Rio Tinto 20F/A 2002 Annual report (foreign) (amended)

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 20-F/A

(Mark One)

	Registration statement pursuant to Section 12 (b) or 12(g) of the Securities Exchange Act of 1934
	or
	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the financial year ended: 31 December 2002
	or
	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from: ____________ to ____________

Commission file number: 1-10533	Commission file number: 0-20122

Rio Tinto plc	Rio Tinto Limited
(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 33, 55 Collins Street
London, SW1Y 4LD, England	Melbourne, Victoria 3001, Australia
(Address of principal executive offices)	(Add ress of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered	Name of each exchange on which registered	Title of each class
American Depositary Shares*	New York Stock Exchange		None
Ordinary Shares of 10p each**	New York Stock Exchange

*	Evidenced by American Depository Receipts. Each American Depository Share represents four Rio Tinto plc Ordinary Shares of 10p each.
**	Not for trading, but only in connection with the listing of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:
Title of each class		Title of each class
None		American Depositary Shares***
		Shares

***	Evidenced by American Depository Receipts. Each American Depository Share represents four Rio Tinto Limited Ordinary Shares.




Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None	None

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:

Title of each class	Number	Number	Title of each class
Ordinary Shares of 10p each	1,065,481,600	498,818,278	Shares
DLC Dividend Share of 10p	1	1	DLC Dividend Share
Special Voting Share of 10p	1	1	Special Voting Share

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:

Yes		No
Indicate by check mark which financial statement item the Registrants have elected to follow:

Item 17		Item 18

Back to Contents

EXPLANATORY NOTE

This Form 20-F/A has been filed to:

•

exclude from Item 18 of the Annual reports on Form 20-F filed by Rio Tinto plc and Rio Tinto Limited on 23 April 2003 (the ��Form 20-F”) the financial statements and supplementary information of the Rio Tinto Group set out on pages 73 to 138 of the 2002 Annual report, including the accompanying Report of the Independent Auditors on page 129 of the 2002 Annual report. Such financial statements and supplementary information, including the accompanying Report of the Independent Auditors, are being excluded because such Report of the Independent Auditors contains language purporting to limit the responsibility of the registrants’ Independent Auditors to third parties, which language the staff of the Securities and Exchange Commission (the “Commission”) does not wish registrants to include in documents filed with the Commission. In view of the exclusion from Item 18 of the Form 20-F of the financial statements referenced above, the reference in Item 4 of the Form 20-F to note 31 on page 116 of the 2002 Annual report should be read as a reference to note 31 on page A-47 of this Form 20-F/A, and the reference in Item 6 of the Form 20-F to note 41 on pages 121 to 124 of the 2002 Annual report should be read as a reference to note 40 on pages A-52 to A-55 of this Form 20-F/A;

•

include in Item 18 of the Form 20-F the Report of the Independent Auditors on page A-1 of this Form 20-F/A. Such Report of the Independent Auditors was inadvertently omitted from the pages referenced under Item 18 of the Form 20-F but was transmitted to the Commission with the Form 20-F and has been and is currently available to the public on the Commission’s EDGAR database; The date of such Report of Independent Auditors has been modified with respect to the last paragraph of note 29 to the financial statements but otherwise such Report of Independent Auditors remains unchanged;

•	update the disclosure in the last paragraph of note 29, Contingent liabilities and commitments, on page A-45 of this Form 20-F/A following the substantial disallowance of the Group’s objections to certain tax assessments issued by the Australian Tax Office in 2002. Based on Counsel’s opinion, the directors continue to believe that the assessments are not sustainable under Australian law prevailing at the time of the transactions and that no material loss will arise; and

•	include in Item 19 of the Form 20-F, and as Exhibit 10.1 to the Form 20-F, the Consent of the Independent Auditors of Rio Tinto plc and Rio Tinto Limited to the incorporation by reference of the Report of the Independent Auditors on page A-1 of this Form 20-F/A in the registration statement on Form F-3 (No. 333-13558) of Rio Tinto Finance (USA) Limited, Rio Tinto plc and Rio Tinto Limited.

Except as described in the third bullet point above with respect to the last paragraph of note 29, Contingent liabilities and commitments, no changes have been made to the financial statements of the Rio Tinto Group, Rio Tinto plc or Rio Tinto Limited as contained in the Form 20-F.

This Form 20-F/A consists of a cover page, this explanatory note, the answers (as amended) to Items 18 and 19 of the Form 20-F, the signature page, Exhibit 10.1 and the required certifications of the principal executive officer and the principal financial officer of Rio Tinto plc and Rio Tinto Limited. While the answers (as amended) to Items 18 and 19 of the Form 20-F have been restated in full as required by Rule 12b-15 under the Securities Exchange Act of 1934, no changes have been made to such answers except as specifically described above.

Other than as expressly set forth above, this Form 20-F/A does not, and does not purport to, amend, update or restate the information in any other Item of the Form 20-F or reflect any events that have occurred after the Form 20-F was filed.

Rio Tinto 2002 Form 20-F/A 1

Back to Contents

RIO TINTO

PART III

Item 18. Financial Statements

The Report of the Independent Auditors and the financial statements of the Rio Tinto Group (the “Group”) and of the Rio Tinto plc and Rio Tinto Limited parts of the Group have been set out on pages A-1 to A-72 of this Form 20-F/A.

Item 19. Exhibits

Index

Exhibit Number	Description

1.1*	Memorandum and Articles of Association of Rio Tinto plc (adopted by special resolution passed on 11 April 2002)
1.2*	Constitution of Rio Tinto Limited (ACN 004 458 404) (as adopted by special resolution passed on 24 May 2000 and amended by special resolution on 18 April 2002).

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 Annual report on Form 20-F for the financial year ended 31 December 1995, File No. 1-10533).
3.2	DLC Merger Sharing Agreement, dated 21 December 1995 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 2.1 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 1995, File No. 1-10533).
3.3	RTZ Shareholder Voting Agreement, dated 21 December 1995 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 2.3 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 1995, File No. 1-10533).
3.4	CRA Shareholder Voting Agreement, dated 21 December 1995 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 2.4 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 1995, File No. 1-10533).

4.01	Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.01 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.02	Letter dated 1 January 1992 to Sir Robert Wilson about supplementary pension arrangements (incorporated by reference to Exhibit 4.02 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.03	Supplementary letter dated 1 January 1992 to Sir Robert Wilson about pension arrangements (incorporated by reference to Exhibit 4.03 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.04	Memorandum effective 1 April 1992 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.04 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.05	Memorandum effective 1 April 1993 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.05 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.06	Letter dated 9 March 1994 amending Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.06 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.07	Memorandum effective 1 April 1994 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.07 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.08	Letter dated 22 November 1994 to Sir Robert Wilson about supplementary pension arrangements (incorporated by reference to Exhibit 4.08 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).

Rio Tinto 2002 Form 20-F/A 2

Back to Contents

4.09	Memorandum effective 1 April 1995 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.09 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.10	Memorandum effective 1 April 1996 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.10 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.11	Letter dated 20 January 1997 to Sir Robert Wilson about directors' pension arrangements (incorporated by reference to Exhibit 4.11 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.12	Memorandum effective 1 April 1997 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and RTZ Limited (incorporated by reference to Exhibit 4.12 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.13	Memorandum effective 1 April 1998 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.13 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.14	Memorandum effective 1 April 1999 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.14 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.15	Memorandum effective 1 April 2000 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.15 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.16	Supplementary letter dated 14 February 2001 to Sir Robert Wilson about reduction of notice period (incorporated by reference to Exhibit 4.16 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.17	Memorandum effective 1 April 2001 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.17 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.18	Memorandum effective 1 March 2002 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.18 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2001, File No. 1-10533).
4.19*	Memorandum effective 1 March 2003 to Service Agreement dated 1 January 1992 between Sir Robert Wilson and Rio Tinto London Limited (formerly RTZ Limited).

4.20	Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited (incorporated by reference to Exhibit 4.18 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.21	Memorandum effective 1 April 1999 to Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited (incorporated by reference to Exhibit 4.19 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.22	Memorandum effective 1 April 2000 to Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited (incorporated by reference to Exhibit 4.20 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.23	Memorandum effective 1 April 2001 to Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited (incorporated by reference to Exhibit 4.21 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.24	Memorandum effective 1 March 2002 to Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited (incorporated by reference to Exhibit 4.23 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2001, File No. 1-10533).
4.25*	Memorandum effective 1 March 2003 to Service Agreement dated 24 March 1999 between Mr R L Clifford and Rio Tinto Limited.

4.26	Letter dated 1 January 1992 to Mr R Adams about supplementary pension arrangements (incorporated by reference to Exhibit 4.23 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.27	Supplementary letter dated 1 January 1992 to Mr R Adams about pension arrangements (incorporated by reference to Exhibit 4.24 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.28	Letter dated 22 November 1994 to Mr R Adams about supplementary pension arrangements (incorporated by reference to Exhibit 4.29 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.29	Letter dated 20 January 1997 to Mr R Adams about directors' pension arrangements (incorporated by reference to Exhibit 4.32 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2001, File No. 1-10533).

Rio Tinto 2002 Form 20-F/A 3

Back to Contents

4.30*	Service Agreement dated 15 April 2003 between Mr R Adams and Rio Tinto London Limited.

4.31*	Service Agreement dated 19 June 2002 between Mr G R Elliott and Rio Tinto London Limited.
4.32*	Memorandum effective 1 March 2003 to Service Agreement dated 19 June 2002 between Mr G R Elliott and Rio Tinto Limited.

4.33	Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited (incorporated by reference to Exhibit 4.53 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.34	Memorandum effective 1 April 1999 to Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited (incorporated by reference to Exhibit 4.54 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.35	Memorandum effective 1 April 2000 to Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited (incorporated by reference to Exhibit 4.55 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-105
4.36	Memorandum effective 1 April 2001 to Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited (incorporated by reference to Exhibit 4.56 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-105
4.37	Memorandum effective 1 March 2002 to Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited (incorporated by reference to Exhibit 4.61 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2001, File No. 1-10533).
4.38*	Memorandum effective 1 March 2003 to Service Agreement dated 19 January 1999 between Mr O L Groeneveld and Rio Tinto Limited.

4.39	Service Agreement dated 1 June 1994 between Mr J C A Leslie and RTZ Limited (incorporated by reference to Exhibit 4.57 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.40	Letter dated 22 November 1994 to Mr J C A Leslie about supplementary pension arrangements (incorporated by reference to Exhibit 4.58 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.41	Memorandum effective 1 April 1995 to Service Agreement dated 1 June 1994 between Mr J C A Leslie and RTZ Limited (incorporated by reference to Exhibit 4.59 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.42	Letter dated 20 January 1997 to Mr J C A Leslie about directors' pension arrangements (incorporated by reference to Exhibit 4.60 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.43	Memorandum effective 1 April 1998 to Service Agreement dated 1 June 1994 between Mr J C A Leslie and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.61 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.44	Memorandum effective 1 April 1999 to Service Agreement dated 1 June 1994 between Mr J C A Leslie and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.62 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.45	Memorandum effective 1 April 2000 to Service Agreement dated 1 June 1994 between Mr J C A Leslie and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.63 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.46	Memorandum effective 1 April 2001 to Service Agreement dated 1 June 1994 between Mr J C A Leslie and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.64 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.47	Memorandum effective 1 March 2002 to Service Agreement dated 19 August 1991 between Mr J C A Leslie and Rio Tinto London Limited (formerly RTZ Limited) (incorporated by reference to Exhibit 4.70 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2001, File No. 1-10533).
4.48	Mining Companies Comparative Plan (incorporated by reference to Exhibit 4.02 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533) (incorporated by reference to Exhibit 4.62 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.49	Share Option Plan (incorporated by reference to Exhibit 4.02 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533) (incorporated by reference to Exhibit 4.62 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).
4.50	Medical expenses plan (incorporated by reference to Exhibit 4.02 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533) (incorporated by reference to Exhibit 4.62 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).

Rio Tinto 2002 Form 20-F/A 4

Back to Contents

4.51	Pension plan (incorporated by reference to Exhibit 4.02 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533) (incorporated by reference to Exhibit 4.62 of Rio Tinto plc's Annual report on Form 20-F for the financial year ended 31 December 2000, File No. 1-10533).

8.1*	List of subsidiary companies

10.1	Consent of the Independent Auditors

* Previously filed as an exhibit to the Annual report on Form 20-F for the year ended 31 December 2002 and incorporated by reference.

Rio Tinto 2002 Form 20-F/A 5

Back to Contents

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)

	/s/ A V Lawless		/s/ A V Lawless

Name:	A V Lawless	Name:	A V Lawless
Title:	Secretary	Title:	Assistant Secretary

Date: 4 June 2003

Rio Tinto 2002 Form 20-F/A 6

Back to Contents

CERTIFICATION

I, R P Wilson, certify that:

1.	I have reviewed this annual report on Form 20-F of Rio Tinto plc;

2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant��s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarise and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6.	The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Rio Tinto plc
(Registrant)

/s/ R P Wilson

Chairman
(Chief Executive Officer)

Date: 4 June 2003

Rio Tinto 2002 Form 20-F/A 7

Back to Contents

CERTIFICATION

I, G R Elliott, certify that:

1.	I have reviewed this annual report on Form 20-F of Rio Tinto plc;

2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarise and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Rio Tinto plc
(Registrant)

/s/ G R Elliott

Finance Director
(Chief Financial Officer)

Date: 4 June 2003

Rio Tinto 2002 Form 20-F/A 8

Back to Contents

CERTIFICATION

I, R P Wilson, certify that:

1.	I have reviewed this annual report on Form 20-F of Rio Tinto Limited;

2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarise and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Rio Tinto Limited
(Registrant)

/s/ R P Wilson

Chairman

(Chief Executive Officer)

Date: 4 June 2003

Rio Tinto 2002 Form 20-F/A 9

Back to Contents

CERTIFICATION

I, G R Elliott, certify that:

1.	I have reviewed this annual report on Form 20-F of Rio Tinto Limited;

2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s boards of directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarise and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Rio Tinto Limited
(Registrant)

/s/ G R Elliott

Finance Director

(Chief Financial Officer)

Date: 4 June 2003

Rio Tinto 2002 Form 20-F/A 10

Back to Contents

REPORT OF THE INDEPENDENT AUDITORS

To the members of Rio Tinto plc and Rio Tinto Limited

We have audited the financial statements of the Rio Tinto Group ("the Group") and of the Rio Tinto plc and Rio Tinto Limited parts of the Group (see "Accounting Presentation" on page A-7) set out on pages A-2 to A-72, which are expressed in US dollars. These consolidated financial statements are the responsibility of the Group's management. Our responsibility is to express an opinion on these financial statements based on our audits. As detailed in the statement of accounting policies, the Group has changed its accounting policy for deferred tax in 2002 following the adoption of Financial Reporting Standard 19 'Deferred Tax' under generally accepted accounting principles in the United Kingdom.

We conducted our audits in accordance with Auditing Standards generally accepted in the United Kingdom and Auditing Standards generally accepted in the United States. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

In our opinion the financial statements set out on pages A-2 to A-72 present fairly, in all material respects, the financial position of the Rio Tinto Group and of the Rio Tinto plc and Rio Tinto Limited parts of the Group at 31 December 2002 and 2001 and their results of operations and cash flows for the years ended 31 December 2002, 2001 and 2000 in conformity with accounting principles generally accepted in the United Kingdom.

Accounting principles generally accepted in the United Kingdom vary in certain significant respects from those generally accepted in the United States of America. The application of the latter would have affected the determination of consolidated net income for each of the three years in the period ended 31 December 2002 and the determination of consolidated shareholders' funds at 31 December 2002, 2001 and 2000 to the extent summarised in Note 42 to the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP		/s/ PricewaterhouseCoopers
PricewaterhouseCoopers LLP		PricewaterhouseCoopers
Chartered Accountants and Registered Auditors		Chartered Accountants
London, England		Perth, Australia
20 February 2003, except as to the information presented in		20 February 2003, except as to the information presented in
the last paragraph of Note 29, for which the date is 4 June		the last paragraph of Note 29, for which the date is 4 June
In respect of the members of Rio Tinto plc		In respect of the members of Rio Tinto Limited

A-1

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED

PROFIT AND LOSS ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER

		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

Note		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Gross turnover (including share of joint
	ventures and associates)	7,213		6,934		7,191		5,458		5,296		4,436		10,828		10,438		9,972
	Share of joint ventures' turnover	(859	)	(855	)	(975	)	(803	)	(757	)	(514	)	(1,662	)	(1,612	)	(1,489	)
	Share of associates' turnover	(2,425	)	(2,356	)	(2,223	)	(141	)	(110	)	(40	)	(723	)	(674	)	(608	)

	Consolidated turnover	3,929		3,723		3,993		4,514		4,429		3,882		8,443		8,152		7,875
	Net operating costs (including exceptional
2	charges in 2002 and 2001 (c))	(3,948	)	(3,586	)	(3,078	)	(3,659	)	(3,004	)	(2,609	)	(7,612	)	(6,590	)	(5,687	)

	Group operating profit	(19	)	137		915		855		1,425		1,273		831		1,562		2,188
	Share of operating profit of :
	Joint ventures (including exceptional
	charges in 2002 (c))	258		268		348		274		286		165		532		554		513
	Associates (including exceptional charges
	in 2001 (c))	671		794		759		51		34		18		239		217		211
	Profit on disposal of interest in joint venture	-		54		-		-		-		-		-		54		-

	Profit on ordinary activities before interest	910		1,253		2,022		1,180		1,745		1,456		1,602		2,387		2,912
5	Net interest payable	(156	)	(225	)	(265	)	(124	)	(190	)	(131	)	(237	)	(347	)	(340	)
6	Amortisation of discount	(39	)	(45	)	(50	)	(23	)	(19	)	(20	)	(54	)	(57	)	(63	)

	Profit on ordinary activities before taxation	715		983		1,707		1,033		1,536		1,305		1,311		1,983		2,509
7	Taxation (including tax relief on exceptional
	charges (c))	(442	)	(378	)	(542	)	(423	)	(522	)	(452	)	(708	)	(718	)	(819	)

	Profit on ordinary activities after taxation	273		605		1,165		610		1,014		853		603		1,265		1,690
	Attributable to outside shareholders (equity)
	(including exceptional charges in 2002 (c))	(78	)	(114	)	(101	)	126		(72	)	(82	)	48		(186	)	(183	)

	Profit for the financial year (net earnings)	195		491		1,064		736		942		771		651		1,079		1,507
8	Dividends to shareholders	(639	)	(628	)	(611	)	(299	)	(294	)	(288	)	(826	)	(812	)	(790	)

	Retained (loss)/profit for the financial year	(444	)	(137	)	453		437		648		483		(175	)	267		717

9	Earnings per ordinary share (US cents)	18.3c		46.1	c	100.1	c	147.6c		189.0	c	142.8	c	47.3	c	78.5	c	109.8	c
4	Adjusted earnings (US$m)	934		1,042		1,064		961		994		771		1,530		1,662		1,507
9	Adjusted earnings per ordinary share (US cents)	87.7c		97.9	c	100.1	c	192.7c		199.4	c	142.8	c	111.2	c	120.9	c	109.8	c
	Dividends per share
8	–– Rio Tinto plc (pence)	37.47	p	41.68	p	38.87	p							37.47	p	41.68	p	38.87	p
8	–– Rio Tinto Limited (Australian cents)							105.93	c	115.27	c	102.44	c	105.93	c	115.27	c	102.44	c

(a)	Diluted earnings per share figures are 0.1 US cents (2001: 0.2 US cents, 2000: 0.1 US cents) lower than the earnings per share figures above.
(b)	The results for all years relate wholly to continuing operations.
(c)	The profit for the financial year is stated after exceptional charges. These are added back to arrive at adjusted earnings (see note 4).

	The separate financial statements for Rio Tinto plc and 100 per cent of Rio Tinto Limited shown above are prepared on the basis of the legal ownership of the various operations within each part of the Group. The distinction between the legal and economic interests represented by Rio Tinto plc and Rio Tinto Limited shareholdings is explained on page A-7. The amounts attributable to the economic interests of Rio Tinto plc shareholders and shareholders of Rio Tinto Limited other than Rio Tinto plc are as follows:

		Rio Tinto plc						Rio Tinto Limited shareholders
		shareholders						other than Rio Tinto plc						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Economic interests in profit for the financial year	504		835		1,166		147		244		341		651		1,079		1,507
	Average percentage of Rio Tinto Limited held by
	shareholders other than Rio Tinto plc							62.4%		62.4%		57.4%

The notes on pages A-7 to A-72 form part of these accounts. Material variations from accounting principles generally
accepted in the United States are set out on pages A-58 to A-72.

A-2

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED

CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER

		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

Note		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Cash flow from operating activities (see below)	1,380		1,034		1,184		1,754		1,733		1,789		3,134		2,767		2,973
	Dividends from joint ventures	228		288		242		285		255		114		513		543		365
	Dividends from associates	368		210		239		4		4		6		96		105		102

	Total cash flow from operations	1,976		1,532		1,665		2,043		1,992		1,909		3,743		3,415		3,440
	Interest received	46		51		35		52		13		37		80		64		72
	Interest paid	(109	)	(140	)	(159	)	(173	)	(195	)	(143	)	(264	)	(335	)	(302	)
	Dividends paid to outside shareholders	(78	)	(66	)	(89	)	(39	)	(13	)	(64	)	(117	)	(79	)	(153	)

	Returns on investment and servicing of finance	(141	)	(155	)	(213	)	(160	)	(195	)	(170	)	(301	)	(350	)	(383	)
	Taxation	(240	)	(172	)	(156	)	(482	)	(443	)	(306	)	(722	)	(615	)	(462	)
	Purchase of property, plant and equipment	(667	)	(601	)	(522	)	(629	)	(750	)	(296	)	(1,296	)	(1,351	)	(818	)
	Funding of Group's share of joint ventures' and
	associates' capital expenditure	(28	)	(72	)	(22	)	(109	)	(7	)	-		(137	)	(79	)	(22	)
	Funding to Rio Tinto Limited (advanced)/repaid	(87	)	(399	)	-		-		-		-		-		-		-
	Other funding of joint ventures and associates
	(advanced)/repaid	(7	)	7		39		1		6		1		(6	)	13		40
11	Exploration and evaluation expenditure	(89	)	(96	)	(107	)	(35	)	(36	)	(42	)	(124	)	(132	)	(149	)
	Sale of property, plant and equipment	3		1		24		13		24		18		16		25		42
	Purchases less sales of other investments	(330	)	(54	)	2		7		-		(1	)	(323	)	(54	)	1

	Capital expenditure and financial investment	(1,205	)	(1,214	)	(586	)	(752	)	(763	)	(320	)	(1,870	)	(1,578	)	(906	)
35	Purchase of subsidiaries, joint arrangements
	joint ventures & associates	(1	)	(221	)	(8	)	(105	)	(744	)	(3,324	)	(106	)	(958	)	(3,332	)
35	Sale of subsidiaries, joint arrangements, joint ventures
	and associates	3		96		115		230		203		26		233		299		141
	Purchases/sales of subsidiaries between
	Rio Tinto Limited and Rio Tinto plc/ receipt of
	share buy back proceeds from Rio Tinto Limited	102		120		-		13		-		-		-		-		-

	Acquisitions less disposals	104		(5	)	107		138		(541	)	(3,298	)	127		(659	)	(3,191	)
	Equity dividends paid - Rio Tinto plc and
	Rio Tinto Limited shareholders	(729	)	(621	)	(611	)	(495	)	(291	)	(312	)	(948	)	(803	)	(789	)
	Cash inflow/(outflow) before management of
	liquid resources and financing	(235	)	(635	)	206		292		(241	)	(2,497	)	29		(590	)	(2,291	)
23	Net cash inflow/(outflow) from management
	of liquid resources	142		(12	)	47		71		(6	)	53		213		(18	)	100
	Ordinary shares in Rio Tinto issued for cash	10		13		3		5		1		-		15		7		3
	Ordinary shares in subsidiaries issued
	to outside shareholders	-		-		-		22		-		-		22		-		-
	Shares repurchased	-		-		(19	)	(115	)	(120	)	(14	)	-		-		(33	)
23	Loans (repaid) less received	67		640		(315	)	(476	)	1		2,492		(409	)	641		2,177
	Loans received/repaid from Rio Tinto plc	-		-		-		87		399		-		-		-		-

	Management of liquid resources and financing	219		641		(284	)	(406	)	275		2,531		(159	)	630		2,247

23	(Decrease)/increase in cash per UK GAAP	(16	)	6		(78	)	(114	)	34		34		(130	)	40		(44	)

	Cash flow from operating activities
	Group operating profit	(19	)	137		915		855		1,425		1,273		831		1,562		2,188
	Exceptional charges (all non cash items)	645		644		-		433		71		-		1,078		715		-

		626		781		915		1,288		1,496		1,273		1,909		2,277		2,188
2	Depreciation and amortisation	423		453		442		531		476		407		954		929		849
11	Exploration & evaluation charged against profit	94		97		98		36		33		38		130		130		136
20	Provisions	33		45		21		25		55		71		58		100		92
20	Utilisation of provisions	(35	)	(54	)	(81	)	(83	)	(94	)	(38	)	(118	)	(148	)	(119	)
	Change in inventories	42		(97	)	(14	)	43		(130	)	45		85		(227	)	31
	Change in accounts receivable & prepayments	113		(8	)	(74	)	23		(73	)	(155	)	158		(126	)	(242	)
	Change in accounts payable and accruals	81		(42	)	32		(116	)	(51	)	119		(57	)	(48	)	164
	Other items	3		(141	)	(155	)	7		21		29		15		(120	)	(126	)

	Cash flow from operating activities	1,380		1,034		1,184		1,754		1,733		1,789		3,134		2,767		2,973

The notes on pages A-7 to A-72 form part of these accounts. Material variations from accounting principles generally
accepted in the United States are set out on pages A-58 to A-72.

