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2010 annual report this report is available online visit www.riotinto.com/annualreport2010 striving globalsector leadership for

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striving for global sector leadership rio tinto is a leading global business delivering value at each stage of mineral and metal production our 77,000 people work in over 40 countries our commitment to the health safety and prosperity of our people is at the heart of our operations so is our determination to maintain the environmental integrity of what we do we achieve all of this by managing our business globally with a well established strategy and a single set of standards and values our approach coupled with our diverse portfolio of quality assets positions us for growth on a global scale more information website www.riotinto.com the shareholders section of www.riotinto.com provides financial and corporate information about the group as well as rio tinto share price charts and data an events calendar dividend information and the latest presentations by management for investors and financial analysts sustainable development sustainable development is integral to the way we work within this report we have provided our 2010 sustainable development performance highlights the our approach section of our website contains details of our programmes to deliver on our commitment to sector leading sustainable development and more comprehensive data on our progress results presentations our results presentations are available live on webcast a playback of the most recent presentation is downloadable at www.riotinto.com messaging service/rio tinto news alert receive news alerts about rio tinto via text or email by subscribing to our messaging service on www.riotinto.com/newsalerts the annual report and auditors 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 these statements are forward looking statements within the meaning of section 27a of the securities act of 1933 and section 21e of the securities exchange act of 1934 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 overview a description of our business and markets the group s strategy and the outlook for 2011 performance highlights group overview product overview chairman s statement chief executive s statement chief financial officer s statement strategic context 2 4 6 8 10 12 14 the way we work group strategy key performance indicators risk management principal risks and uncertainties 16 18 22 24 25 performance performance how we did by product group and function together with a review of progress in sustainable development sustainable development review aluminium copper diamonds minerals energy iron ore 29 42 46 50 54 58 exploration technology innovation financial review five year review acquisitions and divestments capital projects 62 64 66 74 75 76 production reserves and operations production reserves and operations information tables and details of our assets summary metals and minerals production ore reserves 78 80 84 mineral resources competent persons mines and production facilities 88 93 94 governance governance introducing the board of directors and senior management with an explanation of our approach to corporate governance and remuneration board of directors executive committee directors report 102 106 108 corporate governance remuneration report 114 128 financial statements financial statements detailed financial information detailed 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 aas outline of dual listed companies structure and basis of financial statements 156 157 158 159 160 161 162 162 notes to the 2010 financial statements company balance sheet financial information by business unit summary of asic relief directors declaration auditors independence declaration independent auditors report financial summary 2001­2010 summary financial data 163 247 250 254 255 256 257 259 261 additional information additional information other useful information shareholder information definitions 262 276 financial calendar useful information and contacts 278 279 symbols used within this report more content online at www.riotinto.com more content within this report www.riotinto.com 1 key performance indicators within this report

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performance highlights record financial and operational performance strong financial performance record underlying earnings of us$14.0 billion 122 per cent above 2009 record cash flows from operations of us$23.5 billion up 70 per cent record underlying ebitda of us$26.0 billion up 82 per cent on 2009 net debt decreased from us$18.9 billion to us$4.3 billion at the end of 2010 underlying earnings a b us millions kpi see page 22 more information see page 250 13,987 exceptional operational delivery 18 per cent decrease in all injury frequency rate from 2009 production at or above capacity at many operations record annual production of iron ore annual hard coking coal production up 20 per cent on 2009 bauxite production up nine per cent 10,303 7,338 7,443 6,298 growth potential across the business us$11 billion of major capital approvals in 2010 with us$13 billion of capital expenditure expected in 2011 us$5.6 billion committed in 2010 on pilbara expansion 100 per cent basis to grow production by more than 50 per cent the oyu tolgoi copper-gold project came under rio tinto s management with a pathway to increase ownership of ivanhoe mines ltd to 49 per cent us$1 billion approved to modernise hydropower based aluminium portfolio in canada net debt a us millions 2006 2007 2008 2009 2010 kpi see page 22 more information see page 199 45,191 38,672 continuing progress on sustainable development reduced greenhouse gas ghg emissions intensity by 3.7 per cent from 2008 43 per cent decrease in the rate of new cases of occupational illness from 2009 community contributions of us$166 million up 40 per cent on 2009 18,861 2,437 4,284 dividend dividend declared 2010 2009 2008 2007 2006 2006 2007 2008 2009 2010 capital expenditure a us millions us cents uk pence australian cents notes 108.00 67.35 111.21 45.00 28.84 51.56 111.22 67.49 146.22 111.23 56.20 125.72 85.07 44.22 110.69 kpi see page 22 more information see page 252 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 182 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 8,488 notes to pages 2 and 3 a the accounting information in these charts is based on eu ifrs accounting information 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 2010 financial statements both net earnings and underlying earnings deal with amounts attributable to owners of rio tinto however eu ifrs requires that the profit for the year reported in the income statement should also include earnings attributable to non-controlling interests in subsidiaries 3,988 4,968 5,356 4,553 2006 2007 2008 2009 2010 2 rio tinto 2010 annual report

