(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Indicate by check mark if the registrants are well-known seasoned issuers, as defined in rule 405 of the Securities Act.

If this report is an annual or transition report, indicate by check mark if the registrants are not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days:

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, or non-accelerated filers. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark

if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x ~~Accelerated Filer~~¨ ~~Non-Accelerated Filer~~ ¨☐

Indicate by check mark which basis of accounting the registrants have used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrants have elected to follow:

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

This document comprises the annual report on Form 20-F and the annual report to shareholders for the year ended 31 December ~~31, 2015~~2017 of Rio Tinto plc and Rio Tinto Limited (“~~2015~~2017 Form 20-F”). Pursuant to Rule 12b-23(a) of the Securities Exchange Act of 1934, as amended, the information for the ~~2015~~2017 Form 20-F of Rio Tinto set out below is being incorporated by reference from the “Annual Report ~~2015”~~2017” included as exhibit 15.2 to this ~~2015~~2017 Form 20-F (“Annual Report ~~2015”~~2017”).

Only (i) the information set out below with the reference to specific pages of the Annual Report ~~2015,~~2017, including any page references incorporated in the incorporated material unless specifically noted otherwise (ii) the cautionary statement concerning forward-looking statements on the inside cover, and (iii) the Exhibits, shall be deemed to be filed with the Securities and Exchange Commission for any purpose, including incorporation by reference into the Registration Statement on Form F-3 File No. ~~333-196694,~~333-217778, and Registration Statements on Form S-8 File Nos. 333-184397, 333-147914, 333-156093, 333-198655, 333-202546 and 333-202547 and any other documents, including documents filed by Rio Tinto plc and Rio Tinto Limited pursuant to the Securities Act of 1933, as amended, which purport to incorporate by reference the ~~2015~~2017 Form 20-F. Any information herein which is not referenced in the ~~2015~~2017 Form 20-F or the Exhibits themselves, shall not be deemed to be so incorporated by reference. The Annual Report ~~2015~~2017 contains references to our website. Information on our website or any other website in the Annual Report ~~2015~~2017 is not incorporated into this document and should not be considered part of this document. We have included any website as an inactive textual reference only.

All reference in the ~~2015~~2017 Form 20-F to “we”, “our”, the “company” or the “Group” mean Rio Tinto plc and Rio Tinto Limited.

“Performance highlights” on page 1;

“Five year review” on page ~~43;~~48;

“Shareholder information-Dual listed companies structure” on page ~~236;~~250; and

“Shareholder ~~information-Dividend arrangements”~~information-2017 dividends” on page ~~236~~254

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Exchange rates

The following tables show, for the periods and dates indicated, certain information regarding the exchange rates for the pound sterling and Australian dollar, based on the Noon Buying Rates for pounds sterling and Australian dollars expressed in US dollars per £1.00 and per A$1.00.

Pounds sterling

Year ended 31 December(a)
   Period
end    Average
rate    High    Low
Feb 2016 (through 15 Feb)
   1.45       1.45       1.46       1.43
Jan 2016
   1.43       1.44       1.48       1.41
Dec 2015
   1.48       1.50       1.52       1.48
Nov 2015
   1.50       1.52       1.55       1.50
Oct 2015
   1.53       1.53       1.55       1.51
Sep 2015
   1.52       1.53       1.56       1.52
Aug 2015
   1.54       1.56       1.58       1.54
2015
   1.48       1.53       1.59       1.46
2014
   1.56       1.65       1.72       1.55
2013
   1.63       1.56       1.63       1.51
2012
   1.63       1.59       1.63       1.53
2011
   1.55       1.60       1.67       1.67

Year ended 31 December(a)	Period end	Average rate	High	Low
Feb 2018 (through 16 Feb)	1.41	1.40	1.42	1.38
Jan 2018	1.42	1.38	1.43	1.35
Dec 2017	1.35	1.34	1.35	1.33
Nov 2017	1.35	1.32	1.35	1.31
Oct 2017	1.32	1.32	1.33	1.31
Sep 2017	1.34	1.33	1.36	1.29
Aug 2017	1.29	1.30	1.32	1.28
2017	1.35	1.29	1.36	1.21
2016	1.23	1.36	1.49	1.21
2015	1.48	1.53	1.59	1.46
2014	1.56	1.65	1.72	1.55
2013	1.63	1.56	1.63	1.51

(a)

The Noon Buying Rate on such dates differed slightly from the rates used in the preparation of Rio Tinto’s financial statements on the relevant date. No representation is made that pound sterling and Australian dollar amounts have been, could have been or could be converted into dollars at the Noon Buying Rate on such dates or at any other dates.

As at 1516 February ~~2016,~~2018, the Noon Buying Rate was ~~1.45~~1.41 per ~~£1.00.~~£1.00.

Australian dollars

Year ended 31 December(a)
   Period
end    Average
rate    High    Low
Feb 2016 (through 15 Feb)
   0.72       0.71       0.72       0.70
Jan 2016
   0.71       0.70       0.72       0.69
Dec 2015
   0.73       0.72       0.73       0.71
Nov 2015
   0.72       0.72       0.73       0.71
Oct 2015
   0.71       0.72       0.74       0.70
Sep 2015
   0.70       0.71       0.73       0.69
Aug 2015
   0.71       0.73       0.74       0.71
2015
   0.73       0.75       0.82       0.69
2014
   0.82       0.90       0.95       0.81
2013
   0.90       0.98       1.05       �� 0.90
2012
   1.04       1.04       1.08       0.97
2011
   1.02       1.03       1.10       0.94

Year ended 31 December(a)	Period end	Average rate	High	Low
Feb 2018 (through 16 Feb)	0.80	0.79	0.80	0.78
Jan 2018	0.81	0.80	0.81	0.78
Dec 2017	0.78	0.76	0.78	0.75
Nov 2017	0.76	0.76	0.77	0.75
Oct 2017	0.77	0.78	0.79	0.76
Sep 2017	0.78	0.80	0.81	0.78
Aug 2017	0.79	0.79	0.80	0.78
2017	0.78	0.77	0.81	0.72
2016	0.72	0.74	0.78	0.69
2015	0.73	0.75	0.82	0.69
2014	0.82	0.90	0.95	0.81
2013	0.90	0.98	1.05	0.90

(a)

As at 1516 February ~~2016,~~2018, the Noon Buying Rate was ~~0.72~~0.80 per A$1.00.

~~2015~~2017 dividends

The following chart sets out the amounts of interim and final dividends paid or payable on each share or American Depositary Shares (ADS) in respect of each financial year, but before deduction of any withholding tax.

   2015    2014    2013    2012    2011
Rio Tinto Group – US cents per share

Interim
   107.50       96.00       83.50       72.50       54.00
Final
   107.50       119.00       108.50       94.50       91.00
Total
   215.00       215.00       192.00       167.00       145.00










Rio Tinto plc – UK pence per share

Interim
   68.92       56.90       54.28       46.43       33.14
Final
   74.21       77.98       65.82       60.34       57.33
Total
   143.13       134.88       120.10       106.77       90.47










Rio Tinto Limited – Australian cents per share

Interim
   144.91       103.09       93.00       68.51       49.81
Final
   151.89       152.98       120.14       91.67       84.20
Total
   296.80       256.07       213.14       160.18       134.01










Rio Tinto plc – US cents per ADS

Interim
   104.94       93.30       84.62       73.99       53.55
Final(a)
   —         115.76       109.18       91.60       91.56
Total(a)
   —         209.06       193.80       165.59       145.11


	2017	2016	2015	2014	2013
Rio Tinto Group – US cents per share
Interim	110.00	45.00	107.50	96.00	83.50
Final	180.00	125.00	107.50	119.00	108.50
Total	290.00	170.00	215.00	215.00	192.00
Rio Tinto plc – UK pence per share
Interim	83.13	33.80	68.92	56.90	54.28
Final	129.43	100.56	74.21	77.98	65.82
Total	212.56	134.36	143.13	134.88	120.10
Rio Tinto Limited – Australian cents per share
Interim	137.72	59.13	144.91	103.09	93.00
Final	228.53	163.62	151.89	152.98	120.14
Total	366.25	222.75	296.80	256.07	213.14
Rio Tinto plc – US cents per ADS
Interim	110.99	44.59	104.94	93.30	84.62
Final(a)	--	125.62	106.66	115.76	109.18
Total(a)	--	170.21	211.60	209.06	193.80

(a)

The final dividend payable to holders of ADSs for the ~~2015~~2017 financial year will be announced on ~~31 March 2016~~5 April 2018 when the pounds sterling to US dollar currency conversion rate is determined. ~~The ADS dividend for 2010 is restated from the 2010 Annual report and reflects the dividend after currency conversion.~~

3.B Capitalization and indebtedness

Not applicable.

3.C Reasons for the offer and use of proceeds

Not applicable.

3.D Risk factors

Risk management

The risk management environment

2017 was a year where external uncertainty continued and internal risks required constant vigilance.

The geopolitical context for global trade remained unsettled. However, markets in general continued to grow. This combination drove a focus on external factors and the continuation of productivity initiatives in the Group to deliver our value-over-volume strategy. Enhancements to controls for managing operational risks (particularly cyber security and major hazards) sought to maintain and build resilience.

As stronger prices flowed through and supply was delivered in line with expectations, Rio Tinto retained its strong capital allocation discipline, returning cash to shareholders, further strengthening the balance sheet and investing in high quality long term green and brownfield projects.

Principal joint operations, managed and non-managed, and particularly those in jurisdictions with higher sovereign risk, continue to require close monitoring and active management.

Changes to the risk profile of the Group during 2017 are illustrated in the summary table below. Further detail on movements and monitoring of these exposures is provided in the relevant section of the Strategic report, including Market environment, Group strategy, product group overviews, the Directors’ report and the Notes to financial statements of the Annual Report 2017.

Emerging risks

Looking ahead, the external risk landscape continues to evolve. In the relatively near term, increased protectionism and geopolitical uncertainty present risk and uncertainty to the operating environment. In the medium term, technological disruption – from increased automation in mining and processing to greater use of cognitive learning and artificial intelligence – provides both threats and opportunities as companies seek to secure competitive advantage. In the longer term, the societal imperative to manage areas of environmental risk is expected to increase at the macro level, as concern about the ineffective management of “global commons” – the oceans, atmosphere and climate system – drives a search for sustainable solutions.

Internally, the strengthening of the commercial capability of the Group, through the appointment of a chief commercial officer and the development of a strong governance and risk framework to support co-located commercial operations in Singapore, will ensure appropriately rigorous management of this increasingly important part of the business. In addition, the establishment of a dedicated closure team will provide stronger planning and oversight of the growing activities associated with responsible future mine closure.

Looking forward, managed and non-managed joint ventures as well as partnerships are likely to play a still larger role in the Group’s portfolio. These mechanisms provide growth opportunities for the Group but will also require the further development of the Group’s capability and capacity to manage and participate in these arrangements effectively.

Principal risks and uncertainties exposure at a glance – 2017 trend
		External	Internal	Internal and external
Increasing risk or uncertainty	▲	– Sovereign risk^(a)		– Attracting and retaining talent
No change in risk or uncertainty	▬	– Strategic partnerships – Commodity prices – China growth pathway	– Execution of acquisitions and divestments – Capital project development – HSEC	– Exploration and resources – Operational excellence – Regulation and regulatory intervention
Decreasing risk or uncertainty	▼			– Liquidity

(a)	Sovereign risk includes both direct risk from nation states and geopolitical uncertainty more broadly, and presents across all jurisdictions to which the Group has exposure.

Risk management framework

Rio Tinto is exposed to a variety of risks (both threats and opportunities) that can have financial, operational and compliance impacts on our business performance, reputation and licence to operate. The board recognises that creating shareholder ~~returns~~value is the reward for taking and accepting risk. The effective management of risk is therefore critical to supporting the delivery of the Group’s strategic objectives.

~~Risk management framework~~

Rio Tinto’s risk management framework reflects ~~our belief that managing risk effectively is an integral part of how the Group creates value, and fundamental to the Group’s business success.~~this. The responsibility for identifying and managing risks lies with all of Rio Tinto’s ~~managers~~employees and business leaders. They operate within the Group-wide framework to manage risks within ~~understood thresholds.~~approved limits.

The framework includes clearly defined oversight responsibilities for the board and the Executive Committee, who are supported by the Risk Management Committee ~~(an executive management committee chaired by the chief executive)~~ and central support functions including Group Risk and Group Internal Audit, ~~& Assurance,~~ to enable effective risk identification, evaluation and management across Rio Tinto.

This approach reflects a “three lines of defence” model for the management of risks and controls:

–	First line of defence: ownership of risk by ~~the operations.~~employees and business leaders.

–	Second line of defence: control of risk framework and systems of internal control by central support functions and the Risk Management Committee.

–	Third line of defence: assurance of systems of internal control by Group ~~Audit & Assurance.~~Internal Audit.

The key risk management responsibilities throughout the Group are outlined below.

Approach

The Group’s approach to risk management and internal control, underpinned by the Risk policy and ~~standard,~~standards, is aimed at embedding a risk-aware culture in all decision-making, and a commitment to managing risk in a proactive and effective manner. This includes ~~the early identification and evaluation of risks, the management and mitigation of risks before they materialise, and dealing with them effectively in the event they do materialise.~~ the:

–	early identification and evaluation of threats and opportunities;

–	management and mitigation of threats before they materialise and effective response if they do materialise; and

–	active pursuit of opportunities to capture value, within agreed risk tolerances.

Accountability for risk management is clear throughout the Group and is a key performance area offor line managers.

To support risk understanding and management at all levels, the Group Risk function provides the necessary infrastructure to support the management and reporting of material risks within the Group, and escalates key issues through the ~~management team~~Executive Committee and ultimately to the board, where appropriate.

Group Risk also supports the Risk Management Committee in its review of risk.

The process for identifying, evaluating and managing material business risks is designed to manage, rather than eliminate, threats and where appropriate accept risk to generate returns. Certain threats, for example natural disasters, cannot be managed using internal controls. Such major threats are transferred to third parties in the international insurance markets, to the extent considered appropriate or possible.

The Group has material investments in a number of jointly controlled entities. Where Rio Tinto does not have managerial control, it is usually unable to ensure that management will comply with all Rio Tinto policies and standards.


~~Risk management framework~~
Board		~~Board~~		– Determine the nature and extent of risk that is acceptable in pursuit of strategic objectives – Confirm that management’s risk ~~thresholds~~limits reflect the level of risk the board is willing to accept in pursuit of strategic objectives – Provide oversight across the risk management process
Board	Oversight	Board committees		– The Audit Committee monitors and reviews at least annually the maturity and effectiveness of management processes and controls designed to identify, assess, monitor and manage risk – The Audit and Sustainability Committees review periodic reports from management: identifying the ~~Group’s~~Group's material business risks within the ~~committees’~~committees' scope; and the risk management strategies and controls applied
	Third line	Group Internal Audit ~~& Assurance~~		– Provide ~~reasonable~~independent and objective assurance that the systems of ~~risk management,~~ internal ~~control and governance~~controls are adequate and effective
		Executive Committee		– Set risk strategy and assess risks inherent in key investments and in strategic, business or annual plans

	Risk Management Committee		– Oversee the risk management framework to facilitate the identification of significant risks to Group-level objectives and ensure effective risk management processes are in place
Second line	Group Risk		– Provide co-ordination and support of Group-level risk management activity and reporting – Embed risk management into core business processes, such as planning and capital allocation – Build risk management capability and a risk culture throughout the Group

	Other central support functions and management committees		– Provide targeted expertise and support to risk owners – Develop and maintain specific controls, including policies, standards and procedures, to support the effective management of material Group-level risk within the agreed ~~thresholds~~limits – Assure first line of defence compliance with controls
First line		Product groups and central functions, ~~executive /~~ executive/audit forums		– Monitor material risks and track activities to manage risk within their business activities, and escalate where appropriate – Consider risk and uncertainty in strategic and business planning and capital allocation proposals
First line		Product groups and business units		– Identify, assess and manage risks in operations, functions and projects, utilising risk registers and our Group-wide risk data ~~system: RioRisk~~system (Archer)

	Risk managers and Risk Forum		~~– Provide technical expertise and risk management for line leaders and the product group executive management teams~~ – The Risk Forum (risk managers across the Group) supports alignment, consistency and continuous improvement of risk management

The process for identifying, evaluating and managing the material business risks is designed to manage, rather than eliminate, risk and where appropriate accept risk to generate returns. Certain risks, for example natural disasters, cannot be managed using internal controls. Such major risks are transferred to third parties in the international insurance markets, to the extent considered appropriate or possible.

The Group has material investments in a number of jointly controlled entities. Where Rio Tinto does not have managerial control, it is not always able to ensure that management will comply with Rio Tinto standards.

Principal risks ~~and~~and uncertainties

The principal risks and uncertainties outlined in this section reflect the inherent risks that could materially affect Rio Tinto or its ability to meet its strategic objectives, either directly or by triggering a succession of events that in aggregate become material to the Group.

Rio Tinto’s business units and functions assess the potential economic and non-economic consequences of their respective risks using the framework defined by the Group’s Risk ~~policy and~~ standard. Once identified, each principal risk or uncertainty is reviewed and monitored by the relevant internal experts and by the Risk Management Committee, and as appropriate, by the relevant board committees and the board.

There may be additional risks unknown to Rio Tinto and other risks currently not believed to be material which could turn out to be material. In previous years the Group has reported risks related to climate change, community disputes, discount rates, short-term cash generation initiatives, technology and innovation, supply chain and third party exposure, industrial relations, availability of skilled resources, and closure. The Group remains exposed to these risks but does not consider them to be principal risks currently (as defined below). Therefore they are not discussed in detail in this section. A number of them, particularly those with longer-term potential impacts, are ~~however,~~ referred to in the sustainable development section of the Annual Report ~~2015~~2017 on pages 2228 to ~~28.~~

~~The principal risks and uncertainties listed in this section may materialise individually, simultaneously or in combination and could significantly threaten the Group in the following respects:~~

~~Business model~~

~~The basis on which the Group generates or preserves value over the longer term, given its market positioning as a global diversified mining and processing business.~~

~~Future performance~~

~~The Group’s ability to deliver its financial plan in the short to medium term.~~

~~Solvency~~

~~The Group’s ability to maintain an appropriate capital structure and to meet its financial liabilities in full.~~

~~Liquidity~~

~~The Group’s ability to meet its financial liabilities as they fall due.~~

~~Health, safety, environment and communities (HSEC)~~

~~The Group’s ability to send our employees and contractors home safe and healthy every day and work with our communities and partners to achieve our sustainable development goals.~~

~~Group reputation~~

~~The Group’s ability to maintain investor confidence and our social licence to operate.~~

~~Principal risks and uncertainties at a glance (2015 trend)~~
~~External~~
~~Internal~~
~~Internal and external~~
~~Increasing risk~~
~~Commodity prices~~
~~China development pathway~~
~~None~~ ~~None~~
~~No change in risk~~
~~Strategic partnerships~~
~~Jurisdictional risk~~
~~Execution of acquisitions and divestments~~
~~Capital project development HSEC~~
~~Business misconduct~~
~~Liquidity~~
~~Exploration and resources~~
~~Business interruption~~
~~Decreasing risk~~
~~None~~ ~~None~~
~~None~~

~~Principal risks and uncertainties~~

The principal risks and uncertainties in this section have been categorised into Financial risks (Market, Financial and Strategic); Operational risks (HSEC, Resources, Operations, Projects and People); and Compliance risks (Stakeholder, Governance).37.

The principal risks and uncertainties should be considered in connection with any forward-looking statements in the Annual Report ~~2015~~2017 and the cautionary statement on the inside front ~~cover of the Annual Report 2015.~~cover.