A-3

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED

BALANCE SHEETS AT 31 DECEMBER

		Rio Tinto plc -				Rio Tinto Limited -
		part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

		2002		2001		2002		2001		2002		2001
				Restated				Restated				Restated
Note		US$m		US$m		US$m		US$m		US$m		US$m

	Intangible fixed assets
10	Goodwill	272		323		743		699		1,015		1,022
11	Exploration and evaluation	5		7		52		48		57		55

		277		330		795		747		1,072		1,077
	Tangible fixed assets
12	Property, plant and equipment	5,563		5,323		6,614		6,189		12,183		11,512
	Investments
13	Share of gross assets of joint ventures	1,757		1,680		1,352		1,128		3,109		2,808
13	Share of gross liabilities of joint ventures	(715	)	(672	)	(473	)	(453	)	(1,188	)	(1,125	)

		1,042		1,008		879		675		1,921		1,683
13	Investments in associates/other investments	1,493		1,274		193		149		656		607

	Total investments	2,535		2,282		1,072		824		2,577		2,290

	Total fixed assets	8,375		7,935		8,481		7,760		15,832		14,879

	Current assets
15	Inventories	814		809		688		673		1,502		1,482
	Accounts receivable and prepayments
16	Falling due within one year	1,335		1,182		957		1,100		1,598		1,814
16	Falling due after more than one year	1,602		1,625		105		124		641		675

	Total accounts receivable	2,937		2,807		1,062		1,224		2,239		2,489
17	Investments	306		6		-		5		306		11
17	Cash	174		364		151		315		325		679

	Total current assets	4,231		3,986		1,901		2,217		4,372		4,661

	Current liabilities
18	Short term borrowings	(1,359	)	(1,556	)	(2,007	)	(2,279	)	(3,366	)	(3,835	)
19	Accounts payable and accruals	(1,189	)	(1,117	)	(1,556	)	(1,454	)	(1,974	)	(1,974	)

	Total current liabilities	(2,548	)	(2,673	)	(3,563	)	(3,733	)	(5,340	)	(5,809	)

	Net current liabilities	1,683		1,313		(1,662	)	(1,516	)	(968	)	(1,148	)


	Total assets less current liabilities	10,058		9,248		6,819		6,244		14,864		13,731
	Liabilities due after one year
22	Medium and long term borrowings	(1,442	)	(1,125	)	(1,266	)	(1,441	)	(2,708	)	(2,566	)
19	Accounts payable and accruals	(235	)	(42	)	(1,135	)	(1,133	)	(304	)	(101	)
20	Provisions for liabilities and charges	(2,261	)	(2,005	)	(1,351	)	(1,189	)	(3,612	)	(3,194	)
	Outside shareholders' interests (equity)	(221	)	(174	)	(557	)	(653	)	(778	)	(827	)

		5,899		5,902		2,510		1,828		7,462		7,043

	Capital and reserves
	Share capital
24	- Rio Tinto plc	154		154		-		-		154		154
24	- Rio Tinto Limited (excl. Rio Tinto plc interest)	-		-		964		865		816		732
25	Share premium account	1,610		1,600		-		-		1,610		1,600
25	Other reserves	249		247		86		76		303		294
25	Profit and loss account	3,886		3,901		1,460		887		4,579		4,263

	Equity shareholders' funds	5,899		5,902		2,510		1,828		7,462		7,043

The separate financial statements for Rio Tinto plc and 100 per cent of Rio Tinto Limited shown above are prepared on the basis of the legal ownership of the various operations within each part of the Group. The distinction between the legal and economic interests represented by Rio Tinto plc and Rio Tinto Limited shareholdings is explained on page A-7. The amounts of the consolidated shareholders' funds attributable to the economic interests of Rio Tinto plc shareholders and the shareholders of Rio Tinto Limited other than Rio Tinto plc are as follows:

Rio Tinto plc

Rio Tinto Limited shareholders

shareholders

other than Rio Tinto plc

Rio Tinto Group

2002

2001

2002

2001

2002

2001

Restated

US$m

Economic interests in consolidated shareholders' funds

5,774

5,451

1,688

1,592

7,462

7,043

Closing percentage of Rio Tinto Limited held by

shareholders other than Rio Tinto plc

62.4

The notes on pages A-7 to A-72 form part of these accounts. Material variations from accounting principles generally
accepted in the United States are set out on pages A-58 to A-7

A-4

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED

RECONCILIATION WITH AUSTRALIAN GAAP AT 31 DECEMBER 2002

	Rio Tinto Group

	2002		2001

	US$m		US$m
Adjusted earnings reported under UK GAAP	1,530		1,662
Exceptional charges	(879	)	(583	)

Net earnings under UK GAAP	651		1,079
Increase/(decrease) net of tax in respect of:
Goodwill amortisation	(167	)	(169	)
Asset write downs	(19	)	-
Taxation	(13	)	3
Other	3		(7	)

Net profits attributable to members under Australian GAAP	455		906

Earnings per ordinary share under Australian GAAP	33.1	c	65.9	c

Diluted earnings per share under Australian GAAP are 0.1 US cents (2001: 0.1 US cents) less than the above earnings per share figures.

Net earnings under the generally accepted accounting principles in the United Kingdom (UK GAAP) are stated after exceptional charges of US$879 million relating to asset write downs and environmental remediation. In 2001 there was an exceptional charge for asset write downs of US$583 million. Under the generally accepted accounting principles in Australia (Australian GAAP), these items total US$898 million (2001: US$583 million). However, the concept of Adjusted earnings does not exist under Australian GAAP.

Shareholders' funds under UK GAAP (2001 as restated)	7,462		7,043
Increase/(decrease) net of tax in respect of:
Goodwill	1,044		1,227
Taxation	74		87
Other	(23	)	(22	)

Shareholders' funds under Australian GAAP	8,557		8,335

The Group’s financial statements have been prepared in accordance with UK GAAP which differ in certain respects from Australian GAAP. These differences relate principally to the following items, and the effect of each of the adjustments to net earnings and shareholders’ funds that would be required under Australian GAAP is set out above.

Goodwill
For 1997 and prior years, UK GAAP permitted the write off of purchased goodwill on acquisitions directly against reserves. Under Australian GAAP, goodwill is capitalised and amortised by charges against income over the period during which it is expected to be of benefit, subject to a maximum of 20 years. Goodwill previously written off directly to reserves in the UK GAAP financial statements has been reinstated and amortised for the purpose of the reconciliation statements.

For acquisitions in 1998 and subsequent years, goodwill is capitalised under UK GAAP, in accordance with Financial Reporting Standard 10 (FRS 10). Adjustments are required for Australian GAAP purposes where such capitalised goodwill is amortised over periods exceeding 20 years in the UK GAAP accounts.

Taxation
Rio Tinto has implemented FRS 19, the new UK accounting standard on deferred tax. This has resulted in a prior year adjustment under UK GAAP, which reduced shareholders’ funds at 1 January 2001 by US$133 million. Of this amount, US$46 million results from the requirement under FRS 19 to provide in full for deferred taxation on most timing differences. These additional provisions were already recognised under Australian GAAP.

The remaining US$87 million of the prior year adjustment relates to features of FRS 19 that give rise to new variations from Australian GAAP. Accordingly, this element of the prior year adjustment has been reversed in arriving at Australian GAAP shareholders’ funds. These variations, which also affect the determination of earnings under Australian GAAP, relate principally to the following:

(a) Under FRS 19, provision for the taxes arising on remittances of earnings can only be made if the dividends have been accrued or if there is a binding agreement for the distribution of the earnings. Under Australian GAAP, provision must be made for tax arising on expected future remittances of past earnings.

(b) Under FRS 19, tax benefits associated with goodwill charged directly to reserves, in 1997 and previous years, must be accumulated in the deferred tax provision. This means that the tax benefits are not included in earnings until the related goodwill is charged through the profit and loss account on disposal or closure. For Australian GAAP, no provision is required for such deferred tax because the goodwill that gave rise to these tax benefits was capitalised and gives rise to amortisation charges against profit.

Asset write downs
Under Australian GAAP, asset write downs are US$19 million higher because the relevant carrying values include goodwill that was eliminated directly against reserves in the year of acquisition for UK GAAP purposes.

A-5

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEARS ENDED 31 DECEMBER

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group					Rio Tinto Group

	2002		2001		2000		2002	2001		2000		2002		2001		2000

	US$m		US$m		US$m		US$m	US$m		US$m		US$m		US$m		US$m
Profit for the financial year
Subsidiaries	(321	)	(94	)	451		509	740		669		183		646		1,120
Joint ventures	159		157		208		180	187		92		339		344		300
Associates	357		428		405		47	15		10		129		89		87

	195		491		1,064		736	942		771		651		1,079		1,507
Adjustment on currency translation
Subsidiaries	198		(205	)	(182	)	374	(223	)	(374	)	560		(423	)	(518	)
Joint ventures	3		(3	)	(8	)	11	(19	)	(32	)	13		(22	)	(40	)
Associates	137		(91	)	(137	)	1	1		-		6		(4	)	(3	)

	338		(299	)	(327	)	386	(241	)	(406	)	579		(449	)	(561	)
Total recognised gains and losses
relating to the financial year
Subsidiaries	(123	)	(299	)	269		883	517		295		743		223		602
Joint ventures	162		154		200		191	168		60		352		322		260
Associates	494		337		268		48	16		10		135		85		84

	533		192		737		1,122	701		365		1,230		630		946

Prior year adjustment (a)
Subsidiaries	(149	)					6					(143	)
Associates	12						-					10

	(137	)					6					(133	)


Total gains and losses recognised since
the 2001 Annual Report
Subsidiaries	(272	)					889					600
Joint ventures	162						191					352
Associates	506						48					145

	396						1,128					1,097

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR YEARS ENDED 31 DECEMBER

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Profit for the financial year	195		491		1,064		736		942		771		651		1,079		1,507
Dividends	(639	)	(628	)	(611	)	(299	)	(294	)	(288	)	(826	)	(812	)	(790	)

	(444	)	(137	)	453		437		648		483		(175	)	267		717

Adjustment on currency translation	338		(299	)	(327	)	386		(241	)	(406	)	579		(449	)	(561	)
Repurchased Rio Tinto Limited share capital	-		-		573		-		-		(1,364	)	-		-		(14	)
Repurchased Rio Tinto plc share capital	-		-		(19	)	-		-		-		-		-		(19	)
Shares issued by Rio Tinto plc and Rio Tinto
Limited (c)	12		13		54		5		1		38		15		14		92
Dividend on DLC share from Rio Tinto Limited	91		-		-		(146	)	-		-		-		-		-
Goodwill relating to disposal written back	-		-		33		-		-		-		-		-		33

	(3	)	(423	)	767		682		408		(1,249	)	419		(168	)	248
Opening shareholders' funds, as restated (a)	5,902		6,325		5,558		1,828		1,420		2,669		7,043		7,211		6,963

Closing shareholders' funds	5,899		5,902		6,325		2,510		1,828		1,420		7,462		7,043		7,211

	A reconciliation of each individual reserve within shareholders' funds is shown in note 25.
(a)	Shareholders' funds at 1 January 2002 were originally US$7,176 million, before deducting the prior year adjustment of US$133 million arising on implementation of FRS 19 (see note 1 (a) and the Statement of Total Recognised Gains and Losses shown above).
(b)	In 2000 Rio Tinto Limited repurchased 91,000,000 of its ordinary shares from Tinto Holdings Australia Pty Limited , a subsidiary of Rio Tinto plc. This transaction reduced Rio Tinto plc's interest in Rio Tinto Limited from 47.39 per cent to 37.61 per cent. The US$573 million included in the above reconciliation of shareholders' funds for Rio Tinto plc is the excess of the amount received by Rio Tinto plc for the shares over the associated reduction in the carrying value of its investment in Rio Tinto Limited.
(c)	The carrying value of Rio Tinto plc's investment in Rio Tinto Limited increased by US$2 million in 2002 as a result of the Rio Tinto Limited share issues during the year. Rio Tinto plc's share of the proceeds received exceeded the dilution of its interest resulting from the share issues.
	The notes on pages A-7 to A-72 form part of these accounts. Material variations from accounting principles general accepted in the United States are set out on pages A-58 to A-72

A-6

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
OUTLINE OF DUAL LISTED COMPANIES STRUCTURE
AND BASIS OF FINANCIAL STATEMENTS

The Rio Tinto Group
Set out on pages A-2 to A-72 are the financial statements of the Rio Tinto Group (the 'Group'), formed through the merger of economic interests ('merger') of Rio Tinto plc and Rio Tinto Limited, together with separate financial statements for the Rio Tinto plc and Rio Tinto Limited parts of the Group. The financial statements of the Group have been presented by both Rio Tinto plc and Rio Tinto Limited as their consolidated accounts in accordance with both United Kingdom and Australian legislation and regulations.

Rio Tinto is involved in the exploration and extraction of mineral resources. Product and geographic analyses of the Group's operations are shown in notes 26 and 27 respectively.

Merger terms
On 21 December 1995, Rio Tinto plc and Rio Tinto Limited, which are listed respectively on Stock Exchanges in the United Kingdom and Australia, entered into a dual listed companies ('DLC') merger. This was effected by contractual arrangements between the Companies and amendments to Rio Tinto plc's Memorandum and Articles of Association and Rio Tinto Limited's Constitution.

As a result, Rio Tinto plc and Rio Tinto Limited and their respective groups operate together as a single economic enterprise, with neither assuming a dominant role. In particular, the arrangements:

	-	confer upon the shareholders of Rio Tinto plc and Rio Tinto Limited a common economic interest in both groups;
	-	provide for common boards of directors and a unified management structure;
	-	provide for equalised dividends and capital distributions; and
	-	provide for the shareholders of Rio Tinto plc and Rio Tinto Limited to take key decisions, including the election of directors, through an electoral procedure in which the public shareholders of the two Companies effectively vote on a joint basis.

The merger involved no change in the legal ownership of any assets of Rio Tinto plc or Rio Tinto Limited, nor any change in the ownership of any existing shares or securities of Rio Tinto plc or Rio Tinto Limited, nor the issue of any shares, securities or payment by way of consideration, save for the issue by each company of one special voting share to a trustee company which provides the joint electoral procedure for public shareholders. During 2002, each of the parent Companies issued a DLC Dividend Share to facilitate the efficient management of funds within the DLC structure.

Accounting presentation
Under United Kingdom generally accepted accounting principles, the DLC merger is a business combination that was accounted for as a merger on the basis that it has created a single economic enterprise for operating and financial reporting purposes.

For the purposes of its filings in the United States under the requirements of the Securities and Exchange Commission, the primary financial statements of the Rio Tinto plc and Rio Tinto Limited parts of the Group, respectively, are their separate consolidated financial statements prepared on the basis of the legal ownership of the various operations within each part of the Group. Accordingly the consolidated financial statements for the Rio Tinto Limited part of the Group consolidate Rio Tinto Limited with the companies in Rio Tinto Limited's legal ownership. The consolidated financial statements for the Rio Tinto plc part of the Group consolidate Rio Tinto plc with the companies in Rio Tinto plc's legal ownership; Rio Tinto Limited is included on an equity basis that reflects Rio Tinto plc's average 38 per cent (2001: 38 per cent) ownership of Rio Tinto Limited during the year.

The DLC merger between Rio Tinto plc and Rio Tinto Limited has the effect that their shareholders have substantially the same economic interests as if they held shares in a single enterprise which owned all of the assets of both companies. Management therefore considers that the combined financial statements of the Rio Tinto Group provide the most meaningful financial representation of the effects of the DLC merger.

The financial statements are presented in US dollars as most Group revenues are denominated in US dollars, as are many of the Group's costs. In explaining key features and trends of Group financial performance, the US dollar provides a more consistent view which should correspond more closely to underlying business performance.

A-7

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
OUTLINE OF DUAL LISTED COMPANIES STRUCTURE
AND BASIS OF FINANCIAL STATEMENTS (continued)

Australian Corporations Act
The financial statements are drawn up in accordance with an order, under section 340 of the Australian Corporations Act 2001, issued by the Australian Securities and Investments Commission on 9 April 2001. The main provisions of the order are that the financial statements are:

-	to be made out in accordance with United Kingdom requirements applicable to consolidated accounts;
-	to be expressed both in United Kingdom and Australian currencies; and
-	to include a reconciliation from United Kingdom GAAP to Australian GAAP (see page A-5).

United Kingdom Companies Act
In order to present a true and fair view of the Rio Tinto Group, in accordance with United Kingdom Financial Reporting Standard 6, the principles of merger accounting have been adopted. This represents a departure from the provision of the UK Companies Act 1985 which sets out the conditions for merger accounting based on the assumption that a merger is effected through the issue of equity shares.

The main consequence of adopting merger rather than acquisition accounting is that the balance sheet of the merged Group includes the assets and liabilities of Rio Tinto plc and Rio Tinto Limited at their carrying values prior to the merger, subject to adjustments to achieve uniformity of accounting policies, rather than at their fair values at the date of the merger.

In the particular circumstances of the merger, the effect of applying acquisition accounting cannot reasonably be quantified.

In order that the financial statements should present a true and fair view, it is necessary to differ from the presentational requirements of the UK Companies Act 1985 by including amounts attributable to both Rio Tinto plc and Rio Tinto Limited public shareholders in the capital and reserves shown in the balance sheet and in the profit for the financial year. The UK Companies Act 1985 would require presentation of the capital and reserves and profit for the year attributable to Rio Tinto Limited public shareholders (set out on pages A-4 and A-2) as a minority interest in the financial statements of the Rio Tinto Group. This presentation would not give a true and fair view of the effect of the Sharing Agreement under which the position of all public shareholders is as nearly as possible the same as if they held shares in a single company.

A-8

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS

1 Principal accounting policies

(a) Basis of preparation - FRS 19 - 'Deferred Tax' has been adopted in 2002. Prior to the adoption of FRS 19, Rio Tinto provided for deferred tax where, in the opinion of the directors, it was probable that a timing difference would reverse within the foreseeable future. Under FRS 19, full provision is made for deferred taxation on all timing differences that have arisen but not reversed at the balance sheet date, except in limited circumstances.

The main exceptions are as follows:
- Tax payable on the future remittance of the past earnings of subsidiaries, associates and joint ventures is provided only to the extent that dividends have been accrued or there is a binding agreement to distribute such past earnings (where previously the Group recognised such deferred tax to the extent that it was probable that a liability would crystallise).
- Deferred tax is not recognised on revaluations of non monetary assets arising on acquisitions unless there is a binding agreement to sell the asset and the gain or loss expected to arise from the disposal has been recognised (where previously the Group recognised deferred tax in respect of such adjustments).
- FRS 19 requires that provisions for deferred tax are made in respect of tax benefits related to goodwill that was charged directly to reserves on acquisitions made prior to 1998. Such provisions are released when the related goodwill is charged through the profit and loss account on disposal or closure. Under the previous accounting policy, such tax benefits were taken up in the profit and loss account in the year in which they were received.

The balance sheet at 31 December 2001 has been restated following the implementation of FRS 19, which has reduced shareholders' funds by US$133 million. The effect of the restatement is shown in the Statement of Total Recognised Gains and Losses on page A-6. The restatement also included an increase in deferred tax provisions of US$57 million, an increase in the investment in associates of US$10 million and a reduction of US$86 million in property, plant and equipment. The application of FRS 19 did not impact significantly on net earnings for either 2002, 2001 or 2000. Accordingly, prior year earnings have not been restated.

The Group's accounting policies comply with applicable UK accounting standards and, except for the implementation of FRS 19 as described above, are consistent with last year. As explained in the section headed Outline of dual listed companies' structure and basis of financial statements, the accounting policies depart from the requirements of the UK Companies Act in order to provide a true and fair view of the merger between Rio Tinto plc and Rio Tinto Limited.

(b) Basis of consolidation - The financial statements of the Rio Tinto Group consist of the consolidation of the accounts of Rio Tinto plc and Rio Tinto Limited and their respective subsidiary undertakings ('subsidiaries').
The financial statements of the Rio Tinto plc part of the Group consist of the consolidation of the accounts of Rio Tinto plc and its subsidiaries. Within these financial statements Rio Tinto plc equity accounts for its 37.6 per cent interest in Rio Tinto Limited. The financial statements of the Rio Tinto Limited part of the Group consist of the consolidation of the accounts of Rio Tinto Limited and its subsidiaries.
They are prepared on the historical cost basis, with no revaluations of fixed assets. The Group's shares of the assets, liabilities, earnings and reserves of associated undertakings ('associates') and joint ventures are included in the Group financial statements using the equity and gross equity accounting methods respectively. The Group consolidates its own share of the assets, liabilities, income and expenditure of joint arrangements that are not entities.

(c) Turnover - Turnover comprises sales to third parties at invoiced amounts, with most sales being priced ex works, free on board (fob) or cost, insurance and freight (cif). A large proportion of Group production is sold under medium to long term contracts and is included in sales when deliveries are made. Gross turnover shown in the profit and loss account includes the Group's share of the turnover of joint ventures and associates. By product revenues are included in turnover.

(d) Currency translation - Transactions in foreign currencies are translated at the exchange rate ruling at the date of transaction or, where foreign currency forward contracts have been arranged, at contractual rates. Monetary assets and liabilities denominated in foreign currencies are retranslated at year end exchange rates, or at a contractual rate if applicable.

On consolidation, profit and loss account items are translated into US dollars at average rates of exchange. Balance sheet items are translated into US dollars at year end exchange rates. Certain non-United States resident companies, whose functional currency is the US dollar, account in that currency.

The Group finances its operations primarily in US dollars and a significant proportion of the Group's US dollar debt is located in subsidiaries having functional currencies other than the US dollar. Exchange gains and losses relating to US dollar debt impact on the profit and loss accounts of such subsidiaries. However, such exchange gains and losses are excluded from the Group's profit and loss account on consolidation, with a corresponding adjustment to reserves. This means that financing in US dollars impacts in a consistent manner on the Group's consolidated accounts irrespective of the functional currency of the particular subsidiary where the debt is located. Exchange differences on the translation of the net operating assets of companies with functional currencies other than the US dollar, less offsetting exchange differences on net debt in currencies other than the US dollar financing those net assets, are dealt with through reserves.

All other exchange differences are charged or credited to the profit and loss account in the year in which they arise, except as set out below in note o relating to derivative contracts.

A-9

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS

1 Principal accounting policies (continued)

(e) Goodwill and intangible assets - Goodwill represents the difference between the cost of acquisition and the fair value of the identifiable net assets acquired. Goodwill and intangible assets arising on acquisitions after 31 December 1997 are capitalised in accordance with FRS 10. These assets are amortised over their useful economic lives, which may exceed 20 years. Amortisation is charged on a straight line or units of production basis as appropriate. In 1997 and previous years, goodwill was eliminated against reserves in the year of acquisition as a matter of accounting policy. Such goodwill was not reinstated on implementation of FRS 10; but on sale or closure of a business, any related goodwill eliminated against reserves is charged in the profit and loss account.

(f) Exploration and evaluation - During the initial stage of a project, full provision is made in respect of the costs thereof by charge against profits for the year. Expenditure on a project after it has reached a stage at which there is a high degree of confidence in its viability is carried forward and transferred to tangible fixed assets if the project proceeds. If a project does not prove viable, all irrecoverable costs associated with the project are written off. If an undeveloped project is sold, any gain or loss is included in operating profit, such transactions being a normal part of the Group's activities. Where expenditure is carried forward in respect of a project which may not proceed to commercial development for some time, provision is made against the possibility of non-development by charge against profits over a period of up to seven years. When it is decided to proceed with development, any provisions made in previous years are reversed to the extent that the relevant costs are recoverable.

(g) Tangible fixed assets - The cost of a tangible fixed asset comprises its purchase price and any costs directly attributable to bringing it into working condition for its intended use. Costs associated with a start up period are capitalised where the asset is available for use but incapable of operating at normal levels without a commissioning period. Net interest before tax payable on borrowings related to construction or development projects is capitalised until the point when substantially all the activities that are necessary to make the asset ready for the use are complete. Once a mining project has been established as commercially viable, expenditure other than that on buildings, plant and equipment is capitalised under mining properties and leases together with any amount transferred from exploration and evaluation. Such expenditure is amortised against profits, applying the same principles as for other tangible fixed assets.

(h) Deferred Stripping costs - Stripping (i.e. overburden and other waste removal) costs incurred in the development of a mine, before production commences, are capitalised as part of the investment in the construction of the mine and subsequently amortised, generally over the ore production during the life of the operation.

Rio Tinto defers stripping costs incurred during the production stage of its operations for those operations where this is the most appropriate basis for matching revenue and costs, and the effect is material.

The stripping ratio is generally calculated by dividing the tonnage of waste mined by the tonnage of ore mined during the relevant period. The costs to be deferred (or accrued) are those relating to the excess (or shortfall) of the current period stripping ratio compared with that for the life of the mine. The life of mine stripping ratio is based on the proven and probable reserves of the operation.

In some operations, there are distinct periods of new development during the production stage of the mine. These may, for example, relate to a separate ore body or discrete section of the ore body. The new development will be characterised by a major departure from the life of mine stripping ratio. Excess stripping costs during such periods are deferred and subsequently amortised pro-rata, generally to the tonnage of ore mined in the remaining life of the operation.

In operations that experience material fluctuations in the stripping ratio on a year by year basis over the life of the mine, deferred stripping costs are subsequently charged against reported profits to the extent that, in subsequent periods, the stripping ratio falls short of the life of mine stripping ratio.

(i) Depreciation and carrying values of fixed assets - Depreciation of tangible fixed assets is calculated on a straight line or units of production basis, as appropriate. Assets are fully depreciated over their economic lives, or over the remaining life of the mine if shorter. Depreciation rates for the principal assets of the Group vary from two and a half per cent to ten per cent per annum.

Tangible and intangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable. In addition, goodwill is reviewed for impairment at the end of the first complete financial year after the relevant acquisition and, where the goodwill is being amortised over a period exceeding 20 years, annually thereafter. When a review for impairment is conducted, the recoverable amount is assessed by reference to the net present value of expected future cash flows of the relevant income generating unit, or disposal value if higher. The discount rate applied is based upon the Group's weighted average cost of capital with appropriate adjustment for the risks associated with the relevant unit. Estimates of future net cash flows are based on ore reserves and mineral resources for which there is a high degree of confidence of economic extraction.

(j) Determination of ore reserves - Rio Tinto estimates its ore reserves and mineral resources based on information compiled by Competent Persons (as defined in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves of September 1999 (the JORC code)). Reserves, and for certain mines resources determined in this way are used in the calculation of depreciation, amortisation, impairment and close down and restoration costs.

A-10

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS

1 Principal accounting policies (continued)

(k) Provisions for close down and restoration and for environmental clean up costs - Both for close down and restoration and for environmental clean up costs, provision is made in the accounting period when the related environmental disturbance occurs, based on the net present value of estimated future costs.

The amortisation or 'unwinding' of the discount applied in establishing the net present value of provisions is charged to the profit and loss account in each accounting period. The amortisation of the discount is shown as a financing cost rather than as an operating cost.

For close down and restoration costs, which include the dismantling and demolition of infrastructure, removal of residual materials and remediation of disturbed areas, movements in provisions other than the amortisation of the discount, such as those resulting from changes in the cost estimates, lives of operations or discount rates, are capitalised and depreciated over future production.

(l) Inventories - Inventories are valued at the lower of cost and net realisable value. Cost for raw materials and stores is purchase price and for partly processed and saleable products is generally the cost of production, including the appropriate proportion of depreciation and overheads. Inventories are valued on a first in, first out ('FIFO') basis.

(m) Deferred tax - Full provision is made for deferred taxation on all timing differences that have arisen but not reversed at the balance sheet date, except in limited circumstances. The main exceptions are as follows: - Tax payable on the future remittance of the past earnings of subsidiaries, associates and joint ventures is provided only to the extent that dividends have been accrued or there is a binding agreement to distribute such past earnings.

- Deferred tax is not recognised on revaluations of non-monetary assets arising on acquisitions unless there is a binding agreement to sell the asset and the gain or loss expected to arise from the disposal has been recognised.

- Deferred tax assets are recognised only to the extent that it is more likely than not that they will be recovered.

Provisions for deferred tax are made in respect of tax benefits related to goodwill that was charged directly to reserves on acquisitions made prior to 1998. Such provisions are released when the related goodwill is charged through the profit and loss account on disposal or closure.

Deferred tax balances are not discounted to their present value.

