Coal & Allied AGM

Rio Tinto PLC
23 April 2007


Coal & Allied Industries (Rio Tinto 75.7 per cent) issued the following address
by the chairman, Chris Renwick, following the annual meeting of shareholders in
Australia on 20 April 2007. Dollar amounts are in Australian currency.

Coal & Allied AGM - Chairman's address

2006 was a mixed year for Coal & Allied characterised by high coal prices and
positive demand for our export product but our performance was severely impacted
by infrastructure constraints on the Hunter Valley coal chain.  I'll return to
the pressures of infrastructure later.

Coal & Allied's net profit after tax was $207 million compared with $291 million
in 2005.  This reduction in profit was mainly due to significant shipping
congestion at the Port of Newcastle and consequently increased operating
inefficiencies.  Based on this performance, ordinary shareholders received a
final fully franked dividend of 25 cents per ordinary share in March 2007.  This
followed the interim fully frank dividend of $1.10 paid during 2006, bringing
total dividends for the year to $1.26 per ordinary share.

I am pleased to report a significant improvement in the business's safety
performance in 2006.  Coal & Allied's operations achieved a 40 per cent
reduction in the frequency of injury with a lost time injury frequency rate of
1.05 compared with 1.75 in 2005.  While much of this can be attributed to a '
back to basics' approach at the operations, Mount Thorley Warkworth employees
were again recognised for their innovation when named winners of the NSW
Minerals Council Occupational Health and Safety Innovation Award for their
eye-spy device.  In addition, Coal & Allied's Mines Rescue teams from its three
operations were placed first, second and third in the 2006 Hunter Valley Opencut
Mines Rescue competition.

Production across all the Coal & Allied operations was aligned to infrastructure
capacity and was slightly lower than last year.  All operations performed well
with a strong focus on asset utilisation, business improvement and resource
management.  Prolonged drought conditions continue to present challenges for us
and we have developed water management plans to reduce water usage at all mines.

Coal & Allied employs over 1,500 people and recently a new three-year certified
agreement was reached with Hunter Valley Operations and Mount Thorley Warkworth
employees.

In other areas of company activity, 2006 was a year of progress for the company
with activity on the Mount Pleasant project and the Lower Hunter Land holdings.

In November last year we commenced the feasibility study of the Mount Pleasant
project which is adjacent to Bengalla.  The study will take about a year to
complete and will investigate the economics of the development, assess market
demand for the product and examine infrastructure capacity.   The Mount Pleasant
team will be working closely with the local community through the feasibility
study to address any issues they may have.  Mount Pleasant is a significant
thermal coal deposit that has long been part of the Coal & Allied portfolio and
we look forward to reviewing the outcomes of the feasibility study.

Also in late 2006, Coal & Allied signed a Memorandum of Understanding with the
NSW Government to facilitate the provision of extensive land conservation
corridors in the Lower Hunter.  Coal & Allied has been involved in the Lower
Hunter for more than 150 years and we are committed to continue building a
sustainable economic, social and environmental future for the region.  More than
3,000 hectares of land will be transferred to public ownership for the
development of conservation corridors and Coal & Allied has the opportunity to
develop over 800 hectares of its surplus land.  The proposed development will
involve extensive community consultation and involvement to ensure local values
and lifestyles are retained.

During 2006 Coal & Allied continued to play a strong role in the community of
the Hunter Valley.  Through the successful Coal & Allied Community Trust we
provided over $700,000 of support to 13 local projects.  We continued our
support of the Newcastle Knights rugby league team and broadened a number of our
corporate sponsorships, such as that of the Westpac Rescue Helicopter Service,
to provide ongoing benefit to the community.

Coal & Allied faces a number of challenges in 2007 - one of the most significant
is the constrained Hunter Valley coal chain.  Earlier this year, Hunter Valley
coal producers voted to introduce a modified capacity balancing system which we
see as a short term solution to address the queue of more than 70 ships off
Newcastle.  While Coal & Allied recognises the urgent need to address the queue
a longer term solution is required.

Although global demand continues to strengthen and the outlook is positive,
Australia's coal producers are unable to meet this demand.

Make no mistake about this. I am not talking just about a diminution in the
wealth created by the coal industry but about our failure as a nation to
capitalise on the growth opportunities and the need to remove constraints which
are preventing us from maximising these opportunities generated by strong
demand.

In the Hunter Valley alone, infrastructure constraints are preventing producers
from fully capitalising on demand with at least an additional 15 per cent
production capacity not being realised. We can dig up the coal and put it into
our load out bins but we simply can't get enough rail wagons to the port and
onto ships.  This has the very real potential to put Australia's reputation as a
reliable energy supplier at risk.

While the coal industry and Japanese customers own PWCS, it has been operated
largely independently.  As part of its lease conditions from the New South Wales
(NSW) Government, the facility has carried out its role as an open access port
and has tried to deliver everything to everybody.