~~Financial risks~~
Inherent risk and ~~uncertainty~~ Uncertainty		Potential downside impact (threats)
Market risks
~~Market risks:~~ Rio Tinto operates in global markets and accepts the impact of exchange rate movements and market-driven prices for our commodities, seeking premiums where possible.
Commodity prices, driven by demand and supply for the Group’s products, vary outside of expectations over time. Exchange rate variations and geopolitical issues may offset or exacerbate this risk. Anticipating and responding to market movements is inherently uncertain and outcomes may vary. ~~External risk~~			Falling commodity prices, or adverse exchange rate movements, reduce cash flow, limiting profitability and ~~dividend payments.~~shareholder returns. These may trigger impairments and/or impact rating agency metrics. Extended subdued prices may reflect a longer-term fall in demand for the Group’s products, and consequent reduced revenue streams may limit investment and/or growth opportunities. Failure to deliver planned returns from commercial insights would negatively impact cash flows for the Group.
China’s ~~development~~growth pathway could impact demand for the Group’s products outside of expectations. ~~External risk~~		China is the largest market for our products by a long way, and Chinese demand is a strong driver, at times the dominant one, of the market price of the commodities we produce. An economic slowdown in China, and/or a material change in policy, ~~results~~could result in a slowdown in demand for our products and reduced ~~investment opportunities.~~revenues for the Group.
	~~Financial risks:~~
Financial risks
Rio Tinto maintains a strong balance sheet and liquidity position to preserve financial flexibility through the cycle.
External events and internal discipline may impact Group liquidity. ~~External risk~~ ~~Internal risk~~			The Group’s ability to raise sufficient funds for planned expenditure, such as capital growth and/or mergers and acquisitions, as well as the ability to weather a major economic downturn, could be compromised by a weak balance sheet and/or inadequate access to liquidity.

Inherent risk and uncertainty	Potential downside impact (threats)
Strategic risks
~~Strategic risks:~~ Rio Tinto enforces disciplined capital allocation to the best returning opportunities (organic and inorganic growth projects or returns to shareholders).
Rio Tinto’s ability to secure planned value by successfully executing divestments and acquisitions may vary. ~~Internal risk~~		Divestment and acquisition activity incurs transaction costs that cannot be recouped, or may result in value destruction by realising less than ~~planned~~fair value for divestments or paying more than fair value for acquisitions. This could result in unforeseen pressure on the Group’s cash position or reduce the Group’s ability to expand operations. The Group may also be liable for the past acts ~~omissions~~ or ~~liabilities~~omissions of assets it has acquired that were unforeseen or greater than anticipated at the time of acquisition. The Group may also face liabilities for divested entities if the buyer fails to honour commitments or the Group agrees to retain certain liabilities.
The Group’s ability to ~~develop new~~deliver projects successfully may vary. ~~Internal risk~~		A delay or overrun in the project schedule could negatively impact the Group’s profitability, cash flows, ability to repay project-specific indebtedness, asset carrying values, growth aspirations and relationships with key stakeholders.

~~Operational risks~~Strategic partnerships play a material role in delivering the Group’s production, cash and market positioning, and these may not always develop as planned.
Joint venture partners may hinder growth by not agreeing to support investment decisions. For non-managed operations, the decisions of the controlling partners may cause adverse impacts to the value of the Group’s interest in the operation or to its reputation and may expose it to unexpected financial liability.
~~Inherent risk~~Health, Safety, Environment and ~~uncertainty~~
~~Potential downside impact (threats)~~
Community (HSEC) risks
~~HSEC risks:~~
Rio Tinto’s operations are inherently hazardous. We lead responsibly to preserve our licence to operate and ensure our employees and contractors go home safe and healthy.
Our operations and projects are inherently hazardous with the potential to cause illness or injury, damage to the environment, disruption to a community or a threat to personal security.
~~Internal risk~~

Failure to manage our health, safety, environment or community risks could result in a catastrophic event or other long-term damage which could in turn harm the Group’s ~~social~~financial performance and licence to operate.
Recognised hazards and threats include, among others, underground operations, aviation, pit slope instability, tailings facilities, process safety, infrastructure, vector-borne and pandemic disease, chemicals, gases, vehicles and machinery, extreme natural environments, endangered flora or fauna, areas of cultural heritage significance, water supply stress and climate change.

Resources ~~risks:~~risks

Rio Tinto invests materially to accurately identify new deposits and develop orebody knowledge, underpinning our operations and projects.
The success of the Group’s exploration activity may vary. In addition, estimates of ore reserves are based on uncertain assumptions that, if changed, could result in the need to restate ore ~~reserves.~~reserves and mine plans.
~~External risk~~
~~Internal risk~~

A failure to discover new viable orebodies could undermine future growth prospects.
The risk that new information comes to light or operating conditions change means that the economic viability of some ore reserves ~~can change~~ and ~~thus the reserves need to~~mine plans can be restated downwards. As a result, projects may be less successful and of shorter duration than initially anticipated, and/or the asset value may be impaired.

Inherent risk and uncertainty	Potential downside impact (threats)
Operations, projects and people ~~risks:~~risks
Rio Tinto seeks to achieve operational and commercial excellence, and to attract and retain the best people in the industry.
~~Commercial~~Operational excellence is derived from high operational and human ~~productivity. Productivity is driven by optimization of the balance of~~productivity, which requires quality people, ~~process~~processes and systems. ~~External risk~~ ~~Internal risk~~	~~Decreased productivity or business~~	Business interruption may arise from a number of circumstances, including: – Operational difficulties such as extended industrial dispute, delayed development, bottlenecks or interruptions to infrastructure for power, water and transportation, throughout the value chain. – Operational failure such as a process safety incident, major pit slope, dump or tailings/water impoundment failure, underground incident. – Cyber breach/incident ~~such as accidental or malicious actions.~~ of commercial and operational systems. – Natural disasters such as earthquakes, subsidence, drought, flood, fire ~~storm~~ and ~~climate change~~storm can impact mines, smelters, refineries and infrastructure installations. Some of these risks are likely to increase through the impact of climate change. Any of these events could result in a significant HSEC incident, an interruption to operations, or the inability to deliver products and a commercial loss.

Attracting and retaining talent as the company and industry evolves presents a constant challenge.
The inability to attract or retain key talent will constrain the Group’s ability to reach its goals within planned timeframes.
Stakeholder risks
~~Compliance risks~~

~~Inherent risk~~Rio Tinto recognises positive engagement with a range of stakeholders, and ~~uncertainty~~
~~Potential downside impact (threats)~~
seeks to develop collaborative and mutually beneficial partnerships though our “partner to operate” strategy.
~~Stakeholder risks:~~
~~Strategic partnerships and third parties influence the Group’s supply, operations and reputation. The Group’s ability to control the actions of these parties varies.~~
~~External risk~~
Joint venture partners may hinder growth by not agreeing to support investment decisions. For non-managed operations, controlling partners may take action contrary to the Group’s interests or standards and policies, resulting in adverse impact to health and safety, performance, reputation or legal liability.
The Group’s operations are located across a number of jurisdictions, which exposes the Group to a wide range of economic, political, societal and regulatory ~~risks.~~environments.
~~External risk~~

Adverse actions by governments and others can result in operational/project delays or loss of licence to operate. Other potential ~~consequences~~actions can include expropriation, ~~nationalisation,~~ changes in taxation, ~~as well as currency~~ and export or foreign investment ~~restrictions.~~restrictions, which may threaten the investment proposition, title, or carrying value of assets. Legal frameworks with respect to policies such as energy, climate change and mineral law ~~and taxation~~ may also change in a way that increases costs.

Governance ~~risks:~~risks

Rio Tinto employees operate in compliance with The way we work – our global code of business conduct, the Group delegation of authorities and all Group policies, standards and procedures.
The Group’s reputation and regulatory licences are dependent upon appropriate business conduct and are threatened by a public allegation of potential misbehaviour or by regulatory investigation.
~~External risk~~
~~Internal risk~~

Fines may be imposed against Group companies for breaching antitrust rules, anti-corruption legislation, sanctions or human rights violations or for other inappropriate business conduct.
A serious allegation or formal investigation by increasingly connected regulatory authorities (regardless of ultimate ~~decision)~~finding) could result in a loss in share price value, and/or loss of business. Other consequences could include the criminal prosecution of individuals, imprisonment and/or personal fines, and fines, legal liabilities and reputational damage to the Group. There may also be considerable cost and disruption in responding to allegations or investigations and related litigation, and in taking remedial action.

ITEM 4. ~~INFORMATION~~INFORMATION ON THE COMPANY

4.A History and development of the company

The information set forth under the headings:

“Shareholder information-Organisational structure” on page ~~236;~~250;

“Shareholder information-History” on page ~~236;~~250;

“Shareholder information-Nomenclature and financial data” on ~~pages 236;~~page 250;

“Shareholder information-Dual listed companies structure” on pages ~~236~~250 and ~~237;~~251;

“Contact details-Registered offices” on page ~~244;~~258;

~~“Product groups-Aluminium” on pages 32 and 33;~~

~~“Product groups-Copper & Coal” on pages 34 and 35;~~

~~“Product groups-Diamonds & Minerals” on pages 36 and 37;~~

“Product groups-Iron Ore” on pages 38 and ~~39;~~39;

“Product groups-Aluminium” on pages 40 and 41;

“Product groups-Copper & Diamonds” on pages 42 and 43;

“Product groups-Energy & Minerals” on pages 44 and 45;

“Growth & Innovation” on pages 46 and 47;

“Directors’ report-Operating and financial review” on ~~page 46;~~pages 106 and 107;

“Sustainable development” on pages 28 to 34 and pages 36 and 37;

“~~Capital allocation-Acquisitions~~Portfolio management-Material acquisitions and divestments” on page ~~31;~~27;

“Portfolio management-Material capital projects” on pages 26 and 27;

•

~~“Capital allocation-Major capital projects (>US$1bn)” on page 30;~~

“Key performance indicators” on pages 814 and 9;17;

“Rio Tinto financial information by business unit” on pages ~~194~~206 to ~~198;~~208;

“Financial statements Note 2-Operating segments” on pages ~~125~~ 131 to ~~127;~~133;

“Financial statements Note 37-Purchases and sales of subsidiaries, joint ventures, associates and other interests in businesses” on page ~~164;~~171; and

“Financial statements Note ~~43-Events~~42-Events after the balance sheet date” on page ~~167~~173

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

In ~~2015~~2017 and ~~2014,~~2016, the Group did not receive any public takeover offers by third parties in respect of Rio Tinto plc shares or Rio Tinto Limited shares or make any public takeover offers in respect of other companies’ shares.

4.B Business overview

The information set forth under the headings:

“Group overview” on pages 2 and 3;

“~~Strategic context”~~Market environment” on page 7;

“Group strategy” on pages 108 and 11;

“Business model” on pages 12 and 13;

~~“Group overview” on pages 2 and 3;~~

“Key performance indicators” on pages 814 and 9;17;

“Product groups-Iron Ore” on pages 38 and 39;

“Product groups-Aluminium” on pages 40 and 41;

“Product groups-Copper & Diamonds” on pages 42 and 43;

“Product groups-Energy & Minerals” on pages 44 and 45;

•

“Growth & Innovation” on pages 46 and 47;

“Financial statements Note 3-Operating segments-additional information” on page ~~128;~~134;

“Directors’ report-Government regulations” on page ~~49;~~109; and

“Directors’ report-Environmental regulations” on page 49109

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934

Section 13(r) to the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires an issuer to disclose in its annual reports, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with the Government of Iran during the period covered by the report. Disclosure is required even where the activities, transactions or dealings are conducted outside the United States by non-U.S. persons in compliance with applicable law, and whether or not the activities are sanctionable under US law. Pursuant to Section 13(r) of the Exchange Act, the company notes the following in relation to activities that took place in 2017, or in relation to activities the company became aware of in 2017 relating to disclosable activities prior to the reporting period.

The company routinely takes action to protect its intellectual property rights in many countries throughout the world, including Iran. In connection with such protection efforts, the company has used, directly or indirectly, patent agent firms with an agent or branch office in Iran to assist with the filing of patent and trade-mark applications, prosecution activities and maintenance in Iran. Contact with the firms has been minimal and solely limited to these activities. Certain transactions related to patents, trademarks and copyright are authorised activities under U.S sanctions against Iran (including the filing of an application to obtain a patent or trade-mark in Iran), and although the company is not a U.S person, it believes its limited activities in this regard are consistent with this authorisation.

Rio Tinto acquired its interest in Namibia-based Rössing Uranium Limited (Rössing) in 1970. The Iranian Foreign Investments Company (IFIC) acquired its original minority shareholding in Rössing in 1975. IFIC’s interest predates the establishment of the Islamic Republic of Iran and the U.S. economic sanctions targeting Iran’s nuclear, energy and ballistic missile programs. IFIC acquired and continues to own a minority shareholding in Rössing in accordance with Namibian law.

Rössing is neither a business partnership nor joint venture between Rio Tinto and IFIC. Rössing is a Namibian limited liability company with a large number of shareholders, including Rio Tinto with 68.62 per cent, IFIC with 15.29 per cent, the Industrial Development Corporation of South Africa with 10.22 per cent, local individual shareholders with a combined interest of 2.45 per cent and the Government of the Republic of Namibia with 3.42 per cent but with an additional 50.07 per cent vote at a general meeting of Rössing on matters of national interest.

As a shareholder in Rössing, Rio Tinto has no power or authority to divest IFIC’s holding in Rössing. However, Rössing and the Namibian Government have taken several recent steps to limit IFIC’s future involvement in Rössing.

On 1 October 2010, Namibia reported to the United Nations, pursuant to Article 31 of the United Nations Security Council Resolution 1929 (UN SCR 1929), that it had reached an agreement with the Islamic Republic of Iran that IFIC will not participate in any future investments nor will it acquire any further shares in Rössing. It was also agreed that the Government of Iran will not acquire interests in any commercial activity in Namibia involving uranium mining, production, or use of nuclear materials and technology, as required under UN SCR1929, until such time as the United Nations Security Council determines that the objectives of the Resolution have been met.

The Rössing board also took steps in 2012 to terminate IFIC’s involvement in the governance of Rössing. As a shareholder in Rössing, IFIC was entitled under Namibian law to attend annual general meetings of Rössing, which they do attend. IFIC was previously represented on the board of Rössing by two directors. While this level of board representation did not provide IFIC with the ability to influence the conduct of Rössing’s business on its own, the Rössing board nonetheless determined that, in light of international economic sanctions, it would be in the best interest of Rössing to terminate IFIC’s involvement in board

activity. Therefore, on 4 June 2012, at the annual general meeting of Rössing, the shareholders of the company, including Rio Tinto, voted not to re-elect the two IFIC board members. This ended IFIC’s participation in Rössing board activities. IFIC accordingly is not represented on the Rössing board, nor does it have the right to attend board meetings or receive any board information.

While IFIC is entitled to its pro rata share of any dividend that the majority of the board may declare for all shareholders in Rössing, IFIC has not received such monies since early 2008. Simply by maintaining its own shareholding in Rössing, Rio Tinto is not engaging in any activity intended or designed to confer any direct or indirect financial support for IFIC. A dividend was declared for 2015 in March 2016 and an interim 2016 dividend declared in August 2016 with approximately US$13.6 million (representing IFC’s portion of the dividends declared in 2016) deposited into a restricted bank account in Namibia held in favour of IFIC since 2008.

Rössing is one of the world’s largest and longest-operating uranium mines. All of the uranium produced by Rössing is sold to Rio Tinto Marketing Pte. Ltd, (doing business as Rio Tinto Uranium), which re-sells this product to electric utilities in North America, Asia and Europe. As a minority shareholder, IFIC has no uranium product off-take rights. Neither IFIC nor other Government of Iran entities have any supply contracts in place with Rössing and nor receive any uranium from Rössing. IFIC also does not have access to any technology through its investment in Rössing or rights to such technology.

While Rio Tinto does not view itself as actively transacting or entering into business dealings with an instrumentality of the Government of Iran, this information has been provided to ensure transparency regarding the passive, minority shareholding in Rössing currently held by IFIC. Rio Tinto has disclosed the IFIC shareholding matter to the United States Government and has periodically updated the U.S. Department of State as to the same.

See below Item 5.A, “Additional financial information-Sales revenue” (Iron Ore, Aluminium, Copper & ~~Coal,~~ Diamonds, Energy & Minerals).

4.C Organizational structure

The information set forth under the headings:

“Shareholder information-Organisational structure” on page 250;

“Financial statements Note 33-Principal subsidiaries” on pages ~~159~~166 to ~~161;~~168;

“Financial statements Note 34-Principal joint operations” on page ~~161;~~168;

“Financial statements Note 35-Principal joint ventures” on ~~pages 162 and 163; and~~page 169;

“Financial statements Note 36-Principal associates” on page 170; and

“Financial statements Note 46-Related undertakings” on pages ~~163 and 164~~183 to 201

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

4.D Property, plant and equipment

The information set forth under the headings:

“Portfolio management-Material capital projects” on page 26 and 27;

•

~~“Capital allocation-Major capital projects (>US$1bn)” on page 30;~~

“Sustainable development” on pages 2228 to ~~28 ;~~

~~“Product groups-Aluminium” on pages 32 and 33;~~

~~“Product groups-Copper & Coal” on pages~~ 34 and ~~35;~~

~~“Product groups-Diamonds & Minerals” on~~ pages 36 and 37;

“Key performance indicators” on pages 14 and 17;

“Product groups-Iron Ore” on pages 38 and 39;

“~~Directors’ report-Environmental regulations”~~Product groups-Aluminium” on ~~page 49;~~pages 40 and 41;

“Product groups-Copper & Diamonds” on pages 42 and 43;

“Product groups-Energy & Minerals” on pages 44 and 45;

“Growth & Innovation” on pages 46 and 47;

•

“Directors’ report-Environmental regulations” on page 109;

“Directors’ report-Greenhouse gas emissions” on page ~~50;~~109;

“Metals and minerals production” on pages ~~213~~224 to ~~216;~~227;

“Ore reserves” on pages ~~217~~228 to ~~226;~~237 and page 239;

“Mines and production facilities” on pages ~~228~~242 to ~~235;~~249; and

“Financial statements Note 14-Property, plant and equipment” on ~~pages 137 and 138~~page 143

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

ITEM 4A. UNRESOLVED STAFF COMMENTS

As far as the Group is aware, there are no unresolved written comments from the SEC staff regarding its periodic reports under the Exchange Act received more than 180 days before 31 December ~~2015.~~2017.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

5.A Operating results

The information set forth under the headings:

~~“Product groups-Aluminium” on pages 32 and 33;~~

~~“Product groups-Copper & Coal” on pages 34 and 35;~~

~~“Product groups-Diamonds & Minerals” on pages 36 and 37;~~

“Product groups-Iron Ore” on pages 38 and 39;

“Product groups-Aluminium” on pages 40 and 41;

“Product groups-Copper & Diamonds” on pages 42 and 43;

“Product groups-Energy & Minerals” on pages 44 and 45;

“Sustainable development” on pages 2228 to ~~28;~~34 and pages 36 and 37;

~~“Financial overview” on page 42;~~

“Directors’ report-Government regulations” on page ~~49;~~109;

“Directors’ report-Environmental regulations” on page ~~49;~~109; and

“Financial statements Note 30-Financial instruments and risk management” on pages ~~147~~153 to ~~156~~162

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

5A5.A Operating results continued

Additional Financial Information

~~2015~~

2017 financial performance compared with ~~2014~~2016

In order to provide additional insight into the performance of our business, Rio Tinto presents underlying earnings, which is defined in ~~financial~~“Financial statements Note 2 ~~“Operating~~- Operating segments” on pages ~~125~~131 to ~~127~~133 of the Annual Report ~~2015.~~2017.

~~2015~~

2017 underlying earnings of US$~~4,540 million~~8.6 billion and net ~~losses~~earnings of US$~~866 million~~8.8 billion were US$~~4,765 million below~~3.5 billion above and US$~~7,393 million below~~4.1 billion above the comparable measures for the previous year respectively ~~(2014~~(2016 underlying earnings of US$~~9,305 million~~5.1 billion and net earnings of US$~~6,527 million~~4.6 billion were US$~~912 million below~~0.6 billion above and US$~~2,862 million~~5.5 billion above the comparable measures for the previous year respectively). Both net earnings and underlying earnings represent amounts attributable to owners of Rio Tinto. International Financial Reporting Standards (IFRS) requires that the profit/(loss)~~/profit~~ for the period reported in the income statement should also include earnings/(losses)~~/earnings~~ attributable to non-controlling interests in subsidiaries. Underlying earnings is reconciled to net earnings/(losses)~~/earnings~~ in the table below, which also lists the principal factors driving the movement in underlying earnings between periods.