(n) Post retirement benefits - In accordance with SSAP 24, the expected costs of post retirement benefits under defined benefit arrangements are charged to the profit and loss account so as to spread the costs over the service lives of employees entitled to those benefits. Variations from the regular cost are spread on a straight line basis over the expected average remaining service lives of relevant current employees. Costs are assessed in accordance with the advice of qualified actuaries.

(o) Financial instruments - The Group's policy with regard to 'Treasury management and financial instruments' is set out in the Financial review on page 32 of the Annual report and financial statements. When the Group enters into derivative contracts these transactions are designed to reduce exposures related to assets and liabilities, firm commitments or anticipated transactions, and are therefore accounted for as hedges. Amounts receivable and payable in respect of interest rate swaps are recognised as an adjustment to net interest over the life of the contract. Gains or losses on foreign currency forward contracts and currency swaps relating to financial assets and liabilities are matched against the losses or gains on the hedged items, either in the profit and loss account or through reserves as appropriate. Gains and losses on financial instruments relating to firm commitments or anticipated transactions for revenue items are deferred and recognised when the hedged transaction occurs. Gains and losses on financial instruments relating to firm commitments or anticipated transactions for capital expenditure are capitalised and depreciated in line with the underlying asset.The cash flows from these contracts are classified in a manner consistent with the underlying nature of the related transaction.

A-11

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

2	Net operating costs
		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

Note		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Operating costs from continuing operations
	Raw materials and consumables	1,277		1,305		1,318		1,314		1,408		1,168		2,591		2,713		2,486
	Depreciation and amortisation (a)	423		453		442		531		476		407		954		929		849
3	Employment costs	687		626		668		650		534		458		1,337		1,160		1,126
	Royalties and other mining taxes	204		183		168		186		174		157		390		357		325
	Decrease/(increase) in inventories	18		(47	)	(4	)	63		(98	)	79		81		(145	)	75
	Other external costs (a)	558		438		456		585		454		392		1,143		892		848
20	Provisions (a)	33		45		21		25		55		71		58		100		92
11	Exploration and evaluation	94		97		98		36		33		38		130		130		136
	Research and development	17		18		18		8		21		21		25		39		39
	Net exchange losses/(gains) on monetary items	28		(62	)	(12	)	13		4		(16	)	41		(58	)	(28	)
	Capitalised costs included above	(33	)	(52	)	(27	)	(80	)	(61	)	(75	)	(113	)	(113	)	(102	)
	Other operating income	(3		(62	)	(68	)	(105	)	(67	)	(91	)	(103	)	(129	)	(159	)

	Net operating costs before exceptional
	asset write-downs	3,303		2,942		3,078		3,226		2,933		2,609		6,534		5,875		5,687
	Exceptional asset write-downs (a)	645		644		-		433		71		-		1,078		715		-

		3,948		3,586		3,078		3,659		3,004		2,609		7,612		6,590		5,687


(a)	The above detailed analysis of costs is before exceptional charges. Including exceptional charges, the total charge for depreciation and amortisation for the Rio Tinto Group was US$1,893 million (2001: US$1,630 million, 2000: US$849 million), provisions were US$174 million (2001: US$100 million, 2000: US$92 million) and other external costs were US$1,166 million (2001: US$906 million, 2000: US$848 million). The total charge for depreciation and amortisation for Rio Tinto plc was US$929 million (2001: US$1,097 million, 2000: US$442 million), provisions were US$149 million (2001: US$45 million, 2000: US$21 million) and other external costs were US$581 million (2001: US$438 million, 2000: US$456 million). The total charge for depreciation and amortisation for Rio Tinto Limited was US$964 million (2001: US$533 million, 2000: US$407 million) and other external costs were US$585 million (2001:US$468 million, 2000: US$392 million).

(b)	Information on auditor's remuneration is included in note 37.



3	Employee costs
		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group							Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Employment costs, excluding joint ventures and associates
	- Wages and salaries	647		678		714		615		524		490		1,262		1,202		1,204
	- Social security costs	55		54		54		13		11		4		68		65		58
	- Net post retirement cost/(credit) (a)	21		(79	)	(81	)	58		34		26		79		(45	)	(55	)

		723		653		687		686		569		520		1,409		1,222		1,207
	Less: charged within provisions	(36	)	(27	)	(19	)	(36	)	(35	)	(62	)	(72	)	(62	)	(81	)

		687		626		668		650		534		458		1,337		1,160		1,126


(a)	The net post retirement cost/(credit) includes the gradual recognition under SSAP 24 of the surpluses in a number of the Group's pension schemes. The emergence of a charge this year, compared to a credit in 2001, reflects the reduced value of pension fund assets associated with falling stock markets and a reduction in the expected return on pension fund equity investments compared with that applied previously.
(b)	UITF Abstract 17 requires the intrinsic value of share options to be recognised as a cost. However, the Group's SAYE schemes are Inland Revenue approved schemes or equivalent non-UK schemes, and are, therefore, exempt from this requirement. None of the Group's other share option schemes involve granting new options at a discount to market value.

A-12

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

4	Exceptional charges
		Rio Tinto plc -					Rio Tinto Limited -
		part of Rio Tinto Group					part of Rio Tinto Group					Rio Tinto Group

		2002		2001		2000	2002		2001		2000	2002		2001		2000

Note		US$m		US$m		US$m	US$m		US$		US$m	US$m		US$m		US$m

	Profit for the financial year (net earnings)	195		491		1,064	736		942		771	651		1,079		1,507
	Effect of exceptional charges on the profit and loss account:

	Asset write downs	(639	)	(671	)	-	(433	)	(71	)	-	(978	)	(715	)	-
	Environmental remediation charge	(116	)	-		-	-		-		-	(116	)	-		-
	Taxation	9		120		-	42		19		-	42		132		-
	Attributable to outside shareholders (equity)	7		-		-	166		-		-	173		-		-

	Net exceptional charge	(739	)	(551	)	-	(225	)	(52	)	-	(879	)	(583	)	-


	Adjusted earnings	934		1,042		1,064	961		994		771	1,530		1,662		1,507

	Effect of exceptional charges on line items
	in the profit and loss account:
	Group operating profit	(645	)	(644	)	-	(433	)	(71	)	-	(1,078	)	(715	)	-
	Share of operating profit of joint venture:	(16	)	-		-	-		-		-	(16	)	-		-
	Share of operating profit of associates:	(94	)	(27	)	-	-		-		-	-		-		-
	Taxation	-		113		-	42		19		-	42		132		-
	Share of taxation of associates:	9		7		-	-		-		-	-		-		-
	Attributable to outside shareholders (equity)	7		-		-	166		-		-	173		-		-

		(739	)	(551	)	-	(225	)	(52	)	-	(879	)	(583	)	-

The exceptional charges analysed above are added back in arriving at adjusted earnings and adjusted earnings per share.

The exceptional charges of US$879 million recognised in 2002, comprise provisions of US$763 million for the impairment of asset carrying values and a charge of US$116 million relating to environmental remediation works at Kennecott Utah Copper ('KUC'). Of the impairment charge, US$480 million relates to KUC and US$235 million relates to the Iron Ore Company of Canada ('IOC').

In 2001, exceptional asset write-downs of US$583 million after tax included US$531 million relating to KUC, which produces both copper and gold. The remainder related to gold producing assets.

Most of the impairment provisions have been calculated so as to ensure that the carrying value of the relevant assets are the same as the present value of the expected future cash flows relating to those assets. The discount rates used in calculating the present value of expected future cash flows were derived from the Group's weighted average cost of capital, with appropriate risk adjustments, and are consistent with 2001. When adjusted to include inflation and grossed up at the Group's average tax rate for 2002, before exceptional items, the discount rate applied to the relevant income generating units was equivalent to 10 per cent, except for gold production for which a rate equivalent to 7 per cent was used. The impairment provision against IOC aligns the carrying value with the value negotiated between shareholders during 2002 as part of a financial restructuring exercise.

5	Net interest payable and similar charges

		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Interest payable on
	Bank borrowings	(21	)	(22	)	(26	)	(23	)	(35	)	(36	)	(44	)	(57	)	(62	)
	Other loans	(95	)	(111	)	(134	)	(112	)	(184	)	(113	)	(189	)	(295	)	(247	)

		(116	)	(133	)	(160	)	(135	)	(219	)	(149	)	(233	)	(352	)	(309	)
	Amounts capitalised	14		9		9		8		12		2		22		21		11

		(102	)	(124	)	(151	)	(127	)	(207	)	(147	)	(211	)	(331	)	(298	)

	Interest receivable and similar income from fixed asset investments
	Joint ventures	10		14		14		-		-		-		10		14		14
	Associates	18		-		1		1		6		-		1		6		1
	Investments	9		3		3		-		-		-		9		3		3

		37		17		18		1		6		-		20		23		18
	Other interest receivable	13		22		16		17		30		44		30		52		60

		50		39		34		18		36		44		50		75		78

	Group net interest payable	(52	)	(85	)	(117	)	(109	)	(171	)	(103	)	(161	)	(256	)	(220	)
	Share of joint ventures' net interest payable (a)	(20	)	(26	)	(34	)	(6	)	(6	)	(20	)	(26	)	(32	)	(54	)
	Share of associates' net interest payable (a)	(84	)	(114	)	(114	)	(9	)	(13	)	(8	)	(50	)	(59	)	(66	)

	Net interest payable	(156	)	(225	)	(265	)	(124	)	(190	)	(131	)	(237	)	(347	)	(340	)
6	Amortisation of discount	(39	)	(45	)	(50	)	(23	)	(19	)	(20	)	(54	)	(57	)	(63	)

	Net interest payable and similar charges	(195	)	(270	)	(315	)	(147	)	(209	)	(151	)	(291	)	(404	)	(403	)


(a)	The Group's share of net interest payable by joint ventures and associates relates to its share of the net debt of joint ventures and associates, which is disclosed in note 14.
(b)	Interest of US$18 million payable from Rio Tinto Limited to Rio Tinto plc is included as 'Interest receivable from associates' for Rio Tinto plc and as 'Interest payable on other loans' for Rio Tinto Limited.

A-13

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

6	Amortisation of discount
		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	Subsidiaries	(40	)	(37	)	(41	)	(22	)	(18	)	(19	)	(62	)	(55	)	(60	)
	Share of joint ventures	(1	)	(1	)	(2	)	(1	)	(1	)	(1	)	(2	)	(2	)	(3	)
	Share of associates	(8	)	(7	)	(7	)	-		-		-		-		-		-

		(49	)	(45	)	(50	)	(23	)	(19	)	(20	)	(64	)	(57	)	(63	)
	Amounts capitalised	10		-		-		-		-		-		10		-		-


	Amortisation of discount	(39	)	(45	)	(50	)	(23	)	(19	)	(20	)	(54	)	(57	)	(63	)

(a)	The amortisation of discount relates principally to provisions for close down and restoration and for environmental clean up costs as explained in accounting policy 1(k). It also includes the unwind of the discount on non-interest bearing long term accounts payable.


7	Taxation charge for the year
		Rio Tinto plc -						Rio Tinto Limited -
		part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

		2002		2001		2000		2002		2001		2000		2002		2001		2000

		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
	UK taxation
	Corporation tax at 30% (2001 & 2000: 30%)
	- Current	58		51		32		(4	)	-		-		54		51		32
	Deduct: relief for overseas taxes	(63	)	(63	)	(36	)	-		-		-		(63	)	(63	)	(36	)

		(5	)	(12	)	(4	)	(4	)	-		-		(9	)	(12	)	(4	)
	- Deferred	11		48		24		1		-		-		12		48		24

		6		36		20		(3	)	-		-		3		36		20
	Australian taxation
	Corporation tax at 30% (2001: 30%, 2000: 34%)
	- Current	3		-		-		342		364		321		345		364		321
	- Deferred	-		-		-		21		28		4		21		28		4

		3		-		-		363		392		325		366		392		325
	Other countries taxation
	- Current	123		119		101		40		34		82		163		153		183
	- Deferred	10		7		84		(17	)	17		(7	)	(7	)	24		77

		133		126		185		23		51		75		156		177		260
	Joint ventures - charge for year (a)	78		84		104		87		92		52		165		176		156
	Associates - charge for year (including
	share of tax relief on exceptional asset
	write-downs for Rio Tinto plc of US$9
	million (2001: US$7 million) (a))	222		245		233		(5	)	6		-		60		69		58
	Subsidiary companies' deferred tax
	related to exceptional charges(d)	-		(113	)	-		(42	)	(19	)	-		(42	)	(132	)	-

		442		378		542		423		522		452		708		718		819


	Prima facie tax reconciliation

	Profit on ordinary activities before taxation	715		983		1,707		1,033		1,536		1,305		1,311		1,983		2,509

	Prima facie tax payable at UKrate of 30% (2001 and 2000: 30%)	215		295		512		310		461		392		393		595		753

	Impact of exceptional charges	227		201		-		130		21		-		328		214		-

	Other permanent differences
	Effect of higher rate of taxation on Australian earnings in 2000 (2002 and 2001: 30%, 2000: 34%)	-		-		23		-		-		59		-		-		59
	Other tax rates applicable outside the UK and Australia	55		87		69		1		10		6		56		95		71
	Resource depletion and other depreciation allowances	(58	)	(52	)	(53	)	-		-		-		(58	)	(52	)	(53	)
	Permanently disallowed amortisation/depreciation	22		22		18		44		45		30		51		52		35
	Research, development and other investment allowances	(5	)	(6	)	(5	)	(4	)	(10	)	(6	)	(7	)	(13	)	(8	)
	Other	25		(58	)	(82	)	1		3		(31	)	24		(57	)	(98	)

		39		(7	)	(30	)	42		48		58		66		25		6

A-14

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

7 Taxation charge for the year (continued)

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Other deferral of taxation
Capital allowances in excess of other
depreciation charges	(82	)	(114	)	(41	)	(12	)	(24	)	9		(90	)	(131	)	(36	)
Other timing differences	19		22		(68	)	(4	)	(9	)	(14	)	21		17		(77	)

Total timing differences related to the current period	(63	)	(92	)	(109	)	(16	)	(33	)	(5	)	(69	)	(114	)	(113	)

Current taxation charge for the period	418		397		373		466		497		445		718		720		646


Deferred tax recognised on timing differences	63		(28	)	109		(26	)	12		5		27		(18	)	113
Deferred tax impact of changes in tax rate:	(15	)	-		-		3		-		-		(14	)	-		-
Other deferred tax items	(24	)	9		60		(20	)	13		2		(23	)	16		60

Total taxation charge for the year	442		378		542		423		522		452		708		718		819

(a)	Some tax recognised by subsidiary holding companies is presented in these accounts as part of the tax charge on the profits of the joint ventures and associates to which it relates.
(b)	A benefit of US$20 million was recognised in 2002 (2001: US$41 million, 2000: US$ 39 million) for 2002 operating losses that are expected to be recovered in future years.
(c)	Adjustments of prior year accruals reduced the total tax charge for the Group by US$16 million (2001: US$32 million).
(d)	The deferred tax relief on exceptional charges for both years primarily relates to Other countries.
(e)	The Group's effective tax rate for 2002 is 31.2 per cent (2001: 31.5 per cent, 2000: 32.6 per cent) excluding exceptional charges and 54.0 per cent (2001: 36.2 per cent, 2000: 32.6 per cent) including exceptional charges.
(f)	A current tax charge of US$48 million (2001: relief of US$58 million, 2000: charge of US$1 million) and a deferred tax charge of US $13 million (2001: relief of US$11 million, 2000: relief of US$75 million) were dealt with in the Statement of Total Recognised Gains and Losses (STRGL). These tax charges related to exchange gains and losses which are themselves dealt with in the STRGL.

8 Dividends
	2002		2001		2000

	US$m		US$m		US$m
Rio Tinto plc Ordinary Interim dividend	314		213		202
Rio Tinto plc Ordinary Final dividend	325		415		409

	639		628		611

Rio Tinto Limited Ordinary Interim dividend	146		100		95
Rio Tinto Limited Ordinary Final dividend	153		194		193
Less dividends paid to Rio Tinto plc (e)	(112	)	(110	)	(109	)

Rio Tinto Limited dividends paid to public shareholders (b)	187		184		179


Total dividends paid to public shareholders	826		812		790


	2002		2001		2000		2002		2001		2000

	Rates per share						Number of shares
									(millions)
Rio Tinto plc Interim (pence)	18.87	p	14.03	p	12.66	p	1,065.4		1,064.5		1,063.4
Rio Tinto plc Final (pence)	18.60	p	27.65	p	26.21	p	1,065.5		1,064.6		1,063.5

	37.47	p	41.68	p	38.87	p

Rio Tinto Limited Interim - fully franked at 30%
(2001 - 30%, 2000 - 34%) (Australian Cents)	54.06	c	39.42	c	32.68	c	498.8		498.3		498.0
Less shares held by Rio Tinto plc							(187.4	)	(187.4	)	(187.4	)


Shares held by public shareholders (b)							311.4		310.9		310.6

Rio Tinto Limited Final - fully franked at 30%
(2001 - 30%, 2000 - 34%) (Australian Cents)	51.87	c	75.85	c	69.76	c	498.8		498.4		498.3
Less shares held by Rio Tinto plc							(187.4	)	(187.4	)	(187.4	)

	105.93	c	115.27	c	102.44	c

Shares held by public shareholders (b)							311.4		311.0		310.9


(a)	The 2002 dividends have been based on the following US cents per share amounts: interim - 29.5 cents, final - 30.5 cents.
(b)	For the Group accounts, the number of shares on which the Rio Tinto Limited dividends are based excludes those shares held by Rio Tinto plc, in order that the dividends shown represent those paid to public shareholders.
(c)	The proposed Rio Tinto Limited dividends will be franked out of existing franking credits or out of franking credits arising from the payment of income tax during 2003.
(d)	The approximate amount of the Rio Tinto Limited retained profits and reserves that could be distributed as dividends and franked out of existing franking credits which arose from net payments of income tax in respect of periods up to 31 December 2002 (after deducting franking credits on the proposed final dividend) is: US$105 million (2001: US$nil, 2000: US$nil). If all proposed dividends of Rio Tinto Limited's non wholly owned subsidiaries, and all reserves that can be distributed as franked by its wholly owned subsidiaries, are taken into account in addition to the above, the total that could be distributed as franked dividends increases to US$531 million (2001: US$302 million, 2000: US$79 million).
(e)	In addition, Rio Tinto Limited paid a dividend of US$146 million to Rio Tinto plc on the DLC Dividend Share.

A-15

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

9 Earnings per ordinary share

	Rio Tinto plc - part of Rio Tinto Group						Rio Tinto Limited - part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

Average number of ordinary shares in issue
(million) (b)	1,065		1,064		1,063		499		498		540		1,377		1,375		1,373


Profit for the financial year (US$m)	195		491		1,064		736		942		771		651		1,079		1,507
Exceptional charges (US$m) (note 4)	(739	)	(551	)	-		(225	)	(52	)	-		(879	)	(583	)	-

Adjusted earnings (US$m)	934		1,042		1,064		961		994		771		1,530		1,662		1,507


Earnings per ordinary share (US cents)	18.3	c	46.1	c	100.1	c	147.6	c	189.0	c	142.8	c	47.3	c	78.5	c	109.8	c

Exceptional charges per ordinary share (US cents)	(69.4	c)	(51.8	c)	-		(45.1	c)	(10.4	c)	-		(63.9	c)	(42.4	c)	-

Adjusted earnings per ordinary share (US cents)	87.7	c	97.9	c	100.1	c	192.7	c	199.4	c	142.8	c	111.2	c	120.9	c	109.8	c

(a)	Adjusted earnings and adjusted earnings per share exclude exceptional items of such magnitude that their exclusion is necessary in order that adjusted earnings fulfil their purpose of reflecting the underlying performance of the Group. There were no such items in 2000.
(b)	For the Rio Tinto Group, the daily average number of ordinary shares in issue of 1,377 million (2001: 1,375 million, 2000: 1,373 million) excludes the Rio Tinto Limited shares held by Rio Tinto plc.
(c)	Diluted earnings per share figures for the Rio Tinto Group are 0.1 US cents (2001: 0.2 US cents, 2000: 0.1 US cents) lower than the earnings per share figures above. The daily average number of ordinary shares used for the calculation is 1,379 million (2001: 1,377 million, 2000: 1,374 million) and excludes the Rio Tinto Limited shares held by Rio Tinto plc. The extra two million shares included in the calculation relate to share options.

10 Goodwill

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Cost
At 1 January	465		275		733		821		1,198		1,096
Adjustment on currency translation	(2	)	-		78		(65	)	76		(65	)
Additions (note 35)	-		190		8		157		8		347
Subsidiaries sold	-		-		-		(55	)	-		(55	)
Other movements (b)	-		-		-		(125	)	-		(125	)

At 31 December	463		465		819		733		1,282		1,198


Accumulated amortisation
At 1 January	(142	)	(89	)	(34	)	(6	)	(176	)	(95	)
Adjustment on currency translation	3		-		(4	)	-		(1	)	-
Amortisation for the year	(52	)	(53	)	(38	)	(28	)	(90	)	(81	)

At 31 December	(191	)	(142	)	(76	)	(34	)	(267	)	(176	)

Net balance sheet amount	272		323		743		699		1,015		1,022

(a)	Goodwill is being amortised over the economic lives of the relevant business units, which involves periods ranging from 4 to 40 years with a weighted average of around 26 years.
(b)	As a result of further information obtained in respect of the businesses acquired in 2000, an amount of US$125 million was recategorised from goodwill to tangible fixed assets during 2001.

A-16

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

11 Exploration and evaluation

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
At cost less amounts written off
At 1 January	338		370		340		415		678		785
Adjustment on currency translation	(9	)	(2	)	34		(40	)	25		(42	)
Expenditure in year	89		96		35		36		124		132
Charged against profit for the year	(47	)	(43	)	(3	)	(3	)	(50	)	(46	)
Disposals, transfers and other movements	(16	)	(83	)	(67	)	(68	)	(83	)	(151	)

At 31 December	355		338		339		340		694		678

Provision
At 1 January	(331	)	(295	)	(292	)	(322	)	(623	)	(617	)
Adjustment on currency translation	9		1		(31	)	33		(22	)	34
Charged against profit for the year	(47	)	(54	)	(33	)	(30	)	(80	)	(84	)
Disposals, transfers and other movements	19		17		69		27		88		44

At 31 December	(350	)	(331	)	(287	)	(292	)	(637	)	(623	)

Net balance sheet amount	5		7		52		48		57		55

(a)	The total of US$130 million (2001: US$130 million) charged against profit in respect of exploration and evaluation includes US$50 million (2001: US$46 million) written off cost and an increase in the provision of US$80 million (2001: US$84 million).
(b)	Disposals, transfers and other movements in 2001 include US$69 million transferred to property, plant and equipment.

12 Property, plant and equipment

	Mining properties and leases		Land and buildings		Plant and equipment		Capital works in progress		2002 Total		Restated 2001 Total

									US$m		US$m
Rio Tinto Group
Cost
At 1 January (as restated)	3,023		2,830		13,535		1,389		20,777		20,472
Adjustment on currency translation	238		124		750		149		1,261		(1,200	)
Capitalisation of additional closure costs (note 20)	55		-		-		-		55		23
Other additions	445		56		242		874		1,617		1,364
Disposals	(20	)	(88	)	(417	)	(23	)	(548	)	(177	)
Subsidiaries acquired (note 35)	10		4		98		8		120		183
Subsidiaries sold	-		-		-		-		-		(108	)
Transfers and other movements	251		(59	)	359		(506	)	45		220

At 31 December	4,002		2,867		14,567		1,891		23,327		20,777

Accumulated depreciation
At 1 January	(707	)	(929	)	(7,629	)	-		(9,265	)	(8,399	)
Adjustment on currency translation	(51	)	(61	)	(462	)	1		(573	)	551
Depreciation for the year	(175	)	(84	)	(605	)	-		(864	)	(848	)
Exceptional charges	(119	)	(121	)	(563	)	(136	)	(939	)	(701	)
Disposals	18		74		417		13		522		145
Subsidiaries acquired (note 35)	-		(1	)	(33	)	-		(34	)	(26	)
Subsidiaries sold	-		-		-		-		-		34
Transfers and other movements	(42	)	(175	)	239		(13	)	9		(21	)

At 31 December	(1,076	)	(1,297	)	(8,636	)	(135	)	(11,144	)	(9,265	)

Net balance sheet amount at 31 December 2002	2,926		1,570		5,931		1,756		12,183

Net balance sheet amount at 31 December 2001 (as restated)	2,316		1,901		5,906		1,389				11,512

A-17

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

12 Property, plant and equipment (continued)

(a)	The net balance sheet amount at 31 December 2002 includes US$198 million (2001: US$195 million) of pledged assets, in addition to assets held under the finance leases disclosed in note 22.
(b)	Transfers and other movements in 2002 include reclassifications between categories. Transfers and other movements in 2001 included an adjustment of US$129 million relating to the fair values of businesses acquired in 2000; US$69 million for projects transferred to exploration and evaluation and a reduction of US$29 million relating to a company reclassified as a joint venture.
(c)	Interest is capitalised at a rate based on the Group's cost of borrowing or at the rate on project specific debt where applicable. The interest rate used for capitalisation in both 2002 and 2001 did not differ materially from the US dollar LIBOR rate for those periods.
(d)	During 2002, the Group acquired North Jacobs Ranch for US$380 million. The discounted cost of US$353 million is included above as an addition to mining properties. A payment of US$76 million was made in the 2002 and the remainder of the consideration is payable over the next four years.

	Mining properties and leases		Land and buildings		Plant and equipment		Capital works in progress		2002 Total		2001 Total

									US$m		US$m
Rio Tinto plc - part of Rio Tinto Group
Cost
At 1 January	786		1,822		6,475		709		9,792		9,495
Adjustment on currency translation	(37	)	15		81		93		152		(380	)
Capitalisation of additional closure costs (note 20)	24		-		-		-		24		21
Other additions	399		51		174		340		964		604
Disposals	(4	)	(77	)	(332	)	(20	)	(433	)	(63	)
Subsidiaries acquired	-		-		-		-		-		27
Transfers and other movements	155		(156	)	72		(52	)	19		88

At 31 December	1,323		1,655		6,470		1,070		10,518		9,792

Accumulated depreciation
At 1 January	(269	)	(438	)	(3,762	)	-		(4,469	)	(3,627	)
Adjustment on currency translation	27		(7	)	(41	)	-		(21	)	183
Depreciation for the year	(48	)	(43	)	(280	)	-		(371	)	(400	)
Exceptional charges	(48	)	(120	)	(338	)	-		(506	)	(644	)
Disposals	2		67		340		13		422		43
Transfers and other movements	(5	)	(170	)	178		(13	)	(10	)	(24	)

At 31 December	(341	)	(711	)	(3,903	)	-		(4,955	)	(4,469	)

Net balance sheet amount at 31 December 2002	982		944		2,567		1,070		5,563

Net balance sheet amount at 31 December 2001	517		1,384		2,713		709				5,323

(a)	The net balance sheet amount at 31 December 2002 includes US$24 million (2001: US$30 million) of pledged assets, in addition to assets held under the finance leases disclosed in note 22.

