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strategy delivery growth a focused and integrated strategy excellence in operational delivery positioned for growth 2009 annual report this report is available online at www.riotinto.com

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a focused and integrated strategy excellence in operational delivery positioned for growth rio tinto is a leading international business involved in each stage of metal and mineral production we produce aluminium copper diamonds coal iron ore uranium gold and industrial minerals borates titanium dioxide salt talc zircon with production mainly from australia and north america we operate in more than 50 countries we employ about 102,000 people whose health and safety is a key priority and an integral part of placing sustainable development at the heart of everything we do we operate as a global organisation with one set of standards and values sharing best practices across the group · · · · our strategy is to invest in and operate large long term cost competitive mines and businesses driven by the quality of each opportunity our assets give us a rich array of options for growth in line with demand our recapitalisation and asset divestment programmes have strengthened our balance sheet and enhanced options for growth safe working and sustainable development are at the heart of our activities with our worldwide operations providing long term local benefits the annual report and auditor s report comply with the australian and uk reporting requirements copies of rio tinto s shareholder documents are available on the website at www.riotinto.com they can also be obtained free of charge from the company some shareholders may prefer to receive the annual review which contains the summary financial statements although shareholders should note that it does not allow as full an understanding of the group cautionary statement about forward looking statements this document contains certain forward looking statements with respect to the financial condition results of operations and business of the rio tinto group the words intend aim project anticipate estimate plan believes expects may should will or similar expressions commonly identify such forward looking statements examples of forward looking statements in this annual report include those regarding estimated ore reserves anticipated production or construction dates costs outputs and productive lives of assets or similar factors forward looking statements involve known and unknown risks uncertainties assumptions and other factors set forth in this document that are beyond the group s control for example future ore reserves will be based in part on market prices that may vary significantly from current levels these may materially affect the timing and feasibility of particular developments other factors include the ability to produce and transport products profitably demand for our products the effect of foreign currency exchange rates on market prices and operating costs and activities by governmental authorities such as changes in taxation or regulation and political uncertainty in light of these risks uncertainties and assumptions actual results could be materially different from projected future results expressed or implied by these forward looking statements which speak only as to the date of this report except as required by applicable regulations or by law the group does not undertake any obligation to publicly update or revise any forward looking statements whether as a result of new information or future events the group cannot guarantee that its forward looking statements will not differ materially from actual results.

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inside this report overview a description of the business our markets strategy measures of performance and the outlook for 2010 production and reserves information tables and details of our assets financial statements detailed financial information overview performance highlights group overview chairman s statement chief executive s message market review strategy key performance indicators principal risks and uncertainties proposed iron ore production joint venture with bhp billiton 2 4 6 8 10 12 14 16 20 summary metals and minerals production ore reserves mineral resources competent persons mines and production facilities 62 64 68 72 77 78 governance introducing the boards of directors and senior management an explanation of our approach to corporate governance and our remuneration structure performance key performance data and operational highlights by product group and function and review of sustainable development group financial performance sustainable development review aluminium copper diamonds minerals energy iron ore exploration technology innovation financial review acquisitions and divestments capital projects 22 24 34 38 42 46 50 54 56 58 60 61 board of directors executive committee directors report corporate governance remuneration report 84 88 90 94 104 contents group income statement group statement of comprehensive income group cash flow statement group statement of financial position group statement of changes in equity reconciliation with australian ifrs outline of dual listed structure notes to the financial statements company balance sheet financial information by business unit summary of asic relief directors declaration auditors independence declaration independent auditors report financial summary 2000 ­ 2009 summary financial data 130 131 132 133 134 135 136 136 137 216 219 222 223 224 225 227 229 performance production and reserves governance financial statements shareholder information information tables and details of our assets and useful information for shareowners shareholder information definitions and exchange rates financial calendar useful information and contacts 230 236 shareholder information what you can find online www.riotinto.com reference symbols within this report key performance indicators within this report additional information available online at www.riotinto.com sustainable development review at www.riotinto.com additional information available on other pages in this report www.riotinto.com 1

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overview performance highlights a snapshot of the year commendable results in the face of the global downturn · · · · underlying earnings of us$6.3 billion 2008 us$10.3 billion net earnings of us$4.9 billion 2008 us$3.7 billion significant price resurgence in the second half pilbara iron ore production joint venture to deliver substantial synergies revenue by product group 2009 more information on p.219 the balance sheet has been recapitalised · · · · net debt reduced to us$18.9 billion 2008 us$38.7 billion major progress on divestments programme rights issues net proceeds of us$14.8 billion successful us$3.5 billion bond issue 29 9 27 14 15 6 strong operational performance · · · · · cash flows from operations of us$13.8 billion 2008 us$20.7 billion controllable cash costs reduced by us$2.6 billion rio tinto alcan surpassed targeted integration synergies strong volume growth delivered in iron ore copper and gold capital expenditure of us$5.4 billion revenue by product group 2008 continuing focus on sustainable development · reduced greenhouse gas emissions intensity by 7.5 · rate of new occupational illness improved by 21 · spent us$119 million on community assistance programmes more information on p.219 9 32 28 dividend dividend declared 2009 2008 restated 2007 restated 2006 restated 2005 restated 14 7 10 us cents uk pence australian cents 45.00 28.84 51.56 111.22 67.49 146.22 111.23 56.20 125.72 85.07 44.22 110.69 65.46 36.91 86.26 key aluminium copper diamonds minerals energy iron ore other operations and inter segmental transactions the special dividend of 90.00 us cents per share 50.64 uk pence or 118.98 australian cents per share declared payable at the same time as the 2005 final dividend is not included above prior year comparatives have been restated for the impact of the rights issues notes all references in this report to net earnings and underlying earnings relate to profit attributable to equity shareholders of rio tinto underlying earnings is defined below and is reconciled to net earnings on page 23 ebitda is earnings before interest taxes depreciation and amortisation underlying ebitda excludes the same items that are excluded from underlying earnings ebitda and underlying ebitda are reconciled to the income statement in the financial information by business unit section of the financial statements notes to page 3 a the accounting information in these charts is drawn up in accordance with eu ifrs b underlying earnings is the key financial performance indicator which management uses internally to assess performance it is presented here as an additional measure of earnings to provide greater understanding of the underlying business performance of the group s operations items excluded from net earnings to arrive at underlying earnings are explained in note 2 to the 2009 financial statements both net earnings and underlying earnings deal with amounts attributable to equity shareholders of rio tinto however eu ifrs requires that the profit for the year reported in the income statement should also include earnings attributable to outside shareholders in subsidiaries 2 rio tinto 2009 annual report

