NET EARNINGS TO UNDERLYING EARNINGS
 Outside
    
    
    Discontinued
    
    
    Net
    
    
    Net
    
    
    NetPre-tax (h)
    
    
    Taxation
    
    
    interests
    
    
    operations(h)
    
    
    amount
    
    
    amount
    
    
    amount2008
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2007
    
    
    2006Exclusions from Underlying earnings
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mProfits less losses on disposal of interests in
businesses (a)
    
    
    2,231
    
    
    
    (761
    )
    
    
    
    
    
    
    
    
    
    
    1,470
    
    
    
    1
    
    
    
    3Net impairment charges (b) (note 5)
    
    
    (8,030
    )
    
    
    438
    
    
    
    13
    
    
    
    
    
    
    
    (7,579
    )
    
    
    (113
    )
    
    
    44Impairment of discontinued operations (b)
    
    
    
    
    
    
    
    
    
    
    
    
    (827
    )
    
    
    (827
    )
    
    
    
    
    
    
    Exchange differences and gains/(losses) on derivatives:- Exchange gains/(losses) on US dollar net debt and
intragroup balances (c)
    
    
    (140
    )
    
    
    1,105
    
    
    
    (5
    )
    
    
    
    
    
    
    960
    
    
    
    156
    
    
    
    (14
    )- (Losses)/gains on currency and interest rate
derivatives not qualifying for hedge accounting (d), (e)
    (24
    )
    
    
    5
    
    
    
    (3
    )
    
    
    
    
    
    
    (22
    )
    
    
    34
    
    
    
    30- Losses on commodity derivatives not qualifying for
hedge accounting (f)
    
    
    (158
    )
    
    
    62
    
    
    
    1
    
    
    
    
    
    
    
    (95
    )
    
    
    
    
    
    
    Other exclusions (g)
    
    
    (678
    )
    
    
    139
    
    
    
    5
    
    
    
    
    
    
    
    (534
    )
    
    
    (209
    )
    
    
    37Total excluded from Underlying earnings
    
    
    (6,799
    )
    
    
    988
    
    
    
    11
    
    
    
    (827
    )
    
    
    (6,627
    )
    
    
    (131
    )
    
    
    100Net earnings
    
    
    9,178
    
    
    
    (3,742
    )
    
    
    (933
    )
    
    
    (827
    )
    
    
    3,676
    
    
    
    7,312
    
    
    
    7,438Underlying earnings
    
    
    15,977
    
    
    
    (4,730
    )
    
    
    (944
    )
    
    
    
    
    
    
    10,303
    
    
    
    7,443
    
    
    
    7,338
 Underlying earnings is an alternative measure of earnings, which is reported by Rio Tinto to provide greater understanding of the underlying business
performance of its operations. Underlying earnings and Net earnings both represent amounts attributable to Rio Tinto shareholders. Items (a) to (g) below are
excluded from Net earnings in arriving at Underlying earnings.(a)
    
    Gains arising on the disposal of interests in businesses relate principally to sale of the Cortez gold mine and the Greens Creek mine.
Gains arising on the disposal of interests in undeveloped projects are not excluded from Underlying earnings.(b)
    
    Charges relating to impairment of goodwill and other non-current assets other than undeveloped projects but including discontinued
operations (net amount US$8,406 million).2008 includes impairment charges of US$15 million relating to equity accounted units (2007 and 2006: nil).(c)
    
    Exchange gains and losses on US dollar debt and intragroup balances.The tax on exchange gains and losses on external debt and intragroup balances includes a benefit of US$254 million through recovery of
tax relating to prior years. It also includes tax relief for losses on US dollar denominated debt. The pre-tax loss is offset by gains on intragroup balances which
are largely not subject to tax.(d)
    
    Valuation changes on currency and interest rate derivatives which are ineligible for hedge accounting, other than those embedded in commercial
contracts.(e)
    
    The currency revaluation of embedded US dollar derivatives contained in contracts held by entities whose functional currency is not the
US dollar.(f)
    
    Valuation changes on commodity derivatives, including those embedded in commercial contracts, that are ineligible for hedge accounting, but for
which there will be an offsetting change in future Group earnings.(g)
    
    Other credits and charges that, individually, or in aggregate if of a similar type, are of a nature or size to require exclusion in order to provide
additional insight into underlying business performance.During 2008 the Group incurred advisory and other costs related to the rejection by the Board of the pre-conditional takeover proposal
from BHP Billiton which was withdrawn in November. These costs totalled US$270 million (net of tax) in 2008 and have been excluded from
Underlying earnings. Other charges excluded from Underlying earnings comprise costs relating to non-recurring acquisitions, disposals
and similar corporate projects.(h)
    
    Exclusions from Underlying earnings relating to equity accounted units and discontinued operations are stated after tax.
 
 3
    
    NET OPERATING COSTS
 2008
    
    
    2007
    
    
    2006Note
    
    
    US$m
    
    
    US$m
    
    
    US$mRaw materials and consumables
    
    
    
    
    
    
    16,248
    
    
    
    6,096
    
    
    
    3,207Amortisation of intangible assets
    
    
    12
    
    
    
    429
    
    
    
    114
    
    
    
    27Depreciation of property, plant & equipment
    
    
    13
    
    
    
    3,046
    
    
    
    2,001
    
    
    
    1,482Employment costs
    
    
    4
    
    
    
    6,603
    
    
    
    3,827
    
    
    
    2,459Repairs and maintenance
    
    
    
    
    
    
    1,960
    
    
    
    1,393
    
    
    
    1,257Shipping costs
    
    
    
    
    
    
    2,495
    
    
    
    1,874
    
    
    
    1,149Other freight costs
    
    
    
    
    
    
    815
    
    
    
    509
    
    
    
    333(Increase)/decrease in finished goods and work in progress
    
    
    
    
    
    
    (163
    )
    
    
    110
    
    
    
    (139
    )Royalties
    
    
    
    
    
    
    1,946
    
    
    
    1,093
    
    
    
    1,004Amounts charged by jointly controlled entities mainly for toll processing
    
    
    
    
    
    
    2,473
    
    
    
    1,362
    
    
    
    1,196Net foreign
exchange (gains)/losses
    
    
    
    
    
    
    (379
    )
    
    
    (45
    )
    
    
    7Other external costs
    
    
    
    
    
    
    2,230
    
    
    
    2,391
    
    
    
    1,929Provisions (including exchange gains on provisions)
    
    
    27
    
    
    
    265
    
    
    
    308
    
    
    
    60Research and development
    
    
    
    
    
    
    307
    
    
    
    69
    
    
    
    15Costs included above qualifying for capitalisation
    
    
    
    
    
    
    (259
    )
    
    
    (78
    )
    
    
    (69
    )Other operating income
    
    
    
    
    
    
    (375
    )
    
    
    (272
    )
    
    
    (262
    )Net operating costs (excluding items shown separately)
    
    
    
    
    
    
    37,641
    
    
    
    20,752
    
    
    
    13,655Information on auditors remuneration is included in note 43.
 A-18




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##### Table of Contents



Notes to the 2008 Financial statements
 
 4
    
    EMPLOYMENT COSTS
 2008
    
    
    2007
    
    
    2006Note
    
    
    US$m
    
    
    US$m
    
    
    US$mEmployment costs- Wages and salaries
    
    
    
    
    
    
    6,414
    
    
    
    3,618
    
    
    
    2,337- Social security costs
    
    
    
    
    
    
    113
    
    
    
    106
    
    
    
    83- Net post retirement cost (a)
    
    
    49
    
    
    
    502
    
    
    
    240
    
    
    
    189- Share option (credit)/charge (b)
    
    
    48
    
    
    
    (22
    )
    
    
    220
    
    
    
    327,007
    
    
    
    4,184
    
    
    
    2,641Less: charged within provisions
    
    
    
    
    
    
    (404
    )
    
    
    (357
    )
    
    
    (182
    )3
    
    
    
    6,603
    
    
    
    3,827
    
    
    
    2,459
 (a)
    
    Post retirement costs include the aggregate service and interest cost of providing post retirement benefits under defined benefit plans, net of
the related expected return on plan assets. Additional detail of the amount charged to the income statement in respect of post retirement plans,
and the treatment of actuarial gains and losses, is shown in note 49.(b)
    
    Further details of the Groups share options and other share based payment plans are given in note 48.
 
 5
    
    IMPAIRMENT (CHARGES) / REVERSALS
 Outside
    
    
    Net
    
    
    Net
    
    
    NetPre-tax
    
    
    Taxation
    
    
    interests
    
    
    amount
    
    
    amount
    
    
    amount2008
    
    
    2008
    
    
    2008
    
    
    2008
    
    
    2007
    
    
    2006Cash generating unit
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mUpstream Aluminium (a)
    
    
    (6,131
    )
    
    
    4
    
    
    
    
    
    
    
    (6,127
    )
    
    
    
    
    
    
    Downstream Aluminium (excluding Packaging) (b)
    
    
    (1,210
    )
    
    
    230
    
    
    
    
    
    
    
    (980
    )
    
    
    
    
    
    
    HIsmelt (c)
    
    
    (254
    )
    
    
    72
    
    
    
    
    
    
    
    (182
    )
    
    
    
    
    
    
    Argyle Diamonds (d)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (328
    )
    
    
    (289
    )Palabora (e)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    (2
    )Tarong coal mine (f)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134
    
    
    
    (152
    )Kennecott Utah Copper (KUC) (g)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    381Iron Ore Company of Canada (IOC) (h)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111Other
    
    
    (420
    )
    
    
    132
    
    
    
    13
    
    
    
    (275
    )
    
    
    (19
    )
    
    
    (5
    )(8,015
    )
    
    
    438
    
    
    
    13
    
    
    
    (7,564
    )
    
    
    (113
    )
    
    
    44
 (a)
    
    Details of the impairment review relating to Upstream Aluminium are set out in note 11.(b)
    
    The annual review of the goodwill allocated to Downstream Aluminium (excluding Packaging) resulted in a pre-tax impairment charge of
US$1,210 million, of which US$493 million was applied in writing off the attributed goodwill, and the balance to property, plant and equipment.Downstream Aluminium is part of the Alcan group that was acquired in October 2007, and forms part of the Aluminium product group. It manufactures
engineered or fabricated aluminum products and is also a full-service packaging supplier with a worldwide presence.The Groups intention is to sell Downstream Aluminium. As such, the recoverable amount has been estimated by reference to fair value less costs to
sell. Such estimates were derived by applying multiples to forecasts of earnings for the Downstream Aluminium businesses. The multiples were
derived from statistics relating to publicly traded companies in the various sectors in which the Downstream Aluminium businesses operate.The main circumstances that led to impairment were the adverse change in capital markets, making it difficult to fund acquisitions of companies generally;
the global economic downturn and the adverse trading performance of Downstream Aluminiums operations.The specific details of the impairment review relating to Packaging are set out in note 19.(c)
    
    Full provision was made against the carrying value of the HIsmelt operation, which is within the Iron ore product group. Operations at the Kwinana plant
have been suspended and the Groups future role in developing this technology is under review, leading to doubt about the recoverability of the amount
invested.(d)
    
    Large increases in the estimated capital cost of Argyles underground project triggered an assessment of its recoverable amount during 2007. Impairment of
property, plant and equipment was assessed by reference to fair value less costs to sell. The determination of fair value less costs to sell was based on the
estimated amount that would be obtained from sale in an arms length transaction between knowledgeable and willing parties. This estimate was derived from
discounting projections of cash flows, using valuation assumptions that a buyer might be expected to apply.(e)
    
    An increase in the Groups long term copper price assumption triggered an assessment of the recoverable amount of Palabora during 2007. The value in use was
based on cash flows forecast in real terms and discounted at a pre-tax rate of 12 per cent. This led to a full reversal of the remainder of the impairment
provision previously recognised.(f)
    
    An announcement of the sale of Tarong led to full reversal in 2007 of the remainder of the impairment provision previously recognised.(g)
    
    In 2006, an increase in the Groups long term copper price assumption triggered an assessment of the recoverable amount of KUC. The value in use was based on
cash flows forecast in relat terms and discounted at a pre-tax rate of 8 per cent. This led to a full reversal of the remainder of the impairment provision
recognised in 2002.(h)
    
    In 2006, an increase in the Groups long term iron ore price assumption triggered an assessment of the recoverable amount of IOC. The value in use was
based on cash flows forecast in relat terms and discounted at a pre-tax rate of 8 per cent. This led to a full reversal of the impairment provision recognised
in 2002, which had aligned the carrying value with the value negotiated between shareholders during that year as part of a financial restructuring exercise.(i)
    
    Total impairment charges in 2008 excluded from Underlying earnings includes impairment charges of US$15 million relating to equity accounted
units. (2007 and 2006: nil).
 A-19




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##### Table of Contents



Notes to the 2008 Financial statements
 
 6
    
    SHARE OF PROFIT AFTER TAX OF EQUITY ACCOUNTED UNITS
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mSales revenue (a)
    
    
    3,801
    
    
    
    3,818
    
    
    
    2,975Operating costs
    
    
    (2,158
    )
    
    
    (1,261
    )
    
    
    (771
    )Profit before finance items and taxation
    
    
    1,643
    
    
    
    2,557
    
    
    
    2,204Exchange gains on net debt
    
    
    37
    
    
    
    7
    
    
    
    3Losses on currency and interest rate derivatives not qualifying for hedge accounting
    
    
    (19
    )
    
    
    (5
    )
    
    
    Net interest payable
    
    
    (45
    )
    
    
    (49
    )
    
    
    (45
    )Amortisation of discount
    
    
    (17
    )
    
    
    (9
    )
    
    
    (14
    )Share of profit after tax of equity accounted units
    
    
    36
    
    
    
    
    
    
    
    Profit before taxation
    
    
    1,635
    
    
    
    2,501
    
    
    
    2,148Taxation
    
    
    (596
    )
    
    
    (917
    )
    
    
    (770
    )Profit for the year (Rio Tinto share)
    
    
    1,039
    
    
    
    1,584
    
    
    
    1,378
 (a)
    
    The sales revenue of equity accounted units excludes charges by jointly controlled entities to Group subsidiaries.
 
 7
    
    INTEREST RECEIVABLE AND PAYABLE
 2008
    
    
    2007
    
    
    2006Note
    
    
    US$m
    
    
    US$m
    
    
    US$mInterest receivable and similar income from:- Equity accounted units
    
    
    
    
    
    
    43
    
    
    
    28
    
    
    
    27- Other investments (a)
    
    
    
    
    
    
    107
    
    
    
    101
    
    
    
    69150
    
    
    
    129
    
    
    
    96Other interest receivable
    
    
    
    
    
    
    54
    
    
    
    5
    
    
    
    10Total interest receivable and similar income
    
    
    
    
    
    
    204
    
    
    
    134
    
    
    
    106Interest payable and similar charges (b)
    
    
    
    
    
    
    (1,821
    )
    
    
    (660
    )
    
    
    (220
    )Amounts capitalised
    
    
    13
    
    
    
    203
    
    
    
    122
    
    
    
    60Total interest payable and similar charges
    
    
    
    
    
    
    (1,618
    )
    
    
    (538
    )
    
    
    (160
    )
 (a)
    
    Interest income from other investments comprises US$72 million (2007: US$80 million; 2006: US$58 million) of interest income from bank deposits
and US$35 million (2007: US$21 million; 2006: US$11 million) from other financial assets.(b)
    
    Interest payable and similar charges comprises US$1,875 million (2007: US$685 million; 2006: US$175 million) of interest on bank loans and other
borrowings and a US$54 million gain (2007: US$25 million gain; 2006: US$45 million loss) from interest rate swaps.
 
 8
    
    TAX ON PROFIT
 2008
    
    
    2007
    
    
    2006Note

    
    
    US$m
    
    
    US$m
    
    
    US$mUK taxationCorporation tax at 28% (2007 and 2006: 30%)- Current
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14- Deferred
    
    
    
    
    
    
    (46
    )
    
    
    (150
    )
    
    
    27(46
    )
    
    
    (150
    )
    
    
    41Australian taxationCorporation tax at 30%- Current
    
    
    
    
    
    
    3,005
    
    
    
    1,396
    
    
    
    1,517- Deferred
    
    
    
    
    
    
    (812
    )
    
    
    (18
    )
    
    
    (97
    )2,193
    
    
    
    1,378
    
    
    
    1,420Other countries taxation- Current
    
    
    
    
    
    
    1,711
    
    
    
    897
    
    
    
    896- Deferred
    
    
    
    
    
    
    (116
    )
    
    
    (35
    )
    
    
    161,595
    
    
    
    862
    
    
    
    912Total taxation charge- Current
    
    
    
    
    
    
    4,716
    
    
    
    2,293
    
    
    
    2,427- Deferred
    
    
    18
    
    
    
    (974
    )
    
    
    (203
    )
    
    
    (54
    )3,742
    
    
    
    2,090
    
    
    
    2,373
 A-20




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##### Table of Contents



Notes to the 2008 Financial statements
 8
    
    TAX ON PROFIT continued
 2008
    
    
    2007
    
    
    2006Prima facie tax reconciliation
    
    US$m
    
    
    US$m
    
    
    US$mProfit before taxation
    
    
    9,178
    
    
    
    9,836
    
    
    
    10,240Deduct: share of profit after tax of equity accounted units
    
    
    (1,039
    )
    
    
    (1,584
    )
    
    
    (1,378
    )Parent companies and subsidiaries profit before tax
    
    
    8,139
    
    
    
    8,252
    
    
    
    8,862Prima facie tax payable at UK rate of 28% (2007 and 2006: 30%)
    
    
    2,279
    
    
    
    2,476
    
    
    
    2,659Higher rate of taxation on Australian earnings
    
    
    226
    
    
    
    
    
    
    
    Impact of items excluded in arriving at Underlying earnings (c)
    
    
    919
    
    
    
    (28
    )
    
    
    201Additional recognition of deferred tax assets (a)
    
    
    
    
    
    
    
    
    
    
    (335
    )Utilisation of previously unrecognised deferred tax assets
    
    
    (160
    )
    
    
    
    
    
    
    (140
    )Adjustments to deferred tax liabilities following changes in tax rates (b)
    
    
    (25
    )
    
    
    (392
    )
    
    
    (46
    )Other tax rates applicable outside the UK and Australia
    
    
    206
    
    
    
    271
    
    
    
    242Resource depletion and other depreciation allowances
    
    
    (129
    )
    
    
    (173
    )
    
    
    (187
    )Research, development and other investment allowances
    
    
    (72
    )
    
    
    (81
    )
    
    
    (21
    )Unrecognised current year operating losses
    
    
    163
    
    
    
    70
    
    
    
    Foreign exchange differences
    
    
    197
    
    
    
    11
    
    
    
    1Withholding taxes
    
    
    95
    
    
    
    46
    
    
    
    32Other items
    
    
    43
    
    
    
    (110
    )
    
    
    (33
    )Total taxation charge (c)
    
    
    3,742
    
    
    
    2,090
    
    
    
    2,373
 (a)
    
    The Additional recognition of deferred tax assets of US$335 million in 2006 reflected improved prospects for future earnings from the Groups US operations.(b)
    
    The Adjustments to deferred tax liabilities following changes in tax rates, totalling US$392 million in 2007 resulted largely from a
reduction in Canadian tax rates.(c)
    
    An analysis of the impact on the tax reconciliation of items excluded in arriving at Underlying earnings is given below:
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mImpairment charges
    
    
    1,806
    
    
    
    (1
    )
    
    
    157Disposal of interests in businesses
    
    
    136
    
    
    
    
    
    
    
    Exchange losses on external debt, intragroup balances and derivatives not designated as hedges
    
    
    (1,074
    )
    
    
    (19
    )
    
    
    55Other
exclusions
    
    
    51
    
    
    
    (8
    )
    
    
    (11
    )919
    
    
    
    (28
    )
    
    
    201
 (d)
    
    This tax reconciliation relates to the parent companies, subsidiaries and proportionally consolidated units. The Groups share of profit of equity
accounted units is net of tax charges of US$596 million (2007: US$917 million; 2006: US$770 million).
 A-21




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##### Table of Contents



Notes to the 2008 Financial statements
 
 9
    
    EARNINGS/(LOSS) PER ORDINARY SHARE
 Weightedaveragenumber of
    
    
    Per shareEarnings
    
    
    shares
    
    
    amount2008
    
    
    2008
    
    
    2008US$m
    
    
    (millions)
    
    
    (cents)Basic earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    4,503
    
    
    
    1,283.5
    
    
    
    350.8Basic loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    (827
    )
    
    
    1,283.5
    
    
    
    (64.4
    )Total basic earnings per share  profit for the year (b)
    
    
    3,676
    
    
    
    1,283.5
    
    
    
    286.4Diluted earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    4,503
    
    
    
    1,289.3
    
    
    
    349.2Diluted loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    (827
    )
    
    
    1,289.3
    
    
    
    (64.1
    )Total diluted earnings per share  profit for the year (c)
    
    
    3,676
    
    
    
    1,289.3
    
    
    
    285.1Underlying earnings per share attributable to ordinary shareholders (a)- Basic (b)
    
    
    10,303
    
    
    
    1,283.5
    
    
    
    802.7- Diluted (c)
    
    
    10,303
    
    
    
    1,289.3
    
    
    
    799.1
 Weightedaveragenumber of
    
    
    Per shareEarnings
    
    
    shares
    
    
    amount2007
    
    
    2007
    
    
    2007US$m
    
    
    (millions)
    
    
    (cents)Basic earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    7,312
    
    
    
    1,285.8
    
    
    
    568.7Basic loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    
    
    
    
    
    
    
    
    Total basic earnings per share  profit for the year (b) `
    
    
    7,312
    
    
    
    1,285.8
    
    
    
    568.7Diluted earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    7,312
    
    
    
    1,291.3
    
    
    
    566.3Diluted loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    
    
    
    
    
    
    
    
    Total diluted earnings per share  profit for the year (c)
    
    
    7,312
    
    
    
    1,291.3
    
    
    
    566.3Underlying earnings per share attributable to ordinary shareholders (a)- Basic (b)
    
    
    7,443
    
    
    
    1,285.8
    
    
    
    578.9- Diluted (c)
    
    
    7,443
    
    
    
    1,291.3
    
    
    
    576.4
 Weightedaveragenumber of
    
    
    Per shareEarnings
    
    
    shares
    
    
    amount2006
    
    
    2006
    
    
    2006US$m
    
    
    (millions)
    
    
    (cents)Basic earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    7,438
    
    
    
    1,333.4
    
    
    
    557.8Basic loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    
    
    
    
    
    
    
    
    Total basic earnings per share  profit for the year (b)
    
    
    7,438
    
    
    
    1,333.4
    
    
    
    557.8Diluted earnings per share attributable to ordinary shareholders of Rio Tinto  continuing operations
    
    
    7,438
    
    
    
    1,338.8
    
    
    
    555.6Diluted loss per share attributable to ordinary shareholders of Rio Tinto  discontinued operations
    
    
    
    
    
    
    
    
    
    
    Total diluted earnings per share  profit for the year (c)
    
    
    7,438
    
    
    
    1,338.8
    
    
    
    555.6Underlying earnings per share attributable to ordinary shareholders (a)- Basic (b)
    
    
    7,338
    
    
    
    1,333.4
    
    
    
    550.3- Diluted (c)
    
    
    7,338
    
    
    
    1,338.8
    
    
    
    548.1
 (a)
    
    Underlying earnings per share is calculated from Underlying earnings, detailed information on which is given in note 2.(b)
    
    The weighted average number of shares is calculated as the average number of Rio Tinto plc shares outstanding not held as treasury shares
of 997.8 million (2007: 1,000.1 million; 2006: 1,047.7 million) plus the average number of Rio Tinto Limited shares outstanding not held by Rio Tinto plc
of 285.7 million (2007 and 2006: 285.7 million).(c)
    
    For the purposes of calculating diluted earnings per share, the effect of dilutive securities of 5.8 million shares in 2008 (2007: 5.5 million shares;
2006: 5.4 million shares) is added to the weighted average number of shares described in (b) above. This effect is calculated under the treasury stock method.
The Groups only potential dilutive ordinary shares are share options for which terms and conditions are described in note 48.
 A-22




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##### Table of Contents



Notes to the 2008 Financial statements
 
 10
    
    DIVIDENDS
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mRio Tinto plc previous year Final dividend paid
    
    
    838
    
    
    
    646
    
    
    
    442Rio Tinto plc previous year Special dividend paid
    
    
    
    
    
    
    
    
    
    
    1,171Rio Tinto plc Interim dividend paid
    
    
    679
    
    
    
    518
    
    
    
    417Rio Tinto Limited previous year Final dividend paid
    
    
    228
    
    
    
    198
    
    
    
    118Rio Tinto Limited previous year Special dividend paid
    
    
    
    
    
    
    
    
    
    
    312Rio Tinto Limited Interim dividend paid
    
    
    188
    
    
    
    145
    
    
    
    113Dividends paid during the year
    
    
    1,933
    
    
    
    1,507
    
    
    
    2,573
 Dividends
    
    
    Dividends
    
    
    Dividendsper share
    
    
    per share
    
    
    per share2008
    
    
    2007
    
    
    2006Rio Tinto plc previous year Final and Special (pence)
    
    
    43.13p
    
    
    
    32.63p
    
    
    
    85.24pRio Tinto plc Interim (pence)
    
    
    36.25p
    
    
    
    25.59p
    
    
    
    21.42pRio Tinto Limited previous year Final and Special  fully franked at 30% (Australian cents)
    93.02c
    
    
    
    82.84c
    
    
    
    200.28cRio Tinto Limited Interim  fully franked at 30% (Australian cents)
    
    
    77.35c
    
    
    
    60.69c
    
    
    
    52.48c
 Number
    
    
    Number
    
    
    Numberof shares
    
    
    of shares
    
    
    of shares2008
    
    
    2007
    
    
    2006(millions)
    
    
    (millions)
    
    
    (millions)Rio Tinto plc previous year Final
    
    
    997.7
    
    
    
    1,007.3
    
    
    
    1,063.9Rio Tinto plc Interim
    
    
    998.1
    
    
    
    996.7
    
    
    
    1,042.7Rio Tinto Limited previous year Final  fully franked at 30%
    
    
    285.7
    
    
    
    285.7
    
    
    
    285.7Rio Tinto Limited Interim  fully franked at 30%
    
    
    285.7
    
    
    
    285.7
    
    
    
    285.7
      
 11
    
    GOODWILL
 Restated2008
    
    
    2007Net book value
    
    US$m
    
    
    US$mAt 1 January
    
    
    21,105
    
    
    
    841Adjustment on currency translation
    
    
    (196
    )
    
    
    114Additions
    
    
    8
    
    
    
    20,150Impairment charges
    
    
    (6,621
    )
    
    
    At 31 December
    
    
    14,296
    
    
    
    21,105- cost
    
    
    21,123
    
    
    
    21,366- accumulated impairment
    
    
    (6,827
    )
    
    
    (261
    )At 1 January- cost
    
    
    21,366
    
    
    
    1,077- accumulated impairment
    
    
    (261
    )
    
    
    (236
    )
 Impairment Tests for GoodwillAt 31 December 2008, goodwill has been allocated as follows:
 Net book value
    
    US$mUpstream Aluminium
    
    
    13,563Australian Iron Ore
    
    
    345Other
    
    
    38814,296
 Upstream Aluminium
      A-23




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##### Table of Contents



Notes to the 2008 Financial statements
 11
    
    GOODWILLcontinuedThe key assumptions to which the calculation of value in use for Upstream Aluminium is most sensitive are the long term aluminium price; the Canadian dollar, Australian dollar and Euro exchange rates against the US dollar; operating costs;
discount rates; and the real term rate of growth incorporated in the terminal value. Cash flows for the periods included in the projections were translated into the functional currency at the spot exchange rates at the date of the assessment. Future
selling prices
 and operating costs have been estimated in line with the policy in note 1(i). For the long run, the Group does not believe that forward prices quoted in the metals markets provide a good indication of future price levels since forward prices tend
to be strongly influenced by spot price levels. The aluminium prices used in the value in use calculations are within the range of analysts consensus forecasts current around the date of the goodwill assessment. For the long term aluminium
price, this range
is from US$2,000 per tonne to US$2,925 per tonne, with an average of US$2,420 per tonne in real terms. The operating cost levels included in the value in use assessment are calculated based on Upstream Aluminiums long term production plans.
Price assumptions for inputs into the aluminium smelting process are based on analysis of market fundamentals and are made consistent with related output price assumptions. Approximately, two thirds of the
capacity of Rio Tinto Alcans aluminium production network is located in the first quartile of the industry cash cost curve, with another 20 per cent located in the second quartile. Upstream Aluminiums intention is to maintain and, where
possible, improve its relative position on the industry cash cost curve.As a result of the impairment charge, the carrying amount of goodwill allocated to Upstream Aluminium at the date of the goodwill impairment test is equal to its recoverable amount and, therefore, any unfavourable change in the value
assigned to the key assumptions described above will result in further impairment charges. It is estimated that adverse changes in key assumptions would lead to the following decreases in value in use:
 US$ millions1% increase in discount rate applied to pre-tax cash flows
    
    
    (4,600
    )5% decrease in Aluminium price
    
    
    (6,100
    )5% weakening of US dollar
    
    
    (2,800
    )5% increase in operating costs
    
    
    (5,400
    )Decrease in terminal growth rate by one quarter of one percentage point
    
    
    (900
    )
 Each of the sensitivities above was determined assuming the relevant key assumption moved in isolation, except where modifying the Aluminium
price directly affects the price assumption for certain input costs and that there is no mitigating action by management.Australian Iron OreThe recoverable amount of the goodwill relating to Australian Iron Ore has been assessed by reference to value in use. Valuations are based on cash
flow projections that incorporate best estimates of selling prices, ore grades, production rates, future sustaining capital expenditure and production
costs over the life of each mine. In line with normal practice in the mining industry, the cash flow projections are based on long term mine plans
covering the expected life of each operation. Therefore, the projections generally cover periods well in excess of five years.Assumptions about selling prices, operating costs, exchange rates, and discount rates are particularly important in these valuations.Future selling prices and operating costs have been estimated in line with the policy in note 1(i). Long term average selling prices are forecast taking
account of estimates of the costs of producers of each commodity. Forecasts of operating costs are based on detailed mine plans which take account
of all relevant characteristics of the ore body.Goodwill relating to Australian Iron Ore has been reviewed applying a discount rate of 6.5 per cent to the post-tax cash flows expressed in real terms.
If assessed based on pre-tax cash flows expressed in real terms, the equivalent pre-tax discount rate would be around 9 per cent.There are no reasonably possible changes in key assumptions, which would cause the goodwill allocated to Australian Iron Ore to be impaired.OtherThe recoverability of the remaining goodwill, which is included within Other in the table above, has been assessed by reference to value in use,
using assumptions consistent with those described above. In most cases, recoverable amounts were determined to be in excess of carrying
value. Where this was not the case, impairment has been recognised and is presented as part of the Other section of the table in note 5. The
amount of impairment is not significant, and there are no reasonably possible changes in key assumptions that would cause the remaining goodwill
to be impaired by a significant amount.
 A-24




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##### Table of Contents



Notes to the 2008 Financial statements
 
 12
    
    INTANGIBLE ASSETS
 Trademarks,
    
    
    ContractExploration
    
    
    patented and
    
    
    based
    
    
    Otherand
    
    
    non patented
    
    
    intangible
    
    
    intangibleevaluation (a)
    
    
    technology
    
    
    assets (b)
    
    
    assets
    
    
    TotalYear ended 31 December 2008
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mNet book valueAt 1 January 2008 (restated)
    
    
    152
    
    
    
    568
    
    
    
    5,500
    
    
    
    584
    
    
    
    6,804Adjustment on currency translation
    
    
    (10
    )
    
    
    (9
    )
    
    
    (6
    )
    
    
    (69
    )
    
    
    (94
    )Expenditure during the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105
    
    
    
    105Amortisation for the year
    
    
    
    
    
    
    (44
    )
    
    
    (230
    )
    
    
    (155
    )
    
    
    (429
    )Impairment
    
    
    
    
    
    
    (57
    )
    
    
    (69
    )
    
    
    (3
    )
    
    
    (129
    )Disposals, transfers and other movements
    
    
    (9
    )
    
    
    (14
    )
    
    
    13
    
    
    
    38
    
    
    
    28At 31 December 2008
    
    
    133
    
    
    
    444
    
    
    
    5,208
    
    
    
    500
    
    
    
    6,285- cost
    
    
    133
    
    
    
    565
    
    
    
    5,532
    
    
    
    829
    
    
    
    7,059- accumulated amortisation
    
    
    
    
    
    
    (121
    )
    
    
    (324
    )
    
    
    (329
    )
    
    
    (774
    )
 Trademarks,
    
    
    ContractExploration
    
    
    patented and
    
    
    based
    
    
    Otherand
    
    
    non patented
    
    
    intangible
    
    
    intangible
    
    
    Restatedevaluation (a)
    
    
    technology
    
    
    assets
    
    
    assets
    
    
    TotalYear ended 31 December 2007
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mNet book valueAt 1 January 2007
    
    
    196
    
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    384Adjustment on currency translation
    
    
    9
    
    
    
    12
    
    
    
    7
    
    
    
    22
    
    
    
    50Acquisition of subsidiary (note 41) (restated)
    
    
    9
    
    
    
    564
    
    
    
    5,522
    
    
    
    266
    
    
    
    6,361Expenditure during the year
    
    
    194
    
    
    
    
    
    
    
    
    
    
    
    209
    
    
    
    403Amortisation for the year
    
    
    
    
    
    
    (8
    )
    
    
    (28
    )
    
    
    (78
    )
    
    
    (114
    )Impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    (21
    )Disposals, transfers and other movements
    
    
    (256
    )
    
    
    
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (259
    )At 31 December 2007 (restated)
    
    
    152
    
    
    
    568
    
    
    
    5,500
    
    
    
    584
    
    
    
    6,804- cost
    
    
    152
    
    
    
    576
    
    
    
    5,529
    
    
    
    820
    
    
    
    7,077- accumulated amortisation
    
    
    
    
    
    
    (8
    )
    
    
    (29
    )
    
    
    (236
    )
    
    
    (273
    )At 1 January 2007- cost
    
    
    196
    
    
    
    
    
    
    
    
    
    
    
    310
    
    
    
    506- accumulated amortisation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122
    )
    
    
    (122
    )
 (a)
    
    Exploration and evaluation: useful life not determined until transferred to property, plant & equipment. See note 1(e) for useful lives relating to
the other categories of intangible assets.(b)
    
    The Group acquired Alcan Inc. on 23 October 2007. Alcan Inc. benefits from certain intangible assets including power supply contracts, customer
contracts and water rights. The water rights are expected to contribute to the efficiency and cost effectiveness of operations for the foreseeable
future: accordingly, these rights are considered to have indefinite lives and are not subject to amortisation. These water rights constitute the
majority of the amounts in the column of the above table entitled Contract based intangible assets.Intangible assets with indefinite lives were provisionally valued at acquisition based on the advice of expert valuation consultants and subsequently this
valuation was finalised within twelve months of the acquisition date. The amounts in the table have been restated accordingly. The carrying values
will be reviewed for impairment annually or at any time an indicator of impairment is considered to exist. They are reviewed for impairment as part of
the cash-generating units to which they relate. The water rights have been allocated to cash generating units within Upstream Aluminium.In 2008, the recoverable amount of these cash-generating units was determined based on value in use, using a methodology and assumptions
consistent with those described in note 1(i) and note 11. No impairment of these indefinite-lived intangible assets was recognised during 2008, as
the value in use of the related cash-generating units was in excess of their carrying amounts.(c)
    
    There are no intangible assets either pledged as security or held under restriction of title.Exploration and evaluation expenditureThe charge for the year and the net amount of intangible assets capitalised during the year are as follows:
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mCash expenditure in the year (a) (b)
    
    
    440
    
    
    
    576
    
    
    
    345Changes in accruals (c)
    
    
    205
    
    
    
    (61
    )
    
    
    (36
    )Amount capitalised during the year
    
    
    
    
    
    
    (194
    )
    
    
    (72
    )Charge for the year
    
    
    645
    
    
    
    321
    
    
    
    237
 (a)
    
    Exploration and evaluation costs are stated net of gains on disposal of interests in undeveloped projects totalling US$489 million
(2007: US$253 million; 2006: US$46 million).(b)
    
    Cash expenditure is stated net of proceeds of US$673 million (2007: US$171 million; 2006: US$23 million) on disposal of undeveloped projects.(c)
    
    Changes in accruals includes impairment of undeveloped projects of US$156 million (2007 and 2006: nil) and non-cash proceeds on disposal of
undeveloped projects.
 A-25




