Pt 4. Unaudited financial inf

RNS Number : 4292T

Rio Tinto PLC

05 June 2009

 



Unaudited financial information for the three months ended 31 March 2009 and 2008 - 

Group income statement

				(Unaudited)								(Audited)
				Three months ended 31 March 2009				Three months ended 31 March 2008				Year ended 31 December 2008
				US$ million
Gross sales revenue (including share of equity accounted units)(1)				9,538				13,236				58,065
Continuing operations
Consolidated sales revenue				9,191				11,847				54,264
Net operating costs (excluding items shown separately)				(7,502		)		(8,911		)		(37,641		)
Impairment charges net of reversals(2)				-				-				(8,015		)
(Losses)/profit on disposal of interests in businesses(3)				(4		)		1,616				2,231
Exploration and evaluation costs				(136		)		(174		)		(1,134		)
Profit on disposal of interests in undeveloped projects(4)				887				24				489
Operating profit				2,436				4,402				10,194
Share of profit after tax of equity accounted units				121				428				1,039
Profit before finance items and taxation				2,557				4,830				11,233
Finance items
Net exchange gains/(losses) on external debt and intra group balances				79				(45		)		(176		)
Net gains/(losses) on derivatives not qualifying for hedge accounting				39				(111		)		(173		)
Interest receivable and similar income				32				39				204
Interest payable and similar charges				(219		)		(470		)		(1,618		)
Amortisation of discount				(55		)		(74		)		(292		)
				(124		)		(661		)		(2,055		)
Profit before taxation				2,433				4,169				9,178
Taxation				(499		)		(1,130		)		(3,742		)
Profit from continuing operations				1,934				3,039				5,436
Discontinued operations
Loss after tax from discontinued operations(5)				(204		)		-				(827		)
Profit for the period				1,730				3,039				4,609
- attributable to outside equity shareholders				126				100				933
- attributable to equity shareholders of Rio Tinto (Net earnings)				1,604				2,939				3,676
Basic earnings/(loss) per share(6)
Profit from continuing operations				140.8		c		229.0		c		350.8		c
Loss from discontinued operations				(15.9		c)		-				(64.4		c)
Profit for the period				124.9		c		229.0		c		286.4		c
Diluted earnings/(loss) per share(6)
Profit from continuing operations				140.6		c		227.9		c		349.2		c
Loss from discontinued operations				(15.9		c)		-				(64.1		c)
Profit for the period				124.7		c		227.9		c		285.1		c
Dividends paid during the period (US$ million)				-				-				1,933
Dividends per share: paid during the period				-				-				152.0		c
Dividends per share: proposed in the announcement of the results for the period				-				-				68.0		c

Notes:
(1)    Gross sales revenue includes the sales revenue of equity accounted units of US$519 million (31 March 2008: US$1,389 million; 31 December 2008: US$3,801 million) in addition to consolidated sales revenue (after adjusting for intra-subsidiary/equity accounted units sales). Consolidated sales revenue includes subsidiary sales to equity accounted units which are not included in gross sales revenue.
(2)    Of the US$8,015 million included in 'Impairment charges' in 2008, US$7,341 million relates to the Group's aluminium businesses excluding Alcan Packaging, which is discussed separately in note (5) below. Of this amount, US$6,608 million has been allocated to goodwill.
(3)    Gains arising on the disposal of interests in businesses in 2008 relate principally to sales of the Cortez gold mine completed on 5 March 2008 and the Greens Creek mine completed on 16 April 2008.
(4)    Gains arising on the disposal of interests in undeveloped projects are stated net of charges of nil (31 March 2008: nil; 31 December 2008: US$156 million), related to such projects.
(5)    A US$91 million impairment of the Alcan Packaging business has been recognised in the quarter ending 31 March 2009. This impairment is based on an estimate of fair value less costs to sell, which is based on the Group's best estimate of expected proceeds to be realised on sale of Alcan Packaging, less an estimate of remaining costs to sell. Additionally, 'Loss after tax from discontinued operations' includes US$113 million relating to an increase in the Group's estimate of the tax to be paid on sale of the Alcan Packaging business. This increase in estimate follows a detailed review of the changes in the proposed sale structure.
(6)    Per share data is presented in US cents. For the purposes of calculating basic earnings per share, the weighted average number of Rio Tinto plc and Rio Tinto Limited shares outstanding during the period was 1,283.9 million (31 March 2008: 1,283.2 million; 31 December 2008: 1,283.5 million), being the average number of Rio Tinto plc shares outstanding of 998.2 million (31 March 2008: 997.5 million; 31 December 2008: 997.8 million), plus the average number of Rio Tinto Limited shares outstanding not held by Rio Tinto plc of 285.7 million (31 March and December 2008: 285.7 million). The profit figure used in calculating basic and diluted earnings per share is based on profit attributable to equity shareholders of Rio Tinto. For the purposes of calculating diluted earnings per share, the effect of dilutive securities is added to the weighted average number of shares. This effect is calculated under the treasury stock method.