			~~2015~~ 2017 vs ~~2014~~
		~~US$m~~				~~US$m~~		2016
~~2014~~	US$m	US$m
2016 Net earnings	4,617		~~6,527~~
Items excluded from underlying earnings^(a)	483		~~2,778~~
	2016 Underlying earnings		5,100
~~2014 Underlying earnings~~							~~9,305~~
Prices	4,107		~~(7,695~~	)
Exchange rates	(294)		~~2,007~~
Volumes	114		~~132~~
General cost inflation	(240)		~~(185~~	)
Energy	(125)		~~359~~
~~Lower~~Operating cash ~~costs~~cost improvements	373		~~833~~
~~Lower exploration and evaluation costs~~One-off items	(257)		~~120~~
Tax / non-cash / interest / other			~~(336~~	)
		(151)
Total changes in underlying earnings^(a)							~~(4,765~~	) 3,527
					2017 Underlying earnings		8,627
~~2015 Underlying earnings~~							~~4,540~~
Impairment charges	(481)		~~(1,802~~	)
~~Net gains and loss~~Gains/ losses on consolidation and disposal of interests in businesses	2,022		48
Exchange differences and movements on derivatives			~~(3,282~~	)
~~Restructuring costs from global headcount reductions~~			~~(258~~	)
~~Increased closure provision for legacy operations~~			~~(233~~	)
~~Recognition of deferred tax assets relating to planned divestments~~			~~234~~
~~Impact of pit wall slide at Rio Tinto Kennecott~~			18
~~QMM IFRS 2 charge~~			~~(11~~	)
~~Other exclusions~~			~~(120~~	)
		(810)
Changes in corporate tax rates in the US and France	(439)
Receipt of Rio Tinto Kennecott insurance claim	45
Adjustment to deferred tax relating to expected divestments	(202)
Total excluded in arriving at underlying earnings							~~(5,406~~	) 135
					2017 net earnings		8,762
~~2015 net loss~~							~~(866~~	)
~~Loss~~Profit attributable to non-controlling interests							~~(853~~	) 89
					Profit for the year		8,851

~~Loss for the year~~							~~(1,719~~	)
						(a)

~~(a)~~

Earnings contributions from Group businesses and business segments are based on underlying earnings. Amounts excluded from net earnings in arriving at underlying earnings are described in ~~financial~~“Financial statements Note 2 ~~“Operating~~- Operating segments”~~(c) and (d)~~ on ~~pages 126 and 127~~page 131 of the Annual Report ~~2015.~~2017.

Prices

~~Prices~~

The effect of price movements on ~~all major~~the Group’s commodities in ~~2015~~2017 was to ~~decrease~~increase underlying earnings by US$~~7,695 million~~4.1 billion compared with ~~2014.~~ 2016.

The largest contributors to this increase were: iron ore (US$1.9 billion), aluminium including related products (US$1.0 billion), copper (US$0.5 billion), Coking coal (US$0.3 billion) and other coal products including thermal coal (US$0.3 billion).

The Platts price for 62 per cent iron Pilbara fines was 4320 per cent ~~lower~~higher on average compared with ~~2014 while~~2016. Achieved average pricing in 2017 was US$59.6 per wet metric tonne on an FOB basis (2016: US$49.3 per wet metric tonne). This equates to US$64.8 per dry metric tonne (2016: US$53.6 per dry metric tonne), which compares with the average FOB Platts price of US$64.1 per dry metric tonne for 62 per cent iron Pilbara fines (2016: US$53.6 per dry metric tonne).

For Aluminium, the Group achieved an average realised aluminium price of US$2,231 per tonne in 2017 (2016: US$1,849 per tonne). This included premia for value-added products (VAP), which represented 57 per cent of primary metal sold in 2017 (2016: 54 per cent) and generated attractive product premia averaging US$221 per tonne of VAP sold (2016: US$223 per tonne) on top of the physical market premia.

The average price of copper increased from 221 US cents per pound to 281 US cents per pound.

Realised hard coking coal ~~benchmark~~ prices were 1942 per cent ~~lower~~higher on average compared with 2016 and realised thermal coal ~~spot~~ prices averaged 1632 per cent ~~lower. Average copper and gold prices were down 20 and eight per cent respectively, while London Metal Exchange (LME) aluminium prices averaged 11 per cent lower.~~higher.

Exchange rates

Compared with ~~2014,~~2016, the US dollar, on average, ~~in 2015, was stronger~~weakened by 14one per cent against the Canadian dollar, ~~and South African rand and~~weakened by 16four per cent against the Australian ~~dollar.~~dollar and by ten per cent against the South African rand. The effect of all currency movements was to ~~increase~~decrease underlying earnings relative to ~~2014~~2016 by US$~~2,007 million.~~0.3 billion.

Volumes

~~Volumes improved~~

Movements in sales volumes increased earnings by US$~~132 million~~0.1 billion compared with ~~2014. Increased volumes~~2016. The main contributors were ~~achieved primarily in~~higher iron ore ~~following the increase in capacity at~~shipments from the Pilbara, ports and mines, and in bauxite, from record production at Weipa and the ramp-up at Gove. These offset volume declines in copper, mainly at Rio Tinto Kennecott where the focus on de-weighting and de-watering the east wall of Bingham Canyon continued, anda 20 per cent increase in titanium dioxide ~~feedstocks, where production was aligned with market demand.~~slag feedstock sales volumes and a six per cent rise in bauxite sales.

Energy

~~Lower~~

Higher input energy prices during the ~~period improved~~year reduced underlying earnings by US$~~359 million~~0.1 billion compared with ~~2014 mainly~~2016 in part related to oil, where the average price ~~fell~~rose approximately 5023 per cent, ~~year on year to an average~~averaging US$5254 per barrel during ~~2015.~~2017.

Cash costs, exploration and evaluation

Rio Tinto ~~made further strong progress on~~continued to realise considerable savings from its cost reduction programme, delivering US$0.6 billion pre-tax (underlying earnings impact of US$0.4 billion) comprised of operating cash cost improvements* (US$0.5 billion pre-tax) and ~~had, as of 31 December 2015,~~reductions in exploration and evaluation cash expenditure (US$48 million pre-tax) in 2017, meeting its US$2.0 billion target over 2016 and 2017 six months earlier than scheduled. The Group has now achieved US$~~6.2~~8.3 billion pre-tax (US$~~4.3~~5.9 billion post-tax) in total operating cash cost improvements and reductions in exploration and evaluation expenditure compared with the 2012 base. These savings were achieved against a backdrop of rising raw materials costs, in particular for the Aluminium industry.

In 2015, the Group realised US$1.3 billion pre-tax (US$1.0 billion post-tax) in operating cash cost savings and reductions in exploration and evaluation expenditure. This was in addition to the US$4.8 billion pre-tax (US$3.3 billion post-tax) achieved in aggregate in 2013 and 2014.

The Group continued to ~~refine~~optimise its expenditure on exploration and evaluation, ~~expenditure, building on the savings achieved in 2014 whilst~~ progressing the highest ~~priority~~value projects.

* Operating cash cost improvements represent the difference between the current and prior year full cash cost of sales per unit based on the prior year volume sold. This financial performance indicator is used by management internally to assess performance and therefore is considered relevant to users of the accounts.

One off items

Group one-off items of US$0.3 billion included in underlying earnings primarily relate to the impact of the strike at Escondida in the first half of 2017 which resulted in lower volumes and higher unit costs compared with 2016. In ~~2015, approximately six per cent~~addition there was a deferred tax asset write-down at Grasberg. These were partly offset by receipt of ~~this expenditure was incurred by Iron Ore, two per cent by Aluminium, 38 per US cent by Copper & Coal, 23 per cent by Diamonds & Minerals and~~ the ~~remainder by central exploration on greenfield programmes.~~final insurance settlement relating to the Manefay slide at Kennecott in 2013.

Tax / non-cash / interest / other

The ~~2015~~2017 effective corporate income tax rate on underlying earnings, excluding equity accounted units, was 2728 per cent compared with 2822 per cent in ~~2014.~~2016. The ~~decreased~~higher tax rate in 2017 primarily reflected increased profit in Australia and the impact of a deferred tax asset write-down relating to Grasberg while the lower rate in 2016 was ~~principally attributable~~due to the ~~absence~~recognition of ~~the Australian Minerals Resource Rent Tax (MRRT) which was repealed~~a deferred tax asset in ~~the second half~~Mongolia. The effective tax rate on underlying earnings in Australia remained at 30 per cent. The Group expects an effective tax rate on underlying earnings of ~~2014.~~approximately 30 per cent in 2018.

The Group interest charge (net of ~~tax)~~tax and non-controlling interests) of US$~~389 million increased~~0.4 billion was US$0.2 billion lower than 2016 due to the lower level of net debt and an increase in capitalised interest. The interest charge included US$0.2 billion of early redemption costs from bond repurchases in 2017 when the Group successfully completed a US$2.5 billion bond tender and redemption exercise which reduced gross debt. In 2016, similar exercises reduced gross debt by US$~~228 million compared~~7.5 billion, with ~~2014, following completion~~early redemption costs of ~~some major capital projects in~~US$0.2 billion. Since the ~~first half~~start of ~~2015. Interest is capitalised during~~2016, the ~~construction period. In 2015,~~Group has reduced the nominal value of outstanding bonds from approximately US$~~254 million of interest was capitalised, compared with~~21 billion to around US$~~470 million in 2014.~~

9.5 billion.

~~2014~~

2016 financial performance compared with ~~2013~~2015

2016 underlying earnings of US$5.1 billion and net earnings of US$4.6 billion were US$0.6 billion above and US$5.5 billion above the comparable measures for the previous year respectively (2015 underlying earnings of US$4.5 billion and net losses of US$0.9 billion were US$4.8 billion below and US$7.4 billion below the comparable measures for the previous year respectively). Both net earnings and underlying earnings represent amounts attributable to owners of Rio Tinto. International Financial Reporting Standards (IFRS) requires that the profit/(loss) for the period reported in the income statement should also include earnings/(losses) attributable to non-controlling interests in subsidiaries. Underlying earnings is reconciled to net earnings/(losses) in the table below, which also lists the principal factors driving the movement in underlying earnings between periods.

	2016 vs 2015
		~~2014 vs 2013~~
		~~US$m~~				~~US$m~~
~~2013~~	US$m		US$m
2015 Net ~~earnings~~loss	(866	)	~~3,665~~
Items excluded from underlying earnings^(a)			~~6,552~~
	5,406
2015 Underlying earnings
~~2013 Underlying earnings~~4,540							~~10,217~~
Prices	(460	)	~~(4,146~~	)
Exchange rates	49		~~691~~
Volumes	19		~~1,431~~
General cost inflation ~~and energy~~	(158	)	~~(251~~	)
~~Other~~Energy	25
Lower cash costs	1,124		~~958~~
~~Exploration~~Lower exploration and evaluation costs			~~217~~
~~Disposal/write-down of exploration properties~~97			~~101~~
Tax / non-cash / ~~interest/tax~~interest / other	(136		87
	)
Total changes in underlying earnings^(a)							~~(912~~	)
								(560	)
~~2014~~2016 Underlying earnings			5,100				~~9,305~~
Impairment charges ~~net of reversal~~	(183	)	~~(138~~	)
Net gains and ~~losses~~loss on ~~consolidation and~~ disposal of interests in businesses	382		~~(349~~	)
Exchange differences and movements on derivatives	536		~~(1,850~~	)
Restructuring costs from global headcount reductions	(177	)	~~(82~~	)
~~Mineral Resources Rent Tax (MRRT) repeal~~Onerous port and rail contracts	(329	)	~~(362~~	)
~~Gain on disposal of the Group’s St James’s Square properties~~Tax provision	(380	)	~~356~~
~~Simandou IFRS 2 charge~~Increased closure provision for legacy operations	(282	)	~~(116~~	)
Other exclusions	(50		~~(237~~	)

Total excluded in arriving at underlying earnings			(483				~~(2,778~~	)
					2016 net earnings			4,617
~~2014 Net earnings~~							~~6,527~~
~~- Attributable~~Profit attributable to non-controlling interests							~~(28~~	)
								159
Profit for the year							~~6,499~~
								4,776

~~(a)~~

Earnings contributions from Group businesses and business segments are based on underlying earnings. Amounts excluded from net earnings in arriving at underlying earnings are described in financial statements Note 2 “Operating segments”(c) and (d) on pages 126 and 127 of the Annual Report 2015.

Prices

~~The~~

Most commodity prices increased for the first time in a number years in the second half of 2016, despite numerous political and macro shocks to the global economy. However, the effect of all price movements on ~~all major~~the Group’s commodities in ~~2014~~2016 was to decrease underlying earnings by US$~~4,146 million~~0.5 billion compared with ~~2013.~~2015.

Major positive price variances were seen in iron ore (US$0.2 billion), coal (US$0.1 billion) and gold (US$32 million).

Iron ore prices started 2016 at US$43 per dry metric tonne cost and freight (CFR) and ended the year around US$80 per tonne. The average ~~Platts~~realised price for 62iron ore was up approximately 2% to US$49.3 per ~~cent iron Pilbara fines was 31~~wet metric tonne (FOB), from US$48.4 per ~~cent lower compared with 2013, and hard~~wet metric tonne (FOB) in 2015.

Hard coking coal benchmark prices 21were 12 per cent ~~lower,~~higher on average compared with 2015 and thermal coal spot prices 17averaged seven per cent ~~lower. Average~~higher. Hard coking coal prices almost quadrupled to US$310

per tonne from January to November 2016. The thermal coal market was also affected, with prices doubling to US$110 per tonne FOB Newcastle. Prices have since moderated.

These commodity price gains were more than offset by lower average prices for copper and ~~gold prices~~aluminium which were down ~~six~~11 and ~~ten~~three per cent respectively ~~whilst~~year-on-year, and a significant drop in market premia for aluminium in all regions, which fell from their record highs in early 2015.

Aluminium had a negative price variance of US$0.5 billion. Average London Metal Exchange (LME) ~~aluminium~~ prices ~~averaged one~~decreased three per cent ~~higher.~~year on year, and lower market and product premia resulted in the average realised price per tonne decreasing from US$2,058 in 2015 to US$1,849 in 2016.

Copper contributed US$0.1 billion to the negative price variance. Additionally lower prices across industrial mineral and Molybdenum contributed US$0.1 billion to the negative price variance.

Exchange rates

Compared with ~~2013,~~2015, the US dollar, on average, ~~in 2014, was stronger~~strengthened by ~~seven~~three per cent against ~~both~~the Canadian dollar, by one per cent against the Australian ~~and Canadian dollars~~dollar and by 1314 per cent against the South African rand. The effect of all currency movements was to increase underlying earnings relative to ~~2013~~2015 by US$~~691~~49 million.

Volumes

~~Volumes enhanced~~

Movements in sales volumes increased earnings by US$~~1,431~~19 million compared with ~~2013. These~~2015. There were ~~achieved primarily~~volume gains in iron ore, ~~where, for a second consecutive year, a new annual sales volume record was achieved~~ following the increase in capacity at the Pilbara ports and mines, ~~combined with productivity improvements. Volumes also rose~~in bauxite, from increased production at all four mines, and in aluminium following record production at ten smelters. These were mostly outweighed by lower sales volumes in copper, ~~following~~gold and molybdenum.

Energy

Lower input energy prices during the ~~recovery at Rio Tinto Kennecott from~~year improved underlying earnings by US$25 million compared with 2015 in part related to oil, where the ~~Bingham Canyon pit wall slide, in addition to higher ore grades and increased throughput, and at Oyu Tolgoi as shipments outpaced production.~~price fell approximately 16 per cent year-on-year, averaging US$44 per barrel during 2016.

Cash costs, exploration and evaluation

Rio Tinto ~~made further strong progress on~~continued to realise considerable savings from its cost reduction programme, ~~and had, as at 31 December 2014, achieved~~delivering US$~~4.8~~1.6 billion pre-tax (US$~~3.3 billion post-tax) in total operating cash cost improvements and reductions in exploration and evaluation expenditure compared with the 2012 base.~~

~~In 2014, the Group realised US$~~1.2 billion post ~~tax~~tax) in operating cash cost savings and reductions in exploration and evaluation ~~spend. This~~expenditure in 2016.

The Group continued to optimise its expenditure on exploration and evaluation, progressing the highest value projects. In 2016, approximately 41 per cent of this expenditure was ~~in addition to~~incurred by central exploration, 25 per cent by Copper & Diamonds, 25 per cent by Energy & Minerals and the ~~US$2.1 billion post-tax achieved in 2013.~~remainder by Aluminium and Iron Ore.

Tax / non-cash / interest / other

The ~~2014~~2016 effective corporate income tax rate on underlying earnings, excluding equity accounted units, was 2822 per cent compared with 3527 per cent in ~~2013.~~2015. The ~~decreased~~lower effective tax rate in 2016 was ~~primarily attributable~~largely due to the ~~repeal~~recognition of ~~MRRT~~a deferred tax asset in Mongolia. Excluding this item, the ~~second half of 2014 and the absence of prior year~~effective tax ~~provisions.~~rate in 2016 was 26 per cent. The effective tax rate in Australia remained at 30 per cent.

The Group interest charge (net of tax) of US$0.6 billion increased by US$0.2 billion compared with 2015, following completion of some major capital projects in 2015 (interest is capitalised during the construction period of a project) and US$0.2 billion of early redemption costs from bond repurchases in 2016. In 2016, US$0.1 billion of interest was capitalised, compared with US$~~81 million lower than~~0.3 billion in ~~2013, mainly reflecting the reduction in net debt during 2014.~~2015.

~~In 2013, there was a US$128 million charge to earnings from an iron ore royalty payable to joint venture partners following a court decision. There was no such charge in 2014.~~

Exclusions from underlying earnings ~~2013-2015~~2015-2017

	2017		2016		2015
	US$m		US$m		US$m
Impairment charges	(481	)	(183	)	(1,802	)
Gains/(losses) on disposal of interests in businesses	2,022		382		48
Exchange differences and movements on derivatives	(810	)	536		(3,282	)
Changes in corporate tax rates in the US and France	(439	)	-		-
Rio Tinto Kennecott insurance settlement	45		-		18
Adjustment to deferred tax assets relating to expected divestments	(202	)	-		-
Restructuring costs including global headcount reductions	-		(177	)	(258	)
Increased closure provision for non-operational and legacy operations	-		(282	)	(233	)
Onerous port and rail contracts	-		(329	)	-
Tax provision	-		(380	)	-
Recognition of deferred tax assets relating to planned divestments	-		-		234
Simandou and QIT Madagascan Minerals IFRS 2 charge	-		-		(11	)
Other exclusions	-		(50	)	(120	)
Total excluded in arriving at underlying earnings	135		(483	)	(5,406	)

   2015    2014    2013
   US$m    US$m    US$m
Impairment charges
   (1,802 )    (1,187 )    (3,428 )
Impairment reversals
   —         1,049       —
Gains and losses on consolidation and disposal of interests in businesses
   48       (349 )    847
Exchange differences and movements on derivatives
   (3,282 )    (1,850 )    (2,731 )
Restructuring costs including global headcount reductions
   (258 )    (82 )    (367 )
Increased closure provision for legacy operations
   (233 )    —         —
Recognition of deferred tax assets relating to planned divestments
   234       —         —
Mineral Resources Rent Tax repeal
   —         (362 )    —
Gain on sale of the Group’s properties at St James’s Square
   —         356       —
Impact of pit wall slide at Rio Tinto Kennecott
   18       —         (283 )
Adjustments to Clermont/Blair Athol on reclassification to disposal groups held for sale
   —         —         (173 )
Deferred tax asset write-off
   —         —         (114 )
Simandou and QMM IFRS 2 charge
   (11 )    (116 )    —
Other exclusions
   (120 )    (237 )    (303 )






Total excluded in arriving at underlying earnings
   (5,406 )    (2,778 )    (6,552 )

2017

Impairment charges of US$481 million (post-tax) were recognised in 2017, relating primarily to the carrying values of the Roughrider uranium deposit in Canada, the Rössing uranium mine in Namibia and the Argyle diamond mine in Australia. Roughrider’s recoverable amount was determined to be nil following a decision in the first half of 2017 to cease further expenditure on the project. Rössing was impaired due to oversupply in the uranium market resulting in structural changes to forecast prices, while the impairment at Argyle was attributable to lower production volumes, a smaller than expected contribution from productivity improvements and lower realised prices.