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##### Table of Contents



Notes to the 2008 Financial statements
 
 13
    
    PROPERTY, PLANT AND EQUIPMENT
 Mining
    
    
    Land
    
    
    Plant
    
    
    Capitalproperties
    
    
    and
    
    
    and
    
    
    works inand leases (a)
    
    
    buildings
    
    
    equipment
    
    
    progress
    
    
    TotalYear ended 31 December 2008
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mNet book valueAt 1 January 2008 (restated)
    
    
    7,131
    
    
    
    5,384
    
    
    
    23,955
    
    
    
    5,498
    
    
    
    41,968Adjustment on currency translation
    
    
    (1,075
    )
    
    
    (374
    )
    
    
    (2,787
    )
    
    
    (1,050
    )
    
    
    (5,286
    )Capitalisation of additional closure costs (note 27)
    
    
    380
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    393Interest capitalised (b) (note 7)
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    203Additions
    
    
    234
    
    
    
    296
    
    
    
    1,861
    
    
    
    6,581
    
    
    
    8,972Depreciation for the year
    
    
    (517
    )
    
    
    (336
    )
    
    
    (2,178
    )
    
    
    (15
    )
    
    
    (3,046
    )Impairment charges
    
    
    (99
    )
    
    
    (219
    )
    
    
    (792
    )
    
    
    (112
    )
    
    
    (1,222
    )Disposals
    
    
    
    
    
    
    (16
    )
    
    
    (64
    )
    
    
    (15
    )
    
    
    (95
    )Disposal of subsidiaries
    
    
    (48
    )
    
    
    (4
    )
    
    
    (56
    )
    
    
    (6
    )
    
    
    (114
    )Transfers and other movements (c)
    
    
    99
    
    
    
    975
    
    
    
    2,173
    
    
    
    (3,267
    )
    
    
    (20
    )At 31 December 2008
    
    
    6,118
    
    
    
    5,706
    
    
    
    22,112
    
    
    
    7,817
    
    
    
    41,753- cost
    
    
    9,496
    
    
    
    7,894
    
    
    
    35,140
    
    
    
    8,091
    
    
    
    60,621- accumulated depreciation
    
    
    (3,378
    )
    
    
    (2,188
    )
    
    
    (13,028
    )
    
    
    (274
    )
    
    
    (18,868
    )Fixed assets held under finance leases (d)
    
    
    
    
    
    
    21
    
    
    
    19
    
    
    
    
    
    
    
    40Other fixed assets pledged as security (e)
    
    
    20
    
    
    
    
    
    
    
    1,400
    
    
    
    7
    
    
    
    1,427
 Mining
    
    
    Land
    
    
    Plant
    
    
    Capitalproperties
    
    
    and
    
    
    and
    
    
    works in
    
    
    Restatedand leases (a)
    
    
    buildings
    
    
    equipment
    
    
    progress
    
    
    TotalYear ended 31 December 2007
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mNet book valueAt 1 January 2007
    
    
    6,127
    
    
    
    2,540
    
    
    
    10,839
    
    
    
    2,701
    
    
    
    22,207Adjustment on currency translation
    
    
    511
    
    
    
    261
    
    
    
    1,163
    
    
    
    266
    
    
    
    2,201Capitalisation of additional closure costs (note 27)
    
    
    284
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    293Interest capitalised (b) (note 7)
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    31
    
    
    
    122Acquisition of subsidiary (note 41) (restated)
    
    
    229
    
    
    
    2,810
    
    
    
    9,735
    
    
    
    1,829
    
    
    
    14,603Additions
    
    
    207
    
    
    
    169
    
    
    
    1,754
    
    
    
    2,462
    
    
    
    4,592Depreciation for the year (a)
    
    
    (496
    )
    
    
    (191
    )
    
    
    (1,314
    )
    
    
    
    
    
    
    (2,001
    )Impairment (charges)/reversals
    
    
    (203
    )
    
    
    11
    
    
    
    297
    
    
    
    (189
    )
    
    
    (84
    )Disposals
    
    
    (12
    )
    
    
    (33
    )
    
    
    (38
    )
    
    
    
    
    
    
    (83
    )Transfers and other movements (c)
    
    
    484
    
    
    
    (183
    )
    
    
    1,428
    
    
    
    (1,611
    )
    
    
    118At 31 December 2007 (restated)
    
    
    7,131
    
    
    
    5,384
    
    
    
    23,955
    
    
    
    5,498
    
    
    
    41,968- cost
    
    
    10,911
    
    
    
    7,347
    
    
    
    36,265
    
    
    
    5,858
    
    
    
    60,381- accumulated depreciation
    
    
    (3,780
    )
    
    
    (1,963
    )
    
    
    (12,310
    )
    
    
    (360
    )
    
    
    (18,413
    )At 1 January 2007- cost
    
    
    9,166
    
    
    
    4,454
    
    
    
    21,553
    
    
    
    2,835
    
    
    
    38,008- accumulated depreciation
    
    
    (3,039
    )
    
    
    (1,914
    )
    
    
    (10,714
    )
    
    
    (134
    )
    
    
    (15,801
    )Fixed assets held under finance leases (d)
    
    
    
    
    
    
    30
    
    
    
    42
    
    
    
    
    
    
    
    72Other fixed assets pledged as security (e)
    
    
    31
    
    
    
    
    
    
    
    1,792
    
    
    
    
    
    
    
    1,823
 (a)
    
    Mining properties include deferred stripping costs of US$820 million (2007: US$718 million). Amortisation of deferred stripping costs of
US$35 million (2007: US$34 million; 2006: US$40 million) is included within Depreciation for the year.(b)
    
    Interest is capitalised at a rate based on the Groups cost of borrowing or at the rate on project specific debt, where applicable. The Groups average
borrowing rate used for capitalisation of interest is 3.9% (2007 and 2006: 5%).(c)
    
    Transfers and other movements includes reclassifications between categories.(d)
    
    The finance leases under which these assets are held are disclosed in note 23.(e)
    
    Excludes assets held under finance leases. Fixed assets pledged as security represent amounts pledged as collateral against US$234 million
(2007: US$291 million) of loans, which are included in note 22.(f)
    
    At 31 December 2008 the net balance sheet amount for land and buildings includes freehold US$5,557 million (2007 restated:US$5,216 million);
long leasehold US$76 million (2007: US$163 million); and short leasehold US$73 million (2007: US$5 million).
 A-26




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##### Table of Contents



Notes to the 2008 Financial statements
 
 14
    
    INVESTMENTS IN EQUITY ACCOUNTED UNITS
 Restated2008
    
    
    2007Summary balance sheet (Rio Tinto share)
    
    US$m
    
    
    US$mRio Tintos share of assetsNon current assets
    
    
    7,733
    
    
    
    8,168Current assets
    
    
    1,921
    
    
    
    1,6439,654
    
    
    
    9,811Rio Tintos share of liabilitiesCurrent liabilities
    
    
    (1,551
    )
    
    
    (1,154
    )Non current liabilities
    
    
    (3,050
    )
    
    
    (2,913
    )(4,601
    )
    
    
    (4,067
    )Rio Tintos share of net assets
    
    
    5,053
    
    
    
    5,744
 (a)
    
    Further details of investments in jointly controlled entities and associates are set out in notes 38 and 39.(b)
    
    At 31 December 2008, the quoted value of the Groups share in associates having shares listed on recognized stock exchanges was
US$149 million (2007: US$410 million).(c)
    
    Investments in equity accounted units at 31 December 2008 include goodwill of US$1,582 million (2007 restated: US$1,851 million).
 
 15
    
    NET DEBT OF EQUITY ACCOUNTED UNITS (EXCLUDING AMOUNTS DUE TO RIO TINTO)
 Rio Tinto
    
    
    
    
    
    
    Rio TintoRio Tinto
    
    
    share of
    
    
    Rio Tinto
    
    
    share ofpercentage
    
    
    net debt
    
    
    percentage
    
    
    net debt2008
    
    
    2008
    
    
    2007
    
    
    2007%
    
    
    US$m
    
    
    %
    
    
    US$mJointly controlled entitiesMinera Escondida Limitada
    
    
    30.0
    
    
    
    427
    
    
    
    30.0
    
    
    
    285Sohar Aluminium Company L.L.C.
    
    
    20.0
    
    
    
    336
    
    
    
    20.0
    
    
    
    205Queensland Alumina Limited (QAL)
    
    
    80.0
    
    
    
    (13
    )
    
    
    80.0
    
    
    
    29Halco Mining Inc.
    
    
    45.0
    
    
    
    28
    
    
    
    45.0
    
    
    
    39Alcan Ningxia Aluminum Company Limited
    
    
    50.0
    
    
    
    45
    
    
    
    50.0
    
    
    
    39AssociatesTisand (Pty) Limited
    
    
    49.0
    
    
    
    50
    
    
    
    49.0
    
    
    
    100Port Waratah Coal Services
    
    
    27.6
    
    
    
    184
    
    
    
    27.6
    
    
    
    150Mineração Rio do Norte S.A.
    
    
    12.5
    
    
    
    29
    
    
    
    12.5
    
    
    
    23Other equity accounted units
    
    
    
    
    
    
    (93
    )
    
    
    
    
    
    
    (157
    )993
    
    
    
    
    
    
    
    713
 (a)
    
    In accordance with IAS 28 and IAS 31, the Group includes its net investment in equity accounted units in its consolidated balance sheet. This
investment is net of the Groups share of the net debt of such units, which is set out above.(b)
    
    Some of the debt of equity accounted units is subject to financial and general covenants.(c)
    
    US$292 million of the debt shown above is with recourse to Rio Tinto at 31 December 2008 (2007: US$255 million).
 
 16
    
    INVENTORIES
 Restated2008
    
    
    2007US$m
    
    
    US$mRaw materials and purchased components
    
    
    1,100
    
    
    
    1,078Consumable stores
    
    
    1,108
    
    
    
    1,054Work in progress
    
    
    1,800
    
    
    
    1,727Finished goods and goods for resale
    
    
    1,765
    
    
    
    1,7165,773
    
    
    
    5,575Comprising:Expected to be used within one year
    
    
    5,607
    
    
    
    5,397Expected to be used after more than one year
    
    
    166
    
    
    
    1785,773
    
    
    
    5,575
 Inventory write downs amounting to US$280 million (2007: US$4 million; 2006: US$3 million) were recognised during the year.
 A-27




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##### Table of Contents



Notes to the 2008 Financial statements
 
 17
    
    TRADE AND OTHER RECEIVABLES
 Restated
    
    
    RestatedNon current
    
    
    Current
    
    
    Non current
    
    
    Current2008
    
    
    2008
    
    
    2007
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mTrade receivables
    
    
    
    
    
    
    3,792
    
    
    
    
    
    
    
    4,927Provision for doubtful debts
    
    
    
    
    
    
    (71
    )
    
    
    
    
    
    
    (70
    )Trade receivables  net
    
    
    
    
    
    
    3,721
    
    
    
    
    
    
    
    4,857Amounts due from equity accounted units
    
    
    
    
    
    
    253
    
    
    
    
    
    
    
    249Other debtors
    
    
    166
    
    
    
    962
    
    
    
    219
    
    
    
    921Pension surpluses (note 49)
    
    
    137
    
    
    
    23
    
    
    
    674
    
    
    
    31Prepayment of tolling charges to jointly controlled entities (a)
    
    
    435
    
    
    
    
    
    
    
    555
    
    
    
    Other prepayments
    
    
    373
    
    
    
    442
    
    
    
    336
    
    
    
    4421,111
    
    
    
    5,401
    
    
    
    1,784
    
    
    
    6,500
 (a)
    
    Rio Tinto Aluminium has made certain prepayments to jointly controlled entities for toll processing of bauxite and alumina. These prepayments will
be charged to Group operating costs as processing takes place.(b)
    
    There is no material element of trade and other receivables that is interest bearing.(c)
    
    Due to their short term maturities, the fair value of trade and other receivables approximates their carrying value.As of 31 December 2008, trade and other receivables of US$71 million (2007: US$70 million) were impaired. The amount of impairment was
US$71 million (2007: US$70 million). The majority of these receivables were over 90 days overdue.As of 31 December 2008, trade and other receivables of US$427 million (2007: US$364 million) were past due but not impaired. The ageing of
these receivables is as follows:
 2008
    
    
    2007US$m
    
    
    US$mless than 30 days overdue
    
    
    242
    
    
    
    270between 30 and 60 days overdue
    
    
    101
    
    
    
    62between 60 and 90 days overdue
    
    
    40
    
    
    
    29greater than 90 days overdue
    
    
    44
    
    
    
    3
 These relate to a number of customers for whom there is no recent history of default or other indicators of impairment.With respect to trade and other receivables that are neither impaired nor past due, there are no indications as of the reporting date that the debtors
will not meet their payment obligations.The provision for doubtful trade receivables increased by US$1 million in 2008 (2007: US$44 million), of which US$7 million was from net increases
in provisions charged within other external costs offset by US$6 million from currency translation gains.
 A-28




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##### Table of Contents



Notes to the 2008 Financial statements
 
 18
    
    DEFERRED TAXATION
 Restated2008
    
    
    2007US$m
    
    
    US$mAt 1 January
    
    
    4,327
    
    
    
    2,114Adjustment on currency translation
    
    
    (287
    )
    
    
    278Deferred tax of acquired companies
    
    
    
    
    
    
    2,380Credited to the income statement
    
    
    (974
    )
    
    
    (203
    )Credited to SORIE (a)
    
    
    (205
    )
    
    
    (203
    )Other movements (b)
    
    
    (174
    )
    
    
    (39
    )At 31 December
    
    
    2,687
    
    
    
    4,327Comprising:- deferred tax liabilities (c)
    
    
    4,054
    
    
    
    4,912- deferred tax assets (c)
    
    
    (1,367
    )
    
    
    (585
    )
 Deferred tax balances for which there is a right of offset within the same jurisdiction are presented net on the face of the balance sheet as
permitted by IAS 12. The closing deferred tax liabilities and assets, prior to this offsetting of balances, are shown below.
 Other
    
    
    
    
    
    
    RestatedUK
    
    
    Australian
    
    
    countries
    
    
    Total
    
    
    Totaltax
    
    
    tax
    
    
    tax
    
    
    2008
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mDeferred tax liabilities arising from:Accelerated capital allowances
    
    
    105
    
    
    
    1,337
    
    
    
    5,026
    
    
    
    6,468
    
    
    
    6,982Post retirement benefits
    
    
    28
    
    
    
    1
    
    
    
    
    
    
    
    29
    
    
    
    151Unremitted earnings
    
    
    
    
    
    
    1
    
    
    
    339
    
    
    
    340
    
    
    
    513Unrealised exchange losses
    
    
    
    
    
    
    478
    
    
    
    15
    
    
    
    493
    
    
    
    373Other temporary differences
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    161
    
    
    
    19133
    
    
    
    1,978
    
    
    
    5,380
    
    
    
    7,491
    
    
    
    8,038Deferred tax assets arising from:Capital allowances
    
    
    
    
    
    
    (79
    )
    
    
    (123
    )
    
    
    (202
    )
    
    
    Provisions
    
    
    (3
    )
    
    
    (293
    )
    
    
    (1,172
    )
    
    
    (1,468
    )
    
    
    (1,795
    )Post retirement benefits
    
    
    (68
    )
    
    
    (52
    )
    
    
    (1,009
    )
    
    
    (1,129
    )
    
    
    (939
    )Tax losses
    
    
    (246
    )
    
    
    (160
    )
    
    
    (493
    )
    
    
    (899
    )
    
    
    (868
    )Unrealised exchange losses
    
    
    
    
    
    
    (1,064
    )
    
    
    (12
    )
    
    
    (1,076
    )
    
    
    (76
    )Other temporary differences
    
    
    (5
    )
    
    
    
    
    
    
    (25
    )
    
    
    (30
    )
    
    
    (33
    )(322
    )
    
    
    (1,648
    )
    
    
    (2,834
    )
    
    
    (4,804
    )
    
    
    (3,711
    )(Credited)/charged to the income statement(Decelerated)/accelerated capital allowances
    
    
    7
    
    
    
    22
    
    
    
    (161
    )
    
    
    (132
    )
    
    
    (92
    )Provisions
    
    
    17
    
    
    
    33
    
    
    
    153
    
    
    
    203
    
    
    
    (219
    )Post retirement benefits
    
    
    22
    
    
    
    4
    
    
    
    74
    
    
    
    100
    
    
    
    59Tax losses
    
    
    (90
    )
    
    
    (13
    )
    
    
    123
    
    
    
    20
    
    
    
    (105
    )Tax on unremitted earnings
    
    
    
    
    
    
    (3
    )
    
    
    25
    
    
    
    22
    
    
    
    34Unrealised exchange losses
    
    
    
    
    
    
    (823
    )
    
    
    (216
    )
    
    
    (1,039
    )
    
    
    (40
    )Other temporary differences
    
    
    (2
    )
    
    
    (32
    )
    
    
    (114
    )
    
    
    (148
    )
    
    
    160(46
    )
    
    
    (812
    )
    
    
    (116
    )
    
    
    (974
    )
    
    
    (203
    )
 (a)
    
    The amounts credited directly to the SORIE relate to tax relief on share options, provisions for tax on exchange differences on intragroup loans
qualifying for reporting as part of the net investment in subsidiaries, on cash flow hedges and on actuarial gains and losses on pension schemes
and post retirement healthcare plans.(b)
    
    Other movements include deferred tax recognised by subsidiary holding companies that is presented in these accounts as part of the tax charge
on the profits of the equity accounted unit to which it relates.(c)
    
    The deferred tax liability of US$4,054 million (2007 restated: US$4,912 million) includes US$3,866 million (2007 restated: US$4,664 million) due in
more than one year. The deferred tax asset of US$1,367 million (2007: US$585 million) includes US$594 million (2007: US$240 million) receivable
in more than one year.(d)
    
    US$1,311 million (2007 restated: US$809 million) of potential deferred tax assets have not been recognised as assets in these accounts. There is
a time limit for the recovery of US$32 million of these potential assets (2007: nil). US$1,067 million (2007: US$681 million) of the potential assets
relate to realised or unrealised capital losses, recovery of which depends on the existence of capital gains in future years.(e)
    
    Deferred tax is not recognised on the unremitted earnings of overseas subsidiaries and jointly controlled entities where the Group is able to control
the timing of the remittance and it is probable that there will be no remittance in the foreseeable future. If these earnings were remitted, tax of
US$1,130 million (2007: US$1,921 million) would be payable.(f)
    
    There is a limited time period for the recovery of US$187 million (2007:US$62 million ) of tax losses which have been recognised as deferred tax
assets in the financial statements.
 A-29




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##### Table of Contents



Notes to the 2008 Financial statements
 
 19
    
    ASSETS HELD FOR SALEAt 31 December 2008, assets and liabilities held for sale comprise Alcans Packaging group (Packaging). In the announcement of Rio Tintos offer
for Alcan on 12 July 2007, it was stated that Rio Tinto and Alcan had agreed to divest Packaging. As Packaging was acquired with a view to resale,
its results are excluded from the Groups income from continuing operations.An impairment of US$827 million relating to Packaging has been recognised within discontinued operations on the Group income statement.
As required by IFRS 5  Non-current Assets Held-for-Sale and Discontinued Operations, the amount of this impairment was determined by reference
to Packagings fair value less costs to sell. The main circumstances that led to the impairment were:
 -
    
    The adverse change in capital markets, which made it difficult for potential buyers to fund acquisitions of companies like Packaging.-
    
    The global economic downturn.-
    
    The adverse trading performance of companies in Packagings markets.
 Packagings fair value less costs to sell represents the Groups best estimate of the expected proceeds to be realised on sale of Packaging, less an
estimate of remaining costs to sell. This estimate is consistent with estimates of fair value less costs to sell, which were determined using the Income
Approach and the Market Approach valuation techniques.The Income Approach provided an estimation of Packagings fair value based on the cash flows it is expected to generate in the future. A discount rate
of 9 per cent was applied to Packagings post-tax cash flows expressed in nominal terms.Under the Market Approach, an estimate of Packagings fair value was determined based on a comparison of Packaging to comparable publicly traded
companies and transactions in its industry.Packagings impairment reduced the Assets held for saleline of the Groups balance sheet.
 
 20
    
    OTHER FINANCIAL ASSETS
 Restated
    
    
    RestatedNon current
    
    
    Current
    
    
    Non current
    
    
    Current2008
    
    
    2008
    
    
    2007
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mCurrency and commodity contracts: designated as hedges
    
    
    38
    
    
    
    60
    
    
    
    34
    
    
    
    100Derivatives and embedded derivatives not related to net debt: not designated as hedges (a)
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    480Derivatives related to net debt
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    39US Treasury bonds
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    Equity shares and quoted funds
    
    
    150
    
    
    
    111
    
    
    
    53
    
    
    
    321Other investments, including loans
    
    
    478
    
    
    
    2
    
    
    
    467
    
    
    
    96Other liquid resources (non cash equivalent)
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    6666
    
    
    
    264
    
    
    
    578
    
    
    
    1,042
 (a)
    
    Derivatives and embedded derivatives not designated as hedges include amounts of US$21 million (2007: US$117 million) which mature beyond
one year.Detailed information relating to other financial assets is given in note 34.
 
 21
    
    CASH AND CASH EQUIVALENTS
 2008
    
    
    2007US$m
    
    
    US$mCash at bank and in hand
    
    
    629
    
    
    
    579Short term bank deposits
    
    
    552
    
    
    
    1,0661,181
    
    
    
    1,645Bank overdrafts repayable on demand (unsecured)
    
    
    (147
    )
    
    
    (104
    )Balance per Group cash flow statement
    
    
    1,034
    
    
    
    1,541
 (a)
    
    Cash and cash equivalents include US$97 million (2007: US$93 million) for which there are
restrictions on remittances.
 A-30




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##### Table of Contents



Notes to the 2008 Financial statements
 
 22
    
    BORROWINGS
 RestatedNon-current
    
    
    Current
    
    
    Non-current
    
    
    Current2008
    
    
    2008
    
    
    2007
    
    
    2007Borrowings at 31 December
    
    Note
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mSyndicated bank loans (a)
    
    
    
    
    
    
    19,050
    
    
    
    8,846
    
    
    
    33,263
    
    
    
    4,466Other bank loans
    
    
    
    
    
    
    
    
    
    
    582
    
    
    
    97
    
    
    
    1,749Commercial paper
    
    
    
    
    
    
    
    
    
    
    90
    
    
    
    
    
    
    
    644Other loansFinance leases
    
    
    23
    
    
    
    61
    
    
    
    28
    
    
    
    104
    
    
    
    19Rio Tinto Finance (USA) Limited Bonds 2.625% 2008 (d)(f)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    596Rio Tinto Finance (USA) Limited Bonds 7.125% 2013 (f)
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100
    
    
    
    Rio Tinto Finance (USA) Limited Bonds 5.875% 2013 (f)
    
    
    
    
    
    
    2,664
    
    
    
    
    
    
    
    
    
    
    
    Rio Tinto Finance (USA) Limited Bonds 6.5% 2018 (f)
    
    
    
    
    
    
    1,953
    
    
    
    
    
    
    
    
    
    
    
    Rio Tinto Finance (USA) Limited Bonds 7.125% 2028 (f)
    
    
    
    
    
    
    912
    
    
    
    
    
    
    
    
    
    
    
    Colowyo Coal Company L.P. Bonds 9.56% 2011
    
    
    
    
    
    
    23
    
    
    
    9
    
    
    
    32
    
    
    
    8Colowyo Coal Company L.P. Bonds 10.19% 2016
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100
    
    
    
    Alcan Inc. Debentures 6.25% due 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    203Alcan Inc. Debentures 6.45% due 2011
    
    
    
    
    
    
    410
    
    
    
    
    
    
    
    415
    
    
    
    Alcan Inc. Global Notes 4.875% due 2012 (d)
    
    
    
    
    
    
    497
    
    
    
    
    
    
    
    489
    
    
    
    Alcan Inc. Global Notes 4.50% due 2013
    
    
    
    
    
    
    481
    
    
    
    
    
    
    
    476
    
    
    
    Alcan Inc. Global Notes 5.20% due 2014
    
    
    
    
    
    
    493
    
    
    
    
    
    
    
    492
    
    
    
    Alcan Inc. Global Notes 5.00% due 2015 (d)
    
    
    
    
    
    
    496
    
    
    
    
    
    
    
    479
    
    
    
    Alcan Inc. Debentures 7.25% due 2028
    
    
    
    
    
    
    109
    
    
    
    
    
    
    
    110
    
    
    
    Alcan Inc. Debentures 7.25% due 2031
    
    
    
    
    
    
    439
    
    
    
    
    
    
    
    441
    
    
    
    Alcan Inc. Global Notes 6.125% due 2033
    
    
    
    
    
    
    737
    
    
    
    
    
    
    
    736
    
    
    
    Alcan Inc. Global Notes 5.75% due 2035
    
    
    
    
    
    
    281
    
    
    
    
    
    
    
    280
    
    
    
    European Medium Term Notes (c)
    
    
    
    
    
    
    295
    
    
    
    
    
    
    
    384
    
    
    
    76Other secured loans
    
    
    
    
    
    
    310
    
    
    
    10
    
    
    
    346
    
    
    
    27Other unsecured loans
    
    
    
    
    
    
    313
    
    
    
    322
    
    
    
    312
    
    
    
    321Total borrowings
    
    
    
    
    
    
    29,724
    
    
    
    9,887
    
    
    
    38,656
    
    
    
    8,109
 (a)
    
    In support of its acquisition of Alcan Inc., the Group arranged for US$40 billion in term loans and revolving credit facilities, which were fully underwritten
and subsequently syndicated (the Syndicated bank loans). The Syndicated bank loans are divided into four facilities, as follows:
 Facility A(b)
    
    
    Facility B
    
    
    Facility C
    
    
    Facility DFacility amount (US$ billions)
    
    
    15
    
    
    
    10
    
    
    
    5
    
    
    
    10Type
    
    Term Loan
    

    
    Revolving
    
    
    Revolving
    
    
    Term LoanDue
    
    October 2009 (b)
    
    
    October 2010
    
    
    October 2012
    
    
    December 2012Repayment
    
    Bullet
    
    
    Bullet
    

    
    Bullet
    
    
    BulletUndrawn facilities (US$ billions)At 31 December 2008
    
    
    
    
    
    
    0.9
    
    
    
    5
    
    
    
    At 31 December 2007
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
 The amounts outstanding under these facilities are shown net of the unamortised costs of obtaining the facilities. In addition, there is US$2.2
billion of unused committed bilateral banking facilities.Facilities A and B are subject to mandatory prepayment and cancellation to the extent of the net proceeds from disposals of assets and from the
raising of funds through equity or capital markets, subject to specific thresholds and conditions. Any such net proceeds must first be applied in
prepayment of the amounts outstanding under Facility A. The net proceeds must then be applied in cancellation of any undrawn amount under
Facility B, and finally in prepayment of any amounts outstanding under Facility B.The main financial covenant to which the Group is subject is the covenant contained in the Alcan facilities which requires it to maintain a ratio of net
borrowings to EBITDA of no greater than 4.5 times. A compliance certificate must be produced for this ratio on a semi annual basis. In addition,
the Facility Agreement contains restrictions on the Group, including that it be required to observe certain customary covenants including but not limited
to (i) maintenance of authorisations; (ii) compliance with laws; (iii) change of business; (iv) negative pledge (subject to certain carve outs);
(v) environmental laws and licences; and (vi) subsidiaries incurring financial indebtedness.(b)
    
    The original maturity of Facility A was October 2008, with an option for the Group to extend up until October 2009. The Group has exercised this
option.(c)
    
    Rio Tinto has a US$10 billion (2007: US$10 billion) European Medium Term Note (EMTN) programme for the issuance of debt, of which
approximately US$0.3 billion was drawn down at 31 December 2008 (2007: US$0.4 billion). The Groups EMTNs are swapped to US dollars. The
fair value of currency swaps at 31 December 2008 was a
US$99 million liability (2007: US$7 million liability). Details of the major currency swaps are
shown in note 34(d). At 31 December 2007, other EMTNs of
US$31 million related to Alcan Inc.(d)
    
    As at 31 December 2008 none of the fixed rate borrowings shown were swapped to floating rates (2007: US$1.2 billion). At 31 December 2007
the fair value of the interest rate swaps was a gain of US$31million.(e)
    
    The Groups borrowings of US$39.6 billion (2007 restated: US$46.8 billion) include some US$4.6 billion (2007: US$4.7 billion) which relates to
borrowings of subsidiaries that are without recourse to the Group, some of which are subject to various financial and general covenants with which
the respective borrowers were in compliance as at 31 December 2008.(f)
    
    Rio Tinto Finance (USA) is a wholly owned subsidiary of Rio Tinto Limited and the bonds issued  by it have been
 fully and unconditionally guaranteed by Rio Tinto plc and Rio Tinto Limited.
 
 23
    
    CAPITALISED FINANCE LEASES
 2008
    
    
    2007US$m
    
    
    US$mPresent value of minimum lease paymentsTotal minimum lease payments
    
    
    97
    
    
    
    129Effect of discounting
    
    
    (8
    )
    
    
    (6
    )89
    
    
    
    123Payments under capitalised finance leasesDue within one year
    
    
    28
    
    
    
    19Between 1 year and 5 years
    
    
    21
    
    
    
    67More than 5 years
    
    
    40
    
    
    
    3789
    
    
    
    123
 A-31




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##### Table of Contents



Notes to the 2008 Financial statements
 
 24
    
    CONSOLIDATED NET DEBT
 RestatedNet Debt
    
    
    Net Debt2008
    
    
    2007US$m
    
    
    US$mAnalysis of changes in consolidated net debtAt 1 January
    
    
    (45,191
    )
    
    
    (2,437
    )Adjustment on currency translation
    
    
    1,296
    
    
    
    (223
    )Exchange
(losses)/gains (charged)/credited to the income statement (a)
    
    
    (1,701
    )
    
    
    136Gains on derivatives related to net debt
    
    
    105
    
    
    
    11Debt of acquired companies
    
    
    
    
    
    
    (5,504
    )Cash movements excluding exchange movements
    
    
    6,864
    
    
    
    (37,332
    )Other movements
    
    
    (45
    )
    
    
    158At 31 December
    
    
    (38,672
    )
    
    
    (45,191
    )Reconciliation to balance sheet categoriesBorrowings (note 22)
    
    
    (39,611
    )
    
    
    (46,765
    )Bank overdrafts repayable on demand (note 21)
    
    
    (147
    )
    
    
    (104
    )Cash and cash equivalents (note 21)
    
    
    1,181
    
    
    
    1,645Other liquid resources (note 20)
    
    
    4
    
    
    
    6Derivatives related to net debt (note 34)
    
    
    (99
    )
    
    
    27(38,672
    )
    
    
    (45,191
    )
 2008
    
    
    2007US$m
    
    
    US$mExchange (losses)/gains on US dollar net debt and intragroup balancesExchange (losses)/gains on US dollar net debt (a)
    
    
    (1,675
    )
    
    
    163Exchange gains on intragroup balances
    
    
    1,523
    
    
    
    11Exchange losses on loans from equity accounted units
    
    
    (36
    )
    
    
    (2
    )Exchange gains on settlement of dividends
    
    
    12
    
    
    
    22(Charged)/credited to income statement
    
    
    (176
    )
    
    
    194
 (a)
    
    Exchange (losses)/gains that have been (charged)/credited to the income statement include amounts taken to Underlying earnings.Further information relating to the currency and interest rate exposures arising from net debt and related derivatives is given in note 34 on Financial
Instruments.
 
 25
    
    TRADE AND OTHER PAYABLES
 Restated
    
    
    RestatedNon current
    
    
    Current
    
    
    Non current
    
    
    Current2008
    
    
    2008
    
    
    2007
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mTrade creditors
    
    
    
    
    
    
    2,875
    
    
    
    
    
    
    
    3,145Amounts owed to equity accounted units
    
    
    11
    
    
    
    269
    
    
    
    
    
    
    
    219Other creditors (a)
    
    
    243
    
    
    
    641
    
    
    
    176
    
    
    
    575Employee entitlements
    
    
    
    
    
    
    770
    
    
    
    
    
    
    
    915Royalties and mining taxes
    
    
    
    
    
    
    471
    
    
    
    
    
    
    
    325Accruals and deferred income
    
    
    79
    
    
    
    2,130
    
    
    
    110
    
    
    
    1,346Government grants deferred
    
    
    119
    
    
    
    41
    
    
    
    201
    
    
    
    7452
    
    
    
    7,197
    
    
    
    487
    
    
    
    6,532
 (a)
    
    Other creditors include deferred consideration of US$318 million (2007: US$209 million) relating to certain assets acquired. The deferred
consideration is included at its net present value. The amortisation of the discount applied in establishing the net present value is treated as
a finance cost. All other accounts payable and accruals are non interest bearing.(b)
    
    Due to their short term maturities, the fair value of trade and other payables approximates to their carrying value.
 