Group statement of cash flows

				(Unaudited)								(Audited)
				Three months ended 31 March 2009				Three months ended 31 March 2008				Year ended 31 December 2008
				US$ million
Cash flows from consolidated operations(1)				3,388				3,151				19,195
Dividends from equity accounted units				32				385				1,473
Cash flows from operations				3,420				3,536				20,668
Net interest paid				(420		)		(525		)		(1,538		)
Dividends paid to outside shareholders of subsidiaries				(104		)		(53		)		(348		)
Tax paid				(676		)		(599		)		(3,899		)
Net cash generated from operating activities				2,220				2,359				14,883
Cash flows from investing activities
Net disposals of subsidiaries, joint ventures and associates				67				1,924				2,563
Purchase of property, plant and equipment and intangible assets				(1,513		)		(1,663		)		(8,574		)
Sales of financial assets				94				88				171
Purchases of financial assets				(9		)		(21		)		(288		)
Other funding of equity accounted units				(43		)		(139		)		(334		)
Other investing cash flows				15				16				281
Cash (used in)/from investing activities				(1,389		)		205				(6,181		)
Cash flows before financing activities				831				2,564				8,702
Cash flows from financing activities
Equity dividends paid to Rio Tinto shareholders				-				-				(1,933		)
Proceeds from issue of ordinary shares in Rio Tinto				3				17				23
Proceeds from additional borrowings				1,330				-				4,697
Repayment of borrowings				(1,515		)		(2,417		)		(12,667		)
Finance lease repayments				(3		)		(2		)		(10		)
Receipts from close out of interest rate swaps				-				-				710
Other financing cash flows				17				28				72
Cash used in financing activities				(168		)		(2,374		)		(9,108		)
Effects of exchange rates on cash and cash equivalents				(46		)		13				(101		)
Net increase/(decrease) in cash and cash equivalents				617				203				(507		)
Opening cash and cash equivalents less overdrafts				1,034				1,541				1,541
Closing cash and cash equivalents less overdrafts(2)				1,651				1,744				1,034

			(Unaudited)				(Audited)
			Three  months  ended  31 March 2009		Three months ended  31 March  2008		Year  ended 31 December  2008
			US$ million
Notes:
(1)	Cash flows from consolidated operations
	Profit from continuing operations		1,934		3,039		5,436
	Adjustments for:
	Taxation		499		1,130		3,742
	Finance items		124		661		2,055
	Share of profit after tax of equity accounted units		(121	)	(428	)	(1,039	)
	Loss/(profit) on disposal of interests in businesses		4		(1,616	)	(2,231	)
	Impairment charges		—		—		8,015
	Depreciation and amortisation		739		790		3,475
	Provisions (including exchange gains on provisions)		122		51		265
	Utilisation of provisions		(134	)	(110	)	(464	)
	Utilisation of provision for post retirement benefits		(77	)	(86	)	(448	)
	Change in inventories		(134	)	(168	)	(1,178	)
	Change in trade and other receivables		896		(171	)	658
	Change in trade and other payables		(662	)	106		951
	Other items		198		(47	)	(42	)
			3,388		3,151		19,195
(2)	Closing cash and cash equivalents less overdrafts at 31 March 2009 differs from cash and cash equivalents less overdrafts on the statement of financial position as it includes US$15 million related to Corumbá cash and cash equivalents shown separately as assets held for sale on the statement of financial position.

Group statement of financial position

		(Unaudited)		(Audited)
		As at  31 March 2009		As at 31 December 2008
		US$ million
Non-current assets
Goodwill		14,166		14,296
Intangible assets		6,199		6,285
Property, plant and equipment		41,059		41,753
Investments in equity accounted units		5,062		5,053
Loans to equity accounted units		76		264
Inventories		204		166
Trade and other receivables		1,036		1,111
Deferred tax assets		1,456		1,367
Tax recoverable		66		220
Other financial assets		720		666
		70,044		71,181
Current assets
Inventories		5,319		5,607
Trade and other receivables		4,304		5,401
Assets held for sale(1)		5,907		5,325
Loans to equity accounted units		474		251
Tax recoverable		440		406
Other financial assets		289		264
Cash and cash equivalents		1,674		1,181
		18,407		18,435
Current liabilities
Bank overdrafts repayable on demand		(38	)	(147)
Borrowings		(10,142	)	(9,887)
Trade and other payables		(5,569	)	(7,197)
Liabilities of disposal groups held for sale(1)		(2,075	)	(2,121)
Other financial liabilities		(420	)	(480)
Tax payable		(1,318	)	(1,442)
Provisions		(895	)	(826)
		(20,457	)	(22,100)
Net current liabilities		(2,050	)	(3,665)
Non-current liabilities
Borrowings		(29,261	)	(29,724)
Trade and other payables		(462	)	(452)
Other financial liabilities		(331	)	(268)
Tax payable		(354	)	(450)
Deferred tax liabilities		(4,296	)	(4,054)
Provision for post retirement benefits		(3,153	)	(3,601)
Other provisions		(6,255	)	(6,506)
		(44,112	)	(45,055)
Net assets		23,882		22,461
Capital and reserves
Share capital(2)
- Rio Tinto plc		160		160
- Rio Tinto Limited (excluding Rio Tinto plc interest)		946		961
Share premium account		4,708		4,705
Other reserves		(2,761	)	(2,322)
Retained earnings		19,036		17,134
Equity attributable to Rio Tinto shareholders		22,089		20,638
Attributable to outside equity shareholders		1,793		1,823
Total equity		23,882		22,461

Notes:
(1)    Assets and liabilities held for sale as at 31 March 2009 comprise the Corumbá iron ore operation in Brazil, Jacobs Ranch and Alcan Packaging group. Assets and liabilities held for sale as at 31 December 2008 comprise the Alcan Packaging group which was acquired with a view to resale.
(2)    At 31 March 2009, Rio Tinto plc had 998.6 million ordinary shares in issue and held by the public, and Rio Tinto Limited had 285.7 million shares in issue, excluding those held by Rio Tinto plc. Net tangible assets per share as defined by the ASX amounted to US$1.34 (31 December 2008: US$0.04 net tangible assets).

  Net earnings and Underlying Earnings

In order to provide additional insight into the performance of its business, Rio Tinto presents Underlying Earnings. The differences between Underlying Earnings and net earnings are set out in the following table. Net earnings and Underlying Earnings which are the focus of the commentary in this report, deal with amounts attributable to equity shareholders of Rio Tinto.