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overview operating cash flows a us millions dividends from equity accounted units cash flow from consolidated operations profit for the year a us millions all injury frequency rate per 200,000 hours worked including former alcan kpi see page 22 kpi see page 22 23,530 20,668 19,195 13,834 12,569 10,923 10,805 9,196 4,609 5,335 13,224 7,867 7,746 22,126 15,184 1.09 0.95 0.81 0.66 1.21 more information see page 157 more information see page 31 performance 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 production reserves and operations gross sales revenue a us millions share of equity accounted units sales revenue consolidated sales revenue total shareholder return ghg emissions intensity indexed relative to 2008 including former alcan kpi see page 22 more information see page 250 58,065 54,264 44,036 41,825 33,518 25,440 29,700 7.4 22,465 32.6 92.8 60,323 172.8 56,576 110.9 110.2 111.3 100.0 92.5 kpi see page 22 more information see page 34 governance 96.3 71.5 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 financial statements underlying ebitda a us millions underlying earnings per share a b us cents new cases of occupational illness per 10,000 employees including former alcan more information see page 250 more information see page 188 more information see page 32 25,978 656.2 22,317 713.3 47 36 450.1 12,524 13,920 14,312 473.2 357.1 38 additional information 22 22 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 www.riotinto.com 3

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group overview opportunities for long term growth major global operations our assets are ideally positioned to serve our customers worldwide the majority of our operations are in australia and north america but we also have businesses in south america europe southern africa and asia while our operating heartland is in oecd organisation for economic co-operation and development countries much of our sales are to emerging economies ­ which are driving the anticipated growth in metals and minerals demand to meet rising demand we will continue to pursue value-adding organic growth plus targeted small to medium sized acquisitions our five product groups below are supported by our exploration and technology innovation groups of sales by destination to north and south america 21 18 aluminium we are a global leader in the aluminium industry our closely integrated facilities include high quality bauxite mines and alumina refineries as well as some of the world s lowest cost primary aluminium smelters copper with diverse assets and leading technology our copper group is uniquely positioned to supply growing global demand in 2010 we produced 678 thousand tonnes of copper making us the world s fifth largest supplier we also produced 772 thousand ounces of gold and 13 thousand tonnes of molybdenum as by-products of our copper operations diamonds minerals the diamonds minerals group comprises mining refining and marketing operations across three sectors rio tinto diamonds is one of the world s leading diamond producers active in mining and sales and marketing rio tinto minerals is a world leader in borates and talc with mines processing plants commercial and research facilities rio tinto iron titanium is an industry leader in high grade titanium dioxide products · bauxite alumina aluminium key strengths · effective portfolio management improving our already strong position and moving assets further down the cost curve · largest bauxite producer in the industry · self generated hydroelectricity at many facilities · global scale gives the group the ability to seize opportunities and support customers worldwide as markets continue their recovery · one of the best growth project pipelines in the aluminium industry supported by our management expertise and proprietary ap technologytm contribution to group underlying earnings a b products · copper gold molybdenum silver nickel key strengths · participation in and ownership of several world class operating assets management of the oyu tolgoi project scheduled to be a top ten copper producer and a significant gold producer · investment in a substantial growth profile · industry leading technology and innovation products · diamonds borates titanium dioxide feedstocks talc high purity iron metal powders zircon rutile key strengths · poised to benefit from late-cycle demand growth · substantial brownfield and greenfield development pipeline contribution to group underlying earnings a b contribution to group underlying earnings a b 6 18 2 full operating review on page 42 full operating review on page 46 full operating review on page 50 a items excluded from net earnings to arrive at underlying earnings are explained in note 2 to the 2010 financial statements b aggregate product group underlying earnings contribution of 107 per cent is reduced to 100 per cent by negative amounts for other items and net interest 4 rio tinto 2010 annual report