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all injury frequency rate per 200,000 hours worked rio tinto rio tinto including former alcan capital expenditurea us$m kpi more information on p.15 more information on p.220 underlying earningsa b us$m kpi more information on p.14 more information on p.219 greenhouse gas emissions intensity indexed relative to 2008 group intensity excluding former alcan group intensity including former alcan overview kpi more information on p.14 kpi more information on p.15 10,303 performance 100.0 113.1 110.8 110.2 109.4 8,488 05 operating cash flowsa us$m dividends from jointly controlled entities and associates cash flows from consolidated operations underlying earnings per sharea b us cents more information on p.159 1.35 1.10 06 92.5 kpi more information on p.15 20,668 19,195 13,834 12,569 1.21 0.98 07 08 7,443 7,338 6,298 5,356 0.82 2,554 09 05 4,968 07 08 4,955 production and reserves total shareholder return kpi more information on p.14 3,988 06 09 05 06 07 08 09 05 06 07 08 09 governance net debt us$m kpi more information on p.15 more information on p.170 gross sales revenuea us$m share of equity accounted units sales revenue consolidated sales revenue financial statements more information on p 219 45,191 172.5 58,065 38,672 shareholder information 44,036 54,264 92.7 10,923 05 78.5 33,518 13,224 41,825 25,440 7.5 8,031 7,431 05 20,742 10,805 07 08 18,861 9,196 06 29,700 7,431 71.5 08 09 22,465 19,033 2,437 06 07 08 09 1,313 05 09 05 06 07 05 06 07 08 09 ebitdaa us$m profit for the yeara us$m net debt total capitala more information on p.219 23,870 more information on p.131 7,867 7,746 656.21 5,498 14,471 473.21 357.1 9,743 63.3 63.2 5,335 450.05 297.03 06 13,611 12,566 4,609 29.1 11.2 7.7 07 08 09 05 06 07 08 09 05 06 07 08 09 05 06 07 08 09 www.riotinto.com 3

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overview group overview an extensive global presence we have major operations in australia and north america which account for approximately 85 per cent of the value of our assets as well as significant businesses in south america europe southern africa and asia · all injury frequency rate reduced to 0.82 from 0.98 · set iron ore production and sales records · progressed transformation of our aluminium business · exceeded targeted controllable operating cost savings view more about our global operations at www.riotinto.com aluminium rio tinto alcan is a global leader in the aluminium industry it mines high quality bauxite refines alumina for both primary aluminium production and specialty alumina markets and produces primary aluminium at some of the lowest cost most technologically advanced smelters in the industry the group is renowned for its technology leadership as well as its advantaged renewable energy assets number of employees 22,919 1 copper the copper group is one of the world s largest producers of copper with valuable byproducts of gold and molybdenum a diverse mix of operations and projects are located in north and south america africa asia and australia in addition to interests in some of the world s largest copper mines it is taking the lead in the development of three of the world s largest new copper projects number of employees 7,612 1 diamonds minerals the group comprises rio tinto diamonds rtd rio tinto minerals rtm and rio tinto iron titanium rtit rtd accounts for about six per cent of the world s production of rough diamonds by value rtm is a global leader in borates and talc supply and of the science behind their use and rtit is a market leader in titanium dioxide feedstock used in the manufacture of pigments for paints and plastics number of employees 7,375 1 products bauxite alumina specialty aluminas aluminium products copper gold molybdenum silver nickel products diamonds borates titanium dioxide feedstocks talc high purity iron metal powders zircon rutile key facts · integration synergies expected to exceed us$1.1 billion in 2010 · achieved rapid cost reductions and production curtailments · business being transformed in readiness for the economic recovery · during the course of the year aluminium prices plummeted by as much as 70 per cent from 2008 key facts · strong operating performance in 2009 supported by recovering market · kennecott utah copper production up 37 per cent from 2008 · copper industry faces future supply challenges · breakthrough agreement for development of major mongolian copper-gold mine key facts · businesses oriented to oecd demand hence difficult conditions · businesses showing signs of recovery particularly in asian markets · diavik diamonds underground mine starts production in 2010 · commencement of ramp up of madagascar mineral sands mine contribution to gross sales revenue contribution to gross sales revenue contribution to gross sales revenue 27 14 6 more information on page 219 4 rio tinto 2009 annual report more information on page 219 more information on page 219