				(Unaudited) Three months ended 31 March
				2009				2008
				US$ million
Underlying Earnings				1,751				1,881
Items excluded from Underlying Earnings
Losses/profits on disposal of interests in businesses				(8		)		1,093
Loss after tax from discontinued operations				(204		)		-
Exchange differences and derivatives				157				20
Other, including divestment and takeover defence costs				(92		)		(55		)
Net earnings				1,604				2,939

Commentary on the Group financial results

First quarter 2009 Underlying Earnings of US$1,751 million and first quarter 2009 net earnings of US$1,604 million were US$130 million and US$1,335 million below, respectively, the comparable measures for the first quarter of 2008. The principal factors explaining the movements are set out in the table below. Reference to earnings, include both net earnings and Underlying Earnings unless otherwise specified.

								(Unaudited)
								Underlying Earnings				Net  earnings
								US$ million
First quarter 2008								1,881				2,939
Effect of changes in:
Prices(1)								(1,184		)
Exchange rates								470
Volumes								(402		)
General inflation								(102		)
Energy								70
Exploration and evaluation costs (net of profits on disposals of exploration projects)(2)								898
Interest/tax/other								120
Total changes in Underlying Earnings								(130		)		(130		)
Profits on disposal of interests in businesses								-				(1,101		)
Loss after tax from discontinued operations								-				(204		)
Exchange differences and derivatives								-				137
Other, including divestment and takeover defence costs								-				(37		)
First quarter 2009								1,751				1,604

Notes:
(1)    Included in the price variance is a net profit and loss effect in the first quarter of 2009 of (US$46) million related to aluminium inventory write down.
(2)    The variance in exploration and evaluation costs includes a US$797 million profit on disposal following the divestment of the undeveloped potash assets in Argentina and Canada.

Prices

The effect of price movements in the first quarter of 2009 was to decrease Underlying Earnings by US$1,184 million compared with the first quarter of 2008. Prices for aluminium, copper and molybdenum were all considerably lower in the period as economic activity continued to decline in the first quarter of 2009. The table below shows average prices for the first quarters of 2009 and 2008 and the 31 March 2009 price for the principal commodities for which the Group receives payments based on spot market pricing:

Commodity				First Quarter 2009 Average Price				First Quarter 2008 Average Price				31 March 2009 Price
Copper (USc/lb)				154				350				183
Aluminium (USc/lb)				62				123				62
Gold (US$/troy oz)				907				924				917
Molybdenum (US$/lb)				9				34				9

Iron ore prices were higher in the period reflecting the increase in benchmark prices for the 2008/09 contract year, partially offset by a significant amount of sales in the spot market during the first quarter of 2009 at prices significantly below 2008/09 contract levels. During the first quarter of 2009, approximately 50 per cent. of the Group's iron ore sales were on the spot market. Prices were higher for both thermal coal and coking coal reflecting 2008/09 contract price increases.

Exchange rates

The US dollar, the Group's reporting currency, strengthened in the first quarter of 2009 relative to the currencies in which Rio Tinto incurs the majority of its costs. The effect of all currency movements during the first quarter of 2009 increased Underlying Earnings relative to the first quarter of 2008 by US$470 million as, on average, the Australian dollar weakened by 27 per cent., the Canadian dollar by 20 per cent. and the Euro by 13 per cent. during the period.

Volumes

First quarter 2009 volumes were lower in the Iron Ore group following adverse weather conditions in the Pilbara and an alignment of production with lower market demand. Lower volumes at Alcan Engineered Products reflected lower demand as a result of deteriorating market conditions. Copper production was higher in the first quarter of 2009 compared with the same period in 2008, primarily as a result of higher average mill rate combined with significantly higher ore grades at Kennecott Utah Copper, partly offset by technical issues at Escondida that have adversely affected production since August 2008, and will continue to do so until mid-2009. Aluminium production was lower, mainly due to the sale of Alcan Ningxia and the closure of Lannemezan, combined with lower demand and unplanned shutdowns due to equipment issues and emergency maintenance. Demand for industrial minerals products was lower, consistent with reduced economic activity across all major regions and coking coal sales were materially higher compared to the first quarter of 2008, as a result of adverse weather conditions in the first quarter of 2008. The overall impact of all volume movements was a decrease in Underlying Earnings of US$402 million relative to the first quarter of 2008.

Costs

Costs were broadly similar to the first quarter of 2008. Higher demurrage and bunkering costs as a consequence of adverse weather conditions and the effect of lower production increased unit costs in the Iron Ore group. This was largely offset by lower costs elsewhere in the Group reflecting lower input costs and lower corporate costs. The net impact of global inflation decreased Underlying Earnings by US$102 million.

The US$797 million profit on disposal (net of tax) of the Potasio Rio Colorado and the Regina exploration asset (the 'Potash assets') has been recognised within Underlying Earnings. The net impact on Underlying Earnings from the change in exploration and evaluation costs was to increase Underlying Earnings by US$898 million compared with the first quarter of 2008. Underlying earnings includes gains and losses on the disposal or impairment of undeveloped projects as the Group frequently sells undeveloped properties as an alternative to development, and such activities are a core strategic component of the Group's regular exploration and development activities.

Lower energy costs, principally driven by lower fuel and oil prices, increased Underlying Earnings by US$70 million.

Interest, tax and other

The Group charge for the first quarter of 2009 was US$120 million lower than in the first quarter of 2008, reflecting lower net debt balances and lower interest rates, partially offset by other non cash cost.

The effective tax rate on Underlying Earnings, excluding equity accounted units, was 22.5 per cent. compared with 36.8 per cent. in the first quarter of 2008. This decrease largely related to the one-off non-taxable profit on disposal of Potash assets which was recognised in the first quarter of 2009.

Items excluded from Underlying Earnings

The Cortez gold mine (Rio Tinto share: 40 per cent.) and the Tarong Coal mine were divested in the first quarter of 2008. The US$1,093 million profit on disposal from these divestments was excluded from Underlying Earnings for the first quarter of 2008 and disclosed separately as profit on disposal of interests in businesses.

