Coal & Allied FY2004

Rio Tinto PLC
03 February 2005

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





Coal & Allied benefits from improved market conditions - 2004 full year results


SUMMARY



•         Net profit after tax was $111.4 million compared with $0.1 million 
          profit after tax in 2003

•         Net debt in Australian dollar terms reduced by 45.9% in 2004 to 
          $246.2 million

•         A fully franked dividend of $1.00 per share will be paid on ordinary 
          shares



Commenting on the result, Coal & Allied's Managing Director, Dr Grant Thorne
said, 'This result reflects the improved market conditions for seaborne traded
coal in 2004.



'Throughout the year, revenues increased because of higher coal prices and
increased production.  We also benefited from demurrage costs falling to an
average of US$0.19 per tonne in the second half as a result of the Port
Allocation System and more efficient use of infrastructure along the Hunter
Valley coal chain.'



Coal & Allied's net profit was positively affected by the recognition of inpit
inventory, by depreciating mining properties over their estimated life and by
depreciating Hunter Valley property, plant and equipment on a
units-of-production basis.  These accounting adjustments, which were indicated
in the first half results, had a positive effect of $25.5 million on the full
year net profit after tax.



'The new management services agreement with Rio Tinto Coal Australia was
implemented at a much lower cost than expected, and delivered benefits of $15
million for the year,' Dr Thorne said.



'However, the strong Australian dollar, increased oil prices and the higher coal
royalty introduced by the New South Wales Government in mid-year had a negative
effect on the result.



'Despite the absence of capacity in coal infrastructure in New South Wales to
accept expanded production in response to the stronger market, the outlook for
Coal & Allied for 2005 is strong.'



Summary of financial performance



Coal & Allied's results for 2004 are shown below, along with comparative results
for 2003.


                                                                             Year to 31 December      Change

                                                                              2004          2003           %

Sales revenue ($ millions)                                                 1,024.5        895.71         14%
Net profit after tax ($ millions)                                            111.4           0.1
Operating cash flow ($ millions)                                             224.7          16.7
Dividends (cents per share)                                                  100.0           Nil
Coal production2 (million tonnes)                                             29.1          27.2          7%
Coal shipments2 (million tonnes)                                              28.7          27.9          3%




1   Comparative information for 2003 has been reclassified to include sea
freight receipts and foreign exchange gains.

2   Production and shipments are on a 100% basis. Shipments exclude purchased
coal.

  Details of full production and shipments are shown in the Financial and
Operating Statistics appendix.



Restructure

On 1 February 2004, Rio Tinto Coal Australia (100 per cent Rio Tinto) began
managing Coal & Allied's assets in the Hunter Valley under a management services
agreement. Changes to head office administration and support structures
delivered annual pre-tax savings of $20 million to Coal & Allied. A
restructuring provision of $15 million before tax was raised in 2003 to cover
one-off implementation costs but actual costs totalled only $10.5 million.



Sales revenue

Sales revenue of $1,024.5 million was 14 per cent higher than in 2003,
reflecting higher prices for export thermal coal in the second half of 2004,
which were partially offset by a stronger Australian dollar.



Production

Managed production of saleable coal was up by seven per cent (1.9 million
tonnes) to 29.1 million tonnes, consistent with allocation through Port Waratah
and domestic contracts. Coal & Allied's share of saleable coal production was
22.1 million tonnes.



Dividends

A fully franked final dividend of $1.00 per ordinary share will be paid. There
was no interim dividend paid during 2004.  A dividend of 1.75 cents per
preference share, fully franked, will be paid, making the total preference
dividend for the year 3.5 cents per share, fully franked.



Cash flow

Net operating cash was $224.7 million compared with $16.7 million in 2003.  The
significant change in operating cash flow reflected the effect of higher
earnings resulting from better operating performance and improved coal prices in
Australian dollar terms, and the timing of taxation payments/receipts in 2003
and 2004.



Debt

Net debt was lower in Australian dollar terms in 2004 at $246.2 million.
Gearing (net debt to net debt + equity) was 21.2 per cent at 31 December 2004,
compared with 36.2 per cent at 31 December 2003.

Capital expenditure

Total capital expenditure for the year was $29.5 million compared with $55.2
million in 2003.  Expenditure was predominantly for sustaining purposes, the
purchase of land and the upgrade of the Coal Preparation Plant at Hunter Valley
Operations.   Capital expenditure in 2003 included land acquisitions for Mount
Pleasant.



Port Allocation System

Extraordinarily long vessel queues at Port Waratah resulted in demurrage of
US$1.83 per tonne in the first half.  With the introduction of the Port
Allocation System queues were reduced to fewer than 15 vessels, with full year
demurrage averaging US$0.99 per tonne. Stakeholders in the Hunter Valley coal
chain collaborated during the year through a logistics team aimed at maximising
output from existing infrastructure.



Market conditions

Global thermal coal spot prices continued to rise in the first half of 2004.  By
year-end, average prices had drifted down by around 20 per cent, but were still
very high by historical standards.  Strong demand in Asia and Europe combined
with a stabilising of coal exports from China, heavy rains in Indonesia early in
the year and the infrastructure constraints in Australia all contributed to the
strength of the seaborne thermal coal market.







For further information, please contact:

LONDON                                               AUSTRALIA

Media Relations                                      Media Relations
Lisa Cullimore                                       Ian Head
Office:  [phone]                        Office:  [phone]
Mobile: [phone]                         Mobile: [phone]


Investor Relations                                   Investor Relations
Peter Cunningham                                     Dave Skinner
Office:  [phone]                        Office:  [phone]
Mobile: [phone]                         Mobile: [phone]
Richard Brimelow                                     Susie Creswell
Office:  [phone]                        Office:  [phone]
Mobile: [phone]                         Mobile: [phone]


Website: www.riotinto.com




Coal & Allied Financial and Operating Statistics
                                                                                       2004         2003
Production and shipments                                                        '000 tonnes  '000 tonnes


Total shipments 1                                                                    28,677       27,887
Total saleable production 2
Hunter Valley Operations                                                             13,269       12,008
Mount Thorley Operations                                                              3,547        3,152
Bengalla                                                                              5,312        6,203
Warkworth                                                                             6,955        5,869
Total                                                                                29,083       27,232



Coal & Allied equity share of production
Hunter Valley Operations (100%)                                                      13,269       12,008
Mount Thorley Operations (80%)                                                        2,838        2,522
Bengalla (40%)                                                                        2,125        2,481
Warkworth (55.57%)                                                                    3,865        3,261
Total                                                                                22,097       20,272



Shipments by market 1
Japan                                                                                14,441       14,876
Asia (excluding Japan)                                                                8,630        7,388
Europe                                                                                1,564        2,349
Other                                                                                   796          512
Domestic                                                                              3,246        2,762
Total                                                                                28,677       27,887




Shipments by product 1
Export thermal                                                                       20,172       20,316
Domestic thermal                                                                      4,306        2,762
Coking                                                                                4,198        4,809
Total                                                                                28,677       27,887




Financial                                                                              2004         2003
                                                                                  $ million    $ million

Total assets                                                                          1,782        1,805

Capital expenditure and investments                                                      30           55
Depreciation and amortisation                                                           115          121
Employees                                                                             1,400        1,516
Net debt to net debt + equity (%)                                                      21.2         36.2
Earnings per share (cents)                                                            128.6          0.1

1 Shipments are on a 100% basis and exclude purchased coal
2 Production is on a 100% basis





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