core sector communique

Rio Tinto announces first half underlying earnings of $5.2 billion

• Solid financial results driven by record operational performance of iron ore division: – Underlying earnings of $5.2 billion down 34 per cent largely due to lower prices. Net earnings1 of $5.9 billion down 22 per cent. – Underlying EBITDA1 of $10.1 billion and cash flows from operations of $7.8 billion. – Recognition within net earnings of a $1.0 billion deferred tax asset following the introduction of the Minerals Resource Rent Tax (MRRT) in Australia. – Pilbara iron ore network in Western Australia now operating at increased capacity of 230 million tonnes per annum (Mt/a) following completion of second low capital debottlenecking project on time and on budget – Shipped first cargo of premium hard coking coal from Benga mine in Mozambique. • Consistent delivery against clearly defined growth programme: – Capital expenditure of $7.6 billion in 2012 first half. Expectations for capital expenditure for full year 2012 remain at $16 billion (Rio Tinto attributable share: $13.6 billion). – Phase one Pilbara iron ore expansion to 283 Mt/a on track for completion by end of 2013. Second phase expansion to 353 Mt/a to be operational by the first half of 2015. – Development of the Oyu Tolgoi copper-gold project in Mongolia remains on schedule for first commercial production in the first half of 2013. – Completed agreement with Chalco to develop and operate Simandou, with first commercial production by mid-2015. • Further steps taken to shape the portfolio: – Attained majority ownership and full management control of Turquoise Hill (formerly Ivanhoe). – Announced doubling of stake in Richards Bay Minerals in South Africa to 74 per cent: transaction expected to complete in second half of 2012. – Strategic review of diamond business including exploring a range of options for potential divestment. • Interim dividend of 72.5 US cents declared, 34 per cent higher than 2011, in line with the Group’s dividend policy and previous guidance. • $7 billion share buy-back programme completed at end of the first quarter. About Rio Tinto Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.  Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, thermal and metallurgical coal, uranium, gold, industrial minerals (borax, titanium dioxide and salt) and iron ore. Activities span the world and are strongly represented in Australia and North America with significant businesses in Asia, Europe, Africa and South America.