Items excluded from Underlying Earnings also include an impairment charge in respect of the Alcan Packaging business of US$91 million recognised in the first quarter of 2009. This arose because the Group's best estimate of expected proceeds to be realised on sale of Alcan Packaging reduced owing to the foreign exchange movements.

Additionally, 'Loss after tax from discontinued operations' includes US$113 million relating to an increase in the Group's estimate of the tax to be paid on the sale of the Alcan Packaging business.

Profit for the first quarter of 2009

IFRS requires that the profit for the period reported in the income statement should also include earnings attributable to outside shareholders in subsidiaries. For the first quarter of 2009, the profit was US$1,730 million (first quarter 2008: US$3,039 million) of which US$126 million (first quarter 2008: US$100 million) was attributable to outside shareholders, leaving US$1,604 million (first quarter 2008: US$2,939 million) of net earnings attributable to Rio Tinto shareholders. Net earnings and Underlying Earnings, which are the focus of this commentary, deal with amounts attributable to equity shareholders of Rio Tinto.

Cash flow

Cash flow from operations, including dividends from equity accounted units, was US$3,420 million in the first quarter of 2009, 3 per cent. lower than in the first quarter of 2008. The effect of declining prices and volumes and significantly lower dividends from equity accounted units was largely offset by the Potash assets disposal proceeds of US$850 million which, being sales of undeveloped projects, were included in cash flow from operations in accordance with the Group's accounting policy.

Net disposals of subsidiaries, joint ventures and associates of US$67 million in the first quarter of 2009 primarily related to Alcan Ningxia. In the first quarter of 2008 asset disposal proceeds of US$1,924 million primarily related to Cortez and Tarong. There were no acquisitions during the period. Capital expenditure on property, plant and equipment and intangible assets was US$1,513 million in the first quarter of 2009, US$150 million lower than the same period in 2008 reflecting the Group's decision to slow or defer some capital expenditure projects. Capital expenditure during the first quarter of 2009 included the expansion of the Cape Lambert port, the completion of the Hope Downs south mine, Brockman 4 and Mesa A developments in Western Australia, the expansion of the Yarwun alumina refinery and the Alumar expansion.

Net debt

There were net repayments of borrowings of US$185 million in the first quarter of 2009 as further debt was drawn down on Facility B under the Alcan credit facilities prior to partial repayment using the Potash assets proceeds. There were net repayments of borrowings under the Alcan credit facilities of US$2,417 million in the first quarter of 2008 principally attributable to the proceeds of asset disposals.

As at the dates indicated, the Group's net debt was as follows:

				(Unaudited)As at 31 March 2009				(Unaudited)  As at 31 December 2008
				(US$ million)
Bonds				(9,671		)		(9,704		)
Alcan credit facilities (as detailed below)				(27,835		)		(27,985		)
Other debt				(2,031		)		(2,164		)
Cash and cash equivalents				(1,674		)		(1,181		)
Net debt				(37,863		)		(38,672		)

As at the dates indicated, the amounts outstanding under the Alcan credit facilities were as follows:

				As at 30 April 2009				As at 31 March 2009				As at 31 December 2008
				US$ million
Facility A due October 2009				7,145				8,885				8,885
Facility B due October 2010				8,100				8,950				9,100
Facility C due October 2012				-				-				-
Facility D due October 2012				10,000				10,000				10,000
Total				25,245				27,835				27,985

In April 2009 the net proceeds from the issue of the US$3.5 billion bonds were used to pay down Facilities A and B by US$1,740 million and US$1,650 million respectively. Subsequently a further US$800 million was drawn down from Facility B for operational purposes.

As at 31 March 2009, the Group had US$1.05 billion available under Facility B and US$5.0 billion available under Facility C. Once drawn, there is no restriction on the use of these funds. As at 30 April 2009, the Group had US$1.9 billion available under Facility B and US$5.0 billion available under Facility C. The period for drawing down under Facilities A and D has now expired.

As at 31 March 2009, the Group also had additional unused committed bilateral banking facilities of US$2.1 billion; $1.0 billion of these facilities are scheduled to expire in 2011 and the remainder in 2012.

As at the dates indicated, the Group's gross debt maturity profile was as follows:

				As at 30 April 2009				(Unaudited)As at 31 March 2009				As at 31 December 2008
				US$ million
2009				8,034				9,436				9,782
2010				8,503				9,107				9,700
2011				454				484				449
2012				10,583				10,668				10,605
2013				3,408				3,619				3,124
2014 and beyond				9,470				6,227				5,550
Total				40,452				39,541				39,210

Gross debt increased to US$40,452 million as at 30 April 2009 following the payment of the final dividend and regularly scheduled payments to tax authorities.

Capital commitments for 2009 

Capital commitments, including those relating to joint ventures and associates, were US$3,537 million as at 31 March 2009 compared to US$4,354 million as at 31 March 2008.

Interest rate and credit ratings

The weighted average interest cost of the borrowings under the Alcan acquisition facilities as at 30 April 2009 0.809 per cent. per annum which is LIBOR plus margins of between 0.325 and 0.425 per cent. 

In December 2008, Moody's downgraded the long-term rating of the Group from A3 to Baa1, and S&P downgraded its long-term rating from BBB+ to BBB and its short-term corporate credit rating from A-2 to A-3. Since the downgrades, both Moody's and S&P have retained a negative outlook in respect of their ratings.

Following the announcement of the strategic alliance with Chinalco in February 2009, Moody's placed the Group under review for a possible downgrade, while at the same time affirming the Prime-2 short-term rating. S&P reaffirmed the BBB rating.