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overview performance production and reserves countries with operations and/or projects energy rio tinto is a leading supplier of thermal and coking coal to the asian seaborne market as well as being one of the world s largest uranium producers supplying uranium oxide to electric power utilities worldwide rio tinto coal australia manages eight coal mines in queensland and new south wales in the us the group operates the colowyo coal mine and has a 48 per cent interest in cloud peak energy number of employees 7,613 1 iron ore rio tinto iron ore is the second largest supplier to the world s seaborne iron ore trade and produces direct saleable lump and fines ore pellets and concentrates it has a global supply capacity to serve both the pacific and atlantic markets operating an integrated platform of mines rail and port infrastructure including development projects designed to respond rapidly to changes in demand it operates dampier salt located near its iron ore mines in australia as well as rio tinto marine number of employees 11,375 1 global functions activities that support our businesses governance exploration the role of the exploration group is to add value to rio tinto by discovering or acquiring resources that can increase future cash flows it is organised into regional multi-commodity teams with head offices in the uk the us and australia supported by commodity and commercial specialists programmes are prioritised on a global basis with investment decisions driven not by location or choice of commodity but rather by the quality of each opportunity financial statements shareholder information products thermal coal coking coal uranium products iron ore and salt key facts · more robust seaborne coal markets emerging · de-bottlenecking of australian coal export ports under way · new clermont mine and kestrel mine expansion on track · nuclear power comeback spells promise for uranium key facts · operated at full run rate of 220 million tonnes capacity in second half of 2009 · developing plans to produce 330 million tonnes per year · uses automated mining technologies including driverless haul trucks technology innovation technology innovation has offices in australia canada the uk and the us its role is to identify develop and promote best operational technology practice across the group and to pursue step change innovation of strategic importance to orebodies of the future contribution to gross sales revenue contribution to gross sales revenue 15 29 notes more information on page 219 more information on page 219 1 this is the average rio tinto share of employees for managed businesses excluding contractors and employees in businesses classified as assets held for sale during 2009 www.riotinto.com 5

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overview chairman s statement a year of two halves jan du plessis thanks to a number of significant decisions on our part and assisted by a more favourable external environment we have recovered our poise and steadied the ship during what was clearly a historic and tumultuous year for the global community rio tinto found 2009 to be particularly testing it certainly felt at times as if we were experiencing an amplified version of the global financial crisis and its knock-on effect on business confidence demand for commodities and availability of credit however despite the early trauma for rio tinto it turned out to be a year of two halves after the particularly difficult first few months characterised by our balance sheet challenges very weak demand low product pricing and the contentious chinalco transaction our fortunes improved considerably as the year progressed as a result of shareholder support for our rights issues together with the success of our disposal programme and improved operating conditions we ended the year with a much underlying earnings us$m stronger balance sheet in short thanks to a number of significant decisions on our part and assisted by a more favourable external environment we have recovered our poise and steadied the ship relationship with chinalco and to pursue business opportunities that may be to our mutual benefit improving prospects in deciding that we were not able to pursue the transaction with chinalco the board was nevertheless delighted that it was able to announce the proposed production joint venture with bhp billiton in relation to our respective iron ore assets in western australia the joint venture will allow us to capture the enormous long term synergy benefits that would result from the integration of our production facilities the value that could be captured has been estimated to be at least us$10 billion we simultaneously announced major rights issues which took place in the uk and australia in june and july these raised net proceeds of us$14.8 billion which were used to repay debt well ahead of our original us$10 billion target the rights issues attracted an extraordinary vote of confidence in rio tinto with 97 per cent of shareholders taking up their rights in rio tinto plc and a 95 per cent take up in rio tinto limited all of rio tinto s directors as well as chinalco took up their full entitlement of shares these decisions brought relief from some of the pressures of the earlier months of the year it put the period of unusual corporate activity behind us and finally gave us a firm foothold to advance into the second half of the year as we saw markets improve in the subsequent months i was particularly pleased to see the executive team focused on first class operational delivery as a priority for the group we ended the year with a strong set of production figures and the achievement chinalco looking at the year as a whole our attempt to establish a strategic partnership with the largest chinese resources group and our largest shareholder chinalco was undeniably a very significant event for rio tinto the proposed transaction would have allowed us to establish a highly important strategic link with the chinese market whilst at the same time enabling us to significantly recapitalise our balance sheet especially in the context of the situation prevailing at that time the board considered the chinalco proposition both strategically and financially attractive the transaction was nevertheless highly controversial on becoming chairman in april it was evident to me that i needed to look for guidance from our shareholders during the ensuing consultation process i met with a large number of shareholder groups in the uk australia and elsewhere it became clear to me that many shareholders had considerable misgivings about the proposed transaction these concerns related not only to the financial terms of the transaction but there were high levels of discomfort about the structure of our relationship with chinalco the board could not ignore the strength and depth of these feelings although in deciding not to proceed with that transaction we deeply regretted the loss of a unique opportunity to establish a strategic partnership that would have fundamentally changed our relationship with our largest customer base we will continue to work towards extending our 10,303 7,443 7,338 6,298 6 rio tinto 2009 annual report 4,955 05 06 07 08 09