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of sales by destination to europe middle east and africa 19 overview of sales by destination to china 28 32 performance of sales by destination to elsewhere in asia and australia countries with operations and/or projects production reserves and operations energy we are a leading supplier of thermal and coking coal to the asian seaborne market and are one of the world s largest uranium producers serving electric power utilities worldwide our energy portfolio includes rio tinto coal australia a coal mine at colowyo in colorado us energy resources of australia which produces uranium oxide from its ranger operation and rössing a namibian uranium oxide producer iron ore we are the second largest producer supplying the global seaborne iron ore trade after a decade of dramatic expansion in australia and more recent growth in both australia and canada we believe we are well positioned to benefit from the continuing demand surge in china and other asian markets we are driving performance through effective project management and enhanced operational efficiency exploration exploration is one of the group s core activities ­ largely paying for itself through the sale of non core discoveries potential tier 1 discoveries see page 62 are retained for development and operation these have included two of the largest copper opportunities in the world at resolution in arizona us and la granja in peru exploration has also delivered one of the world s largest known undeveloped high grade iron ore deposits at simandou in guinea as well as the caliwingina channel iron deposits in the pilbara australia full operating review on page 62 governance products · thermal coal coking coal uranium products · iron ore salt key strengths · strong customer relationships and high quality assets located in close proximity to growing asian markets · emphasis on operational excellence thereby reducing waste and greenhouse gas emissions and engaging our people key strengths · proximity of the expanded pilbara operations to the world s largest and fastest growing markets · success in increasing operational efficiency and controlling costs · vast potential of brownfield developments near existing infrastructure contribution to group underlying earnings a b technology innovation our centralised team of specialists focuses on improving current technologies and operations with emphasis on project development execution and evaluation the group s innovation centre concentrates on step changes that will give us competitive advantages in developing the orebodies of the future a special energy climate strategy centre is dedicated to improving the group s use of energy reducing greenhouse gas emissions and understanding the effects of climate change on our operations and prospects full operating review on page 64 financial statements contribution to group underlying earnings a b 8 73 additional information full operating review on page 54 full operating review on page 58 www.riotinto.com 5

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product overview touching your life every day major global commodities few people around the world can spend a day without using a metal or mineral in some way in the production and supply of metals and minerals rio tinto is one of the world s most diversified companies major products are aluminium copper diamonds coal iron ore uranium molybdenum gold borates titanium dioxide salt and talc aluminium gold gold has enjoyed a mystique and value unrivalled by other metals most gold that is not stored as bullion for investment purposes goes into jewellery gold s conductivity and non corrosive properties make it a vital fabrication material in technology electronics space exploration and dentistry we produce gold as a by-product from our copper mines silver silver is a good conductor of electricity and does not corrode it is used in many electrical and electronic applications such as photovoltaic cells and is the principal ingredient of x-ray film silver is also a metal of beauty used to make lasting products for the home and person rio tinto produces silver as a by-product of its copper production bauxite alumina aluminium rio tinto is a leading global supplier of bauxite alumina and primary aluminium in a closely integrated value chain the mineral bauxite is refined into alumina which is smelted into aluminium metal aluminium is one of the most widely used metals and its largest markets are transportation building and construction diamonds minerals copper diamonds diamonds share the role with gold as an important component in jewellery that ranges from top end jewellery through to more affordable pieces rio tinto is able to service all diamond jewellery markets as it produces the full range of diamonds in terms of size quality and colour distribution including whites champagnes cognacs greys blues and greens and the rarest of all pink diamonds copper about two thirds of copper production is used in electrical applications due to its high conductivity it helps power our lives in homes and factories cars computers phones and equipment further major uses are in air conditioning and refrigeration plumbing and roofing borates refined borates are used in hundreds of products and processes they are a vital ingredient of many home and automotive applications and are essential nutrients for crops they are commonly used in glass and ceramic applications including fibreglass television screens floor and wall tiles and heat resistant glass molybdenum molybdenum is a metallic element frequently used in alloys with stainless steel and other metals it enhances the metal s toughness high temperature strength and corrosion resistance we produce molybdenum as a by-product from the kennecott utah copper operations segmental analyses of sales revenue by product and by destination have been included in note 32 to the 2010 financial statements 6 rio tinto 2010 annual report

