Coal & Allied

Rio Tinto PLC
28 January 2003



Rio Tinto's 75.7 per cent owned subsidiary, Coal & Allied Industries Limited,
issued the following news release in Australia today. All dollars are Australian
currency.



                 Coal & Allied delivers solid result with lower
                      debt and strong operating cash flow.


HIGHLIGHTS



•        Net profit after tax for 2002 was $159.7 million, down from $212.5
million in 2001. The result reflected lower coal prices and the stronger
Australian dollar in the second half of 2002 and the effects of the sale of
non-core assets acquired from Peabody in 2001.



•        Sales revenue decreased by 18 per cent to $1,181.4 million reflecting
the asset sales, lower coal prices and the stronger Australian dollar.



•        Net debt was reduced by more than 50 per cent to $513.0 million,
representing a gearing level of 39 per cent.



•        Operating cash flow remained strong at $269.3 million.



•        Final dividends of 40 cents per ordinary share and 1.75 cents per
preference share, both fully franked, were declared, taking total dividends for
the year to 80 cents per ordinary share and 3.5 cents per preference share.





Commenting on the result, Coal & Allied's Managing Director, Mr Gary Goldberg
said, 'It was a positive result for the company with solid earnings, strong
operating cash flow and lower debt.



'In 2002, the company consolidated acquisitions, successfully divested non-core
businesses and began transforming the business into three major mining
operations in the Hunter Valley.



'Safety performance was outstanding with lost time due to injury falling more
than 60 per cent, bringing us closer to our goal of achieving zero injuries in
the workplace.



'Coal & Allied performed strongly in difficult market conditions and is well
positioned for future opportunities,' Mr Goldberg said.




SUMMARY OF FINANCIAL PERFORMANCE



Coal & Allied's results for 2002 are shown below, along with comparative results
for 2001.


                                                                             Year to 31 December


                                                                                     2002          2001          Change
                                                                                                                      %

Sales revenue ($ millions)                                                        1,181.4       1,443.2            (18)

Net profit after tax ($ millions)                                                   159.7         212.5            (25)
Operating cash flow ($ millions)                                                    269.3         379.9            (29)
Dividends (cents per share)                                                            80            75               7
Coal production (million tonnes)                                                     32.3          36.0            (10)
Coal shipments (million tonnes)                                                      31.5          35.7            (12)



Production and shipments are on a 100 per cent basis. Shipments exclude
purchased coal.



Sales revenue

Sales revenue of $1,181.4 million was down 18 per cent from $1,443.2 million
reflecting lower prices, lower sales volumes and the stronger Australian dollar
in the second half of the year and the effects of the sale of non-core assets
acquired from Peabody in 2001.



Production

Managed production was down by 3.7 million tonnes to 32.3 million tonnes,
reflecting the sales of Moura, Ravensworth and Narama interests. Excluding
interests sold, Coal & Allied's share of saleable coal increased from 21 million
tonnes to 22 million tonnes.



Dividends

Total dividends for 2002 were 80 cents per ordinary share and 3.5 cents per
preference share, both fully franked (at the tax rate of 30 per cent), compared
with 75 cents per ordinary share and 3.5 cents per preference share both fully
franked.



Final dividends will be paid on 28 February 2003 to shareholders registered at
close of business on 21 February 2003.



Cash flow

Net operating cash flow decreased 29 per cent to $269.3 million reflecting lower
sales volumes, reduced coal prices and the stronger Australian dollar in the
second half of the year.



Debt

Proceeds from the sales of Moura, Ravensworth and Narama interests ($431.5
million) were applied to reduce net debt, which was $513.0 million at year end
compared with $1.1 billion in 2001. This contributed to reducing pre-tax
interest costs by $40 million. Net debt to net debt plus equity was 39 per cent
at 31 December 2002 compared with 61 per cent at the end of 2001.


Capital expenditure and investments

Total capital expenditure and investments for the year were $119.4 million, of
which approximately $50 million was spent on upgrading mobile production
equipment. This compared with $962.5 million in 2001, which included $880.9
million for acquisitions.



Marketing and Outlook

The company responded to historically lower prices by reducing production at
mid-year at Hunter Valley Operations to align better to market conditions. To
address market changes further, Coal & Allied implemented a new approach to its
regional sales organisation by locating managers in their respective markets in
Asia. Also, a new marketing services team was formed to provide research
analysis and logistics support. Coal & Allied also successfully launched a price
marker initiative using the e-commerce platform globalCoal, which assisted in
providing liquidity and transparency to the spot market.



At the end of 2002 the market fundamentals remained balanced although Japanese
nuclear plant outages should positively affect demand for thermal coal. However,
other factors such as a change in buying habits by Japanese and Korean customers
and uncertain export levels from China may further impact the market.





PROJECTS



Mount Pleasant (100 per cent Coal & Allied)

Development of the Mount Pleasant project continued with a pre-feasibility study
being undertaken during 2002.



Integration

Coal & Allied continued to pursue integration of Warkworth and Mount Thorley
Operations to benefit all parties.





For further information, please contact:


LONDON                                                  AUSTRALIA
Media Relations                                         Media Relations
Hugh Leggatt                                            Ian Head
+ 44 (0) 20 7753 2273                                   [phone]

Investor Relations                                      Investor Relations
Peter Cunningham                                        Dave Skinner
+ 44 (0) 20 7753 2401                                   [phone]
Richard Brimelow                                        Daphne Morros
+ 44 (0) 20 7753 2326                                   [phone]

Website: www.riotinto.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange