Coal & Allied

Rio Tinto PLC
26 April 2005


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 today. Dollar amounts are in Australian currency.

Coal & Allied AGM - Chairman's address

The year 2004 saw a strong reversal in financial fortunes for Coal & Allied. The
2004 result reflected the increased demand for seaborne traded coal, greater
efficiency in some key operational processes, and delivery of the early benefits
from the management agreement with Rio Tinto Coal Australia.

While enjoying the financial rewards of the improvements in the global coal
market that affected all coal companies in 2004, our focus was firmly on a 'back
to basics' approach within the mine gate - not doing different things, but
rather doing things differently.  Operations successfully concentrated on
optimisation of mine plans and efficient use of capital assets within the
constraints imposed by rail and port infrastructure.  Overhead costs fell as a
result of the management agreement.

We continued to work hard to improve safety performance. We want to embed the
belief that a business in which injuries do not occur is an achievable
objective.  The frequency of injuries was almost halved from the previous year,
but any degree of satisfaction was shattered by two dreadful incidents.

In May, an experienced contract tyre fitter was fatally injured while using a
crane mounted tyre handler during a routine tyre replacement task.  This piece
of equipment is no longer used at Coal & Allied operations.  The death affected
the organisation deeply and our condolences extend to the man's family. Then in
July, an experienced mechanic lost an eye when grease ejected under great
pressure from a dragline component on which he was working.

These accidents of great severity remind us of the importance of our safety
improvement work and we renew our determination to drive all injuries from our
workplace.

In 2004, the increasingly efficient use of mobile equipment and processing
plants along with a review of mine designs helped optimise the company's benefit
from the escalation in price for export coal sales.  Net profit was also
positively impacted by a number of accounting adjustments.  These included the
recognition of the value of inpit inventory, the depreciation of mining
properties over their estimated life, and by depreciating Hunter Valley
property, plant and equipment on a units-of-production basis.

The key points of our financial results were:
               
     •    A net profit after tax of $111.4 million compared with $0.1 million in 
          2003.
     •    The implementation cost of the new management agreement with RTCA was 
          less than anticipated, and the new structure delivered annual pre-tax 
          savings of $15 million to Coal & Allied. This was above forecast.
     •    Net debt in Australian dollar terms reduced by 45.9 per cent in 2004 
          to $246.1 million.
     •    A $1.00 fully franked dividend on ordinary shares was paid.

Turning now to the management agreement

From 1st February 2004, management and support service functions for the
business were consolidated in Brisbane under Rio Tinto Coal Australia.  Rio
Tinto Coal Australia is responsible to the Coal & Allied Board for the
day-to-day management of the Coal & Allied operations.  The implementation costs
of this move were $10 million - some $5 million less than forecast.

The benefits to head office costs totalled $15 million while providing a
platform for further efficiency gains.

Operations

Coal & Allied production increased in 2004, as the operations rose to meet
demand.  In some instances contractors were brought in to assist mining
operations in order to take advantage of the buoyant market conditions.

The only operation where production did not increase was Bengalla.  This was
largely due to mining taking place in a high strip ratio area.

The operational integration of Mount Thorley Operations and Warkworth Mining was
firmly embedded in 2004.  We are continuing to identify opportunities for value
creation in the integration of the two businesses.

Operations at Mount Thorley Warkworth have moved to seven day rosters as a means
of enhancing production.

Mount Pleasant development

Although the market outlook is now more favourable, infrastructure constraints
need to be resolved before we can develop Mount Pleasant. The development
consent has been ratified and community consultation is ongoing. Studies that
are necessary to allow commitment to commercialisation will proceed through
2005.

Employee involvement

An important commitment in 2004 was engaging employees in what we have called
the 'business of the business'.  This has been extremely successful.  Through
the Business Improvement Process, employees have developed many improvement
projects including manpower utilisation, truck payload, Coal Handling
Preparation Plant throughput and train loading rates.

Sustainable development

The RTCA Sustainable Development Steering Committee was formed in 2004, chaired
by our Managing Director Grant Thorne. The committee meets every three months,
and has responsibility for translating high level sustainable development
aspirations into practical processes across the operations.

Both internal and external communication has played a role in advancing
understanding of sustainable development principles.  Indeed, a Community Issues
Survey carried out in the second half identified our sustainable development
performance was of significant interest to external stakeholders and as such
should be a major component in our communications efforts going forward.