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overview performance titanium dioxide the minerals ilmenite and rutile together with titanium slag can be transformed into a white titanium dioxide pigment or titanium metal the white pigment is a key component in paints plastics paper inks textiles food sunscreen and cosmetics titanium metal s key properties of light weight chemical inertness and high strength make it ideal for use in medical applications and in the aerospace industry iron ore production reserves and operations talc talc is hydrated magnesium silicate and is the softest rock in the world it is an important ingredient in the manufacture of paper paints moulded plastics for cars and other familiar products rio tinto produces various grades of talc for niche markets iron ore iron is the key ingredient in the production of steel one of the most fundamental and durable products for modern day living with uses from railways to paperclips our mines are located in australia and canada energy salt salt is one of the basic raw materials for the chemicals industry and is indispensable to a wide array of automotive construction and electronic products as well as for water treatment food and healthcare governance coal coal is plentiful relatively inexpensive and safe and easy to transport we are a large producer in the export thermal coal market thermal coal is used for electricity generation in power stations we also produce higher value coking or metallurgical coal which when treated into coke is used in furnaces with iron ore to produce steel financial statements uranium uranium is one of the most powerful natural energy sources known used in the production of clean stable base load electricity after uranium ore is mined it is milled into uranium oxide the mine product that is sent away for further processing into fuel rods for nuclear power stations additional information marketing channels all sales and marketing activity is conducted by rio tinto s product groups who utilise a range of sales and marketing channels to interact with customers these channels include direct sales sales via distributors and sales via agents no customer facing sales and marketing activity is handled outside of the product groups www.riotinto.com 7

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chairman s statement a year of record results our commitment to operational excellence has seen us capitalise on improved conditions in the external environment jan du plessis rio tinto had an outstanding 2010 after responding to the challenges of the global financial crisis and taking steps to stabilise and strengthen our organisation we are now concentrating on and delivering operational excellence this focus has allowed us to benefit from opportunities that have arisen in the more favourable external environment and to deliver record results in 2010 the exemplary performance of rio tinto s people was fundamental to our success in 2010 their efforts enabled us in many cases to work our assets throughout the year at or above nameplate capacity while also improving our safety performance in 2010 we set a new group record in the annual production of iron ore we achieved record underlying ebitda of us$26.0 billion and record underlying earnings of us$14.0 billion up 82 per cent and 122 per cent on 2009 respectively net earnings were us$14.3 billion compared with us$4.9 billion in 2009 we remain committed to efficient capital management it is our belief that the long term creation of shareholder value requires a balanced approach to investing in growth and returning excess capital to shareholders while maintaining a strong balance sheet our confidence both in our own portfolio and in future demand dividends us cents 111.23 111.22 for our products has allowed us to increase our annual dividend by 20 per cent compared with our previous commitment we are also proceeding with a us$5 billion share buy-back which we intend to complete by the end of 2012 subject to market conditions improved global economy the world s major developed economies gradually stabilised during 2010 in response to government fiscal and monetary stimulus packages most were experiencing renewed gdp growth by the third quarter of 2009 china saw a sharp rebound in gdp growth up from an annualised rate of nearly six per cent in 2009 to over ten per cent in 2010 this economic stimulus has helped trade to recover from the low point of the global crisis and thanks to our stronger balance sheet we have been well positioned to benefit from this recovery we have sharpened our focus on our programme of organic growth and for 2011 we envisage continuing this focus with capital expenditure set to increase to us$13 billion we believe we are well prepared for the key challenges facing the mining industry as we grow to meet rising demand we will need to overcome skills shortages as we compete for new talent not only with other mining companies but also with other expanding sectors such as oil and gas this trend will become more apparent as we move into new riskier geographies there will be new technical challenges as we develop more remote and complex orebodies and increased competition from new players in our sector although we anticipate continued volatility in our markets we will need to look beyond the peaks and troughs of a cycle and be prepared to expand through volatile times 108.00 2009 45.00 108.00 85.07 45.00 2006 2007 2008 2009 2010 8 rio tinto 2010 annual report