	Mining properties and leases		Land and buildings		Plant and equipment		Capital works in progress		2002 Total		Restated 2001 Total

									US$m		US$m
Rio Tinto Limited - part of Rio Tinto Group
Cost
At 1 January (as restated)	2,237		1,008		7,060		680		10,985		10,977
Adjustment on currency translation	275		109		669		56		1,109		(820	)
Capitalisation of additional closure costs (note 20)	31		-		-		-		31		2
Other additions	46		5		68		534		653		760
Disposals	(16	)	(11	)	(85	)	(3	)	(115	)	(114	)
Subsidiaries acquired (note 35)	10		4		98		8		120		156
Subsidiaries sold	-		-		(6	)	-		(6	)	(108	)
Transfers and other movements	96		97		287		(454	)	26		132

At 31 December	2,679		1,212		8,091		821		12,803		10,985

A-18

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

12 Property, plant and equipment (continued)

	Mining Properties and leases		Land and buildings		Plant and equipment		Capital works in progress		2002 Total		2001 Total

									US$m		US$m
Accumulated depreciation
At 1 January	(438	)	(491	)	(3,867	)	-		(4,796	)	(4,772	)
Adjustment on currency translation	(78	)	(54	)	(421	)	1		(552	)	368
Depreciation for the year	(127	)	(41	)	(325	)	-		(493	)	(448	)
Exceptional charges	(71	)	(1	)	(225	)	(136	)	(433	)	(57	)
Disposals	16		7		77		-		100		102
Subsidiaries acquired (note 35)	-		(1	)	(33	)	-		(34	)	(26	)
Subsidiaries sold	-		-		-		-		-		34
Transfers and other movements	(37	)	(5	)	61		-		19		3

At 31 December	(735	)	(586	)	(4,733	)	(135	)	(6,189	)	(4,796	)

Net balance sheet amount at 31 December 2002	1,944		626		3,358		686		6,614

Net balance sheet amount at 31 December 2001(as restated)	1,799		517		3,193		680				6,189


(a)	The net balance sheet amount at 31 December 2002 includes US$174 million (2001: US$165 million) of pledged assets in addition to assets held under the finance leases disclosed in note 22.

	Rio Tinto plc - part of Rio Tinto Group US$m	Rio Tinto Limited - part of Rio Tinto Group US$m	Rio Tinto Group US$m

The 2002 net balance sheet amounts for land and buildings include:
Freehold	939	560	1,499
Long leasehold	2	40	42
Short leasehold	3	26	29

	944	626	1,570

Details of deferred stripping costs are set out in the following table:

	2002		2001		2000

	US$m		US$m		US$m
Rio Tinto Group
Stripping costs deferred in year to 31 December
Subsidiaries	80		124		85
Equity accounted operations	39		39		37

Total	119		163		122

Deferred stripping costs amortised in year to 31 December
Subsidiaries	(51	)	(38	)	(9	)
Equity accounted operations	(12	)	(6	)	(15	)

Total	(63	)	(44	)	(24	)

Deferred stripping costs carried forward at 31 December
Subsidiaries	326		292		200
Equity accounted operations	198		175		154

Total	524		467		354

	2002		2001		2000

	US$m		US$m		US$m
Rio Tinto plc - part of Rio Tinto Group
Stripping costs deferred in year to 31 December
Subsidiaries	58		97		83
Equity accounted operations	44		48		38

Total	102		145		121

Deferred stripping costs amortised in year to 31 December
Subsidiaries	(45	)	(36	)	(4	)
Equity accounted operations	(13	)	(7	)	(17	)

Total	(58	)	(43	)	(21	)

Deferred stripping costs carried forward at 31 December
Subsidiaries	260		242		175
Equity accounted operations	218		191		162

Total	478		433		337

A-19

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

12 Property, plant and equipment (continued)

	2002		2001		2000

	US$m		US$m		US$m
Rio Tinto Limited - part of Rio Tinto Group
Stripping costs deferred in year to 31 December
Subsidiaries	22		27		2
Equity accounted operations	6		2		-

Total	28		29		2

Deferred stripping costs amortised in year to 31 December
Subsidiaries	(6	)	(2	)	(5	)
Equity accounted operations	(2	)	-		-

Total	(8	)	(2	)	(5	)

Deferred stripping costs carried forward at 31 December
Subsidiaries	66		50		25
Equity accounted operations	8		4		2

Total	74		54		27

13 Fixed asset investments
	Investments in joint ventures		Loans to joint ventures		Investments in associates/ other		Loans to associates		2002 Total		Restated 2001 Total

									US$m		US$m
Rio Tinto Group
At 1 January (as restated)	1,492		191		535		72		2,290		1,802
Adjustment on currency translation	68		2		13		-		83		(42	)
Group’s share of earnings net of distributions (excl.
exceptional charges)	(24	)	-		45		-		21		(70	)
Exceptional charges	(16	)	-		(23	)	-		(39	)	-
Additions (excluding acquisitions)	152		-		28		4		184		152
Acquisitions (note 35)	8		-		-		-		8		345
Disposals and repayments of advances	-		(13	)	(4	)	-		(17	)	(59	)
Transfers and other movements	64		(3	)	(14	)	-		47		162

At 31 December	1,744		177		580		76		2,577		2,290


	Investments in joint ventures		Loans to joint ventures		Investments in associates/ other		Loans to associates		2002 Total		Restated 2001 Total

									US$m		US$m
Rio Tinto plc - part of Rio Tinto Group
At 1 January (as restated)	837		171		1,138		136		2,282		1,925
Adjustment on currency translation	-		-		154		(1	)	153		(103	)
Group’s share of earnings net of distributions (excl.	16		-		193		-		209		166
exceptional charges)
Exceptional charges	(16	)	-		(108	)	-		(124	)	-
Additions (excluding acquisitions)	43		-		26		-		69		272
Acquisitions (note 35)	-		-		11		-		11		-
Disposals and repayments of advances	-		(10	)	-		(49	)	(59	)	(53	)
Transfers and other movements	1		-		(7	)	-		(6	)	75

At 31 December	881		161		1,407		86		2,535		2,282


	Investments in joint ventures		Loans to joint ventures		Investments in associates/ other		Loans to associates		2002 Total		2001 Total

									US$m		US$m
Rio Tinto Limited - part of Rio Tinto Group
At 1 January	655		20		84		65		824		411
Adjustment on currency translation	68		2		4		-		74		(30	)
Group’s share of earnings net of distributions	(40	)	-		45		-		5		8
Additions (excluding acquisitions)	109		-		2		2		113		9
Acquisitions (note 35)	8		-		-		-		8		345
Disposals and repayments of advances	-		(3	)	(4	)	-		(7	)	(6	)
Transfers and other movements	63		(3	)	(5	)	-		55		87

At 31 December	863		16		126		67		1,072		824

(a)	The Group’s investments in joint ventures and associates include, where appropriate, entry premiums on acquisition plus interest capitalised by the Group during the development period of the relevant mines. At 31 December 2002, this capitalised interest less accumulated amortisation amounted to US$13 million (2001: US$14 million).
(b)	Transfers and other movements in 2002 included US$55 million in relation to the revision to fair values relating to assets held for resale explained in note 35. Transfers and other movements in 2001 included US$29 million transferred from property, plant and equipment and the reclassification of certain tax liabilities arising from profits of joint ventures (see note 21).
(c)	The cash flow statement analyses additions to joint ventures and associates between the following: - Funding of Group share of joint ventures' and associates’ capital expenditure, which reports cash supplied by the Group for the formation of net operating assets whose benefits will be attributable to the Group, and -Other funding of joint ventures and associates (advanced)/repaid which includes any financial investment in joint ventures and associates that does not have the above characteristics and all loan repayments. - For Rio Tinto plc, Funding to Rio Tinto Limited (advanced)/repaid includes both of the above types of advance as well as repayments.
(d)	Investments in and loans to associates by the Rio Tinto plc part of the Group include amounts relating to Rio Tinto Limited which are eliminated in arriving at the Rio Tinto Group figures.
(e)	Further details of investments in joint ventures and associates are set out on page A-21 and in notes 14, 32 and 33.

A-20

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

13 Fixed asset investments (continued)

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

Joint Ventures	US$m		US$m		US$m		US$m		US$m		US$m
Rio Tinto's share of assets
Fixed assets	1,640		1,469		1,118		927		2,758		2,396
Current assets	117		211		234		201		351		412

	1,757		1,680		1,352		1,128		3,109		2,808
Rio Tinto's share of third party liabilities
Liabilities due within one year	(124	)	(113	)	(171	)	(175	)	(295	)	(288	)
Liabilities due after more than one year (including provisions)	(591	)	(559	)	(302	)	(278	)	(893	)	(837	)

	(715	)	(672	)	(473	)	(453	)	(1,188	)	(1,125	)
Rio Tinto's share of net assets	1,042		1,008		879		675		1,921		1,683

(a) The Group's share of joint venture liabilities set out above excludes US$177 million (2001: US$191 million) due to the Group. These excluded liabilities correspond with the loans to joint ventures that are presented earlier in this note as an asset of the Group. Including these loans, the Group's share of the total liabilities of joint ventures was US$1,365 million (2001: US$1,316 million).

(b) Of the US$893 million of liabilities due after more than one year, US$554 million relates to long term debt, which matures as follows: US$173 million between 1-2 years; US$166 million between 2-3 years; US$75 million between 3-4 years; US$91 million between 4-5 years and US$49 million after 5 years.

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		Restated 2001		2002		2001		2002		Restated 2001

Associates	US$m		US$m		US$m		US$m		US$m		US$m
Rio Tinto's share of assets
Fixed assets	4,352		4,041		349		264		1,512		1,355
Current assets	944		1,056		66		86		297		309

	5,296		5,097		415		350		1,809		1,664
Rio Tinto's share of third party liabilities
Liabilities due within one year	(1,607	)	(1,470	)	(78	)	(67	)	(345	)	(264	)
Liabilities due after more than one year (including provisions)	(1,961	)	(2,079	)	(162	)	(157	)	(789	)	(788	)

	(3,568	)	(3,549	)	(240	)	(224	)	(1,134	)	(1,052	)
Non equity capital and outside shareholders' interests	(314	)	(345	)	-		-		(105	)	(99	)

Rio Tinto's share of net assets	1,414		1,203		175		126		570		513

(a) The Group's share of associate liabilities set out above excludes US$76 million (2001: US$72 million) due to the Group. These excluded liabilities correspond with the loans to associates that are presented earlier in this note as an asset of the Group. Including these loans, the Group's share of the total liabilities of associates was US$1,210 million (2001: US$1,124 million).

(b) Of the US$789 million of liabilities due after more than one year, US$578 million relates to long term debt which matures as follows: US$48 million between 1-2 years; US$111 million between 2-3 years; US$210 million between 3-4 years; US$66 million between 4-5 years and US$143 million after 5 years.

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	2002	Restated 2001	2002	2001	2002	Restated 2001

	US$m	US$m	US$m	US$m	US$m	US$m
Investments in and loans to associates/other
Investments in and loans to associates	1,414	1,203	175	126	570	513
Other investments	79	71	18	23	86	94

	1,493	1,274	193	149	656	607

(a) Other investments include listed investments with a market value of US$70 million (2001: US$63 million). The Group owns 20.3 per cent of the Labrador Iron Ore Royalty Income Fund which itself owns 15.1 per cent of Iron Ore Company of Canada Inc. This investment is not equity accounted because the Group has no involvement in its management.

(b) Further information on the net debt of joint ventures and associates is shown in note 14.

A-21

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

14 Net debt of joint ventures and associates

	Rio Tinto interest 2002	Rio Tinto share of net debt 2002	Rio Tinto interest 2001	Rio Tinto share of net debt 2001

	%	US$m	%	US$m
Joint ventures
Minera Escondida Limitada	30.0	464	30.0	408
PT Kaltim Prima Coal	50.0	79	50.0	85
Leichhardt	44.7	40	44.7	45
Colowyo	20.0	35	20.0	35
Warkworth	42.1	26	40.4	17

Associates
Freeport-McMoRan Copper & Gold Inc.	16.5	405	16.6	387
Minera Alumbrera Limited	25.0	47	25.0	95
Tisand (Pty) Limited	50.0	62	50.0	51
Port Waratah Coal Services	27.6	103	26.5	56
Sociedade Mineira de Neves-Corvo SA (Somincor)	49.0	28	49.0	32

Other		20		46

		1,309		1,257

(a)	In accordance with FRS 9, the Group includes its net investment in joint ventures and associates in its consolidated balance sheet. This investment is shown net of the Group's share of the net debt of joint ventures and associates due to third parties, which is set out above.

(b)	Some of the debt of joint ventures and associates is subject to financial and general covenants.

(c)	The Group has a partnership interest in the Colowyo Coal Company and has undertaken, via a subsidiary company which entered into a management agreement, to cause the partnership to perform its obligations under certain coal supply contracts. The debt of US$173 million owed by the Colowyo Coal Company is to be serviced and repaid out of the proceeds of these contracts.

(d)	The Group holds 44.7 per cent of the equity of the Leichhardt joint venture, which has a 31.4 per cent interest in the Blair Athol joint venture. Leichhardt has US$58 million of shareholders' funds and US$86 million of debt finance.

(e)	In addition to the Group's share of net debt set out above, Rio Tinto's equity accounted investments are stated net of US$58 million relating to the interests of non equity preference stock holders.

(f)	The debt of joint ventures and associates is without recourse to the Rio Tinto Group except that Rio Tinto plc has guaranteed US$16 million of its share of Somincor's debt.

15 Inventories

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	2002	2001	2002	2001	2002	2001

	US$m	US$m	US$m	US$m	US$m	US$m
Raw material and purchased components	179	198	168	152	347	350
Consumable stores	108	105	140	112	248	217
Work in progress	148	167	97	115	245	282
Finished goods and goods for resale	379	339	283	294	662	633

	814	809	688	673	1,502	1,482

Comprising:
Inventories expected to be sold or used within 12 months	814	809	649	637	1,463	1,446
Inventories not expected to be sold nor used within 12 months	-	-	39	36	39	36

	814	809	688	673	1,502	1,482

A-22

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

16 Accounts receivable and prepayments

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m

Trade debtors	589		643		603		581		1,192		1,224
Provision for doubtful debts	(6	)	(4	)	(10	)	(7	)	(16	)	(11	)
Bills receivable	6		6		11		21		17		27
Amounts owed by joint ventures	-		-		5		3		5		3
Amounts owed by associates	1,643		1,461		7		22		17		31
Other debtors ( 2001 includes assets held for resale)	74		93		270		421		217		424
Current tax recoverable	48		40		14		31		62		71
Deferred tax assets	2		-		42		-		44		-
Pension prepayments	557		543		77		110		634		653
Other prepayments	24		25		43		42		67		67

	2,937		2,807		1,062		1,224		2,239		2,489

Amounts falling due after more than one year of US$641million (2001: US$675 million) for the Rio Tinto Group relate to pension prepayments US$551 million (2001: US$598 million), other debtors US$36 million (2001: US$45 million), amounts owed by associates US$nil million (2001: US$17 million), tax recoverable US$10 million (2001: US$15 million) and deferred tax assets US$44 million (2001: US$nil).
Amounts falling due after more than one year of US$1,602 million (2001: US$1,625 million) for Rio Tinto plc relate to pension prepayments US$521 million (2001: US$524 million), other debtors US$8 million (2001: US$15 million), tax recoverable US$5 million (2001: US$12 million), deferred tax assets of US$2 million and US$1,066 million (2001: US$1,074 million) owed by Rio Tinto Limited for shares bought back during 2000.
Amounts falling due after more than one year of US$105 million (2001: US$124 million) for Rio Tinto Limited relate to pension prepayments US$30 million (2001: US$74 million), other debtors US$28 million (2001: US$30 million), amounts owed by associates US$nil million (2001: US$17 million) and tax recoverable US$5 million (2001: US$3 million) and deferred tax assets of US$42 million (2001: US$nil).
Amounts owed to Rio Tinto plc by associates includes US$441 million (2001: US$267 million) relating to a loan to Rio Tinto Limited and US$1,192 million (2001: US$1,185 million) relating to other balances between the two parts of the Group. In addition, a loan of US$77 million (2001: US$129 million) to Rio Tinto Limited is included within investments in associates (note 13).
Other debtors for Rio Tinto Limited include US$127 million (2001: US$90 million) due from Rio Tinto plc. Movements on pension prepayments are included in Other items in the cash flow.

17 Current asset investments, cash and liquid resources

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Liquid resources
Time deposits	32		198		53		97		85		295
Certificates of deposit	-		2		-		5		-		7
Other	2		4		-		-		2		4

Total liquid resources	34		204		53		102		87		306
Deduct: investments qualifying as cash	(32	)	(198	)	(53	)	(97	)	(85	)	(295	)

	2		6		-		5		2		11
Other current asset investments					-
US Treasury bonds (a)	304		-		-		-		304		-

Investments per balance sheet (unlisted)	306		6		-		5		306		11

Cash
Cash as defined in FRS1 Revised ('FRS1 cash') (note 23)	70		114		9		121		79		235
Investments qualifying as cash	32		198		53		97		85		295
Bank borrowings repayable on demand included in
FRS 1 cash (note 18)	72		52		89		97		161		149

Cash per balance sheet	174		364		151		315		325		679

(a) Current asset investments of Rio Tinto plc and Rio Tinto Group include US$304 million relating to US treasury bonds that are not regarded as liquid assets because they are held as security for the deferred consideration on certain assets acquired during 2002. (b) Information on cash and cash equivalents under US GAAP is given in note 42 Reconciliation to US Accounting Principles.

A-23

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

18 Short term borrowings

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	2002	2001	2002	2001	2002	2001

	US$m	US$m	US$m	US$m	US$m	US$m
Secured
Bank loans repayable within 12 months	2	3	14	130	16	133
Other loans repayable within 12 months	20	26	70	30	90	56

	22	29	84	160	106	189
Unsecured
Bank borrowings repayable on demand	72	52	89	97	161	149
Bank loans repayable within 12 months	-	23	62	59	62	82
Other loans repayable within 12 months	566	27	722	499	1,288	526
Commercial paper	699	1,425	1,050	1,464	1,749	2,889

	1,337	1,527	1,923	2,119	3,260	3,646

Total short term borrowings per balance sheet	1,359	1,556	2,007	2,279	3,366	3,835

In accordance with FRS 4, all commercial paper is classified as short term borrowings though the US$1,749 million outstanding at 31 December 2002 is all backed by medium term facilities (2001: commercial paper of US$2,889 million of which US$1,900 million was backed by medium term facilities). Under US and Australian GAAP, the US$1,749 million would be grouped within non-current borrowings at 31 December 2002. Further details of available facilities are given in note 28.

19 Accounts payable and accruals

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	2002	2001	2002	2001	2002	2001

	US$m	US$m	US$m	US$m	US$m	US$m
Due within one year
Trade creditors	258	251	326	341	584	592
Amounts owed to joint ventures	-	-	-	17	-	17
Amounts owed to associates	149	112	1	1	23	23
Other creditors	151	81	638	490	202	136
Tax on profits	63	97	308	234	371	331
Employee entitlements	88	66	33	28	121	94
Royalties and mining taxes	83	78	47	47	130	125
Accruals and deferred income	68	14	41	102	109	116
Dividends payable to outside shareholders of
subsidiaries	-	-	4	-	4	-
Dividends payable to Rio Tinto plc and Rio Tinto
Limited shareholders	329	418	158	194	430	540

	1,189	1,117	1,556	1,454	1,974	1,974

Due in more than one year
Other creditors	229	36	1,113	1,095	276	57
Accruals and deferred income	6	6	22	38	28	44

	235	42	1,135	1,133	304	101

(a)	Other creditors for the Rio Tinto Group include deferred consideration of US$287 million relating to certain assets acquired during 2002. The deferred consideration is included at its net present value. The amortisation of the discount applied in establishing the net present value is treated as a finance cost. All of the deferred consideration relates to Rio Tinto plc. Other creditors for Rio Tinto Limited includes US$518 million (2001: US$396 million) relating to loans from Rio Tinto plc.

(b)	US$1,066 million (2001: US$1,074 million) of Rio Tinto Limited's creditors due in more than one year represent amounts owed to Rio Tinto plc for shares bought back during 2000. In addition US$587 million (2001: US$435 million) included in other creditors for Rio Tinto Limited and US$57 million (2001: US$72 million) of dividends payable relate to amounts due to Rio Tinto plc. For Rio Tinto plc US$127 million (2001: US$90 million) of amounts owed to associates relate to balances with Rio Tinto Limited.

A-24

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

20 Provisions for liabilities and charges

	Post retirement health care		Other employee entitlements		Close down & restoration/ environmental		Other		2002 Total		Restated 2001 Total

Rio Tinto Group									US$m		US$m
At 1 January	446		210		1,434		189		2,279		2,328
Adjustment on currency translation	9		19		49		23		100		(100	)
Capitalisation of additional closure costs (note 12)	-		-		55		-		55		23
Charged/(released) to profit for the year	27		45		(8	)	(6	)	58		100
Exceptional charges	-		-		116		-		116		-
Amortisation of discount related to provisions	-		-		52		-		52		55
Utilised in year:
provisions set up on acquisition of businesses	-		(1	)	-		(5	)	(6	)	(31	)
other provisions	(16	)	(31	)	(23	)	(42	)	(112	)	(117	)
Subsidiaries acquired (note 35)	-		2		-		3		5		13
Subsidiaries sold	-		-		-		-		-		(6	)
Transfers and other movements	-		(4	)	(13	)	32		15		14

	466		240		1,662		194		2,562		2,279

Provision for deferred taxation (see note 21)									1,050		915

Provisions for liabilities and charges per balance sheet									3,612		3,194

	Post retirement health care		Other employee entitlements		Close down & restoration/ environmental		Other		2002 Total		Restated 2001Total

Rio Tinto plc - part of Rio Tinto Group									US$m		US$m
At 1 January	407		50		927		48		1,432		1,403
Adjustment on currency translation	9		4		(2	)	1		12		(30	)
Capitalisation of additional closure costs (note 12)	-		-		24		-		24		21
Charged/(released) to profit for the year	25		11		(2	)	(1	)	33		45
Exceptional charges	-		-		116		-		116		-
Amortisation of discount related to provisions	-		-		30		-		30		37
Utilised in year:
provisions set up on acquisition of businesses	-		-		-		(1	)	(1	)	-
other provisions	(16	)	(1	)	(12	)	(5	)	(34	)	(54	)
Subsidiaries acquired	-		-		-		-		-		1
Transfers and other movements	-		-		3		6		9		9

	425		64		1,084		48		1,621		1,432

Provision for deferred taxation (see note 21)									640		573

Provisions for liabilities and charges per balance sheet									2,261		2,005

	Post retirement health care	Other employee entitlements		Close down & restoration/ environmental		Other		2002 Total		Restated 2001 Total

Rio Tinto Limited - part of Rio Tinto Group								US$m		US$m
At 1 January	39	160		507		141		847		925
Adjustment on currency translation	-	15		51		22		88		(70	)
Capitalisation of additional closure costs (note 12)	-	-		31		-		31		2
Charged/(released) to profit for the year	2	34		(6	)	(5	)	25		55
Exceptional charges	-	-		-		-		-		-
Amortisation of discount related to provisions	-	-		22		-		22		18
Utilised in year:
provisions set up on acquisition of businesses	-	(1	)	-		(4	)	(5	)	(31	)
other provisions	-	(30	)	(11	)	(37	)	(78	)	(63	)
Subsidiaries acquired	-	2		-		3		5		12
Subsidiaries sold	-	-		-		-		-		(6	)
Transfers and other movements	-	(4	)	(16	)	26		6		5

	41	176		578		146		941		847

Provision for deferred taxation (see note 21)								410		342

Provision for liabilities and charges per balance sheet								1,351		1,189

A-25

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

20 Provisions for liabilities and charges (continued)

(a)	The main assumptions used to determine the provision for post retirement healthcare are disclosed in note 40. The current provision is expect to be utilised over the next 15 to 20 years.
(b)	The provision for other employee entitlements includes pension entitlements of US$44 million and a provision for long service leave, based on the relevant entitlements in certain Group operations. Some US$79 million of the total provision for employee entitlements for the Rio Tinto Group, US$18 million for Rio Tinto plc, US$61 million for Rio Tinto Limited is expected to be utilised within the next year.
(c)	The Group's policy on close down and restoration costs is shown in note 1(k). Close down and restoration costs are a normal consequence of mining, and the majority of close down and restoration expenditure is incurred at the end of a mine's life. Remaining lives of mines range from 2 to over 50 years with an average, weighted by closure provision, of around 25 years. Although the ultimate cost to be incurred is uncertain, subsidiary companies have estimated their respective costs based on feasibility and engineering studies using current restoration standards and techniques. Provisions of US$1,662 million for close down and restoration costs and other environmental obligations include estimates of the effect of future inflation and have been discounted to their present value at six per cent per annum, being an estimate of the risk free pre tax cost of borrowing. Excluding the effects of future inflation, and before discounting, this is equivalent to some US$2.7 billion.
(d)	Some US$106 million of environmental clean up expenditure is expected to take place within the next five years. The remainder includes amounts for the operation and maintenance of remediation facilities in later years. The provision for environmental expenditure includes the issue described in (e) below.
(e)	In 1995, Kennecott Utah Copper (KUC) agreed with the US Environmental Protection Agency (EPA) and the State of Utah to complete certain source control projects and perform specific environmental studies regarding contamination of ground water in the vicinity of the Bingham Canyon mine. A remedial investigation and feasibility study on the South Zone ground water contamination completed in March 1998 identified a range of alternative measures to address this issue. Additional studies were conducted to refine the workable alternatives. A final remedial design document was completed before the end of 2002. It is anticipated that formal agreement with the State of Utah Natural Resource Damage Trustee, the State of Utah and the Jordan Valley Water Conservancy District will be completed in early 2003. KUC will also be entering into a judicial consent decree with the EPA in 2003, for the remedial action on the ground water, including the acidic portion of the contamination. Financial provisions for the estimated clean up costs for this ground water contamination have been increased by US$116 million in 2002 to reflect the terms of the final remedial design document.
(f)	Other provisions deal with a variety of issues and include US$60 million relating to the remaining provision for the mark to market valuation of the hedge books held by companies acquired in 2000 and 2001, which will be utilised over the next 9 years (see note 28), and US$42 million relating to payments received from employees for accommodation at some sites which are refundable in certain circumstances.

21 Deferred taxation

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m

At 1 January (as restated)	573		620		342		351		915		971
Adjustment on currency translation	46		(68	)	33		(31	)	79		(99	)
Reported in the STRGL for the year (b)	1		(11	)	12		-		13		(11	)
Subsidiaries acquired/sold	(1	)	-		1		(25	)	-		(25	)
(Released)/charged to profit for the year	21		(58	)	(37	)	26		(16	)	(32	)
Other movements (a)	(2	)	90		17		21		15		111

	638		573		368		342		1,006		915

Comprising:
Included in provisions for liabilities and charges	640		573		410		342		1,050		915
Included in accounts receivable	(2	)	-		(42	)	-		(44	)	-

	638		573		368		342		1,006		915

(a)	Other movements include deferred tax recognised by subsidiary holding companies that is presented in these accounts as part of the tax charge on the profits of the joint ventures and associates to which it relates. In this respect, tax liabilities of US$87 million arising from profits of joint ventures were reclassified as direct liabilities of subsidiary companies in 2001.
(b)	The amounts reported in the STRGL for the year relate to the provisions for tax charges/(relief) on exchange differences on net debt taken to reserves.

