Re Agreement

Rio Tinto PLC
26 December 2000



The following was released to the Australian Stock Exchange by Rio Tinto's 71
per cent owned subsidiary, Coal & Allied Industries Limited.

                 Peabody Group and Coal & Allied reach Agreement
                  on sale of Peabody's Australian subsidiaries

Peabody Group and Coal & Allied have signed a sale and purchase agreement for
the transfer of Peabody's Australian subsidiaries to Rio Tinto's 71% owned,
NSW coal subsidiary, Coal & Allied Industries Limited.

Coal & Allied is purchasing the stock of the Peabody subsidiaries that own
interests in five coal mines in Australia as well Peabody Mining Services. The
coal mines are Bengalla, Warkworth, Ravensworth and Narama in NSW, and Moura in
Queensland.

The purchase price is US$455 million in cash for the equity. Taking into account
the approximately US$100 million in assumed debt, the total acquisition value
to Coal & Allied is approximately US$555 million.

After internal accounting adjustments by Peabody, which are anticipated to be
approximately US$20 million, the total benefit to Peabody at the closing of the
transaction will be approximately US$575million. Peabody intends to use the
majority of proceeds to reduce debt.

Coal & Allied will finance the acquisition of the equity from internal resources
and a credit facility provided by Rio Tinto. The transaction is scheduled to
close at the end of January, 2001.

Coal & Allied operates three coal mines in the Hunter Valley, NSW, Australia.
The mines (Hunter Valley Operations, Mt Thorley Operations and Lemington Mine)
produce about 16 million tonnes of thermal and semi-soft coking coal for export.
With this Peabody acquisition, Coal & Allied's managed coal operations will have
a production capacity of over 36 million tonnes.

Through both Coal & Allied and Pacific Coal (Rio Tinto's Queensland coal
producer), the Rio Tinto group will control production of over 55 million tonnes
of coal in Australia. The majority of the coal is exported for use in power
stations and steel mills in the Asia Pacific region.

The US based Peabody Group is the world's largest coal company. Its coal
products fuel more than 9 percent of all US electricity generation and 2.5
percent of worldwide electricity generation.

For further information, please contact:

LONDON

Media Relations                       Investor Relations
Lisa Cullimore                        Peter Jarvis
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+ 44 (0) 7730 418 385 (mobile)        + 44 (0) 7710 635 114 (mobile)

AUSTRALIA

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                                      Daphne Morros
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website: www.riotinto.com