Lihir Gold Quarterly Report

Rio Tinto PLC
28 July 2000


The following was announced by Lihir Gold Limited on 27 July 2000

                      
                              Lihir Gold Limited                              
                       Quarterly Report to Shareholders                       

1.   Highlights

  *  Significant improvement in profit before abnormal items and
     tax to US$14.4m in the first half, compared with a loss of US$9.7m
     during the corresponding previous period.

  *  Charges for operating costs were down by US$5.5m.

  *  Total cash costs for the second quarter fell to US$235/oz.
     compared with US$250/oz. for the first quarter.

  *  Mining contract with Thiess-Roche discontinued on 17 April
     with  expected  mining cost reduction from  US$1.94/tonne  to
     US$1.45/tonne.

  *  Production of 141,551 ounces in the second quarter.

  *  New ore reserve statement was released on 28 June reflecting
     a 21% increase to 13.4 million ounces.

  *  As  foreshadowed in the ore reserve release, an impairment
     provision  of  US$231m pre-tax (US$150m post  tax)  has  been
     incorporated as an abnormal item in the profit and loss account in
     compliance with International Accounting Standard IAS 36.

  *  Hedge book represents just 16% of reserves and 33% of  the
     next 12 years' production.


2.   Financial Result for Half Year to 30 June 2000

  Lihir is pleased to announce a profit before abnormal items and
  tax for the half year to 30 June 2000 of US$14.4m compared with
  a loss of US$9.7m for the previous corresponding period.
  
  Revenue  increased  by  US$7.8m due to a  14%  increase  in  the
  average  realised price per ounce from US$361 to  US$410.   Gold
  ounces  sold were down 5% on the corresponding period last  year
  because,  as expected, the average grade dropped to  5.46g  Au/t
  compared with 7.0g Au/t last year.
  
  Operating  costs  were US$5.5m or 8% down on the  previous  half
  year  due  to  the  cost savings arising from  renegotiation  of
  supply   contracts,  reduction  in  the  number  of   expatriate
  employees  and  the move to owner mining (from 17  April  2000).
  The  reduction in the depreciation charge arising from  the  new
  ore reserve amounted to US$5.0m for the half year.
  
  Impairment Provision (IAS 36)

  Lihir  is incorporated in Papua New Guinea and, as such, reports
  in  accordance  with International Accounting Standards.   Under
  the  accounting standard IAS36, Lihir is obliged to  review  the
  carrying values of its assets every six months.  In the light of
  the  company's  lower gold price assumption, the Directors  have
  deemed  it prudent to recognise an impairment of US$231m pre-tax
  (US$150m  after tax).  This non-cash provision has been  treated
  as an abnormal item in the profit and loss statement.
  
  The  impairment was calculated on discounted cash  flows  to  be
  derived  from existing plant and existing reserves.  It excludes
  the  value  of  the hedge book, future conversion  or  value  of
  resources-not-included-in-reserves    and    future    expansion
  opportunities.  Conservative economic and valuation  assumptions
  have been used to determine the operation's recoverable amount.
  
  After   the  asset  impairment  provision  and  a  further   net
  realisable  value  provision of US$11.4m  relating  to  the  low
  grade  stockpile material, the overall loss after  tax  for  the
  six months was US$148.3.
  
                                               First   First
                                               Half     Half
                                               2000     1999
                                                 
   Gold sold                        - oz      256,649 269,121
   Average price realised           US$/oz      410     361
   
                                               US$'M   US$'M
   SALES REVENUE                               105.1    97.3
   Operating costs                            (62.6)   (68.1)
   Depreciation and amortisation              (22.3)   (24.6)
   Profit before interest,                     20.2     4.6
   abnormal items and tax                      (5.8)   (14.3)
   Net interest expense                        14.4    (9.7)
   Profit / (Loss) before                     (231.0)    -
   abnormal items and tax                     (11.4)     -
   Abnormal impairment loss                   (227.9)  (9.7)
   Other abnormal adjustments                  79.7     3.1
   Profit / (Loss) before tax                  148.3   (6.6)
   Income tax                                             
   Profit / (Loss) after tax
   Capital expenditure                         56.6     17.6
   
   Cash flow before financing and             (43.6)   (14.6)
   hedge sale
   

                                               First   First
                                               Half     Half
                                               2000     1999
                                                 
   Gross cash cost per ounce        US$/oz      281     298
   -    deferred waste adjustment                6      (41)
   -    low grade stockpile                    (28)     (7)
        adjustment                             (16)      5
   -    inventory adjustments                    -      (1)
   -    corporate expenses          US$/oz      243     254
   TOTAL CASH COST
   

3.   Production and Sales for the Second Quarter and Half Year
  
  As noted in the first quarter's report to shareholders, the
  relining of the bricks in autoclave 2 limited output to
  121,301 ounces.  Since 18 May all three autoclaves have been
  functioning normally.
  