Covenants

The only financial covenant under the Alcan credit facilities is a ratio of net debt to underlying EBITDA of no greater than 4.5 times which the Group is required to comply with at the end of each financial year and financial half year in respect of the preceding twelve month period. As at 31 March 2009, the ratio was 2.66 (31 December 2008: 1.73). 

There are no financial covenants in respect of Rio Tinto's bonds.

Reconciliation of consolidated net debt

				(Unaudited)As at 31 March 2009				(Unaudited) As at 31 December 2008
				US$ million
Analysis of changes in consolidated net debt
At 1 January in the period				(38,672		)		(45,191		)
Adjustment on currency translation				69				1,296
Exchange losses/gains charged/credited to the income statement				(109		)		(1,701		)
Gains on derivatives related to net debt				19				105
Debt of acquired companies				-				-
Cash movements excluding exchange movements				852				6,864
Other movements				(22		)		(45		)
At period end				(37,863		)		(38,672		)
Analysis of closing balance
Borrowings				(39,403		)		(39,611		)
Bank overdrafts repayable on demand				(38		)		(147		)
Cash and cash equivalents				1,674				1,181
Other liquid resources (included in 'other financial assets')				4				4
Derivatives related to net debt (included in 'other financial assets/liabilities')				(100		)		(99		)
				(37,863		)		(38,672		)

Statement of Financial Position

Net debt decreased to US$37.9 billion as at 31 March 2009 representing a decrease of US$0.8 billion from 31 December 2008, as a result of the Group paying down debt using free cash flow and the proceeds of asset disposals during the period, in particular the Potash assets sale for US$850 million in cash. The ratio of net debt to total capital (defined as Rio Tinto shareholders' funds plus net debt and outside equity interests) was 61 per cent. as at 31 March 2009 slightly down from 63 per cent. as at 31 December 2008. Interest cover (defined as profit before finance items and taxation, divided by net interest payable for the period) remained the same at 31 March 2009 as at 31 December 2008, at approximately ten times net income.

In the first quarter of 2009, receivables decreased in line with lower prices and volumes and payables decreased with lower accruals reflecting the reduction in capital expenditure levels.

For the period ended 31 March 2009, the Group's net assets increased by US$1.4 billion, compared with 31 December 2008, broadly reflecting net profit for the period of US$1.7 billion. During the period ended 31 March 2009, there were actuarial gains of US$286 million compared with US$855 million actuarial losses for the year ended 31 December 2008 as the value of obligations decreased from higher discount rates and lower expected inflation. However, these were more than offset by adverse currency translation effects arising from the strengthening of the US dollar during the period.

Assets held for sale

During the first quarter of 2009, Rio Tinto announced that it had reached agreement to sell its Brazilian iron ore operation, Corumbá, and its US coal mine Jacobs Ranch. Completion of each of these transactions is subject to obtaining required regulatory approvals. Therefore these two operations are treated as assets held for sale in the statement of financial position, as is Alcan Packaging. Assets held for sale are carried at the lower of fair value and carrying value. There was a further impairment charge of US$91 million in the first quarter of 2009 in respect of Alcan Packaging as a result of a reduction in the Group's best estimate of expected proceeds to be realised on sale due to foreign exchange movements. Additionally, 'Loss after tax from discontinued operations' includes US$113 million relating to an increase in the Group's estimate of the tax to be paid on the sale of the Alcan Packaging business. The fair value of Corumbá and Jacobs Ranch exceeded their respective carrying values as at 31 March 2009.

Reconciliation to Australian IFRS

The Group prepares its financial statements in accordance with IFRS as adopted by the European Union ('EU IFRS'), which differs in certain respects from the version of IFRS that is applicable in Australia ('Australian IFRS'). Prior to 1 January 2004, the Group's financial statements were prepared in accordance with UK GAAP. Under EU IFRS, goodwill on acquisitions prior to 1998, which was eliminated directly against equity in the Group's UK GAAP financial statements, has not been reinstated. This was permitted under the rules governing the transition to EU IFRS set out in IFRS 1. The equivalent Australian Standard, AASB 1, does not provide for the netting of goodwill against equity. As a consequence, shareholders' funds under Australian IFRS include the residue of such goodwill, which amounted to US$752 million at 31 March 2009 (31 March 2008: US$736 million; 31 December 2008: US$752 million). Save for the exception described above, the Group's financial statements prepared in accordance with EU IFRS are consistent with the requirements of Australian IFRS.

  Review of operations for the three months ended 31 March 2009 and 2008 

All references to earnings within this section refer to Underlying Earnings.

Financial information by Product Group

				(Unaudited)								(Audited)
				Three months ended 31 March 2009				Three months ended 31 March 2008				Year ended 31 December 2008
				US$ million
Sales revenue
Iron Ore				2,781				2,928				16,527
Energy and Minerals				2,176				1,944				10,998
Aluminium				3,518				5,963				23,839
Copper and Diamonds				1,063				2,401				6,669
Other operations				4				4				44
				9,542				13,240				58,077
Other items				(4		)		(4		)		(12		)
Gross sales revenue				9,538				13,236				58,065
Share of sales of equity accounted units and subsidiary sales to equity accounted units				(347		)		(1,389		)		(3,801		)
Consolidated sales revenue per income statement				9,191				11,847				54,264
Underlying earnings
Iron Ore				988				916				6,017
Energy and Minerals				1,258				241				2,887
Aluminium				(481		)		330				1,184
Copper and Diamonds				182				861				1,758
Other operations				(2		)		(18		)		(52		)
Product group operations				1,945				2,330				11,794
Other items				(116		)		(88		)		(337		)
Central Exploration and evaluation				54				(39		)		(124		)
Net interest payable				(132		)		(322		)		(1,030		)
Underlying earnings				1,751				1,881				10,303
Items excluded from Underlying earnings				(147		)		1,058				(6,627		)
Net earnings per income statement				1,604				2,939				3,676
Depreciation and amortisation
Iron Ore				141				172				705
Energy and Minerals				114				141				612
Aluminium				405				422				1,858
Copper and Diamonds				153				137				621
Other operations				1				(1		)		13
				814				871				3,809
Other items				18				16				80
Less: depreciation and amortisation of equity accounted units				(93		)		(97		)		(414		)
Depreciation and amortisation (excluding equity accounted units)				739				790				3,475

Comparison of underlying earnings

First quarter 2009 underlying earnings of US$1,751 million were $130 million lower than the comparable period of 2008. The table below shows the difference by product group. 