					Other		2002		2001
	UK		Australian		countries'		Total		Total
	tax		tax		tax				Restated

Rio Tinto Group							US$m		US$m
Provided in the accounts
Deferred tax assets	6		263		1,222		1,491		1,627
Deferred tax liabilities	(134	)	(641	)	(1,722	)	(2,497	)	(2,542	)

Balance as shown above	(128	)	(378	)	(500	)	(1,006	)	(915	)

Comprising:
Accelerated capital allowances	(5	)	(493	)	(941	)	(1,439	)	(1,568	)
Other timing differences	(129	)	115		239		225		270
Tax losses (page A-27 note (a))	6		-		202		208		264

	(128	)	(378	)	(500	)	(1,006	)	(1,034	)
Deduct:
US Alternative Minimum Tax credits recoverable	-		-		-		-		119

Balance as shown above	(128	)	(378	)	(500	)	(1,006	)	(915	)

A-26

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

21 Deferred taxation (continued)

					Other		2002		2001
	UK		Australian		countries'		Total		Total
	tax		tax		tax				Restated

Rio Tinto plc - part of Rio Tinto Group							US$m		US$m
Provided in the accounts
Deferred tax assets	6		-		1,101		1,107		1,050
Deferred tax liabilities	(134	)	1		(1,612	)	(1,745	)	(1,623	)

Balance as shown above	(128	)	1		(511	)	(638	)	(573	)

Comprising:
Accelerated capital allowances	(5	)	1		(913	)	(917	)	(1,075	)
Other timing differences	(129	)	-		218		89		119
Tax losses (a)	6		-		184		190		264

	(128	)	1		(511	)	(638	)	(692	)
Deduct:
US Alternative Minimum Tax credits recoverable	-		-		-		-		119

Balance as shown above	(128	)	1		(511	)	(638	)	(573	)


					Other		2002		2001
	UK		Australian		countries'		Total		Total
	tax		tax		tax				Restated

Rio Tinto Limited - part of Rio Tinto Group							US$m		US$m
Provided in the accounts
Deferred tax assets	-		263		121		384		577
Deferred tax liabilities	-		(642	)	(110	)	(752	)	(919	)

Balance as shown above	-		(379	)	11		(368	)	(342	)

Comprising:
Accelerated capital allowances	-		(494	)	(28	)	(522	)	(493	)
Other timing differences	-		115		21		136		151
Tax losses (a)	-		-		18		18		-

	-		(379	)	11		(368	)	(342	)

(a)

US$430 million (2001: US$217 million) of potential deferred tax assets have not been recognised as an asset in these accounts. There is no time limit for the recovery of these potential assets. This total includes US$366 million (2001: US$170 million) of US Alternative Minimum Tax credits and US tax losses for which recovery is dependent on the level of taxable profits in the US tax group and US$64 million of tax losses arising in countries other than the US.

(b)

There is a limited time period for the recovery of US$187 million (2001: US$224 million) of tax losses which have been recognised as deferred tax assets in the accounts.

A-27

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

22 Medium and long term borrowings

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
At 1 January	2,629		2,035		3,623		3,526		6,252		5,561
Adjustment on currency translation	33		(46	)	37		(20	)	70		(66	)
Subsidiaries acquired	-		-		-		125		-		125
Subsidiaries sold	-		-		-		(9	)	-		(9	)
Loans drawn down	1,012		1,050		560		1,223		1,572		2,273
Loan repayments	(945	)	(410	)	(1,036	)	(1,222	)	(1,981	)	(1,632	)

At 31 December	2,729		2,629		3,184		3,623		5,913		6,252
Deduct: short term	(1,287	)	(1,504	)	(1,918	)	(2,182	)	(3,205	)	(3,686	)

Medium and long term borrowings	1,442		1,125		1,266		1,441		2,708		2,566


Borrowings at 31 December
Commercial paper (b)	699		1,425		1,050		1,464		1,749		2,889

Bank loans
Secured	8		10		254		287		262		297
Unsecured	82		221		121		178		203		399

	90		231		375		465		465		696
Other loans
Secured
Loans	22		30		68		26		90		56
Finance leases	103		108		16		21		119		129
Unsecured
Rio Tinto Canada Inc 6% guaranteed bonds 2003	300		300		-		-		300		300
Rio Tinto Finance (USA) Limited Bonds 5.75% 2006	-		-		500		500		500		500
Rio Tinto Finance (USA) Limited Bonds 6.5% 2003	-		-		200		200		200		200
Rio Tinto Finance (USA) Limited Bonds 7.125% 2013	-		-		100		100		100		100
Eurobond 2007 (c)	716		-		-		-		716		-
European Medium Term Notes (c)	640		358		477		508		1,117		866
North Finance (Bermuda) Limited 7% 2005	-		-		200		200		200		200
Other unsecured loans	159		177		198		139		357		316

	1,940		973		1,759		1,694		3,699		2,667

Total	2,729		2,629		3,184		3,623		5,913		6,252

(a)	The majority of the fixed rate borrowings shown above are swapped to floating rates. Details of interest rate and currency swaps and of available standby credit facilities are shown in note 28.
(b)	In accordance with FRS 4, all commercial paper is classified as short term borrowings though the US$1,749 million outstanding at 31 December 2002 is all backed by medium term facilities (2001: commercial paper of US$2,889 million of which US$1,900 million was backed by medium term facilities). Under US and Australian GAAP, the US$1,749 million would be grouped within non current borrowings at 31 December 2002. Further details of available facilities are given in note 28.
(c)	The Group has a US$2 billion European programme for the issuance of short to medium term debt of which US$1,833 million was drawn down at 31 December 2002. A US$500 million five year bond has been issued, from a possible US$1 billion which the Group is able to issue under an SEC shelf registration subject to market conditions and terms.
(d)	Intragroup borrowings between the Rio Tinto plc and Rio Tinto Limited parts of the Group are included in accounts payable.
(e)	Rio Tinto Finance (USA) Limited is a 100 per cent owned finance subsidiary of Rio Tinto Limited. Rio Tinto Limited and Rio Tinto plc have fully and unconditionally guaranteed the securities issued by Rio Tinto Finance (USA) Limited.

A-28

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

23 Net debt

Analysis of changes in consolidated net debt:	FRS 1				Liquid		2002		2001
	cash (a)		Borrowings		resources (a)		Net debt		Net debt

Rio Tinto Group	US$m		US$m		US$m		US$m		US$m

At 1 January	235		(6,252	)	306		(5,711	)	(5,050	)
Adjustment on currency translation	(26	)	(70	)	(6	)	(102	)	38
Subsidiaries acquired	-		-		-		-		(125	)
Subsidiaries sold	-		-		-		-		9
Per cash flow statement (b)	(130	)	409		(213	)	66		(583	)

At 31 December	79		(5,913	)	87		(5,747	)	(5,711	)



	FRS 1				Liquid		2002		2001
	cash (a)		Borrowings		resources (a)		Net debt		Net debt

Rio Tinto plc - part of Rio Tinto Group	US$m		US$m		US$m		US$m		US$m

At 1 January	114		(2,629	)	204		(2,311	)	(1,760	)
Adjustment on currency translation	(28	)	(33	)	(28	)	(89	)	71
Per cash flow statement (b)	(16	)	(67	)	(142	)	(225	)	(622	)

At 31 December	70		(2,729	)	34		(2,625	)	(2,311	)



	FRS 1				Liquid		2002		2001
	cash (a)		Borrowings		resources (a)		Net debt		Net debt

Rio Tinto Limited - part of Rio Tinto Group	US$m		US$m		US$m		US$m		US$m

At 1 January	121		(3,623	)	102		(3,400	)	(3,290	)
Adjustment on currency translation	2		(37	)	22		(13	)	(33	)
Subsidiaries acquired	-		-		-		-		(125	)
Subsidiaries sold	-		-		-		-		9
Per cash flow statement (b)	(114	)	476		(71	)	291		39

At 31 December	9		(3,184	)	53		(3,122	)	(3,400	)

(a)

A reconciliation of these figures to their respective balance sheet categories is shown in note 17.

(b)

The decrease/(increase) in net debt equates to the Cash outflow before management of liquid resources and financing shown on the cash flow statement together with Ordinary shares in Rio Tinto issued for cash and Ordinary shares in subsidiaries issued to outside shareholders. In addition, for Rio Tinto Limited, the decrease/(increase) in net debt includes loans received/repaid from Rio Tinto plc plus shares repurchased from Rio Tinto plc.

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Reconciliation of cash flow to movement in net debt:
(Decrease)/increase in cash per cash flow	(16	)	6		(114	)	34		(130	)	40
Cash outflow/(inflow) from decrease/(increase in
borrowings)	(67	)	(640	)	476		(1	)	409		(641	)
Cash (inflow)/outflow from (decrease)/increase in
liquid resources	(142	)	12		(71	)	6		(213	)	18

Decrease/(increase) in net debt	(225	)	(622	)	291		39		66		(583	)


Net cash flow from movement in liquid resources comprises:
(Decrease)/increase in time deposits	(195	)	(1	)	(9	)	23		(204	)	22
(Decrease)/increase in certificates of deposit	(2	)	29		(5	)	(35	)	(7	)	(6	)
(Decrease)/increase in other liquid investments	55		(16	)	(57	)	18		(2	)	2

	(142	)	12		(71	)	6		(213	)	18

(a)

US$304 million of US Treasury bonds included within current asset investments for Rio Tinto plc and the Rio Tinto Group are excluded from liquid resources. These investments were purchased to be held as security for the deferred consideration on certain assets acquired during 2002, which is payable over the next four years.

A-29

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

24 Share capital - Rio Tinto plc

	2002		2001		2002	2001

	Number(m)		Number(m)		US$m	US$m
Share capital account
At 1 January	1,064.59		1,063.51		154	154
Ordinary shares issued	0.89		1.08		-	-

At 31 December	1,065.48		1,064.59		154	154

Issued and fully paid share capital
Special voting share of 10p (d)	1 only		1 only		-	-
DLC dividend share (d)	1 only		-		-	-
Ordinary shares of 10p each (equity)	1,065.48		1,064.59		154	154

Total issued share capital					154	154

Unissued share capital
Ordinary shares of 10p each	354.55		355.44		52	52
Equalisation share of 10p (d)	1 only		1 only		-	-

Total authorised share capital	1,420.03		1,420.03		206	206

Options outstanding
Options outstanding at 1 January	7.93		5.90
- granted	2.61		2.91
- exercised	(0.89	)	(0.68	)
- cancelled	(0.31	)	(0.20	)

Options outstanding at 31 December (b)	9.34		7.93

(a)	887,488 Ordinary shares were issued during the year resulting from the exercise of options under Rio Tinto plc employee share option schemes at prices between 476.99p and 1,061.0p (2001: 681,152 shares at prices between 476.99p and 965.4p).
(b)	At 31 December 2002, options over the following number of Ordinary shares were outstanding: -62,000 under the Rio Tinto plc Executive Share Option Scheme 1985 at prices between 689.0p and 861.0p and exercisable at various dates up to April 2004 (31 December 2001: 130,786 shares at prices between 476.99p and 861.0p). -7,186,254 under the Rio Tinto Share Option Plan 1998 at prices between 808.8p and 1458.6p (31 December 2001: 5,785,625 shares at prices between 808.8p and 1265.6p). The exercise of share options is subject to the satisfaction of a graduated performance condition set by the Remuneration committee at various dates up to March 2012. -2,079,845 under the Rio Tinto plc Share Savings Plan at prices between 521.0p and 1,061.0p and exercisable at various dates up to June 2008 (31 December 2001: 2,010,403 shares at prices between 521.0p and 1061.0p).
(c)	At the 2002 annual general meeting the shareholders resolved to renew the general authority for the company to buy back up to 10 per cent of its Ordinary shares of 10p each for a further period of 18 months. During the year to 31 December 2002 no shares were bought back.
(d)	The 'Special Voting Share' was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on Joint Decisions, following the DLC merger. Directors have the ability to issue an equalisation share if that is required under the terms of the DLC Merger Sharing Agreement. The 'DLC Dividend Share' was issued to facilitate the efficient management of funds within the DLC structure.
(e)	The aggregate consideration received for shares issued during 2002 was US$10 million (2001: US$13 million).

Further information on share options is given in note 42 'Reconciliation to US Accounting Principles'.

A-30

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

24 Share capital - Rio Tinto Limited (100 per cent)
	2002		2001		2002	2001

	Number(m)		Number(m)		US$m	US$m
Share capital account
At 1 January	498.46		498.36		865	939
Adjustment on currency translation	-		-		94	(75	)
Share issues	0.36		0.10		5	1

At 31 December	498.82		498.46		964	865

Options outstanding
Options outstanding at 1 January	3.08		0.85
- granted	2.25		2.33
- exercised	(0.21	)	(0.08	)
- cancelled	(0.43	)	(0.02	)

Options outstanding at 31 December (d)	4.69		3.08

(a)	359,821 (2001: 78,775) shares were issued during the year, of which 210,658 resulted from the exercise of options under Rio Tinto Limited employee share option schemes at prices between A$20.14 and A$39.30 (2001: A$20.14 and A$22.64) and 149,163 from the vesting of shares under various Rio Tinto Limited employee share schemes (2001: nil). In 2001 a further 10,474 shares were allotted at a price of A$33.43.
(b)	Rio Tinto Limited is authorised by shareholder approvals obtained in 1999 to buy back up to all the Rio Tinto Limited shares held by Tinto Holdings Australia Pty Limited (a wholly owned subsidiary of Rio Tinto plc) plus, on-market, up to ten percent of the publicly held capital in any 12 month period. Rio Tinto Limited is seeking a renewal of these approvals at its annual general meeting in 2003. During the year to 31 December 2002, no shares were bought back (2001: nil).
(c)	Total share capital in issue at 31 December 2002 was 498.8 million shares plus one special voting share and one DLC Dividend Share (31 December 2001: 498.5 million shares plus one Special Voting Share). The 'Special Voting Share' was issued to facilitate the joint voting by shareholders of Rio Tinto plc and Rio Tinto Limited on joint decisions following the DLC merger. Directors have the ability to issue an Equalisation Share if that is required under the terms of the DLC Merger Sharing Agreement. The DLC Dividend Share was issued to facilitate the efficient management of funds within the DLC structure.
(d)	At 31 December 2002, options over the following number of shares were outstanding: - 2,439,330 shares under the Rio Tinto Share Option Plan at prices between A$20.14 and A$39.87 (31 December 2001: 1,694,730 shares at prices between A$20.14 and A$33.01) . These share options are exercisable at various dates up to March 2012, subject to the satisfaction of a graduated performance condition set by the Remuneration committee. - 2,246,174 shares under the Rio Tinto Limited Share Savings Plan at prices between A$25.57 and A$27.86 (31 December 2001: 1,380,826 shares at a price of A$27.86). These share options are exercisable at various dates up to June 2008.

A-31

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

25 Share premium and reserves
	Rio Tinto plc -				Rio Tinto Limited -
	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Share premium account
At 1 January	1,600		1,587		-		-		1,600		1,587
Premium on issues of ordinary shares	10		13		-		-		10		13

At 31 December	1,610		1,600		-		-		1,610		1,600


Parent and subsidiary companies' profit and loss account
At 1 January (as restated) (a)	3,060		3,603		600		195		3,676		3,821
Adjustment on currency translation	199		(204	)	270		(145	)	472		(356	)
Retained (loss)/profit for the year	(552	)	(303	)	432		640		(180	)	337
Transfers and other movements (b)	93		(36	)	(146	)	(90	)	-		(126	)

At 31 December	2,800		3,060		1,156		600		3,968		3,676


Joint ventures' profit and loss account
At 1 January	264		295		266		201		531		497
Adjustment on currency translation	3		(3	)	11		(19	)	13		(22	)
Retained loss for the year	-		(64	)	(40	)	(6	)	(40	)	(70	)
Transfers and other movements (b)	-		36		-		90		-		126

At 31 December	267		264		237		266		504		531


Associates' profit and loss account
At 1 January (as restated)	577		437		21		6		56		60
Adjustment on currency translation	134		(90	)	1		1		6		(4	)
Retained profit for the year	108		230		45		14		45		-

At 31 December	819		577		67		21		107		56


Total profit and loss account	3,886		3,901		1,460		887		4,579		4,263


Other reserves
At 1 January	247		249		76		79		294		298
Adjustment on currency translation	2		(2	)	10		(3	)	9		(4	)

At 31 December	249		247		86		76		303		294


Total reserves
- Parent and subsidiary companies	3,002		3,265		1,242		676		4,256		3,955
- Joint ventures	267		264		237		266		504		531
- Associated companies	866		619		67		21		122		71

	4,135		4,148		1,546		963		4,882		4,557

(a)	At 1 January 2002, the Rio Tinto Group parent and subsidiary companies profit and loss account balance was US$3,819 million (Rio Tinto plc US$3,209 million and Rio Tinto Limited US$594 million) and the Rio Tinto Group associates' profit and loss account balance was US$46 million (Rio Tinto plc US$565 million and Rio Tinto Limited US$21 million) before restatement to reflect the implementation of FRS 19.
(b)	Transfers and other movements' for Rio Tinto plc in 2002 include US$91 million relating to a dividend on the DLC dividend share received from Rio Tinto Limited and US$2 million relating to Rio Tinto Limited share issues (page A-6 note (c)). In 2001 certain tax liabilities arising from profits of joint ventures were reclassified as direct liabilities of subsidiary companies. The reclassification of these liabilities was included in 'Transfers and other movements'.
(c)	A substantial portion of Group reserves are in overseas companies. If these reserves were distributed, there would be a liability to withholding taxes and to corporate tax in the UK and Australia. This would, however, be reduced by double taxation relief. Provision is made in these accounts for such additional tax only to the extent that dividends have been accrued or there is a binding agreement to distribute such past earnings.
(d)	At 31 December 2002, cumulative goodwill written off directly to reserves for the Rio Tinto Group amounted to US$3,087 million (2001: US$3,047 million), Rio Tinto plc US$2,897 million (2001: US$2,876 million) and Rio Tinto Limited US$304 million (2001: US$274 million).
(e)	Adjustments on currency translation include net of tax exchange gains on net debt of US$211 million (2001: losses of US$189 million), Rio Tinto plc gains of US$55 million (2001: losses of US$52 million) and Rio Tinto Limited gains of US$250 million (2001: losses of US$154 million).

A-32

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

26 Product analysis - Rio Tinto Group

	2002	2001	2002		2001
		Restated (a)			Restated (a)

	%	%	US$m		US$m
Operating assets
Copper, gold and by-products	21.5	27.2	2,861		3,552
Iron ore	21.0	20.5	2,794		2,674
Coal	13.9	11.9	1,847		1,556
Aluminium	17.8	14.7	2,364		1,922
Industrial minerals	16.1	16.3	2,135		2,123
Other products (incl. diamonds) (page A-34 note (d))	9.7	9.4	1,281		1,223

Total	100.0	100.0	13,282		13,050

Unallocated item			(73	)	(296	)
Less: net debt			(5,747	)	(5,711	)

Net assets			7,462		7,043

	2002	2001	2000	2002		2001		2000

	%	%	%	US$m		US$m		US$m
Gross turnover
Copper	12.4	12.2	15.3	1,348		1,277		1,528
Gold (all sources)	9.7	9.5	7.8	1,046		988		781
Iron ore	16.4	16.3	13.9	1,772		1,704		1,385
Coal	20.3	20.1	16.5	2,203		2,102		1,648
Aluminium	15.4	16.4	18.2	1,663		1,714		1,817
Industrial minerals	17.5	17.5	19.5	1,898		1,825		1,941
Other products (incl. diamonds) (page A-34 note (d))	8.3	8.0	8.8	898		828		872

Total	100.0	100.0	100.0	10,828		10,438		9,972


Profit before tax
Copper, gold and by-products	18.6	15.1	17.9	525		474		530
Iron ore	24.1	24.3	19.2	682		761		567
Coal	18.2	17.9	12.3	516		560		365
Aluminium	13.5	16.0	21.2	382		500		627
Industrial minerals	20.0	20.8	21.6	565		651		639
Other products (incl. diamonds) (page A-34 note (d))	5.6	5.9	7.8	159		185		229

	100.0	100.0	100.0	2,829		3,131		2,957

Exploration and evaluation				(130	)	(130	)	(136	)
Net interest (page A-34 note (e))				(161	)	(256	)	(220	)
Other items (page A-34 note (f))				(133	)	(47	)	(92	)

				2,405		2,698		2,509
Exceptional charges (page A-34 note (g))				(1,094	)	(715	)	-

Total				1,311		1,983		2,509


Net earnings
Copper, gold and by-products	20.3	15.6	18.8	363		298		334
Iron ore	25.8	26.4	20.6	461		504		367
Coal	17.7	18.1	13.6	316		345		242
Aluminium	14.9	17.3	20.2	266		330		359
Industrial minerals	16.5	17.4	18.8	295		332		335
Other products (incl. diamonds) (page A-34 note (d))	4.8	5.2	8.0	87		97		142

	100.0	100.0	100.0	1,788		1,906		1,779

Exploration and evaluation				(109	)	(104	)	(108	)
Net interest (page A-33 note (e))				(95	)	(167	)	(138	)
Other items (page A-34 note (f))				(54	)	27		(26	)

				1,530		1,662		1,507
Exceptional charges (page A-34 note (g))				(879	)	(583	)	-

Total				651		1,079		1,507

See notes on page A-34.

A-33

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

26 Product analysis - Rio Tinto Group (continued)

Notes

(a)	The 2001 restatement of segmental data for FRS 19 impacts operating assets only.
(b)	Operating assets of subsidiaries comprise net assets before deducting net debt, less outside shareholders' interests which are calculated by reference to the net assets of the relevant companies (i.e. net of such companies' debt). For joint ventures and associates, Rio Tinto's net investment is shown.
(c)	The above analyses include the Rio Tinto share of the results of joint ventures and associates including interest.
(d)	Diamonds have been reclassified from 'Industrial Minerals' to 'Other products' and comparative figures have been restated accordingly.
(e)	The amortisation of discount is included in the applicable product category. All other financing costs of subsidiaries are shown as 'net interest'.
(f)	'Other items' includes various corporate items and, in 2001, the US$54 million gain on the sale of Norzink
(g)	Of the exceptional charges in 2002, US$596 million before and after tax relates to KUC which is included in the copper, gold and by-product segment and US$443 million before tax (US$235 million net of tax and minorities) relates to IOC which is included in the iron ore segment. 2001, US$644 million before tax and US$531 million after tax related to KUC. Exceptional charges are shown separately in the above analyses of profit before tax and net earnings

The Group figures on page A-33 include the following amounts for joint ventures:
			2002	2001

			US$m	US$m
Net investment
Copper, gold and by-products			1,027	990
Coal			828	623
Other			66	70

Total			1,921	1,683


	2002		2001	2000

	US$m		US$m	US$m
Gross turnover
Copper	419		369	521
Gold	236		247	151
Coal	956		912	664
Other	51		84	153

Total	1,662		1,612	1,489


Profit before tax
Copper, gold and by-products	232		220	278
Coal	285		297	163
Other	3		3	15
Exceptional charges	(16	)	-	-

Total	504		520	456


Net earnings
Copper, gold and by-products	155		141	183
Coal	198		201	105
Other	2		2	12
Exceptional charges	(16	)	-	-

Total	339		344	300

A-34

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

26 Product analysis - Rio Tinto Group (continued)

The Group figures on page A-33 include the following amounts for associates:			Restated
		2002	2001

		US$m	US$m
Net investment
Copper, gold and by-products		505	458
Other		65	55

Total		570	513


	2002	2001	2000

	US$m	US$m	US$m
Gross turnover
Copper	259	267	267
Gold	355	333	264
Other	109	74	77

Total	723	674	608


Profit before tax
Copper, gold and by-products	130	97	95
Other	59	61	50

Total	189	158	145


Net earnings
Copper, gold and by-products	93	51	53
Other	36	38	34

Total	129	89	87

A-35

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

27 Geographical analysis - Rio Tinto Group
By country of location
	2002	2001	2002		2001
		Restated (a)			Restated (a)

Operating assets	%	%	US$m		US$m

North America	35.5	39.3	4,714		5,130
Australia and New Zealand	48.5	45.1	6,445		5,890
South America	5.3	5.3	703		686
Africa	3.5	2.8	466		361
Indonesia	4.5	4.6	599		606
Europe and other countries	2.7	2.9	355		377

Total	100.0	100.0	13,282		13,050

Unallocated items			(73	)	(296	)
Less: net debt			(5,747	)	(5,711	)

Net assets			7,462		7,043

	2002	2001	2000	2002	2001	2000

	%	%	%	US$m	US$m	US$m
Gross turnover by country of origin
North America	31.2	30.1	31.1	3,377	3,143	3,100
Australia and New Zealand	41.6	42.0	39.1	4,500	4,386	3,900
South America	4.8	5.0	6.0	525	524	594
Africa	7.2	8.2	9.1	783	857	905
Indonesia	9.6	9.1	8.2	1,039	951	820
Europe and other countries	5.6	5.6	6.5	604	577	653

Total	100.0	100.0	100.0	10,828	10,438	9,972

	2002		2001	2000	2002		2001		2000

	%		%	%	US$m		US$m		US$m
Profit before tax
North America	17.1		15.2	21.5	439		449		586
Australia and New Zealand	57.1		56.4	49.6	1,464		1,666		1,353
South America	3.4		2.9	8.7	86		85		237
Africa	11.8		14.2	12.4	303		420		338
Indonesia	12.2		8.6	5.6	312		254		153
Europe and other countries	(1.6	)	2.7	2.2	(38	)	80		62

	100.0		100.0	100.0	2,566		2,954		2,729

Net interest (page A-37 note (d))					(161	)	(256	)	(220	)

					2,405		2,698		2,509
Exceptional charges (page A-37 note (e))					(1,094	)	(715	)	-

Total					1,311		1,983		2,509

	2002		2001	2000	2002		2001		2000

	%		%	%	US$m		US$m		US$m
Net earnings
North America	20.1		19.6	24.1	326		359		397
Australia and New Zealand	57.8		57.5	49.7	939		1,052		818
South America	4.0		3.1	10.6	65		56		174
Africa	7.1		7.8	7.0	115		143		115
Indonesia	11.4		7.0	4.4	185		128		73
Europe and other countries	(0.4	)	5.0	4.2	(5	)	91		68

	100.0		100.0	100.0	1,625		1,829		1,645

Net interest (page A-37 note (d))					(95	)	(167	)	(138	)

					1,530		1,662		1,507
Exceptional charges (page A-37 note (e))					(879	)	(583	)	-

Total					651		1,079		1,507

See notes on page A-37.