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of a number of production and sales records this of course also signalled a significant pickup in physical demand for our products global leaders 2009 published by dow jones newswires and an italian business daily our recently completed mineral sands mine in madagascar won south africa s prestigious 2009 nedbank environmental award in the environmental category for significant effort in protecting or improving the biophysical environment in which it operates rio tinto became a signatory to the un global compact in 2000 and we were one of its early supporters we also remain an active member of the world business council for sustainable development and the international council on mining and metals whose members are committed to superior business practices in sustainable development outlook the outlook for mining and metals is improving but remains volatile and uncertain in the short term the latest leading indicators for developed economies imply that we may have returned to expansionary territory although no one knows to what extent or for how long the pick up in metals demand at mid year was primarily driven by government stimulus measures and a recovery in economic activity which caused producers to return to buying raw materials the key driver for the mining industry continues to be demand from china record chinese metals imports have served to offset weakness in other markets however we will also need to see oecd economies improve and a resumption in international trade flows to fully support a global economic recovery similarly there are concerns about the sustainability of chinese demand in the short term longer term china is likely to move towards more domestic consumption led development results and dividend the strong production numbers coupled with improved commodity prices translated into a significant improvement in operating cash flow in the second half this together with the proceeds of our rights issues and the disposal of assets significantly strengthened our balance sheet rio tinto started 2009 with net debt of us$38.7 billion and a debt to equity ratio of 63 per cent we had made the commitment in december 2008 to reduce net debt by us$10 billion during 2009 net debt at the end of 2009 stood at us$18.9 billion with gearing much reduced to 29 per cent the group s underlying earnings in 2009 were us$6.3 billion 39 per cent below 2008 net earnings were us$4.9 billion compared with us$3.7 billion in 2008 cash flow from operations decreased 33 per cent to us$13.8 billion with our balance sheet significantly strengthened and our prospects much improved we are pleased to be able to reinstate the dividend total dividends declared for 2009 were 45 us cents per share the group expects that the total cash dividend for the 2010 financial year will be at least equal to the total cash dividend of us$1.75 billion paid in respect of 2008 albeit spread over an increased number of shares from 2010 on we are committed to a progressive dividend policy over the longer term overview performance production and reserves governance and board the board is committed to high standards of governance as the foundation of our ethical approach to business in 2009 we strengthened our governance system by renewing our global code of conduct the way we work establishing a common group wide code to replace business unit codes of conduct the code serves to spread our values of accountability respect teamwork and integrity throughout the organisation by providing guidance on how employees should conduct themselves at work and when representing rio tinto our confidential whistleblowing programme speak-out is a key element of the way we work available in the language of the employee s choice to alert senior management to any serious issues or inappropriate behaviour that employees do not feel able to discuss with management on site your boards enjoy a balanced representation of viewpoints and a wealth of business experience sir david clementi and david mayhew will retire as directors at the conclusion of the 2010 annual general meetings the boards thank them for their valuable contributions over many years we welcomed ann godbehere who has 25 years experience in the financial services industry to the board on 9 february 2010 she will be chairman of the audit committee robert brown who has considerable global business experience in the aerospace industry will join the boards on 1 april 2010 ann and bob will be standing for election at the annual general meetings in april along with sam walsh chief executive rio tinto iron ore and australia who joined the boards effective 5 june 2009 governance financial statements our people our year of two halves demonstrated commendable perseverance as we moved from difficulty to success facing up to setbacks and promoting recovery has shown rio tinto to be a high performing organisation we have come through these testing times thanks in no small measure to the quality and commitment of our people the downturn unfortunately necessitated a reduction of about 16,000 employees and contractors across the group which took place mainly in the early months of the year since then we have stabilised the organisation and a renewed management structure has been introduced these steps will provide the platform to mobilise and energise the workforce and give us the momentum to resume growth the board and i would like to express our collective appreciation to group employees and contractors around the world for their strong commitment and unflagging efforts in 2009 for their focus on safety operational excellence and delivery to customers as well as for conducting our business in a socially responsible way shareholder information sustainable development rio tinto conducts business in an ethical and socially responsible manner aimed at building a positive reputation and ensuring ongoing access to people capital and mineral resources delivering on our commitment means making sustainable development considerations an integral part of our business plans and decision making processes rio tinto was again identified as a sustainable development leader during the year by retaining its listing on the dow jones sustainability index djsi world index and djsi stoxx index as well as the ftse4good we have been included in the djsi series since 2002 and the ftse4good since becoming eligible for inclusion in 2007 rio tinto s long standing commitment to sustainable development and the quality of our sustainable development web pages have been recognised in the csr online awards jan du plessis chairman www.riotinto.com 7