All sites maintained international accreditation of their Environmental
Management Systems received in 2003 under ISO14001.  This process that has
delivered improved engagement on environmental performance both inside and
outside the business.  Significant steps were taken in managing water at both
the Hunter Valley Operations and at Mount Thorley Warkworth, resulting in
reduced water use.
Coal & Allied's environmental credentials were further enhanced when Bengalla
was the joint winner of the Hunter Catchment Management's Environmental
Excellence Award for the Upper Hunter River Rehabilitation Initiative.  Projects
such as the integration of sites' Environmental Management Systems and the
relocation of a dragline across the Hunter River were also recognised.

Within the community

A 'Near Neighbour' Strategy was developed and implemented in the Hunter Valley,
designed to improve relationships between operational personnel and adjoining
landowners.  The program has resulted in an improved understanding of landowner
issues, which has led to a substantial reduction in complaints.
                                                     
The Community Trust had its most active year with projects approved totalling
approximately $1 million.

Sponsorship and donation teams were established at each operation, involving
employees in the decision making process for community relations' support.  The
teams meet on a regular basis and make recommendations to each site general
manager on funding grants for local groups.

In the latter half of 2004, a Community Issues Survey was carried out with
results used in developing a new community engagement and development program
for the year ahead.           

Market conditions

Global thermal coal spot prices continued to rise through the first half of
2004.

This was the result of a combination of factors.  These included:

     •    Strong demand in Asia and Europe;
     •    A stabilising of export growth from China;
     •    Heavy rains in Indonesia at the start of the year; and
     •    Infrastructure constraints in Australia.

By year end, average prices had drifted down by around 20 per cent.  However
these were still very high by historical standards.

2004 was a year of two distinct halves for Coal & Allied.  Our selling price was
locked in for most of the first half of the year based on the settlement levels
of 2003. Consequently gains from the increasing market prices did not flow
through until the third quarter when Coal & Allied returned to more profitable
trading.

Vessel queues at Port Waratah reduced with the introduction of the Port
Allocation System in April.  This system was implemented with the authority of
the Australian Competition and Consumer Commission and brought the queue under
control.  We are hopeful that excessive demurrage will no longer be an issue.
We estimate that had the allocation system not been in place, Coal & Allied
would have sustained extra demurrage costs in the order of $30 million in 2004.

Stakeholders in the Hunter Valley coal chain collaborated throughout the year in
a logistics team, which aimed to maximise output from existing infrastructure.
In time the infrastructure improvements to be delivered by Australian Rail Track
Corporation will allow further access to the export market. This will begin
feeding through later this year.  However a full contribution to increased
capacity is not likely to be in place much before the end of the second quarter
2006.

We expect that the market will remain strong with a positive outlook for price -
the global coal market is the strongest it has been in a generation.

Export coal supply chains across the globe are currently operating at capacity,
ensuring that the production surge which usually overcorrects in circumstances
such as we currently face will not occur with the same speed as has been
possible in the past.

China's domestic demand for coal has halted growth in that country's exports.
Indeed China as well as India are emerging opportunities for coal sales.  While
they are immature markets for seaborne traded coal, the sheer scale of demand
from these countries may provide opportunities into the future.

We see continued strong demand growth elsewhere in the Asia Pacific region,
particularly from Taiwan, Korea and Japan.  The nuclear power generating units
shut down in Japan due to maintenance and safety concerns in 2003 were slow to
return to duty, so more coal was required for that country's power requirements
than the market had allowed for.  In addition in both Taiwan and Korea there is
underlying economic growth as well as the rebuilding of stock levels.

Looking ahead, maintaining high stock levels will be vital for Coal & Allied.
We entered 2005 with more than one and a half million tonnes on our stockpiles.
We will continue to maintain this approach to ensure that we can take advantage
of any additional available capacity in the transport infrastructure above our
2005 allocation of 24.9 million tonnes.

In conclusion

Given the relatively high cost of Hunter Valley coal mines in the global cost
curve, it is imperative that our operations continue to increase efficiency and
seek to secure financial security even at high points in the commodity price
cycle. The prices of 2003 were insufficient to support current operations, let
alone underpin further investment, but so too the price peaks of 2004 will
subside as new capacity is eventually brought to market.

The imperative for ongoing improvement at our operations is undiminished and our
commitment to it remains strong.

Chris Renwick
Chairman

For further information, please contact:

LONDON                                      AUSTRALIA

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Investor Relations                          Investor Relations
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Website: www.riotinto.com



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