Net gains on disposal of interests in businesses of US$2,022 million primarily related to the sale of the Coal & Allied thermal coal business which completed on 1 September 2017.

Non-cash exchange and derivative losses in 2017 of US$810 million arose primarily on US dollar debt in non-US dollar functional currency Group companies, intragroup balances, and on the revaluation of certain derivatives which do not qualify for hedge accounting. These exchange losses were in contrast to net exchange and derivative gains in 2016 of US$536 million, giving rise to a negative period-on-period movement of US$1,346 million. The exchange losses are largely offset by currency translation gains recognised in equity and the quantum of US dollar debt, which will be repaid from US dollar sales receipts and US dollar divestment proceeds, is therefore largely unaffected.

Deferred tax assets have been remeasured to reflect lower corporate income tax rates in the US and France as a results of tax legislation changes. Deferred tax assets have also been derecognised as a result of revised profit forecasts in France due to expected divestments.

In 2017, the Group received the final settlement on the insurance claims related to the 2013 pit-wall slide at Rio Tinto Kennecott of US$233 million pre-tax (US$146 million post-tax). Part of the settlement, US$73 million pre-tax (US$45 million post-tax), has been excluded from underlying earnings in line with the treatment of associated costs incurred from 2013 to 2015.

2016

Impairment charges during the year ended 31 December 2016 primarily related to the Argyle diamond mine in Western Australia. An impairment trigger assessment at the Argyle diamond mine cash-generating unit resulted in the identification of impairment indicators as a result of lower production volumes compared with forecast and the lower prices achieved for bulk diamonds. The reduction in the recoverable amount resulted in a pre-tax impairment charge of US$241 million to property, plant and equipment and intangible assets.

Net gains on disposal of interests in businesses in 2016 related mainly to the sale of Rio Tinto’s 40 per cent interest in the Bengalla Joint Venture on 1 March 2016 and the sale of the Lochaber assets in Scotland on 23 November 2016. This was partially offset by a loss on disposal of the 100 per cent interest in Carbone Savoie on 31 March 2016.

Net exchange gains in 2016 comprised post-tax foreign exchange gains of US$123 million principally on external US dollar denominated net debt in non-US dollar functional currency companies (on borrowings of approximately US$17.6 billion), and US$393 million of gains on intragroup balances mainly as the Canadian dollar strengthened against the US dollar compared to 31 December 2015. The Group took further steps during 2016 to reduce the income statement exposure on retranslation of intragroup balances. The remaining US$20 million related to valuation changes on commodity, currency and interest rate derivatives which are ineligible for hedge accounting.

A review of the infrastructure capacity requirements in Queensland, Australia, confirmed that it was no longer likely that Rio Tinto would utilise the Abbot Point Coal Terminal and associated rail infrastructure capacity contracted under take or pay arrangements. On 31 October 2016, an agreement was reached with Adani, the owner of the port, to relinquish that capacity. Accordingly, an onerous contract provision was recognised based on the net present value of expected future cash flows for the port and rail capacity discounted at a post-tax real rate of two per cent, resulting in a post-tax onerous contract charge of US$329 million.

Tax provision includes amounts provided for specific tax matters for which the timing of resolution and potential economic outflow are uncertain. During 2016 a provision was made in relation to matters under discussion with the Australian Taxation Office (ATO) relating to the transfer pricing of certain transactions between Rio Tinto entities based in Australia and the Group’s commercial centre in Singapore for the period since 2009.

The increase in closure provision (non-operating sites) related to the Gove alumina refinery in Northern Territory, Australia where operations have been curtailed since May 2014. The provision was updated based on the current cost estimates from the studies. Future revisions to the closure cost estimate during the study periods (including the next stage of feasibility study) will continue to be excluded from underlying earnings as the site operating assets have been fully impaired.

2015

Total impairment charges of US$1,802 million (post-tax) were recognised in 2015. On 26 May 2014, Rio Tinto and its Simandou iron ore project partners signed an Investment Framework with the Government of Guinea which provided the legal and commercial foundation for the project and formally separated the infrastructure and mine development plan. The Simandou project partners ~~are currently~~were finalising an integrated Bankable Feasibility Study (BFS) for the mine, port and infrastructure elements of the project, which iswas scheduled to be submitted to the Government of Guinea in May 2016. As a result of current market conditions and uncertainty over infrastructure ownership and funding at that time, the Group ~~has~~ determined that it ~~would be~~was appropriate to record a non-cash impairment charge of US$1,118 million (net of non-controlling interests and tax).

On 11 June 2015, Rio Tinto announced that it supported Energy Resources of Australia Ltd’s (ERA) decision not to proceed with the final Feasibility Study of the Ranger 3 Deeps project. Rio Tinto also determined it did not support any further study or future development of Ranger 3 Deeps due to the project’s economic challenges. This resulted in a write down to property, plant and equipment, intangible assets and deferred tax assets to fully write off these long-term assets. ~~Total~~The total impairment charge recognised was a non-cash charge of US$262 million (net of non-controlling ~~interest~~interests and tax).

In late 2015, Rio Tinto completed an Order of Magnitude study on the Roughrider uranium project in Canada. This led to the Group recognising a post-tax impairment charge of US$199 million relating to goodwill and intangible assets.

Other impairment charges during the year reflect challenging economic conditions at business units in the Group’s Aluminium and Copper & ~~Coal~~Diamonds product groups.

Non-cash exchange and derivative losses of US$3,282 million (post-tax) arose primarily on US dollar debt in non-US dollar functional currency Group companies, intragroup balances, and on the revaluation of certain derivatives which do not qualify for hedge accounting.

During 2015, the Group incurred US$258 million (post-tax) of restructuring costs associated with its ongoing costs reduction programme.

A post-tax charge of US$233 million ~~has been~~was recognised for the remediation of legacy properties, including the Holden Mine in ~~Washington State.~~the US.

~~2014~~

Impairment charges of US$1,187 million (net of tax and non-controlling interests) were recognised in 2014 and related to the Group’s aluminium business, US$840 million, and the Group’s copper businesses, US$347 million.

The Group’s copper business impairment charge resulted from a review of the investment case for the Molybdenum Autoclave Process project in Utah, USA which concluded that the project, which had been on care and maintenance since early 2013, would be terminated. The recoverable amount was determined based on anticipated net disposal proceeds. As a result, a post-tax impairment charge of US$347 million was recorded against property, plant and equipment.

During the first half of 2014, further revisions to future capital required to complete the modernisation project at Kitimat in British Columbia, and related impacts on the project, led to a reduction in the recoverable value of the Kitimat cash-generating unit. Additional capital of US$1.5 billion was approved by the Board in August 2014, taking the total approved capital cost of the project to US$4.8 billion. The reduction in the recoverable amount resulted in a post-tax impairment charge of US$800 million to property, plant and equipment. Other post-tax impairment charges during 2014, related to the Group’s Aluminium business, were US$40 million.

The above impairment charges were largely offset by the reversal of previously booked impairments on other non-current assets in the Group’s aluminium business, due to significant cost improvements and high regional and product premiums. This resulted in a post-tax impairment reversal of US$460 million recorded against the property, plant and equipment of Tomago, Bell Bay and Gladstone Power Station and a post-tax impairment reversal of US$589 million relating to Boyne Smelters recorded against investments in equity accounted units. The recoverable amount of the assets is greater than the amount at which these assets would have been carried, net of depreciation, had no impairment loss been recognised in prior periods and therefore the impairment reversal is based on the latter amount.

Net losses on disposal and consolidation of interests in businesses during 2014 mainly related to the Group’s divestment of Rio Tinto Coal Mozambique, the Clermont Joint Venture and the transfer of Alucam to the Government of Cameroon.

~~Non-cash exchange and derivative losses of US$1,850 million arose primarily on US dollar debt in non-US dollar functional currency Group companies, and on intragroup balances.~~

~~The remaining MRRT starting base deferred tax asset was derecognised on repeal of the tax in Australia, effective 30 September 2014.~~

~~A gain of US$356 million net of tax was recognised on the disposal of the Group’s St James’s Square properties in London, UK.~~

~~2013~~

Total impairment charges of US$3,428 million (net of tax and non-controlling interests) were recognised in 2013, of which US$2,125 million related to the Group’s copper and coal businesses. This included a charge of US$1,565 million related to the impairment of certain assets of Turquoise Hill (including Oyu Tolgoi). On 29 July 2013, Rio Tinto announced that funding and work on the underground development would be delayed pending resolution of outstanding shareholder issues, including finalising project finance. The consequent impact of updates to timing of revenues and expenditure resulted in the carrying value being higher than fair value less costs of disposal (FVLCD).

~~Impairments to the Group’s copper businesses also included adjustments to reduce the carrying value of the Eagle nickel-copper project to FVLCD prior to divestment on 17 July 2013.~~

A post-tax impairment charge of US$470 million relating to Rio Tinto Coal Mozambique (RTCM) was recognised. An assessment of FVLCD derived from future cash flows, which included a reassessment of the development plan and review of the discount rate and associated country risk premium, resulted in the recoverable value being below carrying value. Other impairments included the impact of medium and long-term coking and thermal coal prices on non-cash fair value acquisition adjustments to undeveloped projects at SouthGobi Resources, and adjustment to the carrying value of Inova Resources, which was sold on 1 November 2013.

In addition, there was a post-tax impairment of US$1,293 million relating to the Group’s aluminium businesses. This included US$555 million for the Gove refinery, following an announcement on 29 November 2013 to suspend alumina production and focus on the bauxite operation. As a result of this decision, the timing and scope of site restoration and environmental rehabilitation cash flows were revised, together with the write-off of operating assets not fully depreciated. The remaining post-tax charge of US$738 million related to the Group’s Canadian aluminium operations, primarily at Kitimat in British Columbia, resulting from a change in assumptions about future capital required to complete the modernisation project, which diminished the value of the associated intangible assets, and another site closure within the Aluminium portfolio.

Net gains on disposal of interests in businesses during 2013 mainly related to the Group’s divestment of its remaining interest in Constellium (formerly Alcan Engineered Products) and the Northparkes mine.

~~Non-cash exchange and derivative losses of US$2,731 million arose primarily on US dollar debt in non-US dollar functional currency Group companies, and on intragroup balances.~~

Rio Tinto Kennecott’s Bingham Canyon mine experienced a slide along a geological fault line of its north-eastern wall in April 2013. Charges relating to the slide, which were excluded from underlying earnings, primarily comprised the write-off of certain deferred stripping assets and damaged equipment. Adjustments for settlement of insurance claims were made to the amount excluded from underlying earnings, and were forecast to continue as insurance claims settled.

Adjustments in relation to Clermont and Blair Athol arose following reclassification to disposal groups held for sale, and reflected contractual obligations for product sales and funding of closure activities, which would remain with the Group following completion of the divestments.

Group financial results by product group ~~2013-2015~~2015-2017

   2015    2014    2013
   US$m    US$m    US$m
Iron Ore
   3,952       8,107       9,858
Aluminium
   1,118       1,248       557
Copper & Coal
   274       831       965
Diamonds & Minerals^(a)
   189       269       237
Other operations
   (88 )    (240 )    (279 )
Inter-segment transactions
   —         —         (4 )
Other items
   (375 )    (593 )    (730 )
Exploration and evaluation
   (141 )    (156 )    (145 )
Net interest
   (389 )    (161 )    (242 )






Group underlying earnings
   4,540       9,305       10,217
Exclusions from underlying earnings
   (5,406 )    (2,778 )    (6,552 )






Net (loss)/earnings
   (866 )    6,527       3,665

	2017		2016		2015
	US$m		US$m		US$m
Iron Ore	6,692		4,611		3,940
Aluminium	1,583		947		1,118
Copper & Diamonds	263		(18	)	370
Energy & Minerals^(a)	1,242		612		177
Other operations	(138	)	(88	)	(90	)
Other items	(483	)	(241	)	(375	)
Exploration and evaluation	(178	)	(147	)	(211	)
Net interest	(354	)	(576	)	(389	)
Group underlying earnings	8,627		5,100		4,540
Exclusions from underlying earnings	135		(483	)	(5,406	)
Net earnings/(loss)	8,762		4,617		(866	)

(a)	Includes the Simandou iron ore project in Guinea ~~which is the responsibility~~and Iron Ore Company of ~~the Diamonds & Minerals product group chief executive.~~Canada.

Sales Revenue

Consolidated sales revenue for 2017 of US$40.0 billion was US$6.2 billion or 18% higher than the prior period. Gross sales revenue (including the sales revenue of equity accounted units on a proportionately consolidated basis, after adjusting for sales to subsidiaries) increased from US$35.3 billion to US$41.9 billion. Rio Tinto’s sales revenue continues to be predominantly attributable to iron ore and Aluminium.

Prices

2015    2014    2013
Commodity

Source

Unit

US$

US$

US$

Average prices

Iron ore 62% Fe Fines FOB

Platts Index less Baltic Exchange Freight Rate
   dmt ^(a) 56       88       126
Aluminium

LME^(b)
   Tonne    1,661       1,867       1,845
Copper

LME
   Pound    2.49       3.10       3.33
Gold

LBMA
   Ounce    1,160       1,266       1,410
Closing prices (quoted commodities only)

Aluminium
      Tonne    1,500       1,825       1,755
Copper
      Pound    2.13       2.89       3.35
Gold
      Ounce    1,061       1,184       1,208

			2017	2016	2015
Commodity	Source	Unit	US$	US$	US$
Average prices
Iron ore 62% Fe Fines FOB	Platts Index less Baltic Exchange Freight Rate	dmt^(a)	64.1	54	56
Aluminium	LME^(b)	Tonne	1,969	1,605	1,661
Copper	LME	Pound	2.81	2.21	2.49
Gold	London Bullion Market (LBMA)	Ounce	1,257	1,250	1,160
Closing prices (quoted commodities only)
Aluminium		Tonne	2,256	1,704	1,500
Copper		Pound	3.27	2.51	2.13
Gold		Ounce	1,153	1,148	1,061

(a)	Dry metric tonne

(b)	LME cash price

The above table shows published prices for Rio Tinto’s commodities for the last three years where these are publicly available, and where there is a reasonable degree of correlation between the published prices and Rio Tinto’s realised prices.

Group sales revenue will not necessarily move in line with these published prices for a number of reasons which are discussed below.

The discussion of revenues below relates to the Group’s gross revenue from sale of commodities, as included in the ~~financial~~“Financial information by business ~~unit~~unit” on pages ~~194~~206 to ~~198~~208 of the Annual Report ~~2015.~~2017.

Iron Ore

~~2015~~

2017 sales revenue compared with ~~2014~~2016

~~Higher~~

Gross sales revenue increased by US$3.6 billion (25%) to US$18.3 billion.

Sales volumes ~~(approximately 11 per cent) in the Pilbara partially mitigated the impact of lower iron ore prices, down 43~~were one per cent higher than 2016 sales, reflecting ongoing productivity improvements being made to the rail network, along with increased flexibility across the infrastructure system. Achieved average pricing was also higher in 2017, US$59.6 per wet metric tonne on ~~average year on year. In 2015, approximately 22~~an FOB basis compared with US$49.3 per wet metric tonne in 2016.

Approximately 67 per cent of sales in 2017 were priced with reference to ~~a quarterly~~the current month average, ~~index set at~~17 per cent with reference to the prior quarter’s average index lagged by one ~~month. The remainder was sold via pricing mechanisms priced closer~~month, five per cent with reference to the ~~index price at the time of shipment, such as~~ current quarter average ~~current month average or~~and 11 per cent were sold on fixed terms on the spot ~~index prices.~~market. Index prices are adjusted for product characteristics and iron and moisture content.

~~2014~~

2016 sales revenue compared with ~~2013~~2015

~~Record~~

Gross sales revenue increased by US$0.7 billion (approximately five percent) to US$14.6 billion. Sales volumes were three per cent higher in 2016, attributable to the ~~Pilbara~~newly expanded infrastructure and minimal disruption from weather events. The average realised price for ~~a second year partially mitigated the impact of lower~~ iron ore ~~prices, down 30~~was also up approximately 2% to US$49.3 per ~~cent on average year on year. In 2014, approximately 25~~wet metric tonne (FOB), from US$48.4 per wet metric tonne (FOB) in 2015.

Approximately 20 per cent of sales in 2016 were priced with reference to ~~a quarterly~~the previous quarter’s average index ~~set at the prior quarter’s average~~ lagged by one month. The remainder was sold ~~via pricing mechanisms priced closer to the index price at the time of shipment, such as~~either on current quarter average, current month average or on the spot ~~index prices. Index prices are adjusted for product characteristics and iron and moisture content.~~market.

Aluminium

~~2015~~

2017 sales revenue compared with ~~2014~~2016

~~The Aluminium product group’s~~

Aluminium’s sales revenues are from aluminium and related products such as alumina and bauxite.

Gross sales revenue increased by 16% to US$11.0 billion in 2017. The ~~decline in prices was the main driver of the 17 per cent drop in revenues compared with 2014. The 2015~~2017 cash LME aluminium price averaged US$~~1,661~~1,969 per tonne, ~~a decrease~~an increase of 1123 per cent on ~~2014. Market premia across all regions fell an average of 36 per cent in 2015, down from US$404 per tonne in 2014~~2016, however this was partially offset by lower sales volumes due to ~~US$257 per tonne in 2015.~~operational issues at Sohar and curtailment at the Boyne Smelter.

~~Bauxite prices were stable in 2015, underpinned by growing import~~

Strong bauxite production performance, combined with robust demand from ~~China. Rio Tinto’s~~China, enabled the Group to increase its share of third party bauxite ~~sales increased~~shipments by 14ten per cent ~~in 2015 compared with 2014.~~to 32.3 million tonnes (2016: 29.3 million tonnes).

~~2014~~

2016 sales revenue compared with ~~2013~~2015

~~A one~~

There was an overall decrease in gross sales revenue of US$0.7 billion (approximately seven per cent) to US$9.5 billion in 2016. Average LME prices decreased three per cent year on year, and lower market and product premia resulted in the average realised price per tonne decreasing from US$2,058 in 2015 to US$1,849 in 2016. This realised price included premia for value-added products (VAP), which generated attractive product premia averaging US$223 per tonne of VAP sold (2015: US$251 per tonne) on top of the physical market premia. In the US, the Mid-West market premium averaged US$162 per tonne in 2016, compared with an average US$271 per tonne in 2015, a 40 per cent decrease.

Gross sales revenue for bauxite in 2016 decreased seven per cent to US$1.9 billion. Declines in bauxite pricing compared with 2015 were partially offset by continued increase in third party bauxite sales. There was a ten per cent increase in ~~LME prices and stronger regional and product premia were not sufficient to offset the impact of reduced sales volumes of~~third party bauxite and aluminium compared with 2013, resulting in a three percent reduction in sales revenue. The reduction in aluminium sales volumes was mainly due to the closure of the Shawinigan smelter in December 2013 and the divestment of the Søral and Alucam smelters during 2014.shipments.

Copper & ~~Coal~~Diamonds

~~2015~~

2017 sales revenue compared with ~~2014~~2016

Gross sales revenue ~~decreased~~increased by 237 per cent in ~~2015~~2017 compared with ~~2014. Average prices in 2015 were lower than 2014 for the Copper & Coal product group commodities.~~2016.

Copper sales revenue was higher than in 2016 as the average LME copper price ~~declined 20~~increased by 27 per cent to ~~249~~281 US cents per pound and the gold ~~decreased 8~~price increased by one per cent to US$~~1,160~~1,257 per ~~ounce, which were~~ounce. This was partially offset by the ~~main drivers for~~impact of lower sales volumes (13% lower than 2016), mainly due to the ~~decline~~impact of a strike at Escondida in ~~gross sales~~the first quarter of 2017.

Diamonds revenue ~~from copper operations (down 22~~increased 15 per cent ~~compared with 2014).~~to US$0.7 billion in 2017, reflecting higher sales volumes, including the effect of factories in India increasing manufacturing capacity as the market normalised following Indian banknote reform in 2016, and the outlook in key emerging markets improved. This resulted in sustained re-stocking activity throughout the pipeline for most of the year.

