Coal & Allied half year 03

Rio Tinto PLC
23 July 2003



Coal & Allied 2003 half year results



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





SUMMARY



•         Net profit after tax was $7.2 million compared with $104.7 million in
          the same period last year.

•         Net debt was steady at $504 million.

•         No interim dividend on ordinary shares will be paid.





Commenting on the result, Coal & Allied's Managing Director, Mr Gary Goldberg
said,  'This result reflects the tough market conditions faced by all Australian
export coal producers in 2003.'



'We have clearly been impacted by the sharp movement in US dollar exchange
rates, generally lower contract prices, increased demurrage costs and the
increasing shift to lower priced spot sales of Australian coal.'



'The company has responded to these challenges by reducing stockpiles and
adjusting production to meet demand. Last month the company introduced a range
of operational changes aimed at further lowering costs. This involved changed
work patterns and a decrease in the use of contract labour.'



'While we are facing a difficult second half, we have tight control of costs and
have now repositioned our operations to respond flexibly and quickly to current
market conditions. On this basis, I am confident the many years of reform,
growth and cost reduction achieved by Coal & Allied has put the company on solid
ground to meet the challenges of 2003,' Mr Goldberg concluded.





SUMMARY OF FINANCIAL PERFORMANCE



Coal & Allied's results for the first half of 2003 are shown below, along with
comparative results for the first half of 2002.


                                                              Half year to 2003    30 June 2002      Change %

Sales revenue ($ millions)                                                463.0           674.6          (31)
Net profit after tax ($ millions)                                           7.2           104.7          (93)
Operating cash flow ($ millions)                                         (15.8)           175.3         (109)
Dividends (cents per share)                                                 Nil              40
Coal production1 (million share)                                           13.8           14.72           (6)
Coal shipments1 (million share)                                            13.8           14.32           (3)





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

2 Excludes sold operations.  Details of full production and shipments disclosed
in Financial and Operating Statistics appendix.



Sales revenue

Sales revenue of $463 million was down 31% compared with the first half of 2002,
reflecting the lower market price for export thermal coal, the stronger
Australian dollar against the US dollar and the exclusion of operations sold in
2002.



Production

Managed production of saleable coal, excluding sold operations, was down by
900,000 tonnes to 13.8 million tonnes, reflecting the decision to align
production to market conditions.  Coal & Allied's share is approximately 10.3
million tonnes of saleable coal produced.



Dividends

In light of a tough first half and the prospect of a difficult second half,
Directors have decided no interim dividend for ordinary shares will be paid for
the first half of 2003.  The preference dividend of 1.75 cents per share will be
paid. This compares with fully franked interim dividends of 40 cents per
ordinary share and 1.75 cents per preference share for the first half of 2002.



Cash flow

Net operating cash was an outflow of $15.8 million compared with an inflow of
$175.3 million in the first half of 2002.  The significant change in operating
cash flow is the effect of lower earnings resulting from the impact of lower
coal prices in Australian dollar terms, the fall off of operating cash from the
mines sold in 2002 and taxation payments made in the first half relating to 2002
earnings.



Debt

Net debt was steady at $504 million. Gearing (net debt to net debt + equity) was
38.4% at June 2003, compared with 38.9% at 31 December 2002.



Capital expenditure

Total capital expenditure for the first half of 2003 was $17.9 million compared
with $63.4 million for the same period last year.  Expenditure was predominantly
for sustaining purposes, the purchase of land and some expenditure to develop
new mining areas.  Capital expenditure for the first half of 2002 included the
purchase of a shovel and the Cheshunt pit development.



Market conditions

European spot thermal coal prices began to move up towards the end of the first
half of 2003.  Newcastle spot thermal prices have also increased slightly,
although they remain down on an Australian dollar basis.  Conditions remain
difficult, however, reflecting increased supply, predominantly from Indonesia,
China and Australia.



Long term contract prices were settled with major Asian customers approximately
US$2/tonne lower than for 2002, prompted by the perceived market oversupply at
that time.  The trend to spot or indexed sales rather than contract tonnes
continued to gather pace in Asia led by the Japanese power utilities.  High
ocean freight rates decreased the competitiveness of Australian coal into its
markets in Europe and southern Asia.



Abnormal vessel queues through the first half of 2003 have resulted in demurrage
costs increasing to around $US1/tonne.  Despite record shipments from the port,
fluctuations in the arrival of vessels caused congestion.  This matter is being
addressed on an industry wide basis.



As a result of these competitive market conditions, Coal & Allied will produce
less coal in 2003 than 2002, operating at approximately four million tonnes
below installed capacity of just over 32 million tonnes.





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                                     Daphne Morros
Office:  [phone]                        Office:  [phone]
Mobile: [phone]                         Mobile: [phone]


Website: www.riotinto.com





Coal & Allied Financial and Operating Statistics


                                                                          First Half 2003    First Half 2002 
                                                                              '000 tonnes        '000 tonnes
Production and shipments

Total shipments 1                                                                 13,807              17,211

Total saleable production 2

Hunter Valley Operations                                                           6,104               6,431
Mount Thorley Operations                                                           1,558               2,278
Bengalla                                                                           3,074               2,640
Warkworth                                                                          3,065               3,377
Sub total                                                                         13,801              14,726
Narama                                                                                 -                 370
Ravensworth East                                                                       -                 387
Moura                                                                                  -               2,400
Total                                                                             13,801              17,883

Coal & Allied equity share of production

Hunter Valley Operations (100%)                                                    6,104               6,431
Mount Thorley Operations (80%)                                                     1,246               1,822
Bengalla (40%)                                                                     1,230               1,056
Warkworth (55.57%)                                                                 1,703               1,877
Narama (50%)                                                                           -                 185
Ravensworth East (100%)                                                                -                 387
Moura (55%)                                                                            -               1,320
Total                                                                             10,283              13,078

Shipments by products 1
Export thermal                                                                    10,022              10,468
Domestic thermal                                                                   1,254               2,383
Coking                                                                             2,531               4,360
Hard coking                                                                            -                   -
Total                                                                             13,807              17,211




Financial                                                                    2003 $ million    2002 $ million


Total assets                                                                          1,803             1,958
Capital expenditure and investments                                                      18                63
Depreciation and amortisation 3                                                          58                69
Employees 4                                                                           1,534             1,542
Net debt to net debt + equity (%)                                                      38.4              40.8
Earning per share (cents)                                                               8.3             121.0


1 Shipments are on a 100% basis and exclude purchased coal.

2 Production is on a 100% basis.

3 Depreciation and amortisation include amortisation of mining rights relating
  to Lemington   and Peabody mines.

4 In 2002 Ravensworth, Narama & Moura employees were excluded.


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