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overview sustainable development as the world becomes more reliant on the metals and minerals we produce we are increasingly challenged to grow and to find new more efficient ways of providing our markets with the raw materials they demand and as we grow we are able to share more of the sustainable benefits of our activities with those around us rio tinto s commitment to sustainable development permeates our entire business it is integral to our daily operations to our legacy and to our future by maintaining our reputation as a responsible employer neighbour partner and citizen we are constantly renewing our licence to operate this approach gives us continuing access to the people capital and resources we need we are recognised as a leader in sustainable development as evidenced by our continued listing on the ftse4good the dow jones sustainability indexes and the carbon disclosure leadership index our reputation helps us forge robust alliances with other organisations that lead the way in sustainable development such as the three year partnership we formed with the international union for conservation of nature in 2010 by sharing knowledge and best practice with our partners we seek to continue to deliver sustainable benefits to the people and places where we work on behalf of the board i continue to lead the succession and routine refreshment of directors to ensure the most appropriate balance of skills and experience and to drive effective decision making outlook urbanisation and industrialisation in populous parts of the world will continue to provide a strong platform for increasing demand for metals and minerals although long term fundamentals for growth are strong there are downside risks in the short term and potential for medium term volatility due to persistent economic imbalances financial systems remain fragile particularly in oecd countries the increase in sovereign debts and government measures to address fiscal imbalances are likely to temper short term growth we constantly seek to assess the potential impact of these factors on the group s plans and to enhance our capabilities to predict demand and understand our markets performance our people s commitment it is inspiring to see the way our global team of people works together and strives for ways to improve our collective performance throughout the year their commitment talent and integrity have led to the delivery of remarkable results on behalf of the board i would like to thank all of our people for their hard work during the past year our thanks also go to our shareholders whose continued support of rio tinto has helped us achieve record levels of performance in 2010 production reserves and operations governance and risk to achieve our vision of global sector leadership we must continue to maintain the highest standards of corporate governance these standards are underpinned by ethical guidance in the form of our global code of conduct the way we work the application of best practice and continually striving for excellence to create value for our shareholders based upon our agreed strategic framework rio tinto s board supports and oversees the group s management in its delivery of sustained operational excellence as well as growth opportunities whether organic or through prudent corporate activity the board recognises that risk is an integral and unavoidable part of doing business and that while risk carries threats it also offers opportunities our processes for handling risk effectively are embedded throughout our organisation and are essential for maintaining our competitive advantage there is a more detailed discussion of risk management on page 24 board succession planning is an essential component of effective corporate governance and the continued success of our business in 2010 we strengthened our board through the appointment of two new non executive directors ann godbehere and robert brown we also saw two retirements from the board sir david clementi who was chairman of the audit committee stepped down in may 2010 as did david mayhew in accordance with a provision of the new uk corporate governance code all of the directors will stand for re-election by shareholders annually with effect from the 2011 annual general meetings as previously indicated yves fortier formerly chairman of the board of alcan inc and also sir rod eddington will not be standing for re-election by shareholders in 2011 yves and rod have each made significant contributions to the board during their tenure with rio tinto and i would like to express my personal appreciation of the tremendous support they have given to me over the years meanwhile andrew gould senior independent director and chairman of the remuneration committee has announced that he will be leaving the board at the conclusion of the 2012 annual general meetings governance jan du plessis chairman financial statements additional information www.riotinto.com 9

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chief executive s statement strong momentum and value adding growth from a position of increased strength and with growth firmly on our agenda we are making significant progress towards our vision of global sector leadership tom albanese 2010 saw rio tinto move steadily towards its vision of global sector leadership recording exceptional performance and creating a clear pathway for sustainable growth we are now financially stronger and have greater optionality thanks to significant progress with our divestment programme efficiencies derived from our business transformation initiatives and record annual production in our iron ore business improved pricing and market conditions also enhanced our flexibility and enabled us to approve us$11 billion in major capital projects during 2010 growth is firmly on our agenda these achievements are a credit to the 77,000 employees who work for rio tinto across the world and i would like to thank them for their ongoing commitment in 2010 we increased our focus on operational efficiency and risk management with a particular emphasis on compliance and continuous improvement running operations which are safe reliable and injury and illness free is our number one priority we are proud to have improved our safety record with an 18 per cent decrease in the all injury frequency rate however i must record with sorrow the deaths of three people in our managed facilities we have increased our focus on process and contractor safety remaining absolutely committed to safety in the workplace we are determined to achieve zero harm in all of our operations all injury frequency rate per 200,000 hours worked including former alcan strategy our strategy has remained absolutely consistent ­ to invest