At 31 December ~~2015,~~2017, the Group had an estimated ~~252~~250 million pounds of copper sales ~~(2014: 331 million pounds)~~ that were provisionally priced at ~~217~~304 US cents per ~~pound (2014: 288 US cents per pound).~~pound. The final price of these sales will be determined during the first half of ~~2016.~~2018. This compares with 235 million pounds of open shipments at 31 December 2016, provisionally priced at 250 cents per pound.

There was a decline in gross sales revenue from coal operations of 24 per cent compared with 2014. Thermal and coking coal prices declined further in 2015, averaging US$62 and US$102 per tonne respectively. In addition to lower thermal and coking coal prices, there was also a decline in sales volumes mainly due to the divestment of the Clermont mine in May 2014.

A significant proportion of Rio Tinto’s coal production is sold under long-term contracts. In Australia, the prices applying to sales under the long-term contracts are generally renegotiated annually for thermal coal, but prices are fixed at different times of the year and on a variety of bases. Coking coal prices for 2015 have been negotiated on a quarterly basis consistent with 2014. For these reasons, average realised prices will not necessarily reflect the movements in any of the publicly available prices.

~~2014~~2016 sales revenue compared with ~~2013~~2015

~~Gross~~

Overall gross sales revenue ~~decreased~~declined by ~~five~~19 per cent to US$4.5 billion in ~~2014 compared with 2013,~~2016.

Copper sales revenue was lower than 2015 as a result of ~~the increase in copper operations (six percent increase year-on-year) offset by reductions from coal operations (18.5 per cent year-on-year).~~

~~The six per cent increase in copper operations gross sales revenue compared with 2013 arose from increased~~lower sales volumes ~~primarily attributable to a full year of production at Oyu Tolgoi, which was partially offset by a seven per cent decline in average copper prices and~~along with an 11 per cent decline in prices to 221 US cents per pound in 2016. Gold revenue was lower than 2015 due mainly to

lower grade and volumes. This was partially offset by an eight per cent increase in the ~~average~~ gold price to US$1,250 per ounce.

At 31 December 2016, the Group had an estimated 235 million pounds of unsettled copper sales (2015: 252 million pounds) that were provisionally priced at 250 US cents per pound (2015: 217 US cents per pound). The final price of these sales was determined during the ~~period.~~first half of 2017.

The ~~18.5 per cent~~overall decline in ~~coal operations gross sales~~diamonds revenue was ~~predominantly~~ attributable to lower prices, with 21 per cent and 17 per cent reductions in the average coking coal benchmark and thermal coal prices respectively. Price reductions were partially offset by higher sales volumes at Kestrel and Hail Creek, offset by the loss of tonnes from Clermont with the divestment completed on 29 May 2014.

~~Diamonds & Minerals~~

~~2015 sales revenue compared with 2014~~

~~Gross sales revenues decreased by 23 per cent compared with 2014, with lower revenues driven by lower prices and a reduction in~~ sales volumes. Sales volumes were lower across most products, including the impact of softer markets, most notably in titanium dioxide feedstocks. In addition, prices for Rio Tinto Iron & Titanium’s metallic co-products fell in response to market trends and titanium dioxide feedstock prices remained under pressure as the industry continued to absorb inventories.

Sales volumes of diamonds were higher due to the ramp up of the Argyle underground mine, but industry rough diamond prices were weaker, driven by lower demand from India and China, higher rough diamond and polished diamond inventory and lower trade manufacturer margins. Diamond prices realised by Rio Tinto depend on the size and quality of diamonds in the product mix.

Energy & Minerals

2017 sales revenue compared with 2016

Gross sales revenue for the product group in 2017 of US$7.8 billion was 15 per cent higher than 2016 as a result of higher prices and higher sales volumes across most products.

Gross sales revenue for Rio Tinto Coal Australia of US$2.8 billion in 2017 was seven per cent higher than 2016, despite the impact of the sale of Coal & Allied Industries Limited in September 2017. The Group achieved hard coking coal prices of US$169 per tonne, on average, in 2017 on an FOB basis (2016: US$119 per tonne). Average prices realised for thermal coal were US$78 per tonne on an FOB basis in 2017 (2016: US$60 per tonne).

Gross sales revenue at Iron Ore Company or Canada (IOC) of US$1.9 billion was 41 per cent higher than 2016, driven by higher prices and a five per cent increase in production.

Market conditions for titanium dioxide continued to improve in 2017, with strengthening pigment prices supported by low inventory and tight supply. Consequently, feedstock demand has improved year-on-year. Improved conditions have also been evident in the zircon market.

Borates demand growth was primarily driven by the agriculture and construction sectors in 2017. Offtake across most regions held firm, although borates demand in China was impacted by environmental-related shutdowns during the third quarter.

The uranium market remained oversupplied in 2017, with many market players along the value chain reporting excess inventories. The spot price fell from US$26 per pound in the first quarter to below US$21 per pound for much of the year until capacity curtailment announcements boosted spot prices as the year drew to a close. Adverse policy shifts in South Korea and Japan, as well as an increasingly competitive energy market in the US, have dampened the expected demand growth in these markets.

2016 sales revenue compared with 2015

Gross sales revenues decreased by six per cent compared with 2015, down US$0.4 billion to US$6.7 billion.

An increase in iron ore sales volumes from Iron Ore Company of Canada (IOC) of two per cent and stronger realised prices had a favourable impact on sales revenues. This was offset by the impact of lower freight revenue.

Hard coking coal benchmark prices were 12 per cent higher on average compared with 2015 and thermal coal spot prices averaged seven per cent higher. The favourable impact of price changes was offset by the impact of the Coal & Allied restructure and the divestment of Bengalla.

Titanium dioxide feedstock demand remained subdued throughout 2016 as the industry continued to absorb excess inventories, resulting in continued price pressure, although there are signs of underlying demand improvement for both sulphate and chloride feedstock. The market for zircon has recently stabilised following an initial period of weak demand in China. Demand for borates has remained stable globally, with robust demand in the Americas and India partly offset by weaker growth in China and weather-related demand constraints in south-east Asia.

Uranium prices fell through the latter half of 2016, due to lacklustre demand growth and oversupply. The uranium spot price index ended the year 441 per cent below ~~2014~~2015 at US$~~34.23~~20.25 per pound, while the long-term price indicators lost 1132 per cent to end the year at US$~~44.00~~30.00 per pound. Rio Tinto Uranium also sells predominantly on a longer-term contract basis.

~~Sales volumes of all products will vary during the year and the timing of shipments will also result in differences between average realised prices and published prices.~~

~~2014 sales revenue compared with 2013~~

Gross sales revenues decreased by seven per cent compared with 2013. Excluding the impact of Uranium, gross sales revenues decreased by one per cent, mainly driven by lower prices for titanium dioxide feedstocks, borates and zircon, and a decline in volume of diamond sales which were partially offset by higher realised prices on diamonds, and higher sales volumes of titanium dioxide feedstocks, borates and zircon.

Diamond prices realised by Rio Tinto depend on the size and quality of diamonds in the product mix. Gross sales revenues from Uranium declined 32 per cent compared with 2013. The uranium spot price index ended the year three per cent above 2013 at US$35.50 per pound, while the long-term price indicators lost one per cent to end the year at US$49.50 per pound.

Cash flow

~~2015~~

2017 compared with ~~2014~~2016

A full consolidated cash flow statement is contained in the ~~financial statements~~Financial Statements on page ~~109~~114 of the Annual Report ~~2015.~~2017.

Net cash generated from operating activities of US$~~9.4~~13.9 billion was 3464 per cent higher than 2016 driven by higher commodity prices and cash cost improvements, partly offset by higher tax payments from increased underlying profits.

Purchases of property, plant and equipment and intangible assets were US$4.5 billion in 2017, a rise of 49 per cent compared with 2016. Major capital projects in 2017 included the development of the Oyu Tolgoi underground copper mine in Mongolia, construction of key infrastructure at the Amrun bauxite project in Queensland and completion of the Silvergrass iron ore mine in the Pilbara.

In 2017, the Group generated US$9.5 billion of free cash flow, 64 per cent higher than 2017. This included US$0.4 billion of productivity gains from the mine-to-market productivity programme which was implemented in 2017, targeting the delivery of US$5.0 billion of additional free cash flow from 2017 to 2021.

Dividends paid in 2017 of US$4.2 billion reflected the 2016 final dividend paid in April 2017, and the 2017 interim dividend paid in September 2017. Share repurchases totalled US$2.1 billion comprised of the US$1.5 billion on-market buy-back in Rio Tinto plc shares and the US$0.6 billion (AUD$0.8 billion) off-market buy-back in Rio Tinto Limited shares.

In 2017, disposals of subsidiaries, joint ventures and associates mainly related to the cash proceeds received to date for the sale of Coal & Allied Industries Limited of US$2.54 billion (net of working capital adjustments and cash transferred on disposal) and also included receipts of the second and final instalment of funds for Rio Tinto’s disposal of its 100 percent interest in Lochaber, which was completed in November 2016.

Rio Tinto completed a US$2.5 billion (nominal value) bond buy-back programme in June 2017. Net interest paid included US$0.3 billion being the payment of the premiums and the accelerated interest associated with the bond redemption. In addition, US$7 million was paid relating to the close out of interest rate swaps and was recognised in other financing cash flows.

2016 compared with 2015

Net cash generated from operating activities of US$8.5 billion was ten per cent lower than ~~2014, mainly due~~2015. 2015 cash flows benefited from a significant working capital reduction. 2016 saw a rebound in receivables, driven by higher year-end prices. In addition, there was an increase in interest paid to US$1.3 billion, of which US$0.5 billion related to early redemption costs associated with the ~~impact of lower prices, reflecting~~bond repurchase programmes. These were partly offset by cash cost improvements and lower tax payments, in line with lower underlying profits.

Total working capital cash inflows of US$1.5 billion in 2015 arose from continued efforts to reduce inventories and receivables, which were partly offset by a reduction in payables, mostly from actions taken to reduce capital and operating expenditures during the year.

Purchases of property, plant and equipment and intangible assets ~~declined by~~were US$~~3.5~~3.0 billion ~~or 43~~in 2016, a decline of 36 per cent ~~to US$4.7 billion in~~compared with 2015. ~~Major~~Some major capital projects ~~included the completion of the~~were completed in 2015, including expansion of the Pilbara iron ore infrastructure and the modernisation and expansion of the Kitimat aluminium ~~smelter~~smelter. Major capital projects in ~~British Columbia, where first metal was poured~~2016 included the development of the Oyu Tolgoi underground copper mine in ~~June 2015.~~Mongolia, construction of key infrastructure at the Amrun bauxite project in Queensland and completion of the Silvergrass iron ore mine in the Pilbara.

Dividends paid in ~~2015~~2016 of US$~~4.1~~2.7 billion reflected the ~~increase in the~~ final ~~2014~~2015 dividend paid in April ~~2015~~2016 and the ~~2015~~2016 interim dividend paid in September ~~2015. Share repurchases totalled~~2016.

In 2016, net proceeds from the disposal of subsidiaries, joint ventures and associates of US$~~2.0~~0.8 billion ~~in 2015.~~

~~2014 compared with 2013~~

~~Net cash generated from operating activities was US$14.3 billion, five~~related primarily to amounts received following the disposal of the Group’s 40 per cent ~~lower than 2013, reflecting~~interest in the ~~negative impact~~Bengalla Joint Venture and the first tranche from the sale of ~~lower prices partially offset by~~ the ~~positive impact of higher volumes, cash costs improvements and favourable current trade working capital movements.~~

~~Purchase~~Lochaber aluminium assets. In addition, the Group realised US$0.4 billion from the sale of property, plant and equipment and ~~intangible~~intangibles, which included the Mount Pleasant thermal coal assets ~~declined by US$4.8 billion or 37 per cent to US$8.2 billion~~ in ~~2014. This was driven by the completion of five major capital projects during 2013~~New South Wales, undeveloped land in Utah and ~~continued capital discipline.~~some office buildings in North America.

Net proceeds from disposals of subsidiaries, joint ventures and associates totalled US$0.9 billion in 2014, primarily reflecting the sale of the Group’s interests in the Clermont Joint Venture and Rio Tinto Coal Mozambique.

~~Other investing cash flows resulted in an improvement of US$647 million, mainly due to the disposal of the Group’s properties at St James’s Square.~~

~~Dividends paid in 2014 of US$3.7 billion reflect the 12 per cent increase to the 2013 dividends paid.~~

~~Repayments of borrowings increased from US$1.8 billion to US$3.5 billion during 2014.~~

Balance sheet at 31 December ~~2015~~2017

Net debt ~~increased from~~reduced to US$~~12.5~~3.8 billion at 31 December ~~2014~~2017, a decrease of US$5.8 billion.

Net debt to ~~US$13.8 billion~~EBITDA improved from 0.7 times at 31 December ~~2015, with free cash flow partly funding the US$2.0 billion share buy-back. Net debt as~~2016 to 0.2 times at 31 December 2015 was made up principally from adjusted total borrowing (as defined in financial statements Note 24 “Consolidated net debt” of the Annual Report 2015) of US$23.1 billion, offset by US$9.4 billion in cash and cash equivalents.2017. Net debt to total capital ~~(gearing~~(net gearing ratio) ~~was 24~~declined to seven per cent at 31 December ~~2015~~2017 (31 December ~~2014: 19~~2016: 17 per cent)~~. The increase in the gearing ratio~~ and interest cover was mainly driven by the US$10.5 billion decline in shareholders’ equity from 31 December 2014 to 31 December 2015, which was largely attributable to weaker Australian and Canadian currencies along with the share buy-back and dividend payments.14 times (2016: seven times).

~~Adjusted total borrowings~~

Total financing liabilities at 31 December ~~2015~~2017 were US$~~23.1~~15.4 billion. ~~The~~At 31 December 2017, approximately 80 per cent of Rio Tinto’s total borrowings were at floating interest rates, the weighted average cost of total borrowings was approximately ~~3.5~~4.2 per cent and the weighted average maturity was around ~~eight~~ten years. The maximum ~~nominal~~ amount, within non-current borrowings, maturing in any one calendar year was US$~~3.3~~1.7 billion which matures in ~~2018. At~~2025.

In 2017, the Group repaid US$2.8 billion of borrowings, including successfully completing a US$2.5 billion (nominal value) bond tender and redemption exercise which reduced overall gross debt. Cash and cash equivalents plus other short-term cash investments at 31 December ~~2015, approximately half of Rio Tinto’s total borrowings~~2017 were ~~at fixed interest rates.~~US$11.5 billion (31 December 2016: US$8.4 billion).

Financial instruments and risk management

The Group’s policies with regard to financial instruments and risk management are clearly defined and consistently applied. They are a fundamental part of the Group’s long-term strategy covering areas such as foreign exchange risk, interest rate risk, commodity price risk, credit risk, ~~and~~ liquidity risk and capital management. Further details of our Financial instruments and risk management are disclosed in ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management” on pages 153 to 162 of the Annual Report ~~2015.~~2017.

The Annual Report ~~2015~~2017 shows the full extent of the Group’s financial commitments, including debt. The risk factors to which the Group is subject are summarised above in Item 3.D, “Risk factors”.

The effectiveness of internal controls continues to be a high priority in the Rio Tinto Group. ~~The board’s statement on internal control is set out in the Risk management section.~~

Dividend

The ~~2015~~2017 interim dividend was ~~107.5~~110.0 US cents ~~(2014: 96.0~~(2016: 45.0 US cents) and the final dividend was determined as ~~107.5~~180.0 US cents ~~(2014: 119.0~~(2016: 125.0 US cents). Dividends paid on Rio Tinto plc and Rio Tinto Limited shares are equalised on a net cash basis; that is, without taking into account any associated tax credits.

Dividends are determined in US dollars. Rio Tinto plc dividends are paid and declared in pounds

sterling and Rio Tinto Limited dividends are declared and paid in Australian dollars, converted at exchange rates on 96 February ~~2016.~~2018. Details relating to the dividend policy, determination and payment of dividends in sterling, Australian dollars and other currencies and on the payment of dividends to holders of American Depositary Receipts (ADRs) are included inunder the ~~Shareholder information section~~heading “Shareholder information-2017 dividends” on page ~~240~~254 of the Annual Report ~~2015.~~2017 and above in Item 3.A, “Selected financial data”.

Capital and liquidity risk management

The Group’s total capital is defined as equity attributable to owners of Rio Tinto plus equity attributable to non-controlling interests and net debt, as shown below:

Total capital

	2017	2016
	US$m	US$m
Equity attributable to owners of Rio Tinto	44,711	39,290
Equity attributable to non-controlling interests	6,404	6,440
Net debt (Financial Statements Note 24 of the Annual Report 2017)	3,845	9,587
Total capital	54,960	55,317

   2015
US$m    2014
US$m
Equity attributable to owners of Rio Tinto
   37,349       46,285
Equity attributable to non-controlling interests
   6,779       8,309
Net debt (financial statements Note 24 of the Annual Report 2015)
   13,783       12,495




Total capital
   57,911       67,089

The Group’s ~~major~~material capital and evaluation projects are listed inunder the ~~Capital allocation section~~heading “Portfolio management” on pages 3026 and 3127 of the Annual Report ~~2015.~~2017.

We expect that contractual commitments for expenditure, together with other expenditure and liquidity requirements, will be met from internal cash flow and, to the extent necessary, from the existing facilities described in ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management”, part ~~(v)~~A(b)(i) on pages 154 and 155 of the Annual Report ~~2015.~~2017. This ~~Note~~note also provides further details of our liquidity and capital risk management.

Treasury management and financial instruments

Details of our Treasury management and financial instruments are ~~contained within the introductory paragraphs of financial~~disclosed in “Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management” on pages 153 to 162 of the Annual Report ~~2015.~~2017.

Foreign exchange

The following sensitivities give the estimated effect on underlying earnings assuming that each exchange rate moved in isolation. The relationship between currencies and commodity prices is a complex one and movements in exchange rates can cause movements in commodity prices and vice versa. Where the functional currency of an operation is that of a country for which production of commodities is an important feature of the economy, such as the Australian dollar, there is a certain degree of natural protection against cyclical fluctuations, in that the currency tends to be weak, reducing costs in US dollar terms, when commodity prices are low, and vice versa.

Earnings sensitivities – Exchange rate

					Average exchange rate for 2017	Effect on underlying earnings of 10% change in full year average
	Average exchange rate for 2015 US cents		Effect on underlying earnings of 10% change in full year average +/- US$m		US cents	+/- US$m
Australian dollar		75		651	77	674
Canadian dollar		78		211	77	160
Euro		111		18	113	5
Chilean peso		US$1 = 654		25
New Zealand dollar		70		19
South African rand		US$1 = 12.68		23	US$1 = 13.30	25
UK sterling		153		—

The exchange rate sensitivities quoted above include the effect on net operating costs of movements in exchange rates but exclude the effect of the revaluation of foreign currency financial assets and liabilities. They should therefore be used with caution. Further details of our exposure to foreign currency fluctuations and currency derivatives, and our approach to currency hedging, are contained within ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management”, part A(b)~~(i)~~(iv), on pages 157 and 158 of the Annual Report ~~2015.~~2017.

Interest rates

Details of our exposure to interest rate fluctuations are contained within ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management”, part A(b)(v), on page 158 of the Annual Report ~~2015.~~2017.

Commodity prices

The approximate effect on the Group’s underlying and net earnings of a ten per cent change from the full year average market price in ~~2015~~2017 for the following products would be:

Commodity
   Unit    Average market price
for 2015
US$    Effect on underlying
earnings of 10%
change in full year
average
+/- US$m
Iron ore
62% Fe Fines FOB
   dmt       50       843
Aluminium^(a)
   Tonne       1,661       416
Copper^(a)
   Pound       2.49       213
Gold
   Ounce       1,160       39

		Average market price for 2017	Effect on underlying earnings of 10% change in full year average
Commodity	Unit	US$	+/- US$m
Iron ore 62% Fe Fines FOB	dmt	64.1	1,037
Aluminium^(a)	Tonne	1,969	592
Copper^(a)	Pound	2.81	242
Gold	Ounce	1,257	30

(a)	Excludes the impact of commodity derivatives.

The sensitivities give the estimated impact on net earnings of changes in prices assuming that all other variables remain constant. These should be used with caution. As noted previously, the relationship between currencies and commodity prices is a complex one and changes in exchange rates can influence commodity prices and vice versa.