				(Unaudited) US$ million
Unaudited
First quarter 2008 underlying earnings				1,881
Iron ore				72
Energy and Minerals(1)				1,017
Aluminium				(811		)
Copper and Diamonds				(679		)
Other operations				16
Central exploration and evaluation				93
Interest				190
Other				(28		)
First quarter 2009 underlying earnings				1,751

Note:
(1)    The variance in the Energy and Minerals earnings includes a US$797 million profit on disposal following the divestment of the Potash assets (PRC in Argentina and Regina in Canada).
All subsequent references to earnings within the business unit section refer to underlying earnings.

Iron ore

Product group earnings of US$988 million for the first quarter of 2009 were US$72million higher than the comparable period in 2008, which was primarily attributable to higher prices being achieved in the 2008/09 contract period and the weaker Australian dollar, partially offset by lower shipments due to the weaker global economy, higher unit costs following lower production and increased sales of lower margin products.

Long-term contract prices for Pilbara customers during the first quarter of 2009 benefitted from the 2008/09 price settlements which represented an average increase of 86 per cent above first quarter 2008 benchmark prices. However, this price increase was partially offset by approximately half of sales being made into the spot market in the quarter at significant discounts to benchmark prices. First quarter 2009 production in the Pilbara of 36 million tonnes (29 million tonnes on an attributable basis) was broadly consistent with the fourth quarter of 2008, and represented a 15 per cent decrease on the corresponding quarter of 2008. Total shipments from the Pilbara during the first quarter of 2009 totalled 39 million tonnes, 17 per cent higher than the fourth quarter of 2008, and 9 per cent lower than the comparable quarter of 2008. The Pilbara region experienced prolonged heavy rain during the first quarter of 2009, including two metres of rain across the west and central Pilbara. As a result, production at several mines was suspended or significantly hindered for up to a month. In addition, the mainline rail system was suspended for more than two weeks, preventing any in-loading at the ports. The Robe Valley line remained blocked for six weeks during the first quarter of 2009. Wherever possible, however, the interruptions were exploited to bring forward maintenance or upgrades. The new shiploader at East Intercourse Island was successfully installed during this time. Production at all the Pilbara mines has since recovered to normal levels.

Rio Tinto's share of first quarter 2009 production at the Iron Ore Company of Canada ('IOC') was 0.9 million tonnes of concentrate, a fourfold increase on the first quarter of 2008, and one million tonnes of pellets, about half the total of the first quarter of 2008. These figures reflected the effect of a decision in late 2008 to suspend production from two pellet lines, as global demand slumped for premium iron ore products in the wake of the global financial crisis. This action was in line with other iron ore pellet producers who also reduced pellet production in an effort to balance global supply and demand. 

During the first quarter of 2009, iron ore capital expenditure of US$568 million (first quarter of 2008: US$469 million) focused on Brockman 4, the finalisation of the Cape Lambert port expansion and Mesa A.

In January 2009, Rio Tinto announced that it had reached agreement to sell the Corumbá iron ore mine in Brazil and the associated river logistics operations in Paraguay for US$750 million subject to receipt of the relevant regulatory approvals. Completion is expected in the second half of 2009.

Rio Tinto Alcan

Rio Tinto Alcan realised an underlying loss of US$481 million in the first quarter of 2009, US$811 million lower than underlying earnings for the first quarter of 2008. The 50 per cent. decline in the average LME aluminium price during the first quarter of 2009 compared with the first quarter of 2008 was the most significant factor, partially offset by the weaker Canadian dollar and the weaker Euro compared with the US dollar. 

The LME aluminium price averaged 62 cents per pound in the first quarter of 2009 against 123 cents per pound in the first quarter of 2008. Rio Tinto Alcan's result for the quarter ended 31 March 2009 includes a net write down of inventory values by US$46 million.

There was a significant decrease in sales volumes in all sectors of Alcan Engineered Products and higher production costs leading to an operating loss in the business unit.

First quarter 2009 bauxite production was 19 per cent. lower than the same quarter of 2008 with production at Weipa down 32 per cent., reflecting the deterioration of market conditions and lower demand.

First quarter 2009 alumina production was 2 per cent. lower than the same quarter of 2008. In January 2009, Rio Tinto Alcan announced that production from the Vaudreuil and Gardanne refineries would be curtailed, reducing the annual production rate of alumina by approximately 6 per cent compared with 2008. 

First quarter 2009 aluminium production was 6 per cent. lower than the same quarter of 2008. Consistent production volumes at the Canadian smelters was outweighed by production cutbacks in Europe and New Zealand. The ramp-up of the Sohar smelter in Oman continued on schedule with 79,000 tonnes (100 per cent. basis) of metal produced in the quarter. In January 2009, Rio Tinto Alcan announced a further 6 per cent. reduction in annual aluminium production, bringing the total reduction to approximately 11 per cent. on an annualised basis. This reduction included the expected closure of the Beauharnois smelter in Quebec at the end of the second quarter of 2009, the anticipated stoppage of smelting operations at Anglesey Aluminium in September 2009 and the sale of the Ningxia smelter in China for US$125 million, which was completed in January 2009.

Capital expenditure for Rio Tinto Alcan in the first quarter of 2009 was US$548 million (first quarter of 2008: US$536) and included the Alumar expansion, Yarwun 2, Arvida AP50, and the Kitimat modernisation.