A-36

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

27 Geographical analysis - Rio Tinto Group (continued)

Notes
(a)	The 2001 restatement of segmental data for FRS 19 impacts operating assets only.
(b)	Operating assets of subsidiaries comprise net assets before deducting net debt, less outside shareholders' interests which are calculated by reference to the net assets of the relevant companies (i.e. net of such companies' debt). For joint ventures and associates, Rio Tinto's net investment is shown
(c)	The above analyses include the Rio Tinto share of the results of joint ventures and associates including interest.
(d)	The amortisation of discount is included in the applicable geographical area. All other financing costs of subsidiaries are shown as ‘net interest’.
(e)	Of the 2002 exceptional charges, US$596 million before tax relates to Kennecott Utah Copper ('KUC') and US$443 million before tax relates to IOC, both of which are included in 'North America'. The impact of 2002 exceptional charges on net earnings was US$596 million for KUC and US$235 million for IOC. Of the 2001 exceptional charges, US$644 million before tax and US$531 million after tax related to KUC. Exceptional charges are shown separately in the above analyses of profit before tax and net earnings.


The Group figures shown on page A-36 include the following amounts for joint ventures:

			2002	2001

			US$m	US$m
Net investment by origin
Australia and New Zealand			834	614
South America			498	494
Indonesia			567	548
Other			22	27

Total			1,921	1,683


	2002		2001	2000

	US$m		US$m	US$m
Gross turnover by origin
Australia and New Zealand	587		545	364
South America	283		289	388
Indonesia	565		528	423
Other	227		250	314

Total	1,662		1,612	1,489


Profit before tax by origin
Australia and New Zealand	214		207	117
South America	49		64	151
Indonesia	231		228	155
Other	26		21	33
Exceptional charges	(16	)	-	-

Total	504		520	456


Net earnings by origin
Australia and New Zealand	151		145	74
South America	32		41	97
Indonesia	149		142	104
Other	23		16	25
Exceptional charges	(16	)	-	-

Total	339		344	300

A-37

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

27 Geographical analysis - Rio Tinto Group (continued)

The Group figures shown on page A-36 include the following amounts for associates:
		Restated
	2002	2001

	US$m	US$m
Net investment by origin
North America	71	88
Indonesia	127	109
Other	372	316

Total	570	513

	2002	2001	2000

	US$m	US$m	US$m
Gross turnover by origin
North America	131	128	115
Indonesia	306	296	307
Other	286	250	186

Total	723	674	608


Profit before tax by origin
North America	42	45	60
Indonesia	54	35	29
Other	93	78	56

Total	189	158	145


Net earnings by origin
North America	33	36	45
Indonesia	19	1	2
Other	77	52	40

Total	129	89	87

By destination
	2002	2001	2000	2002	2001 (a)	2000 (a)

	%	%	%	US$m	US$m	US$m
Turnover by destination
North America	29	28.1	29.2	3,143	2,936	2,913
Europe	21.6	22.4	23.6	2,340	2,338	2,355
Japan	17.9	19.3	17.3	1,943	2,012	1,729
Other Asia	19.2	18.9	19.8	2,083	1,974	1,970
Australia and New Zealand	8.2	7.1	6.0	887	740	598
Other	4.1	4.2	4.1	432	438	407

Total	100.0	100.0	100.0	10,828	10,438	9,972

The Group figures shown above include the following amounts for joint ventures:
	2002	2001	2000

	US$m	US$m	US$m
Turnover by destination
North America	214	225	254
Europe	303	304	345
Japan	575	506	443
Other	570	577	447

Total	1,662	1,612	1,489

The Group figures shown above include the following amounts for associates:
	2002	2001	2000

	US$m	US$m	US$m
Turnover by destination
North America	157	159	140
Europe	248	251	199
Other	318	264	269

Total	723	674	608


(a)	The sales analysis of turnover by destination for 2001 has been restated, the principal changes being an increase in sales to Australia and New Zealand of US$277 million and a reduction in sales to Japan of US$270 million. Similarly, the analysis of 2000 turnover by destination has been restated increasing sales to Australia and New Zealand by US$116 million and reducing sales to Japan by the same amount.
(b)	An analysis of Property, Plant and Equipment by location is included in note 42 'Reconciliation to US Accounting Principles'.

A-38

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments

The Group's policies with regard to currency, interest rate and commodity price exposures, and the use of derivative financial instruments, are discussed in the following sections on pages 31 and 32 of the Financial review included in the Annual report and financial statements:

-	Exchange rates, reporting currencies and currency exposure
-	Interest rates
-	Commodity prices
-	Treasury management and financial instruments

Except where stated, the information given below relates to the financial instruments of the parent companies and their subsidiaries and excludes joint ventures and associates. The information provided is as at the end of the financial year. Short term debtors and creditors are included only in the currency analysis.

Financial instruments held by companies acquired are marked to market as part of the adjustment of assets and liabilities acquired to fair value. Where appropriate, these fair value adjustments are shown in the disclosures below.

A) Currency
The Group's material currency derivatives are itemised below:

a) Forward contracts hedging trading transactions

	Buy currency amount	Sell currency amount	Weighted average exchange rate	Fair value		Total fair value
Buy Australian dollar: sell US dollar	A$m	US$m	A$/US$	US$m		US$m

Less than 1 year	292	178	0.61	(15	)
1 to 5 years	779	474	0.61	(61	)
More than 5 years	246	148	0.60	(27	)

Total	1,317	800	0.61			(103	)


Of the above, contracts to sell US$651 million were acquired with companies purchased in 2000 and 2001.

Buy New Zealand dollar: sell US dollar	NZ$m	US$m	NZ$/US$	US$m

Less than 1 year	130	65	0.50	2
1 to 5 years	485	226	0.47	4
More than 5 years	390	175	0.45	(8	)

Total	1,005	466	0.46			(2	)


Buy Canadian dollar: sell US dollar (all of which were acquired with companies purchased in 2000)

	C$m	US$m	C$/US$m	US$m


Less than 1 year	123	86	0.70	(8	)
1 to 5 years	18	12	0.67	(1	)

Total	141	98	0.70			(9	)

Other currency forward contracts						(1	)

Total fair value						(115	)
Deduct: Fair value recognised on acquisition in respect of these contracts						20

Fair value not recognised						(95	)

A-39

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments (continued)

b) Options hedging trading transactions
The Group acquired a series of bought call options with companies purchased in 2000. No further options have been taken out since that time. The majority of these bought call options are matched by sold puts creating synthetic forwards. In the event that the Australian dollar strengthens above pre-determined levels, the put options are 'knocked-out', i.e. cancelled.

	Buy currency amount	Sell currency amount	Weighted average strike rate	Fair value	Total fair value
Bought A$ call option	A$m	US$m	A$/US$	US$m	US$m

Less than 1 year	94	66	0.70	-
1 to 5 years	374	263	0.70	1
More than 5 years	60	42	0.70	-

Total	528	371	0.70		1

The following sold A$ put options (knock-out puts) will be cancelled should, at any time during their term, the Australian dollar strengthen above pre-determined barrier rate. Details are shown below.

	Buy currency amount	Sell currency amount	Weighted average strike rate	Weighted average barrier rate	Fair value
Sold knock-out A$ put option	A$m	US$m	A$/US$	A$/US$	US$m

Less than 1 year	94	66	0.70	0.77	(13	)
1 to 5 years	374	263	0.70	0.77	(60	)
More than 5 years	60	42	0.70	0.77	(10	)

Total	528	371	0.70	0.77			(83	)

Total fair value							(82	)
Deduct: Fair value recognised on acquisition in respect of these contracts:							43

Fair value not recognised							(39	)


c) Forward contracts hedging future capital expenditure

	Buy currency amount	Sell currency amount	Weighted average exchange rate	Fair value		Total fair value
Buy Australian dollar: sell US dollar	A$m	US$m	A$/US$	US$m		US$m

Less than 1 year	758	380	0.50	43
1 to 5 years	393	198	0.50	22

	1151	578	0.50			65


Buy Canadian dollar: sell US dollar	C$m	US$m	C$/US$	US$m


Less than 1 year	46	32	0.70	(3	)

						(3	)

Fair value not recognised						62


d) Currency swaps hedging non US dollar debt
	Buy currency amount	Sell currency amount	Weighted average exchange rate	Fair value
		US$m		US$m

Buy Euro: sell US dollars
1 to 5 years	Euro 750m	674	1.11	112
Buy Japanese yen: sell US dollars
1 to 5 years	Yen 16 billion	131	122	4
Buy sterling: sell US dollars
Less than 1 year	£112m	175	0.64	4
1 to 5 years	£175m	251	0.70	30

Buy Swiss francs: sell US dollars
1 to 5 years	CHF20m	12	1.66	2

Total		1243		152
Fair value recognised within carrying value of debt*				(152	)

Fair value not recognised				-

* These fair values comprise only the currency element of the swaps. The fair value of the interest element is presented in the summary interest rate swaps.

A-40

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments (continued)

e) Currency exposures arising from the Group's net monetary assets/(liabilities)
After taking into account the effect of relevant derivative instruments, almost all the Group's net debt is either denominated in US dollars or in the functional currency of the entity holding the debt. The table below sets out the currency exposures arising from net monetary assets/(liabilities) other than net debt, which are not denominated in the functional currency of the relevant business unit. Gains and losses resulting from such exposures are recorded in the profit and loss account. This table reflects the currency exposures before adjusting for tax and outside interests.

	Currency of exposure				Currency of exposure
	US dollar US$m	Other currencies US$m		2002 Total US$m	US dollar US$m	Other currencies US$m		2001 Total US$m

Functional currency of business unit :
United States dollar	-	32		32	-	9		9
Australian dollar	346	35		381	273	16		289
Canadian dollar	56	-		56	47	(12	)	35
South African rand	105	26		131	170	(6	)	164
Other currencies	28	(1	)	27	5	34		39

Total	535	92		627	495	41		536

The table below shows the Rio Tinto share of the above currency exposures after tax and outside interest

	Currency of exposure				Currency of exposure
	US	Other		2002	US	Other		2001
	dollar	currencies		Total	dollar	currencies		Total
	US$m	US$m		US$m	US$m	US$m		US$m

Functional currency of business unit :
United States dollar	-	22		22	-	4		4
Australian dollar	224	24		248	189	11		200
Canadian dollar	21	-		21	17	(9	)	8
South African rand	37	9		46	60	(3	)	57
Other currencies	17	(1	)	16	3	24		27

Total	299	54		353	269	27		296

B) Interest rates

(i) Financial liabilities and assets including the effect of interest rate and currency swaps
This table analyses the currency and interest rate composition of the Group's financial assets and liabilities

											2002		2001
	United		Australian		Sterling		South		Other		Total		Total
	States		dollar				African		currencies		carrying		carrying
	dollar						rand				value		value
	US$m		US$m		US$m		US$m		US$m		US$m		US$m

Financial liabilities (page A-42 note (f))
Fixed rate	(685	)	-		-		-		-		(685	)	(822	)
Floating rate	(4,775	)	(331	)	(25	)	(162	)	(96	)	(5,389	)	(5,579	)
Non interest bearing (page A-42 note (g))	(287	)	-		-		-		-		(287	)	-

	(5,747	)	(331	)	(25	)	(162	)	(96	)	(6,361	)	(6,401	)
Financial assets (page A-42 note (f))
Fixed rate	304		-		-		-		-		304		137
Floating rate (including loans to joint ventures and associates)	375		92		31		4		78		580		816

	(5,068	)	(239	)	6		(158	)	(18	)	(5,477	)	(5,448	)

Less :
US Treasury bonds (fixed rate)											(304	)	-
Deferred consideration payable (non interest bearing)											287		-
Loans to joint ventures and associates (floating rate)											(253	)	(263	)

Net debt (note 23)											(5,747	)	(5,711	)

A-41

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments (continued)

(ii) Fixed rate liabilities and assets, presented gross, and interest rate and currency swap
The US$685 million (2001: US$822 million) of fixed rate liabilities shown in (i) above comprise gross liabilities of US$2,539 million (2001: US$1,793 million) less the interest rate swaps of US$1,854 million (2001: US$971 million) shown below:

			2002				2001
			Excess of				Excess of
		Average	fair value			Average	fair value
Gross liabilities		fixed	over			fixed	over
	Principal	rate	principal		Principal	rate	principal
	US$m	% p.a.	US$m		US$m	% p.a.	US$m
Maturity
Less than 1 year	621	5.4	(17	)	20	8.9	-
1 to 5 years	750	6.1	(66	)	1,367	6.4	(42	)
More than 5 year	100	7.2	(18	)	100	7.1	(4	)

US$ fixed rate liabilities	1,471	5.9			1,487	6.5

Less than 1 year	-	-	-		23	0.1	-
1 to 5 years	1,068	4.7	(46	)	283	4.5	5

Non US dollar fixed rate liabilities (a)	1,068	4.7			306	4.1

Fixed rate liabilities before interest rate swaps	2,539		(147	)	1,793		(41	)



		Average				Average
Interest rate swaps		fixed	2002			fixed	2001
	Principal	rate	Fair value*		Principal	rate	Fair value
Maturity	US$m	% p.a.	US$m		US$m	% p.a.	US$m

Less than 1 year	321	4.7	9		-	-	-
1 to 5 years	750	6.1	74		950	6.2	29

Interest rate swaps to US$ floating rates	1,071	5.7			950	6.2

Less than 1 year	-	-	-		23	0.1	-
1 to 5 years (a)	1,068	4.7	48		283	4.5	(6	)

Interest rate swaps from non US$ fixed rates to US$ floating rates (a)	1,068	4.7			306	4.1

1 to 5 years	245	7.1	(28	)	245	7.1	(18	)
More than 5 year	40	5.6	(9	)	40	5.6	(1	)

Interest rate swaps to US$ fixed rates (b)	285	6.9			285	6.9

Interest rate swaps (net impact)	1,854		94		971		4


Total fixed rate financial liabilities after interest rate
swaps (b), (d)	685		(53	)	822		(37	)


*These fair values include the interest element of the currency swaps described earlier.

2002

2001

Excess of

Average

fair value

Average

fair value

Gross Assets

fixed

over

fixed

over

Maturity

Principal

rate

principal

Principal

rate

principal

US$m

% p.a.

US$m

% p.a.

US$m

Less than 1 year

304

1.7

8.9

1 to 5 years

117

8.9

Total fixed rate financial assets

304

1.7

137

8.9

(a)	All of the above non US$ liabilities are swapped to US$. The principal amounts shown above reflect the currency element of the related currency swaps.
(b)	As a consequence of acquisitions during 2000, the Group holds a number of interest rate swaps to receive US$ floating rates and pay US$ fixed rates which have been included in the total of fixed rate debt shown above. Similarly, as a consequence of acquisitions in 2000, the Group acquired interest rate option contracts which give it the right to pay fixed interest rates and receive floating interest rates. As at 31 December 2002, these options had a principal of US$25 million (2001: US$180 million) and a US$nil (2001: US$nil) fair value.
(c)	The Group has US$119 million of finance leases (2001: US$129 million), the largest of which has a principal of US$86 million, a maturity of 2018 and a floating interest rate.
(d)	After taking into account all interest rate swaps, the Group's fixed rate debt totals US$685 million and has a weighted average interest rate of 6.6 per cent and a weighted average time to maturity of 3 years (2001: US$822 million with a weighted average interest rate of 7.0 per cent and a weighted average time to maturity of four years).
(e)	Interest rates on the great majority of the Group's floating rate financial liabilities and assets will have been reset within six months. The interest rates applicable to the Group's US dollar denominated floating rate financial liabilities and assets did not differ materially at the year end from the three month US dollar LIBOR rate of 1.4 per cent.
(f)	The above table does not include the remaining US$60 million (2001: US$80 million) net provision for the market to market valuation of the hedge books held by companies acquired in 2000 and 2001 and other financial assets of US$122 million (2001: US$343 million), all of which are non interest bearing. Further details of the instruments included within the acquisition provision for mark to market valuation of the hedge books held by companies acquired are shown in section A above and section C below.
(g)	These non interest bearing financial liabilities have been presented in the financial statements on a discounted basis, using a discount rate of 3.8 per cent.

A-42

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments (continued)

C) Commodities
The Group's material commodity derivatives are itemised below:

	2002
	Fair value
	US$m

Commodity derivatives, including options, of which US$2 million relates to acquisitions during 2000	6

Total fair value	6
Deduct: Fair value recognised on acquisition in respect of these contracts	(3	)

Fair value not recognised	3

D) Liquidity
The maturity profile of the Group's net debt is discussed in the Balance Sheet section of the Financial review on page 31 of the Annual report and financial statements.

Financial assets and liabilities are repayable as follows:


	2002		2001

	US$m		US$m
Financial liabilities
Within 1 year, or on demand	(3,434	)	(3,835	)
Between 1 and 2 years	(215	)	(770	)
Between 2 and 3 years	(394	)	(149	)
Between 3 and 4 years	(1,042	)	(152	)
Between 4 and 5 years	(810	)	(1,176	)
After 5 years	(466	)	(319	)

	(6,361	)	(6,401	)
Financial assets
Within 1 year, or on demand	668		612
Between 1 and 2 years	10		51
Between 2 and 3 years	10		48
Between 3 and 4 years	14		48
Between 4 and 5 years	14		14
After 5 years	168		180

Total per currency/interest rate analysis	(5,477	)	(5,448	)

In addition, of the remaining US$60 million net provision for the mark to market valuation of the hedge books held by companies acquired in 2000 and 2001, US$15 million matures in 2003, US$39 million in 2004 to 2007 and US$6 million thereafter. There are other financial assets totalling US$122 million of which US$86 million have no fixed maturity and US$36 million which has a maturity greater than one year.
In accordance with FRS 4, all commercial paper is classified as short term borrowings though the US$1,749 million outstanding at 31 December 2002 is all backed by medium term facilities (2001: commercial paper of US$2,889 million of which US$1,900 million was backed by medium term facilities). Under US and Australian GAAP, the US$1,749 million would be grouped within non-current borrowings at 31 December 2002. Further details of available facilities are given below.
As at 31 December 2002, a total of US$1,833 million is outstanding under the US$2 billion European Medium Term Notes facility, of which US$674 million is repayable within one year. A US$500 million five year bond was issued in 2001 from a possible US$1 billion which the Group is able to issue under the SEC shelf registration filed in that year, subject to market conditions and terms
At 31 December 2002, the Group had unutilised standby credit facilities totalling US$2.8 billion. These facilities, which are summarised below, are for back-up support for the Group”s commercial paper programmes and for general corporate purposes:

	2002	2001

	US$m	US$m
Within 1 year	1,050	1,725
Between 1 and 2 years	1,650	-
After 2 years	100	1,900

	2,800	3,625

A-43

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

28 Financial Instruments (continued)

E) Fair values of financial instruments
The carrying values and the fair values of Rio Tinto's financial instruments at 31 December are shown in the following table. Fair value is the amount at which a financial instrument could be exchanged in an arm's length transaction between informed and willing parties. Where available, market values have been used to determine fair values. In other cases, fair values have been calculated using quotations from independent financial institutions, or by discounting expected cash flows at prevailing market rates. The fair value of cash, short term borrowings and loans to joint ventures and associates approximates to the carrying value, as a result of their short maturity or because they carry floating rates of interest.

If Rio Tinto's financial instruments were sold at the fair values shown, tax of US$37 million would become recoverable (2001: US$117 million). The maturity of the financial instruments is shown in the notes above.

		2002				2001

		Carrying		Fair		Carrying		Fair
		value		value		value		value
US$m
Primary financial instruments held or issued to
finance the Group's operations:
	Cash (note 17)	325		325		679		679
	Current asset investments (note 17)	306		310		11		11
	Short term borrowings	(3,370	)	(3,387	)	(3,835	)	(3,835	)
	Medium and long term borrowings	(2,856	)	(2,986	)	(2,566	)	(2,607	)
	Loans to joint ventures and associates (note 13)	253		253		263		263
	Other (liabilities)/assets	(165	)	(165	)	343		342

		(5,507	)	(5,650	)	(5,105	)	(5,147	)
Derivative financial instruments held to manage
the interest rate and currency profile:
	Currency forward contracts hedging trading transactions (A)	(20	)	(115	)	(32	)	(314	)
	Currency option contracts hedging trading transactions (A)	(43	)	(82	)	(49	)	(114	)
	Currency forward contracts hedging future capital expenditure (A)	-		62		-		(16	)
	Currency swaps hedging non US dollar debt (A)	152		152		-		-
	Interest rate swap agreements and options (B)	-		94		-		4
	Commodity forward/future contracts hedging trading transactions (C)	3		6		1		11

		(5,415	)	(5,533	)	(5,185	)	(5,576	)

Less: mark to market provision at acquisition		60				80
Other financial assets		(122	)			(343	)

Total per liquidity analysis		(5,477	)			(5,448	)

Gains and losses on hedges
Changes in the fair value of derivatives used as hedges of trading transactions, capital expenditure and interest rate exposures, including changes relating to derivatives held by companies acquired during 2000 and 2001, are not recognised in the financial statements until the hedged position matures.

US$m					2002		2001
					Total net		Total net
					gains/		gains/
	Gains		Losses		(losses)		(losses)


Unrecognised gains and losses on hedges at 1 January	42		(391	)	(349	)	(137	)
Gains and losses arising in previous years recognised in the year	(13	)	101		88		28

Gains and losses arising before 1 January that were not recognised in the year	29		(290	)	(261	)	(109	)
Gains and losses arising in the year that were not recognised in the year	173		113		286		(240	)

Unrecognised gains and losses on hedges at 31 December	202		(177	)	25		(349	)

Of which:
Gains and losses expected to be recognised within one year	61		(26	)	35		(88	)
Gains and losses expected to be recognised in more than one year	141		(151	)	(10	)	(261	)

	202		(177	)	25		(349	)

A-44

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

29 Contingent liabilities and commitments

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	2002	2001	2002	2001	2002	2001

	US$m	US$m	US$m	US$m	US$m	US$m
Commitments
Contracted capital expenditure at 31 December	68	269	282	293	350	562
Operating lease commitments	13	8	89	95	102	103
Other commitments	-	-	51	62	51	62

Included above are operating lease commitments falling due within one year of US$26 million (2001: US$30 million).

Unconditional purchase obligations
The aggregate amount of future payment commitments under unconditional purchase obligations outstanding at 31 December 2002 was US$2,539 million. The amounts payable in each of the next 5 years are as follows: 2003: US$209 million, 2004: US$213 million, 2005: US$215 million, 2006: US$187 million and 2007: US$193 million. These future payment commitments mainly consist of take or pay contracts for the supply of power.

Rio Tinto plc -

part of Rio Tinto Group

Rio Tinto Limited -

part of Rio Tinto Group

Rio Tinto Group

2002

2001

2002

2001

2002

2001

US$m

Contingent liabilities

Indemnities and other performance guarantees on

which no material loss is expected

129

145

139

Pursuant to the DLC merger both Rio Tinto plc and Rio Tinto Limited issued deed poll guarantees by which each guaranteed contractual obligations incurred by the other or, to the extent guaranteed by the other, any person. The amounts shown above for Rio Tinto plc and Rio Tinto Limited do not reflect these deed poll guarantees.

There are a number of legal claims arising from the normal course of business which are currently outstanding against the Group. No material loss to the Group is expected to result from these claims.

In 2002, the Australian Tax Office issued assessments of approximately A$500 million (which amount includes penalties and interest) in relation to certain transactions undertaken by the Australian group in a prior year. (These assessments would equate with US$283 million at the year end exchange rate). The Group lodged objections to these assessments, which objections were substantially disallowed. This dispute is likely to result in litigation but, based on Counsels’ opinion, the directors believe that the assessments are not sustainable under the Australian law prevailing at the time of the transactions. Accordingly, the directors believe that no material loss will arise. In accordance with Australian tax law and practice, payment of all or part of the disputed tax assessments may be required pending resolution of the dispute. Any such payment will be subject to recovery with interest if, as is believed, the Group is successful in challenging the assessments. These assessments relate to the Rio Tinto Limited part of the Rio Tinto Group and therefore are also relevant to the Rio Tinto Group and the Rio Tinto plc part of the Group.

A-45

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

30 Average number of employees

	Subsidiaries and joint arrangements (a)

	2002	2001	2000

The principal locations of employment were :
North America	8,906	9,143	7,884
Australia and New Zealand	8,721	8,876	7,624
Africa	6,012	6,273	6,964
Europe	2,765	2,864	2,660
South America	1,708	1,614	1,695
Indonesia	908	1,065	1,283
Other countries	150	188	182

	29,170	30,023	28,292


	Joint ventures and associates (a)
	(Rio Tinto share)

	2002	2001	2000

The principal locations of employment were :
North America	873	922	1,132
Australia and New Zealand	995	881	531
Africa	450	468	473
Europe	433	473	623
South America	940	823	770
Indonesia	2,774	2,771	2,797
Other countries	158	155	156

	6,623	6,493	6,482


	Group total

	2002	2001	2000

The principal locations of employment were :
North America	9,779	10,065	9,016
Australia and New Zealand	9,716	9,757	8,155
Africa	6,462	6,741	7,437
Europe	3,198	3,337	3,283
South America	2,648	2,437	2,465
Indonesia	3,682	3,836	4,080
Other countries	308	343	338

	35,793	36,516	34,774


(a)	Employee numbers, which represent the average for the year, include 100 per cent of employees of subsidiary companies. Employee numbers for joint arrangements, joint ventures and associates are proportional to the Group's equity interest. Average employee numbers include a part year effect for companies acquired during the year.
(b)	Part-time employees are included on a full time equivalent basis. Temporary employees are included in employee numbers.
(c)	People employed by contractors are not included.

A-46

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

31 Principal subsidiaries at 31 December 2002

		Class of	Proportion	Group	Ultimate
Company and country		shares	of class	interest	parent
of incorporation	Principal activities	held	held %	%	company

Australia
Argyle Diamond Mines (c)	Mining and processing of diamonds		(c)	100	Rio Tinto Limited
Coal & Allied Industries Limited	Coal mining	Ordinary	75.71	75.71	Rio Tinto Limited
Comalco Limited	Bauxite mining; alumina production;	Ordinary	100	100	Rio Tinto Limited
	primary aluminium smelting
Dampier Salt Limited	Salt production	Ordinary	64.94	64.94	Rio Tinto Limited
Energy Resources of Australia Ltd	Uranium mining	Class A	68.39	68.39	Rio Tinto Limited
Hamersley Iron Pty Limited	Iron ore mining	Ordinary	100	100	Rio Tinto Limited
Peak Gold Mines Pty Limited	Gold mining	Ordinary	100	100	Rio Tinto Limited
Pacific Coal Pty Limited	Coal mining	Ordinary	100	100	Rio Tinto Limited

Brazil
Rio Paracatu Mineracao S.A.	Gold mining	Common	51	51	Rio Tinto plc
Mineracao Serra da Fortaleza	Nickel mining	Common	100	100	Rio Tinto plc
Limitada

Canada
Iron Ore of Company of Canada Inc (d)	Iron ore mining; iron ore pellets	Series A & E	58.72	58.72	Rio Tinto Limited
QIT-Fer et Titane Inc	Titanium dioxide feedstock;	Common shares	100	100	Rio Tinto plc
	high purity iron and steel	Preferred shares	100	100

France
Talc de Luzenac S.A.	Mining, refining and marketing of talc	E15.25	99.94	99.94	Rio Tinto plc

Indonesia
P.T. Kelian Equatorial Mining	Gold mining	Ordinary US$1	90	90	Rio Tinto Limited

Namibia
Rossing Uranium Limited (e)	Uranium mining	'B'N$1	71.16	68.58	Rio Tinto plc
		'C'N10c	70.59

Papua New Guinea
Bougainville Copper Limited (f)	Copper and gold mining	Ordinary 1 Kina	53.58	53.58	Rio Tinto Limited

South Africa
Palabora Mining Company Limited	Copper mining, smelting and refining	R1	75.2	49.2	Rio Tinto plc
Richards Bay Iron and Titanium	Titanium dioxide feedstock;	R1	50.5	50	Rio Tinto plc
(Pty) Limited	high purity iron

Sweden
Zinkgruvan AB	Zinc, lead and silver mining	Ordinary	100	100	Rio Tinto Limited

United Kingdom
Anglesey Aluminium Metal Limited	Aluminium smelting	Ordinary £1	51	51	Rio Tinto plc

United States of America
Kennecott Holdings Corporation	Copper and gold mining, smelting	Common US$0.01	100	100	Rio Tinto plc
(including Utah Copper,	and refining, land development
Kennecott Minerals and Kennecott
Land Company)
Kennecott Energy & Coal Company	Coal mining	Common US$1	100	100	Rio Tinto plc
U.S. Borax Inc.	Mining, refining and marketing of borates	Common US$1	100	100	Rio Tinto plc

Zimbabwe
Rio Tinto Zimbabwe Limited	Gold mining and metal refining	Ordinary Z40c	56.04	56.04	Rio Tinto plc


(a)	The Group comprises a large number of companies and it is not practical to include all of them in this list. The list therefore only includes those companies that have a more significant impact on the profit or assets of the Group.
(b)	All companies operate mainly in the countries in which they are incorporated.
(c)	The entity marked (c) is unincorporated.
(d)	In addition, the Group holds 20.3 per cent of the Labrador Iron Ore Royalty Income Fund which has a 15.1 per cent interest in the Iron Ore Company of Canada.
(e)	The Group holding of shares in Rossing Uranium Limited carries 35.54 per cent of the total voting rights. Rossing is consolidated by virtue of Board control.
(f)	The results of Bougainville Copper Limited are not consolidated - refer to note 39.
(g)	The Group's principal subsidiaries are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.