Further details of our exposure to commodity price fluctuations are contained within ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management”, on part A(b)(ii), on pages 155 and 156 of the Annual Report ~~2015.~~

2017.

Credit risks

Details of our exposure to credit risks relating to receivables, financial instruments and cash deposits, are contained within ~~financial~~“Financial statements Note ~~30 “Financial~~30-Financial instruments and risk management”, part A(b)(iii), on page 156 of the Annual Report ~~2015.~~2017.

Disposals and acquisitions

Information regarding disposals and acquisitions is provided in ~~financial~~“Financial statements Note ~~37 “Purchases~~37-Purchases and sales of subsidiaries, joint ventures, associates and other interests in businesses” on page 171 of the Annual Report ~~2015.~~2017.

Critical accounting policies and estimates

Many of the amounts included in the financial statements involve the use of judgment and/or estimates. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ from the amounts included in the financial statements.

Information about such judgments and estimation is contained under “Judgments in applying accounting policies and key sources of estimation uncertainty” in ~~financial~~“Financial statements Note ~~1 “Principal~~1-Principal accounting policies” on ~~pages 113 and 114~~page 120 of the Annual Report ~~2015.~~2017.

Off balance sheet arrangements and contractual commitments

The table below presents information in relation to our material off balance sheet arrangements and contractual commitments. Information regarding the Group’s post retirement commitments and funding arrangements is provided in ~~financial~~“Financial statements Note ~~45 “Post-retirement~~44-Post-retirement benefits” on pages 176 to 181 of the Annual Report ~~2015.~~2017. Information regarding the Group’s close-down and restoration obligations is provided in ~~financial~~“Financial statements Note ~~26 “Provisions~~26-Provisions (including post-retirement benefits)” on page 150 of the Annual Report ~~2015.~~2017. In addition ~~financial~~“Financial statements Note ~~31 “Commitments~~31-Contingencies and ~~contingencies”~~commitments” on pages 162 to 164 of the Annual Report ~~2015,~~2017, provides further information regarding contingent liabilities, guarantees and commitments.

We expect that these contractual commitments for expenditure, together with other expenditure and liquidity requirements, will be met from internal cash flow and, to the extent necessary, from ~~the~~ existing facilities.

	<1 yr	1-3 yrs	3-5 yrs	> 5 yrs	Total
At 31 December 2017	US$m	US$m	US$m	US$m	US$m
Expenditure commitments in relation to:
Operating leases	397	542	313	593	1,845
Other (capital commitments)	2,081	531	58	-	2,670
	2,478	1,073	371	593	4,515
Long-term debt and other financial obligations*:
Debt	552	1,159	2,199	11,387	15,297
Interest payments	679	1,343	1,244	4,553	7,819
Asset retirement obligations	361	492	639	11,406	12,898
Purchase obligations	2,818	3,097	2,380	11,494	19,789
Other	362	201	49	350	962
	4,772	6,292	6,511	39,190	56,765
Total	7,250	7,365	6,882	39,783	61,280

*Other contractual commitments that the Group has where the maturity profile is unknown include pension obligations of US$3.4 billion and taxes payable of US$2.3 billion. Taxes payable include balances that relate to uncertain tax positions. This may mean the commitment is greater or less than that disclosed.

At 31 December 2015
   <1 yr
US$m    1-3 yrs
US$m 3-5 yrs
US$m    > 5 yrs
US$m    Total
US$m
Expenditure commitments in relation to:

Operating leases
   400       590    443       745       2,178
Other (capital commitments)
   1,010       155    2       24       1,191








   1,410       745    445       769       3,369








Long-term debt and other financial obligations:

Debt
   2,266       5,351    3,483       12,318       23,418
Interest payments
   884       1,704    1,189       4,4789       8,566
Purchase obligations
   2,677       4,125    2,865       12,945       22,612
Other
   192       (43 ) 111       181       441








   6,019       11,137    7,648       30,233       55,037








Total
   7,429       11,882    8,093       31,002       58,406

Except as disclosed in ~~financial~~“Financial statements Note ~~21 “Cash~~21-Cash and cash equivalents” on page 147 of the Annual Report ~~2015,~~2017, there are no material legal or economic restrictions on the ability of our subsidiaries to transfer funds to the company in the form of cash dividends, loans, or advances.

5.B Liquidity and capital resources

The information set forth under the headings:

“Portfolio management-Material capital projects” on pages 26 and 27;

•

~~“Capital allocation-Major capital projects (>US$1bn)” on page 30;~~

“Product groups-Iron Ore-Development projects” on page 39;

“Product groups-Aluminium-Development projects” on page 41;

“Product groups-Copper & Diamonds-Development projects” on page 43;

“Product groups-Energy & Minerals-Development projects” on page 45;

“Growth & Innovation” on page 47;

“Financial statements Note 22-Borrowings and other financial liabilities” on ~~pages 142~~page 148; and ~~143; and~~

“Financial statements Note 30-Financial instruments and risk management” on pages ~~147~~153 to ~~156~~162

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

See above Item 5.A, “Additional financial information-Cash flow” to “Additional Information-Off balance sheet arrangements and contractual commitments”.

5.C Research and development, patents and licenses

The information set forth under the headings:

“~~Exploration” on page 40;~~

~~“Technology~~Growth & Innovation” on pages 46 and 47;

“Director’s report-Exploration, research and development” on page ~~41;~~ 109 and

“Financial statements Note 4-Net operating ~~costs”~~costs (excluding items shown separately)” on page ~~129~~135

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

5.D Trend information

The information set forth under the headings:

“~~Strategic context”~~Market environment” on page 7;

“Group overview” on pages 2 and 3;

“Group ~~strategy-Challenging~~strategy-Supportive market ~~conditions”~~conditions and strong value focus” on page ~~10;~~8;

“Chairman’s letter” on page 4;

“Chief executive’s statement” on pages 5 and 6;

~~“Product groups-Aluminium” on pages 32 and 33;~~

~~“Product groups-Copper & Coal” on pages 34 and 35;~~

~~“Product groups-Diamonds & Minerals” on pages 36 and 37; and~~

“Product groups-Iron Ore” on pages 38 and 3939;

“Product groups-Aluminium” on pages 40 and 41;

“Product groups-Copper & Diamonds” on pages 42 and 43;

“Product groups-Energy & Minerals” on pages 44 and 45;

“Growth & Innovation” on pages 46 and 47

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

5.E Off-balance sheet arrangements

The information set forth under the heading “Financial statements Note 31-Contingencies and commitments” on pages ~~156 and 157~~162 to 164 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

See above Item 5.A, “Additional financial information-Off balance sheet arrangements and contractual commitments”.

5.F Tabular disclosure of contractual obligations

See above Item 5.A, “Additional financial information-Off balance sheet arrangements and contractual commitments”.

5.G Safe harbour

The information set forth under the heading “Cautionary statement about forward-looking statements” on the inside front cover of the Annual Report ~~2015~~2017 is incorporated herein by reference.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A Directors and senior management

The information set forth under the headings:

“Board of directors” on pages 5152 to ~~53;~~54; and

“Executive committee” on page 5455

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

There are no family relationships between any of our directors or executive committee members. None of our directors or executive committee members are elected or appointed under any arrangement or understanding with any major shareholder, customer, supplier or otherwise.

6.B Compensation

The information set forth under the headings:

“Remuneration report” on pages 6770 to ~~104;~~105;

“Remuneration report tables” on pages 9697 to ~~104;~~105;

“Financial statements Note 26-Provisions (including post-retirement benefits)” on page ~~144;~~150; and

“Financial statements Note ~~45-Post-retirement~~44-Post-retirement benefits” on pages ~~170~~176 to ~~175~~181

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

6.C Board practices

The information set forth under the headings:

“Board of directors” on pages 5152 to ~~53;~~54;

“Executive committee” on page ~~54;~~55;

“~~Corporate governance”~~Chairman’s governance review” on pages 5550 and 51;

“Governance report” on pages 56 to ~~66;~~69;

“Remuneration report-Executives’ service contracts and termination” on ~~pages 75 and 76;~~page 78;

“Remuneration report-Chairman and non-executive directors’ remuneration” on page ~~77;~~79;

“Remuneration report-Treatment of STIP and LTIP on termination” on pages 7678 and ~~77;~~79; and

“Remuneration report-Positions held and date of appointment to position” on page 8885

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

6.D Employees

The information set forth under the headings:

“Sustainable development-Performance data 2013-2017” on page 30;

“Sustainable development-Our people” on pages 30 and 31;

“Financial statements Note 5-Employment costs” on page ~~129;~~135;

“Financial statements Note 32-Average number of employees” on page ~~158;~~165; and

“~~Director’s report-Employment policies and communication”~~Relations with stakeholders-Employment policies” on page 4969

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Rio Tinto focuses on working with our employees and their unions in good faith, seeking fair solutions while maintaining the competitiveness of each of our managed operations. At present we do not anticipate any union activity which would have a material adverse effect on the Group’s managed operations as a whole.

6.E Share ownership

The information set forth under the headings:

“Remuneration report tables-table 2 and 3” on pages 99100 to ~~104;~~105;

“Shareholder information-Substantial shareholders” on page ~~238;~~252;

“Remuneration report-Employee share plans” on page ~~94;~~96;

“Remuneration report-All employee share plans” on page 9496;

“Remuneration report-Global employee share plan” on page ~~94;~~96; and

“Financial statements Note ~~44-Share based~~43-Share-based payments” on pages ~~167~~ 174to ~~170~~176

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A Major shareholders

The information set forth under the headings:

“Shareholder information-Substantial shareholders” on page ~~238;~~252;

“Shareholder information-Analysis of ordinary shareholders” on page ~~239;~~253; and

“Shareholder information-Twenty largest registered shareholders” on page ~~239~~253

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Share ownership

Rio Tinto plc

As at 1516 February ~~2016,~~2018, there were ~~42,580~~34,362 holders of record of Rio Tinto plc’s shares. Of these holders, ~~405~~388 had registered addresses in the US and held a total of ~~536,299~~ 342,306 Rio Tinto plc shares, representing 0.03 per cent of the total number of Rio Tinto plc shares issued and outstanding as at such date. In addition, ~~116,136,119~~118,080,965 Rio Tinto plc shares were registered in the name of a custodian account in London which represented ~~8.39~~ 8.77 per cent of Rio Tinto plc shares issued and outstanding. These shares were represented by ~~116,136,119~~118,080,965 Rio Tinto plc ADRs held of record by ~~386~~367 ADR holders. In addition, certain accounts of record with registered addresses other than in the US hold shares, in whole or in part, beneficially for US persons.

Rio Tinto Limited

As at 1516 February ~~2016,~~2018, there were ~~191,910~~162,617 holders of record of Rio Tinto Limited shares. Of these holders, ~~293~~290 had registered addresses in the US, representing approximately ~~0.15~~0.04 per cent of the total number of Rio Tinto Limited shares issued and outstanding as of such date. In addition, nominee accounts of record with registered addresses other than in the US may hold Rio Tinto Limited shares, in whole or in part, beneficially for US persons.

7.B Related party transactions

The information set forth under the heading “Financial statements Note 40-Related-party transactions” on ~~pages 166 and 167~~page 173 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

7.C Interests of experts and counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8.A Consolidated statements and other financial information

See below Item 18.

In addition, the information set forth under the headings:

“Chairman’s governance review” on pages 50 and 51;

“Financial statements Note 31-Contingencies and commitments” on pages ~~156~~162 to 164; and ~~157; and~~

“Shareholder information-Dividends” on page ~~240~~254

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

See above Item 3.A ~~“2015~~“2017 dividends”.

8.B Significant changes

The information set forth under the heading “Financial statements Note ~~43-Events~~42-Events after the balance sheet date” on page ~~167~~173 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

ITEM 9. THE ~~OFFER~~OFFER AND LISTING

9.A Offer and listing details

The information set forth under the heading “Shareholder information-Markets” on page ~~238~~252 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Share price information

The following table shows share prices for the period indicated, the reported high and low middle market quotations, which represent an average of bid and asked prices, for Rio Tinto plc’s shares on the London Stock Exchange based on the Daily Official List, the high and low sale prices of the Rio Tinto plc ADSs as reported on the NYSE composite tape and the high and low closing sale prices of Rio Tinto Limited shares based upon information provided by the ASX. There is no established trading market in the US for Rio Tinto Limited’s shares.

      Pence per
Rio Tinto plc
share    US$ per
Rio Tinto
plc ADS^(a)    A$ per Rio
Tinto Limited
share
      High    Low    High    Low    High    Low
2011
      4,712       2,713       76.67       40.50       88.68       59.00
2012
      3,988       2,716       62.70       42.32       72.30       48.63
2013
      3,757       2,583       59.92       39.90       72.07       50.24
2014
      3,627       2,616       59.93       40.70       70.88       52.65
2015
      3,238       1,848       49.94       27.38       65.60       41.76
Aug 2015
      2,635       2,154       41.60       34.14       54.60       46.97
Sep 2015
      2,398       2,111       37.44       32.06       52.01       46.52
Oct 2015
      2,600       2,220       39.74       33.76       55.18       48.73
Nov 2015
      2,371       2,199       36.41       33.08       50.85       45.91
Dec 2015
      2,215       1,848       33.40       27.38       46.92       41.76
Jan 2016
      1,940       1,578       28.65       22.70       44.63       37.75
Feb 2016 (through 15 Feb)
      1,858       1,618       26.96       23.25       42.53       37.03
2014
   – First quarter    3,627       3,115       59.93       51.18       70.88       60.80
   – Second quarter    3,426       3,017       57.33       51.30       65.14       57.45
   – Third quarter    3,515       3,031       59.18       49.18       67.82       59.21
   – Fourth quarter    3,163       2,616       51.47       40.70       61.24       52.65
2015
   – First quarter    3,238       2,772       49.94       41.40       65.60       53.69
   – Second quarter    3,030       2,614       46.88       40.96       59.90       53.29
   – Third quarter    2,635       2,111       41.60       32.06       54.60       46.52
   – Fourth quarter    2,600       1,848       39.74       27.38       55.18       41.76

		Pence per Rio Tinto plc share		US$ per Rio Tinto plc ADS(a)		A$ per Rio Tinto Limited share
		High	Low	High	Low	High	Low
2013		3,757	2,583	59.92	39.90	72.07	50.24
2014		3,627	2,616	59.93	40.70	70.88	52.65
2015		3,238	1,848	49.94	27.38	65.60	41.76
2016		3,294	1,578	42.12	22.70	62.79	37.03
2017		3,942	2,910	52.93	38.00	75.81	57.15
Aug 2017		3,747	3,370	49.08	44.21	67.84	62.75
Sep 2017		3,760	3,417	49.66	46.61	69.53	65.47
Oct 2017		3,718	3,497	50.02	47.10	71.46	67.43
Nov 2017		3,774	3,502	50.50	47.56	74.74	70.01
Dec 2017		3,942	3,441	52.93	47.06	75.81	68.83
Jan 2018		4,173	3,919	57.67	52.93	81.80	75.81
Feb 2018 (through 16 Feb)		4,126	3,757	58.90	52.27	82.48	75.43
2016	– First quarter	2,237	1,578	31.95	22.70	46.47	37.03
	– Second quarter	2,424	1,866	35.42	26.93	52.55	41.96
	– Third quarter	2,634	2,257	33.74	29.80	51.85	46.07
	– Fourth quarter	3,294	2,576	42.12	31.77	62.79	50.61
2017	– First quarter	3,680	3,095	46.65	38.36	69.38	58.97
	– Second quarter	3,276	2,910	42.31	38.00	65.20	57.15
	– Third quarter	3,760	3,324	49.66	43.14	69.53	62.62
	– Fourth quarter	3,942	3,441	52.93	47.06	75.81	67.43

(a)	One ADR represents one ordinary share of 10p in Rio Tinto plc.

9.B Plan of distribution

Not applicable.

9.C Markets

The information set forth under the heading “Shareholder information-Markets” on page ~~238~~252 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

9.D Selling shareholders

Not applicable.

9.E Dilution

Not applicable.

9.F Expenses of the issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A Share capital

Not applicable.

10.B Memorandum and articles of association

The information set forth under the headings:

“Governance report-Independence” on page 62;

“~~Corporate governance-The board-Board balance~~Governance report-Board re-election and ~~independence-Election and re-election”~~board composition” on ~~pages 55 and 56;~~page 62;

“Shareholder information-Material contracts” on pages ~~240~~254 and ~~241;~~255;

“Shareholder information-Dividends” on page ~~240;~~254;

“Shareholder information-Dual listed companies structure” on pages ~~236~~250 and ~~237;~~251; and

“Shareholder information-Exchange controls and foreign investment” on pages ~~241~~255 and ~~242~~256

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

10.C Material contracts

The information set forth under the headings:

“Shareholder information-Material contracts” on pages ~~240~~254 and ~~241;~~255; and

“Financial statements Note 30-Financial instruments and risk management” on pages ~~147~~153 to ~~156~~162

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

10.D Exchange controls

The information set forth under the heading “Shareholder information-Exchange controls and foreign investment” on pages ~~241~~255 and ~~242~~256 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

10.E Taxation

US residents

The following is a summary of the principal UK tax, Australian tax and US Federal income tax consequences of the ownership of Rio Tinto plc ADSs, Rio Tinto plc shares and Rio Tinto Limited shares, “the Group’s ADSs and shares”, by a US holder as defined below. It is not intended to be a comprehensive description of all the tax considerations that are relevant to all classes of taxpayer. This summary does not cover all aspects of US federal income taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have on, the acquisition, ownership, or disposal of the Group’s ADSs and shares by particular investors (including the alternative minimum tax or net investment income tax). Future changes in legislation may affect the tax consequences of the ownership of the Group’s ADSs and shares.

ItThis summary is based in part on representations by the Group’s depositary bank as depositary for the ADRs evidencing the ADSs and assumes that each obligation in the deposit agreements will be performed in accordance with its terms.

You are a US holder if you are a beneficial owner of the Group’s ADSs and shares and you ~~are:~~are for US federal income tax purposes: a citizen or resident of the US; a domestic corporation; an estate whose income is subject to US federal income tax regardless of its source; or a trust if a US court can exercise primary supervision over the trust’s administration and one or more US persons are authorised to control all substantial decisions of the trust.

This section applies to US holders only if shares or ADSs are held as capital assets for tax purposes. This section does not address tax considerations applicable to investors that own (directly, indirectly, or by attribution) 5% or more of the stock of the Company (by vote or value) and does not apply to shareholders who are members of a special class of holders subject to special rules, including a dealer in securities, a trader in securities who elects to use a mark-to-market method of accounting for securities holdings, a tax exempt organisation, a life insurance company, ~~a person liable for alternative minimum tax or net investment income tax,~~ a person that actually or constructively owns five per cent or more of Rio Tinto’s voting stock, a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction, persons that have ceased to be US citizens or lawful permanent residents of the United States, investors holding shares or ADSs in connection with a trade or business conducted outside of the United States, US expatriates or a person whose functional currency is not the US dollar.

This section is based on the US Internal Revenue Code of 1986, as amended (the Code), its legislative history, existing and proposed regulations, published rulings and court decisions, UK and Australian tax law and practice and on the convention between the US and UK, and the convention between the US and Australia (together, the Conventions) which may affect the tax consequences of the ownership of the Group’s ADSs and ~~shares.~~shares, all as of the date hereof. These laws and conventions are subject to change, possibly on a retroactive basis.

For the purposes of the Conventions and of the Code, US holders of ADSs are treated as the owners of the underlying shares.

The summary describes the treatment applicable under the conventions in force at the date of this report.

UK taxation of shareholdings in Rio Tinto plc

Taxation of dividends

~~US holders are not liable to~~Under current UK tax legislation, no withholding tax onis required to be withheld from dividends paid by Rio Tinto plc. ~~Under current UK tax legislation,~~Where dividends are paid by Rio Tinto plc ~~carry~~to a ~~tax credit equal to one-ninth of the net dividend, or ten per cent of the net dividend plus the tax credit. US holders are not generally liable to UK tax on dividends by direct assessment (unless such~~ US holder ~~holds~~who is not resident in the UK and who does not hold the shares or ADSs in connection with a branch, agency or permanent establishment in the ~~UK) and the tax credit is not repayable to US holders.~~

~~Note that the~~ UK, ~~dividend taxation rules are being reformed with effect from 6 April 2016. Assuming the legislation is enacted as drafted; UK dividends will~~ no ~~longer carry a tax credit and will instead be subject~~liability to UK tax ~~at special rates. However, there~~ will ~~be no change for~~generally arise to the US ~~holders and no additional UK income tax liability will be due on dividends paid by Rio Tinto plc.~~holder in respect of such dividends.