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overview chief executive s message well positioned for growth tom albanese during 2009 we made some good decisions to improve our financial position we have emerged from this testing year as a stronger and fitter business by contrast the continuing strong china story was offset by a stagnant demand picture in oecd countries where consumer spending remains relatively weak australia was an exception with its economy bolstered by the strong demand for commodities in the us japan and europe pervasive economic concerns mean that we will continue to be cautious especially as we begin to see the effects of the winding down of stimulus programmes financial recovery the speed and severity of the downturn in late 2008 exposed our levels of debt and made it more difficult to achieve the asset disposals we had planned for the repayment of debt during 2009 we made some good decisions in difficult circumstances to improve our financial position and achieve a reduction in controllable cash costs of us$2.6 billion we have emerged from this testing year as a stronger and fitter business regarding divestments we chose to postpone a number of sales we made good progress with completion of the sale of our potash assets in the first half and the brazilian iron ore operation in the second half more importantly in the second half we made significant progress with announced divestments on most of the former alcan s packaging businesses and our us coal operations by the end of 2009 we had announced sales transactions of more than us$10 billion over the past two years over the course of 2009 management s focus has been on strengthening the business after a period of prolonged corporate activity and a severe downturn we are grateful for the support we received from shareholders in recapitalising the company and helping us regain our momentum we were also helped by the capacity of our organisation to deliver strong operational performance in challenging economic circumstances the successful injection of us$14.8 billion from our rights issues the efficiencies derived from our cash preservation measures and significant progress with our divestment programme which realised sales and binding offers of us$5.7 billion in the year have given rio tinto greater financial strength and flexibility i am proud of the way in which our employees have persevered in delivering the commitments we made during these demanding times unfortunately these achievements have been overshadowed by four fatalities during the year at managed operations three of these took place in africa and we have renewed our focus on embedding our safety systems in developing countries i am pleased to say our key performance indicators for safety continued to improve during 2009 with a reduction in our all injury frequency rate of 16 per cent reaching agreement to form the western australian iron ore production joint venture with bhp billiton was an important highlight of the year we expect it will achieve substantial benefits for stakeholders by delivering synergies and unlocking the full potential of the valuable western australian iron ore assets in an era of increasing demand for this vital commodity 8 rio tinto 2009 annual report during 2009 we took steps to improve our aluminium business which was significantly affected by the economic downturn rio tinto alcan surpassed targeted integration synergies adopted rio tinto hse policies and standards improved safety performance implemented cost reductions progressed with the permanent closure and divestment of high cost facilities and made temporary production curtailments taken together these measures amount to a strong start to the transformation of that business to prepare ourselves for the next stage of rio tinto s growth and to develop the next generation of leaders i made changes to the structure of my senior management team this included the reinstatement of the diamonds minerals product group our structure ensures a tight focus on our core objective and allows for a broad range of investment opportunities to be generated regardless of our portfolio strategic direction and markets we completed a thorough review of our strategy with our board and executive committee leading to the reaffirmation of our longstanding core objective this is to maximise our long term return to shareholders by investing in and operating large long life cost competitive mines and assets driven not by choice of commodity but rather by the quality of each opportunity this strategy will of course be recognisable to our long term shareholders we will ensure that our structure and capabilities are tailored to meet the requirements of our customers and the marketplace our diverse portfolio high quality assets people and expertise in technology and marketing give us the capability to supply a wide spectrum of customers and markets this gives us exposure to worldwide markets at various stages of the development cycle we will continue to improve our understanding of market dynamics and how we fit into the global picture and apply this to our planning and investment proposals market conditions a year ago i said that we hoped to see some recovery in china s gross domestic product gdp in the second half of 2009 the effect of the chinese government s monetary stimulus package exceeded most commentators expectations ­ actual growth surpassed eight per cent ­ and we expect this strong growth to continue through 2010 the improvements we have seen in most of our markets were primarily driven by this stronger chinese gdp growth and its attendant effects on chinese construction and infrastructure development whilst we remain cautious about the recovery in our markets we believe that these trends are likely to continue for some time as china continues to urbanise and industrialise.