 26
    
    OTHER FINANCIAL LIABILITIES
 RestatedNon current
    
    
    Current
    
    
    Non current
    
    
    Current2008
    
    
    2008
    
    
    2007
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mForward commodity contracts: designated as hedges
    
    
    173
    
    
    
    84
    
    
    
    490
    
    
    
    283Derivatives related to net debt
    
    
    95
    
    
    
    4
    
    
    
    6
    
    
    
    9Other derivatives and embedded derivatives: not designated as hedges
    
    
    
    
    
    
    355
    
    
    
    
    
    
    
    591Other financial liabilities
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    49268
    
    
    
    480
    
    
    
    496
    
    
    
    932
 Detailed information relating to other financial liabilities is given in note 34.
 A-32




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##### Table of Contents



Notes to the 2008 Financial statements
 
 27
    
    PROVISIONS (NOT INCLUDING TAXATION)
 Close downPensions
    
    
    Other
    
    
    andand post
    
    
    employee
    
    
    restoration/
    
    
    
    
    
    
    
    
    
    
    Restatedretirement
    
    
    entitlements
    
    
    environmental
    
    
    
    
    
    
    Total
    
    
    Totalhealthcare (a)
    
    
    (b)
    
    
    (c), (d), (e)
    
    
    Other (f)
    
    
    2008
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mAt 1 January
    
    
    3,313
    
    
    
    749
    
    
    
    6,228
    
    
    
    811
    
    
    
    11,101
    
    
    
    4,668Adjustment on currency translation
    
    
    (262
    )
    
    
    (118
    )
    
    
    (553
    )
    
    
    (26
    )
    
    
    (959
    )
    
    
    320Amounts capitalised
    
    
    
    
    
    
    
    
    
    
    393
    
    
    
    
    
    
    
    393
    
    
    
    293Acquisition of subsidiary (note 41)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,721Disposal of subsidiary
    
    
    (5
    )
    
    
    4
    
    
    
    (25
    )
    
    
    (16
    )
    
    
    (42
    )
    
    
    Charged/(credited) to profit:- new provisions
    
    
    
    
    
    
    33
    
    
    
    2
    
    
    
    18
    
    
    
    53
    
    
    
    19- increases to existing provisions
    
    
    306
    
    
    
    176
    
    
    
    80
    
    
    
    67
    
    
    
    629
    
    
    
    498- unused amounts reversed
    
    
    
    
    
    
    (111
    )
    
    
    (36
    )
    
    
    3
    
    
    
    (144
    )
    
    
    (209
    )- exchange gains on provisions
    
    
    
    
    
    
    (5
    )
    
    
    (240
    )
    
    
    (28
    )
    
    
    (273
    )
    
    
    Amortisation of discount
    
    
    
    
    
    
    1
    
    
    
    292
    
    
    
    4
    
    
    
    297
    
    
    
    166Utilised in year
    
    
    (448
    )
    
    
    (187
    )
    
    
    (130
    )
    
    
    (147
    )
    
    
    (912
    )
    
    
    (283
    )Transfer to liabilities of disposal groups
held for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136
    )Liability incurred as a result of acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    189Actuarial losses/(gains) recognised in equity
    
    
    809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    809
    
    
    
    (87
    )Transfers and other movements
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    (58
    )At 31 December
    
    
    3,713
    
    
    
    523
    
    
    
    6,011
    
    
    
    686
    
    
    
    10,933
    
    
    
    11,101Balance sheet analysis:Current
    
    
    112
    
    
    
    298
    
    
    
    235
    
    
    
    181
    
    
    
    826
    
    
    
    766Non current
    
    
    3,601
    
    
    
    225
    
    
    
    5,776
    
    
    
    505
    
    
    
    10,107
    
    
    
    10,335Total
    
    
    3,713
    
    
    
    523
    
    
    
    6,011
    
    
    
    686
    
    
    
    10,933
    
    
    
    11,101
 (a)
    
    The main assumptions used to determine the provision for pensions and post retirement healthcare, and other information, including the expected
level of future funding payments in respect of those arrangements, are given in note 49.(b)
    
    The provision for other employee entitlements includes a provision for long service leave of US$142 million (2007:US$107 million), based
on the relevant entitlements in certain Group operations. It also includes the provisions relating to the Groups cash-settled share-based
payment plans of US$43 million (2007: US$219 million), which are described in note 48.(c)
    
    The Groups policy on close down and restoration costs is described in note 1(k). Close down and restoration costs are a normal consequence of
mining, and the majority of close down and restoration expenditure is incurred at the end of the relevant operation. Remaining lives of mines and
infrastructure range from 1 to over 50 years with an average, weighted by closure provision, of around 18 years. Although the ultimate cost to be
incurred is uncertain, the Groups businesses estimate their respective costs based on feasibility and engineering studies using current restoration
standards and techniques. Provisions of US$6,011 million (2007 restated: US$6,228 million) for close down and restoration costs and environmental
clean up obligations, include estimates of the effect of future inflation and have been adjusted to reflect risk. These estimates have been
discounted to their present value at an average rate of approximately five per cent per annum, being an estimate of the long term, risk free, pre-tax
cost of borrowing. Excluding the effects of future inflation, and before discounting, this provision is equivalent to some US$8.2 billion
(2007: US$8.1 billion).(d)
    
    Some US$495 million (2007: US$214 million) of environmental clean up expenditure is expected to take place within the next five years. The
remainder includes amounts for the operation and maintenance of remediation facilities in later years. The provision for environmental clean up
expenditure includes the issue described in (e) below.(e)
    
    In 1995, Kennecott Utah Copper (KUC) agreed with the US Environmental Protection Agency (EPA) and the State of Utah to complete certain
source control projects and perform specific environmental studies regarding contamination of ground water in the vicinity of the Bingham Canyon
mine. A remedial investigation and feasibility study on the South Zone ground water contamination, completed in March 1998, identified
a range of alternative measures to address this issue. Additional studies were conducted to refine the workable alternatives. A remedial design
document was completed in 2002. A joint proposal and related agreements with the State of Utah Natural Resource Damage Trustee, the
State of Utah and the Jordan Valley Water Conservancy District were approved in 2004. KUC entered into a formal agreement with the EPA in 2007
on the remedial action. In September 2008, the EPA withdrew its proposal to list the Kennecott South Zone Site on the Superfund National
Priorities List. This action recognises that soil clean up work is complete and that groundwater cleanup is adequately initiated and financial
assurance is in place to assure completion of the work.The provision was reduced by US$101 million in 2007 following a reassessment of the expected cost of remediation and the expected timing of the
expenditure to reflect recent experience. The ultimate cost of remediation remains uncertain, being dependent on the responsiveness of the
contamination to pumping and acid neutralisation.(f)
    
    Other provisions deal with a variety of issues and include US$103 million (2007 restated: US$163 million) relating to the Rio Tinto Alcan Foundation
commitment in Canada, involving payments of C$200 million over a five year period.
 A-33




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##### Table of Contents



Notes to the 2008 Financial statements
 
 28
    
    SHARE CAPITAL  RIO TINTO PLC
 2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Number (m)
    
    
    Number (m)
    
    
    Number (m)
    
    
    US$m
    
    
    US$m
    
    
    US$mIssued and fully paid up share capitalAt 1 January
    
    
    1,071.80
    
    
    
    1,071.49
    
    
    
    1,071.02
    
    
    
    172
    
    
    
    172
    
    
    
    172Ordinary shares issued (a)
    
    
    0.18
    
    
    
    0.31
    
    
    
    1.27
    
    
    
    
    
    
    
    
    
    
    
    Own shares purchased and cancelled (b)
    
    
    (67.88
    )
    
    
    
    
    
    
    (0.80
    )
    
    
    (12
    )
    
    
    
    
    
    
    At 31 December
    
    
    1,004.10
    
    
    
    1,071.80
    
    
    
    1,071.49
    
    
    
    160
    
    
    
    172
    
    
    
    172- Special Voting Share of 10p (d)
    
    1 only
    
    1 only
    
    1 only- DLC Dividend Share of 10p (d)
    
    1 only
    
    1 only
    
    1 only- shares repurchased and held in treasury (b)
    
    
    5.91
    
    
    
    74.55
    
    
    
    47.82- shares held by public
    
    
    998.19
    
    
    
    997.25
    
    
    
    1,023.67Shares held by publicAt 1 January
    
    
    997.25
    
    
    
    1,023.67
    
    
    
    1,068.42Ordinary shares issued (a)
    
    
    0.18
    
    
    
    0.31
    
    
    
    1.27Own shares purchased and cancelled (b)
    
    
    
    
    
    
    
    
    
    
    (0.80
    )Shares reissued from treasury (b)
    
    
    0.76
    
    
    
    0.97
    
    
    
    1.12Shares repurchased and held in treasury
    
    
    
    
    
    
    (27.70
    )
    
    
    (46.34
    )At 31 December
    
    
    998.19
    
    
    
    997.25
    
    
    
    1,023.67Unissued share capitalOrdinary shares of 10p each
    
    
    417.13
    
    
    
    349.43
    
    
    
    349.74
    
    
    
    63
    
    
    
    51
    
    
    
    51Equalisation Share of 10p (d)
    
    1 only
    
    1 only
    
    1 only
    
    
    
    
    
    
    
    
    
    
    Total authorised share capital
    
    
    1,421.23
    
    
    
    1,421.23
    
    
    
    1,421.23
    
    
    
    223
    
    
    
    223
    
    
    
    223
 (a)
    
    183,714 Ordinary shares were issued, and 763,919 Ordinary shares reissued from treasury during the year resulting from the exercise of
options under Rio Tinto plc employee share based payment plans with exercise prices between £8.09p and £35.57p per share (2007:
1,280,893
shares issued with exercise prices between £8.09p and £27.99p per share; 2006: 2,382,591 shares issued at prices between £8.09p and
£19.25p).(b)
    
    At the 2007 annual general meeting, the shareholders renewed the general authority for the Company to buy back up to ten per cent of
its Ordinary
shares of 10p each for a further period of 12 months. The share buyback programme was suspended on 12 July 2007 at the time the
Alcan offer
was announced. This authority was renewed at the 2008 annual general meeting. During the year to 31 December 2008, no shares were bought
back and held in treasury (2007: 27,700,000 shares at an average buy back price of £30.05p per share; 2006: 46,340,000 shares at an
average buy back
price of £27.27 per share). No shares were cancelled during the year ended 31 December 2008 (2007: none; 2006: 800,000 shares bought
back at an average
buy back price of £27.36 and cancelled). The total consideration paid in 2007 was US$1,648 million (2006:
US$2,394 million).As part of the Groups internal capital management programme, Rio Tinto undertook a series of transactions, whereby 67,880,000
shares
held by Rio Tinto plc in treasury were sold to Rio Tinto Limited at market value, before being immediately repurchased by Rio Tinto plc
for a nominal amount, pursuant to the share purchase approval granted by Rio Tinto plc shareholders at the 2008 Rio Tinto plc annual
general meeting. The shares were then cancelled upon their repurchase by Rio Tinto plc.(c)
    
    The aggregate consideration received for new shares issued during 2008 was US$6 million (2007: US$13 million; 2006:
US$31 million). The aggregate
consideration received for treasury shares reissued was US$25 million (2007: US$24 million; 2006: US$24 million).(d)
    
    The Special Voting Share was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited
on Joint Decisions, following
the DLC merger. Directors have the ability to issue an Equalisation Share if that is required under the terms of the DLC Merger Sharing
Agreement.
The DLC Dividend Share was issued to facilitate the efficient management of funds within the DLC structure.(e)
    
    Information relating to share options and other share based incentive schemes is given in note 48 on share based payments.
 
 29
    
    SHARE CAPITAL  RIO TINTO LIMITED
 2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Number (m)
    
    
    Number (m)
    
    
    Number (m)
    
    
    US$m
    
    
    US$m
    
    
    US$mIssued and fully paid up share capitalAt 1 January
    
    
    285.75
    
    
    
    285.75
    
    
    
    285.75
    
    
    
    1,219
    
    
    
    1,099
    
    
    
    1019Adjustment on currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (258
    )
    
    
    120
    
    
    
    80At 31 December
    
    
    285.75
    
    
    
    285.75
    
    
    
    285.75
    
    
    
    961
    
    
    
    1,219
    
    
    
    1,099- Share capital held by Rio Tinto plc
    
    
    171.07
    
    
    
    171.07
    
    
    
    171.07- Special Voting Share of 10p (c)
    
    1 only
    
    1 only
    
    1 only- DLC Dividend Share of 10p (c)
    
    1 only
    
    1 only
    
    1 onlyTotal share capital (c)
    
    
    456.82
    
    
    
    456.82
    
    
    
    456.82
 (a)
    
    The share buyback programme was suspended on 12 July 2007 at the time the Alcan acquisition was announced. This authority was
renewed
at the 2008 annual general meeting.No shares were bought back during the year to 31 December 2008 (2007 and 2006: nil).(b)
    
    No new shares were issued during 2008 (2007 and 2006: nil).(c)
    
    The Special Voting Share was issued to facilitate the joint voting by shareholders of Rio Tinto Limited and Rio Tinto plc
on Joint Decisions following
the DLC merger. Directors have the ability to issue an Equalisation Share if that is required under the terms of the DLC Merger Sharing
Agreement.
The DLC Dividend Share was issued to facilitate the efficient management of funds within the DLC structure.(d)
    
    Share options exercised during the year to 31 December 2008 under various Rio Tinto Limited employee share option schemes were
satisfied by
the on-market purchase of Rio Tinto Limited shares by a third party on the Groups behalf.(e)
    
    Information relating to share options and other share based incentive schemes is given in note 48 on share based payments.
 A-34




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##### Table of Contents



Notes to the 2008 Financial statements
 
 30
    
    CHANGES IN EQUITY, SHARE PREMIUM AND RESERVES
 RestatedYear ended 31 December 2008
    
    
    Year ended 31 December 2007Attributable to
    
    
    
    
    
    
    
    
    
    
    Attributable toshareholders
    
    
    Outside
    
    
    
    
    
    
    shareholders
    
    
    Outsideof Rio Tinto
    
    
    Interests
    
    
    Total
    
    
    of Rio Tinto
    
    
    Interests
    
    
    TotalSummary statement of changes in equity
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mOpening balance
    
    
    24,772
    
    
    
    1,521
    
    
    
    26,293
    
    
    
    18,232
    
    
    
    1,153
    
    
    
    19,385Total recognised (loss)/income for the year
    
    
    (2,165
    )
    
    
    578
    
    
    
    (1,587
    )
    
    
    9,407
    
    
    
    470
    
    
    
    9,877Dividends (note 10)
    
    
    (1,933
    )
    
    
    (348
    )
    
    
    (2,281
    )
    
    
    (1,507
    )
    
    
    (164
    )
    
    
    (1,671
    )Own shares purchased from Rio Tinto shareholders:- Under capital management programme
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,372
    )
    
    
    
    
    
    
    (1,372
    )- To satisfy share options
    
    
    (128
    )
    
    
    
    
    
    
    (128
    )
    
    
    (64
    )
    
    
    
    
    
    
    (64
    )Ordinary shares issued
    
    
    31
    
    
    
    
    
    
    
    31
    
    
    
    37
    
    
    
    
    
    
    
    37Outside interests in acquired companies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    24Shares issued to outside interests
    
    
    
    
    
    
    72
    
    
    
    72
    
    
    
    
    
    
    
    38
    
    
    
    38Employee share options charged to income statement
    
    
    61
    
    
    
    
    
    
    
    61
    
    
    
    39
    
    
    
    
    
    
    
    39Closing balance
    
    
    20,638
    
    
    
    1,823
    
    
    
    22,461
    
    
    
    24,772
    
    
    
    1,521
    
    
    
    26,293
 Year ended 31 December 2006Attributable toshareholders
    
    
    Outsideof Rio Tinto
    
    
    Interests
    
    
    TotalSummary statement of changes in equity
    
    US$m
    
    
    US$m
    
    
    US$mOpening balance
    
    
    14,948
    
    
    
    791
    
    
    
    15,739Total recognised income for the year
    
    
    8,514
    
    
    
    468
    
    
    
    8,982Dividends (note 10)
    
    
    (2,573
    )
    
    
    (193
    )
    
    
    (2,766
    )Own shares purchased from Rio Tinto shareholders:- Under capital management programme (a)
    
    
    (2,658
    )
    
    
    
    
    
    
    (2,658
    )- To satisfy share options
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Ordinary shares issued
    
    
    31
    
    
    
    
    
    
    
    31Shares issued to outside interests
    
    
    
    
    
    
    69
    
    
    
    69Employee share options charged to income statement
    
    
    23
    
    
    
    
    
    
    
    23Other movements
    
    
    (4
    )
    
    
    18
    
    
    
    14Closing balance
    
    
    18,232
    
    
    
    1,153
    
    
    
    19,385
 (a)
    
    The charge to equity for shares bought back in 2006 included US$288 million in respect of a commitment entered into before the
financial year end to purchase,
from a bank, Rio Tinto plc shares that the bank could buy in the market during the period up to the preliminary announcement of the
Groups results. The
commitment was settled during 2007.
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mShare premium accountAt 1 January
    
    
    1,932
    
    
    
    1,919
    
    
    
    1,888Premium on issues of ordinary shares
    
    
    6
    
    
    
    13
    
    
    
    31Premium on issue of own shares held in treasury, subsequently repurchased and
cancelled
    
    
    2,767
    
    
    
    
    
    
    
    At 31 December
    
    
    4,705
    
    
    
    1,932
    
    
    
    1,919Retained earnings(a)At 1 January
    
    
    19,033
    
    
    
    14,401
    
    
    
    11,893Parent and subsidiaries profit for the year
    
    
    3,879
    
    
    
    7,058
    
    
    
    7,440Equity accounted units retained (loss)/profit for the year
    
    
    (203
    )
    
    
    254
    
    
    
    (2
    )Actuarial (losses)/gains
    
    
    (1,299
    )
    
    
    135
    
    
    
    338Dividends
    
    
    (1,933
    )
    
    
    (1,507
    )
    
    
    (2,573
    )Own shares purchased from Rio Tinto shareholders under capital management
programme
    
    
    
    
    
    
    (1,372
    )
    
    
    (2,658
    )Employee share options charged to income statement
    
    
    34
    
    
    
    19
    
    
    
    12Own shares purchased and cancelled
    
    
    (2,767
    )
    
    
    
    
    
    
    Tax recognised directly in statement of recognised income and expense
    
    
    365
    
    
    
    21
    
    
    
    (45
    )Ordinary shares held in treasury, reissued to satisfy share options
    
    
    25
    
    
    
    24
    
    
    
    Other movements
    
    
    
    
    
    
    
    
    
    
    (4
    )At 31 December
    
    
    17,134
    
    
    
    19,033
    
    
    
    14,401
 A-35




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##### Table of Contents



Notes to the 2008 Financial statements
 30
    
    CHANGES IN EQUITY, SHARE PREMIUM AND RESERVEScontinued
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mCapital redemption reserve(b)At 1 January
    
    
    
    
    
    
    
    
    
    
    Own shares purchased and cancelled
    
    
    12
    
    
    
    
    
    
    
    At 31 December
    
    
    12
    
    
    
    
    
    
    
    Hedging reserves(c)At 1 January
    
    
    (174
    )
    
    
    (133
    )
    
    
    (77
    )Parent and subsidiaries net cash flow hedge fair value
gains/(losses)
    
    
    28
    
    
    
    (197
    )
    
    
    (178
    )Equity accounted units cash flow hedge fair value gains/(losses)
    
    
    3
    
    
    
    (4
    )
    
    
    Parent and subsidiaries net cash flow hedge losses transferred to the income
statement
    
    
    245
    
    
    
    89
    
    
    
    63Tax on the above
    
    
    (88
    )
    
    
    71
    
    
    
    59At 31 December
    
    
    14
    
    
    
    (174
    )
    
    
    (133
    )Available for sale revaluation reserves(d)At 1 January
    
    
    57
    
    
    
    31
    
    
    
    20(Losses)/gains on available for sale securities
    
    
    (173
    )
    
    
    49
    
    
    
    14Gains on available for sale securities transferred to the income statement
    
    
    (1
    )
    
    
    (16
    )
    
    
    (4
    )Tax on the above
    
    
    10
    
    
    
    (7
    )
    
    
    1At 31 December
    
    
    (107
    )
    
    
    57
    
    
    
    31Other reserves(e)At 1 January
    
    
    19
    
    
    
    8
    
    
    
    42Own shares purchased from Rio Tinto shareholders to satisfy share options
    
    
    (128
    )
    
    
    (64
    )
    
    
    (49
    )Employee share options: value of services
    
    
    27
    
    
    
    20
    
    
    
    11Deferred tax on share options
    
    
    (87
    )
    
    
    55
    
    
    
    4At 31 December
    
    
    (169
    )
    
    
    19
    
    
    
    8Foreign currency translation reserve(f)At 1 January
    
    
    2,514
    
    
    
    735
    
    
    
    (9
    )Currency translation adjustments
    
    
    (4,468
    )
    
    
    1,796
    
    
    
    748Exchange losses
    
    
    (215
    )
    
    
    (30
    )
    
    
    (8
    )Currency translation reclassified on disposal
    
    
    (2
    )
    
    
    
    
    
    
    4Tax on exchange adjustments
    
    
    99
    
    
    
    13
    
    
    
    At 31 December
    
    
    (2,072
    )
    
    
    2,514
    
    
    
    735Total other reserves per balance sheet
    
    
    (2,322
    )
    
    
    2,416
    
    
    
    641
 (a)
    
    Retained profit and movements in reserves of subsidiaries include those arising from the Groups share of proportionally
consolidated units.(b)
    
    The capital redemption reserve was set up to comply with section 170 of the Companies Act 1985, when shares of a company are redeemed
or
purchased wholly out of the companys profits. The amount at 31 December 2008 reflects the amount by which the companys issued
share capital
is diminished in accordance with section 162.(c)
    
    The hedging reserve records gains or losses on cash flow hedges that are recognised initially in equity, as described in note
1(p).(d)
    
    The available for sale revaluation reserves record fair value gains or losses relating to available for sale securities, as described
in note 1(p).(e)
    
    Other reserves record the cumulative amount recognised in respect of options granted but not exercised to acquire shares in Rio Tinto
Limited,
less, where applicable, the cost of shares purchased to satisfy share options exercised. The estimated effect of unexercised options to
acquire
shares in Rio Tinto plc is recorded in retained earnings.(f)
    
    Exchange differences arising on the translation of the Groups net investment in foreign controlled companies are taken to the
foreign currency
translation reserve, as described in note 1(d), (net of translation adjustments relating to Rio Tinto Limited share capital). The cumulative
differences
relating to an investment are transferred to the income statement when the investment is disposed of.
 A-36




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##### Table of Contents



Notes to the 2008 Financial statements
 
 31
    
    PRIMARY SEGMENTAL ANALYSIS (BY PRODUCT GROUP)
 2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Sales revenue
    
    %
    
    
    %
    
    
    %
    
    
    US$m
    
    
    US$m
    
    
    US$mIron Ore
    
    
    30.5
    
    
    
    31.0
    
    
    32.3
    
    
    16,527
    
    
    
    9,193
    
    
    
    7,264Energy & Minerals
    
    
    19.4
    
    
    
    23.9
    
    
    28.3
    
    
    10,539
    
    
    
    7,096
    
    
    
    6,366Aluminium
    
    
    42.2
    
    
    
    23.9
    
    
    15.6
    
    
    22,939
    
    
    
    7,105
    
    
    
    3,515Copper & Diamonds
    
    
    7.8
    
    
    
    21.1
    
    
    23.3
    
    
    4,227
    
    
    
    6,258
    
    
    
    5,234Other
    
    
    0.1
    
    
    
    0.1
    
    
    0.4
    
    
    32
    
    
    
    48
    
    
    
    86Consolidated sales revenue
    
    
    100.0
    
    
    
    100.0
    
    
    100.0
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465Consolidated profit before finance items and taxationIron Ore (c)
    
    
    89.3
    
    
    
    48.0
    
    
    
    43.2
    
    
    
    9,101
    
    
    
    4,113
    
    
    
    3,878Energy & Minerals (c), (d)
    
    
    42.9
    
    
    
    15.3
    
    
    
    12.2
    
    
    
    4,375
    
    
    
    1,309
    
    
    
    1,096Aluminium (c)
    
    
    (61.0
    )
    
    
    9.5
    
    
    
    11.9
    
    
    
    (6,219
    )
    
    
    813
    
    
    
    1,069Copper & Diamonds (c), (d)
    
    
    31.8
    
    
    
    35.3
    
    
    
    37.0
    
    
    
    3,242
    
    
    
    3,026
    
    
    
    3,318Exploration and evaluation not attributed to product groups
    
    
    (1.5
    )
    
    
    0.7
    
    
    
    (1.1
    )
    
    
    (158
    )
    
    
    58
    
    
    
    (101
    )Other
    
    
    (1.5
    )
    
    
    (8.8
    )
    
    
    (3.2
    )
    
    
    (147
    )
    
    
    (748
    )
    
    
    (286
    )Operating profit (segment result)
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    10,194
    
    
    
    8,571
    
    
    
    8,974Share of profit after tax of equity accounted unitsCopper & Diamonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    838
    
    
    
    1,542
    
    
    
    1,271Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201
    
    
    
    42
    
    
    
    107Profit before finance items and taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,233
    
    
    
    10,155
    
    
    
    10,352Depreciation and amortisation (excluding share of equity accounted
units)Iron Ore
    
    
    20.3
    
    
    
    25.8
    
    
    
    25.6
    
    
    
    705
    
    
    
    546
    
    
    
    387Energy & Minerals
    
    
    16.5
    
    
    
    24.9
    
    
    
    31.1
    
    
    
    573
    
    
    
    527
    
    
    
    470Aluminium
    
    
    45.5
    
    
    
    21.5
    
    
    
    9.5
    
    
    
    1,582
    
    
    
    455
    
    
    
    143Copper & Diamonds
    
    
    15.0
    
    
    
    25.1
    
    
    
    31.5
    
    
    
    522
    
    
    
    531
    
    
    
    476Exploration and evaluation
    
    
    0.1
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    2
    
    
    
    4
    
    
    
    3Other
    
    
    2.6
    
    
    
    2.5
    
    
    
    2.1
    
    
    
    91
    
    
    
    52
    
    
    
    30Product group total
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    3,475
    
    
    
    2,115
    
    
    
    1,509
 (a)
    
    The product groups shown above reflect the Groups management structure and are the Groups primary segments in accordance
with IAS 14.
The analysis deals with: the sales revenue, profit before finance costs and taxation, and depreciation and amortisation, for subsidiary
companies
and proportionally consolidated units. Inter-segment sales are insignificant The amounts presented for each product group exclude equity
accounted
units, but include the amounts attributable to outside equity shareholders. The product groups are consistent with those identified in the
financial
information by business unit data included in note 50. However, that information includes the results of equity accounted units and
presents different financial measures. The Alcan businesses are included within the Aluminium product group except for Packaging which is
classified as a discontinued operation and is held for sale at the year end. Dampier Salt was reclassified from the Energy & Minerals
product group
to the Iron Ore group, and accordingly information for 2007 has been reclassified.(b)
    
    As detailed below, the analysis of profit before finance costs and taxation includes the profit on disposal of interests in businesses
(including
investments) and impairment (charges)/reversals, which are excluded from Underlying earnings.(c)
    
    An analysis of net impairment (charges)/reversals reported in the operating income of each product group is shown below:
 Pre-tax
    
    
    Pre-tax
    
    
    Pre-tax2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mImpairment (charges)/reversals by product groupIron Ore
    
    
    (365
    )
    
    
    
    
    
    
    298Energy & Minerals
    
    
    (94
    )
    
    
    145
    
    
    
    (188
    )Aluminium
    
    
    (7,341
    )
    
    
    (9
    )
    
    
    Copper & Diamonds
    
    
    (205
    )
    
    
    (194
    )
    
    
    297Other
    
    
    (10
    )
    
    
    
    
    
    
    (11
    )(8,015
    )
    
    
    (58
    )
    
    
    396
 (d)
    
    Of the US$2,231 million gain on disposal of businesses  US$2,166 million related to the Copper & Diamonds
segment and US$65 million to the
Energy & Minerals segment.
 A-37




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##### Table of Contents



Notes to the 2008 Financial statements
 31
    
    PRIMARY SEGMENTAL ANALYSIS (BY PRODUCT GROUP)continued
 Restated2008
    
    
    2007
    
    
    2008
    
    
    2007Segment assets (subsidiaries and proportionally consolidated units)
    
    %
    
    
    %
    
    
    US$m
    
    
    US$mIron Ore
    
    
    17.8
    
    
    
    16.2
    
    
    
    13,386
    
    
    
    13,634Energy & Minerals
    
    
    13.1
    
    
    
    11.9
    
    
    
    9,858
    
    
    
    10,028Aluminium
    
    
    57.8
    
    
    
    62.0
    
    
    
    43,472
    
    
    
    52,095Copper & Diamonds
    
    
    9.2
    
    
    
    8.2
    
    
    
    6,903
    
    
    
    6,879Other
    
    
    2.1
    
    
    
    1.7
    
    
    
    1,581
    
    
    
    1,353Product group total
    
    
    100.0
    
    
    
    100.0
    
    
    
    75,200
    
    
    
    83,989Equity accounted units (a)Copper & Diamonds
    
    
    30.2
    
    
    
    30.6
    
    
    
    1,684
    
    
    
    1,873Aluminium
    
    
    67.0
    
    
    
    66.5
    
    
    
    3,733
    
    
    
    4,074Other
    
    
    2.8
    
    
    
    2.9
    
    
    
    151
    
    
    
    181Equity accounted units total
    
    
    100.0
    
    
    
    100.0
    
    
    
    5,568
    
    
    
    6,128Assets held for sale
    
    
    
    
    
    
    
    
    
    
    5,325
    
    
    
    7,024Deferred tax assets
    
    
    
    
    
    
    
    
    
    
    1,367
    
    
    
    585Current tax recoverable
    
    
    
    
    
    
    
    
    
    
    626
    
    
    
    353Pension surpluses
    
    
    
    
    
    
    
    
    
    
    160
    
    
    
    705Derivative assets
    
    
    
    
    
    
    
    
    
    
    185
    
    
    
    656Cash and liquid resources
    
    
    
    
    
    
    
    
    
    
    1,185
    
    
    
    1,651Total assets
    
    
    
    
    
    
    
    
    
    
    89,616
    
    
    
    101,091
 (a)
    
    The analysis of the Groups investment in equity accounted units includes loans to equity accounted units, which are shown
separately on the
face of the balance sheet.
 Restated2008
    
    
    2007
    
    
    2008
    
    
    2007Segment liabilities (subsidiaries and proportionally consolidted units)
    
    %
    
    
    %
    
    
    US$m
    
    
    US$mIron Ore
    
    
    17.3
    
    
    
    15.9
    
    
    
    (2,574
    )
    
    
    (2,358
    )Energy & Minerals
    
    
    17.7
    
    
    
    14.2
    
    
    
    (2,642
    )
    
    
    (2,115
    )Aluminium
    
    
    47.5
    
    
    
    51.4
    
    
    
    (7,077
    )
    
    
    (7,643
    )Copper & Diamonds
    
    
    12.7
    
    
    
    12.2
    
    
    
    (1,889
    )
    
    
    (1,808
    )Other
    
    
    4.8
    
    
    
    6.3
    
    
    
    (724
    )
    
    
    (932
    )Product group total
    
    
    100.0
    
    
    
    100.0
    
    
    
    (14,906
    )
    
    
    (14,856
    )Liabilities of disposal groups held for sale
    
    
    
    
    
    
    
    
    
    
    (2,121
    )
    
    
    (2,632
    )Borrowings and bank overdrafts
    
    
    
    
    
    
    
    
    
    
    (39,758
    )
    
    
    (46,869
    )Current tax payable
    
    
    
    
    
    
    
    
    
    
    (1,892
    )
    
    
    (837
    )Deferred tax liabilities
    
    
    
    
    
    
    
    
    
    
    (4,054
    )
    
    
    (4,912
    )Derivative liabilities
    
    
    
    
    
    
    
    
    
    
    (711
    )
    
    
    (1,379
    )Provision for post retirement benefits
    
    
    
    
    
    
    
    
    
    
    (3,713
    )
    
    
    (3,313
    )Total liabilities
    
    
    
    
    
    
    
    
    
    
    (67,155
    )
    
    
    (74,798
    )
 Restated2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006%
    
    
    %
    
    
    %
    
    
    US$m
    
    
    US$m
    
    
    US$mCapital additions (a)Iron Ore
    
    
    36.1
    
    
    
    9.3
    
    
    
    47.2
    
    
    
    3,491
    
    
    
    2,465
    
    
    
    2,248Energy & Minerals
    
    
    19.3
    
    
    
    4.5
    
    
    
    20.3
    
    
    
    1,868
    
    
    
    1,198
    
    
    
    966Aluminium
    
    
    25.2
    
    
    
    81.9
    
    
    
    5.3
    
    
    
    2,436
    
    
    
    21,591
    
    
    
    253Copper & Diamonds
    
    
    15.7
    
    
    
    2.8
    
    
    
    21.1
    
    
    
    1,515
    
    
    
    726
    
    
    
    1,007Other
    
    
    3.7
    
    
    
    1.5
    
    
    
    6.1
    
    
    
    363
    
    
    
    394
    
    
    
    289Total capital additions
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    9,673
    
    
    
    26,374
    
    
    
    4,763
 NoteAnalysis of capital additionsProperty, plant & equipment  cash expenditure
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,466
    
    
    
    19,191
    
    
    
    3,800Capitalised closure costs and other provisions
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    393
    
    
    
    293
    
    
    
    619Capitalised interest
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    203
    
    
    
    122
    
    
    
    60Intangible assets  cash expenditure
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    6,561
    
    
    
    120Exploration & evaluation capitalised
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    203
    
    
    
    72Finance leases taken out
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Movement in payables for capital expenditure
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    503
    
    
    
    4
    
    
    
    90Capital additions per above
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,673
    
    
    
    26,374
    
    
    
    4,763
 (a)
    
    Capital additions represent the total cost incurred during the period to acquire the non current assets shown above, measured on an
accruals
basis, in accordance with IAS 14. Capital additions include the relevant non current assets of the acquired companies at the date of
acquisition.
These figures exclude capital additions of equity accounted units.
 A-38




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##### Table of Contents



Notes to the 2008 Financial statements
 
 32
    
    SECONDARY SEGMENTAL ANALYSIS (GEOGRAPHICAL)
 2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006%
    
    
    %
    
    
    %
    
    
    US$m
    
    
    US$m
    
    
    US$mGross sales revenue by destinationNorth America (a)
    
    
    22.4
    
    
    
    22.6
    
    
    
    21.9
    
    
    
    12,984
    
    
    
    7,582
    
    
    
    5,575Europe
    
    
    24.3
    
    
    
    19.8
    
    
    
    17.2
    
    
    
    14,127
    
    
    
    6,641
    
    
    
    4,378Japan
    
    
    15.2
    
    
    
    16.8
    
    
    
    19.6
    
    
    
    8,825
    
    
    
    5,633
    
    
    
    4,986China
    
    
    18.6
    
    
    
    18.0
    
    
    
    16.0
    
    
    
    10,803
    
    
    
    6,021
    
    
    
    4,062Other Asia
    
    
    11.3
    
    
    
    12.2
    
    
    
    13.5
    
    
    
    6,584
    
    
    
    4,105
    
    
    
    3,438Australia and New Zealand
    
    
    3.2
    
    
    
    5.6
    
    
    
    5.8
    
    
    
    1,877
    
    
    
    1,892
    
    
    
    1,477Other
    
    
    5.0
    
    
    
    5.0
    
    
    
    6.0
    
    
    
    2,865
    
    
    
    1,644
    
    
    
    1,524Total
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    58,065
    
    
    
    33,518
    
    
    
    25,440Less: share of equity accounted units sales revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,801
    )
    
    
    (3,818
    )
    
    
    (2,975
    )Consolidated sales revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465Consolidated sales revenue by destinationNorth America (a) `
    
    
    23.5
    
    
    
    24.5
    
    
    
    23.9
    
    
    
    12,751
    
    
    
    7,262
    
    
    
    5,358Europe
    
    
    24.0
    
    
    
    20.3
    
    
    
    17.5
    
    
    
    13,025
    
    
    
    6,027
    
    
    
    3,929Japan
    
    
    15.1
    
    
    
    16.9
    
    
    
    19.6
    
    
    
    8,206
    
    
    
    5,012
    
    
    
    4,402China
    
    
    18.7
    
    
    
    18.0
    
    
    
    16.2
    
    
    
    10,134
    
    
    
    5,342
    
    
    
    3,648Other Asia
    
    
    11.0
    
    
    
    10.9
    
    
    
    12.0
    
    
    
    5,990
    
    
    
    3,238
    
    
    
    2,691Australia and New Zealand
    
    
    3.5
    
    
    
    6.0
    
    
    
    6.3
    
    
    
    1,876
    
    
    
    1,771
    
    
    
    1,412Other
    
    
    4.2
    
    
    
    3.4
    
    
    
    4.5
    
    
    
    2,282
    
    
    
    1,048
    
    
    
    1,025Total
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465Gross sales revenue by country of originNorth America (a)
    
    
    28.5
    
    
    
    29.8
    
    
    
    29.6
    
    
    
    16,570
    
    
    
    9,992
    
    
    
    7,529Australia and New Zealand
    
    
    42.5
    
    
    
    45.5
    
    
    
    49.9
    
    
    
    24,652
    
    
    
    15,243
    
    
    
    12,703South America
    
    
    4.7
    
    
    
    9.5
    
    
    
    10.5
    
    
    
    2,731
    
    
    
    3,195
    
    
    
    2,679Africa
    
    
    4.0
    
    
    
    5.9
    
    
    
    5.7
    
    
    
    2,295
    
    
    
    1,975
    
    
    
    1,461Indonesia
    
    
    0.1
    
    
    
    1.4
    
    
    
    1.6
    
    
    
    53
    
    
    
    461
    
    
    
    396Europe and other countries
    
    
    20.2
    
    
    
    7.9
    
    
    
    2.7
    
    
    
    11,764
    
    
    
    2,652
    
    
    
    672Total
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    58,065
    
    
    
    33,518
    
    
    
    25,440Less: share of equity accounted units sales revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,801
    )
    
    
    (3,818
    )
    
    
    (2,975
    )Consolidated sales revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465
 Segment assets
    
    
    
    
    
    
    Capital additionsRestated
    
    
    
    
    
    
    Restated2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mAssets and capital additions by location (excluding equity accounted
units)North America (a)
    
    
    34,904
    
    
    
    39,310
    
    
    
    2,599
    
    
    
    13,770
    
    
    
    1,430Australia and New Zealand
    
    
    26,059
    
    
    
    28,212
    
    
    
    5,426
    
    
    
    6,301
    
    
    
    2,993South America
    
    
    873
    
    
    
    724
    
    
    
    271
    
    
    
    281
    
    
    
    19Africa
    
    
    2,402
    
    
    
    2,140
    
    
    
    602
    
    
    
    500
    
    
    
    204Indonesia
    
    
    591
    
    
    
    669
    
    
    
    42
    
    
    
    76
    
    
    
    49Europe
    
    
    9,724
    
    
    
    13,268
    
    
    
    564
    
    
    
    5,188
    
    
    
    68Other countries
    
    
    807
    
    
    
    371
    
    
    
    169
    
    
    
    258
    
    
    
    75,360
    
    
    
    84,694
    
    
    
    9,673
    
    
    
    26,374
    
    
    
    4,763Investments in equity accounted units(b)North America (a)
    
    
    1,087
    
    
    
    994Australia and New Zealand
    
    
    1,884
    
    
    
    2,148South America
    
    
    1,240
    
    
    
    1,498Other countries
    
    
    1,357
    
    
    
    1,4885,568
    
    
    
    6,128Assets held for sale
    
    
    5,325
    
    
    
    7,024Deferred tax assets
    
    
    1,367
    
    
    
    585Current tax recoverable
    
    
    626
    
    
    
    353Derivative assets
    
    
    185
    
    
    
    656Cash and liquid resources
    
    
    1,185
    
    
    
    1,651Total assets
    
    
    89,616
    
    
    
    101,091
 (a)
    
    The United States of America and Canada have been combined to form the North America Geographical segment, having regard
to the similarity of
economic and political conditions in these countries.(b)
    
    This analysis of investments in equity accounted units represents the Groups share of net assets plus loans to equity accounted
units, which
are shown separately on the face of the balance sheet.
 A-39




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##### Table of Contents



Notes to the 2008 Financial statements
 
 33
    
    FINANCIAL RISK MANAGEMENT
       (i) Foreign exchange risk
      Restated2008
    
    
    2007Net (debt)/funds by currency
    
    US$m
    
    
    US$mUnited States dollar
    
    
    (38,111
    )
    
    
    (44,776
    )Australian dollar
    
    
    (351
    )
    
    
    (256
    )South African rand
    
    
    52
    
    
    
    103UK sterling
    
    
    (34
    )
    
    
    (112
    )Euro
    
    
    (77
    )
    
    
    (150
    )Canadian dollar
    
    
    (122
    )
    
    
    (62
    )Other
    
    
    (29
    )
    
    
    62Total
    
    
    (38,672
    )
    
    
    (45,191
    )
 A-40




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##### Table of Contents



Notes to the 2008 Financial statements
 33
    
    FINANCIAL RISK MANAGEMENTcontinued
 Currency hedging
  Foreign exchange sensitivity: Risks associated with exposure
to financial instruments
  At 31 December 2008  Gains/(losses) associated with 10% strengthening of the US dollar
  Of whichamountClosing
    
    
    Effect on
    
    
    impacting
    
    
    Impactexchange
    
    
    net
    
    
    Underlying
    
    
    directlyrate
    
    
    earnings
    
    
    earnings
    
    
    on equityFunctional currency
    
    US cents
    
    
    US$m
    
    
    US$m
    
    
    US$mAustralian dollar (a)
    
    
    69
    
    
    
    (27
    )
    
    
    63
    
    
    
    3Canadian dollar
    
    
    82
    
    
    
    53
    
    
    
    99
    
    
    
    South African rand
    
    
    11
    
    
    
    13
    
    
    
    19
    
    
    
    Euro
    
    
    141
    
    
    
    239
    
    
    
    18
    
    
    
    New Zealand dollar
    
    
    58
    
    
    
    21
    
    
    
    2
    
    
    
    
 
  Of whichamountClosing
    
    
    Effect on
    
    
    impacting
    
    
    Impactexchange
    
    
    net
    
    
    Underlying
    
    
    directlyrate
    
    
    earnings
    
    
    earnings
    
    
    on equityFunctional currency
    
    US cents
    
    
    US$m
    
    
    US$m
    
    
    US$mAustralian dollar (a)
    
    
    88
    
    
    
    204
    
    
    
    99
    
    
    
    (20
    )Canadian dollar
    
    
    101
    
    
    
    149
    
    
    
    53
    
    
    
    South African rand
    
    
    15
    
    
    
    14
    
    
    
    12
    
    
    
    (4
    )Euro
    
    
    147
    
    
    
    33
    
    
    
    14
    
    
    
    149New Zealand dollar
    
    
    78
    
    
    
    (9
    )
    
    
    3
    
    
    
    
 (a)
    
    The sensitivities show the net sensitivity of US$ exposures in A$ functional currency companies, for example, and A$ exposures in US$
functional currency companies.(b)
    
    The sensitivities indicate the effect of a 10 per cent strengthening of the US dollar against each currency.(c)
    
    Rio Tinto Alcan Inc., which has a US functional currency for accounting purposes, has a significant amount of US dollar denominated
external and
intragroup debt held in Canada and is taxed on a Canadian currency basis. The above sensitivities as at 31 December 2008 for a 10 per
cent
strengthening of the US dollar do not include any tax benefit related to this debt because the capital losses generated would not be
recognised.
If the US dollar weakened below 97 Canadian cents then tax charges would begin to be recognised at 15 per cent.