A-47

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

32 Principal joint venture interests at 31 December 2002

			Class of	Proportion	Group	Ultimate
Name and country		Number of shares	shares	of class	interest	parent
of incorporation/operation	Principal activities	held by the Group	held	held %	%	company

Australia
Bengalla	Coal mining		(b)		30.3	Rio Tinto Limited
Blair Athol Coal	Coal mining		(b)		71.2	Rio Tinto Limited
Kestrel	Coal mining		(b)		80.0	Rio Tinto Limited
Mount Thorley	Coal mining		(b)		60.6	Rio Tinto Limited
Warkworth	Coal mining		(b)		42.1	Rio Tinto Limited

Chile
Minera Escondida Limitada	Copper mining and refining				30	Rio Tinto plc

Indonesia
Grasberg expansion	Copper and gold mining		(b)		40	Rio Tinto plc
P.T. Kaltim Prima Coal	Coal mining	150,000	Ordinary US$100	50	50	Rio Tinto Limited

United States of America
Decker	Coal mining		(b)		50.0	Rio Tinto plc
Greens Creek	Silver, gold, zinc and lead mining		(b)		70.3	Rio Tinto plc
Rawhide	Gold mining		(b)		51.0	Rio Tinto plc

The Group has joint control of the above ventures and therefore includes them in its accounts using the gross equity accounting technique.

33 Principal associates at 31 December 2002

			Class of	Proportion	Group	Ultimate
Name and country		Number of shares	shares	of class	interest	parent
of incorporation/operation	Principal activities	held by the Group	held	held %	%	company

Argentina
Minera Alumbrera Limited	Copper and gold mining	92,901,000	Common	50	25	Rio Tinto Limited
		1,000,000	Preference	50	25

Papua New Guinea
Lihir Gold Limited (d)	Gold mining	185,758,126	Ordinary Kina 0.1	16.26	16.26	Rio Tinto plc

Portugal
Sociedade Mineira de Neves-Corvo S.A.	Copper mining	7,178,500	E5	49	49	Rio Tinto plc

South Africa
Tisand (Pty) Limited	Ilmenite, rutile	7,353,675	R1	49.5	50	Rio Tinto plc
	and zircon mining

United States of America
Cortez	Gold mining		(b)		40.0	Rio Tinto plc
Freeport-McMoRan	Copper & gold mining	23,931,100	Class 'B'	16.51	16.51	Rio Tinto plc
Copper & Gold Inc. (d)	in Indonesia		Common US$ 0.10

34 Principal joint arrangements at 31 December 2002

			Class of	Proportion	Group	Ultimate
Name and country		Number of shares	shares	of class	interest	parent
of incorporation/operation	Principal activities	held by the Group	held	held %	%	company

Australia
Boyne Smelters Limited	Aluminium smelting	153,679,560	Ordinary	59.4	59.4	Rio Tinto Limited
Channar Joint Venture	Iron ore mining		(b)		60.0	Rio Tinto Limited
Gladstone Power Station	Power generation		(b)		42.1	Rio Tinto Limited
Northparkes Mine	Copper/gold mining and processing		(b)	80	80	Rio Tinto Limited
Queensland Alumina Limited	Alumina production	854,078	Ordinary	38.6	38.6	Rio Tinto Limited
Robe River Iron Associates	Iron ore mining		(b)	65	53	Rio Tinto Limited
Hlsmelt Kwinana	Iron technology		(b)	60	60	Rio Tinto Limited
Bao-HI Ranges Joint Venture	Iron ore mining		(b)	54	54	Rio Tinto Limited

Canada
Diavik	Mining and processing of diamonds		(b)		60	Rio Tinto plc

New Zealand
New Zealand Aluminium Smelters Limited	Aluminium smelting	24,998,400	Ordinary	79.36	79.36	Rio Tinto Limited


(a)	The Group comprises a large number of companies and it is not practical to include all of them in this list. The list therefore only includes those companies that have a more significant impact on the profit or assets of the Group.
(b)	Those joint ventures, associates and joint arrangements marked (b) are unincorporated entities.
(c)	All entities operate mainly in the countries in which they are incorporated except where stated.
(d)	The Group equity accounts for its interests in Freeport-McMoRan Copper & Gold Inc. and Lihir Gold Limited because it exercises significant influence over their activities.
(e)	The Group's principal joint ventures, associates and joint arrangements are held by intermediate holding companies and not directly by Rio Tinto plc or Rio Tinto Limited.

A-48

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

35 Purchases and sales of subsidiaries, joint arrangements, joint ventures and associates

Acquisitions
On 6 June 2002, the Group acquired an additional 9.5 per cent interest in reduction lines 1 and 2 at Boyne Smelters at a cost of US$78 million. The Group also increased its interest in Coal & Allied from 72.71 to 75.71 per cent on 17 September 2002, for a consideration of US$29 million. On 20 December 2002, the Group contributed additional equity to IOC, increasing its shareholding from 56.1 to 58.7%. The goodwill arising has been capitalised and is being amortised over the economic lives of the relevant assets, some of which exceed 20 years.

The table below shows the additional assets and liabilities consolidated by the Group in respect of the increase in Rio Tinto's interest in Boyne Smelters, a joint arrangement. It also reflects the reduction in the outside shareholders' interests of Coal & Allied and IOC resulting from the above transactions.

				Fair
	Book			value
	value		Re-valuations	to Group

	US$m		US$m	US$m
Tangible fixed assets	21		65	86
Investment in joint ventures	-		8	8
Accounts payable and accruals	(3	)	-	(3	)
Provisions for liabilities and charges	(5	)	-	(5	)
Outside interests	12		-	12

Net tangible assets acquired	25		73	98

Goodwill				8

Total consideration for acquisitions (cash)				106

Mining properties, included within tangible fixed assets and investments in joint ventures, were revalued by reference to the net present values of the projected cash flows for each business acquired, based on circumstances existing at the date of acquisition, less the estimated fair values of other separately identifiable assets and liabilities. Revaluation adjustments to other tangible fixed assets were based on depreciated replacement cost or, where appropriate, the asset's recoverable amount.

The fair values attributed to the mining properties and joint ventures of the Australian coal operations of the Peabody Group, acquired in 2001, in the balance sheet reported at 31 December 2001 were provisional. These fair values have been updated during 2002 to take account of updated estimates of the future cash flows for the businesses acquired, based on a closer examination of the potential of these businesses at the date of acquisition, a further analysis of tax and other liabilities and the proceeds of the disposals referred to below. This has resulted in an increase in the fair values ascribed to the retained joint ventures of US$55 million, an increase in current tax liabilities of US$46 million, an increase in tangible fixed assets of US$15 million, an increase in provisions of US$12 million and a decrease in assets held for resale (see below) of US$12 million.

The ownership of Itallumina was transferred from a Rio Tinto Limited subsidiary to a Rio Tinto plc subsidiary during 2002 for a consideration of US$13 million.

Disposals
Total disposal proceeds for the sale of subsidiaries, joint ventures and associates were US$233 million. The Group disposed of the Moura joint venture and Ravensworth and Narama thermal coal complex which were acquired with the Australian coal operations of the Peabody Group in 2001. This disposal had no earnings effect as the fair values ascribed to these assets on acquisition were adjusted during 2002 to reflect the sale proceeds. This involved a decrease in the fair value ascribed to assets held for resale of US$12 million.

A-49

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

36 Directors' remuneration
Aggregate remuneration of the directors of the parent Companies was as follows:

	Rio Tinto Group

	2002	2001	2000

	US$'000	US$'000	US$'000

Emoluments	9,541	8,402	8,973
Long term incentive plans	8,443	4,439	2,870

	17,984	12,841	11,843

Pension contributions	65	4	4
Gains made on exercise of share options	2,992	17	9

For 2002, a total of £3,467,688 (A$9,701,754) (US$5,389,636), (2001: £2,030,214 (A$5,719,166)(US$2,937,132) was attributable to the highest paid director in respect of the aggregate amounts disclosed in the above table, including gains made on exercise of share options. The accrued pension entitlement for the highest paid director was £656,000 (A$1,812,528) (US$984,000), (2001: £579,000 (A$1,642,452) (US$840,129)).

The aggregate remuneration, including pension contributions and other retirement benefits, incurred by Rio Tinto plc in respect of its directors was £7,333,000 (US$11,492,000) (2001: £5,384,000 (US$7,786,000)). There were no pension contributions.

The aggregate remuneration, including pension contributions and other retirement benefits, incurred by Rio Tinto Limited in respect of its directors was A$11,756,000 (US$6,557,000) (2001: A$9,841,000 (US$5,059,000)). The aggregate pension contribution was A$119,232 (US$64,730) (2001: A$7,200 (US$3,723)).

During 2002, seven directors (2001: six) accrued retirement benefits under defined benefit arrangements.

Shares awarded last year in respect of the MCCP 1998 performance period vested after the publication of the 2001 Annual Report and financial statements and the value of awards provided therein were estimated based on share prices of 1,399p and A$39.594. The actual share prices on 1 March 2002 when the awards vested were 1,420p and A$39.30 and the above 2002 figures for long term incentive plans have been adjusted accordingly. Further details are given in the Remuneration report on page 58 of the 2002 Annual Report and Financial Statements.

Emoluments included in the table above have been translated from local currency at the average rate for the year with the exception of bonus payments, which, together with amounts payable under long term incentive plans, have been translated at the year end rate.

More detailed information concerning directors’ remuneration, shareholdings and options is shown in the Remuneration report, including Tables 1 to 5, on pages 56 to 59 of the 2002 Annual Report and Financial Statements.

37 Auditors' remuneration

	Rio Tinto plc - part of Rio Tinto Group			Rio Tinto Limited - part of Rio Tinto Group			Rio Tinto Group
	Rio Tinto plc - part of Rio Tinto Group			Rio Tinto Limited - part of Rio Tinto Group			Rio Tinto Group

	2002	2001	2000	2002	2001	2000	2002	2001	2000

Auditors' remuneration	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m	US$m
Group auditors	2.7	2.6	2.4	1.4	1.4	1.4	4.1	4.0	3.8
Other auditors	0.2	0.2	0.2	0.1	0.3	0.1	0.3	0.5	0.3

	2.9	2.8	2.6	1.5	1.7	1.5	4.4	4.5	4.1

Amounts payable to the Group Auditors
for non audit work:
Tax	0.6	0.9	0.3	1.7	0.9	0.8	2.3	1.8	1.1
Internal audit	0.3	0.2	0.4	-	-	-	0.3	0.2	0.4
Half year review and other public filings	0.3	0.6	0.2	0.2	0.1	0.1	0.5	0.7	0.3
Work connected with acquisitions and
disposals	-	-	-	0.3	0.4	0.7	0.3	0.4	0.7
Other	0.8	1.4	1.5	0.4	0.8	0.9	1.2	2.2	2.4

	2.0	3.1	2.4	2.6	2.2	2.5	4.6	5.3	4.9


(a)	The audit fees payable to PricewaterhouseCoopers, the Group auditors, are reviewed by the Audit committee. The committee sets the policy for awarding non audit work to the auditors and reviews the nature and extent of such work, and the amount of the related fees, to ensure that independence is maintained. The fees disclosed above consolidate all payments made to PricewaterhouseCoopers by the Companies and their subsidiaries.
(b)	Amounts payable to PricewaterhouseCoopers for non audit work for the Group's UK companies were US$0.9 million (2001: US$1.5 million, 2000: US$0.4 million) and for the Group's Australian companies were US$1.7 million (2001: US$1.9 million, 2000: US$2.5 million).
(c)	Fees to firms of accountants other than PricewaterhouseCoopers for non audit services amounted to US$5.5 million (2001: US$10.4 million). Such services included assistance with the implementation of new systems, internal audit and tax advice.

A-50

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

38 Related party transactions

Information about material related party transactions of the Rio Tinto Group is set out below:

Subsidiary companies: Details of investments in principal subsidiary companies are disclosed in note 31.

Joint ventures and associates: Information relating to joint ventures and associates can be found in the following notes

Note 5
Note 6
Note 7
Note 13
Note 16
Note 19
Note 25
Note 26
Note 27
Note 32
Note 33
Note 35

- Net interest payable and similar charges
- Amortisation of discount
- Taxation charge for the year
- Fixed asset investments
- Accounts receivable and prepayments
- Accounts payable and accruals
- Share premium and reserves
- Product analysis
- Geographical analysis
- Principal joint venture interests
- Principal associates
- Purchases and sales of subsidiaries, joint arrangements, joint ventures and associates

Information relating to joint arrangements can be found in note 34 - Principal joint arrangements.

Pension funds: Information relating to pension fund arrangements is disclosed in note 40

Directors: Details of directors' remuneration are set out in note 36 and in the remuneration report on pages 53 to 59 of the 2002 Annual Report and Financial Statements.

Leighton Holdings Limited (Leighton)
In 2001, Mr Morschel became a director and, subsequently, the chairman of Leighton, Australia's largest project development and contracting group. A number of Rio Tinto companies in Australia and Indonesia have, in the ordinary course of their businesses, awarded commercial contracts to subsidiaries of Leighton. The Board does not consider the value of these contracts to be material to the business of either Leighton or the Rio Tinto Group.

Transactions between the Rio Tinto plc part of the Group and the Rio Tinto Limited part of the Group
These are eliminated on the consolidation of the Rio Tinto Group. Transactions during the year included the following:

-	A dividend of US $146 million was paid by Rio Tinto Limited on the DLC Dividend Share, which was issued to facilitate the efficient management of funds within the DLC structure. Of this, US$55 million was paid out of Rio Tinto plc's 37.4% share of the reserves of Rio Tinto Limited and, therefore, had no impact on the shareholders' funds of Rio Tinto plc. The remaining US$91 million of this dividend gave rise to an increase in the shareholders' funds of the Rio Tinto plc part of the Group. This dividend, however, had no impact on the shareholders' funds of the Rio Tinto Group as the economic interests of shareholders both of Rio Tinto plc and Rio Tinto Limited are in the combined net assets of the two dual listed companies.

-	The ownership of Itallumina was transferred from a Rio Tinto Limited subsidiary to a Rio Tinto plc subsidiary during 2002 for a consideration of US$13 million. The Rio Tinto Limited part of the Group recognised a gain of US$5 million in respect of this disposal.

39 Bougainville Copper Limited ('BCL')

The Panguna mine remains shut down. Access to the mine site has not been possible and an accurate assessment of the condition of the assets cannot be determined. Considerable funding would be required to recommence operations to the level which applied at the time of the mine's closure in 1989 and these funding requirements cannot be forecast accurately. The directors do not have access to reliable, verifiable or objective information on BCL and the directors have therefore decided to exclude BCL information from the financial statements. BCL reported a net profit of US$2 million for the financial year (2001: profit of US$3 million, 2000: profit of US$6 million). This is based upon actual transactions for the financial year. The aggregate amount of capital and reserves reported by BCL as at 31 December 2002 was US$76 million (2001: US$79 million). The Group owns 214,887,966 shares in BCL, representing 53.6 per cent of the issued share capital. The investment of US$195 million was fully provided against in 1991. At 31 December 2002, the market value of the shareholding in BCL was US$16 million.

A-51

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

40 Post retirement benefits

a) Description of schemes
The Group operates a number of pension plans around the world. Whilst some of these plans are defined contribution, the majority are of the defined benefit type, with assets held in separate trustee administered funds, which are reviewed by independent qualified actuaries. A triennial actuarial valuation of the Group's UK plan was made at 31 March 2000 using the projected unit method. The main financial assumptions used for the independent actuarial review as at 31 December 2002 were: rate of return on investments 6.5 per cent (2001: 7.0 per cent), rate of earnings growth 4.8 per cent (2001: 5.0 per cent) plus promotional salary scale, rate of pension increase 2.3 per cent (2001: 2.5 per cent). Assets were measured at market value, smoothed over a one year period (2001: smoothed market value).

Based on an average of market prices for the four quarters to 31 December 2002, the value of the assets in the UK pension plans was sufficient to cover 129 per cent (2001: 154 per cent) of the benefits that had accrued to members after allowing for expected increases in earnings. The smoothed market value of the assets was US$1,358 million (2001: US$1,417 million).

In Australia, whilst Group companies sponsor or subscribe to a number of pension plans, the Rio Tinto Staff Superannuation Fund is the only significant plan. This plan principally contains defined contribution liabilities but also has defined benefit liabilities. Independent actuarial valuations are made annually using the projected unit method. The main financial assumptions used for the valuation as at 30 September 2002 were: rate of return on investments (after tax) 6.5 per cent (2001: 6.5 per cent), rate of earnings growth 4.0 per cent (2001: 4.0 per cent) plus promotional salary scale, rate of pension increase 2.5 per cent (2001: 2.5 per cent). Assets were measured at smoothed market value (2001: smoothed market value).
Based on an average of the market prices for the four quarters to 31 December 2002, the value of the assets in the Australian pension plans was sufficient to cover 103 per cent (2001: 115 per cent) of the benefits that had accrued to members after allowing for expected increases in earnings. The smoothed market value of the assets was US$600 million (2001: US$586 million).

A number of defined benefit pension plans are sponsored by the US entities, typically with separate provision for salaried and hourly paid staff. Independent actuarial valuations are made annually using the projected unit method. The main financial assumptions used for the valuation as at 30 September 2002 were: rate of return on investments 6.7 per cent (2001: 7.5 per cent), rate of earnings growth, where appropriate, 3.25 per cent (2001: 3.5 per cent). Assets were measured at smoothed market value (2001: smoothed market value).

Based on an average of the market prices for the four quarters to 31 December 2002, the value of the assets in the US plans was sufficient to cover 81 per cent (2001: 103 per cent) of the benefits that had accrued to members after allowing for expected increases in earnings. Within the total there were plans which had deficits of US$136 million (2001: US$67 million). The smoothed market value of the assets was US$551 million (2001: US$613 million). Contributions will be paid, if necessary, to ensure that the plans meet statutory US funding levels.
A number of defined benefit pension plans are sponsored by entities in Canada. Independent actuarial valuations are made annually using the projected unit method. The main financial assumptions used for the valuation as at 30 September 2002 were: rate of return on investments 6.5 per cent (2001: 7.75 per cent), rate of earnings growth, where appropriate, 3.7 per cent (2001: 5.0 per cent). Assets were measured at smoothed market value (2001: smoothed market value).

Based on an average of the market prices for the four quarters to 31 December 2002, the value of the assets in the Canadian plans was sufficient to cover 82 per cent (2001: 105 per cent) of the benefits that had accrued to members after allowing for expected increases in earnings. Within the total there were plans which had deficits of US$134 million (2001: US$27 million). The smoothed market value of the assets was US$538 million (2001: US$557 million). Additional contributions will be paid in 2003 to meet a funding shortfall in one Canadian plan.

The main defined benefit plans outside the UK, Australia and North America were assessed at various dates during 2001 and 2002. The total market value of the assets at the assessment dates was US$202 million (2001: US$224 million). The actuarial value of the total assets of these plans was sufficient to cover 141 per cent (2001: 137 per cent) of the benefits that had accrued to members after allowing for expected increases in earnings. The expected average remaining service life in the major plans ranges from 10 to 20 years with an overall average of 12 years.

The main pension plans providing purely defined contribution benefits held assets, equal to their liabilities, of US$101 million as at 31 December 2002. The Group's contributions to these plans are charged against profits.

The Group uses asset values smoothed over a one year period in arriving at its pension costs under SSAP 24. Pension costs for 2003 are expected to be higher than in 2002 as a result of changes in stock market values.

Certain subsidiaries of the Group, mainly in the US, provide health and life insurance benefits to retired employees and in some cases their beneficiaries and covered dependants. Eligibility for cover is dependent upon certain age and service criteria. These arrangements are unfunded. On 30 September 2002, the unfunded accumulated post retirement benefits obligation and annual cost of accrual of benefits were determined by independent actuaries using the projected unit method. In the US, the main financial assumptions were: discount rate 6.5 per cent (at 30 September 2001: 7.5 per cent), Medical Trend Rate 8.0 per cent reducing to 5.0 per cent by the year 2009 (at 30 September 2001 initially 8.5 per cent reducing to 5.0 per cent by the year 2009), claims cost based on individual company experience. The assumptions were consistent with those adopted for determining pension costs. At 30 September 2002, the unfunded accumulated post retirement benefits obligation (excluding associates and joint ventures) was US$437 million (at 30 September 2001: US$362 million).

b) FRS 17 Transitional disclosures for 2002
Mandatory implementation of FRS 17 - 'Retirement Benefits', which deals with accounting for post retirement benefits, has been delayed until the year ending 31 December 2005 but additional disclosures are required for the current year, which are shown below. The standard requires pension deficits, and surpluses to the extent that they are considered recoverable, to be recognised in full. Annual service cost and net financial income on the assets and liabilities of the schemes are recognised through earnings. Other fluctuations in the value of the surpluses/deficits are recognised in the Statement of Total Recognised Gains and Losses (STRGL).

Details of post retirement benefit scheme assets and liabilities at 31 December 2002 and 2001, valued on a projected unit basis in accordance with FRS 17, are set out below:

A-52

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

40 Post retirement benefits (continued)

	UK		Australia		US		Canada		Other (mainly Africa)

Main assumptions for FRS 17 purposes
At 31 December 2002
Rate of increase in salaries	4.8	%	4.0	%	3.2	%	3.7	%	10.5	%
Rate of increase in pensions	2.3	%	2.5	%	-		-		7.0	%
Discount rate	5.6	%	6.2	%	6.2	%	6.5	%	11.5	%
Inflation	2.3	%	2.5	%	2.2	%	2.2	%	7.0	%

At 31 December 2001
Rate of increase in salaries	5.5	%	4.0	%	3.5	%	4.0	%	10.5	%
Rate of increase in pensions	2.5	%	2.5	%	-		-		5.8	%
Discount rate	6.0	%	6.5	%	7.0	%	7.0	%	11.5	%
Inflation	2.5	%	2.5	%	2.5	%	2.5	%	5.8	%

The main financial assumptions used for the health care schemes, which are predominantly in the US, were: discount rate 6.2% (2001: 7%), Medical Trend rate: 8% reducing to 5% by the year 2009 (2001: Medical Trend rate: 8.5% reducing to 5% by the year 2009), claims cost based on individual company experience.

	UK		Australia		US		Canada		Other (mainly Africa)

Long term rate of return expected at 31 December 2002
Equities	7.3	%	7.0	%	7.2	%	7.2	%	12.5	%
Bonds	5.0	%	5.5	%	5.6	%	6.0	%	11.0	%
Other	4.6	%	5.9	%	6.4	%	5.0	%	10.2	%

Long term rate of return expected at 31 December 2001
Equities*	7.5	%	7.0	%	7.5	%	7.5	%	12.5	%
Bonds	5.5	%	6.0	%	6.5	%	6.5	%	11.0	%
Other	5.3	%	6.3	%	6.8	%	5.1	%	9.7	%

* The equity return assumptions applied in determining the impact of FRS 17 on the profit and loss account for 2002 have been reduced by approximately 1 per cent on average from those quoted in the 2001 Annual report and financial statements.

Scheme assets
The assets in the schemes and the contributions made were:

	UK	Australia	US	Canada	Other (mainly Africa)	Total

Value at 31 December 2002	US$m	US$m	US$m	US$m	US$m	US$m
Equities	823	377	342	271	93	1,906
Bonds	294	165	150	180	18	807
Other	155	65	39	64	190	513

	1,272	607	531	515	301	3,226


Value at 31 December 2001
Equities	965	416	441	375	161	2,358
Bonds	244	137	135	189	45	750
Other	147	64	56	17	30	314

	1,356	617	632	581	236	3,422


Employer contributions made during 2002	-	10	4	15	4	33


Employer contributions made during 2001	-	6	3	13	-	22

In addition, there were contributions of US$16 million (2001: US$13 million) in respect of unfunded health care schemes in the year. Since these schemes are unfunded, contributions for future years will be equal to benefit payments and therefore cannot be pre-determined.

A-53

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

40 Post retirement benefits (continued)

In relation to pensions, it is expected that there will be no regular employer or employee contributions to the UK plan in the period before the next full valuation. There are no pre-agreed contribution rates outside the UK, Canada and Australia for periods beyond 2003. Cash contributions to the main Australian plan recommended in December 2002 at rates set by the actuary to the plan and are primarily to defined contribution arrangements. In the US, contributions are agreed annually in nominal terms. Contribution rates for the Canadian schemes vary between the plans from zero to 6.5 per cent, although additional contributions will be paid in 2003 to meet a funding shortfall in one plan.

The most recent full valuation of the UK schemes was at 31 March 2000. The most recent full valuation of the Australian schemes was at 30 September 2002. For both the US and Canadian schemes, the most recent full valuation was at 1 January 2002.