in and operate large long term cost competitive mines and assets driven not by the choice of commodity but rather by the quality of each opportunity to achieve this we focus on a portfolio of tier 1 assets diversified by commodity market and geography this approach has underpinned our ability to overcome the challenges of previous years i am greatly encouraged by the group s performance which is a testament to our focus on creating shareholder value in the long term 2010 objectives as a result of the investments announced during the year we have significantly enhanced our global presence in key operational areas in 2010 to support the execution of our strategy we focused the business on five short term priorities operational delivery prudent balance sheet management pursuing our growth path completing the proposed western australian iron ore production joint venture and strengthening our relationship with china i am pleased to say we made significant progress in almost all of these areas our focus on operational delivery helped us break production records we took steps to optimise our financial position and as a result our balance sheet is stronger we grew organically reflecting confidence in our business and the outlook for our markets the cessation of our plans to form a western australian iron ore production joint venture with bhp billiton was a disappointment but we respect the regulators views we remain focused on a more than 50 per cent expansion of our iron ore business in the pilbara leveraging our world class assets and organisational capability 0.66 2009 0.81 1.21 1.09 0.95 0.81 0.66 we began 2010 with a difficult period in china but went on to make significant progress in developing stronger ties there in march 2010 four employees based in shanghai were convicted of receiving bribes and obtaining commercial secrets this disappointing and unacceptable behaviour violated the group s strong ethical culture as well as chinese law hence their employment was terminated the independent forensic investigation found that any illegal activities were conducted entirely outside the group s systems 2006 2007 2008 2009 2010 10 rio tinto 2010 annual report

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overview we also looked towards the future in july we signed a joint venture agreement with chalco for the development and operation of the simandou iron ore project in guinea and we continue to have discussions with the government of guinea at the end of the year we signed a memorandum of understanding with chinalco to establish a landmark exploration joint venture in china and also agreed to extend our channar mining joint venture in the pilbara with our partner sinosteel corporation in a year of considerable progress across the group several projects stand out our iron ore expansion plans in the pilbara our increased interest in the oyu tolgoi copper-gold project in mongolia and the signing of an agreement to become the development and operating manager of oyu tolgoi and progress towards modernising and expanding our canadian aluminium portfolio at the end of the year we announced a recommended offer for riversdale mining limited which if successful would provide us with a substantial tier 1 coking coal development pipeline in mozambique this is an example of the small to medium sized acquisitions that we are currently focused on financial recovery we will meet that demand from a strong financial position in the past year we have transformed the group s balance sheet our robust operating performance including record annual production in iron ore led to record cash flows and underlying earnings in 2010 we completed a number of disposals making asset sales totalling us$4.2 billion in 2010 this takes the total divestments completed since 2008 to more than us$11 billion and largely completes the disposal programme launched in 2007 performance achieving our vision with a focus on organic growth we will also consider strategic merger and acquisition opportunities of moderate size that fit our overall direction and help us achieve our vision as we move into 2011 we have established a longer term vision for global sector leadership reflecting the long term nature of our business our strategy and business model are explained in detail on p18 a strong framework for sustainable development wherever we operate whatever we do sustainable development underpins our vision our sustainable development approach gives governments confidence that we will develop resources in a way that will benefit their economies and communities and will protect their environments the mining and natural resource sector occupies an increasingly strategic and exposed position in the thinking of governments and other stakeholders while these factors can lead to tensions with effective management new opportunities will emerge through proactive leadership and by building relationships with all our stakeholders we can turn this area of challenge and complexity into a source of competitive advantage we will continue to show leadership in areas such as employee health and safety community engagement and in global issues vital to the future of the world s environment such as carbon water use and biodiversity the people who make it all happen we are fortunate in the group that our geographic spread gives us access to the skills and talents of a highly diverse workforce but there is much more we have to do and we have set ambitious plans to foster greater diversity it is our policy to offer our employees career opportunities that are rewarding and stimulating with real opportunities for personal and professional development for example training and recruitment programmes are under way in a number of countries in which we have embarked on major development opportunities these include madagascar mongolia and guinea we recognise that given our ambitious growth plans our recruitment challenge will be substantial particularly in some of our more competitive labour markets we will not fulfil