Rio Tinto & BP joint venture

Rio Tinto PLC
17 May 2007



Rio Tinto and BP join forces to develop clean energy worldwide

BP and Rio Tinto today announced the formation of a new jointly-owned company,
Hydrogen Energy, which will develop decarbonised energy projects around the
world. The venture will initially focus on hydrogen-fuelled power generation,
using fossil fuels and carbon capture and storage (CCS) technology to produce
new large-scale supplies of clean electricity.

Decarbonised energy projects are based on the conversion of fossil fuel
feedstocks such as coal, petroleum coke (a refinery by-product) or natural gas,
to hydrogen and carbon dioxide gases, with the carbon dioxide being captured and
sent for permanent storage in geological formations deep beneath the Earth's
surface.

In power projects, the hydrogen would be used to fuel a gas turbine for
generation of industrial-scale supplies of electrical power. Full integration
with CCS technology would ensure that 90 per cent of the carbon dioxide which
would otherwise have been emitted to the atmosphere would be safely captured and
stored.

There is rapid worldwide development of new power generating capacity as older
power stations are replaced and new plants built to meet growth in demand,
particularly in the rapidly expanding economies of the developing world.
According to the International Energy Agency, about two-thirds of the generating
capacity that will be needed in the next 25 years has yet to be built. Much of
the growth will be in countries where coal is abundant and so the fuel is
expected to be a significant part of the energy mix.

The recent UN Intergovernmental Panel on Climate Change (IPCC) report into the
potential to mitigate the effects of climate change recognised that reducing
carbon dioxide emissions from power generation will be vital and that
technologies such as CCS will have a key role in meeting the challenge. It also
recognises the role of governments in putting in place appropriate regulatory
and support mechanisms to enable this to happen.

Hydrogen Energy will benefit from the world-leading capabilities of both parent
companies: Rio Tinto's expertise and world-class assets in coal extraction and
supply; and BP's experience and expertise in chemical processing, low carbon
power generation and carbon capture and storage.

Tom Albanese, Chief Executive, Rio Tinto, said: 'Coal is a key part of Rio
Tinto's energy business and we believe it has an essential role in generating
clean power in the future. The investment we are making in Hydrogen Energy will
allow us to deliver decarbonised energy and carbon capture and storage. Although
initial projects may be based on non-coal feedstocks, they will be significant
building blocks in the development of coal gasification on an industrial scale.
Investing now means we will be well-placed to create value for shareholders from
opportunities in the emerging clean power market.'

Tony Hayward, BP group chief executive, said: 'Projects such as these have the
potential to help deliver the carbon emission reductions which companies and
countries around the world are now seeking. This will only be possible if
companies work together and work alongside governments. The combination of
skills and experience which BP and Rio Tinto bring will allow us to accelerate
the development and deployment of these important new technologies and 
projects.'

Hydrogen Energy, whose final formation will be subject to regulatory approvals,
will identify and secure opportunities for decarbonised energy projects
worldwide, working with governments to determine appropriate policies and
regulatory regimes, and develop and operate the assets, with partners where
appropriate. The projects will typically use coal or petroleum coke as
feedstock; although in some cases natural gas may be used.

The previously announced hydrogen-fuelled power projects in Peterhead, Scotland
and Carson, California will become part of Hydrogen Energy. As part of the
agreement, Rio Tinto will make a cash payment to BP of some $32million, subject
to post-completion adjustments.

Hydrogen Energy will be headquartered in Weybridge in the south-east of England
and will initially have a staff of 75 seconded from the parent companies. The
chief executive of Hydrogen Energy was today named as Lewis Gillies, formerly
head of BP's hydrogen power business and its chief financial officer as Peter
Cunningham, formerly head of business evaluation for Rio Tinto.


Notes to editors:

•  Hydrogen Energy will be equally-owned by BP and Rio Tinto. Further
   information on the company can be found at: www.hydrogenenergy.com

•  BP, together with Scottish and Southern Energy, announced plans in
   June 2005 for its first hydrogen power project, in Peterhead, Scotland. The
   planned project would use natural gas as a feedstock, generating some 475MW
   electricity and capturing and storing some 1.8 million tonnes of CO2 a year 
   in the North Sea Miller oilfield. Injection of the CO2 into the oilfield 
   would also increase recovery of oil from the reservoir by an estimated 
   50-60 million barrels. Engineering design for the project is complete and 
   the partners hope the project will be able to take part in the competition 
   the UK government has announced to select which such project should be 
   supported. If the decision to go ahead with the project were taken at the
   beginning of 2008, it would be expected to be in commercial operation in 
   2011.

•  The second planned hydrogen power project, in Carson, California, USA
   would use petroleum coke as feedstock. In January 2006, BP and partner Edison
   Mission Group announced plans to develop the 500MW power project alongside 
   BP's Carson refinery, about 20 miles south of Los Angeles. The project would 
   capture some four million tonnes of CO2 a year and transport it for 
   reinjection into geological formations in southern California for permanent 
   storage. Subject to the successful outcome of engineering studies and 
   appropriate policy being in place, it is anticipated the final investment 
   decision could be taken in time for the plant to be operational by the end of 
   2012.

•  Rio Tinto is a leading international mining group headquartered in the
   UK, combining Rio Tinto plc, a London listed public company, and Rio Tinto
   Limited, which is listed on the Australian Stock Exchange. The Group finds,
   mines and processes the earth's mineral resources - metals and minerals
   essential for making thousands of everyday products that meet society's needs
   and contribute to improved living standards. The Group's major products 
   include aluminium, copper, diamonds, energy products (coal and uranium), 
   gold, industrial minerals (borates, titanium dioxide, salt and talc), and 
   iron ore. Its activities span the world but are strongly represented in 
   Australia and North America. There are also significant businesses in South 
   America, Asia, Europe and southern Africa. For further information, 
   see: www.riotinto.com

•  BP is one of the world's largest oil and gas companies with operations
   in more than 100 countries across six continents. The company's main 
   businesses are exploration and production of oil and gas; refining, 
   manufacturing and marketing of oil products and petrochemicals; 
   transportation and marketing of natural gas; and a growing business in 
   renewable and low-carbon power, BP Alternative Energy. BP's low carbon 
   interests combined in BP Alternative Energy include: BP Solar; the company's 
   fast growing interests in wind power; gas-fired power generation; and BP's 
   interest in Hydrogen Energy. For further information see: www.bp.com and 
   www.bpalternativeenergy.com.



Further information:

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