At 31 December 2007 tax charges would have begun to be recognised if the US dollar weakened below 97 Canadian cents. The sensitivities
for
both years incorporate the effect of an intragroup restructuring in January 2008.
 A-41




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##### Table of Contents



Notes to the 2008 Financial statements
 33
    
    FINANCIAL RISK MANAGEMENTcontinued
 (ii) Interest rate risk
     (iii) Commodity price risk
      Commodity price sensitivity: Risks associated with
derivatives
   At 31 December 2008  Gains/(losses) associated with 10% increase from year end price
  Effect on
    
    
    Effect directly on equitynet earnings
    
    
    attributable to Rio TintoProducts
    
    US$m
    
    
    US$mCopper
    
    
    
    
    
    
    (13
    )Coal
    
    
    
    
    
    
    (8
    )Aluminium
    
    
    21
    
    
    
    (16
    )Total
    
    
    21
    
    
    
    (37
    )
 A-42




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##### Table of Contents



Notes to the 2008 Financial statements
 33
    
    FINANCIAL RISK MANAGEMENTcontinued
 
 Effect on
    
    
    Effect directly on equitynet earnings
    
    
    attributable to Rio TintoProducts
    
    US$m
    
    
    US$mCopper
    
    
    
    
    
    
    (40
    )Coal
    
    
    
    
    
    
    (25
    )Aluminium
    
    
    (41
    )
    
    
    (50
    )Total
    
    
    (41
    )
    
    
    (115
    )
 (iv) Credit risk
  Credit risks related to receivables
    Credit risk related to financial instruments and cash
deposits
   (v) Liquidity and Capital risk management
     A-43




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##### Table of Contents



Notes to the 2008 Financial statements
 33
    
    FINANCIAL RISK MANAGEMENTcontinued
      At 31 December 2008
 Trade
    
    
    Borrowings
    
    
    Expected
    
    
    Derivatives
    
    
    Other
    
    
    Totaland other
    
    
    before
    
    
    future interest
    
    
    related to
    
    
    financial
    
    
    financialpayables
    
    
    swaps
    
    
    payments
    
    
    net debt
    
    
    liabilities
    
    
    liabilitiesUS$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mFinancial liabilitiesWithin 1 year, or on demand
    
    
    (5,478
    )
    
    
    (10,079
    )
    
    
    (1,375
    )
    
    
    
    
    
    
    (414
    )
    
    
    (17,346
    )Between 1 and 2 years
    
    
    
    
    
    
    (9,485
    )
    
    
    (1,139
    )
    
    
    (85
    )
    
    
    (129
    )
    
    
    (10,838
    )Between 2 and 3 years
    
    
    
    
    
    
    (417
    )
    
    
    (914
    )
    
    
    
    
    
    
    (130
    )
    
    
    (1,461
    )Between 3 and 4 years
    
    
    
    
    
    
    (10,525
    )
    
    
    (744
    )
    
    
    
    
    
    
    (113
    )
    
    
    (11,382
    )Between 4 and 5 years
    
    
    
    
    
    
    (3,112
    )
    
    
    (486
    )
    
    
    
    
    
    
    (106
    )
    
    
    (3,704
    )After 5 years
    
    
    
    
    
    
    (5,760
    )
    
    
    (3,366
    )
    
    
    
    
    
    
    (123
    )
    
    
    (9,249
    )(5,478
    )
    
    
    (39,378
    )
    
    
    (8,024
    )
    
    
    (85
    )
    
    
    (1,015
    )
    
    
    (53,980
    )
 Restated
 Trade
    
    
    Borrowings
    
    
    Expected
    
    
    Derivatives
    
    
    Other
    
    
    Totaland other
    
    
    before
    
    
    future interest
    
    
    related to
    
    
    financial
    
    
    financialpayables
    
    
    swaps
    
    
    payments
    
    
    net debt
    
    
    liabilities
    
    
    liabilitiesUS$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mFinancial liabilitiesWithin 1 year, or on demand
    
    
    (5,303
    )
    
    
    (8,263
    )
    
    
    (2,310
    )
    
    
    (5
    )
    
    
    (813
    )
    
    
    (16,694
    )Between 1 and 2 years
    
    
    
    
    
    
    (10,628
    )
    
    
    (1,862
    )
    
    
    (4
    )
    
    
    (309
    )
    
    
    (12,803
    )Between 2 and 3 years
    
    
    
    
    
    
    (10,441
    )
    
    
    (1,322
    )
    
    
    (6
    )
    
    
    (222
    )
    
    
    (11,991
    )Between 3 and 4 years
    
    
    
    
    
    
    (37
    )
    
    
    (892
    )
    
    
    
    
    
    
    (190
    )
    
    
    (1,119
    )Between 4 and 5 years
    
    
    
    
    
    
    (13,298
    )
    
    
    (768
    )
    
    
    
    
    
    
    (187
    )
    
    
    (14,253
    )After 5 years
    
    
    
    
    
    
    (4,394
    )
    
    
    (2,084
    )
    
    
    
    
    
    
    (225
    )
    
    
    (6,703
    )(5,303
    )
    
    
    (47,061
    )
    
    
    (9,238
    )
    
    
    (15
    )
    
    
    (1,946
    )
    
    
    (63,563
    )
 (a)
    
    Interest payments have been projected using interest rates applicable at 31 December, including the impact of interest rate swap
agreements,
where appropriate.(b)
    
    Much of the debt is subject to variable interest rates. Future interest payments are therefore subject to change in line with market
rates.
 A-44




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##### Table of Contents



Notes to the 2008 Financial statements
 
 34
    
    FINANCIAL INSTRUMENTS
  
 (A) Financial assets and liabilities by categories
 At 31 December 2008
 OtherAvailable
    
    
    
    
    
    
    financialLoans and
    
    
    for sale
    
    
    Held at
    
    
    assets andTotal
    
    
    receivables
    
    
    securities
    
    
    fair value
    
    
    liabilitiesUS$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mFinancial AssetsCash and cash equivalent assets (note 21)
    
    
    1,181
    
    
    
    1,181
    
    
    
    
    
    
    
    
    
    
    
    Trade and other receivables (note 17) (a)
    
    
    5,054
    
    
    
    5,054
    
    
    
    
    
    
    
    
    
    
    
    Equity shares and quoted funds (note 20)
    
    
    261
    
    
    
    
    
    
    
    261
    
    
    
    
    
    
    
    Other investments, including loans (note 20)
    
    
    480
    
    
    
    480
    
    
    
    
    
    
    
    
    
    
    
    Other liquid resources (note 20)
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Currency and commodity contracts: designated as hedges (note 20)
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98Currency and commodity contracts: not designated as hedges (note 20)
    
    
    87
    
    
    
    
    
    
    
    
    
    
    
    87
    
    
    
    Loans to equity accounted units including quasi equity loans
    
    
    1,113
    
    
    
    1,113
    
    
    
    
    
    
    
    
    
    
    
    Total financial assets
    
    
    8,278
    
    
    
    7,828
    
    
    
    261
    
    
    
    87
    
    
    
    102Financial liabilitiesTrade and other payables (note 25)(b)
    
    
    (5,478
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,478
    )Short term borrowings and bank overdrafts (note 21 and 22)
    
    
    (10,034
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,034
    )Medium and long term borrowings (note 22)
    
    
    (29,724
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29,724
    )Deferred consideration (note 25)
    
    
    (318
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (318
    )Forward commodity contracts: designated as hedges (note 26)
    
    
    (257
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (257
    )Derivatives related to net debt (note 26)
    
    
    (99
    )
    
    
    
    
    
    
    
    
    
    
    (99
    )
    
    
    Other derivatives and embedded derivatives not designated
as hedges (note 26)
    
    
    (355
    )
    
    
    
    
    
    
    
    
    
    
    (355
    )
    
    
    Other financial liabilities (note 26)
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )Total financial liabilities
    
    
    (46,302
    )
    
    
    
    
    
    
    
    
    
    
    (454
    )
    
    
    (45,848
    )
  OtherAvailable
    
    
    
    
    
    
    financialLoans and
    
    
    for sale
    
    
    Held at
    
    
    assets andTotal
    
    
    receivables
    
    
    securities
    
    
    fair value
    
    
    liabilitiesUS$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mFinancial AssetsCash and cash equivalent assets (note 21)
    
    
    1,645
    
    
    
    1,645
    
    
    
    
    
    
    
    
    
    
    
    Trade and other receivables (note 17) (a)
    
    
    6,272
    
    
    
    6,272
    
    
    
    
    
    
    
    
    
    
    
    US Treasury bonds (note 20)
    
    
    21
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    Equity shares and quoted funds (note 20)
    
    
    374
    
    
    
    
    
    
    
    374
    
    
    
    
    
    
    
    Other investments, including loans (note 20)
    
    
    563
    
    
    
    563
    
    
    
    
    
    
    
    
    
    
    
    Other liquid resources (note 20)
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Currency and commodity contracts: designated as hedges (note 20)
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134Currency and commodity contracts: not designated as hedges (note 20)
    
    
    480
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    Derivatives related to net debt (note 20)
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    Loans to equity accounted units including quasi equity loans
    
    
    746
    
    
    
    746
    
    
    
    
    
    
    
    
    
    
    
    Total financial assets
    
    
    10,283
    
    
    
    9,226
    
    
    
    395
    
    
    
    522
    
    
    
    140Financial liabilitiesTrade and other payables (note 25)(b)
    
    
    (5,303
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,303
    )Short term borrowings and bank overdrafts (note 21 and 22)
    
    
    (8,213
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,213
    )Medium and long term borrowings (note 22)
    
    
    (38,656
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,656
    )Deferred consideration (note 25)
    
    
    (209
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (209
    )Forward commodity contracts: designated as hedges (note 26)
    
    
    (773
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (773
    )Derivatives related to net debt (note 26)
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    (15
    )
    
    
    Other derivatives and embedded derivatives not designated
as hedges (note 26)
    
    
    (591
    )
    
    
    
    
    
    
    
    
    
    
    (591
    )
    
    
    Other financial liabilities (note 26)
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49
    )Total financial liabilities
    
    
    (53,809
    )
    
    
    
    
    
    
    
    
    
    
    (606
    )
    
    
    (53,203
    )
 (a)
    
    This excludes pension surpluses, prepayment of tolling charges to jointly controlled entities and other prepayments and accrued
income.(b)
    
    Trade and other payables includes trade creditors, amounts owed to equity accounted units, other creditors excluding deferred
consideration shown separately and accruals.
 A-45




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##### Table of Contents



Notes to the 2008 Financial statements
 34
    
    FINANCIAL INSTRUMENTScontinued
 (B) Derivative financial instruments
  a) Forward contracts relating to operating transactions:
designated as hedges
 Assets
(note 20)
 Total fair
    
    
    Total fairvalue
    
    
    value2008
    
    
    2007Buy Australian dollar; sell US dollar
    
    US$m
    
    
    US$mLess than 1 year
    
    
    7
    
    
    
    34Between 1 and 5 years
    
    
    2
    
    
    
    25Total
    
    
    9
    
    
    
    59Other currency forward contracts
    
    
    12
    
    
    
    2Total currency forward contracts
    
    
    21
    
    
    
    61The above currency forward contracts were acquired with companies purchased in 2000
and were entered into by those companies in order to
reduce their exposure to the US dollar through forecast sales.Aluminium
forward contractsLess than 1 year
    
    
    
    
    
    
    25Total
    
    
    
    
    
    
    25Aluminium price exposures embedded in electricity purchase contractsLess than 1 year
    
    
    6
    
    
    
    1 to 5 years
    
    
    36
    
    
    
    Total
    
    
    42
    
    
    
    Coal forward contractsLess than 1 year
    
    
    35
    
    
    
    30Between 1 and 5 years
    
    
    
    
    
    
    8Total
    
    
    35
    
    
    
    38Total commodity forward contracts
    
    
    77
    
    
    
    63Total assets related to forward contracts designated as hedges
    
    
    98
    
    
    
    124
  Liabilities
(note 26)
 Total fair
    
    
    Total fairvalue
    
    
    value2008
    
    
    2007Copper forward contracts
    
    US$m
    
    
    US$mLess than 1 year
    
    
    (34
    )
    
    
    (153
    )Between 1 and 5 years
    
    
    (146
    )
    
    
    (344
    )More than 5 years
    
    
    
    
    
    
    (34
    )Total
    
    
    (180
    )
    
    
    (531
    )Coal (API #2) forward contractsLess than 1 year
    
    
    (18
    )
    
    
    (83
    )Between 1 and 5 years
    
    
    (4
    )
    
    
    (39
    )Total
    
    
    (22
    )
    
    
    (122
    )Coal (GC NewC) forward contractsLess than 1 year
    
    
    (31
    )
    
    
    (25
    )Between 1 and 5 years
    
    
    
    
    
    
    (9
    )Total
    
    
    (31
    )
    
    
    (34
    )Aluminium forward contracts embedded In electricity purchase contracts
    
    
    
    
    
    
    (26
    )Other commodity contracts
    
    
    
    
    
    
    (3
    )Total liabilities related to forward contracts designated as hedges
    
    
    (233
    )
    
    
    (716
    )
   A-46




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##### Table of Contents



Notes to the 2008 Financial statements
 34
    
    FINANCIAL INSTRUMENTScontinued
 b) Options relating to operating transactions: designated as
hedges
 Assets
(note 20)
 Total
    
    
    Totalfair value
    
    
    fair value2008
    
    
    2007Bought A$ call options
    
    US$m
    
    
    US$mLess than 1 year
    
    
    
    
    
    
    10Between 1 and 5 years
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    10
  Liabilities (note 26)
 Total
    
    
    Totalfair value
    
    
    fair value2008
    
    
    2007Aluminium options embedded In electricity purchase contracts
    
    US$m
    
    
    US$mLess than 1 year
    
    
    (1
    )
    
    
    (7
    )Between 1 and 5 years
    
    
    (23
    )
    
    
    (50
    )Total
    
    
    (24
    )
    
    
    (57
    )
  Reconciliation
to Balance Sheet categories for derivatives designated as
hedges
 2008
    
    
    2007US$m
    
    
    US$m- non-current assets (note 20)
    
    
    38
    
    
    
    34- current assets (note 20)
    
    
    60
    
    
    
    100- current liabilities (note 26)
    
    
    (84
    )
    
    
    (283
    )- non-current liabilities (note 26)
    
    
    (173
    )
    
    
    (490
    )Total derivatives designated as hedges, detailed above
    
    
    (159
    )
    
    
    (639
    )
    c) Forward and option contracts relating to operating
transactions: not designated as hedges
 Assets
 Total
    
    
    Totalfair value
    
    
    fair valueForward contracts
    
    2008
    
    
    2007Buy New Zealand dollar; sell US dollar
    
    US$m
    
    
    US$mLess than 1 year
    
    
    15
    
    
    
    40Between 1 and 5 years
    
    
    15
    
    
    
    63Total
    
    
    30
    
    
    
    103The above currency forward contracts relating to the New Zealand dollar were taken
out to manage exposures impacting on operating costs.Aluminium forward contractsLess than 1 year
    
    
    
    
    
    
    225Between 1 and 5 years
    
    
    
    
    
    
    17Total
    
    
    
    
    
    
    242The above aluminium forward contracts (acquired with Alcan) were taken out to manage
exposure to movements in the aluminium price. These
contracts are not designated as hedges as they are predominantly offset by other aluminium forward contracts.Buy EUR; sell USDLess than 1 year
    
    
    
    
    
    
    7Buy GBP; sell USDLess than 1 year
    
    
    
    
    
    
    1Total
    
    
    
    
    
    
    8
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##### Table of Contents



Notes to the 2008 Financial statements
 34
    
    FINANCIAL INSTRUMENTScontinued
 Option contracts
 Total
    
    
    Totalfair value
    
    
    fair value2008
    
    
    2007Aluminium options embedded in electricity purchase contracts
    
    US$m
    
    
    US$mLess than 1 year
    
    
    1
    
    
    
    11Between 1 and 5 years
    
    
    26
    
    
    
    56More than 5 years
    
    
    18
    
    
    
    17Total
    
    
    45
    
    
    
    84The above aluminium options embedded in electricity purchase contracts reduce
exposure to movements in the aluminium price.Others:Other embedded derivatives
    
    
    6
    
    
    
    13Other commodity contracts
    
    
    2
    
    
    
    5Other currency forward contracts and swaps
    
    
    4
    
    
    
    5Other option contracts
    
    
    
    
    
    
    20Total assets relating to derivatives not designated as hedges (note
20)
    
    
    87
    
    
    
    480
 Liabilities
 Total fair
    
    
    Total fairvalue
    
    
    valueForward contracts
    
    2008
    
    
    2007Aluminium forward contracts
    
    US$m
    
    
    US$mLess than 1 year
    
    
    (158
    )
    
    
    (212
    )Between 1 and 5 years
    
    
    (7
    )
    
    
    (16
    )Total
    
    
    (165
    )
    
    
    (228
    )The above aluminium forward contracts were taken out to manage exposure to movements
in the aluminium price. These contracts are
not designated as hedges as they are predominantly offset by other aluminium forward contracts.Aluminium options embedded in electricity purchase contractsLess than 1 year
    
    
    (10
    )
    
    
    (53
    )Between 1 and 5 years
    
    
    (79
    )
    
    
    (201
    )More than 5 years
    
    
    (73
    )
    
    
    (68
    )Total
    
    
    (162
    )
    
    
    (322
    )The above aluminium options embedded in electricity purchase contracts reduce
exposure to movements in the aluminium price.Others:Other currency derivative contracts
    
    
    (3
    )
    
    
    (5
    )Other embedded derivatives
    
    
    (20
    )
    
    
    (26
    )Other commodity contracts
    
    
    (5
    )
    
    
    (5
    )Other derivatives
    
    
    
    
    
    
    (5
    )Total liabilities relating to derivatives not designated as hedges (note
26)
    
    
    (355
    )
    
    
    (591
    )
 A-48




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##### Table of Contents



Notes
to the 2008 Financial statements
 34      FINANCIAL
INSTRUMENTS
 d) Currency and interest contracts relating to borrowings
 RestatedTotal fair
    
    
    Total fairvalue
    
    
    value2008
    
    
    2007Liabilities
    
    US$m
    
    
    US$mBuy Japanese yen: sell US dollarsLess than 1 year
    
    
    
    
    
    
    (1
    )Buy US dollar: sell GBP1 to 5 years
    
    
    (95
    )
    
    
    Other currency swaps
    
    
    (4
    )
    
    
    (6
    )Total currency swaps
    
    
    (99
    )
    
    
    (7
    )- designated as fair value hedges
    
    
    (99
    )
    
    
    (7
    )- not designated as hedges
    
    
    
    
    
    
    Interest contracts relating to borrowings: assets
    
    
    
    
    
    
    42Interest contracts relating to borrowings: liabilities
    
    
    
    
    
    
    (8
    )Total derivatives related to net debt
    
    
    (99
    )
    
    
    27
 Reconciliation
to Balance Sheet categories for currency and interest
derivatives
 2008
    
    
    2007US$m
    
    
    US$m- non-current assets (note 20)
    
    
    
    
    
    
    3- current assets (note 20)
    
    
    
    
    
    
    39- current liabilities (note 26)
    
    
    (4
    )
    
    
    (9
    )- non-current liabilities (note 26)
    
    
    (95
    )
    
    
    (6
    )Total currency and interest rate contracts, detailed above
    
    
    (99
    )
    
    
    27
   (C) Fair values
  Restated31 December 2008
    
    
    31 December 2007Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairvalue
    
    
    value
    
    
    value
    
    
    valueUS$m
    
    
    US$m
    
    
    US$m
    
    
    US$mPrimary financial instruments held or issued to finance the Groups operationsUS Treasury bonds (note 20)
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    21Equity shares and quoted funds (note 20)
    
    
    261
    
    
    
    261
    
    
    
    374
    
    
    
    374Other investments, including loans (note 20)
    
    
    480
    
    
    
    480
    
    
    
    563
    
    
    
    563Cash and cash equivalent assets (note 21)
    
    
    1,181
    
    
    
    1,181
    
    
    
    1,645
    
    
    
    1,645Other liquid resources (note 20)
    
    
    4
    
    
    
    4
    
    
    
    6
    
    
    
    6Short term borrowings and bank overdrafts (notes 21 and 22)
    
    
    (10,034
    )
    
    
    (10,059
    )
    
    
    (8,213
    )
    
    
    (8,225
    )Medium and long term borrowings (note 22)
    
    
    (29,724
    )
    
    
    (29,752
    )
    
    
    (38,656
    )
    
    
    (38,669
    )Loans to equity accounted units including quasi equity
    
    
    1,113
    
    
    
    1,113
    
    
    
    746
    
    
    
    746Deferred consideration (note 25)
    
    
    (318
    )
    
    
    (318
    )
    
    
    (209
    )
    
    
    (209
    )Other financial liabilities (note 26)
    
    
    (37
    )
    
    
    (37
    )
    
    
    (49
    )
    
    
    (49
    )(37,074
    )
    
    
    (37,127
    )
    
    
    (43,772
    )
    
    
    (43,797
    )Derivatives:Forward contracts: cash flow hedge (Section B (a) of note 34)
    
    
    (135
    )
    
    
    (135
    )
    
    
    (592
    )
    
    
    (592
    )Option contracts: cash flow hedge (Section B (b) of note 34)
    
    
    (24
    )
    
    
    (24
    )
    
    
    (47
    )
    
    
    (47
    )Forward contracts and option contracts not designated (Section B (c) of note 34)
    
    
    (268
    )
    
    
    (268
    )
    
    
    (111
    )
    
    
    (111
    )Currency swaps hedging borrowings (Section B (d) of note 34)
    
    
    (99
    )
    
    
    (99
    )
    
    
    (7
    )
    
    
    (7
    )Interest rate swap agreements (Section B (d) of note 34)
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    34(37,600
    )
    
    
    (37,653
    )
    
    
    (44,495
    )
    
    
    (44,520
    )
 A-49




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##### Table of Contents



Notes to the 2008 Financial statements
 
 35      CONTINGENT LIABILITIES AND COMMITMENTS
 2008
    
    
    2007US$m
    
    
    US$mCapital commitments (excluding those related to joint ventures and associates)Contracted capital expenditure: property, plant and equipment (a)
    
    
    3,247
    
    
    
    2,857Other commitments
    
    
    18
    
    
    
    75Capital commitments relating to joint ventures and associates(b)Capital commitments incurred by the Group
    
    
    376
    
    
    
    238Capital commitments incurred jointly with other venturers (Rio Tinto share)
    
    
    713
    
    
    
    808
 Operating leases
  2008
    
    
    2007US$m
    
    
    US$mWithin 1 year
    
    
    336
    
    
    
    283Between 1 and 5 years
    
    
    910
    
    
    
    985After 5 years
    
    
    315
    
    
    
    5141,561
    
    
    
    1,782
 Unconditional purchase obligations
  2008
    
    
    2007US$m
    
    
    US$mWithin 1 year
    
    
    1,245
    
    
    
    1,525Between 1 and 2 years
    
    
    870
    
    
    
    814Between 2 and 3 years
    
    
    773
    
    
    
    757Between 3 and 4 years
    
    
    648
    
    
    
    561Between 4 and 5 years
    
    
    505
    
    
    
    5184,041
    
    
    
    4,175
  2008
    
    
    2007US$m
    
    
    US$mContingent liabilities (excluding those relating to joint ventures and associates)Indemnities and other performance guarantees
    
    
    329
    
    
    
    235Contingent liabilities relating to joint ventures and associates(b)Share of contingent liabilities of joint ventures and associates
    
    
    5
    
    
    
    6Incurred in relation to interests in joint ventures
    
    
    187
    
    
    
    435Incurred in relation to other venturers contingent liabilities
    
    
    67
    
    
    
    63
 (a)
    
    The Groups commitment to reduce capital expenditure in 2009 has resulted in capital projects being slowed or deferred. As a result US$472 million
of capital commitment contracts, relating to 2009, have been cancelled subsequent to the balance sheet date. However these contracts or equivalent
contracts may be renegotiated should the transaction with Chinalco be approved (see note 47).(b)
    
    Amounts disclosed include those arising as a result of the Groups investments in both jointly controlled assets and jointly controlled entities.(c)
    
    The disagreement with the Australian tax office relating to certain transactions undertaken in 1997 to acquire franking credits was settled on
14 June 2007, resulting in an additional tax charge of US$46 million for the year to 31 December 2007.(d)
    
    There are a number of legal claims currently outstanding against the Group. No material loss to the Group is expected to result from these claims.
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##### Table of Contents



Notes to the 2008 Financial statements
 
 36      AVERAGE NUMBER OF EMPLOYEES
 Subsidiaries and proportionallyconsolidated units2008
    
    
    2007
    
    
    2006The principal locations of employment were:Australia and New Zealand
    
    
    17,875
    
    
    
    14,065
    
    
    
    11,636North America
    
    
    23,167
    
    
    
    13,363
    
    
    
    10,201Africa
    
    
    6,329
    
    
    
    5,548
    
    
    
    4,269Europe
    
    
    16,909
    
    
    
    4,623
    
    
    
    1,468South America
    
    
    2,909
    
    
    
    1,348
    
    
    
    874Indonesia
    
    
    2,206
    
    
    
    2,125
    
    
    
    1,969Other countries
    
    
    942
    
    
    
    286
    
    
    
    225Discontinued operations
    
    
    28,386
    
    
    
    5,680
    
    
    
    98,723
    
    
    
    47,038
    
    
    
    30,642
 Equity accounted units(Rio Tinto share) (a)2008
    
    
    2007
    
    
    2006The principal locations of employment were:Australia and New Zealand
    
    
    2,471
    
    
    
    2,289
    
    
    
    2,192North America
    
    
    370
    
    
    
    376
    
    
    
    311Africa
    
    
    1,980
    
    
    
    585
    
    
    
    521Europe
    
    
    520
    
    
    
    367
    
    
    
    507South America
    
    
    1,116
    
    
    
    905
    
    
    
    1,072Other countries
    
    
    605
    
    
    
    117
    
    
    
    7,062
    
    
    
    4,639
    
    
    
    4,603
 Group Total2008
    
    
    2007
    
    
    2006The principal locations of employment were:Australia and New Zealand
    
    
    20,346
    
    
    
    16,354
    
    
    
    13,828North America
    
    
    23,537
    
    
    
    13,739
    
    
    
    10,512Africa
    
    
    8,309
    
    
    
    6,133
    
    
    
    4,790Europe
    
    
    17,429
    
    
    
    4,990
    
    
    
    1,975South America
    
    
    4,025
    
    
    
    2,253
    
    
    
    1,946Indonesia
    
    
    2,206
    
    
    
    2,125
    
    
    
    1,969Other countries
    
    
    1,547
    
    
    
    403
    
    
    
    225Discontinued operations
    
    
    28,386
    
    
    
    5,680
    
    
    
    105,785
    
    
    
    51,677
    
    
    
    35,245
 (a)
    
    Employee numbers, which represent the average for the year, include 100 per cent of employees of subsidiary companies. Employee numbers
for proportionally consolidated and equity accounted units are proportional to the Groups interest. Average employee numbers include a part
year effect for companies acquired or disposed of during the year.(b)
    
    Part time employees are included on a full time equivalent basis. Temporary employees are included in employee numbers.(c)
    
    People employed by contractors are not included.(d)
    
    Rio Tinto Alcans employees in 2007 are shown on a pro rata basis.
 A-51




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##### Table of Contents



Notes to the 2008 Financial statements
 
 37      PRINCIPAL SUBSIDIARIES
 At 31 December 2008
 Company and country of
    
    
    
    Class of
    
    Proportion of
    
    Groupincorporation/operation
    
    Principal activities
    
    shares held
    
    class held %
    
    interest %AustraliaArgyle Diamond Mines
    
    Mining and processing of diamonds
    
    (a)
    
    
    100
    
    
    
    100Coal & Allied Industries Limited
    
    Coal mining
    
    Ordinary
    
    
    75.71
    
    
    
    75.71Dampier Salt Limited
    
    Salt production
    
    Ordinary
    
    
    68.40
    
    
    
    68.40Energy Resources of Australia Limited
    
    Uranium mining
    
    Class A
    
    
    68.39
    
    
    
    68.39Hamersley Iron Pty Limited
    
    Iron ore mining
    
    Ordinary
    
    
    100
    
    
    
    100Queensland Coal Pty Limited (b)
    
    Coal mining
    
    Ordinary
    
    
    100
    
    
    
    100Rio Tinto Aluminium (Holdings) Limited
    
    Bauxite mining; alumina production;
primary aluminium smelting
    
    Ordinary
    
    
    100
    
    
    
    100CanadaIron Ore Company of Canada Inc.
    
    Iron ore mining; iron ore pellets
    
    Series A & E
    
    
    58.72
    
    
    
    58.72QIT-Fer et Titane Inc.
    
    Titanium dioxide feedstock; high
purity iron and steel
    
    Common shares 

Class B preference shares
    
    
    100
100
    
    
    
    100
100Rio Tinto Alcan Inc. (c)
    
    Bauxite mining; alumina refining;
production of specialty alumina;
aluminium smelting, manufacturing
and recycling; engineered products;
flexible and specialty packaging
    
    Common shares
    
    
    100
    
    
    
    100FranceTalc de Luzenac France S.A.
    
    Mining, refining and marketing of talc
    
    E 15.25
    
    
    100
    
    
    
    100IndonesiaP.T. Kelian Equatorial Mining
    
    Gold mining (now in close down phase)
    
    Ordinary US$1
    
    
    90
    
    
    
    90NamibiaRössing Uranium Limited (d)
    
    Uranium mining
    
    B N$1
    
    
    71.16
    }
    
    
    68.58C N10c
    
    
    70.59Papua New GuineaBougainville Copper Limited (e)
    
    Copper and gold mining
    
    Ordinary 1 Kina
    
    
    53.58
    
    
    
    53.58South AfricaPalabora Mining Company Limited
    
    Copper mining, smelting and refining
    
    R1
    
    
    72.03
    
    
    
    57.67Richards Bay Iron and Titanium
(Pty) Limited
    
    Titanium dioxide feedstock; high purity
iron
    
    R1
    
    
    50.50
    
    
    
    50United States of AmericaKennecott Holdings Corporation
     (including Kennecott Utah Copper,
    
    Copper and gold mining,
smelting and refining, land development and exploration activities
    
    Common US$0.01
    
    
    100
    
    
    
    100Kennecott Minerals, Kennecott Land
and Kennecott Exploration)Rio Tinto Energy America Inc.
    
    Coal mining
    
    Common US$0.01
    
    
    100
    
    
    
    100U.S. Borax Inc.
    
    Mining, refining and marketing of borates
    
    Common US$1
    
    
    100
    
    
    
    100
 (a)
    
    This entity is unincorporated.(b)
    
    Queensland Coal Pty Limited is the main legal entity that owns the shares shown in note 40 of Hail Creek, Blair Athol and Kestrel.(c)
    
    On 23 October 2007, the Rio Tinto Group acquired a controlling 79.42 per cent interest in the issued share capital of Alcan Inc. The remaining
20.58 per cent was acquired by 14 November 2007. See note 41.(d)
    
    The Groups shareholding in Rössing Uranium Limited carries 35.54 per cent of the total voting rights. Rössing is consolidated by virtue
of Board control.(e)
    
    The results of Bougainville Copper Limited are not consolidated. See note 46.(f)
    
    The Group comprises a large number of companies and it is not practical to include all of them in this list. The list therefore only includes those
companies that have a more significant impact on the profit or assets of the Group.(g)
    
    The Groups principal subsidiaries are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.(h)
    
    Companies operate mainly in the countries in which they are incorporated.
 A-52




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##### Table of Contents



Notes to the 2008 Financial statements38
    
    PRINCIPAL JOINTLY CONTROLLED ENTITIES
 At 31 December 2008
 Company and country of
    
    
    
    Number of
        
    Class of
    
    Proportion of
    
    Groupincorporation/operation
    
    Principal activities
    
    shares held
        
    shares held
    
    class held %
    
    interest %AustraliaBoyne Smelters Limited (g)
    
    Aluminium smelting
    
    
    153,679,560
    
    
    Ordinary
    
    
    59.4
    
    
    
    59.4Leichhardt Coal  Limited (b)
    
    Coal mining
    
    
    20,115,000
    
    
    Ordinary
    
    
    44.7
    
    
    
    44.7Queensland Alumina Limited (g)
    
    Alumina production
    
    
    1,769,600
    
    
    Ordinary
    
    
    80
    
    
    
    80ChileMinera Escondida Limitada (c)
    
    Copper mining and refining
    
    
    
    
    
    
    
    
    30
    
    
    
    30ChinaAlcan Ningxia Aluminium Company 
Limited (h)
    
    Aluminium smelting, alloy
production, aluminium
product manufacture
    
    
    459,500,000
    
    
    RMBY
    
    
    50
    
    
    
    50New ZealandNew Zealand Aluminium Smelters 
Limited (g)
    
    Aluminium smelting
    
    
    24,998,400
    
    
    Ordinary
    
    
    79.36
    
    
    
    79.36NorwaySor-Norge Aluminium A.S.
    
    Aluminium smelting
    
    
    500,000
    
    
    Ordinary
    
    
    50
    
    
    
    50OmanSohar Aluminium Company L.L.C.
    