this requirement without a concerted effort to make rio tinto the employer of choice something we are committed to achieving i want to take this opportunity to thank our shareholders my leadership team and all of our employees across the world it has been a year of exceptional performance and momentum which was truly a team effort i am looking forward to building on this success in 2011 production reserves and operations governance well placed to meet rising demand prices for many of our products recovered during the year driven principally by demand growth in china and the oecd countries iron ore and copper prices were particularly strong while government stimulus measures generally supported a gradual return to normalised global trade the improvement in developed economies faded slightly during the latter part of 2010 we believe the recovery momentum of the major economies will remain uncertain and volatile as the impact of the fiscal and monetary stimuli fades therefore we remain cautious about the short term view of the economy globally we expect gdp growth in 2011 to continue at broadly healthy levels of around 4.5 per cent however the pace of economic recovery will vary between the different markets we supply in the longer term we believe the fundamentals are strong but we will not be complacent much of the anticipated growth in demand for minerals will be driven by china and other emerging economies implementation of our established strategy will enable us to take advantage of increasing demand from these fast growing regions financial statements in a world of increasing commodity demand and growing sustainable development challenges i believe rio tinto will set itself apart through its leadership in operational delivery exploration technology and innovation and sustainable development to become the preferred industry partner and developer additional information tom albanese chief executive www.riotinto.com 11

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chief financial officer s statement sustainable growth in shareholder value rio tinto is once again able to invest in its high quality value adding growth programme maintain a strong balance sheet and deliver capital returns to shareholders guy elliott record breaking financial performance record underlying earnings of us$14.0 billion were 122 per cent higher than 2009 driven by the continuing recovery in commodity prices and strong operational performance record cash flows from operations of us$23.5 billion demonstrated the exceptional cash generation capabilities of our tier 1 assets strong operational performance during 2010 allowed us to benefit fully from the strong price environment the broader global recovery meant that we began to face pressures on our costs that are likely to continue in the coming year in particular labour and contractor costs in some geographies such as western australia are expected to rise however we are focusing on productivity improvements effective procurement and operating efficiency to help to offset these input cost pressures the markets for our products are increasingly complex with the introduction of new pricing mechanisms in the bulk commodity markets the continued emergence of base metals as a financial asset class and the volatile macroeconomic environment in which we continue to operate to navigate these challenges effectively rio tinto has formed a marketing leadership team this team will support our marketing vision of optimising the value of our resources enabling our sales and marketing teams to become increasingly nimble and customer focused net debt us millions restoration of balance sheet strength we transformed our balance sheet in 2009 and we further improved on that position during 2010 through strong cash flows from operations and the completion of us$4.2 billion in divestments we reduced our net debt from us$18.9 billion to us$4.3 billion in addition to reducing net debt we have also improved our medium term debt maturity profile and reduced our weighted average interest cost in october 2010 we successfully issued us$2 billion in bonds with five ten and 30 year maturities at record low interest rates for the metals and mining industry the proceeds were used in a successful tender for us$1.9 billion of bonds due in 2013 these actions are part of a prudent approach to managing the balance sheet this approach has been rewarded by the restoration of a single a credit rating by moody s a strong balance sheet will allow rio tinto to invest at all points of the commodities cycle in our first class growth projects it may help us to withstand sudden large shocks to the global economy that could arise from the significant imbalances that currently exist enabling us to take advantage of value creating opportunities as they arise the investment environment over the long term we expect industrialisation and urbanisation in developing economies including china and india to continue to drive underlying growth in demand for the commodities that we produce in europe and north america high levels of government debt will mean difficult decisions for governments as they rebalance their economies these worldwide discontinuities introduce the risk of unexpected shocks in the global economy our outlook is therefore for strong underlying growth for our products but with a potentially high degree of volatility 18,861 4,284 2009 18,861 45,191 38,672 to be updated 2,437 4,284 2006 2007 2008 2009 2010 it is important that we have a stable environment within which we can invest a key to successful mineral development is a culture of trust transparency and mutual benefit to all parties australia s proposed resource super profits tax and its subsequent replacement with the mineral resource rent tax proposal highlighted that resources and resource nationalism are now major items on the political agenda 12 rio tinto 2010 annual report

