Statement re Argyle Diamonds

Rio Tinto PLC
08 December 2005

Rio Tinto approves Argyle Diamonds underground mine development



Rio Tinto has today announced the decision to develop a US$760 million block
cave underground project at its wholly owned Argyle diamond mine in the
Kimberley region of Western Australia.



An additional US$150 million will be spent on a related open pit cutback to
enable continuity of production between the cessation of open pit mining in 2008
and the ramp up of the underground mine.  Development work associated with the
present exploratory decline will continue, with construction of the underground
mine to begin once government approvals have been finalised.



The average annual production over the life of the underground mine from 2007 to
2018 is expected be around 60 per cent of Argyle's historical annual average of
34 million carats and of similar quality.



Rio Tinto chief executive Leigh Clifford said, 'This investment springs from Rio
Tinto's proven capacity to develop large scale underground mines and to compete
successfully in the global diamond business.



'It will allow the Argyle mine - the world's largest diamond mine- to operate
beyond 2008. Furthermore, it will ensure that the mine's high levels of
Indigenous employment will continue to deliver economic and social benefits to
the Kimberley region.'



Argyle is the largest single contributor to the Kimberley economy with 25 per
cent of its present full time workforce Indigenous and 50 per cent living
locally.



'The Western Australian Government's agreement to provide royalty relief and
waive some secondary processing obligations has been fundamental to the
economics of the expansion and will ensure that Argyle continues to play an
important regional role,' Mr Clifford said.



Keith Johnson, chief executive of Rio Tinto Diamonds said, 'The Argyle brand and
its signature stone, the pink diamond, will continue to play an important role
in the world diamond market.



'This is a particularly good decision for the East Kimberley area, the Indian
cutting and polishing industry and the affordable fashion jewellery industry,
each with a degree of dependence on the Argyle business,' he said.





For further information, please contact:

LONDON                                              AUSTRALIA

Media Relations                                     Media Relations
Maria Darby Walker                                  Ian Head
Office:  [phone]                       Office:  [phone]
Mobile: [phone]                        Mobile: [phone]

Investor Relations                                  Investor Relations

Nigel Jones                                         Dave Skinner
Office: [phone]                        Office:  [phone]
Mobile: [phone]                        Mobile: [phone]



David Ovington                                      Susie Creswell
Office:  [phone]                       Office:  [phone]
Mobile: [phone]                        Mobile: [phone]



Website: www.riotinto.com






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