  Gold  poured in the second quarter of 141,551 ounces represented
  a  17%  improvement on the 121,301 ounces achieved in the  first
  quarter.   Despite the disruptions, the 600,000 ounce production
  target for the full year 2000 remains achievable.

                         First Half   2nd Quarter     First
                            2000         2000        Quarter
                                                      2000
Mine

   Ore mined       kt       5,184        2,676        2,508
   
   Material moved  kt      17,218        8,053        9,165

Processing

   Ore milled      kt        1,632        841          792
                   
   Grade           g         5.46        5.64         5.27
                   Au/t
   Recovery        %         91.5        92.7         90.5
   
   Gold poured     Oz       262,852     141,551      121,301
   
Revenue / Costs

   Gold Sold       oz       256,649     131,014      125,635
   
   Average price   US$/oz      410         398          421
                 
   Total      cash US$/oz      243         235          250
   cost       

4.   Reserves and Exploration

  An updated ore reserve statement was published on 28 June,
  reflecting a 21% increase in reserves, despite a reduction in
  the reserve price from $350 oz to $325.  The new reserves as of
  the end of May 2000 were 117.9mt at 3.53 g Au/t for 13.4 moz
  contained gold.
  
  The second quarter drilling programme concentrated on the north
  Minifie area, providing infill data into the planned Phase 4
  north cut, along with additional geotechnical drilling around
  the south and southeast Minifie limits. In total, 23 holes for
  5,547m were completed.
  
  Preparations for the US$5m Lienetz drilling programme are in
  progress and drilling will commence shortly.
  
  
5.   Finance
  
  Negotiations continue on the introduction of the new  five  year
  US$50m  revolving credit facility.  The objective is  to  extend
  the  tenure of committed facilities from 2003 to 2005 and  cover
  the  Lienetz  development period during which  higher  stripping
  ratios, lower grade and reduced production prevail.
  

6.   Hedging

  Lihir's unused hedge position as at 30 June 2000 was as set down
  below.  The mark-to-market value was US$69.9m:

              Forward         Put             Spot           
              Sales           Options         Deferreds         Total
                                                        
                   Min.            Min.            Min.             Min.
          Ounces   price   Ounces  price   Ounces  price   Ounces   price
                                                              
    Jul - 72,996  313.45  63,985  407.75  564,192 284.57   701,173  298.82
   Sep                                              
    Oct - 77,996  317.31  63,985  409.86                   141,981  359.02
   Dec                                               
   2001  351,380  319.99  154,125 466.23                   505,505  364.58
                                                  
   2002  329,611  342.54  150,413 480.33                   480,024  385.72
                               
   2003  100,000  336.94                                   100,000  336.94
                                                    
   2004                    40,000 335.00                    40,000  335.00
   2005  40,000  367.70    40,000 335.00                    80,000  351.35
   2006                    40,000 335.00                    40,000  335.00
   2007                    40,000 335.00                    40,000  335.00
   2008                    40,000 335.00                    40,000  335.00
        971,983 330.64    632,508  416.47 564,192 284.57 2,168,684  343.69
                                              
  
  Hedging Policy
  Lihir is required under the terms of the loan covenants of  both
  the   existing   and  proposed  loan  facilities   to   maintain
  substantial levels of hedging.  Beyond 2005, Lihir is likely  to
  have  greater freedom of manoeuvre on hedging although  it  will
  continue   to  avoid  speculative  activity.   Lihir's   current
  intention is to adopt a policy of providing a threshold level of
  protection for earnings while maintaining extensive exposure  to
  upside  movements  in  the  gold  price.   Lihir's  policy  will
  necessarily change over time but the company's present  view  is
  that  it  will  procure  hedge cover  for  one-third  of  annual
  production for the period 2005 onwards on a rolling 12 year time
  horizon.   The corollary is that two-thirds of annual production
  will  remain unhedged.  Placement of the additional hedging will
  be  progressive  and  will  be flexed  in  terms  of  quantities
  according to spot gold price trends.
  

7.   New Investment
  
  On  25  July the Board approved investment in a power plant  and
  commissioned a feasibility study including detailed  engineering
  for a fourth autoclave to increase production.


8.   Other Matters
  
  Share  Register  -  The  transfer of the  ordinary  shares  that
  Niugini  Mining  held in Lihir Gold Limited to  Class  B  shares
  with  limited rights has now been completed.  This  reduces  the
  number  of issued ordinary shares to 1,142,334,215.  As a result
  of  the  merger with Niugini Mining, the dissolution of Southern
  Gold (Bahamas) Limited and the divestment of the shares held  by
  Vengold  Inc., the ownership structure of the company  has  been
  simplified.
  

For further information, please contact:

Media Relations                    Investor Relations

Lisa Cullimore                     Peter Jarvis
+ 44 (0) 20 7753 2305              + 44 (0) 20 7753 2401

Website: www.riotinto.com



Note to Editors

Rio Tinto owns 16.3 per cent of Lihir Gold Limited