Aluminium smelting /power
generation
    
    
    37,500
    
    
    OMR1
    
    
    20
    
    
    
    20United KingdomAnglesey Aluminium Metal Limited (g)
    
    Aluminium smelting
    
    
    13,387,500
    
    
    Ordinary £1
    
    
    51
    
    
    
    51Hydrogen Energy
    
    Alternative energy
    
    
    1,187,500
    
    
    Ordinary £1
    
    
    50
    
    
    
    50United States of AmericaDecker Coal Company
    
    Coal mining
    
    
    (d
    )
    
    (d)
    
    
    (d
    )
    
    
    50Halco (Mining) Inc.
    
    (e)
    
    
    4,500
    
    
    Common
    
    
    45
    
    
    
    45Pechiney Reynolds Quebec Inc.
    
    (f)
    
    
    100
    
    
    Common
    
    
    50
    }
    
    
    50.31
    
    
    Preferred
    
    
    100
 (a)
    
    The Group has joint control of the above operations which, except as disclosed in note (d)
below, are independent legal entities. It therefore
includes them in its accounts using the equity accounting method.(b)
    
    Leichhardt has a 31.4 per cent interest in the Blair Athol joint venture. As a result, the
Group has a further beneficial interest of 14 per cent in
addition to its direct interest of 57.2 per cent, which is owned via a subsidiary of Rio
Tinto Limited. The Blair Athol joint venture is disclosed
as a jointly controlled asset in note 40.(c)
    
    The year end of Minera Escondida Limitada is 30 June. However, the amounts included in the
consolidated financial statements of Rio Tinto are
based on accounts of Minera Escondida Limitada that are coterminous with those of the Group.(d)
    
    This operation is unincorporated. The joint venture agreement creates an arrangement that is
similar in form to a partnership, and it is therefore
classified as a jointly controlled entity.(e)
    
    Halco has a 51 per cent indirect interest in Compagnie des Bauxites de Guinée, a bauxite mine,
the core assets of which are located in Guinea.(f)
    
    Pechiney Reynolds Quebec has a 50.1 per cent interest in the Aluminerie de Becancour aluminium
smelter, which is located in
Canada.(g)
    
    While the Group holds more than a 50 per cent interest in these entities, other participants
have veto rights over operating, financing and
strategic decision making. Accordingly, the Group does not have the ability to unilaterally
control, and therefore does not consolidate these
entities.(h)
    
    In January 2009 the Groups interest in Alcan Ningxia was sold for a gross cash consideration
of US$125 million.(i)
    
    The Group comprises a large number of operations and it is not practical to include all of them
in this list. The list therefore only includes those
jointly controlled entities that have a more significant impact on the profit or operating
assets of the Group.(j)
    
    The Groups principal jointly controlled entities are held by intermediate holding companies
and not directly by Rio Tinto plc or Rio Tinto Limited.(k)
    
    With the exception of (e) and (f) above, all jointly controlled entities operate mainly in the
countries in which they are incorporated.
 A-53




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##### Table of Contents



Notes to the 2008 Financial statements39
    
    PRINCIPAL ASSOCIATES
 At 31 December 2008
 Company and country of
    
    
    
    Number of
    
    Class of
    
    Proportion of
    
    Groupincorporation/operation
    
    Principal activities
    
    shares held
    
    shares held
    
    class held %
    
    interest %BrazilMineração Rio do Norte SA (a)
    
    Bauxite mining
    
    
    25,000,000
    
    
    Ordinary
    
    
    12.5
    }
    
    
    1247,000,000
    
    
    Preferred
    
    
    11.8CameroonCompagnie Camerounaise de
lAluminum
    
    Aluminium smelting
    
    
    1,623,127
    
    
    XAF
    
    
    46.7
    
    
    
    46.7CanadaIvanhoe Mines Ltd (b)
    
    Copper and gold mining
    
    
    37,333,655
    
    
    Common
    
    
    9.95
    
    
    
    9.95South AfricaTisand (Pty) Limited
    
    Ilmenite, rutile and zircon mining
    
    
    7,353,675
    
    
    R1
    
    
    49
    
    
    
    50
 (a)
    
    Mineração Rio do Norte SA is accounted for as an associated company because the Group has
significant influence through representation on its
Board of Directors.(b)
    
    Ivanhoe Mines Ltd is accounted for as an associated company because the Group has significant
influence through representation on its Board
of Directors and participation in the technical committee that will be responsible for its
Oyu Tolgoi project. Rio Tinto has the ability to increase
progressively its stake to 43 per cent over the next four years at predetermined prices
involving an additional investment of US$1.5 billion.(c)
    
    On 5 March 2008, the Group completed the sale of its interest in the Cortez gold mine
(previously in the Copper product group) for a sales price
which included cash consideration of US$1,695 million. The Group will benefit from a
deferred bonus payment in the event of a significant
discovery of additional reserves and resources at the Cortez mine and also will retain a
contingent royalty interest in the future production
of the property. See note 41.(d)
    
    The Groups principal associates are held by intermediate holding companies and not directly by
Rio Tinto plc or Rio Tinto Limited.(e)
    
    The Group comprises a large number of operations and it is not practical to include all of them
in this list. The list therefore only includes those
associates that have a more significant impact on the profit or operating assets of the
Group.(f)
    
    With the exception of Ivanhoe Mines Ltd, the core assets of which are located in Mongolia, all
associates operate mainly in the countries in which
they are incorporated.
 40
    
    PRINCIPAL JOINTLY CONTROLLED ASSETS AND OTHER PROPORTIONALLY CONSOLIDATED UNITS
 At 31 December 2008
 Name and country
    
    
    
    Groupof operation
    
    Principal activities
    
    interest %AustraliaTomago Aluminium Joint Venture
    
    Aluminium smelting
    
    
    51.6Bengalla (b)
    
    Coal mining
    
    
    30.3Blair Athol Coal (c)
    
    Coal mining
    
    
    71.2Hail Creek
    
    Coal mining
    
    
    82Kestrel
    
    Coal mining
    
    
    80Mount Thorley (d)
    
    Coal mining
    
    
    60.6Warkworth
    
    Coal mining
    
    
    42.1Northparkes Mine
    
    Copper/gold mining and processing
    
    
    80Gladstone Power Station
    
    Power generation
    
    
    42.1Robe River Iron Associates
    
    Iron ore mining
    
    
    53Hope Downs Joint Venture
    
    Iron ore mining
    
    
    50HIsmelt®
    
    Iron technology
    
    
    60BrazilConsórcio de Alumínio Maranhão
    
    Alumina production
    
    
    10CanadaDiavik
    
    Mining and processing of diamonds
    
    
    60IndonesiaGrasberg expansion
    
    Copper and gold mining
    
    
    40
 (a)
    
    The Group comprises a large number of operations, and it is not practical to include all of
them in this list. The list therefore only includes those
proportionally consolidated units that have a more significant impact on the profit or
operating assets of the Group.(b)
    
    The Group owns a 40 per cent interest in Bengalla through its 75.71 per cent investment in Coal
and Allied, giving a beneficial interest
to the Group of 30.3 per cent.(c)
    
    The Group has a direct interest of 57.2 per cent in Blair Athol Coal, and an additional 14 per
cent interest through its investment in
Leichhardt Coal Pty Limited, which is disclosed as a jointly controlled entity in note 38.(d)
    
    The Group owns an 80 per cent interest in Mount Thorley through its 75.71 per cent investment
in Coal and Allied, giving a beneficial interest
to the Group of 60.6 per cent.(e)
    
    On 16 April 2008, the Group completed the sale of its joint venture interest in the Greens
Creek mine to Hecla Mining Company.
Greens Creek, which mines silver, gold, zinc and lead, was previously part of the Copper
product group. The sale price was US$750 million,
comprising a cash component of US$700 million with the balance in the common stock of Hecla
Mining Company. See note 41.(f)
    
    The Groups proportionally consolidated units are held by intermediate holding companies and
not directly by Rio Tinto plc or Rio Tinto Limited.
 A-54




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##### Table of Contents



Notes to the 2008 Financial statements41
    
    PURCHASES AND SALES OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER INTERESTS IN BUSINESSES
 2008 Acquisitions
  2007 Acquisitions
 Alcan acquisition
     Provisional
    
    
    
    
    
    
    Finalfair value
    
    
    Further
    
    
    fair valueto Group
    
    
    adjustments
    
    
    to GroupAt 23 October 2007
    
    US$m
    
    
    US$m
    
    
    US$mIntangible assets
    
    
    7,467
    
    
    
    (1,106
    )
    
    
    6,361Property, plant & equipment
    
    
    18,282
    
    
    
    (3,679
    )
    
    
    14,603Equity method investments
    
    
    4,185
    
    
    
    (1,294
    )
    
    
    2,891Inventories
    
    
    2,856
    
    
    
    15
    
    
    
    2,871Assets held for sale
    
    
    6,984
    
    
    
    
    
    
    
    6,984Cash
    
    
    991
    
    
    
    
    
    
    
    991Deferred tax assets
    
    
    228
    
    
    
    
    
    
    
    228Other assets
    
    
    4,584
    
    
    
    156
    
    
    
    4,740Loans and borrowings
    
    
    (5,465
    )
    
    
    (42
    )
    
    
    (5,507
    )Liabilities of disposal groups held for sale
    
    
    (2,642
    )
    
    
    
    
    
    
    (2,642
    )Deferred tax liabilities
    
    
    (4,182
    )
    
    
    1,574
    
    
    
    (2,608
    )Provisions for liabilities and charges
    
    
    (4,638
    )
    
    
    (1,083
    )
    
    
    (5,721
    )Other liabilities
    
    
    (4,476
    )
    
    
    (180
    )
    
    
    (4,656
    )Minority interest
    
    
    (55
    )
    
    
    31
    
    
    
    (24
    )Goodwill
    
    
    14,533
    
    
    
    5,608
    
    
    
    20,141Net attributable assets including goodwill
    
    
    38,652
    
    
    
    
    
    
    
    38,652Total consideration:Cost of shares
    
    
    
    
    
    
    
    
    
    
    37,996Acquisition costs
    
    
    
    
    
    
    
    
    
    
    74Liabilities assumed
    
    
    
    
    
    
    
    
    
    
    132Loans to acquired subsidiary
    
    
    
    
    
    
    
    
    
    
    450Total consideration  Alcan
    
    
    
    
    
    
    
    
    
    
    38,652Other subsidiaries and equity accounted units acquired
    
    
    
    
    
    
    
    
    
    
    54Total consideration
    
    
    
    
    
    
    
    
    
    
    38,706Cash outflow on acquisitions:Total consideration
    
    
    
    
    
    
    
    
    
    
    38,706Net cash of acquired companies
    
    
    
    
    
    
    
    
    
    
    (991
    )Liabilities assumed
    
    
    
    
    
    
    
    
    
    
    (132
    )Other (including disposal proceeds of US$13 million)
    
    
    
    
    
    
    
    
    
    
    (57
    )Net acquisitions per cash flow statement
    
    
    
    
    
    
    
    
    
    
    37,526
 A-55




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##### Table of Contents



Notes to the 2008 Financial statements41
    
    PURCHASES AND SALES OF SUBSIDIARIES, JOINT VENTURES, ASSOCIATES AND OTHER INTERESTS IN BUSINESSEScontinued
 In accordance with the requirements of IFRS 3, the Group balance sheet as at acquisition has been restated to incorporate the final fair values
above. No amendment has been made to the Group income statement for 2007 to take into account the revised depreciation, amortisation and
amortisation of discount related to provisions as the effect was not deemed material. Accordingly, the income statement effect has been recorded
in 2008 and the further adjustments above also impact the Group balance sheet as at 31 December 2007.The main adjustments to the provisional fair values relate to:
 -
    
    The fair value of the Engineered Products business was reduced based on a further assessment of the amount for which such businesses could
be sold at the date of the acquisition.-
    
    The fair value attributed to the facilities within Bauxite & Alumina was reduced based on further analysis of the operating capability
of related expansion projects.-
    
    Provisions for environmental clean up and closure obligations were increased following a detailed assessment of the costs and
timing of closure of smelters, refineries and mines. The timing of closure was assessed having regard to the prospects for continued
access to economic sources of power beyond the term of existing contracts.-
    
    The value attributed to water rights in Canada was reduced after a further assessment of the capital investment, which will be required to benefit
from these sources of hydro-electric power.
 From the date of acquisition to 31 December 2007, Alcans sales revenue of US$3,544 million (excluding equity accounted units) and profit after tax
of US$293 million attributable to continuing operations were included in the Groups 2007 income statement.The following pro forma summary presents the Group as if Alcan Inc. had been acquired on 1 January 2007. The pro forma information includes the
results of the acquired group, recognising the depreciation and amortisation of the final fair values attributed to the assets acquired and the interest
expense on debt incurred as a result of the acquisition. The pro forma interest charge for the whole of 2007 on the acquisition debt has been based on
the one month LIBOR rate as at 31 December 2007, of 4.6 per cent. Pro forma profit for the year also includes the tax effects on foreign exchange gains
and losses relating to third party and intercompany debt, which would have resulted from the strengthening of the Canadian dollar during 2007. The
pro forma information has been adjusted to reflect the effects of incorporating the final fair values noted above. It does not take account of synergies
anticipated as a result of the acquisition; but includes non recurring costs borne by Alcan Inc. relating to the acquisition and suffers the costs of
financing assets held for sale. The pro forma information does not necessarily reflect the actual results that would have occurred, nor is it necessarily
indicative of future results of operations of the combined companies.
 Restated31 December2007US$mConsolidated sales revenue
    
    
    45,590Profit for the year (including amounts attributable to outside equity shareholders)
    
    
    7,473
 2006 Acquisitions
 Ownership
    
    
    Date ofName of operation
    
    Location
    
    Principal activities
    
    acquired %
    
    
    acquisitionAssociatesIvanhoe Mines
    
    Canada
    
    Copper and gold mining
    
    
    9.95
    
    
    18 October 2006Proportionally consolidated unitsHope Downs Joint Venture
    
    Australia
    
    Iron ore mining
    
    
    50
    
    
    16 March 20062008 DisposalsOwnership
    
    
    Date ofName of operation
    
    Location
    
    Principal activities
    
    disposed of %
    
    
    disposalPrincipal associatesCortez
    
    USA
    
    Gold mining
    
    
    40
    
    
    5 March 2008Jointly controlled assetsGreens Creek
    
    USA
    
    Silver, gold, zinc and lead mining
    
    
    70.3
    
    
    16 April 2008
 (a)
    
    The aggregate profit on disposal of interests in businesses (including investments) in 2008 was
US$2,231 million (US$1,470 million net of tax).
These gains have been excluded from Underlying earnings, as shown in note 2.(b)
    
    The Cash flow statement includes the following relating to acquisitions and disposals of
interests in businesses:
 -
    
    US$2,563 million in Net disposals/(acquisitions) of subsidiaries, joint ventures &
associates, comprising US$2,572 million in disposal proceeds,
net of US$9 million paid for acquisitions . In accordance with IAS 7, these proceeds were
stated net of US$5 million cash and cash equivalents
transferred on sale of subsidiaries.
 (c)
    
    Non-cash disposal proceeds of US$88 million were received during the year.2007 DisposalsThere were no significant disposals in 2007.2006 Disposals
 Ownership
    
    
    Date ofName of operation
    
    Location
    
    Principal activities
    
    disposed of %
    
    
    disposalJointly controlled entitiesEurallumina SpA
    
    Italy
    
    Alumina production
    
    
    56.16
    
    
    2 November 2006
 (a)
    
    The aggregate profit on disposal of interests in businesses in 2006 was US$5 million (US$3
million net of tax). These gains have been excluded
from Underlying earnings, as shown in note 2.(b)
    
    The Cash flow statement includes the following relating to acqusitions and disposals of
interests in businesses:
 -
    
    US$279 million in (Acquisitions) / disposals of subsidaries, joint ventures and
associates, comprising US$303 million paid for acquisitions, net of
US$24 million of disposal proceeds. In accordance with IAS 7, these proceeds were stated net
of US$17 million of cash and cash equivalents
transferred on sale of subsidaries.-
    
    US$167 million included in Purchase of financial assets.
 (c)
    
    Non cash disposal proceeds of US$23 million were received during the year.
 A-56




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##### Table of Contents



Notes to the 2008 Financial statements42
    
    DIRECTORS AND KEY MANAGEMENT REMUNERATION
  2008
    
    
    2007
    
    
    2006US$000
    
    
    US$000
    
    
    US$000Emoluments
    
    
    10,620
    
    
    
    11,103
    
    
    
    9,852Long term incentive plans
    
    
    2,647
    
    
    
    9,573
    
    
    
    25513,267
    
    
    
    20,676
    
    
    
    10,107Pension contributions: defined contribution plans
    
    
    338
    
    
    
    130
    
    
    
    60Gains made on exercise of share options
    
    
    
    
    
    
    
    
    
    
    1,260
     Remuneration report
  2008
    
    
    2007
    
    
    2006US$000
    
    
    US$000
    
    
    US$000Short term employee benefits and costs
    
    
    21,086
    
    
    
    25,826
    
    
    
    20,663Post employment benefits
    
    
    3,664
    
    
    
    4,480
    
    
    
    3,444Other long term benefits
    
    
    
    
    
    
    2,537
    
    
    
    737Termination benefits
    
    
    
    
    
    
    817
    
    
    
    Share based payments
    
    
    (5,360
    )
    
    
    41,540
    
    
    
    1,63119,390
    
    
    
    75,200
    
    
    
    26,475
  Remuneration report
 A-57




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##### Table of Contents



Notes to the 2008 Financial statements43
    
    AUDITORS REMUNERATION
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mGroup Auditors remuneration(a)Audit services pursuant to legislation- audit of the Groups annual accounts
    
    
    3.2
    
    
    
    3.0
    
    
    
    2.8- audit of the accounts of the Groups subsidiaries (b)
    
    
    26.5
    
    
    
    27.7
    
    
    
    8.0Audit services in connection with divestment programme (g)
    
    
    24.4
    
    
    
    2.8
    
    
    
    54.1
    
    
    
    33.5
    
    
    
    10.8Other services- other services supplied pursuant to legislation (h)
    
    
    
    
    
    
    
    
    
    
    2.4- services in connection with bid defence
    
    
    9.4
    
    
    
    2.5
    
    
    
    - services in connection with divestment programme
    
    
    25.8
    
    
    
    0.9
    
    
    
    - taxation services (c)
    
    
    3.3
    
    
    
    0.8
    
    
    
    0.8- other services (d)
    
    
    2.6
    
    
    
    4.0
    
    
    
    0.9Total other services
    
    
    41.1
    
    
    
    8.2
    
    
    
    4.1Fees in respect of pension scheme audits
    
    
    
    
    
    
    
    
    
    
    0.195.2
    
    
    
    41.7
    
    
    
    15.0Remuneration payable to other accounting firms(e)Audit services pursuant to legislation- audit of accounts of the Groups subsidiaries (b)
    
    
    0.2
    
    
    
    0.4
    
    
    
    0.3Non audit services- taxation services (c)
    
    
    15.8
    
    
    
    3.7
    
    
    
    2.8- financial systems design and implementation
    
    
    0.2
    
    
    
    0.3
    
    
    
    0.3- internal audit
    
    
    7.1
    
    
    
    4.4
    
    
    
    4.2- litigation services
    
    
    
    
    
    
    0.1
    
    
    
    0.1- other services (f)
    
    
    42.0
    
    
    
    7.0
    
    
    
    7.165.3
    
    
    
    15.9
    
    
    
    14.8Fees in respect of pension scheme audits
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.265.6
    
    
    
    16.2
    
    
    
    15.0160.8
    
    
    
    57.9
    
    
    
    30.0
 (a)
    
    The remuneration payable to PricewaterhouseCoopers, the Group Auditors, is approved by the
Audit committee. The committee sets the
policy for the award of non audit work to the auditors and approves the nature and extent of
such work, and the amount of the related fees,
to ensure that independence is maintained. The fees disclosed above consolidate all
payments made to PricewaterhouseCoopers by the
Companies and their subsidiaries, together with the Groups share of the payments made by
proportionally consolidated units. Non-audit
services arise largely from assurance and/or regulation related work.(b)
    
    Fees payable for the audit of the accounts of the Groups subsidiaries includes the statutory
audit of subsidiaries and other audit work
performed to support the audit of the Group financial statements. This includes the full
costs relating to the audit of Alcan Inc. and its
subsidiaries of US$15.9 million (2007: US$18.8 million;
2006: nil).(c)
    
    Taxation services includes tax compliance and advisory services. Tax compliance involves the
preparation or review of returns for corporation,
income, sales and excise taxes. Tax advisory services includes advice on non recurring
acquisitions and disposals, advice on transfer pricing and
advice on employee global mobility.(d)
    
    In 2007, other services include fees in connection with the acquisition of Alcan Inc.(e)
    
    Remuneration payable to other accounting firms does not include fees for similar services
payable to suppliers of consultancy services
other than accountancy firms.(f)
    
    Other services in respect of other accounting firms includes one off costs related to the
rejection by the Board of the pre-conditional takeover proposal
from BHP Billiton which was withdrawn in November. It also includes costs relating to
divestments and similar corporate services, pension fund and
payroll administration, advice on accounting matters, secondments of accounting firms
staff, forensic audit, advisory services in connection with
Section 404 of the Sarbanes-Oxley Act and other consultancy.(g)
    
    Audit services represent assurance provided in respect of carve-out financial statements.(h)
    
    Other services supplied pursuant to legislation primarily relates to preparatory work relating
to compliance with the Sarbanes-Oxley Act.
 A-58




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##### Table of Contents



Notes to the 2008 Financial statements44
    
    RELATED PARTY TRANSACTIONS
  Subsidiary companies and proportionally consolidated units
   Equity accounted units
  2008
    
    
    2007
    
    
    2006Income statement items
    
    US$m
    
    
    US$m
    
    
    US$mPurchases from equity accounted units
    
    
    (2,770
    )
    
    
    (1,538
    )
    
    
    (1,364
    )Sales to equity accounted units
    
    
    3,011
    
    
    
    1,338
    
    
    
    1,497RestatedBalance sheet items
    
    US$m
    
    
    US$mInvestments in equity accounted units (note 14) (a)
    
    
    5,053
    
    
    
    5,744Loans to equity accounted units
    
    
    515
    
    
    
    384Loans from equity accounted units
    
    
    (195
    )
    
    
    (174
    )Trade and other receivables: amounts due from equity accounted units (note 17)
    
    
    688
    
    
    
    804Trade and other payables: amounts due to equity accounted units (note 25)
    
    
    (280
    )
    
    
    (219
    )Cash flow statement items
    
    US$m
    
    
    US$m
    
    
    US$mNet funding of equity accounted units
    
    
    (334
    )
    
    
    (216
    )
    
    
    (47
    )
 (a)
    
    Further information about investments in equity accounted units is set out in notes 38 and 39.Pension fundsInformation relating to pension fund arrangements is disclosed in note 49.Directors and key managementDetails of directors and key management remuneration are set out in note 42 and in the
Remuneration report on pages 138 to 165.
 45
    
    EXCHANGE RATES IN US$
 The principal exchange rates used in the preparation of the 2008 Financial statements are:
 Annual
    
    
    Annual
    
    
    Annual
    
    
    Year
    
    
    Year
    
    
    YearAverage
    
    
    Average
    
    
    Average
    
    
    end
    
    
    end
    
    
    end2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006Sterling
    
    
    1.86
    
    
    
    2.00
    
    
    
    1.84
    
    
    
    1.44
    
    
    
    1.99
    
    
    
    1.96Australian dollar
    
    
    0.86
    
    
    
    0.84
    
    
    
    0.75
    
    
    
    0.69
    
    
    
    0.88
    
    
    
    0.79Canadian dollar
    
    
    0.94
    
    
    
    0.93
    
    
    
    0.88
    
    
    
    0.82
    
    
    
    1.01
    
    
    
    0.86South African rand
    
    
    0.122
    
    
    
    0.142
    
    
    
    0.148
    
    
    
    0.107
    
    
    
    0.147
    
    
    
    0.143Euro
    
    
    1.47
    
    
    
    1.37
    
    
    
    1.26
    
    
    
    1.41
    
    
    
    1.47
    
    
    
    1.32
 46
    
    BOUGAINVILLE COPPER LIMITED (BCL)
 Mining has been suspended at the Panguna mine since 1989. Access to the mine site has not
been possible since that time and an accurate
assessment of the condition of the assets cannot therefore be made. Considerable funding
would be required to recommence operations to the
level which applied at the time of the mines closure in 1989 and these funding requirements
cannot be forecast accurately. The directors consider
that the Group does not currently realise a benefit from its interest in BCL and therefore
BCL information continues to be excluded from the financial
statements. BCL reported a net loss of US$2 million for the financial year (2007: profit
US$1 million; 2006: profit US$1 million). This is based upon actual
transactions for the financial year. The aggregate amount of capital and reserves reported
by BCL as at 31 December 2008 was US$113 million (2007:
US$147 million). The Group owns 214,887,966 shares in BCL, representing 53.6 per cent of
the issued share capital. The investment of US$195 million
was fully provided against in 1991. At 31 December 2008, the number of shares in BCL held
by the Group, multiplied by the share price, resulted in
an amount of US$101 million (2007: US$281 million).
 47
    
    EVENTS AFTER THE BALANCE SHEET DATE
 On 12 February 2009 the Group announced that the Boards are recommending a
transaction with Aluminium Corporation of China
(Chinalco) to the shareholders. Under the terms of the transaction Chinalco will invest
US$12.3 billion in certain aluminium, copper and iron ore
joint ventures and a further US$7.2 billion in subordinated convertible bonds. In total
there will be four convertible bonds issued: two that are
convertible into shares of Rio Tinto plc at a price of US$45 and US$60 respectively and two
that are convertible into shares of Rio Tinto Limited at a
price of US$45 and US$60 respectively. The transaction is subject to approval by the
shareholders, governments and other regulators. If the Boards
withdraw their recommendation or recommend a competing proposal to the shareholders there is
a break fee of US$195 million payable. The proceeds
will be used in part for the repayment of debt.In January 2009, Rio Tinto reached an agreement to sell its Brazilian iron ore operation. The
completion of the sale of these assets, from which
proceeds of US$750 million will be received, is subject to regulatory approvals which are
expected during the second half of 2009.On 5 February 2009 the Group announced the completion of the sale of its undeveloped potash
assets to Companhia Vale do Rio Doce (Vale) for
a cash consideration of US$850 million. The transaction is comprised of the Potasio Rio
Colorado potash project in Argentina and the Regina
exploration assets in Canada. The proceeds from this divestment have been used to pay down
debt.On 9 March 2009, Rio Tinto reached an agreement to sell
Jacobs Ranch coal mine to Arch Coal Inc for cash consideration of
US$761 million. The completion of the sale is subject to regulatory
approvals.
 A-59




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##### Table of Contents



Notes to the 2008 Financial statements
 
 48 SHARE BASED PAYMENTS
   Charge/(credit)
    
    
    
    
    
    Liability at therecognised for the year
    
    
    
    
    
    end of the year2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mEquity-settled plans
    
    
    61
    
    
    
    39
    
    
    
    25
    
    
    
    
    
    
    
    Cash-settled plans
    
    
    (83
    )
    
    
    181
    
    
    
    7
    
    
    
    43
    
    
    
    219Total
    
    
    (22
    )
    
    
    220
    
    
    
    32
    
    
    
    43
    
    
    
    219
 Lattice-based option valuation modelThe fair value of share options is estimated as at the date of grant using a lattice-based option
valuation model. The significant
assumptions used in the valuation model are disclosed below. Expected volatilities are based on
the historical volatility of
Rio Tintos share returns under the UK and Australian listings. Historical data was used to
estimate employee forfeiture and
cancellation rates within the valuation model. Under the Share Option Plans, it is assumed that
after options have vested,
20 per cent per annum of participants will exercise their options when the market price is at least
20 per cent above the exercise
price of the option. Participants in the Share Savings Plans are assumed to exercise their options
immediately after vesting.
The implied lifetime of options granted is derived from the output of the option valuation model
and represents the period
of time that options granted are expected to be outstanding. The risk-free rate used in the
valuation model is equal to the yield
available on UK and Australian zero-coupon government bonds (for plc and Limited options
respectively) at the date of grant
with a term equal to the expected term of the options.Summary of options outstandingA summary of the status of the Companies share option plans at 31 December 2008, and changes
during the year ended
31 December 2008, is presented below.
 WeightedWeighted
    
    
    average
    
    
    Aggregateaverage
    
    
    remaining
    
    
    intrinsicexercise price
    
    
    contractual
    
    
    valueper option
    
    
    life
    
    
    2008Options outstanding at 31 December 2008
    
    Number
    
    
    £ / A$
    
    
    Years
    
    
    US$mRio Tinto plc Share Savings Plan (£8 - £36)
    
    
    1,372,165
    
    
    
    22.85
    
    
    
    2.1
    
    
    
    1Rio Tinto Limited Share Savings Plan (A$25 - A$83)
    
    
    1,901,417
    
    
    
    59.51
    
    
    
    2.4
    
    
    
    1Rio Tinto plc Share Option Plan (£8 - £58)
    
    
    4,665,835
    
    
    
    20.88
    
    
    
    5.9
    
    
    
    6Rio Tinto Limited Share Option Plan (A$33 - A$135)
    
    
    2,711,678
    
    
    
    54.92
    
    
    
    6.3
    
    
    
    210,651,095
    
    
    
    
    
    
    
    
    
    
    
    10
  Options exercisable at 31 December 2008Rio Tinto plc Share Option Plan (£8 - £19)
    
    
    1,892,539
    
    
    
    14.88
    
    
    
    4.4
    
    
    
    3Rio Tinto Limited Share Option Plan (A$33 - A$48)
    
    
    809,737
    
    
    
    42.04
    
    
    
    5.1
    
    
    
    12,702,276
    
    
    
    
    
    
    
    
    
    
    
    4
  A-60




---



##### Table of Contents



Notes to the 2008 Financial statements48
    
    SHARE BASED PAYMENTScontinuedShare Savings PlansAwards under these plans are settled in equity and accounted for accordingly. The fair value of each award on the day of
grant was estimated using a lattice-based option valuation model, including allowance for the exercise price being at a
discount to market price. The key assumptions used in the valuation are noted in the following table.
 Risk free
    
    
    Expected
    
    
    Dividend
    
    
    Forfeiture
    
    
    Cancellation
    
    
    Impliedinterest rate
    
    
    volatility
    
    
    yield
    
    
    rates
    
    
    rates (a)
    
    
    lifetime%
    
    
    %
    
    
    %
    
    
    %
    
    
    %
    
    
    YearsAwards made in 2008- Rio Tinto plc
    
    
    3.9-4.4
    
    
    
    39.0
    
    
    
    3.9
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    2.2-5.2- Rio Tinto Limited
    
    
    4.6-5.0
    
    
    
    31.0
    
    
    
    3.1
    
    
    
    5.0
    
    
    
    5.0
    
    
    
    3.2-5.2
  Rio Tinto plc  Share Savings Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice
    
    
    
    
    
    
    price
    
    
    
    
    
    
    price2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    £
    
    
    Number
    
    
    £
    
    
    Number
    
    
    £Options outstanding at 1 January
    
    
    1,419,715
    
    
    
    18.39
    
    
    
    1,497,463
    
    
    
    14.26
    
    
    
    1,624,492
    
    
    
    11.84Granted
    
    
    439,837
    
    
    
    27.81
    
    
    
    324,170
    
    
    
    30.47
    
    
    
    323,256
    
    
    
    20.72Forfeited
    
    
    (37,749
    )
    
    
    19.53
    
    
    
    (32,518
    )
    
    
    14.30
    
    
    
    (35,953
    )
    
    
    14.06Exercised
    
    
    (384,451
    )
    
    
    12.05
    
    
    
    (311,458
    )
    
    
    11.12
    
    
    
    (376,802
    )
    
    
    9.59Cancellations
    
    
    (55,016
    )
    
    
    26.75
    
    
    
    (36,075
    )
    
    
    20.13
    
    
    
    (25,097
    )
    
    
    12.38Expired
    
    
    (10,171
    )
    
    
    15.50
    
    
    
    (21,867
    )
    
    
    10.36
    
    
    
    (12,433
    )
    
    
    11.72Options outstanding at 31 December
    
    
    1,372,165
    
    
    
    22.85
    
    
    
    1,419,715
    
    
    
    18.39
    
    
    
    1,497,463
    
    
    
    14.26
 2008
    
    
    2007
    
    
    2006£
    
    
    £
    
    
    £Weighted average fair value, at date of grant, of options granted during the year
    
    
    1.87
    
    
    
    13.16
    
    
    
    7.93Share price, at date of grant, of options granted during the year
    
    
    20.50
    
    
    
    41.31
    
    
    
    24.63Weighted average share price at the time the options were exercised during the year
    
    
    47.75
    
    
    
    28.55
    
    
    
    27.86
 Rio Tinto Limited  Share Savings Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice
    
    
    
    
    
    
    price
    
    
    
    
    
    
    price2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    Number
    
    
    A$Options outstanding at 1 January
    
    
    2,634,607
    
    
    
    46.36
    
    
    
    2,748,026
    
    
    
    36.00
    
    
    
    2,786,301
    
    
    
    30.56Granted
    
    
    413,271
    
    
    
    82.19
    
    
    
    548,549
    
    
    
    79.27
    
    
    
    494,141
    
    
    
    56.80Forfeited
    
    
    (285,641
    )
    
    
    59.42
    
    
    
    (121,590
    )
    
    
    37.05
    
    
    
    (81,201
    )
    
    
    30.85Exercised
    
    
    (797,744
    )
    
    
    27.36
    
    
    
    (480,955
    )
    
    
    27.75
    
    
    
    (414,201
    )
    
    
    25.65Cancellations
    
    
    (46,602
    )
    
    
    80.16
    
    
    
    (39,126
    )
    
    
    41.75
    
    
    
    (36,936
    )
    
    
    30.94Expired
    
    
    (16,474
    )
    
    
    25.57
    
    
    
    (20,297
    )
    
    
    27.71
    
    
    
    (78
    )
    
    
    25.57Options outstanding at 31 December
    
    
    1,901,417
    
    
    
    59.51
    
    
    
    2,634,607
    
    
    
    46.36
    
    
    
    2,748,026
    
    
    
    36.00
 2008
    
    
    2007
    
    
    2006A$
    
    
    A$
    
    
    A$Weighted average fair value, at date of grant, of options granted during the year
    
    
    5.15
    
    
    
    34.13
    
    
    
    23.56Share price, at date of grant, of options granted during the year
    
    
    66.01
    
    
    
    106.28
    
    
    
    69.25Weighted average share price at the time the options were exercised during the year
    
    
    128.19
    
    
    
    81.13
    
    
    
    74.16
 A-61




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##### Table of Contents



Notes to the 2008 Financial statements48
    
    SHARE BASED PAYMENTScontinuedShare Option PlansThe Group has a policy of settling these awards in equity, although the directors at their discretion can offer a cash
alternative. The awards are accounted for in accordance with the requirements applying to equity-settled, share based
payment transactions. The performance conditions in relation to Total Shareholder Return (TSR) have been incorporated
in the measurement of fair value for these awards by modelling the correlation between Rio Tintos TSR and that of the
index. The relationship between Rio Tintos TSR and the index was simulated many thousands of
times to derive a distribution
which, in conjunction with the lattice-based option valuation model, was used to determine the
fair value of the options.
The key assumptions are noted in the following table.
 Risk free
    
    
    Expected
    
    
    Dividend
    
    
    Turnover
    
    
    Impliedinterest rate
    
    
    volatility
    
    
    yield
    
    
    rates
    
    
    lifetime%
    
    
    %
    
    
    %
    
    
    %
    
    
    YearsAwards made in 2008- Rio Tinto plc
    
    
    4.1
    
    
    
    37.0
    
    
    
    1.5
    
    
    nil
    
    
    6.1- Rio Tinto Limited
    
    
    6.1
    
    
    
    28.0
    
    
    
    1.4
    
    
    nil
    
    
    7.3
  Rio Tinto plc  Share Option Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice
    
    
    
    
    
    
    price
    
    
    
    
    
    
    price2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    £
    
    
    Number
    
    
    £
    
    
    Number
    
    
    £Options outstanding at 1 January
    
    
    4,960,203
    
    
    
    18.75
    
    
    
    5,185,847
    
    
    
    16.33
    
    
    
    6,290,155
    
    
    
    13.45Granted
    
    
    274,696
    
    
    
    57.23
    
    
    
    786,002
    
    
    
    27.29
    
    
    
    931,418
    
    
    
    27.11Forfeited
    
    
    (126,287
    )
    
    
    32.18
    
    
    
    (42,211
    )
    
    
    24.73
    
    
    
    (63,713
    )
    
    
    25.16Exercised
    
    
    (442,777
    )
    
    
    16.31
    
    
    
    (969,435
    )
    
    
    12.50
    
    
    