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overview in many countries rio tinto is committed to working constructively with all host governments to ensure that tax policy development does not create a hostile environment for investment within this context our strategy remains to invest in tier 1 resources ­ those with the potential for a long life that are cost competitive and that have options to expand we do not prioritise investment in any particular commodity and do not limit ourselves to those commodities in which we currently operate similarly we do not target or avoid specific geographies by focusing on identifying and investing in tier 1 assets which will add value to our shareholders regardless of the commodity concerned we will remain a diversified natural resources group in december we signed an agreement with ivanhoe mines the owner of 66 per cent of the world class oyu tolgoi coppergold project in mongolia whereby rio tinto will become the development and operating manager of that project we have now increased our ownership interest in ivanhoe mines to 42.1 per cent and secured the right to increase this further to 49 per cent we will continue to look for further innovative opportunities to enter into new joint ventures with various parties in the past we have gained access to new resources new geographies and special expertise through such vehicles and will look to continue to do so in the future we continue to employ a disciplined approach to investing in growth opportunities investments in projects and business combination opportunities must continue to meet our strict criteria of investing in high quality large long term cost competitive and expandable assets at good value performance investing in organic growth we have a very strong pipeline of high quality organic projects and a resource and mineralisation position which allows sustainable long term growth because the quality of our projects is high we will maintain our position as a large cost competitive producer we have continued to invest in the business with capital expenditures in 2010 of us$4.6 billion during the year we approved us$11 billion for new major projects including expansion of our iron ore infrastructure and mines in western australia and canada the first phase of an aluminium smelting plant in quebec using our new ap60 technology and the modernisation of the kitimat aluminium smelter in british columbia the approval of these and other projects in 2010 together with ongoing projects such as the expansion of yarwun alumina refinery and the kestrel coking coal mine will drive the allocation of capital in 2011 when we expect capital expenditure of approximately us$13 billion in 2010 we began to reinvigorate our exploration and evaluation programmes the group has a long history of finding high quality assets through exploration we are funding feasibility and pre-feasibility studies on projects such as the further expansion of our pilbara operations simandou la granja resolution and the kennecott utah copper extension this work will develop the next generation of tier 1 assets rio tinto has a very substantial inventory of projects and resources which have not yet reached the stage of development approval these projects provide us with valuable growth potential over the longer term the return of capital to shareholders our first priority for allocation of capital has always been and remains to make value adding investments in our business in order to optimise shareholder value we are committed to achieving and maintaining a single a credit rating a further priority is our dividend we were pleased to announce a final dividend of 63 us cents per share the total dividend in respect of 2010 was 108 us cents per share 20 per cent higher than the dividend commitment we had made to shareholders at the time of the rights issues in june 2009 this will form the basis of a progressive dividend policy so that we expect the us dollar value of ordinary dividends will increase over time the interim dividend is set at one half of the total dividend for the previous year and is therefore expected to be 54 us cents per share in 2011 under the progressive dividend policy the final dividend for each year is expected to be at least equal to the previous interim dividend we recognise that during times of high cash generation a progressive dividend policy alone will not return excess cash to shareholders therefore we are undertaking a us$5 billion share buy-back programme over 2011 and 2012 subject to market conditions this commitment will still leave us with the flexibility to make significant investments in our business while remaining committed to achieving a single a credit rating rio tinto is once again able to invest in its high quality value adding growth programme maintain a strong balance sheet and deliver capital returns to shareholders our established strategy financial discipline and leadership in project execution all mean that we are well positioned to continue creating sustainable growth in shareholder value over the coming decades production reserves and operations governance financial statements business development since the beginning of 2008 we have realised over us$11 billion of gross cash proceeds from the sale of non core assets the majority of the divestments identified during the strategic review in 2007 are now complete including nearly all of the alcan downstream businesses however we will continue to review the portfolio of assets to identify those that are no longer consistent with our strategy with a particular focus on higher cost aluminium assets we are also constantly reviewing the market for potential opportunities to add to our portfolio through small to medium sized acquisitions and other business combinations in december we announced a recommended cash offer for riversdale mining this is a good fit with rio tinto s strategy of focusing on small to medium sized acquisitions that provide access to large long term cost competitive assets additional information guy elliott chief financial officer www.riotinto.com 13

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