Operating in this way has meant that during the current resources boom, all
producers - large, small, new and established - have suffered.  This year the
Hunter Valley coal chain is expected to deliver about 80 per cent of capacity
requested by producers, and there is no certainty of allocation at all in future
years.  To cut back existing producers to set up new producers on an
unsustainable basis is in nobody's long term interest.

Our industry does not have a short term focus, to the contrary, we have a long
term view of mine development and operation and long term contracts with our
customers, yet we have no long-term security of capacity of the necessary
infrastructure.

As a shareholder of PWCS we will be encouraging the establishment of long-term
contracts with port users to provide certainty for producers and support the
future expansion of the PWCS facility.  Coal & Allied believes that a result can
be achieved which will bring certainty and growth opportunities for the entire
industry.  However it is likely to be a difficult transition.

The support and commitment of State and Federal governments will be critical to
the success of this transition.  Specifically, the lease conditions must be
addressed by the NSW Government, and PWCS should be allowed to develop an access
regime and operating rules which will deliver a better outcome than the current
situation.

We acknowledge the positive steps the NSW Government has taken in starting to
address the infrastructure constraints by allowing the Newcastle Coal
Infrastructure Group (NCIG) consortium to progress with development of a new
coal loading facility.  But this is just the start of a process which needs
urgency otherwise market position and valuable export income will be lost.  This
project needs to be fast tracked to be of significant benefit to the coal
industry in the Hunter Valley.  It is vital to the provision of a more
sustainable demand management system and will complement the operations of PWCS.

The reality is, however, that it will be at least two to three years before
investment in rail and port capacity matches producers' requirements.  But this
investment is only part of the issue.

Many of you would have seen photographs of the ship queue on the front page of
The Australian newspaper on Wednesday of last week. This is why we as an
industry need to challenge ourselves along with government and regulators to
make a concerted and coordinated effort to remove existing coal chain
bottlenecks.  Only then can we create appropriate shareholder return and
appropriate business earnings, which then in turn support local communities
through greater employment and Government royalty payments.

We have to design and implement a system for the longer term that prevents
queues from forming in the first place. What is required is a transparent demand
management system that determines coal chain entitlements based on production,
rail capacity and port allocation. Under such a system new producers and new
operations would be able to plan their developments effectively with the
security of knowing there is available port and rail capacity.

Over a three to four year period we believe additional exports - 50 per cent
more than exists today - could be achieved. Coal & Allied wants to see a system
that rewards producers by allowing them to exploit strong demand.  We want a
system that ensures we retain our reputation as a reliable supplier, that
rewards our local communities by ensuring ongoing sustainability of the industry
and a system that financially rewards both our shareholders and Government's
willingness to support and foster long-term development of the coal industry in
this state.

What this unfortunate situation means for Coal & Allied in 2007 is that based on
our allocation of port capacity this year production and sales will be
constrained and are likely to be in line with production rates and sales
achieved in the last two quarters.  As a result our financial performance this
year will be substantially adversely effected.

Let me move on to other issues.  One of the most prominent issues facing the
mining industry and communities around the world is climate change.  We
recognise there is a lot of public interest in the way we are responding to this
challenge.  Coal & Allied has developed a climate change action plan that is
focussed on three areas - support for clean coal technology; improving energy
efficiency at our operations and designing our new projects to ensure they are
energy efficient and will help to deliver on climate change targets.

The work on clean coal technologies to date is only one of many actions needed
to be adopted to address climate change.  To support the advancement of clean
coal technology, Coal & Allied voluntarily contributes funding to the COAL21
fund.  This fund will support demonstration projects that are applying for
funding under the Federal Government's Low Emissions Technology Development
Fund.  This, however is just one activity.

Through Rio Tinto, Coal & Allied is addressing the technological response to
clean coal by supporting and funding a range of collaborative international and
domestic projects and programmes.  These projects include:
          
     •    FutureGen in the United States which aims to install a 250 megawatt
          gasification power station with integrated hydrogen production,

     •    carbon capture and storage as a prototype demonstration of zero
          emission coal fired technologies, and

     •    Australia's first carbon capture and storage demonstration project
          currently underway in Victoria's Otway Basin region.

Within our business, all the sites have developed action plans to achieve energy
efficiency improvements and studies like that on Mount Pleasant will consider
the risks arising from a changing climate and the opportunities for step changes
in energy use as part of the project design.

Looking forward, demand for coal remains strong and as 2007 progresses we will
do what we can to address the challenges we face - namely infrastructure and its
impact on the business and the need to manage the costs of business inputs. We
will work collaboratively with other Hunter Valley producers to capitalise on
existing infrastructure capacity while innovation and business improvement will
help to manage costs.  All our operations are working hard to embed energy
efficiency into our business and to form partnerships with others in support for
the development of clean coal technology.  This is essential to ensure the
long-term viability of coal as an energy source.

Chris Renwick
Chairman


For further information, please contact:

LONDON                                        AUSTRALIA

Media Relations                               Media Relations
Christina Mills                               Ian Head
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Nick Cobban
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Investor Relations                            Investor Relations
Nigel Jones                                   Dave Skinner
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David Ovington                                Susie Creswell
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