    (1,972,013
    )
    
    
    11.95Options outstanding at 31 December
    
    
    4,665,835
    
    
    
    20.88
    
    
    
    4,960,203
    
    
    
    18.75
    
    
    
    5,185,847
    
    
    
    16.33
 2008
    
    
    2007
    
    
    2006£
    
    
    £
    
    
    £Weighted average fair value, at date of grant, of options granted during the year
    
    
    20.63
    
    
    
    6.25
    
    
    
    7.40Weighted average share price, at date of grant, of options granted during the year
    
    
    55.94
    
    
    
    27.48
    
    
    
    26.89Weighted average share price at the time the options were exercised during the year
    
    
    51.16
    
    
    
    39.25
    
    
    
    29.01
  Rio Tinto Limited  Share Option Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice
    
    
    
    
    
    
    price
    
    
    
    
    
    
    price2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    Number
    
    
    A$Options outstanding at 1 January
    
    
    3,351,754
    
    
    
    50.84
    
    
    
    3,540,588
    
    
    
    43.53
    
    
    
    3,959,472
    
    
    
    36.17Granted
    
    
    63,633
    
    
    
    134.18
    
    
    
    568,638
    
    
    
    75.12
    
    
    
    716,318
    
    
    
    71.06Forfeited
    
    
    (45,231
    )
    
    
    96.23
    
    
    
    (20,504
    )
    
    
    71.57
    
    
    
    (89,041
    )
    
    
    53.64Exercised
    
    
    (658,478
    )
    
    
    38.94
    
    
    
    (736,968
    )
    
    
    31.88
    
    
    
    (1,043,766
    )
    
    
    33.65Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,395
    )
    
    
    39.87Options outstanding at 31 December
    
    
    2,711,678
    
    
    
    54.92
    
    
    
    3,351,754
    
    
    
    50.84
    
    
    
    3,540,588
    
    
    
    43.53
 2008
    
    
    2007
    
    
    2006A$
    
    
    A$
    
    
    A$Weighted average fair value, at date of grant, of options granted during the year
    
    
    44.04
    
    
    
    14.37
    
    
    
    17.09Weighted average share price, at date of grant, for options granted during the year
    
    
    131.20
    
    
    
    75.57
    
    
    
    70.85Weighted average share price at the time the options were exercised during the year
    
    
    138.10
    
    
    
    102.04
    
    
    
    76.64
  Share Ownership Plan
  A-62




---



##### Table of Contents



Notes to the 2008 Financial statements48
    
    SHARE BASED PAYMENTScontinuedMining Companies Comparative PlanAwards under this plan are accounted for in accordance with the requirements applying to
cash-settled, share based payment
transactions. If any awards are ultimately settled in shares, the liability is transferred
direct to equity as the consideration for the
equity instruments issued. The grant date fair value of the awards made prior to 2008 are
taken to be the market value of the shares
at the date of award reduced by 50 per cent for anticipated relative TSR performance. The
grant date fair value of the awards made
in 2008 were calculated using a Monte Carlo simulation model. In addition, for the valuations
after 2005, the market value is
reduced for non receipt of dividends between measurement date and date of vesting (excluding
awards for executive directors and
product group CEOs). Forfeitures are assumed prior to vesting at three per cent per annum of
outstanding awards. In accordance
with the method of accounting for cash-settled awards, fair values are subsequently remeasured
each year to reflect the market price
of shares at the measurement date and the number of awards expected to vest based on the
current and anticipated TSR
performance. This remeasurement at 31 December 2008 was calculated using a Monte Carlo
simulation model.A summary of the status of the Companies performance-based share plans at 31 December 2008,
and changes during the year, is presented below.Rio Tinto plc  Mining Companies Comparative Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averagefair value
    
    
    
    
    
    
    fair value
    
    
    
    
    
    
    fair valueat grant
    
    
    
    
    
    
    at grant
    
    
    
    
    
    
    at grantdate
    
    
    
    
    
    
    date
    
    
    
    
    
    
    date2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    £
    
    
    Number
    
    
    £
    
    
    Number
    
    
    £Non vested awards  at 1 January
    
    
    3,178,073
    
    
    
    8.60
    
    
    
    2,777,374
    
    
    
    7.36
    
    
    
    2,276,511
    
    
    
    6.62Awarded
    
    
    389,760
    
    
    
    48.07
    
    
    
    719,898
    
    
    
    12.61
    
    
    
    850,126
    
    
    
    9.02Forfeited
    
    
    (143,445
    )
    
    
    16.25
    
    
    
    (45,370
    )
    
    
    10.39
    
    
    
    (60,826
    )
    
    
    8.18Failed performance conditions
    
    
    (441,868
    )
    
    
    6.45
    
    
    
    (221,656
    )
    
    
    6.26
    
    
    
    (233,843
    )
    
    
    6.20Vested
    
    
    (381,406
    )
    
    
    6.45
    
    
    
    (52,173
    )
    
    
    6.26
    
    
    
    (54,594
    )
    
    
    6.22Non vested awards  at 31 December
    
    
    2,601,114
    
    
    
    14.78
    
    
    
    3,178,073
    
    
    
    8.60
    
    
    
    2,777,374
    
    
    
    7.36Weighted-average share price at date of vesting
    
    
    
    
    
    
    54.93
    
    
    
    
    
    
    
    27.99
    
    
    
    
    
    
    
    28.67
 2008
    
    
    2007
    
    
    2006£000
    
    
    £000
    
    
    £000Total fair value of shares issued in settlement of awards vested during the year
    
    
    6,486
    
    
    
    457
    
    
    
    529Total cash payments made in settlement of awards vested during the year
    
    
    14,628
    
    
    
    1,003
    
    
    
    1,035Total cash payments made in settlement of awards vested during previous years
    
    
    
    
    
    
    
    
    
    
    1,374
 2008
    
    
    2007
    
    
    2006Total number of shares issued in settlement of awards vested during the year
    
    
    116,601
    
    
    
    16,335
    
    
    
    18,443
 Rio Tinto Limited  Mining Companies Comparative Plan
 Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averagefair value
    
    
    
    
    
    
    fair value
    
    
    
    
    
    
    fair valueat grant
    
    
    
    
    
    
    at grant
    
    
    
    
    
    
    at grantdate
    
    
    
    
    
    
    date
    
    
    
    
    
    
    date2008
    
    
    2008
    
    
    2007
    
    
    2007
    
    
    2006
    
    
    2006Number
    
    
    A$
    
    
    Number
    
    
    A$
    
    
    Number
    
    
    A$Non vested awards  at 1 January
    
    
    2,209,688
    
    
    
    23.04
    
    
    
    1,897,008
    
    
    
    19.35
    
    
    
    1,510,846
    
    
    
    17.27Awarded
    
    
    173,086
    
    
    
    107.04
    
    
    
    533,225
    
    
    
    34.91
    
    
    
    646,637
    
    
    
    23.59Forfeited
    
    
    (33,711
    )
    
    
    54.85
    
    
    
    (39,790
    )
    
    
    31.36
    
    
    
    (83,092
    )
    
    
    19.90Failed performance conditions
    
    
    (318,032
    )
    
    
    16.44
    
    
    
    (149,044
    )
    
    
    17.50
    
    
    
    (146,738
    )
    
    
    16.84Vested
    
    
    (244,276
    )
    
    
    16.44
    
    
    
    (31,711
    )
    
    
    17.58
    
    
    
    (30,645
    )
    
    
    16.84Non vested awards  at 31 December
    
    
    1,786,755
    
    
    
    32.65
    
    
    
    2,209,688
    
    
    
    23.04
    
    
    
    1,897,008
    
    
    
    19.35Weighted-average share price at date of vesting
    
    
    
    
    
    
    137.10
    
    
    
    
    
    
    
    77.95
    
    
    
    
    
    
    
    71.65
 2008
    
    
    2007
    
    
    2006A$000
    
    
    A$000
    
    
    A$000Total fair value of shares issued in settlement of awards vested during the year
    
    
    14,706
    
    
    
    879
    
    
    
    1,136Total cash payments made in settlement of awards vested during the year
    
    
    19,217
    
    
    
    1,604
    
    
    
    1,060Total cash payments made in settlement of awards vested during previous years
    
    
    141
    
    
    
    
    
    
    
    
 2008
    
    
    2007
    
    
    2006Total number of shares issued in settlement of awards vested during the year
    
    
    107,266
    
    
    
    11,275
    
    
    
    15,853
 A-63




---



##### Table of Contents



Notes to the 2008 Financial statements48
    
    SHARE BASED PAYMENTScontinuedManagement Share PlanThe Management Share Plan was introduced during 2007 which provides conditional awards to
management. The vesting of these
awards is dependent on service and/or performance based conditions being met. The awards will
be settled in equity including the
dividends accumulated from date of award to vesting. The awards are accounted for in
accordance with the requirements applying to
equity-settled share based payment transactions. The fair value of each award on the day of
grant is set equal to share price on the
day of grant. Forfeitures are assumed prior to vesting at three per cent per annum of
outstanding awards.A summary of the status of the Companies share plans at 31 December 2008, and changes during
the year, is presented
below.Rio Tinto plc  Management Share Plan
 Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averagefair value
    
    
    
    
    
    
    fair valueat grant
    
    
    
    
    
    
    at grantdate
    
    
    
    
    
    
    date2008
    
    
    2008
    
    
    2007
    
    
    2007Number
    
    
    £
    
    
    Number
    
    
    £Non vested awards at 1 January
    
    
    344,216
    
    
    
    30.20
    
    
    
    
    
    
    
    Awarded
    
    
    440,784
    
    
    
    55.15
    
    
    
    365,670
    
    
    
    30.09Forfeited
    
    
    (47,586
    )
    
    
    40.32
    
    
    
    (19,382
    )
    
    
    28.33Vested
    
    
    (24,609
    )
    
    
    38.92
    
    
    
    (2,072
    )
    
    
    27.15Non vested awards at 31 December
    
    
    712,805
    
    
    
    44.65
    
    
    
    344,216
    
    
    
    30.20Estimated weighted average share price of awards vested during the year
    
    
    3,804
    
    
    
    48.65
    
    
    
    
    
    
    
    43.75
  Rio Tinto Limited  Management Share Plan
 Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averagefair value
    
    
    
    
    
    
    fair valueat grant
    
    
    
    
    
    
    at grantdate
    
    
    
    
    
    
    date2008
    
    
    2008
    
    
    2007
    
    
    2007Number
    
    
    A$
    
    
    Number
    
    
    A$Non vested awards at 1 January
    
    
    271,200
    
    
    
    81.89
    
    
    
    
    
    
    
    Awarded
    
    
    183,843
    
    
    
    129.37
    
    
    
    282,565
    
    
    
    81.65Forfeited
    
    
    (29,015
    )
    
    
    93.42
    
    
    
    (9,973
    )
    
    
    76.02Vested
    
    
    (3,357
    )
    
    
    81.72
    
    
    
    (1,392
    )
    
    
    74.84Non vested awards at 31 December
    
    
    422,671
    
    
    
    101.75
    
    
    
    271,200
    
    
    
    81.89Estimated weighted average share price of awards vested during the year
    
    
    2,894
    
    
    
    120.79
    
    
    
    1,392
    
    
    
    98.69
  A-64




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##### Table of Contents



Notes to the 2008 Financial statements
 
 49
    
    POST RETIREMENT BENEFITSDescription of plansThe Group operates a number of pension and post retirement healthcare plans around the world. Some of these plans are defined contribution
and some are defined benefit, with assets held in separate trusts, foundations and similar entities. Valuations of these plans are produced and
updated annually to 31 December by qualified actuaries. A number of defined benefit and defined contribution plans were brought into the Group
as a result of the Alcan acquisition in October 2007. Plans sponsored by the Rio Tinto Alcan Packaging business continue to be accounted for as
assets or liabilities held for sale, and are not included in this note.
 Pension plansThe majority of the Groups pension obligations are in Canada, the UK, the US, Australia and Switzerland, with further notable obligations
in other European countries.There are a number of pension arrangements in the UK. The defined benefit sections of these arrangements are linked to final pay and are closed
to new members, with new employees being admitted to defined contribution sections.In Australia, there are two superannuation plans providing defined benefits linked to final pay, typically paid in lump sum form. The main plan
contains principally defined contribution liabilities, but is accounted for as a defined benefit plan as it contains characteristics of both types of plan.A number of defined benefit pension plans are sponsored by the US and Canadian entities. The main plans are two Canadian plans for
salaried and bargaining employees. Benefits for salaried staff are generally linked to final average pay, while benefits for bargaining
employees are reviewed in negotiation with unions.In Europe, there are defined benefit plans in Switzerland, the Netherlands, Germany and France. The largest single plan is in
Switzerland and provides benefits linked to final average pay.The Group also operates a number of unfunded defined benefit plans, which are included in the figures below.
 Post retirement healthcare plansCertain subsidiaries of the Group, mainly in the US and Canada, provide health and life insurance benefits to retired employees and in
some cases to their beneficiaries and covered dependants. Eligibility for cover is dependent upon certain age and service criteria. These
arrangements are unfunded, and are included in the figures below.Plan assetsThe proportions of the total fair value of assets in the pension plans for each asset class at the balance sheet date were:
 2008

    
    2007Equities
    
    
    52.4
    %
    
    
    60.2
    %Bonds
    
    
    35.1
    %
    
    
    29.4
    %Property
    
    
    7.7
    %
    
    
    7.2
    %Other
    
    
    4.8
    %
    
    
    3.2
    %100.0
    %
    
    
    100.0
    %
 The assets of the plans are generally managed on a day-to-day basis by external specialist fund managers. These managers may
invest in the Groups securities subject to limits imposed by the relevant fiduciary committees and local legislation. The approximate
total holding of Group securities within the plans is US$6 million (2007: US$44 million).Main assumptions (rates per annum)The main assumptions for the valuations of the plans are set out below.
 Other(mainlyUK
    
    
    Australia (a)
    
    
    US
    
    
    Canada
    
    
    Eurozone
    
    
    Switzerland
    
    
    Africa) (b)At 31 December 2008Rate of increase in salaries
    
    
    4.4
    %
    
    
    3.9
    %
    
    
    3.0
    %
    
    
    2.7
    %
    
    
    2.4
    %
    
    
    2.7
    %
    
    
    6.2
    %Rate of increase in pensions
    
    
    2.7
    %
    
    
    1.5
    %
    
    
    
    
    
    
    0.4
    %
    
    
    1.6
    %
    
    
    
    
    
    
    4.2
    %Discount rate
    
    
    6.3
    %
    
    
    3.3
    %
    
    
    6.1
    %
    
    
    7.4
    %
    
    
    5.6
    %
    
    
    3.3
    %
    
    
    7.3
    %Inflation
    
    
    2.8
    %
    
    
    2.0
    %
    
    
    1.5
    %
    
    
    1.4
    %
    
    
    1.8
    %
    
    
    1.5
    %
    
    
    4.2
    %At 31 December 2007Rate of increase in salaries
    
    
    5.0
    %
    
    
    5.5
    %
    
    
    3.9
    %
    
    
    3.4
    %
    
    
    2.8
    %
    
    
    2.6
    %
    
    
    7.5
    %Rate of increase in pensions
    
    
    3.1
    %
    
    
    2.7
    %
    
    
    
    
    
    
    0.6
    %
    
    
    2.3
    %
    
    
    0.8
    %
    
    
    5.5
    %Discount rate
    
    
    5.9
    %
    
    
    5.4
    %
    
    
    6.2
    %
    
    
    5.5
    %
    
    
    5.5
    %
    
    
    3.6
    %
    
    
    8.1
    %Inflation
    
    
    3.4
    %
    
    
    3.6
    %
    
    
    2.4
    %
    
    
    2.2
    %
    
    
    2.3
    %
    
    
    1.4
    %
    
    
    5.5
    %
 
 (a)
    
    The discount rate shown for Australia is after tax.(b)
    
    The assumptions vary by location for the Other
plans. Assumptions shown are for Southern Africa.The main financial assumptions used for the healthcare plans, which are predominantly in the US and Canada, were: discount rate: 6.5 per cent
(2007: 6.1 per cent), medical trend rate: 7.0 per cent reducing to 5.0 per cent by the year 2015 broadly on a straight line basis (2007: 7.7 per cent,
reducing to 5.1 per cent by the year 2016), claims costs based on individual company experience.For both the pension and healthcare arrangements the post-retirement mortality assumptions allow for future improvements in longevity.
The mortality tables used for the main arrangements imply that a male aged 60 at the balance sheet date has an expected future lifetime
of 24 years (2007: 24 years) and that a man aged 60 in 2028 would have an expected future lifetime of 26 years (2007: 25 years).
 A-65




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##### Table of Contents



Notes to the 2008 Financial statements
 49
    
    POST RETIREMENT BENEFITScontinued
 Other(mainlyUK
    
    
    Australia
    
    
    US
    
    
    Canada
    
    
    Eurozone
    
    
    Switzerland
    
    
    Africa) (a)Long term rate of return expected at 1 January 2008Equities
    
    
    7.7
    %
    
    
    9.1
    %
    
    
    7.7
    %
    
    
    7.4
    %
    
    
    7.7
    %
    
    
    6.6
    %
    
    
    11.4
    %Bonds
    
    
    4.9
    %
    
    
    5.9
    %
    
    
    5.0
    %
    
    
    4.4
    %
    
    
    4.5
    %
    
    
    3.4
    %
    
    
    7.9
    %Property
    
    
    6.0
    %
    
    
    7.2
    %
    
    
    6.0
    %
    
    
    5.7
    %
    
    
    6.0
    %
    
    
    4.9
    %
    
    
    9.7
    %Other
    
    
    4.2
    %
    
    
    3.7
    %
    
    
    3.2
    %
    
    
    3.0
    %
    
    
    3.0
    %
    
    
    2.3
    %
    
    
    6.3
    %Long term rate of return expected at 1 January 2007Equities
    
    
    7.5
    %
    
    
    8.7
    %
    
    
    8.1
    %
    
    
    7.4
    %
    
    
    
    
    
    
    
    
    
    
    10.7
    %Bonds
    
    
    4.5
    %
    
    
    5.2
    %
    
    
    5.2
    %
    
    
    4.4
    %
    
    
    
    
    
    
    
    
    
    
    7.4
    %Property
    
    
    5.8
    %
    
    
    6.8
    %
    
    
    6.4
    %
    
    
    5.7
    %
    
    
    
    
    
    
    
    
    
    
    9.0
    %Other
    
    
    4.2
    %
    
    
    3.5
    %
    
    
    3.4
    %
    
    
    3.3
    %
    
    
    
    
    
    
    
    
    
    
    5.8
    %
 
 (a)
    
    The assumptions vary by location for the Other plans. Assumptions shown are for Southern Africa.
 The expected rate of return on pension plan assets is determined as managements best estimate of the long term returns of the major
asset classes  equities, bonds, property and other  weighted by the actual allocation of assets among the categories at the
measurement date. The expected rate of return is calculated using geometric averaging. The expected rates of return shown
have been reduced to allow for plan expenses including, where appropriate, taxes incurred within pension plans on investment returns.
Based on the assumptions made and the distribution of assets the weighted average expected return on assets as at 1 January 2008 was 6.4
per cent (2007: 6.9 per cent) and is expected to be 5.9 per cent as at 1 January 2009.The sources used to determine managements best estimate of long term returns are numerous and include country-specific bond
yields, which may be derived from the market using local bond indices or by analysis of the local bond market, and country-specific
inflation and investment market expectations derived from market data and analysts or governments expectations as applicable.Total expense before tax recognised in the income statement
 Pension
    
    
    Other
    
    
    Total
    
    
    Total
    
    
    Totalbenefits
    
    
    benefits
    
    
    2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mCurrent employer service cost for Defined Benefits (DB) plans
    
    
    (265
    )
    
    
    (19
    )
    
    
    (284
    )
    
    
    (145
    )
    
    
    (102
    )Current employer service cost for Defined Contribution benefits within
DB plans
    
    
    (133
    )
    
    
    
    
    
    
    (133
    )
    
    
    (106
    )
    
    
    (74
    )Current employer service cost for Defined Contribution plans
    
    
    (62
    )
    
    
    
    
    
    
    (62
    )
    
    
    (40
    )
    
    
    (21
    )Interest cost
    
    
    (963
    )
    
    
    (62
    )
    
    
    (1,025
    )
    
    
    (516
    )
    
    
    (314
    )Expected return on assets
    
    
    1,000
    
    
    
    
    
    
    
    1,000
    
    
    
    550
    
    
    
    326Past service cost
    
    
    (8
    )
    
    
    5
    
    
    
    (3
    )
    
    
    17
    
    
    
    (7
    )Gains on curtailment and settlement
    
    
    3
    
    
    
    2
    
    
    
    5
    
    
    
    
    
    
    
    3Total expense
    
    
    (428
    )
    
    
    (74
    )
    
    
    (502
    )
    
    
    (240
    )
    
    
    (189
    )
 The above expense is included as an employee cost within net operating costs.Total amount recognised in the Statement of Recognised Income and Expense before tax
 2008
    
    
    2007
    
    
    2006US$m
    
    
    US$m
    
    
    US$mActuarial (loss)/gain
    
    
    (1,666
    )
    
    
    141
    
    
    
    373Gain on currency translation on plans using US dollar functional currency
    
    
    321
    
    
    
    
    
    
    
    Loss on application of asset limit
    
    
    26
    
    
    
    
    
    
    
    Total (loss)/gain recognised in the Statement of Recognised Income and Expense
    
    
    (1,319
    )
    
    
    141
    
    
    
    373Cumulative amount recognised in the Statement of Recognised Income and Expense at 31 December
    
    
    (830
    )
    
    
    489
    
    
    
    348Actuarial (loss)/gain includes US$5 million loss related to equity accounted units (2007: US$4 million loss; 2006: nil).
 Surpluses/(deficits) in the plansThe following amounts were measured in accordance with IAS 19:
 Restated2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Pension
    
    
    Other
    
    
    Total
    
    
    Total
    
    
    Total
    
    
    Total
    
    
    Totalbenefits
    
    
    benefits
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mTotal fair value of plan assets
    
    
    10,505
    
    
    
    
    
    
    
    10,505
    
    
    
    16,150
    
    
    
    6,031
    
    
    
    5,115
    
    
    
    4,777Present value of obligations  funded
    
    
    (12,243
    )
    
    
    
    
    
    
    (12,243
    )
    
    
    (16,622
    )
    
    
    (5,847
    )
    
    
    (5,315
    )
    
    
    (5,118
    )Present value of obligations  unfunded
    
    
    (891
    )
    
    
    (893
    )
    
    
    (1,784
    )
    
    
    (2,089
    )
    
    
    (597
    )
    
    
    (596
    )
    
    
    (649
    )Present value of obligations  total
    
    
    (13,134
    )
    
    
    (893
    )
    
    
    (14,027
    )
    
    
    (18,711
    )
    
    
    (6,444
    )
    
    
    (5,911
    )
    
    
    (5,767
    )Unrecognised past service cost
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )
    
    
    (2
    )
    
    
    3
    
    
    
    
    
    
    
    Effect of asset limit
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    Aggregate surplus/(deficit) to be shown in the
balance sheet
    
    
    (2,648
    )
    
    
    (905
    )
    
    
    (3,553
    )
    
    
    (2,608
    )
    
    
    (410
    )
    
    
    (796
    )
    
    
    (990
    )Comprising:- Deficits shown in balance sheet
    
    
    (2,808
    )
    
    
    (905
    )
    
    
    (3,713
    )
    
    
    (3,313
    )
    
    
    (770
    )
    
    
    (996
    )
    
    
    (1,069
    )- Surpluses shown in balance sheet
    
    
    160
    
    
    
    
    
    
    
    160
    
    
    
    705
    
    
    
    360
    
    
    
    200
    
    
    
    79Net (deficits)/surpluses on pension plans
    
    
    (2,648
    )
    
    
    
    
    
    
    (2,648
    )
    
    
    (1,519
    )
    
    
    48
    
    
    
    (324
    )
    
    
    (450
    )Unfunded post retirement healthcare obligation
    
    
    
    
    
    
    (905
    )
    
    
    (905
    )
    
    
    (1,089
    )
    
    
    (458
    )
    
    
    (472
    )
    
    
    (540
    )
 The surplus amounts shown above are included in the balance sheet as Trade and Other Receivables. See note 17. Deficits are shown in the
balance sheet as Post Retirement benefits. See note 27.
 A-66




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##### Table of Contents



Notes to the 2008 Financial statements
 49
    
    POST RETIREMENT BENEFITScontinuedContributions to plansContributions to pension plans totalled US$615 million (2007: US$246 million; 2006: US$172 million). These contributions include US$52 million
(2007: US$30 million; 2006: US$26 million) for plans providing purely defined contribution benefits (including 401k plans in the US)
and US$10 million (2007: US$10 million; 2006: US$9 million) to industry-wide or multi-employer plans; these are charged against profits and are
included in the figures for current employer service cost shown above.Contributions for other benefits totalled US$53 million (2007: US$30 million; 2006: US$19 million).Contributions to pension plans for 2009 are estimated to be around US$150 million higher than for 2008. Healthcare plans are unfunded
and contributions for future years will be equal to benefit payments and therefore cannot be predetermined.Movements in the present value of the defined benefit obligation and in the fair value of assetsThe amounts shown below include, where appropriate, 100 per cent of the costs, contributions, gains and losses in respect of
employees who participate in the plans and who are employed in operations that are proportionally consolidated or equity
accounted. Consequently, the costs, contributions, gains and losses do not correspond directly to the amounts disclosed above in
respect of the Group. Pure defined contribution plans and industry-wide plans are excluded from the movements below.
 Total
    
    
    TotalPension
    
    
    Other
    
    
    2008
    
    
    2007benefits
    
    
    benefits
    
    
    US$m
    
    
    US$mChange in present value of obligation:Present value of obligation at start of the year
    
    
    (17,624
    )
    
    
    (1,087
    )
    
    
    (18,711
    )
    
    
    (6,444
    )Current employer service cost
    
    
    (423
    )
    
    
    (19
    )
    
    
    (442
    )
    
    
    (272
    )Interest cost
    
    
    (963
    )
    
    
    (62
    )
    
    
    (1,025
    )
    
    
    (516
    )Contributions by plan participants
    
    
    (253
    )
    
    
    
    
    
    
    (253
    )
    
    
    (190
    )Experience gain/(loss)
    
    
    554
    
    
    
    11
    
    
    
    565
    
    
    
    (62
    )Changes in actuarial assumptions gain
    
    
    1,583
    
    
    
    101
    
    
    
    1,684
    
    
    
    315Benefits paid
    
    
    1,097
    
    
    
    53
    
    
    
    1,150
    
    
    
    572Alcan acquisition (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,654
    )Inclusion of arrangements
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )
    
    
    Past service cost
    
    
    (7
    )
    
    
    15
    
    
    
    8
    
    
    
    22Curtailment gains
    
    
    4
    
    
    
    2
    
    
    
    6
    
    
    
    Settlement gains
    
    
    28
    
    
    
    
    
    
    
    28
    
    
    
    Currency exchange rate gain/(loss)
    
    
    2,873
    
    
    
    93
    
    
    
    2,966
    
    
    
    (482
    )Present value of obligation at end of the year
    
    
    (13,134
    )
    
    
    (893
    )
    
    
    (14,027
    )
    
    
    (18,711
    )
 Gains and losses on obligations
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Experience gains and (losses): (i.e. variances between the estimate of obligations
and the subsequent outcome)Gain/(loss) (US$m)
    
    
    565
    
    
    
    (62
    )
    
    
    (89
    )
    
    
    139
    
    
    
    (148
    )As a percentage of the present value of the year end obligations
    
    
    4
    %
    
    
    0
    %
    
    
    -1
    %
    
    
    2
    %
    
    
    -3
    %Change in assumptions gain/(loss) (US$m)
    
    
    1,684
    
    
    
    315
    
    
    
    124
    
    
    
    (180
    )
    
    
    (429
    )
 Total
    
    
    TotalPension
    
    
    Other
    
    
    2008
    
    
    2007benefits
    
    
    benefits
    
    
    US$m
    
    
    US$mChange in plan assets:Fair value of plan assets at the start of the year
    
    
    16,150
    
    
    
    
    
    
    
    16,150
    
    
    
    6,031Expected return on plan assets
    
    
    1,000
    
    
    
    
    
    
    
    1,000
    
    
    
    550Actuarial loss on plan assets
    
    
    (3,910
    )
    
    
    
    
    
    
    (3,910
    )
    
    
    (108
    )Contributions by plan participants
    
    
    253
    
    
    
    
    
    
    
    253
    
    
    
    190Contributions by employer
    
    
    586
    
    
    
    53
    
    
    
    639
    
    
    
    263Benefits paid
    
    
    (1,097
    )
    
    
    (53
    )
    
    
    (1,150
    )
    
    
    (572
    )Alcan acquisition (restated)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,380Inclusion of arrangements
    
    
    8
    
    
    
    
    
    
    
    8
    
    
    
    Settlement losses
    
    
    (29
    )
    
    
    
    
    
    
    (29
    )
    
    
    Currency exchange rate (loss)/gain
    
    
    (2,456
    )
    
    
    
    
    
    
    (2,456
    )
    
    
    416Fair value of plan assets at the end of the year
    
    
    10,505
    
    
    
    
    
    
    
    10,505
    
    
    
    16,150Actual return on plan assets
    
    
    
    
    
    
    
    
    
    
    (2,910
    )
    
    
    442
 2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Difference between the expected and actual return on plan assets:(Loss)/gain (US$m)
    
    
    (3,910
    )
    
    
    (108
    )
    
    
    338
    
    
    
    223
    
    
    
    387As a percentage of year end plan assets
    
    
    -37
    %
    
    
    -1
    %
    
    
    6
    %
    
    
    4
    %
    
    
    8
    %
 A-67




---



##### Table of Contents



Notes to the 2008 Financial statements
 49
    
    POST RETIREMENT BENEFITScontinued
 Post-retirement healthcare  sensitivity to changes in assumptionsAn increase of one per cent in the assumed medical cost trend rates would increase the aggregate of the current service cost and interest
cost components of the post-retirement healthcare expense by US$8 million (2007: US$5 million; 2006: US$6 million), and increase the benefit
obligation for these plans by US$85 million (2007:US$89 million; 2006: US$73 million). A decrease of one per cent in the assumed medical cost
trend rates would decrease the aggregate of the current service cost and interest cost components of the post-retirement healthcare expense by
US$7 million (2007 and 2006:US$5 million), and decrease the benefit obligation for these plans by US$75 million (2007: US$77 million;
2006: US$62 million).
 A-68




---



##### Table of Contents



Notes to the 2008 Financial statements
 50
    
    Rio Tinto financial information by business unit
  Rio Tinto
    
    
    Gross revenue (a)
    
    
    EBITDA (b)
    
    
    
    
    
    
    Net earnings (c)interest
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006%
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$mIron OreHamersley Iron (including HIsmelt®) (d)
    
    
    100.0
    
    
    
    11,006
    
    
    
    6,155
    
    
    
    4,416
    
    
    
    7,038
    
    
    
    3,427
    
    
    
    2,611
    
    
    
    4,642
    
    
    
    2,151
    
    
    
    1,673Robe River (e)
    
    
    53.0
    
    
    
    2,728
    
    
    
    1,640
    
    
    
    1,379
    
    
    
    1,983
    
    
    
    991
    
    
    
    902
    
    
    
    1,062
    
    
    
    503
    
    
    
    461Iron Ore Company of Canada
    
    
    58.7
    
    
    
    2,065
    
    
    
    943
    
    
    
    1,051
    
    
    
    1,251
    
    
    
    298
    
    
    
    441
    
    
    
    443
    
    
    
    104
    
    
    
    145Rio Tinto Brasil
    
    
    100.0
    
    
    
    176
    
    
    
    61
    
    
    
    92
    
    
    
    73
    
    
    
    (1
    )
    
    
    27
    
    
    
    44
    
    
    
    (12
    )
    
    
    13Dampier Salt
    
    
    68.4
    
    
    
    377
    
    
    
    269
    
    
    
    270
    
    
    
    95
    
    
    
    51
    
    
    
    48
    
    
    
    40
    
    
    
    13
    
    
    
    14Product group operations
    
    
    
    
    
    
    16,352
    
    
    
    9,068
    
    
    
    7,208
    
    
    
    10,440
    
    
    
    4,766
    
    
    
    4,029
    
    
    
    6,231
    
    
    
    2,759
    
    
    
    2,306Evaluation projects/other
    
    
    
    
    
    
    175
    
    
    
    125
    
    
    
    56
    
    
    
    (228
    )
    
    
    (98
    )
    
    
    (45
    )
    
    
    (214
    )
    
    
    (95
    )
    
    
    (41
    )16,527
    
    
    
    9,193
    
    
    
    7,264
    
    
    
    10,212
    
    
    
    4,668
    
    
    
    3,984
    
    
    
    6,017
    
    
    
    2,664
    
    
    
    2,265AluminiumProduct group operations
    
    
    (f
    )
    
    
    23,795
    
    
    
    7,309
    
    
    
    3,493
    
    
    
    4,224
    
    
    
    1,729
    
    
    
    1,389
    
    
    
    1,255
    
    
    
    1,119
    
    
    
    763Evaluation projects/other
    
    
    
    
    
    
    44
    
    
    
    50
    
    
    
    22
    
    
    
    (87
    )
    
    
    (28
    )
    
    
    (24
    )
    
    
    (71
    )
    
    
    (22
    )
    
    
    (17
    )23,839
    
    
    
    7,359
    
    
    
    3,515
    
    
    
    4,137
    
    
    
    1,701
    
    
    
    1,365
    
    
    
    1,184
    
    
    
    1,097
    
    
    
    746Copper & DiamondsKennecott Utah Copper
    
    
    100.0
    
    
    
    2,609
    
    
    
    3,539
    
    
    
    2,829
    
    
    
    1,587
    
    
    
    2,614
    
    
    
    2,111
    
    
    
    998
    
    
    
    1,649
    
    
    
    1,810Escondida
    
    
    30.0
    
    
    
    2,402
    
    
    
    3,103
    
    
    
    2,575
    
    
    
    1,464
    
    
    
    2,510
    
    
    
    2,105
    
    
    
    836
    
    
    
    1,525
    
    
    
    1,250Grasberg joint venture
    
    
    (g
    )
    
    
    53
    
    
    
    461
    
    
    
    373
    
    
    
    38
    
    
    
    296
    
    
    
    258
    
    
    
    4
    
    
    
    159
    
    
    
    122Palabora
    
    
    57.7
    
    
    
    560
    
    
    
    689
    
    
    
    588
    
    
    
    167
    
    
    
    202
    
    
    
    203
    
    
    
    49
    
    
    
    58
    
    
    
    52Kennecott Minerals
    
    
    100.0
    
    
    
    81
    
    
    
    338
    
    
    
    277
    
    
    
    47
    
    
    
    175
    
    
    
    139
    
    
    
    31
    
    
    
    106
    
    
    
    105Northparkes
    
    
    80.0
    
    
    
    124
    
    
    
    371
    
    
    
    437
    
    
    
    (1
    )
    
    
    212
    
    
    
    346
    
    
    
    (12
    )
    
    
    137
    
    
    
    229Diamonds
    
    
    (h
    )
    
    
    840
    
    
    
    1,020
    
    
    
    838
    
    
    
    395
    
    
    
    539
    
    
    
    491
    
    
    
    137
    
    
    
    280
    
    
    
    211Product group operations
    
    
    
    
    
    
    6,669
    
    
    
    9,521
    
    
    
    7,917
    
    
    
    3,697
    
    
    
    6,548
    
    
    
    5,653
    
    
    
    2,043
    
    
    
    3,914
    
    
    
    3,779Evaluation projects/other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (403
    )
    
    
    (212
    )
    
    
    (63
    )
    
    
    (285
    )
    
    
    (163
    )
    
    
    (41
    )6,669
    
    
    
    9,521
    
    
    
    7,917
    
    
    
    3,294
    
    
    
    6,336
    
    
    
    5,590
    
    
    
    1,758
    
    
    
    3,751
    
    
    
    3,738Energy & MineralsRTEA
    
    
    100.0
    
    
    
    1,869
    
    
    
    1,560
    
    
    
    1,428
    
    
    
    397
    
    
    
    331
    
    
    
    302
    
    
    
    147
    
    
    
    132
    
    
    
    177Rio Tinto Coal Australia
    
    
    (i
    )
    
    
    5,142
    
    
    
    2,272
    
    
    
    2,344
    
    
    
    2,900
    
    
    
    510
    
    
    
    920
    
    
    
    1,721
    
    
    
    246
    
    
    
    490Rössing
    
    
    68.6
    
    
    
    548
    
    
    
    486
    
    
    
    229
    
    
    
    260
    
    
    
    235
    
    
    
