Rio Tinto Zimbabwe Results

Rio Tinto PLC
26 February 2001



Rio Tinto Zimbabwe Limited, which is 56 per cent owned by Rio Tinto, issued
the following in Zimbabwe on Friday 23 February 2001.
 
                          Rio Tinto Zimbabwe Limited                          
                          Statement to Shareholders                           
 
 
The Group's audited results for the year ended 31 December 2000 were as
follows:
 

                                                               
Profit And Loss Statement                            Historical Cost  
                                                                              
                                           31-Dec-00 Z$000    31-Dec-99 Z$000 
  Group turnover                                 1 655 127          1 370 223 
  Cost of sales                                 (1475 447)         (1055 189) 
  Operating profit before depreciation             179 680            315 034 
  Monetary gain (loss)                                                        
  Depreciation                                    (63 747)           (58 032) 
  Profit before interest                           115 933            257 002 
  Net interest (payable) receivable                (8 567)             75 204 
  Profit before taxation                           107 366            332 206 
  Taxation                                          18 741           (59 335) 
  Profit after taxation                            126 107            272 871 
  Dividends payable (proposed)                           0            101 074 
  Earning per share (cents)                            561              1 215 
  Dividends per share (cents)                            0                450 
  Interim (cents)                                        0                200 
  Final (cents)                                          0                250 
  Number of shares in issue ( millions)                 22                 22 
  Abridged Balance Sheet                                                      
  Shareholder's funds                              709 430            583 825 
  Adjustment to equity                                                        
  Deferred tax                                     129 709            148 214 
  Long term provision                               55 000             37 000 
  Mine Closure provision                           100 000             69 861 
  Medium and long term debt                          5 839              5 839 
  Total funds employed                             999 978            844 739 
  Represented by :                                                            
  Fixed assets, exploration and                    755 107            532 704 
  Development                                                                 
  Investments                                       83 446             53 683 
  Current assets                                   692 925            563 108 
  Current liabilities                              531 500            304 756 
  Net current assets                               161 425            258 352 
  Total net assets employed                        999 978            844 739 


RESULTS

Gold production at 2 190 kg was identical to the 1999 outturn. Approximately
80 kg was lost at Renco to the combined effects of cyclone Eline, industrial
action and a breakdown of the main hoist motor in November.
 
 
Operations at the Empress refinery were intermittently affected throughout
the year by impurity problems. These problems disrupted production for
periods of a few weeks on three occasions. Understanding of the cause and
effect of small quantities of selenium improved and the operation is better
placed to cope in future however the failure to use the plant's capacity had
a negative impact on profits from the toll refining contracts.
 
The average gold price for the year at US$280 per ounce was almost identical
to the US$279 per ounce recorded in 1999. In Zimbabwe dollar terms i.e. at
the official exchange rate the price averaged Z$400 637 per kg, a 17%
increase on the 1999 average and for the first seven months of the year the
price was static at around Z$350 000 per kg.
 

EXPLORATION

Exploration work continued and targets for follow up in several new areas of
Zimbabwe were generated. Exploration expenditure by the joint venture with
Rio Tinto plc was Z$94 million with Rio Tinto Zimbabwe Ltd responsible for
50%.
 

MUROWA PROJECT

The completion of the feasibility study demonstrated a robust project to mine
500 000 tonnes per year of kimberlite with a possible expansion in later
years.
 
Up to the conclusion of the study a total of US$25 million had been spent on
the project from grass roots exploration.
 
The requirements for bringing the US$35 million project into operation are
now being addressed. Major amongst these is the resettlement of the
approximately 1 000 people resident within the project footprint. Provided
this can be achieved in the next six months operations could commence in 2003.
 
DIRECTORATE

Mr Albert Nhau accepted an invitation to join the board and attended his
first meeting in February 2001. Mr Back will retire as Chairman following the
AGM in May and will remain a Director. Mr Eric Kahari will be appointed
Chairman thereafter.
 
DIVIDEND

No dividend has been declared in respect of the year 2000 activities.
 
The company's cash flow was directed towards the requirements of the Murowa
feasibility study which absorbed Z$201 million during the year.
 
OUTLOOK

Whilst the company is looking forward to improved fortunes following
commissioning of the Murowa project the short term is problematic. The gold
price at US$260 per ounce would, in itself, create problems for the company's
gold operations, but when this is compounded by (once again) a strong
exchange rate the future becomes very tenuous. On the positive side a new
area at Renco should provide higher grade and even at a lower tonnage an
improvement in production is anticipated.
 
The refinery should see an improved production performance however the drop
in nickel prices as demand continues to slow will lead to reduced refining
fees.
 
The Cam Dump, which was expected to run out of feed last December, is still
operating and could continue to do so until May.
 
Every effort will be made to expedite the Murowa development.
 
INFLATION ACCOUNTING

Current cost accounts have been produced. The directors do not feel that the
method and processes used are appropriate. They will comment further in the
annual report.
 
 
For further information, please contact:
 
 
LONDON 
 
Media Relations                     Investor Relations 
Lisa Cullimore                      Peter Jarvis
+ 44 (0) 20 7753 2305               + 44 (0) 20 7753 2401
 
                                    Jonathan Murrin
                                    + 44 (0) 20 7753 2326
AUSTRALIA 
 
Media Relations                     Investor Relations 
Ian Head                            Daphne Morros
[phone]                 [phone]
                              
Website: www.riotinto.com

 
Note to Editors: 
 
The Murowa Diamond Prospect is owned by 50 per cent Rio Tinto Zimbabwe and 50
per cent Rio Tinto.