Copper and Diamonds

Copper and Diamonds earnings of US$182 million during the first quarter of 2009 were US$679 million lower than the comparable period in 2008. The fall in the average copper price from 350 US cents per pound in the first quarter of 2008 to 154 US cents per pound in the first quarter of 2009; the 74 per cent. decline in the average molybdenum price to US$9 per pound; and lower rough diamond prices reduced earnings by US$756 million in the aggregate. This included a gain of US$49 million due to provisional pricing movements. In addition, there were benefits from exchange rate movements and higher sales volumes at Kennecott Utah Copper and Grasberg, which were partly offset by a significant fall in diamond sales and prices.

First quarter 2009 production of mined copper and gold increased by 67 per cent. and 84 per cent., respectively, at Kennecott Utah Copper compared with the same quarter of 2008. Following a decline in the price of molybdenum, the mining sequence focused on delivery of copper and gold and yielded higher ore grades at Kennecott Utah Copper than in previous quarters. Concentrate grade was also higher during the first quarter of 2009 compared with the first quarter of 2008, with the bulk flotation upgrade at the concentrator continuing to drive improvements in performance. The increase in both concentrate smelted and anodes produced in the first quarter of 2009 compared with the first and fourth quarters of 2008 was primarily due to greater production hours and improved concentrate grade. This resulted in higher cathode and precious metal production at the refinery.

Rio Tinto's share of mined copper at Escondida in the first quarter of 2009 declined by 33 per cent. compared with the first quarter of 2008 due to lower head grades and lower recoveries from a higher clay content in the ore.

Rio Tinto's share of joint venture copper and gold at Grasberg in the first quarter of 2009 was significantly higher than the first quarter of 2008 primarily attributable to higher metal share under the joint venture agreement and improved ore grades.

First quarter 2009 carat production at Argyle was more than double that in the same quarter of 2008 due to the processing of higher grade ore. In January 2009, Rio Tinto announced that the Argyle underground mining project will be slowed to critical development activities and the diamond processing facilities will undergo an extended maintenance shut down of up to three months. This commenced in March 2009.

First quarter 2009 production at Diavik was largely unchanged from the same quarter of 2008. In March 2009, Diavik announced that summer and winter production shutdowns of six weeks each will be implemented. During these shutdowns diamond production will temporarily cease and the mine will be placed on a care and maintenance schedule. Following these measures, Diavik is expected to produce between five and six million carats (100 per cent. basis) of rough diamonds in 2009.

As a result of the global economic downturn, demand for, and the prices of, diamonds declined significantly and adversely impacted the Group's Underlying Earnings during the first quarter of 2009 compared with the same period of 2008. 

Capital expenditure in the first quarter of 2009 of US$228 million (first quarter of 2008: US$365 million) reflected the slow down on the Argyle expansion and the underground development at Diavik and sustaining capital expenditure at the copper operations.

Energy and Minerals

Product group earnings of US$1,258 million for the first quarter of 2009 were US$1,017 million higher than in the first quarter of 2008 primarily due to the recognition of a US$797 million profit on disposal of the Potash assets (the sale completed on 5 February 2009 realising cash proceeds of US$850 million). The remaining increase was due to higher prices, particularly at Rio Tinto Coal Australia, and the weaker Australian dollar compared with the US dollar. These factors more than offset the effect of lower coking coal sales at Rio Tinto Coal Australia and lower volumes and pricing at Rio Tinto Iron and Titanium and Rio Tinto Minerals.

Thermal coal contracts for the 2009 fiscal year (annual period commencing 1 April 2009) were settled in the US$70-72 per tonne range, a decrease of approximately 44 per cent on the record levels of the previous year. Coking coal contracts for the 2009 fiscal year were settled in the US$115-130 per tonne range, a decline of approximately 60 per cent on the record levels of the 2008/09 fiscal year.

First quarter 2009 hard coking coal production from the Queensland coal operations increased by 32 per cent., compared with the same quarter of 2008 when heavy rains and consequent flooding disrupted production and transportation, particularly at Hail Creek. Production at Kestrel is expected to fall by 15 per cent. in 2009 in response to the slowdown in the global steel industry.

Wet weather in the Hunter Valley in the first quarter of 2009 adversely impacted production of thermal coal. Lower semi-soft production was a response to weaker market demand. An investment programme by the owners and operators of the coal ports at Newcastle and Dalrymple Bay is expected to result in additional capacity from 2010.

Access to higher grade ores continued at Rössing compared with the first quarter of 2008. Lower head grade and lower mill recovery at ERA led to lower production in the first quarter of 2009.

Minerals production in the first quarter of 2009 continued to be affected by significantly lower demand in line with reduced economic activity across all major regions but prices were higher as a result of reduced supply. In April 2009, QIT announced that it will be implementing a two-month summer shutdown of its ilmenite mine and smelting operations in Canada as a response to the current market uncertainty. At Richards Bay, one of the four furnaces is expected to be out of operation for a period of five months for a planned rebuild. A general decline in production volumes of approximately 14 per cent. across the Rio Tinto Iron and Titanium product portfolio is anticipated in 2009, compared with 2008.

First quarter 2009 capital expenditure of US$238 million (first quarter of 2008: US$320 million) included the Clermont and Kestrel mine developments and the completion of the QMM mineral sands operations in Madagascar.

During the first quarter of 2009, Rio Tinto divested its undeveloped potash assets in Argentina and Canada for $850 million in cash. The profit on disposal of US$797 million is recognised within underlying earnings in the Energy and Minerals product group.

In March 2009, Rio Tinto announced that it had signed a conditional agreement to sell its Jacobs Ranch coal mine in the United States to Arch Coal, Inc. for a total cash consideration of US$761 million. Completion of the transaction remains subject to customary closing conditions, including regulatory approvals. The FTC has recently requested additional information from Rio Tinto in relation to this disposal.