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to deliver on our objective the group will continue to concentrate on developing tier 1 assets these are assets that will safeguard our future cash flow and will operate profitably at every stage of the commodity cycle key to our way of operating is a commitment to sustainable development it is an essential part of the way we work and is at the heart of everything we do this commitment is key to maintaining our licence to operate we have a comprehensive sustainable development programme which is discussed more fully on pages 24-33 carbon water use and biodiversity are becoming increasingly topical in this context we have taken a pro-active approach in all three areas and are progressively building them into our planning especially as we see these three issues becoming increasingly inter-linked contributed our benchmark ap36 smelting technology this is a good example of how rio tinto alcan s technology leadership can position us as a partner of choice the portfolio will enable us to leverage our technology advantage extensive project management expertise and strong operating capabilities current projects involve investment in the clermont thermal coal and kestrel coking coal projects in queensland australia reflecting strong energy markets we have options to expand at both of our uranium operations construction of the yarwun 2 alumina refinery continues albeit at a slower rate than originally anticipated in response to market conditions in diamonds the diavik and argyle underground projects also continued at a slower rate each of these projects was approved before the global financial crisis and we have continued to invest in them we expect to see production begin at both clermont and diavik underground in 2010 we increased our stake in the oyu tolgoi project through additional investment in ivanhoe mines rio tinto has responsibility for developing and operating the mine following the signing of the investment agreement with the government of mongolia in october 2009 a project budget was agreed that covers the resumption in 2010 of shaft sinking construction of a shaft headframe continuation of underground development and installation of infrastructure the size of the resource is consistent with our strategy of investing in large long term cost competitive mines and businesses outlook our markets and our balance sheet are much improved from last year but we recognise that major short term uncertainties remain long term however given continued growth and urbanisation of the developing world the outlook for our industry is attractive the exponential growth of china s demand for iron ore copper coal and aluminium is expected to continue over the next 15 years as the average wealth of many millions of people increases their consumption of raw materials will rise accordingly as china nears the top of the commodity intensity usage curve india is expected to follow supporting a further potential wave of strong commodity demand for rio tinto 2009 marked a positive turning point from which we have emerged with our options for growth enhanced nevertheless major challenges remain the tier 1 deposits that are the focus of our strategy are becoming harder to find and more technologically difficult to develop there are pressures in countries well endowed with minerals for governments to gain a greater proportion of resource rents together with the executive committee i wish to join our chairman in expressing appreciation to all who work for rio tinto for their contribution to a very busy and successful year all have played a part in strengthening the business for our next stage of growth with our strong assets growth options and great people we can look forward to an exciting future for the group overview performance production and reserves governance priorities for growth one of our key objectives for 2010 is to put the group back on a growth path following the rights issues and strengthening of the balance sheet we continued to invest in growth throughout 2009 capital expenditure was us$5.4 billion of which us$3 billion was on major construction projects in 2010 capital expenditure is expected to be us$5 to us$6 billion the strong demand for iron ore clearly provides the most obvious option for production growth we are continuing work on staged growth projects in the pilbara we used the past 12 months to optimise our planned growth pathway finding ways to ease input costs capture savings from reduced lead times and refining project design we have commenced initiatives to expand capacity to 280 million tonnes per year by 2013 and 330 million tonnes per annum by 2015 in 2009 we completed an unprecedented and technologically sophisticated integration of our iron ore operations in western australia through our mine of the futuretm programmes and the opening of our new operations centre in perth this will contribute to the us$10 billion synergy savings we expect to reap from the proposed production joint venture with bhp billiton the benefits from the production joint venture would be without equal in the mining industry applied broadly across production and development activities including combining adjacent mines into single operations more efficient use and allocation of infrastructure and ore blending opportunities to maximise product recovery in aluminium we completed the start up of the sohar smelter in oman to which we financial statements shareholder information china an objective for 2010 and one that i am particularly focused on is to strengthen our relationship with china china is our largest source of short term demand growth in 2009 it became the most important destination for our products and influences global pricing of most metals it is also the home of our largest shareholder chinalco we were pleased to see chinalco take up its full entitlement of shares in our rights issues and maintain its shareholding at 12 per cent of rio tinto plc and 9.3 per cent of the dual listed company overall i would like to add a word on our four employees who were detained on 5 july 2009 in shanghai we wish to see the completion of an expeditious and transparent legal process our continued priority is our duty of care to our colleagues and support for their families www.riotinto.com 9 tom albanese chief executive

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overview market review a global perspective for metals and minerals commodity price indices january 2009 to february 2010 daily spot price index 1 january 2009 =100 key aluminium spot iron ore 62 fe fob thermal coal newc copper decline in global growth 2007 to 2009 industrial production growth year on year change key non-oecd oecd world 300 10 200 0 100 -10 jan 2009 mar 2009 may 2009 aug 2009 jan 2010 -20 q1 2007 q1 2008 q1 2009 q1 2010 source lme sbb reuters ecowin globalcoal source global insight competitive environment rio tinto is a major producer in all of the metals and minerals markets in which it operates it is generally among the top five global producers by volume in each such market it has market shares for different commodities ranging from five per cent to 40 per cent rio tinto s activities are spread across the globe most of rio tinto s competitors are private sector companies which are publicly quoted several are like rio tinto diversified in terms of commodity exposure but others are focused on particular commodities high quality long life mineral resources the basis of attractive financial returns are relatively scarce nevertheless rio tinto holds interests in some of the world s largest deposits rio tinto expects world production volumes to grow in line with global economic growth in addition higher demand from china and potentially india as a result of high rates of economic growth and urbanisation trends in those countries could contribute further to increases in world production volumes in the long term growth became unavoidable with most major developed economies moving into recession by the end of 2008 the deterioration in global economic activity continued into 2009 leading to the greatest contraction in industrial production for over 30 years global trade ground to a halt consumer confidence collapsed with rising fears about unemployment and businesses responded to the credit crunch by cutting spending and reducing output in order to pare back high inventory levels however the introduction of large fiscal and monetary stimuli by governments around the world started to take effect towards the middle of the year averting a second great depression global trade started to recover during the second half of 2009 led by activity in asia major developed economies gradually stabilised with most experiencing renewed gdp growth by the third quarter of 2009 most oecd economies are now in the early stages of recovery initially driven by inventory rebuilding government spending and in some cases net trade the normal pattern of recovery is that the process of inventory rebuilding and economic stimulus would generate job growth increase business confidence and create the basis for increased consumption however at this stage there remain risks that the pace of recovery may not be sustained this is mainly because consumer confidence has been so heavily weighed upon by high unemployment rates the loss in wealth and the prospect of increased taxes to fund the current stimulus chinese government in early 2008 and a correction in a slightly overheating property market contributed to the slowdown in the pace of economic growth in china during the second half of 2008 by the first quarter of 2009 the annualised pace of gdp growth had fallen to nearly six per cent a sharp contrast to the double digit growth that the chinese economy had become accustomed to over the previous four years the chinese government reacted strongly and rapidly to the economic slowdown announcing a rmb 4 trillion stimulus package equivalent to about 12 per cent of gdp to be spent over two years the government also introduced a set of measures aimed at supporting demand in key sectors and boosting consumption in rural areas the stimulus was accompanied by a massive surge in bank lending during the first half of 2009 with significant investment going into the development of infrastructure projects all these measures were successful in boosting economic growth as early as the second quarter of 2009 the growth momentum continued to build up during the second half of the year with activity in the property sector also starting to bounce back strongly all of these developments bode well for the strength of china s economy in 2010 economic overview global economy following more than four years of rapid expansion the global economy started to deteriorate rapidly during the third quarter of 2008 as financial markets became increasingly unstable the bankruptcy of lehman brothers became the defining moment of this period sparking significant increases in risk premiums and a sharp contraction in availability of finance governments around the world took action to restore confidence in financial markets but a decline in global economic 10 rio tinto 2009 annual report commodity markets the sharp fall in global economic activity has had a significant impact on the demand for metals and minerals contractions in end-use consumption have been amplified by heavy destocking at all stages of the supply chains metals such as aluminium which tend to be more exposed to the construction and transport sectors of developed economies have been affected most strongly leading to china the collapse in global trade affected many developing economies including china the lagged impact of policy tightening by the