Capital gains

A US holder, who has at no time been resident in the UK, will not normally be liable to UK tax on capital gains realised on the disposition of a Rio Tinto plc ~~ADSs~~ADS or ~~shares~~share unless the holder carries on a trade, profession or vocation in the UK through a branch, agency or permanent establishment in the UK and the ~~ADSs~~ADS or ~~shares have~~share has been used for the purposes of the trade, profession or vocation or ~~are~~is acquired, held or used for the purposes of such a branch, agency or permanent establishment.

Inheritance tax

Under the UK/US Estate Tax Treaty, a US holder, who is domiciled in the US and is not a national of the UK, will not (provided any US federal or estate gift tax chargeable has been paid) be subject to UK inheritance tax upon the holder’s death or on a transfer during the holder’s lifetime, unless the ~~ADSs and shares form~~ADS or share (i) forms part of the business property of a permanent establishment in the UK, ~~or pertain~~(ii) pertains to a fixed base situated in the UK used in the performance of independent personal ~~services. In~~services, or (iii) is comprised in a settlement (unless, at the ~~exceptional case where ADSs~~time the settlement was made, the settlor was domiciled in the US and was not a national of the UK). Where an ADS or ~~shares are~~share is subject to both to UK inheritance tax and to US Federal gift or estate tax, ~~the UK Estate Tax Treaty generally provides for~~ tax payments ~~to be~~are relieved in accordance with the priority rules set out in the Treaty.

Stamp duty and stamp duty reserve tax

~~Transfers~~UK stamp duty should not be required to be paid in respect of a transfer of Rio Tinto plc ADSs ~~will not be subject to UK stamp duty~~ provided that the transfer instrument is not executed in, and at all times remains outside, the UK and does not relate to any property situate or to any matter or thing to be done in the UK. Electronic “paperless” purchases of Rio Tinto plc shares are subject to stamp duty reserve tax (SDRT) at a rate of ~~0.5 per cent (rounded to the nearest penny)~~0.5%. Purchases of Rio Tinto plc shares using a stock transfer form are subject to ~~Stamp Duty~~stamp duty at a rate of ~~0.5 per cent~~0.5% on transactions over £1,000 (rounded up to the nearest £5). Conversions of Rio Tinto plc shares into Rio Tinto plc ADSs will be subject to additional ~~Stamp Duty~~stamp duty or SDRT at a rate of ~~1.5 per cent (rounded to the nearest penny)~~1.5% on all transfers to the depositary or its nominee.

Australian taxation of shareholdings in Rio Tinto Limited

Taxation of dividends

US holders are not normally liable to Australian withholding tax on dividends paid by Rio Tinto Limited because such dividends are normally fully franked under the Australian dividend imputation system, meaning that they are paid out of income that has borne Australian income tax. Any unfranked dividends would suffer Australian withholding tax which under the Australian income tax convention is limited to 15 per cent of the gross dividend.

Capital gains

US holders are not normally subject to any Australian tax on the disposal of Rio Tinto Limited ADSs or shares unless they have been used in carrying on a trade or business wholly or partly through a permanent establishment in Australia, or the gain is in the nature of income sourced in Australia.

Gift, estate and inheritance tax

Australia does not impose any gift, estate or inheritance taxes in relation to gifts of shares or upon the death of a shareholder.

Stamp duty

An issue or transfer of Rio Tinto Limited shares does not require the payment of Australian stamp duty.

US federal income tax

In general, taking into account the earlier assumptions that each obligation of the Deposit Agreement and any related agreement will be performed according to its terms, for US federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to US federal income tax.

Taxation of dividends

Under the US federal income tax laws, and subject to the Passive Foreign Investment Company (PFIC) Rules discussed below, if you are a US holder, the gross amount of any ~~dividend~~distribution the Group pays out of its current or accumulated earnings and profits (as determined for US federal income tax purposes) is subject to US federal income ~~taxation.~~

taxation as dividend income. The dividend will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of dividends received from other US corporations. Distributions in excess of current and accumulated earnings and profits, as determined for US federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis in the shares or ADSs and thereafter as capital gain. Rio Tinto ~~plc dividends~~does not maintain calculations of its earnings and profits in accordance with US federal income tax accounting principles. US holders should therefore assume that any distributions the Group pays with respect to ADSs or Shares will be reported as ordinary dividend income.

Dividends paid to a non-corporate US holder generally ~~will~~may be taxable at the reduced rate normally applicable to long-term capital gains provided the shares are readily tradable on an established securities market in the United States or the company qualifies for the benefits of an income tax treaty between the

United States and the relevant jurisdiction and certain other requirements are met. Rio Tinto ~~Limited dividends paid to a non-corporate US holder generally will be taxable at~~plc ADSs are traded on the ~~reduced rate normally applicable to long-term capital gains provided that~~NYSE. Rio Tinto Limited believes it qualifies for the benefits of the convention between the US and ~~Australia, which Rio Tinto Limited believes it does, and certain other requirements are met.~~Australia. A US holder ~~will~~may be eligible for this reduced rate only if it has held the shares or ADSs for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date.

~~You must include any Australian tax withheld from the dividend payment in this gross amount even though you do not in fact receive it.~~ The dividend is taxable to you when you, in the case of shares, or the depositary, in the case of ADSs, receive the dividend, actually or constructively. ~~The dividend will not be eligible for the dividends-received deduction generally allowed to US corporations in respect of dividends received from other US corporations.~~ The amount of the dividend distribution that you must include in your income as a US holder will be the US dollar value of the non-US dollar payments made, determined at the spot UK pound/US dollar rate (in the case of Rio Tinto plc) or the spot Australian dollar/US dollar rate (in the case of Rio Tinto Limited) on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into US dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you include the dividend payment in income to the date you convert the payment into US dollars will be treated as ordinary income or loss and will not be eligible for the reduced tax rate normally applicable to capital gains. The gain or loss generally will be income or loss from sources within the US for foreign tax credit limitation purposes. ~~Distributions~~

You must include any Australian tax withheld from the dividend payment in ~~excess of current and accumulated earnings and profits, as determined for US federal income tax purposes, will be treated as a non-taxable return of capital to the extent of your basis~~this gross amount even though you do not in ~~the shares or ADSs and thereafter as capital gain.~~

fact receive it. Subject to certain limitations, any Australian tax withheld in accordance with the convention between the US and Australia and paid over to Australia will be creditable or deductible against your US federal income tax liability.

For foreign tax credit purposes, dividends will generally be income from sources outside the US and will, depending on your circumstances, generally be either “passive” or “general” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit allowable to you. The rules regarding foreign tax credits are complex and US holders should consult their own tax advisors regarding the outstanding and calculation of foreign tax credits and the application of the foreign tax credit rules to their particular situation.

Taxation of capital gains

Subject to the PFIC Rules discussed below, if you are a US holder and you sell or otherwise dispose of the Group’s ADSs or shares, you will recognise a capital gain or loss for US federal income tax purposes equal to the difference between the US dollar value of the amount that you realise and your tax basis, determined in US dollars, in your shares or ADSs. ~~Capital~~The capital gain of a non-corporate US holder is generally taxed at preferential rates where the holder has a holding period greater than one year. The gain or loss will generally be income or loss from sources within the US for foreign tax credit limitation purposes.

Passive Foreign Investment Company Rules

We believe that the Group’s shares or ADSs should not be treated as stock of a PFIC for US federal income tax purposes for the 2017 taxable year, but this conclusion is a factual determination that is made annually and thus may be subject to change. If we were to be treated as a PFIC, ~~unless the shares or ADSs are “marketable stock” and a~~ US holder elects to be taxed annually on a mark-to-market basis with respect to the shares or ADSs, gain realised on the sale or other disposition of the shares or ADSs would in general not be treated as capital gain. Instead, if you are a US holder, youholders generally would be ~~treated as if you had realised such gain~~required (i) to pay a special addition to US tax on certain distributions and ~~certain “excess distributions” rateably over your holding period for the~~gains on sale of shares or ADSs, and ~~would be taxed~~(ii) to pay tax on any gain from the sale of shares or ADSs at ordinary income (rather than capital gains) rates in addition to paying the ~~highest~~special addition to tax ~~rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. In addition,~~on this gain. Additionally, dividends that you receive from us will not be eligible for the reduced rate of tax ~~rates normally applicable to capital gains if we are a PFIC either in~~described above under “Taxation of dividends.” US holders should consult their own tax advisors regarding the ~~taxable year~~potential application of the ~~distribution~~PFIC rules.

Backup Withholding and Information Reporting

The proceeds of a sale or ~~the preceding taxable year, but instead~~other disposition, as well as dividends and other proceeds, with respect to shares or ADSs by a US paying agent or other US intermediary will be ~~taxable at rates~~reported to the IRS and to the US holder as may be required under applicable regulations. Backup withholding may apply to ~~ordinary income.~~these payments if the US holder fails to provide an accurate taxpayer identification number or certification of exempt status or fails to comply with applicable certification requirements. Certain US holders are not subject to backup withholding. US holders should consult their tax advisers about these rules and any other reporting obligations that may apply to the ownership or disposition of shares or ADSs, including requirements related to the holding of certain foreign financial assets.

10.F Dividends and paying agents

Not applicable.

10.G Statement by experts

Not applicable.

10.H Documents on display

Rio Tinto is subject to the Securities and Exchange Commission reporting requirements for foreign companies. This Form 20-F, which corresponds with the Form 10-K for US public companies, was filed with the SEC on 31 March ~~2016.~~2018. Rio Tinto’s Form 20-F and other filings can be viewed on the Rio Tinto website as well as the SEC website at www.sec.gov. ADR holders may also read without charge and copy at prescribed rates any document filed at the public reference facilities of the SEC’s principal office at 100 F Street NE, Washington, DC 20549, US. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

10.I Subsidiary information

Not applicable.

ITEM 11. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth under the headings:

“Financial statements Note 30-Financial instruments and risk management” on pages ~~147~~153 to ~~156;~~162; and

“Cautionary statement about forward-looking statements” on the inside front cover

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

See above Item 3.D, “Principal risks and uncertainties” and Item 5.A, “Additional financial information-Treasury management and financial instruments”.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.D American Depositary Shares

American depositary receipts (ADRs)

Rio Tinto plc has a sponsored ADR facility with JPMorgan Chase Bank NA (JPMorgan) under a Deposit Agreement, dated 13 July 1988, as amended on 11 June 1990, as further amended and restated on 15 February 1999, 18 February 2005 (when JPMorgan became Rio Tinto plc’s depositary), 29 April 2010 and on 19 February 2016. The ADRs evidence Rio Tinto plc ADSs, each representing one ordinary share. The shares are registered with the US Securities and Exchange Commission (SEC), are listed on the NYSE and are traded under the symbol RIO.

Fees and charges payable by a holder of ADSs

In accordance with the terms of the Deposit Agreement, JPMorgan may charge holders of Rio Tinto ADSs, either directly or indirectly, fees or charges up to the amounts described in the table below.


Category	Depositary actions	Associated fee
~~Depositing or substituting the underlying shares~~	Issuance of ADSs against the deposit of shares, including deposits and issuance in respect of: Share distributions, stock split, rights, merger Exchange of securities or other transactions Other events or distributions affecting the ADSs or the deposited securities	US$5.00 per 100 ADSs (or portion thereof) evidenced by the new ADSs delivered

Selling or exercising rights	Distribution or sale of securities, the fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities	US$5.00 for each 100 ADSs (or portion thereof)

Withdrawing an underlying share	Acceptance of ADSs surrendered for withdrawal of deposited securities	US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADSs surrendered

Transferring, splitting or grouping receipts	Transfers, combining or grouping of depositary receipts	US$1.50 per ADS

General depositary services, particularly those charged on an annual basis	Other services performed by the depositary in administering the ADRs Provide information about the depositary’s right, if any, to collect fees and charges by offsetting them against dividends received and deposited securities	US$0.02 per ADS (or portion thereof) not more than once each calendar year and payable at the sole discretion of the depositary by billing holders or deducting such charge from one or more cash dividends or other cash distributions

Expenses of the depositary	Expenses incurred on behalf of holders in connection with: Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment The depositary’s or its custodian’s compliance with applicable law, rule or regulation Stock transfer or other taxes and other governmental charges Cable, telex, facsimile and electronic transmission/delivery Expenses of the depositary in connection with the conversion of foreign currency into US dollars (which are paid out of such foreign currency) Any other charge payable by the depositary or its agents	Expenses payable at the sole discretion of the depositary by billing holders or by deducting charges from one or more cash dividends or other cash distributions

Fees and payments made by the depositary to the issuer

JPMorgan has agreed to reimburse certain company expenses related to the Rio Tinto plc ADR programme and incurred by the Group in connection with the programme. ~~The Group received US$ 1.05 million~~JPMorgan did not pay any amount in respect of expenses incurred by the Group in connection with the ADR programme for the year ended 31 December ~~2015.~~2017. JPMorgan did not pay any amount on the Group’s behalf to third parties. JPMorgan also waived certain of its standard fees and expenses associated with the administration of the programme relating to routine programme maintenance, reporting, distribution of cash dividends, annual meeting services and report mailing services.

Under certain circumstances, including removal of JPMorgan as depositary or termination of the ADR programme by the Company, the Company is required to repay JPMorgan any amounts of administrative fees and expenses waived during the 12-month period prior to notice of removal or termination.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

The information set forth under the heading on ~~“Corporate governance-Financial~~“Directors’ report-Financial reporting” on ~~page 66~~pages 109 and 110 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

PricewaterhouseCoopers LLP and PricewaterhouseCoopers, the auditors of Rio Tinto plc and Rio Tinto

Limited respectively, audited the financial statements included in this Form 20-F and audited the effectiveness of internal controls over financial reporting as of 31 December ~~2015.~~2017. Their audit report and attestation on ~~management’s assessment of~~ the issuer’s internal control over financial reporting is included below under Item 18 “Report of Independent Registered Public Accounting Firm”.

ITEM 16

16.A Audit committee financial expert

The information set forth under the heading ~~“Corporate governance-Audit~~“Governance report-Audit Committee report” on pages 5863 to 6067 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

16.B Code of ethics

The information set forth under the heading ~~“Corporate governance-Other disclosures”~~“Relations with stakeholders-The way we work” on page 6369 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

The way we work applies to ~~the Group’s~~ employees including the Group’s Chief executive and Chief financial officer and is available on our website at www.riotinto.com. ~~A new edition of~~~~The way we work~~ ~~was published in 2015. However, no~~No substantive amendments to a provision ofThe way we work were made during ~~2015~~2017 and no waivers were granted.

16.C Principal accountant fees and services

The information set forth under the headings:

“~~Directors’~~Audit Committee report-Fees for audit and non-audit services” on page ~~50;~~65;

“~~Corporate governance-Governance processes”~~Audit Committee report-Relationship with external auditors” on ~~page 60;~~pages 65 and 66; and

~~“Directors’ report-Auditors” on page 50; and~~

“Financial statements Note 39-Auditors’ remuneration” on page ~~166~~172

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

16.D Exemptions from the listing standards for audit committees

Not applicable.

16.E Purchases of equity securities by the issuer and affiliated purchasers

The information set forth under the headings:

“Directors’ report-Share capital” on page ~~47;~~107; and

“Directors’ report-Purchases” on page 48108 and

of the Annual Report ~~2015~~2017 is incorporated herein by reference.

16.F Change in registrant’s certifying accountant

Not applicable.

16.G Corporate governance

The information set forth under the heading ~~“Corporate governance-Statement~~“Chairman’s governance review-Statement of compliance with governance codes and standards in ~~2015”~~2017” on page 5551 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

16.H Mine safety disclosure

The information set forth in Exhibit 16.1 is incorporated herein by reference.

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The financial information concerning the Company set forth under the headings ~~“2015~~“2017 Financial statements”, “Primary financial statements” on pages 112 to 116 and ~~notes~~Notes 1 to 4544 on pages ~~106~~118 to ~~175~~181, Note 46 on pages 183 to 201, and pages ~~194~~206 to ~~199~~208 of the Annual Report ~~2015~~2017 is incorporated herein by reference.

Report of Independent Registered Public Accounting Firms

To the Boards of Directors and Shareholders of Rio Tinto plc and Rio Tinto Limited

~~In our opinion,~~

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of the Rio Tinto Group ~~balance sheet~~(comprising Rio Tinto plc and Rio Tinto Limited and their respective subsidiaries) as of 31 December 2017 and 2016, and the related Group income statement, the Group statement of comprehensive income, the Group cash flow statement and the Group statement of changes in equity for each of the three years in the period ended 31 December 2017, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Group’s internal control over financial reporting as of 31 December 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the ~~Rio Tinto Groupat~~Group as of 31 December ~~2015~~2017 and ~~2014,~~2016, and the results of ~~their~~its operations and ~~their~~its cash flows for each of the three years in the period ended 31 December ~~2015~~2017 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards ~~Board.~~Board and in conformity with International Financial Reporting Standards as adopted by the European Union. Also in our opinion, the Rio Tinto Group maintained, in all material respects, effective internal control over financial reporting as of 31 December ~~2015,~~2017, based on criteria established inInternal Control - Integrated Framework ~~2013~~ (2013) issued by the ~~Committee of Sponsoring Organizations of the Treadway Commission (COSO).~~ COSO.

Basis for Opinions

The Rio Tinto Group’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included ~~inManagement’s report~~in Management’s Report on ~~internal control~~Internal Control over ~~financial reporting.~~Financial Reporting. Our responsibility is to express opinions on ~~these~~the Group’s consolidated financial statements and on the Rio Tinto ~~Group’s~~Group's internal control over financial reporting based on our ~~integrated~~ audits. We are public accounting firms registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the consolidated financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, ~~and~~as well as evaluating the overall presentation of the consolidated financial ~~statement presentation.~~statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures ~~that:~~that (i) pertain to the maintenance of

records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,

and that receipts and expenditures of the company are being made only in accordance with ~~authorizations~~authorisations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of ~~unauthorized~~unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


/s/ PricewaterhouseCoopers LLP		/s/ PricewaterhouseCoopers
PricewaterhouseCoopers LLP		PricewaterhouseCoopers
London, United Kingdom		~~Melbourne,~~ Brisbane, Australia
~~2 March 2016~~ 28 February 2018		~~2 March 2016~~ 28 February 2018
In respect of the Board of Directors and ~~Shareholders of Rio Tinto plc~~		In respect of the Board of Directors and
Shareholders of Rio Tinto plc	Shareholders of Rio Tinto Limited

PricewaterhouseCoopers LLP and PricewaterhouseCoopers have acted as auditors of Rio Tinto since its formation under a dual listed company structure in 1995.

A predecessor firm of PricewaterhouseCoopers LLP have served as the auditor of a predecessor company of Rio Tinto plc since 1958 and a predecessor firm of PricewaterhouseCoopers have served as the auditor of a predecessor company of Rio Tinto Limited since 1959.

ITEM 19. EXHIBITS

Exhibits marked “*” have been filed as exhibits to this Annual report on Form 20-F and other exhibits have been incorporated by reference as indicated.