Central Exploration and Evaluation

Central exploration and evaluation costs in the first quarter of 2009 were US$93 million lower than in the first quarter of 2008 as a result of the Group wide initiative to reduce operating costs. The post-tax centrally reported exploration charge is presented net of the gain on disposal of central exploration projects. During the first quarter of 2009 the Group realised US$68 million from the divestment of these projects.

This announcement is an advertisement. It is not a prospectus, disclosure document or offering document under Australian law, the laws of England and Wales or any other law and does not purport to be complete. Investors should not subscribe for or purchase any Rio Tinto plc Rights, Rio Tinto plc Provisional Allotment Letter, or New Rio Tinto plc Shares or New Rio Tinto Limited Shares referred to in this announcement except on the basis of information in the prospectus to be published by Rio Tinto plc and Rio Tinto Limited (together, “Rio Tinto”) in due course in connection with the rights issues (the “Prospectus”). The Prospectus will, following publication, be available on Rio Tinto’s website for information purposes only. In the case of the Rio Tinto Limited rights issue, investors outside Australia and New Zealand should not subscribe for or purchase any Rio Tinto Limited Rights or New Rio Tinto Limited Shares referred to in this announcement except on the basis of information in the Prospectus. Offers will be made to investors within Australia and New Zealand under an Australian offer document to be dispatched in due course. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, the Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares offered by any person in any jurisdiction in which such an offer or solicitation is unlawful. Any decision to participate in the Rights Issues or to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities should only be made on the basis of information contained in the Prospectus when it is published in due course, which will contain further information relating to the issuer as well as a summary of the risk factors to which any investment is subject.

 

This announcement and the information contained herein do not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States. The Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. There will be no public offer of the Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares in the United States.

 

This announcement and the information contained herein do not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in Canada, the People’s Republic of China, Hong Kong SAR, Japan, Papua New Guinea, Singapore, the Republic of South Africa or Switzerland or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction, and no public offer of rights or shares will be made in such jurisdictions. The Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws.

 

The distribution of this announcement and/or the Prospectus and/or the Australian offer document and/or the Rio Tinto plc Provisional Allotment Letter and/or the transfer of the Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares into jurisdictions other than the UK, Australia or New Zealand may be restricted by law. Persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

The Joint Sponsors, the Underwriters and Macquarie Capital (Europe) Limited are acting exclusively for the issuer and no one else in connection with the Rights Issues and will not regard any other person (whether or not a recipient of this announcement) as their respective client in relation to the Rights Issues and will not be responsible to anyone other than the issuer for providing the protections afforded to their respective clients or for providing advice in relation to the Rights Issues or any matters referred to in this announcement.

 

This announcement has been issued by, and is the sole responsibility of, Rio Tinto plc and Rio Tinto Limited apart from the responsibilities and liabilities, if any, which may be imposed on the Joint Sponsors and the Underwriters by the FSMA, none of the Joint Sponsors or Underwriters accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for or in respect of the contents of this announcement, including its accuracy, completeness or verification or regarding the legality of an investment in the Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares by an offeree or purchaser thereof under the laws applicable to such offeree or purchaser or for any other statement made or purported to be made by them, or on their behalf, in connection with the issuer, the Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto Limited Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Entitlement and Acceptance Forms or New Rio Tinto plc Shares or New Rio Tinto Limited Shares, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. The Joint Sponsors and the Underwriters accordingly disclaim any responsibility and liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this announcement or any such statement.

 

Neither the content of the issuer’s website nor any website accessible by hyperlinks on the Issuer’s website is incorporated in, or forms part of, this announcement.

 

Certain statements made in this announcement constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “seek”, “continue”, “forecast” or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Group’s financial position including forecast or estimated profits, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group’s products, production forecasts and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, cash flows, dividends of the Group, the ability of the Group to satisfy its debt repayment obligations or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

 

Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic conditions in relevant areas of the world, levels of actual production during any period, levels of demand, market prices and inflation, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation and such other risk factors. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement. The Group expressly disclaims any obligation or undertaking (except as required by applicable law, including the UK Listing Rules, Prospectus Rules, the Disclosure and Transparency Rules of the Financial Services Authority and the ASX Listing Rules) to release publicly any updates or revisions to any statement (including any forward-looking statement) contained herein to reflect any change in the Group’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

The Underwriters or the Joint Sponsors or any affiliate thereof acting as an investor for its or their own account(s) may subscribe for, retain, purchase or sell Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Rights and/or New Rio Tinto plc Shares or New Rio Tinto Limited Shares for its or their own account(s) and may offer or sell such securities otherwise than in connection with the Rights Issues. The aforementioned entities do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any applicable legal or regulatory requirements.

 

The Underwriters or the Joint Sponsors may engage in trading activity other than, to the extent prohibited under applicable law and regulation, short selling to hedge commitments under the Underwriting Agreement or otherwise. Such activity may include purchases and sales of securities of Rio Tinto and related and other securities and instruments (including Rio Tinto plc Nil Paid Rights, Rio Tinto plc Fully Paid Rights, Rio Tinto plc Provisional Allotment Letter, Rio Tinto Limited Rights and/or New Rio Tinto plc Shares or New Rio Tinto Limited Shares).

 

Credit Suisse Securities (Europe) Limited, J.P. Morgan Cazenove Limited, Macquarie Capital (Europe) Limited (which are authorised and regulated in the United Kingdom by the FSA) are acting exclusively for Rio Tinto and no one else in connection with the Rights Issues and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Rights Issues and will not be responsible to anyone other than Rio Tinto for providing the protections afforded to their respective clients nor for giving advice in relation to the Rights Issues or any transaction or arrangement referred to in this document.

 

 

END

 

 

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