    71
    
    
    
    101
    
    
    
    95
    
    
    
    27Energy Resources of Australia
    
    
    68.4
    
    
    
    418
    
    
    
    303
    
    
    
    239
    
    
    
    352
    
    
    
    135
    
    
    
    79
    
    
    
    141
    
    
    
    38
    
    
    
    17Rio Tinto Iron and Titanium
    
    
    (j
    )
    
    
    1,919
    
    
    
    1,673
    
    
    
    1,449
    
    
    
    755
    
    
    
    471
    
    
    
    428
    
    
    
    295
    
    
    
    164
    
    
    
    152Rio Tinto Minerals
    
    
    (k
    )
    
    
    1,061
    
    
    
    965
    
    
    
    911
    
    
    
    183
    
    
    
    176
    
    
    
    148
    
    
    
    86
    
    
    
    71
    
    
    
    77Product group operations
    
    
    
    
    
    
    10,957
    
    
    
    7,259
    
    
    
    6,600
    
    
    
    4,847
    
    
    
    1,858
    
    
    
    1,948
    
    
    
    2,491
    
    
    
    746
    
    
    
    940Evaluation projects/other
    
    
    
    
    
    
    41
    
    
    
    144
    
    
    
    65
    
    
    
    395
    
    
    
    (63
    )
    
    
    (52
    )
    
    
    396
    
    
    
    (59
    )
    
    
    (42
    )10,998
    
    
    
    7,403
    
    
    
    6,665
    
    
    
    5,242
    
    
    
    1,795
    
    
    
    1,896
    
    
    
    2,887
    
    
    
    687
    
    
    
    898Other operations
    
    
    
    
    
    
    44
    
    
    
    55
    
    
    
    86
    
    
    
    (63
    )
    
    
    30
    
    
    
    39
    
    
    
    (52
    )
    
    
    15
    
    
    
    3358,077
    
    
    
    33,531
    
    
    
    25,447
    
    
    
    22,822
    
    
    
    14,530
    
    
    
    12,874
    
    
    
    11,794
    
    
    
    8,214
    
    
    
    7,680Other items
    
    
    
    
    
    
    (12
    )
    
    
    (13
    )
    
    
    (7
    )
    
    
    (355
    )
    
    
    (635
    )
    
    
    (249
    )
    
    
    (337
    )
    
    
    (526
    )
    
    
    (241
    )Exploration and evaluation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (150
    )
    
    
    25
    
    
    
    (101
    )
    
    
    (124
    )
    
    
    20
    
    
    
    (84
    )Net interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,030
    )
    
    
    (265
    )
    
    
    (17
    )Underlying earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,317
    
    
    
    13,920
    
    
    
    12,524
    
    
    
    10,303
    
    
    
    7,443
    
    
    
    7,338Items excluded from underlying earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,553
    
    
    
    (309
    )
    
    
    42
    
    
    
    (6,627
    )
    
    
    (131
    )
    
    
    100Less: share of equity accounted units sales revenue
    
    
    
    
    
    
    (3,801
    )
    
    
    (3,818
    )
    
    
    (2,975
    )Total
    
    
    
    
    
    
    54,264
    
    
    
    29,700
    
    
    
    22,465
    
    
    
    23,870
    
    
    
    13,611
    
    
    
    12,566
    
    
    
    3,676
    
    
    
    7,312
    
    
    
    7,438Depreciation and amortisation in subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,475
    )
    
    
    (2,115
    )
    
    
    (1,509
    )Impairment charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,030
    )
    
    
    (58
    )
    
    
    396Depreciation and amortisation in equity accounted units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (414
    )
    
    
    (310
    )
    
    
    (275
    )Taxation and finance items in equity accounted units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (718
    )
    
    
    (973
    )
    
    
    (826
    )Profit before finance items and taxation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,233
    
    
    
    10,155
    
    
    
    10,352
 A-69




---



##### Table of Contents



Notes to the 2008 Financial statements
 50
    
    Rio Tinto financial information by business unit (continued)
  Depreciation &
    
    
    
    OperatingRio Tinto
    
    
    Capital expenditure (l)
    
    
    amortisation
    
    
    
    assets (m)
    
    
    Employees (o)interest
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2006%
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    US$m
    
    
    Number
    
    
    Number
    
    
    NumberIron OreHamersley Iron (including HIsmelt®) (d)
    
    
    100.0
    
    
    
    1,860
    
    
    
    1,597
    
    
    
    1,700
    
    
    
    466
    
    
    
    352
    
    
    
    231
    
    
    
    5,170
    
    
    
    6,133
    
    
    
    6,321
    
    
    
    4,786
    
    
    
    4,161Robe River (e)
    
    
    53.0
    
    
    
    683
    
    
    
    241
    
    
    
    104
    
    
    
    111
    
    
    
    104
    
    
    
    90
    
    
    
    1,622
    
    
    
    1,877
    
    
    
    1,011
    
    
    
    873
    
    
    
    678Iron Ore Company of Canada
    
    
    58.7
    
    
    
    256
    
    
    
    163
    
    
    
    151
    
    
    
    83
    
    
    
    78
    
    
    
    58
    
    
    
    482
    
    
    
    869
    
    
    
    2,094
    
    
    
    1,939
    
    
    
    1,886Rio Tinto Brasil
    
    
    100.0
    
    
    
    146
    
    
    
    30
    
    
    
    18
    
    
    
    14
    
    
    
    9
    
    
    
    8
    
    
    
    207
    
    
    
    135
    
    
    
    841
    
    
    
    657
    
    
    
    522Dampier Salt
    
    
    68.4
    
    
    
    27
    
    
    
    20
    
    
    
    25
    
    
    
    21
    
    
    
    21
    
    
    
    17
    
    
    
    154
    
    
    
    273
    
    
    
    394
    
    
    
    376
    
    
    
    349Other
    
    
    
    
    
    
    24
    
    
    
    34
    
    
    
    8
    
    
    
    10
    
    
    
    3
    
    
    
    
    
    
    
    (3
    )
    
    
    24
    
    
    
    448
    
    
    
    375
    
    
    
    2,996
    
    
    
    2,085
    
    
    
    2,006
    
    
    
    705
    
    
    
    567
    
    
    
    404
    
    
    
    7,632
    
    
    
    9,311
    
    
    
    11,109
    
    
    
    9,006
    
    
    
    7,596Aluminium
    
    
    (f
    )
    
    
    2,671
    
    
    
    612
    
    
    
    236
    
    
    
    1,858
    
    
    
    618
    
    
    
    266
    
    
    
    35,730
    
    
    
    43,885
    
    
    
    39,326
    
    
    
    11,428
    
    
    
    4,347Copper & DiamondsKennecott Utah Copper
    
    
    100.0
    
    
    
    316
    
    
    
    282
    
    
    
    295
    
    
    
    246
    
    
    
    251
    
    
    
    151
    
    
    
    1,750
    
    
    
    1,694
    
    
    
    1,915
    
    
    
    1,854
    
    
    
    1,744Escondida
    
    
    30.0
    
    
    
    120
    
    
    
    170
    
    
    
    155
    
    
    
    98
    
    
    
    98
    
    
    
    96
    
    
    
    849
    
    
    
    1,045
    
    
    
    960
    
    
    
    876
    
    
    
    1,072Grasberg joint venture
    
    
    (g
    )
    
    
    32
    
    
    
    76
    
    
    
    45
    
    
    
    25
    
    
    
    24
    
    
    
    43
    
    
    
    426
    
    
    
    410
    
    
    
    2,185
    
    
    
    2,047
    
    
    
    1,781Palabora
    
    
    57.7
    
    
    
    40
    
    
    
    27
    
    
    
    18
    
    
    
    57
    
    
    
    41
    
    
    
    40
    
    
    
    123
    
    
    
    84
    
    
    
    2,116
    
    
    
    2,072
    
    
    
    1,811Kennecott Minerals
    
    
    100.0
    
    
    
    71
    
    
    
    84
    
    
    
    78
    
    
    
    4
    
    
    
    24
    
    
    
    26
    
    
    
    30
    
    
    
    236
    
    
    
    46
    
    
    
    457
    
    
    
    409Northparkes
    
    
    80.0
    
    
    
    105
    
    
    
    55
    
    
    
    16
    
    
    
    15
    
    
    
    22
    
    
    
    48
    
    
    
    187
    
    
    
    151
    
    
    
    210
    
    
    
    208
    
    
    
    182Diamonds
    
    
    (h
    )
    
    
    652
    
    
    
    525
    
    
    
    257
    
    
    
    175
    
    
    
    181
    
    
    
    182
    
    
    
    1,340
    
    
    
    1,241
    
    
    
    1,401
    
    
    
    1,291
    
    
    
    1,354Other
    
    
    
    
    
    
    132
    
    
    
    22
    
    
    
    57
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    831
    
    
    
    498
    
    
    
    143
    
    
    
    162
    
    
    
    561,468
    
    
    
    1,241
    
    
    
    921
    
    
    
    621
    
    
    
    642
    
    
    
    586
    
    
    
    5,536
    
    
    
    5,359
    
    
    
    8,976
    
    
    
    8,967
    
    
    
    8,409Energy & MineralsRTEA
    
    
    100.0
    
    
    
    204
    
    
    
    226
    
    
    
    262
    
    
    
    150
    
    
    
    131
    
    
    
    116
    
    
    
    1,090
    
    
    
    1,163
    
    
    
    2,477
    
    
    
    2,435
    
    
    
    2,297Rio Tinto Coal Australia
    
    
    (i
    )
    
    
    449
    
    
    
    226
    
    
    
    251
    
    
    
    194
    
    
    
    165
    
    
    
    170
    
    
    
    1,134
    
    
    
    1,755
    
    
    
    3,206
    
    
    
    2,832
    
    
    
    2,462Rössing
    
    
    68.6
    
    
    
    73
    
    
    
    57
    
    
    
    38
    
    
    
    20
    
    
    
    13
    
    
    
    6
    
    
    
    229
    
    
    
    151
    
    
    
    1,307
    
    
    
    1,175
    
    
    
    936Energy Resources of Australia
    
    
    68.4
    
    
    
    144
    
    
    
    80
    
    
    
    31
    
    
    
    51
    
    
    
    50
    
    
    
    32
    
    
    
    212
    
    
    
    296
    
    
    
    448
    
    
    
    365
    
    
    
    366Rio Tinto Iron and Titanium
    
    
    (j
    )
    
    
    563
    
    
    
    494
    
    
    
    252
    
    
    
    118
    
    
    
    119
    
    
    
    112
    
    
    
    2,122
    
    
    
    2,202
    
    
    
    4,105
    
    
    
    3,854
    
    
    
    3,728Rio Tinto Minerals
    
    
    (k
    )
    
    
    63
    
    
    
    51
    
    
    
    83
    
    
    
    68
    
    
    
    61
    
    
    
    60
    
    
    
    792
    
    
    
    892
    
    
    
    2,580
    
    
    
    2,512
    
    
    
    2,667Other
    
    
    
    
    
    
    5
    
    
    
    17
    
    
    
    
    
    
    
    11
    
    
    
    3
    
    
    
    
    
    
    
    60
    
    
    
    58
    
    
    
    155
    
    
    
    135
    
    
    
    1,501
    
    
    
    1,151
    
    
    
    917
    
    
    
    612
    
    
    
    542
    
    
    
    496
    
    
    
    5,639
    
    
    
    6,517
    
    
    
    14,278
    
    
    
    13,308
    
    
    
    12,456Other operations
    
    
    
    
    
    
    192
    
    
    
    37
    
    
    
    23
    
    
    
    13
    
    
    
    2
    
    
    
    2
    
    
    
    560
    
    
    
    139
    
    
    
    163
    
    
    
    203
    
    
    
    309Net assets held for sale (n)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,204
    
    
    
    4,392
    
    
    
    28,386
    
    
    
    5,680
    
    
    
    Other items
    
    
    
    
    
    
    151
    
    
    
    144
    
    
    
    174
    
    
    
    80
    
    
    
    54
    
    
    
    30
    
    
    
    1,009
    
    
    
    360
    
    
    
    3,547
    
    
    
    3,085
    
    
    
    2,128Less: equity accounted units
    
    
    
    
    
    
    (491
    )
    
    
    (302
    )
    
    
    (289
    )
    
    
    (414
    )
    
    
    (310
    )
    
    
    (275
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    8,488
    
    
    
    4,968
    
    
    
    3,988
    
    
    
    3,475
    
    
    
    2,115
    
    
    
    1,509
    
    
    
    59,310
    
    
    
    69,963
    
    
    
    105,785
    
    
    
    51,677
    
    
    
    35,245Less: Net debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,672
    )
    
    
    (45,191
    )Total Rio Tinto shareholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,638
    
    
    
    24,772
   (a)
    
    Gross sales revenue includes 100 per cent of subsidiaries sales revenue and the Groups share of the sales revenue of equity accounted units.(b)
    
    EBITDA of subsidiaries and the Groups share of EBITDA relating to equity accounted units represents profit before: tax, net finance items,
depreciation and amortisation.(c)
    
    Net earnings represent profit after tax for the year attributable to the Rio Tinto Group. Earnings of subsidiaries are stated before
finance items but after the amortisation of the discount related to provisions. Earnings attributable to equity accounted units
include interest charges and amortisation of discount. Earnings attributed to business units do not include amounts that are excluded
in arriving at Underlying earnings.(d)
    
    Includes Rio Tintos interests in Hamersley iron (100 per cent) and HIsmelt (60 per cent).
 (e)
    
    The Group holds 65 per cent of Robe River Iron Associates, of which 30 per cent is held through a 60 per cent owned subsidiary. The
Groups net beneficial interest is therefore 53 per cent, net of amounts attributable to outside equity shareholders.(f)
    
    Includes the Alcan group, excluding Packaging which is shown as an Asset Held for Sale, acquired in 2007 together with the aluminium business
previously owned by Rio Tinto.(g)
    
    Under the terms of a joint venture agreement, Rio Tinto is entitled to 40 per cent of additional material mined as a consequence of expansions and
developments of the Grasberg facilities since 1998.(h)
    
    Diamonds includes Rio Tintos interests in Argyle (100 per cent), Diavik (60 per cent) and Murowa (77.8 per cent).(i)
    
    Includes Rio Tintos 75.7 per cent interest in Coal and Allied, which is managed by Rio Tinto Coal Australia, a 100 per cent subsidiary of Rio Tinto.
The Group owns a 40 per cent interest in Bengalla and 80 per cent
interest in Mount Thorley through a 75.71 per cent investment in Coal and Allied,
giving a beneficial interest to the Group of 30.3 per cent and 60.6 per cent, respectively.(j)
    
    Includes Rio Tintos interests in QIT (100 per cent) and Richards Bay Iron and Titanium (Pty) Limited (50 per cent).(k)
    
    Includes Rio Tintos interests in Rio Tinto Borax (100 per cent) and Luzenac Talc (100 per cent).(l)
    
    Capital expenditure comprises the net cash outflow on purchases less disposals of property, plant and equipment, capitalised evaluation costs
and purchases less disposals of other intangible assets. The details provided include 100 per cent of subsidiaries capital expenditure and
Rio Tintos share of the capital expenditure of equity accounted units. Amounts relating to equity accounted units not specifically funded by Rio Tinto
are deducted before arriving at total capital expenditure for the Group.(m)
    
    Operating assets of subsidiaries comprise net assets before deducting net debt, less outside shareholders interests which are calculated by reference
to the net assets of the relevant companies (i.e. net of such companies debt). For equity accounted units, Rio Tintos net investment is shown.(n)
    
    On this line, operating assets deal with Alcan Packaging and other assets held for sale. The remaining data on this line relates only to Alcan Packaging.(o)
    
    Employee numbers, which represent the average for the year, include 100 per cent of employees of subsidiary companies. Employee numbers
for proportionally consolidated and equity accounted units are proportional to the Groups interest. Average employee numbers include a part
year effect for companies acquired or disposed of during the year. Part time employees are included on a full time equivalent basis. Temporary employees
are included in employee numbers. People employed by contractors are not included. Rio Tinto Alcans employees in 2007 are shown on a pro rata basis.
 A-70




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##### Table of Contents



Australian Corporations Act  summary of ASIC relief
    
   Directors report Remuneration report Directors report Directors report Remuneration report Remuneration report Remuneration report
 Directors report Remuneration report Remuneration
report Directors report Remuneration report Remuneration report
 Remuneration report
     A-71




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 To
the Boards of Directors and Shareholders of Rio Tinto plc and Rio Tinto Limited:
 Internal
Control  Integrated Framework
   PricewaterhouseCoopers LLP
    
    PricewaterhouseCoopersLondon, United Kingdom
    
    Brisbane, Australia2
April 2009
    
    2 April 2009In respect of the
Board of Directors and

Shareholders of Rio Tinto
plc
    
    In respect of the Board of Directors 
and Shareholders of Rio Tinto
Limited
 A-72




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##### Table of Contents



MINERA ESCONDIDA LIMITADAFinancial StatementsJune 30, 2008, 2007 and 2006(With Independent Auditors Report Thereon)
 A-73




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 CONTENTS
 1.
    
    Independent Auditors Report
    
    
    A-752.
    
    Balance Sheets
    
    
    A-763.
    
    Statements of Income
    
    
    A-784.
    
    Statements of Equity
    
    
    A-795.
    
    Statements of Cash Flows
    
    
    A-806.
    
    Notes to Financial Statements
    
    
    A-82
 A-74




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##### Table of Contents



Independent Auditors Report
 
     
 A-75




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 
 2008
    
    2007AssetsCurrent assets:Cash and cash equivalents
    
    
    50,335
    
    
    
    127,299Trade accounts receivable
    
    
    1,918,997
    
    
    
    1,729,031Due from related companies
    
    
    25,076
    
    
    
    25,907Other receivables, including employee receivables
    
    
    19,931
    
    
    
    17,280Production inventories
    
    
    317,912
    
    
    
    178,485Supplies and spare parts, net
    
    
    125,262
    
    
    
    79,594Other current assets
    
    
    279,040
    
    
    
    187,452Total current assets
    
    
    2,736,553
    
    
    
    2,345,048Property, plant and mine development, net
    
    
    3,861,341
    
    
    
    3,620,235Other assets:Intangible assets, net
    
    
    49,611
    
    
    
    53,371Other assets, net
    
    
    204,787
    
    
    
    166,580Total other assets
    
    
    254,398
    
    
    
    219,951Total assets
    
    
    6,852,292
    
    
    
    6,185,234
  A-76




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 2008
    
    2007Liabilities and Owners EquityCurrent liabilities:Short-term portion of senior unsecured debt
    
    
    85,000
    
    
    
    85,000Short-term portion of subordinated owners debt
    
    
    48,000
    
    
    
    48,000Short-term portion of bonds
    
    
    
    
    
    
    19,336Accounts payable to suppliers
    
    
    265,816
    
    
    
    147,502Due to related companies
    
    
    49,597
    
    
    
    40,295Accrued liabilities and withholdings
    
    
    166,560
    
    
    
    174,243Sundry creditors
    
    
    4,756
    
    
    
    4,392Income taxes payable
    
    
    130,948
    
    
    
    65,873Deferred income taxes
    
    
    18,473
    
    
    
    40,083Interest payable
    
    
    12,344
    
    
    
    23,089Financial liabilities
    
    
    189,217
    
    
    
    175,955Total current liabilities
    
    
    970,711
    
    
    
    823,768Long-term liabilities:Senior unsecured debt
    
    
    807,500
    
    
    
    892,500Subordinated owners debt
    
    
    266,000
    
    
    
    314,000Sundry creditors
    
    
    46,380
    
    
    
    51,136Accrued employee severance indemnities
    
    
    66,351
    
    
    
    60,161Deferred income taxes
    
    
    262,760
    
    
    
    236,654Accruals and reclamation reserve
    
    
    128,894
    
    
    
    131,558Other liabilities
    
    
    29,422
    
    
    
    Total long-term liabilities
    
    
    1,607,307
    
    
    
    1,686,009Owners equity:Paid-in capital
    
    
    647,902
    
    
    
    647,902Retained earnings
    
    
    3,626,372
    
    
    
    3,027,555Total owners equity
    
    
    4,274,274
    
    
    
    3,675,457Total liabilities and owners equity
    
    
    6,852,292
    
    
    
    6,185,234
  A-77




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 
 2008
        
    2007
        
    2006Operating revenues:Sales
    
    
    11,530,662
    
    
    
    9,843,344
    
    
    
    8,073,540Refining and treatment charges
    
    
    (423,768
    )
    
    
    (626,715
    )
    
    
    (762,021
    )Concentrate and cathode shipping charges
    
    
    (294,458
    )
    
    
    (196,036
    )
    
    
    (149,716
    )Net sales
    
    
    10,812,436
    
    
    
    9,020,593
    
    
    
    7,161,803Operating costs and expensesCost of products sold
    
    
    (1,995,211
    )
    
    
    (1,408,227
    )
    
    
    (1,179,954
    )Sales commissions
    
    
    (26,087
    )
    
    
    (27,621
    )
    
    
    (14,209
    )Net operating income
    
    
    8,791,138
    
    
    
    7,584,745
    
    
    
    5,967,640Non-operating income (expense):Interest income
    
    
    6,771
    
    
    
    11,748
    
    
    
    10,500Interest expense
    
    
    (90,987
    )
    
    
    (113,792
    )
    
    
    (57,391
    )Realized fair value change  derivative
    
    
    (130,009
    )
    
    
    (89,280
    )
    
    
    (188,086
    )Unrealized fair value change  derivative
    
    
    57,339
    
    
    
    61,801
    
    
    
    (95,746
    )Exchange loss, net
    
    
    (9,708
    )
    
    
    (6,635
    )
    
    
    (14,270
    )Exploration activities
    
    
    (37,727
    )
    
    
    (18,764
    )
    
    
    (9,410
    )Miscellaneous expenses, net
    
    
    (126,275
    )
    
    
    (50,635
    )
    
    
    (45,178
    )Non-operating expense
    
    
    (330,596
    )
    
    
    (205,557
    )
    
    
    (399,581
    )Income before income taxes
    
    
    8,460,542
    
    
    
    7,379,188
    
    
    
    5,568,059Income taxes
    
    
    (1,665,540
    )
    
    
    (1,376,483
    )
    
    
    (1,027,534
    )Net income for the year
    
    
    6,795,002
    
    
    
    6,002,705
    
    
    
    4,540,525
  A-78




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 
 TotalRetained
    
    StockholdersCapital
    
    earnings
    
    equityBalance at June 30, 2005
    
    
    547,902
    
    
    
    1,095,318
    
    
    
    1,643,220Net income
    
    
    
    
    
    
    4,540,525
    
    
    
    4,540,525Capitalization of retained earnings
    
    
    50,000
    
    
    
    (50,000
    )
    
    
    Dividends declared
    
    
    
    
    
    
    (3,500,000
    )
    
    
    (3,500,000
    )Balance at June 30, 2006
    
    
    597,902
    
    
    
    2,085,843
    
    
    
    2,683,745Net income
    
    
    
    
    
    
    6,002,705
    
    
    
    6,002,705Capitalization of retained earnings
    
    
    50,000
    
    
    
    (50,000
    )
    
    
    Dividends declared
    
    
    
    
    
    
    (5,010,993
    )
    
    
    (5,010,993
    )Balance at June 30, 2007
    
    
    647,902
    
    
    
    3,027,555
    
    
    
    3,675,457Net income
    
    
    
    
    
    
    6,795,002
    
    
    
    6,795,002Dividends declared
    
    
    
    
    
    
    (6,196,185
    )
    
    
    (6,196,185
    )Balance at June 30, 2008
    
    
    647,902
    
    
    
    3,626,372
    
    
    
    4,274,274
  A-79




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 
 2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Cash received from customers
    
    
    10,934,136
    
    
    
    8,587,229
    
    
    
    6,248,350Cash paid to suppliers and employees
    
    
    (2,244,723
    )
    
    
    (1,113,194
    )
    
    
    (1,048,252
    )Interest received
    
    
    6,771
    
    
    
    11,748
    
    
    
    10,500Other income
    
    
    (496
    )
    
    
    14,595
    
    
    
    6,725Interest paid
    
    
    (92,499
    )
    
    
    (103,385
    )
    
    
    (92,615
    )Income taxes paid
    
    
    (1,596,061
    )
    
    
    (1,470,662
    )
    
    
    (780,212
    )Fair value change  derivative
    
    
    (130,009
    )
    
    
    (89,280
    )
    
    
    (188,086
    )Exploration activities
    
    
    (37,727
    )
    
    
    (18,764
    )
    
    
    (9,410
    )Other expenses paid
    
    
    (33,591
    )
    
    
    (30,541
    )
    
    
    (26,294
    )Net cash flows provided by operating activities
    
    
    6,805,801
    
    
    
    5,787,746
    
    
    
    4,120,706Cash flow from investing activities:Proceeds from sale of equipment
    
    
    
    
    
    
    939
    
    
    
    1,250Purchase of property, plant and equipment
    
    
    (529,853
    )
    
    
    (445,737
    )
    
    
    (650,478
    )Net cash flows used in investing activities
    
    
    (529,853
    )
    
    
    (444,798
    )
    
    
    (649,228
    )Cash flow from financing activities:Borrowing from banks and financial institutions
    
    
    29,100
    
    
    
    150,000
    
    
    
    190,000Dividends paid
    
    
    (6,196,185
    )
    
    
    (5,010,993
    )
    
    
    (3,500,000
    )Principal payments on long-term debt
    
    
    (118,491
    )
    
    
    (279,056
    )
    
    
    (221,744
    )Principal payments on bonds
    
    
    (19,336
    )
    
    
    (40,000
    )
    
    
    (40,000
    )Repayments of loans from related parties
    
    
    (48,000
    )
    
    
    (48,000
    )
    
    
    (40,500
    )Net cash flows used in financing activities
    
    
    (6,352,912
    )
    
    
    (5,228,049
    )
    
    
    (3,612,244
    )Net cash flows for the year
    
    
    (76,964
    )
    
    
    114,899
    
    
    
    (140,766
    )Cash and cash equivalents at beginning of year
    
    
    127,299
    
    
    
    12,400
    
    
    
    153,166Cash and cash equivalents at end of year
    
    
    50,335
    
    
    
    127,299
    
    
    
    12,400
  A-80




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 2008
    
    
    2007
    
    
    2006Reconciliation of net income to net cash flows provided
by operating activitiesNet income for the year
    
    
    6,795,002
    
    
    
    6,002,705
    
    
    
    4,540,525Result on sale of assets:(Gain)/Loss from sale of equipment
    
    
    
    
    
    
    (939
    )
    
    
    (1,250
    )Debits/(credits) to net income not representing
cash flows:Depreciation and amortization
    
    
    285,983
    
    
    
    242,671
    
    
    
    280,324Net foreign exchange loss
    
    
    9,708
    
    
    
    6,635
    
    
    
    14,270Deferred income taxes
    
    
    4,496
    
    
    
    96,104
    
    
    
    83,070(Increase)/decrease in current assets:Trade accounts receivable
    
    
    (189,966
    )
    
    
    (279,013
    )
    
    
    (903,183
    )Due from related companies
    
    
    831
    
    
    
    2,637
    
    
    
    (3,081
    )Other receivables
    
    
    (2,651
    )
    
    
    (10,155
    )
    
    
    (34,707
    )Production inventories
    
    
    (139,427
    )
    
    
    (74,125
    )
    
    
    (36,782
    )Supplies and spare parts, net
    
    
    (45,668
    )
    
    
    (48,322
    )
    
    
    (26,798
    )Other current assets
    
    
    (126,035
    )
    
    
    (40,873
    )
    
    
    (84,539
    )Increase/(decrease) in current liabilities:Accounts payable to suppliers
    
    
    118,314
    
    
    
    (5,310
    )
    
    
    (47,939
    )Due to related companies
    
    
    9,302
    
    
    
    10,777
    
    
    
    5,499Accrued liabilities and withholdings
    
    
    7,683
    
    
    
    91,029
    
    
    
    10,535Sundry creditors
    
    
    (4,392
    )
    
    
    (4,060
    )
    
    
    309Income taxes payable
    
    
    65,075
    
    
    
    (189,215
    )
    
    
    143,766Financial liabilities
    
    
    13,262
    
    
    
    (11,518
    )
    
    
    187,473Other
    
    
    4,284
    
    
    
    (1,282
    )
    
    
    (6,786
    )Net cash flows from operating activities
    
    
    6,805,801
    
    
    
    5,787,746
    
    
    
    4,120,706
  A-81




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 
 (1)
    
    Description of BusinessMinera Escondida Limitada (the Company or Escondida) is a mining company engaged in the
exploration, extraction, processing, and marketing of mineral resources. The Company is
currently exploiting the Escondida copper ore body located in the Second Region of the
Republic of Chile, 170 kilometers southeast of the city of Antofagasta at an altitude of
3,100 meters above sea level. The Company produces copper concentrates and copper cathodes
through an open-pit mining operation and cathode treatment plants at the mine site. The
concentrate also includes gold and silver. The concentrate is transported by pipeline to the
port facility in Coloso near Antofagasta where it is filtered and shipped to the customers.
The copper cathodes are produced at an Oxide Plant, a heap leaching and SX/EW facility,
located at the mine site. The copper cathodes are transported by rail to the port of
Antofagasta for shipment to customers.The Company, at the present operated by BHP Billiton, was formed by public deed on August
14, 1985 as a partnership. As of June 30, 2008 and 2007, the Owners are as follows:
 Percentage ofEquity %BHP Escondida Inc.
    
    
    57.5Rio Tinto Escondida Limited
    
    
    30.0JECO Corporation
    
    
    10.0International Finance Corporation
    
    
    2.5Total
    
    
    100.0
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices
 (a)
    
    GeneralThe accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
Company maintains accounting records in United States dollars, the Companys
functional currency, as authorized by the Companys Foreign Investment Contract with
the Chilean government. Transactions in other currencies are recorded at actual
rates of the transaction date. Year-end balances in Chilean pesos and other
currencies are translated at the applicable closing exchange rates.(b)
    
    Cash EquivalentsCash equivalents of $50,335 and $127,299 at June 30, 2008 and 2007, respectively,
consist of short term investments with an initial term of less than one month in
financial instruments issued by Commercial Banks and Central Bank of Chile
Securities. For the purpose of the statement of cash flows, the Company considers
all highly liquid debt instruments with original maturities of three months or less
to be cash equivalents.(c)
    
    Trade Accounts ReceivableThe accounts receivable balances at June 30, 2008 and 2007 include provisional
invoices issued for copper concentrate and copper cathode shipments. Such invoices
are based on the Companys weights and assays, which are subject to review and final
agreement by the customers. Under the terms of the sales contracts, the final prices
to be received will also depend on the prices fixed for copper by independent metal
exchanges, including the London Metal Exchange, during the future quotation periods
applicable to each delivery. At June 30, 2008 and 2007, the sales under provisional
invoicing arrangements have been valued based on forward price. Refining, treatment
and shipping charges are netted against operating revenues in accordance with
industry practices. The Company has not recorded an allowance for doubtful accounts,
as management considers all accounts and notes receivable are collectible.(d)
    
    InventoryMinerals in process (including stockpile inventory), copper concentrate and copper
cathodes are valued at the lower of cost or market value. Mining and milling costs
and non cash costs are included in the value of the inventories, as well as the
allocated costs of central maintenance and engineering and the on-site general and
administrative costs including all essential infrastructure support. Materials and
supplies are valued at the lower of average cost and estimated net realizable value.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (e)
    
    Financial InstrumentsThe Company accounts for derivatives and hedging activities in accordance with FASB
Statement N° 133, Accounting for Derivative Instruments and Certain Hedging
Activitiesas amended, which requires that all derivate instruments be recorded on
the balance sheet at their respective fair value. Derivatives, including those
embedded in other contractual arrangements but separated for accounting purposes
because they are not clearly and closely related to the host contract, are initially
recognized at fair value on the date the contract is entered into and are
subsequently remeasured at their fair value. The resulting gain or loss on
remeasurement is recognized in the income statement. The measurement of fair value
is based on quoted market prices. Where no price information is available from a
quoted market source, alternative market mechanisms or recent comparable
transactions, fair value is estimated based on the Companys views on relevant
prices.The Companys financial instrument policy is designed to achieve sales at the
average annual LME price shifted forward by one month and three months, for cathodes
and concentrates respectively, for all tonnes of copper shipped in a given calendar
year. In the case where copper is sold with a different quotation period than our
targeted standard price or shipments are not distributed evenly over the year, paper
adjustments will be made.Financial instruments in revenue  see note 2(p). Financial instruments in
treatment charges  see note 22.All derivatives are marked to market at year end.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (f)
    
    Property, Plant and EquipmentProperty, plant and equipment are stated at cost. Cost includes capitalized interest
incurred during the construction and development period and during subsequent
expansion periods.Plant and equipment with a useful life of less than the life of the mine are
depreciated on a straight-line basis over the respective useful lives, ranging from
3 to 11 years. The remaining items of plant and equipment are depreciated on a
units-of-production basis over the life of the proven and probable copper reserves.Mine development is depreciated on a units-of-production basis over the life of the
proven and probable copper reserves. Land is not subject to depreciation.Changes in estimates are accounted for over the estimated remaining economic life or
the remaining commercial reserves of the mine as applicable.Total depreciation and amortization for the years ended June 30, 2008, 2007 and 2006
is included as a cost of the production of inventories.Expenditures for replacements and improvements are capitalized when the assets
standard of performance is significantly enhanced or the expenditure represents a
replacement of a component of an overall tangible fixed asset which has been
separately depreciated.(g)
    
    Mining PropertyAt June 30, 2008 and 2007, the Company has recognized certain costs relating to
mining property as property, plant and equipment. These include:
 i)
    
    Costs incurred in delineating and developing the Escondida
copper ore body and neighboring mineral areas of interest (in areas which have
been subject to feasibility studies), together with the cost of drilling
programs aimed at determining the extent of the mineral body, obtaining other
technical data, and related direct expenses.ii)
    
    Other expenditure incurred in the pre-operating stage of the
project.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (h)
    
    ExplorationExploration expenditures incurred in search of mineral deposits and the
determination of the commercial viability of such deposits are charged against
income as incurred until project feasibility is attained, from which time onward
such costs are capitalized.At June 30, 2008 and 2007 there were no capitalized exploration expenditures.(i)
    
    Intangible AssetsThis corresponds to the fair value of the water rights at the date of acquisition.
This asset is amortized on a units-of-production basis over the life of proven and
probable copper reserves.(j)
    
    Other AssetsOther assets consist of medium-grade ore stockpiles, deferred borrowing expenses,
spare parts and other minor assets.The medium-grade ore stockpiled for future use is valued at the lower of average
production cost or market value.Borrowing expenses corresponding to the issuance of debt are capitalized and
amortized based on the interest method over the period of the debt.Spare parts are assets that will not be consumed within one year from balance sheet
date, and are stated at cost and net of a provision for inventory obsolescence.
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MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (k)
    
    Income TaxesPursuant to its Foreign Investment Agreement with the Chilean government, the
Company has opted to pay income taxes based on the generally applicable rate in
effect, instead of the fixed rate set forth in such agreement. As a result, current
income taxes are calculated in accordance with existing Chilean tax legislation.Income taxes are accounted for under the asset and liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss and tax credit
carry forwards. Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.(l)
    
    Reclamation and Environmental CostsThe Company provides for the costs of mine reclamation activities as required by
various Chilean governmental agencies and Escondida owners regarding required
minimum environmental business conduct. Certain reclamation costs are incurred and
expensed as part of ongoing mining operations where no current or future benefit is
discernible. For other reclamation costs the estimated future cost of
decommissioning and restoration, discounted to its net present value, is provided
and capitalized as part of the cost of each project. The capitalized cost is
amortized over the life of the project and the increase in the net present value of
the provision is treated as an operating expense.Liabilities for loss contingencies, including environmental remediation costs not
within the scope of FASB Statement No.143, Accounting for Asset Retirement
Obligations, arising from claims, assessments, litigation, fines, and penalties and
other sources are recorded when it is probable that a liability has been incurred
and the amount of the assessment and/or remediation can be reasonably estimated.
Legal costs incurred in connection with loss contingencies are expensed as incurred.
Recoveries of environmental remediation costs from third parties, which are probable
of realization, are separately recorded as assets, and are not offset against the
related environmental liability, in accordance with FASB Interpretation No. 39,
Offsetting of Amounts Related to Certain Contracts.
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MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (m)
    
    Severance IndemnitiesThe Company has an agreement with its employees to pay severance indemnities on
termination of labor contracts. Provision has been made on the basis of one months
remuneration per year of service, calculated on the latest months remunerations.(n)
    