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chinese growth offsets western declines in 2009 year on year change key global ex-china china urbanisation key driver of long term metals demand urban population key india china us overview 30 15 0 -15 -30 al demand cu demand steel output 100 performance 75 50 25 production and reserves 10000 source un 20000 30000 40000 50000 60000 source iisi rio tinto gdp per capita governance very rapid increases in excess stocks prices which in many cases were trading well in excess of the marginal costs of production prior to the economic downturn reacted quickly to falling demand and rising inventories the price falls were especially steep for exchange traded commodities as the turbulence in the financial sector forced investors out of these markets aluminium and copper experienced a peakto-trough variation of about 60 per cent and 70 per cent respectively within just a couple of quarters meanwhile the iron ore contract price settled with japanese customers in the second quarter of 2009 was about one third lower than the previous benchmark the hard coking coal contract price also fell substantially by close to 60 per cent whilst spot thermal coal prices fell 65 per cent between july 2008 and the end of the first quarter of 2009 such price declines put significant pressure on mining companies with for some commodities significant portions of the industry showing negative margins this led to a shift in focus from maximising output to capital management production curtailment and cost saving these recent developments reinforced rio tinto s strategy of investing in tier 1 assets which are generally able to generate positive margins over the whole of the economic cycle the sharp price falls and credit restrictions also led to the cancellation or postponement of many mining projects the start of a stabilisation in the global economy from the second quarter of 2009 and more importantly the rapid turnaround of the chinese economy triggered a sharp bounce back in commodity prices chinese imports of metals and minerals soared to new highs as a result of recovering underlying demand restocking closure of high cost domestic capacity and some speculative activity facilitated by rising liquidity falls in scrap supplies as a result of slower industrial activity and lower prices also created a need for chinese consumers to use and import a higher proportion of primary metals this was especially acute in the case of copper throughout the first half of 2009 these high levels of chinese imports absorbed some of the surpluses building up outside china keeping some markets relatively tight copper experienced one of the strongest rebounds with prices rising 140 per cent between the start and the end of the year moving to within less than 20 per cent of the pre-crisis 2008 peak meanwhile spot iron ore prices almost doubled over the second half of 2009 and aluminium recovered from a low of near us$1,300 per tonne during the first quarter of 2009 to just over us$2,200 per tonne by year end despite historically high visible stock levels movements in coal prices were more subdued during 2009 but started to trend up again towards the very end of the year emerge as the fiscal and monetary stimulus wanes or is removed over time some risks to the outlook include the possibility of an aggressive tightening of monetary policies in asian economies in response to concerns about consumer and or asset price inflation also it is possible that consumer spending in the oecd will remain constrained due to concerns about employment prospects housing wealth and increased tax burdens economic data releases and news flow will affect investors perceptions about the likelihood of such risks compared with the strength of the more positive forces on the markets this will lead to negative and positive swings in sentiment affecting commodity prices through speculation financial statements shareholder information trend information demand for the group s products is closely aligned with levels of and changes in global gdp changes in the gdp of developing countries will generally have a greater impact on demand for commodities such as iron ore and coking coal which are significant inputs in the development and improvement of infrastructure conversely changes in the gdp of developed countries will have a greater impact on industrial minerals which have many applications in consumer products aluminium and copper are used in a wide range of applications from infrastructure to consumer products and demand for these metals has tended to grow in line with or slightly faster than global gdp trends in production of the group s minerals and metals gross sales revenue and underlying earnings are set out in the performance reviews starting on page 22 outlook for 2010 forecasters have become progressively more optimistic about economic growth in 2010 the imf is predicting global growth of nearly four per cent and chinese gdp is expected to grow at between nine and ten per cent economy wide inventory rebuilding in the oecd should provide a short term boost to activity such growth acceleration would have positive implications for metals and minerals markets although it is still unclear whether a sustainable recovery in private sector confidence and economic activity will www.riotinto.com 11