INDEX


Exhibit Number		Description
1.1
~~1.1~~		Articles of Association of Rio Tinto plc (adopted by special resolution passed on 20 April 2009 and amended on 1 October 2009) (incorporated by reference to Exhibit 1.1 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2009, File No. ~~1-10533)~~1‑10533)

1.2		Constitution of Rio Tinto Limited ~~(ACN~~(CAN 004 458 404) (as adopted by special resolution passed on 24 May 2000 and amended by special resolution on 18 April 2002, 29 April 2005, 27 April 2007, 24 April 2008 and 20 April 2009) (incorporated by reference to Exhibit 1.2 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2009, File No. ~~1-10533)~~1‑10533)

~~3.1~~ 3.1*		DLC Merger Implementation Agreement, dated 3 November 1995 between CRA Limited and The RTZ Corporation PLC relating to the implementation of the DLC merger (incorporated by reference to Exhibit 2.1 of Rio Tinto ~~plc’s~~plc's Annual report on Form 20-F for the financial year ended 31 December 1995, File No. ~~1-10533)~~1‑10533)

3.2		DLC Merger Sharing Agreement, dated 21 December 1995 and amended on 14 April 2005, 29 April 2005 and 18 December 2009 between CRA Limited and The RTZ Corporation PLC relating to the ongoing relationship between CRA and RTZ following the DLC merger (incorporated by reference to Exhibit 3.2 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2009, File No. ~~1-10533)~~1‑10533)

3.3		RTZ Shareholder Voting Agreement, dated 21 December 1995 and amended on 18 January 2010 between The RTZ Corporation PLC, RTZ Shareholder SVC Pty. Limited, CRA Limited, R.T.Z. Australian Holdings Limited and The Law Debenture Trust Corporation p.l.c (incorporated by reference to Exhibit 3.3 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2009, File No. ~~1-10533)~~1‑10533)

3.4		CRA Shareholder Voting Agreement, dated 21 December 1995 and amended 18 January 2010 between CRA Limited, CRA Shareholder SVC Limited, The RTZ Corporation PLC and The Law Debenture Trust Corporation p.l.c., relating to the RTZ Special Voting Share (incorporated by reference to Exhibit 3.4 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2009, File No. ~~1-10533)~~1‑10533)

4.01		Rio Tinto plc - Share Option Plan 2004 (incorporated by reference to Exhibit 4.3 of Rio Tinto’s Registration statement on Form S-8, File No. ~~333-147914)~~333‑147914)

4.02		Rio Tinto Limited - Share Option Plan 2004 (incorporated by reference to Exhibit 4.6 of Rio Tinto’s Registration statement on Form S-8, File No. ~~333-147914)~~333‑147914)

4.03		Rules of the Rio Tinto plc Performance Share Plan 2004 (formerly known as the Rio Tinto plc - Mining Companies Comparative Plan 2004) (incorporated by reference to Exhibit 4.03 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2011, File No. ~~1-10533)~~1‑10533)

4.04		Rules of the Rio Tinto Limited Performance Share Plan 2004 (formerly known as the Rio Tinto Limited - Mining Companies Comparative Plan 2004) (incorporated by reference to Exhibit 4.04 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2011, File No. ~~1-10533)~~1‑10533)


4.05		Rules of the Rio Tinto plc Performance Share Plan 2013 (incorporated by reference to Exhibit 4.05 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2013, File No. ~~1-10533)~~1‑10533)

4.06		Rules of the Rio Tinto Limited Performance Share Plan 2013 (incorporated by reference to Exhibit 4.06 of Rio Tinto plc Annual report on Form 20-F for the fiscal year ended 31 December 2013, File No. ~~1-10533)~~

1‑10533)

4.07
Rules of the Rio Tinto plc Bonus Deferral Plan (incorporated by reference to Exhibit 4.4 of Rio Tinto’s Registration statement on Form S-8, File No. ~~333-202547)~~333‑202547)
4.08
Rules of the Rio Tinto Limited Bonus Deferral Plan (incorporated by reference to Exhibit 4.6 of Rio Tinto’s Registration statement on Form S-8, No. ~~333-202547)~~333‑202547)
8.1**
~~List of subsidiary companies~~
12.1**
~~Certifications pursuant to Rule ~~13a-14(a)~~13a‑14(a) of the Exchange Act~~
13.1**
~~Certifications furnished pursuant to~~ ~~Rule ~~13a-14(b)~~13a‑14(b) of the Exchange Act (such certifications are not deemed filed for purpose of Section 18 of the Exchange Act and not incorporated by reference in any filing under the Securities Act)~~
15.1**
~~Consent~~
C~~onsent of~~ Independent Registered Public Accounting Firms to the incorporation of the audit report relating to the Rio Tinto Group and effectiveness of internal control over financial reporting of the Rio Tinto Group by reference in registration statements on Form ~~F-3~~F-~~3 and Form S-8~~
15.2**
Rio Tinto Annual Report ~~2015†~~2017†
16.1**
Mine safety and health administration safety data

*	Paper filing in 1995

**	Filed herewith

†

Certain of the information included within Exhibit 15.2, which is provided pursuant to Rule ~~12b-23(a)~~12b‑23(a)(3) of the Securities Exchange Act of 1934, as amended, is incorporated by reference in this Form 20-F, as specified elsewhere in this Form 20-F. With the exception of the items and pages so specified, the Annual Report ~~2015~~2017 is not deemed to be filed as part of this Form 20-F.

~~Signature~~Signature

The Registrants hereby certify that they meet all of the requirements for filing on Form 20-F and that they have duly caused and authorised the undersigned to sign this Annual Report on their behalf.


~~Rio Tinto plc~~				~~Rio Tinto Limited~~
~~(Registrant)~~				~~(Registrant)~~

Rio Tinto plc	Rio Tinto Limited
(Registrant)	(Registrant)
/s/ ~~Eleanor Evans~~Steve Allen			/s/ ~~Eleanor Evans~~Steve Allen
Name: Steve Allen		~~Eleanor Evans~~		Name:	~~Eleanor Evans~~ Steve Allen
Title:		Company Secretary		Title:	Joint Company Secretary

Date: 28 February 2018		~~2 March 2016~~		Date:	~~2 March 2016~~ 28 February 2018

4248


~~Commission file number: 001-10533~~		~~Commission file number: 001-34121~~

Commission file number: 001-10533	Commission file number: 001-34121

Rio Tinto plc		Rio Tinto Limited
	ABN 96 004 458 404
(Exact Name of Registrant as Specified in Its Charter)		(Exact Name of Registrant as Specified in Its Charter)

England and Wales		Victoria, Australia
(Jurisdiction of Incorporation or Organisation)		(Jurisdiction of Incorporation or Organisation)

6 St. James’s Square	Level 7, 360 Collins Street
London, SW1Y 4AD, United Kingdom		~~Level 33, 120 Collins Street~~ Melbourne, Victoria 3000, Australia
(Address of Principal Executive Offices)		(Address of Principal Executive Offices)


Title of Each Class	Name of Each Exchange On Which Registered	Title of Each Class	Name of Each Exchange On Which Registered
American Depositary Shares*	New York Stock Exchange
Ordinary Shares of 10p each** 4.125% Notes due 2021 3.750% Notes due 2021 3.500% Notes due 2022 2.875% Notes due 2022 3.750% Notes due 2025 7.125% Notes due 2028 5.200% Notes due 2040 4.750% Notes due 2042 4.125% Notes due 2042	New York Stock Exchange
~~1.375% Notes due 2016~~	New York Stock Exchange	~~1.375% Notes due 2016~~	New York Stock Exchange
~~2.000% Notes due 2017~~	New York Stock Exchange	~~2.000% Notes due 2017~~	New York Stock Exchange
~~1.625% Notes due 2017~~	New York Stock Exchange	~~1.625% Notes due 2017~~	New York Stock Exchange
~~6.500% Notes due 2018~~	New York Stock Exchange	~~6.500% Notes due 2018~~	New York Stock Exchange
~~2.250% Notes due 2018~~	New York Stock Exchange	~~2.250%~~ 4.125% Notes due ~~2018~~2021 3.750% Notes due 2021 3.500% Notes due 2022 2.875% Notes due 2022 3.750% Notes due 2025 7.125% Notes due 2028 5.200% Notes due 2040 4.750% Notes due 2042 4.125% Notes due 2042	New York Stock Exchange
~~9.000% Notes due 2019~~	New York Stock Exchange	~~9.000% Notes due 2019~~	New York Stock Exchange
~~3.500% Notes due 2020~~	New York Stock Exchange	~~3.500% Notes due 2020~~	New York Stock Exchange
~~4.125% Notes due 2021~~	New York Stock Exchange	~~4.125% Notes due 2021~~	New York Stock Exchange
~~3.750% Notes due 2021~~	New York Stock Exchange	~~3.750% Notes due 2021~~	New York Stock Exchange
~~3.500% Notes due 2022~~	~~New York Stock Exchange~~	~~3.500% Notes due 2022~~	~~New York Stock Exchange~~
~~2.875% Notes due 2022~~	~~New York Stock Exchange~~	~~2.875% Notes due 2022~~	~~New York Stock Exchange~~
~~3.750% Notes due 2025~~	~~New York Stock Exchange~~	~~3.750% Notes due 2025~~	~~New York Stock Exchange~~
~~7.125% Notes due 2028~~	~~New York Stock Exchange~~	~~7.125% Notes due 2028~~	~~New York Stock Exchange~~
~~5.200% Notes due 2040~~	~~New York Stock Exchange~~	~~5.200% Notes due 2040~~	~~New York Stock Exchange~~
~~4.750% Notes due 2042~~	~~New York Stock Exchange~~	~~4.750% Notes due 2042~~	~~New York Stock Exchange~~
~~4.125% Notes due 2042~~	~~New York Stock Exchange~~	~~4.125% Notes due 2042~~	~~New York Stock Exchange~~
~~Floating Rate Notes due 2016~~	~~New York Stock Exchange~~	~~Floating Rate Notes due 2016~~	~~New York Stock Exchange~~

Large Accelerated Filer☒	Accelerated Filer ☐	Non-Accelerated Filer ☐
		Emerging growth company ☐

~~PART I~~
~~PART I~~
~~ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS~~			1
~~ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE~~			1
~~ITEM 3. KEY INFORMATION~~			1
~~ITEM 4. INFORMATION ON THE COMPANY~~			11	10
~~ITEM 4A. UNRESOLVED STAFF COMMENTS~~			12	13
~~ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS~~			12	13
~~ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES~~			27	31
~~ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS~~			28	32
~~ITEM 8. FINANCIAL INFORMATION~~			29	33
~~ITEM 9. THE OFFER AND LISTING~~			30	34
~~ITEM 10. ADDITIONAL INFORMATION~~			32	35
~~ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~			35	40
~~ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES~~			35
	40
~~PART II~~			37
~~PART II~~		42
~~ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES~~			37	42
~~ITEM 14. MATERIAL~~ ~~MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS~~			37	42
~~ITEM 15. CONTROLS AND PROCEDURES~~			37	42
~~ITEM 16~~			37
	42
~~PART III~~			38
~~PART III~~		43
~~ITEM 17. FINANCIAL STATEMENTS~~			38	43
~~ITEM 18. FINANCIAL STATEMENTS~~			38	43
~~ITEM 19. EXHIBITS~~			40	46


Year ended 31 December(a)	Period end		Average rate		High		Low
Feb 2016 (through 15 Feb)		1.45		1.45		1.46		1.43
Jan 2016		1.43		1.44		1.48		1.41
Dec 2015		1.48		1.50		1.52		1.48
Nov 2015		1.50		1.52		1.55		1.50
Oct 2015		1.53		1.53		1.55		1.51
Sep 2015		1.52		1.53		1.56		1.52
Aug 2015		1.54		1.56		1.58		1.54
2015		1.48		1.53		1.59		1.46
2014		1.56		1.65		1.72		1.55
2013		1.63		1.56		1.63		1.51
2012		1.63		1.59		1.63		1.53
2011		1.55		1.60		1.67		1.67


~~Principal risks and uncertainties at a glance (2015 trend)~~
	~~External~~	~~Internal~~	~~Internal and external~~
~~Increasing risk~~	~~Commodity prices~~ ~~China development pathway~~	~~None~~	~~None~~
~~No change in risk~~	~~Strategic partnerships~~ ~~Jurisdictional risk~~	~~Execution of acquisitions and divestments~~ ~~Capital project development HSEC~~ ~~Business misconduct~~	~~Liquidity~~ ~~Exploration and resources~~ ~~Business interruption~~
~~Decreasing risk~~	~~None~~	~~None~~	~~None~~


~~Operational risks~~Strategic partnerships play a material role in delivering the Group’s production, cash and market positioning, and these may not always develop as planned.	Joint venture partners may hinder growth by not agreeing to support investment decisions. For non-managed operations, the decisions of the controlling partners may cause adverse impacts to the value of the Group’s interest in the operation or to its reputation and may expose it to unexpected financial liability.
~~Inherent risk~~Health, Safety, Environment and ~~uncertainty~~			~~Potential downside impact (threats)~~ Community (HSEC) risks
~~HSEC risks:~~ Rio Tinto’s operations are inherently hazardous. We lead responsibly to preserve our licence to operate and ensure our employees and contractors go home safe and healthy.
Our operations and projects are inherently hazardous with the potential to cause illness or injury, damage to the environment, disruption to a community or a threat to personal security. ~~Internal risk~~		Failure to manage our health, safety, environment or community risks could result in a catastrophic event or other long-term damage which could in turn harm the Group’s ~~social~~financial performance and licence to operate. Recognised hazards and threats include, among others, underground operations, aviation, pit slope instability, tailings facilities, process safety, infrastructure, vector-borne and pandemic disease, chemicals, gases, vehicles and machinery, extreme natural environments, endangered flora or fauna, areas of cultural heritage significance, water supply stress and climate change.

Resources ~~risks:~~risks
Rio Tinto invests materially to accurately identify new deposits and develop orebody knowledge, underpinning our operations and projects.
The success of the Group’s exploration activity may vary. In addition, estimates of ore reserves are based on uncertain assumptions that, if changed, could result in the need to restate ore ~~reserves.~~reserves and mine plans. ~~External risk~~ ~~Internal risk~~		A failure to discover new viable orebodies could undermine future growth prospects. The risk that new information comes to light or operating conditions change means that the economic viability of some ore reserves ~~can change~~ and ~~thus the reserves need to~~mine plans can be restated downwards. As a result, projects may be less successful and of shorter duration than initially anticipated, and/or the asset value may be impaired.

Attracting and retaining talent as the company and industry evolves presents a constant challenge.			The inability to attract or retain key talent will constrain the Group’s ability to reach its goals within planned timeframes.
Stakeholder risks	~~Compliance risks~~
~~Inherent risk~~Rio Tinto recognises positive engagement with a range of stakeholders, and ~~uncertainty~~					~~Potential downside impact (threats)~~ seeks to develop collaborative and mutually beneficial partnerships though our “partner to operate” strategy.
~~Stakeholder risks:~~
~~Strategic partnerships and third parties influence the Group’s supply, operations and reputation. The Group’s ability to control the actions of these parties varies.~~ ~~External risk~~		Joint venture partners may hinder growth by not agreeing to support investment decisions. For non-managed operations, controlling partners may take action contrary to the Group’s interests or standards and policies, resulting in adverse impact to health and safety, performance, reputation or legal liability.
The Group’s operations are located across a number of jurisdictions, which exposes the Group to a wide range of economic, political, societal and regulatory ~~risks.~~environments. ~~External risk~~				Adverse actions by governments and others can result in operational/project delays or loss of licence to operate. Other potential ~~consequences~~actions can include expropriation, ~~nationalisation,~~ changes in taxation, ~~as well as currency~~ and export or foreign investment ~~restrictions.~~restrictions, which may threaten the investment proposition, title, or carrying value of assets. Legal frameworks with respect to policies such as energy, climate change and mineral law ~~and taxation~~ may also change in a way that increases costs.

Governance ~~risks:~~risks
Rio Tinto employees operate in compliance with The way we work – our global code of business conduct, the Group delegation of authorities and all Group policies, standards and procedures.
The Group’s reputation and regulatory licences are dependent upon appropriate business conduct and are threatened by a public allegation of potential misbehaviour or by regulatory investigation. ~~External risk~~ ~~Internal risk~~				Fines may be imposed against Group companies for breaching antitrust rules, anti-corruption legislation, sanctions or human rights violations or for other inappropriate business conduct. A serious allegation or formal investigation by increasingly connected regulatory authorities (regardless of ultimate ~~decision)~~finding) could result in a loss in share price value, and/or loss of business. Other consequences could include the criminal prosecution of individuals, imprisonment and/or personal fines, and fines, legal liabilities and reputational damage to the Group. There may also be considerable cost and disruption in responding to allegations or investigations and related litigation, and in taking remedial action.


	2015 US$m		2014 US$m
Equity attributable to owners of Rio Tinto		37,349		46,285
Equity attributable to non-controlling interests		6,779		8,309
Net debt (financial statements Note 24 of the Annual Report 2015)		13,783		12,495

Total capital		57,911		67,089


Commodity	Unit		Average market price for 2015 US$		Effect on underlying earnings of 10% change in full year average +/- US$m
Iron ore 62% Fe Fines FOB		dmt		50		843
Aluminium^(a)		Tonne		1,661		416
Copper^(a)		Pound		2.49		213
Gold		Ounce		1,160		39


At 31 December 2015	<1 yr US$m		1-3 yrs US$m			3-5 yrs US$m		> 5 yrs US$m		Total US$m
Expenditure commitments in relation to:
Operating leases		400		590			443		745		2,178
Other (capital commitments)		1,010		155			2		24		1,191

		1,410		745			445		769		3,369

Long-term debt and other financial obligations:
Debt		2,266		5,351			3,483		12,318		23,418
Interest payments		884		1,704			1,189		4,4789		8,566
Purchase obligations		2,677		4,125			2,865		12,945		22,612
Other		192		(43	)		111		181		441

		6,019		11,137			7,648		30,233		55,037

Total		7,429		11,882			8,093		31,002		58,406


		Pence per Rio Tinto plc share				US$ per Rio Tinto plc ADS^(a)				A$ per Rio Tinto Limited share
		High		Low		High		Low		High		Low
2011			4,712		2,713		76.67		40.50		88.68		59.00
2012			3,988		2,716		62.70		42.32		72.30		48.63
2013			3,757		2,583		59.92		39.90		72.07		50.24
2014			3,627		2,616		59.93		40.70		70.88		52.65
2015			3,238		1,848		49.94		27.38		65.60		41.76
Aug 2015			2,635		2,154		41.60		34.14		54.60		46.97
Sep 2015			2,398		2,111		37.44		32.06		52.01		46.52
Oct 2015			2,600		2,220		39.74		33.76		55.18		48.73
Nov 2015			2,371		2,199		36.41		33.08		50.85		45.91
Dec 2015			2,215		1,848		33.40		27.38		46.92		41.76
Jan 2016			1,940		1,578		28.65		22.70		44.63		37.75
Feb 2016 (through 15 Feb)			1,858		1,618		26.96		23.25		42.53		37.03
2014	– First quarter		3,627		3,115		59.93		51.18		70.88		60.80
	– Second quarter		3,426		3,017		57.33		51.30		65.14		57.45
	– Third quarter		3,515		3,031		59.18		49.18		67.82		59.21
	– Fourth quarter		3,163		2,616		51.47		40.70		61.24		52.65
2015	– First quarter		3,238		2,772		49.94		41.40		65.60		53.69
	– Second quarter		3,030		2,614		46.88		40.96		59.90		53.29
	– Third quarter		2,635		2,111		41.60		32.06		54.60		46.52
	– Fourth quarter		2,600		1,848		39.74		27.38		55.18		41.76



4.07		Rules of the Rio Tinto plc Bonus Deferral Plan (incorporated by reference to Exhibit 4.4 of Rio Tinto’s Registration statement on Form S-8, File No. ~~333-202547)~~333‑202547)

4.08		Rules of the Rio Tinto Limited Bonus Deferral Plan (incorporated by reference to Exhibit 4.6 of Rio Tinto’s Registration statement on Form S-8, No. ~~333-202547)~~333‑202547)

8.1**		~~List of subsidiary companies~~

12.1**		~~Certifications pursuant to Rule ~~13a-14(a)~~13a‑14(a) of the Exchange Act~~

13.1**		~~Certifications furnished pursuant to~~ ~~Rule ~~13a-14(b)~~13a‑14(b) of the Exchange Act (such certifications are not deemed filed for purpose of Section 18 of the Exchange Act and not incorporated by reference in any filing under the Securities Act)~~

15.1**		~~Consent~~ C~~onsent of~~ Independent Registered Public Accounting Firms to the incorporation of the audit report relating to the Rio Tinto Group and effectiveness of internal control over financial reporting of the Rio Tinto Group by reference in registration statements on Form ~~F-3~~F-~~3 and Form S-8~~

15.2**		Rio Tinto Annual Report ~~2015†~~2017†

16.1**		Mine safety and health administration safety data