    Use of EstimatesThe preparation of the financial statements requires the management of the Company
to make a number of estimates and assumptions relating to the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the period. Significant items subject to such estimation and
assumptions include the carrying amount of property, plant and equipment, mining
property, exploration and intangibles; valuation allowances for receivables,
inventories and deferred income tax assets; environmental liabilities; financial
instruments and obligations related to employee benefits. Actual results could
differ from those estimates.(o)
    
    Impairment of Long-Lived AssetsIn accordance with FASB Statement No. 144 Accounting for the Impairment or Disposal
of Long-Lived Assets, long-lived assets, such as property, plant, and equipment
(including mining property, exploration), and purchased intangibles subject to
amortization, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash flows expected to
be generated by the asset. If the carrying amount of an asset exceeds its estimated
future cash flows, an impairment charge is recognized being the amount by which the
carrying amount of the asset exceeds the fair value of the asset. Assets to be
disposed of are separately presented in the balance sheet and reported at the lower
of the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposal group classified as held for
sale are presented separately in the appropriate asset and liability sections of the
balance sheet.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (p)
    
    Revenue RecognitionRevenue is recognized when title to Copper Concentrate and Copper Cathode passes to
the buyer when the ships depart from the loading port. The passing of title to the
customer is based on the terms of the sales contract.Under our copper concentrate sales contracts with smelters, final prices are set on
a specified future quotational period, typically three months after the month of
arrival. For copper cathode sales contracts, final prices are typically one month
after the month of arrival. Revenues are recorded under these contracts at the time
title passes to the buyer based on the forward price for the expected settlement
period. The contracts, in general, provide for a provisional payment based upon
provisional assays and quoted metal prices. Final settlement is based on the
average applicable price for a specified future period, and generally occurs from
four to six months after shipment in copper concentrates and two months for copper
cathodes. Final sales are settled using smelter weights, settlement assays (average
of assays exchanged and/or umpire assay results) and are priced as specified in the
smelter contract. The Companys provisionally priced sales contain an embedded
derivative that is required to be separated from the host contract for accounting
purposes. The host contract is the receivable from the sale of concentrates
measured at the forward price at the time of sale. The embedded derivative does not
qualify for hedge accounting. The embedded derivative is recorded as a receivable
on the balance sheet and is adjusted to fair value through revenue and cost of sales
(for the smelting and refining charges of the sales) each period until the date of
final copper settlement. The form of the material being sold, after deduction for
smelting and refining is in an identical form to that sold on the London Bullion
Market. The form of the product is metal in flotation concentrate, which is the
final process for which the Company is responsible.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (q)
    
    Recently Issued Accounting StandardsIn February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, The Fair Value Option for Financial Assets and Financial Liabilities 
including an amendment of FASBStatement No. 115(Statement 159). Statement 159
gives the Company the irrevocable option to carry most financial assets and
liabilities at fair value that are not currently required to be measured at fair
value. If the fair value option is elected, changes in fair value would be recorded
in earnings at each subsequent reporting date. SFAS 159 is effective for the
Companys 2009 fiscal year. The Company is currently evaluating the impact the
adoption of this statement could have on its financial condition, results of
operations and cash flows.In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurement
(Statement 157). Statement 157 defines fair value, establishes a framework for the
measurement of fair value, and enhances disclosures about fair value measurements.
The Statement does not require any new fair value measures. The Statement is
effective for fair value measures already required or permitted by other standards
for fiscal years beginning after November 15, 2007. The Company is required to adopt
Statement 157 beginning on July 1, 2008. Statement 157 is required to be applied
prospectively, except for certain financial instruments. Any transition adjustment
will be recognized as an adjustment to opening retained earnings in the year of
adoption. In November 2007, the FASB proposed a one-year deferral of Statement 157s
fair-value measurement requirements for nonfinancial assets and liabilities that are
not required or permitted to be measured at fair value on a recurring basis. The
Company is currently evaluating the impact of adopting Statement 157 on its results
of operations and financial position.(r)
    
    Recently Adopted Accounting StandardsEffective July 1, 2007, the Company adopted the provisions of FASB Interpretation
No.48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB
statement No.109, (FIN 48). FIN 48 addresses the accounting for uncertainty in
income taxes recognized in an enterprises financial statements and prescribes a
threshold of more-likely-than-not for recognition and derecognition of tax positions
taken or expected to be taken in a tax return. FIN 48 also provides related guidance
on measurement, classification, interest and penalties, and disclosure. The
Companys accounting policy is to accrue interest and penalties related to
unrecognized tax benefits as a component of income taxes in the statements of
income. There was no significant impact of adopting FIN 48 on the Companys results
of operations and financial position.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (2)
    
    Summary of Significant Accounting Policies and Practices, Continued
 (s)
    
    Deferred Stripping  Change in Accounting Policy in 2007Previously costs incurred through the removal of overburden and other waste
materials once saleable materials have begun to be extracted from a mine were
referred to as production stripping costs. Previously these production stripping
costs were charged to the income statement as operating costs when the ratio of
waste material to ore extracted for an area of interest is expected to be constant
throughout its estimated life. When the current ratio of waste to ore was greater
than the estimated life-of-mine ratio, a portion of the production stripping costs
was capitalized. In subsequent years, when the ratio of waste to ore was less than
the estimated life-of-mine ratio, a portion of capitalized stripping costs was
charged to the income statement as operating costs. The amount capitalized or
charged in a year was determined so that the stripping expense for the financial
year reflects the estimated life-of-mine ratio.In March 2005, the Emerging Issues Task Force (EITF) of the FASB reached a consensus
in Issue No. 04-6 Accounting for Stripping Costs Incurred During Production in the
Mining Industry(EITF 04-6) that stripping costs incurred during the production
phase of a mine are variable production costs (effective July 1, 2006). As such,
stripping costs incurred during the production phase are treated differently to
stripping costs incurred during the development stage. The Company has adopted EITF
04-6 and retrospectively adjusted the 2006 and 2005 comparative financial years as
follow:
 FY 2005As originally stated
    
    As adjusted
    
    Effect of chargeIncome StatementCost of products sold
    
    
    970,391
    
    
    
    997,519
    
    
    
    27,128Income taxes
    
    
    389,713
    
    
    
    385,101
    
    
    
    (4,612
    )
 FY 2006As originally stated
    
    As adjusted
    
    Effect of chargeBalance SheetDeferred stripping, net
    
    
    441,111
    
    
    
    
    
    
    
    (441,111
    )Deferred income taxes non
current
    
    
    (188,110
    )
    
    
    (103,331
    )
    
    
    84,779Retained earnings  beginning
    
    
    (1,505,095
    )
    
    
    (1,095,318
    )
    
    
    409,777Retained earnings  ending
    
    
    (2,442,175
    )
    
    
    (2,085,843
    )
    
    
    356,332Income StatementCost of products sold
    
    
    1,231,376
    
    
    
    1,179,954
    
    
    
    (51,422
    )Income taxes
    
    
    1,029,557
    
    
    
    1,027,534
    
    
    
    (2,023
    )
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (3)
    
    Cash and Cash EquivalentsAs of June 30, 2008 and 2007, cash and cash equivalents are summarized as follows:
 2008
    
    
    2007Cash and bank deposits
    
    
    31,480
    
    
    
    1,230Deposits
    
    
    18,855
    
    
    
    126,069Total
    
    
    50,335
    
    
    
    127,299
 (4)
    
    Trade Accounts ReceivableTrade accounts receivable at June 30, 2008 and 2007, consist of the following:
 2008
    
    
    2007Domestic clients
    
    
    204,380
    
    
    
    110,086Foreign clients
    
    
    1,714,617
    
    
    
    1,618,945Total
    
    
    1,918,997
    
    
    
    1,729,031
 (5)
    
    Other Receivables, Including Employee ReceivablesOther receivables are summarized as follows:
 2008
    
    
    2007Accounts and notes receivable from employees
    
    
    13,590
    
    
    
    15,904Other accounts receivables
    
    
    6,341
    
    
    
    1,376Total
    
    
    19,931
    
    
    
    17,280
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MINERA ESCONDIDA LIMITADA
 
 (6)
    
    Production InventoriesProduction inventories are summarized as follows:
 2008
    
    
    2007Work in progress  Ore stockpiles
    
    
    10,741
    
    
    
    4,993Minerals in process
    
    
    268,202
    
    
    
    147,764Finished Goods  Copper concentrate
    
    
    12,037
    
    
    
    11,019Finished Goods  Copper cathode
    
    
    26,932
    
    
    
    14,709Total
    
    
    317,912
    
    
    
    178,485
 (7)
    
    Other Current AssetsOther current assets are summarized as follows:
 2008
    
    
    2007Prepayment and deferred expenses (a)
    
    
    33,365
    
    
    
    77,900Derivative asset
    
    
    237,409
    
    
    
    79,752Tax for recovery
    
    
    8,263
    
    
    
    29,796Other assets
    
    
    3
    
    
    
    4Total
    
    
    279,040
    
    
    
    187,452
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MINERA ESCONDIDA LIMITADA
 
 (7)
    
    Other Current Assets, Continued
 (a)
    
    Prepayment and deferred expenses.
Details of this account include:
 2008
    
    
    2007Prepayment for Power line
    
    
    
    
    
    
    10,000Prepayment for Mineral Rights
    
    
    1,760
    
    
    
    1,340Deferred borrowing expenses
    
    
    125
    
    
    
    645Derivative asset (price participation in refining)
    
    
    11,873
    
    
    
    62,257Employee benefit pre-payment
    
    
    6,889
    
    
    
    3,658Prepayment for Vendors and others
    
    
    12,718
    
    
    
    Total
    
    
    33,365
    
    
    
    77,900
 (8)
    
    Property, Plant and Mine DevelopmentProperty, plant and mine development is summarized as follows:
 2008
    
    
    2007Land
    
    
    4,252
    
    
    
    4,252Mining development costs (pre-production)
    
    
    238,379
    
    
    
    238,379Machinery, vehicles and installations
    
    
    5,662,963
    
    
    
    5,090,456Construction in progress
    
    
    442,568
    
    
    
    491,746Sub total
    
    
    6,348,162
    
    
    
    5,824,833Accumulated depreciation and amortization
    
    
    (2,486,821
    )
    
    
    (2,204,598
    )Total
    
    
    3,861,341
    
    
    
    3,620,235
 Depreciation and amortization expense amounted to $282,223, $239,073 and $274,740 for the
years ending June 30, 2008, 2007 and 2006, respectively, and is included as a cost of the
production of inventories.Interest capitalized for the years ending June 30, 2006 was $39,359. No interest was
capitalized for the year ending June 30, 2007 and 2008.The asset retirement obligation asset included in property, plant and mine development, net
of accumulated amortization was $71,080 and $76,466 for the years ending June 30, 2008 and
2007, respectively.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (9)
    
    Intangible Assets, netIntangible assets are summarized as follows:
 2008
    
    
    2007Water rights  at cost
    
    
    75,886
    
    
    
    75,886Accumulated amortization
    
    
    (26,275
    )
    
    
    (22,515
    )Total intangible assets, net
    
    
    49,611
    
    
    
    53,371
 The above water rights were acquired from Minera Zaldívar in November 2000 and are related
to operations of Phase IV of the mining project.Aggregate amortization expense for amortizing intangible assets was $3,760, $3,598 and
$5,584 for the years ended June 30, 2008, 2007 and 2006, respectively. For each of the next
5 years amortization expense for intangibles is expected to be approximately $2,501 in 2009,
$2,416 in 2010, $2,350 in 2011, $2,902 in 2012 and $2,685 in 2013.
 (10)
    
    Other Assets, net (Non current)Other assets are summarized as follows:
 2008
    
    
    2007Medium-grade ore stockpile (a)
    
    
    99,698
    
    
    
    89,188Deferred borrowing expenses (b)
    
    
    55
    
    
    
    175Spare parts (c)
    
    
    83,507
    
    
    
    53,063Other assets (d)
    
    
    21,527
    
    
    
    24,154Total
    
    
    204,787
    
    
    
    166,580
 
 (a)

    
    Medium-grade ore stockpileDuring mining operations the portion of ore mined below a specific copper grade is
stockpiled in the medium-grade ore stockpile for future use. This ore is valued as
described in note 2(j).
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (10)
    
    Other Assets, net (Non current), Continued
 (b)
    
    Deferred borrowing expensesThe amortization expense for the periods ending June 30, 2008, 2007 and 2006 amounts to
$120, $657 and $1,721, respectively, calculated as described in note 2(j).
 (c)
    
    Spare partsCorresponds to spare parts that will not be consumed within one year from balance sheet
date.
 (d)
    
    Other assets
 2008
    
    
    2007Recoverable withholding taxes (*)
    
    
    5,317
    
    
    
    6,180Notes receivable  employee housing program and other
    
    
    16,210
    
    
    
    17,974Total other assets
    
    
    21,527
    
    
    
    24,154
 (*)
    
    The Chilean Internal Revenue Service allows for the recovery of
withholding taxes relating to technical service contracts over the tax life of the
related asset. The non-current portion of recoverable withholding taxes has been
included under other assets.
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (11)
    
    Balances and Transactions with Related Companies
 (a)
    
    Balances with related companies are summarized as follows:
 i)
    
    Due from  current
 Nature ofCompany
    
    relationship
    
    2008
    
    
    2007BHP Billiton Marketing AG
    
    Common ownership
    
    
    25,074
    
    
    
    25,775Other
    
    Various
    
    
    2
    
    
    
    132Total
    
    
    
    
    
    
    25,076
    
    
    
    25,907
 ii)
    
    Due to  current
 Company
    
    Nature of relationship
    
    
    2008
    
    
    2007BHP Minerals International Inc.
    
    Common ownership
    
    
    1,249
    
    
    
    1,338BHP Billiton Marketing AG
    
    Common ownership
    
    
    38,039
    
    
    
    31,706BHP Chile Inc.
    
    Common ownership
    
    
    9,216
    
    
    
    5,290BHP International Finance
Corporation
    
    Common ownership
    
    
    503
    
    
    
    826Other
    
    Various
    
    
    590
    
    
    
    1,135Total
    
    
    
    
    
    
    49,597
    
    
    
    40,295
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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (11)
    
    Balances and Transactions with Related Companies, Continued
 (b)
    
    Transactions with related companies are summarized as follows:
 Revenue/(expense) for the year endedCompany
    
    Nature of relationship
    
    Transaction
    
    2008
    
    2007
    
    2006BHP Billiton Marketing AG
    
    Common ownership
    
    Sales agency commissions &
others commissions
    
    
    (22,418
    )
    
    
    (27,621
    )
    
    
    (14,209
    )BHP Mineral International
    
    Common ownership
    
    Reimbursement of expatriate salaries
    
    
    (593
    )
    
    
    (645
    )
    
    
    (6,869
    )BHP Billiton Marketing AG
    
    Common ownership
    
    Freight
    
    
    (255,658
    )
    
    
    (169,888
    )
    
    
    (140,396
    )BHP Billiton Marketing AG
    
    Common ownership
    
    Sales
    
    
    277,894
    
    
    
    623,908
    
    
    
    400,111Minera Cerro Colorado
    
    Common ownership
    
    Sales
    
    
    15,926
    
    
    
    40,933
    
    
    
    Minera Spence
    
    Common ownership
    
    Sales
    
    
    47,585
    
    
    
    3,843
    
    
    
    BHP Chile Inc.
    
    Common ownership
    
    Financial service
    
    
    (4,661
    )
    
    
    (6,700
    )
    
    
    (4,797
    )BHP Chile Inc.
    
    Common ownership
    
    Reimbursement of capital project
    
    
    (36,207
    )
    
    
    (17,172
    )
    
    
    (12,351
    )
 Payment conditions for all intercompany liabilities are 30 days from the date the
transactions are received and accepted.
  A-98




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (12)
    
    Income Taxes
 (a)
    
    Current income taxes payableOn 1 January 2006 the Chilean tax rate for the Company was 17%. This increased to 18.92%
and 20.32% on 1 January 2007 and 2008 respectively. The rate of 20.32% will continue
until 2018, following the introduction of a mining tax. The effect of this on current
income tax from 1 January 2006 is included in Computed expect tax expense.
 (b)
    
    Income tax charge for the yearThe income tax charge for the year is summarized as follows:
 2008
    
    
    2007
    
    
    2006Current income taxes
    
    
    1,661,044
    
    
    
    1,280,379
    
    
    
    944,464Deferred income taxes
    
    
    4,496
    
    
    
    96,104
    
    
    
    83,070Total
    
    
    1,665,540
    
    
    
    1,376,483
    
    
    
    1,027,534
 Income tax expense attributable to income from continuing operations of $1,665,540,
$1,376,483 and $1,027,534 for the years ended June 30, 2008, 2007 and 2006,
respectively, differed from the amounts computed by applying the Chilean income tax rate
of 20.32% (2007: 18.92%; 2006: 18.09%), to pretax income from continuing operations as a
result of the following:
 2008
    
    
    2007
    
    
    2006Computed expected tax expense
    
    
    1,719,182
    
    
    
    1,396,142
    
    
    
    1,007,262Increase (decrease) in
income taxes resulting from:Adjustment to deferred tax
assets and liabilities
from increase in tax rate
    
    
    
    
    
    
    
    
    
    
    36,692Other, net
    
    
    (53,642
    )
    
    
    (19,659
    )
    
    
    (16,420
    )Actual income tax expense
    
    
    1,665,540
    
    
    
    1,376,483
    
    
    
    1,027,534
 All income tax expense is domestic tax. There is no foreign income tax expense.
  A-99




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (12)
    
    Income Taxes, Continued
 (c)
    
    Deferred income taxesTax effects of temporary differences that give rise to significant portions of the
deferred income taxes are summarized as follows:
 2008
    
    2007Current
    
    Long-term
    
    Current
    
    Long-termDeferred income tax assets:Obsolescence reserve
    
    
    
    
    
    
    1,220
    
    
    
    
    
    
    
    2,601Accrued employee vacation
    
    
    1,708
    
    
    
    
    
    
    
    1,457
    
    
    
    Accrued employee benefits
    
    
    
    
    
    
    1,580
    
    
    
    
    
    
    
    13,402Accrued reclamation
    
    
    
    
    
    
    26,191
    
    
    
    
    
    
    
    26,260Hedging non realized
    
    
    
    
    
    
    
    
    
    
    33,296
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    2,140Gross deferred income tax
assets
    
    
    1,708
    
    
    
    28,991
    
    
    
    34,785
    
    
    
    44,403Deferred income tax liabilities:Property, plant and equipment,
net
    
    
    
    
    
    
    (291,751
    )
    
    
    
    
    
    
    (281,057
    )Hedging non realized
    
    
    (8,008
    )
    
    
    
    
    
    
    
    
    
    
    Price variance provision for
provisional sales
    
    
    (12,173
    )
    
    
    
    
    
    
    (74,868
    )
    
    
    Gross deferred income tax
liabilities
    
    
    (20,181
    )
    
    
    (291,751
    )
    
    
    (74,868
    )
    
    
    (281,057
    )Net deferred income tax
liability
    
    
    (18,473
    )
    
    
    (262,760
    )
    
    
    (40,083
    )
    
    
    (236,654
    )
 In assessing the realizability of deferred tax assets, management considers whether it
is more likely than not that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income, and tax planning strategies in making
this assessment. In order to fully realize the deferred tax asset, the Company will need
to generate future taxable income of US$151,077. Based upon the level of historical
taxable income and projections for future taxable income over the periods in which the
deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these
deductible differences. The amount of the deferred tax asset considered realizable,
however, could be reduced in the near term if estimates of future taxable income are
reduced.
  A-100




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (12)
    
    Income Taxes, ContinuedThe Company adopted the provisions of FIN 48 on July 1, 2007, and there was no significant
effect on the financial statements. As a result, the Company did not record any cumulative
effect adjustment related to adopting FIN 48.As of July 1, 2007, and for the 12-month period ended June 30, 2008, the Company did not
have any material unrecognized tax benefits and thus, no significant interest and penalties
related to unrecognized tax benefits were recognized. In addition, the Company and its
subsidiaries do not expect that the amount of unrecognized tax benefits will change
significantly within the next 12 months.The Company files its income tax return in Chile and its Chilean tax returns are open to
examination by the local tax authorities for the 2005 tax year.
 (13)
    
    Accrued Liabilities and WithholdingsAccrued liabilities and withholdings are summarized as follows:
 2008
    
    
    2007Accrued liabilities and withholdings for employee
compensation
    
    
    40,991
    
    
    
    31,885Accrued project and vendor costs
    
    
    120,345
    
    
    
    137,169Other
    
    
    5,224
    
    
    
    5,189Total
    
    
    166,560
    
    
    
    174,243
 (14)
    
    Accruals and Reclamation ReserveDetails of this account include:
 2008
    
    
    2007Restoration and Rehabilitation (a)
    
    
    128,894
    
    
    
    125,970Deferred customs duties and other
    
    
    
    
    
    
    5,588Total
    
    
    128,894
    
    
    
    131,558
  A-101




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (14)
    
    Accruals and Reclamation Reserve, Continued
 (a)
    
    Provision for restoration and rehabilitation movements are summarized:
 2008
    
    
    2007Opening balance
    
    
    125,970
    
    
    
    86,892Accretion
    
    
    4,409
    
    
    
    3,256Increases to the provision
    
    
    
    
    
    
    36,307Payments
    
    
    (1,485
    )
    
    
    (485
    )Closing balance
    
    
    128,894
    
    
    
    125,970
 The estimated undiscounted value of the restoration & rehabilitation provision is US$359,279
as at June 30, 2007 and US$377,590 for June 30, 2008. The discount rate applied to the cash
flows is 3.5% and 3.5% respectively and it is not expected to have significant payments in
the next five years.The provision for restoration & rehabilitation includes the dismantling of all the mine site
facilities including Los Colorados and Laguna Seca plants, the Cathode oxide plant, Cathode
Sulphide Leach plant, a portion of the Coloso port facilities and the rehabilitation of the
Salar de Punta Negra environment. Refer to note 8 for details of the asset retirement
obligation.
 (15)
    
    Long Term DebtThe balances of long-term debt outstanding are summarized as follows:
 (a)
    
    Senior unsecured debtThe balances of the senior unsecured debt outstanding (including the short-term
position) are summarized as follows:
 Current rate
    
    
    2008
    
    
    2007BNP Paribas (1998)
    
    
    **L +0.50
    %
    
    
    275,000
    
    
    
    275,000The Bank of Tokyo  Mitsubishi UFJ Ltd. (2001)
    
    
    **L+0.175
    %
    
    
    37,500
    
    
    
    62,500Japan Bank for International Cooperation (2001)
    
    
    **L +0.25
    %
    
    
    192,500
    
    
    
    227,500Kreditanstalt für Wiederaufbau (2001)
    
    
    **L +0.275
    %
    
    
    87,500
    
    
    
    112,500The Bank of Tokyo  Mitsubishi UFJ Ltd. (2005)
    
    
    **L +0.275
    %
    
    
    90,000
    
    
    
    90,000Japan Bank for International Cooperation (2005)
    
    
    **L +0.20
    %
    
    
    210,000
    
    
    
    210,000Sub total
    
    
    
    
    
    
    892,500
    
    
    
    977,500Less:Short term portion
    
    
    
    
    
    
    (85,000
    )
    
    
    (85,000
    )Total
    
    
    
    
    
    
    807,500
    
    
    
    892,500
 (**) L: LIBOR 180 days
  A-102




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (15)
    
    Long Term Debt, ContinuedOn June 12, 1998 the Company entered into an unsecured loan agreement for the amount of $275
million with BNP Paribas. As at June 30, 2008 the interest rate is LIBOR + 0.50%. The loan
is due for repayment in June 2011 (full amount).On September 14, 2001, the Company entered into a loan agreement for the amount of $500
million, of which $350 million is with Japan Bank for International Cooperation, and $150
million with a syndicate of banks, with The Bank of Tokyo-Mitsubishi Ltd. being the agent
bank. At June 30, 2003, the total loan had been drawn down. The loan with Japan Bank for
International Cooperation is payable in 20 semi-annual payments commencing March 1, 2004 and
bears interest at LIBOR (180-day) plus 0.25%. The syndicate loan with The Bank of
Tokyo-Mitsubishi Ltd. as lead bank is payable in 12 semi-annual payments commencing March 1,
2004, and at commencement bore interest at LIBOR (180-days) + 0.90%. On March 2006 the
interest rate was renegotiated and decreased to Libor (180 days) + 0.175%. The outstanding
balance as of June 30, 2008 was $230 million (June 30, 2007: $290 million).On January 31, 2005 the Company entered into an unsecured loan agreement for the amount of
$300 million of which $210 million is with Japan Bank for International Cooperation and $90
million with a syndicate of banks, with The Bank of Tokyo-Mitsubishi UFJ Ltd being the agent
bank. The loan with Japan Bank for International Cooperation bears interest at LIBOR (180
days) +0.20% and will mature after 12 years commencing January 31, 2010. The syndicate loan
with The Bank of Tokyo-Mitsubishi Ltd as lead bank bears interest at LIBOR (180 days) +
0.275% and will mature in 5 years. The balance outstanding as of June 30, 2008 was $300
million (June 30, 2007: $300 million).On September 14, 2001, the Company entered into a loan agreement for the amount of $200
million with Kreditanstalt für Wiederaufbau. The loan is payable in 16 semi-annual payments
commencing April 1, 2004. At commencement the loan bore interest at LIBOR (180 days) +
0.75%. On December 2005 the interest rate was renegotiated and decreased to a rate of LIBOR
(180 days) + 0.275%. The maturity of the loan did not change. The balance outstanding at
June 30, 2008 was $87.5 million (June 30, 2007: $112.5 million).
  A-103




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (15)
    
    Long Term Debt, Continued
 (b)
    
    At June 30, 2008, the Company maintains unused lines of credit with Banco de
Chile, Banco Scotiabank, Banco Santander Santiago, Banco Bice, Banco del Estado, Banco
BCI and Banco BBVA Chile totaling $300 million. These lines of credit are not
committed.The above loans in (a) and (b) are subject to certain covenants, the most restrictive
of which require that:
 i)
    
    the total debt to Earnings Before Interest, Tax, Depreciation and
Amortization (EBITDA) ratio be no greater than 2.75 to 1.0 at June 30, 2001, 3.50
to 1.0 at June 30, 2002, 3.00 to 1.0 at June 30, 2003 and 2.75 to 1.0 thereafter;
and,ii)
    
    the net worth of the Company may not be less than US$900 million.
 The senior unsecured debt ranks pari passu with any other senior unsecured debt.The Company was in compliance with all debt covenants as of June 30, 2008 and June 30,
2007.
 (c)
    
    Subordinated Owners debt
 Lender
    
    2008
    
    
    2007International Finance Corporation
    
    
    7,850
    
    
    
    9,050Rio Tinto Finance PLC
    
    
    94,200
    
    
    
    108,600JEFCO Corporation
    
    
    31,400
    
    
    
    36,200BHP International Finance Corporation
    
    
    180,550
    
    
    
    208,150Sub total
    
    
    314,000
    
    
    
    362,000Less:Short term portion
    
    
    (48,000
    )
    
    
    (48,000
    )Total long-term portion
    
    
    266,000
    
    
    
    314,000
  A-104




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (15) Long Term Debt, Continued
  
    
    US$295 million during December 1998, payable in 30 semi-annual payments
commencing on June 15, 1999. Interest accrues at LIBOR plus 4% and is payable
semi-annually on June 15 and December 15.
    
    US$200 million during May and June 2000, payable in 30 semi-annual
payments commencing on December 15, 2000. Interest accrues at LIBOR plus 4% and is
payable semi-annually on June 15 and December 15.
    
    US$150 million on May 11, 2001, with a grace period of 5 years for
principal payable in 20 semi-annual payments commencing on June 15, 2006. Interest
accrues at LIBOR plus 4% and is payable semi-annually on June 15 and December 15.
   (d)
    
    Scheduled principal payments on long-term debt (including short-term portion)
at June 30, 2008 are as follows:
 Principal payments during the year
    
    Senior
    
    Subordinatedending June 30
    
    Unsecured debt
    
    owners debt
    
    Total2009
    
    
    85,000
    
    
    
    48,000
    
    
    
    133,0002010
    
    
    175,625
    
    
    
    48,000
    
    
    
    223,6252011
    
    
    361,250
    
    
    
    48,000
    
    
    
    409,2502012
    
    
    73,750
    
    
    
    48,000
    
    
    
    121,7502013
    
    
    61,250
    
    
    
    48,000
    
    
    
    109,2502014 and after
    
    
    135,625
    
    
    
    74,000
    
    
    
    209,625Total
    
    
    892,500
    
    
    
    314,000
    
    
    
    1,206,500
  A-105




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (16) Bonds
  2008
    
    2007Total nominal value
    
    
    
    
    
    
    200,000Discount at issue
    
    
    
    
    
    
    (6,510
    )Net proceeds
    
    
    
    
    
    
    193,490Accumulated amortization of discount
    
    
    
    
    
    
    5,846Sub total
    
    
    
    
    
    
    199,336Less:Principal repaid as of June 30
    
    
    
    
    
    
    (180,000
    )Current portion of principal outstanding
    
    
    
    
    
    
    (19,336
    )Total long-term portion
    
    
    
    
    
    
    
  A-106




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (16) Bonds, Continued
  Total nominal value
    

    Outstanding nominalSeries
    
    Number of Bonds
    
    Bond value
    
    at issue
    

    valueA1
    
    
    1,000
    
    
    
    10
    
    
    
    10,000
    
    
    
    A2
    
    
    400
    
    
    
    100
    
    
    
    40,000
    
    
    
    A3
    
    
    100
    
    
    
    500
    
    
    
    50,000
    
    
    
    A4
    
    
    100
    
    
    
    1000
    
    
    
    100,000
    
    
    
    1,600
    
    
    
    
    
    
    
    200,000
    
    
    
    
   i)
    
    The ratio of debt to Earnings Before Interest, Tax, Depreciation and
Amortization (EBITDA) for the last twelve months should not exceed 6, based on the
Chilean GAAP Financial Statements at December 31 of each year that the bonds were
outstanding.ii)
    
    The Companys net worth should not be less than $800 million.
   A-107




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (17) Sundry Creditors Long-Term
  2008
    
    

    2007Liability outstanding for water rights acquired
    
    
    51,136
    
    
    
    55,527Less:Short-term portion (included in Sundry creditors-current)
    
    
    (4,756
    )
    
    
    (4,391
    )Total
    
    
    46,380
    
    
    
    51,136
  (18) Interest Expense
  2008
    
    
    2007
    
    
    2006Interest incurred
    
    
    (90,987
    )
    
    
    (113,792
    )
    
    
    (96,750
    )Interest capitalized in fixed assets
    
    
    
    
    
    
    
    
    
    
    39,359Total
    
    
    (90,987
    )
    
    
    (113,792
    )
    
    
    (57,391
    )
  A-108




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (19) Capital
  Initial capital (*)
    
    
    65,727Capitalization of retained earnings by public deed dated:July 27, 1988
    
    
    1,497October 7, 1988
    
    
    22,877February 6, 1989
    
    
    6,110April 7, 1989
    
    
    6,013March 30, 2001
    
    
    161,000December 21, 2001
    
    
    196,700December 19, 2002
    
    
    54,578December 30, 2003
    
    
    16,700December 30, 2004
    
    
    16,700December 30, 2005
    
    
    50,000December 30, 2006
    
    
    50,000Capital as of June 30, 2008
    
    
    647,902
 
 (*)
    
    The Companys initial capital of $65,727 was contributed by the former
partners Minera Utah de Chile Inc. and Getty Mining (Chile) Inc., and relates to
property, plant and equipment, cash advances and exploration costs.   A-109




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (20) Fair Value of Financial Instruments
  (21) Commitments and Contingencies
 (1)
    
    At June 30, 2008, the Company had entered into long-term contracts for the
sale of approximately $7.5 million dry metric tonnes of concentrates in total, in
predetermined annual amounts through the year 2015. Under the terms of the contracts,
annual prices are based upon prevailing market prices.(2)
    
    Minera Escondida Limitada (MEL) entered into a Sales Agency Agreement for
export tonnage with BHP Billiton Marketing A. G., a related party. This agreement,
dated January 1, 2002, replaces the Sales Agency Agreement between MEL and BHP
Billiton Minerals International Inc., originally signed in October 1985 between MEL
and Utah International Inc., and amended in 1995. The sales commission is variable and
can be up to 0.5% of monthly sale volumes. Shipping operations for export tonnage are
covered by a Shipping Agency Agreement between Minera Escondida Limitada and BHP
Billiton Marketing A.G. dated January 1, 2002, with a rate of US$68/wmt. Sales and
shipping operations of Escondida within Chile are covered by a Domestic Marketing
Services Agreement signed between Minera Escondida Limitada and BHP Chile Inc., dated
January 1, 2002, with a rate of 0.125% of sales volumes.
  A-110




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 (22) Financial Instruments
  Buy fixed/sell
    
    Sell fixed/buy
    
    Buy fixed/sell
    
    Sell fixed/buyfloating
    
    floating
    
    floating Non
    
    floating NonForwards
    
    Current
    
    Current
    
    Current
    
    CurrentVolume (000 tonnes)
    
    
    272
    
    
    
    242
    
    
    
    35
    
    
    
    31Average price of fixed
contract (US$/tonne)
    
    
    7,684
    
    
    
    7,671
    
    
    
    7,168
    
    
    
    7,242Term to maturity (years)
    
    
    0-1
    
    
    
    0-1
    
    
    
    1-4
    
    
    
    1-4Notional amount of
fixed contract (US$M)
    
    
    2,093
    
    
    
    1,853
    
    
    
    250
    
    
    
    225
   A-111




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 Mining Operations Information
           A-112




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 Ore Reserves
      Commodity
    
    Price US$Copper
    
    2.65/lb
  A-113




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 Ore Reserves, Continued
 Proven Ore Reserve
    
    Probable Ore ReserveNominal
    
    Mine lifeMillions
    
    
    
    
    
    Millions
    
    
    
    
    
    Millions
    
    
    
    
    
    production
    
    based onCommodity
    
    
    
    
    
    of dry
    
    
    
    
    
    of dry
    
    
    
    
    
    of dry
    
    
    
    
    
    capacity
    
    ReserveDeposit(1,2,3)
    
    Ore type
    
    metric tonnes
    
    % TCu
    
    metric tonnes
    
    % TCu
    
    metric tonnes
    
    % TCu
    
    (Mtpa)
    
    (years)CopperTotal Escondida (4,5)
    
    Oxide
    
    
    94.9
    
    
    
    0.86
    
    
    
    48.8
    
    
    
    1.07
    
    
    
    143.7
    
    
    
    0.93
    
    
    
    169.8
    
    
    
    24.4Sulphide
    
    
    769.8
    
    
    
    1.16
    
    
    
    961.6
    
    
    
    1.05
    
    
    
    1,731.4
    
    
    
    1.1Sulphide
    
    
    692
    
    
    
    0.55
    
    
    
    1,568
    
    
    
    0.56
    
    
    
    2,260
    
    
    
    0.55Leach
  A-114




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 Notes to previous table
 1)
    
    % TCu  per cent total copper.2)
    
    Approximate drill hole spacing used to classify the reserves is:
 Deposit
    
    Proven Reserve
    
    Probable Ore ReserveEscondida
    
    Sulphide: 55m x 55m
    
    Sulphide: 85m x 85mSulphide leach: 60m x 60m
    
    Sulphide leach: 95m x 95mOxide: 45m x 45m
    
    Oxide: 65m x 65 m
 3)
    
    Metallurgical recoveries for the operations are:
 Deposit
    
    %CuEscondidaSulphide
    
    85% of TCuSulphide Leach
    
    33% of TCuOxide
    
    68% of TCu
 4)
    
    Changes in the Escondida reserves for the year 2008 include an updated geological model using
new data, updated cost and price estimates, full valuation of sulphide leach ore in ultimate
pit limits, and variable cut-off grade of sulphide mill ore. This year reserve report
combined the two mines into a single reportable reserve. Economic and metallurgical studies
are being conducted to evaluate optimal sulphide leach cut-off grades, which may lead to
revision in the reserve. The price used for Escondida was Cu = US$2.65/lb.
 5)
    
    Escondida production rate and mine life estimate is based on the current life-of-mine plan
which uses a future variable production rate from the Escondida pits. The current combined
nominal production rate available to the operation is 103 million tonnes per annum.
  A-115




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##### Table of Contents



MINERA ESCONDIDA LIMITADA
 
 Proven reserves in stockpiles
  Millions of dryEscondida Copper
    
    metric tonnes
    
    % TCuSulphide Ore
    
    
    2.8
    
    
    
    1.62Sulphide Leach
    
    
    126.1
    
    
    
    0.84Oxide Ore
    
    
    85.8
    
    
    
    0.82
  Sulphide Ore
    
    1 YearsSulphide Leach
    
    4 YearsOxide Ore
    
    11 Years
 A-116