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overview strategy summary a focused and integrated strategy vision our vision of being the global mining leader means maintaining or achieving sector leadership including operational excellence sustainable development exploration and innovation we are well placed to achieve this vision through our ownership of some of the world s best assets we focus on the development of tier 1 orebodies ­ those that will give us large scale long term and cost competitive operations this will safeguard our future cash flow and ensure we can operate profitably at every stage of the commodity cycle the global reach of our operations and projects gives us the ability to respond to rising demand for metals and minerals from developed and emerging economies we will use the advantages that our assets bring to deliver options for future growth our diverse portfolio high quality assets and expertise in technology and marketing give us the capability to supply a wide spectrum of customers and markets we can supply the raw materials needed for basic infrastructure and the high performance mineral grades needed for high tech applications this gives us exposure to markets worldwide at various stages of the development cycle by understanding what our customers value we develop offerings which meet their needs and generate superior returns for rio tinto effective supply chain integration with our operations and rio tinto marine ensures that we meet customer needs and create value for ourselves by supplying the right products and services at the right time to the right place rio tinto has a strong reputation for operational excellence and sustainable development this reputation gives us our licence to operate and it is essential that we uphold it and build upon it long term sustainable development is at the heart of everything we do we must build upon recent improvements in our safety performance and we must also continue and extend our leadership in areas such as community and government engagement biodiversity and land carbon water and energy management our assets and reputation give us the capabilities to operate and grow our business on a global scale and as we do so we also have the scope and expertise to bring long term benefits to our local communities and host countries rio tinto s vision is to be the global mining leader our vision shapes our core objective which is to maximise total shareholder return by sustainably finding developing mining and processing natural resources to deliver this objective the group follows a strategy of investing in and operating large long term cost competitive mines and businesses driven not by choice of commodity but rather by the quality of each opportunity we have five business priorities for 2010 to enable us to deliver our strategy and improve our long term financial performance · focus on operational delivery · pursue our growth path · complete the iron ore production joint venture · prudent balance sheet management · strengthen our relationship with china given our geographical reach strong assets and reputation we believe we are well positioned for success priorities for 2010 the group is focusing on five business priorities which are the pathway to delivering our strategy and achieving our vision core objective to maximise total shareholder return by sustainably finding developing mining and processing natural resources strategy to invest in and operate large long term cost competitive mines and businesses driven not by choice of commodity but rather by the quality of each opportunity priorities for 2010 we have five business priorities to enable us to deliver our strategy and improve our long term financial performance these priorities will support our vision to be the global mining leader 12 rio tinto 2009 annual report

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focus on operational delivery we will pursue cost reductions and productivity improvements in order to strengthen our focus on operational delivery a key activity will be the continued transformation of the aluminium business rio tinto alcan is now sharing common safety internal compliance and human resource systems as we complete the financial integration of alcan we expect to exceed us$1.1 billion per year in synergies our capacity for innovation is an important driver of operational delivery improvements we will continue to capitalise on our leading technologies and develop our capabilities in areas such as automation the delivery of capacity improvements along the supply chain is also a key part of this priority this includes the mining processing and shipping of our commodities complete the iron ore production joint venture a key achievement this year would be the completion of the proposed western australian iron ore production joint venture with bhp billiton after signing the binding agreements in december 2009 covering all aspects of how the joint venture will operate and be governed we are now addressing the approvals required and integration planning this transaction would enable us to deliver substantial synergies and unlock the true value of our significant assets in the pilbara sustainable development our commitment to sustainable development underpins our vision and every area of our business it is an essential factor in maintaining and extending our licence to operate this commitment provides opportunities for us to plan implement and deliver sustainable contributions to social wellbeing environmental stewardship and economic prosperity within our strong governance systems our approach helps us to manage risk and our strong reputation as a socially responsible miner gives us improved access to land people and capital ­ the three critical resources upon which our business success is built a full review of our sustainable development performance begins on page 24 building relationships with all our internal and external stakeholders is a cornerstone of our sustainable development approach a vital element of our relationship with our employees is to keep them healthy and safe we believe that all incidents and injuries are preventable and we must continue to make improvements in our key safety indicators our aim is to create an environment where all employees and contractors have the knowledge skills and desire to work safely so that everyone goes home safe and healthy at the end of each day attracting developing and retaining a skilled and engaged workforce is essential for our business performance building enduring relationships with our local communities host countries and governments is also fundamental to our sustainable development commitment and helps us to be seen as the partner of choice for mineral development overview performance prudent balance sheet management we will focus on prudent management of our balance sheet building on the successful measures we undertook to alleviate our debt position in 2009 we will continue with our operating and capital cost reduction initiatives as well as our asset divestment programme in order to optimise our financial position our objective in this area is towards achieving a single a credit rating this priority links closely to the pursuit of growth through disciplined capital expenditure production and reserves governance pursue our growth path our second priority is to grow our business through disciplined capital expenditure the improved strength of our balance sheet in 2009 positions us well for growth we have confidence in the projected increase in long term demand for our products particularly from emerging markets which will be the driver of this growth the growth opportunities that we focus on are aligned with our strategy and so we will make investment decisions based on the quality of each opportunity rather than the choice of commodity this may mean considering new commodities as well as capitalising on the expansion potential that is held within our existing assets financial statements strengthen our relationship with china we will seek to strengthen our relationship with china our largest trading partner the home of our largest shareholder and a market that will be one of the major drivers of future demand china is strategically important to rio tinto and it is essential that we build durable and ongoing relationships there shareholder information 1 focus on operational delivery 2 pursue our growth path 3 complete the iron ore production joint venture 4 prudent balance sheet management 5 strengthen our relationship with china key performance indicators achievement of our strategy and goals are measured by a mixture of financial and non financial performance indicators some of which are linked to executive remuneration more information on p.14 www.riotinto.com 13

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