Surpluses/(deficits) in the plans
The following amounts were measured in accordance with FRS 17:

At 31 December 2002	UK US$m		Australia US$m		US US$m		Canada US$m		Other US$m		Healthcare US$m		Total US$m

Total market value of assets	1,272		607		531		515		301		-		3,226
Present value of plan liabilities	(1,178	)	(594	)	(721	)	(670	)	(312	)	(417	)	(3,892	)

Surplus/(deficit) in the plans	94		13		(190	)	(155	)	(11	)	(417	)	(666	)

Related deferred tax													113
Related outside shareholders' interest													47

Net post retirement liability													(506	)

Surplus/(deficit) in the plans comprises:
Surplus	108		13		45		2		-		-		168
Deficit	(14	)	-		(235	)	(157	)	(11	)	(417	)	(834	)

	94		13		(190	)	(155	)	(11	)	(417	)	(666	)

At 31 December 2001	UK US$m		Australia US$m		US US$m		Canada US$m		Other US$m		Healthcare US$m		Total US$m

Total market value of assets	1,356		617		632		581		236		-		3,422
Present value of plan liabilities	(1,036	)	(537	)	(619	)	(587	)	(242	)	(323	)	(3,344	)

Surplus/(deficit) in the plans	320		80		13		(6	)	(6	)	(323	)	78

Related deferred tax													(19	)
Related outside shareholders' interest													24

Net post retirement asset													83

Surplus/(deficit) in the plans comprises:
Surplus	327		80		129		19		-		-		555
Deficit	(7	)	-		(116	)	(25	)	(6	)	(323	)	(477	)

	320		80		13		(6	)	(6	)	(323	)	78

If the above amounts had been recognised in the financial statements, the Group's shareholders' funds at 31 December would have been as follows:

	2002 US$m		2001 US$m

Shareholders' funds including SSAP 24 post retirement net asset (2001 as restated)	7,462		7,043
Deduct: SSAP 24 post retirement net asset	96		140

Shareholders' funds excluding SSAP 24 post retirement net asset	7,366		6,903
Add: FRS 17 post retirement net (liability)/asset	(506	)	83

Shareholders' funds including FRS 17 post retirement net (liability)/asset	6,860		6,986

A-54

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

40 Post retirement benefits (continued)

Movements in surplus/(deficit) during the year
The net post retirement surplus/(deficit) under FRS 17 would have moved as follows during 2002:

	2002
	US$m

Net post retirement surplus at 1 January	78
Movement in year:
Currency translation adjustment	19
Total current service cost (employer and employee)	(113	)
Past service cost	(11	)
Curtailment and settlement loss (one-off costs associated with early retirements on restructuring)	(2	)
Other net finance income	23
Contributions (including employee contributions)	59
Actuarial loss recognised in STRGL	(719	)

Net post retirement deficit at 31 December	(666	)

Amounts which would have been recognised in the profit and loss account and in the STRGL under FRS 17
The following amounts would have been included within operating profit under FRS 17:
	2002
	US$m

Employer current service cost	(103	)
Past service cost	(11	)
Curtailment and settlement cost	(2	)

Total operating charge (of which US$13 million related to defined contribution schemes)	(116	)


The following amounts would have been included as other net finance income under FRS 17:
	2002
	US$m

Expected return on pension scheme assets (a)	254
Interest on post retirement liabilities	(231	)

Net return	23

If the above amounts had been recognised in the financial statements, the Group's reported net earnings for 2002 would have decreased by US$15 million.

The following amounts would have been recognised within the Statement of Total Recognised Gains and Losses (STRGL) under FRS 17:

	2002		2002
	%		US$m


Actual return on pension scheme assets less expected return (a)			(599	)
- as a percentage of scheme assets at 31 December 2002	(19	)%

Experience gains and losses on post retirement liabilities (i.e. variances between the actuarial
estimate of liabilities and the subsequent outcome)			28
- as a percentage of the present value of post retirement liabilities at 31 December 2002	1	%

Change in assumptions			(148	)

Total amount recognised in STRGL			(719	)
- as a percentage of the present value of post retirement liabilities at 31 December 2002	(18	)%


(a) As calculated using the revised assumptions for equity returns as at 31 December 2001.

A-55

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

41 Rio Tinto financial information by business unit

			Gross turnover (a)			EBITDA (b)						Net earnings (c)
	Rio Tinto
	interest		2002	2001	2000	2002		2001		2000		2002		2001		2000

	%		US$m	US$m	US$m	US$m		US$m		US$m		US$m		US$m		US$m
Iron Ore
Hamersley (incl. HIsmel† ®)	100.0		1,117	1,118	1,100	688		733		621		410		441		344
Robe River	53.0		240	193	90	160		127		50		54		45		16
Iron Ore Company of Canada	58.7		400	380	179	16		67		42		(6	)	16		7

			1,757	1,691	1,369	864		927		713		458		502		367

Energy
Kennecott Energy	100.0		949	882	817	260		223		210		86		84		81
Pacific Coal	100.0		417	362	341	236		201		177		136		117		93
Kaltim Prima Coal	50.0		216	212	150	79		101		66		26		42		18
Coal & Allied	75.7		623	647	340	207		255		128		68		102		49
Rossing	68.6		112	115	124	52		68		54		23		21		19
Energy Resources of Australia	68.4		113	90	33	50		38		19		12		7		4

			2,430	2,308	1,805	884		886		654		351		373		264

Industrial Minerals			1,847	1,768	1,869	722		797		786		289		323		324

Aluminium - Comalco	100.0		1,454	1,499	1,589	504		598		731		256		313		338

Copper
Kennecott Utah Copper	100.0		755	675	804	223		271		295		78		81		100
Escondida	30.0		283	289	388	121		142		236		32		41		97
Freeport	16.5		306	296	307	139		128		125		19		4		2
Freeport Joint Venture	40.0		349	316	273	215		186		149		113		88		71
Palabora	49.2		201	233	252	54		66		71		13		14		15
Peak/Northparkes	(d	)	74	87	58	22		43		31		(1	)	13		7
Other copper			148	145	83	78		64		38		36		10		8
Other metals	(e	)	240	251	252	24		43		61		-		11		23

			2,356	2,292	2,417	876		943		1,006		290		262		323

Diamonds & Gold
Argyle	100.0		372	278	261	178		147		134		65		58		68
Diavik	60.0		-	-	-	-		-		0		-		-		-
Kennecott Minerals	100.0		205	196	185	93		83		91		38		33		43
Kelian	90.0		168	127	90	66		35		26		17		1		(9	)
Brazil	(f	)	115	111	148	40		46		68		16		26		45
Other Diamonds & Gold			40	106	169	15		26		42		8		15		16

			900	818	853	392		337		361		144		133		163

Other items			84	62	70	(152	)	(50	)	(87	)	(54	)	27		(26	)
Exploration and evaluation						(130	)	(130	)	(136	)	(109	)	(104	)	(108	)
Net interest												(95	)	(167	)	(138	)

Adjusted EBITDA and adjusted earnings						3,960		4,308		4,028		1,530		1,662		1,507
Exceptional charges						(116	)	-				(879	)	(583	)	-

Total			10,828	10,438	9,972	3,844		4,308		4,028		651		1,079		1,507


Reconciliation of EBITDA
Profit on ordinary activities before interest						1,602		2,387		2,912
Depreciation & amortisation in subsidiaries						954		929		849
Asset write downs relating to subsidiaries & joint ventures						955		701		-
Depreciation & amortisation in joint ventures & associates						333		291		267

						3,844		4,308		4,028


(a)	Gross turnover includes 100 per cent of subsidiaries' turnover and the Group's share of the turnover of joint ventures and associates.
(b)	EBITDA of subsidiaries, joint ventures and associates represents profit before: tax, net interest payable, depreciation and amortisation.
(c)	Net earnings represent after tax earnings attributable to the Rio Tinto Group. Earnings of subsidiaries are stated before interest charges but after the amortisation of the discount related to provisions. Earnings attributable to joint ventures and associates include interest charges.
(d)	Rio Tinto has a 100 per cent interest in Peak and an 80 per cent interest in the Northparkes joint venture.
(e)	Includes Anglesey Aluminium in which Rio Tinto’s interest is 51 per cent.
(f)	Includes Morro do Ouro in which Rio Tinto’s interest is 51 per cent.
(g)	Business units have been classified above according to the Group’s management structure. Generally, this structure has regard to the primary product of each business unit but there are exceptions. For example, the Copper group includes the gold revenues of Kennecott Utah Copper and Freeport (Rio Tinto share) and the businesses of Rio Tinto Aluminium and Zinkgruvan. This summary differs, therefore, from the Product Analysis in which the contributions of individual business units are attributed to several products as appropriate.

A-56

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

41 Rio Tinto financial information by business unit (continued)

	Capital expenditure (h)						Depreciation (i)						Operating assets (j)				Employees (k)

	2002		2001		2000		2002		2001		2000		2002		2001		2002	2001	2000

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		Number	Number	Number
Iron Ore
Hamersley (incl. HIsmelt ®)	79		58		76		94		90		104		923		762		2,006	2,070	2,164
Robe River	81		203		35		50		37		13		1,409		1,221		496	449	208
Iron Ore Company of Canada	39		242		62		35		36		18		408		612		1,936	2,099	694

	199		503		173		179		163		135		2,740		2,595		4,438	4,618	3,066

Energy
Kennecott Energy	152		54		33		128		110		100		454		439		1,710	1,656	1,450
Pacific Coal	126		20		11		37		31		37		406		275		679	526	473
Kaltim Prima Coal	5		4		6		21		22		25		46		59		1,380	1,348	1,353
Coal & Allied	58		31		14		69		44		34		626		786		1,375	1,379	662
Rossing	5		(1	)	7		5		5		6		47		25		786	794	911
Energy Resources of Australia	4		2		1		23		22		9		140		165		262	232	88

	350		110		72		283		234		211		1,719		1,749		6,192	5,935	4,937

Industrial Minerals	133		146		194		158		144		147		2,098		2,046		6,723	7,079	7,239

Aluminium - Comalco	261		99		52		132		117		131		2,353		1,893		3,374	3,426	3,354

Copper
Kennecott Utah Copper	97		115		84		129		167		161		1,135		1,838		1,596	1,926	2,311
Escondida	117		188		68		52		52		53		449		447		704	623	637
Freeport	23		25		42		50		54		55		128		109		1,445	1,475	1,498
Freeport Joint Venture	55		57		18		40		35		27		412		398
Palabora	64		83		76		13		21		20		282		207		2,176	2,269	2,803
Peak/Northparkes	37		31		17		23		24		18		113		102		321	323	196
Other copper	17		13		7		39		36		16		202		155		669	673	571
Other metals	14		13		9		16		18		16		133		150		831	879	665

	424		525		321		362		407		366		2,854		3,406		7,742	8,168	8,681

Diamonds & Gold
Argyle	31		52		11		76		55		24		488		493		751	794	520
Diavik	206		182		94		-		-		-		484		318		250	99	72
Kennecott Minerals	21		21		22		43		41		31		155		166		763	814	877
Kelian	2		4		2		32		31		40		20		50		835	979	1,035
Brazil	14		22		16		11		11		11		91		119		1,320	1,181	1,154
Other diamonds & gold	4		9		18		4		7		13		94		118		1,954	2,005	2,303

	278		290		163		166		145		119		1,332		1,264		5,873	5,872	5,961

Other	13		3		(1	)	7		10		7		113		(199	)	1,451	1,418	1,536
Less: joint ventures and
associates (h), (i)	(241	)	(271	)	(176	)	(333	)	(291	)	(267	)

Total	1,417		1,405		798		954		929		849		13,209		12,754		35,793	36,516	34,774

Net debt													(5,747	)	(5,711	)

Net assets													7,462		7,043

(h)	Capital expenditure comprises the net cash outflow on purchases less disposals of property, plant and equipment. The details provided include 100 per cent of subsidiaries' capital expenditure and Rio Tinto's share of the capital expenditure of joint ventures and associates. Amounts relating to joint ventures and associates not specifically funded by Rio Tinto are deducted before arriving at total capital expenditure.
(i)	Depreciation figures include 100 per cent of subsidiaries' depreciation and amortisation of goodwill and include Rio Tinto's share of the depreciation and goodwill amortisation of joint ventures and associates. Amounts relating to joint ventures and associates are deducted before arriving at the total depreciation charge.
(j)	Operating assets of subsidiaries comprise net assets before deducting net debt, less outside shareholders' interests which are calculated by reference to the net assets of the relevant companies (i.e. net of such companies' debt). For joint ventures and associates, Rio Tinto's net investment is shown. For joint ventures and associates shown above, Rio Tinto's shares of operating assets, defined as for subsidiaries, are as follows: Escondida US$913 million (2001 : US$855 million), Freeport joint venture US$412 million (2001: US$398 million), Freeport associate US$533 million (2001: US$496 million), Kaltim Prima US$111 million (2001: US$144 million).
(k)	Employee numbers, which represent the average for the year, include 100 per cent of employees of subsidiary companies. Employee numbers for joint arrangements, joint ventures and associates are proportional to the Group's equity interest. Part time employees are included on a full time equivalent basis and people employed by contractors are not included. Average employee numbers include a part year effect for companies acquired during the year. Temporary employees are included in employee numbers.

A-57

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles
Reconciliation with US GAAP

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000
			Restated		Restated				Restated		Restated				Restated		Restated

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Net earnings under UK GAAP	195		491		1,064		736		942		771		651		1,079		1,507
Increase/(decrease) before tax in respect of:
Amortisation of goodwill - subsidiaries
and joint arrangements	52		(88	)	(65	)	38		(9	)	(10	)	90		(97	)	(75	)
Amortisation of goodwill - equity
accounted companies (excluding Rio Tinto Limited)	-		(35	)	(29	)	-		-		-		-		(35	)	(29	)
Amortisation of intangibles - subsidiaries
and joint arrangements	(59	)	-		-		-		-		-		(59	)	-		-
Amortisation of intangibles - equity accounted
companies (excluding Rio Tinto Limited)	(9	)	-		-		-		-		-		(9	)	-		-
Exchange differences taken to earnings under US GAAP	(53	)	9		-		293		(225	)	(139	)	240		(216	)	(139	)
Mark to market of certain derivative contracts	6		(6	)	(15	)	151		(42	)	(88	)	157		(48	)	(103	)
Asset write downs - subsidiaries and joint
arrangements	(422	)	571		-		420		-		-		(2	)	571		-
Asset write downs - equity accounted companies
excluding Rio Tinto Limited	(87	)	(103	)	-		-		-		-		(87	)	(103	)	-
Pensions/post retirement benefits	8		(73	)	(73	)	(7	)	-		(3	)	1		(73	)	(76	)
Exploration and evaluation	-		-		-		(17	)	(83	)	1		(17	)	(83	)	1
Share options	(12	)	(6	)	(11	)	(5	)	(2	)	(2	)	(17	)	(8	)	(13	)
Higher cost of sales resulting from
acquisition accounting	-		-		-		-		(6	)	(41	)	-		(6	)	(41	)
Other	(29	)	7		(22	)	(52	)	(52	)	(17	)	(81	)	(45	)	(39	)
Taxation:
Tax effect of adjustments above	11		(51	)	37		(125	)	134		137		(114	)	83		174
Other tax adjustments	(13	)	3		2		-		-		-		(13	)	3		2
Minority effect of adjustments above	6		2		-		(165	)	14		5		(159	)	16		5
Share of Rio Tinto Limited US GAAP adjustments	200		(103	)	(68	)	-		-		-		-		-		-

Net income/(loss) under US GAAP	(206	)	618		820		1,267		671		614		581		1,038		1,174

Basic earnings per ordinary share under
US GAAP	(19.3)	c	58.1	c	77.1	c	254.0	c	134.6	c	113.9	c	42.2	c	75.5	c	85.5	c

Diluted earnings per ordinary share
under US GAAP	(19.3)	c	58.0	c	77.1	c	253.7	c	134.5	c	113.9	c	42.1	c	75.4	c	85.4	c

A-58

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000
			Restated		Restated				Restated		Restated				Restated		Restated

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Shareholders' funds under UK GAAP (2001 and
2000 as previously reported)	5,899		6,039		6,462		2,510		1,822		1,414		7,462		7,176		7,344
Prior year adjustment	-		(137	)	(137	)	-		6		6		-		(133	)	(133	)

Shareholders' funds under UK GAAP (as
restated)	5,899		5,902		6,325		2,510		1,828		1,420		7,462		7,043		7,211
Increase/(decrease) before tax in respect of:
Goodwill - subsidiaries and joint arrangements	862		1,110		1,199		203		160		185		1,065		1,270		1,384
Goodwill - equity accounted companies
(excluding Rio Tinto Limited)	352		508		543		-		-		-		352		508		543
Intangibles - subsidiaries and joint
arrangements	271		-		-		-		-		-		271		-		-
Intangibles - equity accounted companies
(excluding Rio Tinto Limited)	49		-		-		-		-		-		49		-		-
Mark to market of derivative contracts	(10	)	(2	)	(19	)	(44	)	(331	)	(84	)	(54	)	(332	)	(103	)
Asset write downs - subsidiaries and joint
arrangements	133		578		7		420		-		-		553		578		7
Asset write downs - equity
accounted companies
(excluding Rio Tinto Limited)	-		-		103		-		-		-		-		-		103
Pensions/post retirement benefits	(454	)	(296	)	(172	)	(18	)	21		97		(472	)	(275	)	(75	)
Exploration and evaluation	-		-		-		(124	)	(102	)	(19	)	(124	)	(102	)	(19	)
Share options	(29	)	(17	)	(11	)	(9	)	(4	)	(2	)	(38	)	(21	)	(13	)
Higher cost of sales resulting from
acquisition accounting	-		-		-		(49	)	(44	)	(41	)	(49	)	(44	)	(41	)
Reversal of additional provisions
under FRS 12	270		270		271		114		103		110		384		373		381
Amortisation on reversal of additional
provisions under FRS 12	(54	)	(40	)	(35	)	(43	)	(32	)	(24	)	(97	)	(72	)	(59	)
Start up costs	(81	)	(79	)	(86	)	(29	)	(21	)	(10	)	(110	)	(100	)	(96	)
Proposed dividends	272		343		336		158		194		193		430		537		529
Other	15		2		3		(33	)	(22	)	1		(18	)	(20	)	4
Deferred tax on acquisitions:
Impact on mining property	-		-		-		825		853		666		825		853		666
Impact on tax provisions	-		-		-		(825	)	(853	)	(666	)	(825	)	(853	)	(666	)
Tax effect of other adjustments above	(32	)	(30	)	1		(28	)	138		(16	)	(60	)	107		(15	)
Other tax adjustments	80		93		90		(6	)	(6	)	(6	)	74		87		84
Minority effect of adjustments above	(1	)	(4	)	(4	)	(100	)	38		(9	)	(101	)	34		(13	)
Share of Rio Tinto Limited US GAAP
adjustments	155		33		142		-		-		-		-		-		-

Shareholders' funds under US GAAP	7,697		8,371		8,693		2,922		1,920		1,795		9,517		9,571		9,812

The Group’s financial statements have been prepared in accordance with generally accepted accounting principles in the United Kingdom ('UK GAAP'), which differ in certain respects from those in the United States ('US GAAP'). These differences relate principally to the following items, and the effect of each of the adjustments to net earnings and shareholders' funds that would be required under US GAAP is set out on this and the preceding page.

Goodwill
For 1997 and prior years, UK GAAP permitted the write off of purchased goodwill on acquisition, directly against reserves. For acquisitions in 1998 and subsequent years, goodwill is capitalised and amortised over its expected useful life under UK GAAP. Under US GAAP, goodwill is capitalised and, until 2001, was amortised by charges against income over the period during which it was expected to be of benefit, subject to a maximum of 40 years. Goodwill previously written off directly to reserves in the UK GAAP financial statements was therefore reinstated and amortised, under US GAAP. From 1 January 2002, goodwill and indefinite lived intangible assets are no longer amortised under US GAAP but are reviewed annually for impairment under FAS 142 'Goodwill and Other Intangible Assets'. Goodwill amortisation of US$90 million charged against UK GAAP earnings for 2002 is added back in the US GAAP reconciliation. No impairment write-downs were required on the initial introduction of FAS 142. Implementation of FAS 141 'Business Combinations' resulted in the reclassification of US$340 million from goodwill to finite lived intangible assets.

	Rio Tinto plc -				Rio Tinto Limited -
	part of				part of
	Rio Tinto Group				Rio Tinto Group				Rio Tinto Group

	2001		2000		2001		2000		2001		2000
	US$m		US$m		US$m		US$m		US$m		US$m
Net income under US GAAP as reported	618		820		671		614		1,038		1,174
Goodwill amortisation	125		100		37		16		148		109

Net income under US GAAP on a FAS 142 basis	743		920		708		630		1,186		1,283

Basic earnings per ordinary share under US GAAP on a FAS 142 basis	69.8	c	86.6	c	142.1	c	116.9	c	86.3	c	93.5	c

Diluted earnings per ordinary share under US GAAP on a FAS 142 basis	69.7	c	86.5	c	142.0	c	116.8	c	86.1	c	93.4	c

A-59

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Exchange differences taken to earnings under US GAAP
The Group finances its operations primarily in US dollars and a significant proportion of the Group's US dollar debt is located in its Australian operations. Under UK GAAP, this debt is dealt with in the context of the currency status of the Group as a whole and exchange differences reported by the Australian operations are adjusted through reserves. US GAAP permits such exchange gains and losses to be taken to reserves only to the extent that the US dollar debt hedges US dollar assets in the Australian Group. Exchange gains of the Rio Tinto Group of US$240 million pre-tax (2001: losses of US$216 million, 2000: losses of US$139 million), US$177 million net of tax and minorities (2001: US$148 million net of tax and minorities, 2000: US$56 million net of tax and minorities), on US dollar debt that do not qualify for hedge accounting under US GAAP have therefore been recorded in US GAAP earnings.

Mark to market of derivative contracts
The Group is party to derivative contracts in respect of some of its future transactions in order to hedge its exposure to fluctuations in exchange rates against the US dollar. Under UK GAAP, these contracts are accounted for as hedges: gains and losses are deferred and subsequently recognised when the hedged transaction occurs. Under US standard FAS 52, which applied prior to 1 January 2001, some of these transactions did not qualify for hedge accounting, principally because they were not yet contractual commitments. Provision for unrealised pre-tax losses of the Rio Tinto Group of US$103 million, Rio Tinto plc US$53 million, Rio Tinto Limited US$88 million (Rio Tinto Group US$67 million net of tax and minorities) on derivatives relating to such transactions was therefore recognised in earnings under US GAAP at 31 December 2000. Under FAS 133 ' Accounting for Derivative Instruments and Hedging Activities', which applies to Rio Tinto from 1 January 2001, all derivative instruments are included in the balance sheet as assets or liabilities measured at fair value. Certain of the Group's derivative contracts do not qualify for hedge accounting under FAS 133, principally because the hedge is not located in the entity with the exposure. Unrealised pre-tax gains for the Rio Tinto Group of US$157 million (2001: losses of US$48 million), US$111 million after tax and minorities (2001: US$26 million after tax and minorities), on such derivatives have therefore been taken to US GAAP earnings.

Asset write downs
Following the implementation of FRS 11 in 1998, impairment of fixed assets under UK GAAP is recognised and measured by reference to the discounted cash flows expected to be generated by an income generating unit. Under US GAAP, impairment is recognised only when the anticipated undiscounted cash flows are insufficient to recover the carrying value of the income generating unit. Where an asset is found to be impaired under US GAAP, the amount of such impairment is generally similar under US GAAP to that computed under UK GAAP, except where the US GAAP carrying value includes additional goodwill. The asset write downs for the Rio Tinto Group in 2002, under US GAAP, include amounts recognised in 2001 under UK GAAP of US$445 million and excludes asset write downs recognised in 2002 under UK GAAP of US$235 million. The 2002 Rio Tinto Group US GAAP asset write downs also include an adjustment for goodwill. The 2002 US GAAP impairment write-down for the Rio Tinto Group was US$1,067 million pre-tax (US$1,060 million net of tax and minorities). This is US$89 million pre-tax (US$297 million net of tax and minorities) above the charge of US$978 million pre-tax (US$763 million net of tax and minorities) included under UK GAAP.

The asset write downs for Rio Tinto plc in 2002, under US GAAP, include amounts recognised in 2001 under UK GAAP of US$445 million. The 2002 Rio Tinto plc asset write downs also include an adjustment for goodwill. The 2002 US GAAP impairment write-down for Rio Tinto plc was US$1,059 million pre-tax (US$1,052 million net of tax and minorities). This is US$420 million pre-tax (US$429 million net of tax and minorities) above the charge of US$639 million pre-tax (US$623 million net of tax and minorities) included under UK GAAP.

The asset write downs for Rio Tinto Limited in 2002, under US GAAP, exclude asset write downs recognised in 2002 under UK GAAP of US$212 million. The 2002 US GAAP impairment write-down for Rio Tinto Limited was US$13 million pre-tax (US$13 million net of tax and minorities). This is US$420 million pre-tax (US$212 million net of tax and minorities) below the charge of US$433 million pre-tax (US$225 million net of tax and minorities) included under UK GAAP. The 2001 US GAAP impairment write-down is US$243 million pre tax for the Rio Tinto Group, US$199 million pre tax for Rio Tinto plc and US$71 million pre tax for Rio Tinto Limited (Rio Tinto Group: US$183 million net of tax and minorities). For the Rio Tinto Group and for Rio Tinto plc this is US$472 million pre-tax (Rio Tinto Group: US$400 million net of tax and minorities) below the charges of US$715 million and US$671 million pre-tax included under UK GAAP for the Rio Tinto Group and Rio Tinto plc respectively (Rio Tinto Group: US$583 million net of tax and minorities). The net difference of US$468 million related to asset write-downs for the Rio Tinto Group and Rio Tinto plc comprises the above US$472 million, offset by US$4 million (Rio Tinto Group: US$3 million net of tax and minorities) of additional current year amortisation related to US GAAP adjustments made in previous years.

Exploration and evaluation
Under UK GAAP, expenditure on a project can be carried forward after it has reached a stage where there is a high degree of confidence in its viability. US GAAP does not allow expenditure to be carried forward unless the viability of the project is supported by a final feasibility study. In addition, under UK GAAP, provisions made against exploration and evaluation in prior years can be reversed when the project proceeds to development to the extent that the relevant costs are recoverable. US GAAP does not allow such provisions to be reversed.

Pensions/post retirement benefits
Under UK GAAP, post retirement benefits are accounted for in accordance with Statement of Standard Accounting Practice 24. The expected costs under defined benefit arrangements are spread over the service lives of employees entitled to those benefits. Variations from the regular cost are spread on a straight line basis over the expected average remaining service lives of relevant current employees. Under US GAAP, the annual pension cost comprises the estimated cost of benefits accruing in the period adjusted for the amortisation of the surplus arising when FAS 87, 'Employers' Accounting for Pensions', was adopted. The charge is further adjusted to reflect the cost of benefit improvements and any surpluses/deficits that emerge as a result of variances from actuarial assumptions. For US purposes, only those surpluses/deficits outside a 10 per cent fluctuation 'corridor' are spread.

The reduction in shareholders' funds at 31 December 2002 and 2001 also includes the effect of the US GAAP requirement to make immediate provision for pension fund deficits through other comprehensive income. The provision reflects the reduction in equity values in the relevant years.

Higher cost of sales resulting from acquisition accounting
Under UK GAAP, the inventories of acquired companies are valued at the lower of replacement cost and net realisable value. Under US GAAP, such inventories are recognised at the time of acquisition on the basis of expected net sales proceeds. Earnings for 2001 and 2000 are lower under US GAAP as a result of the higher cost of sales relating to inventories that were held at the date of acquisition.

Share option plans
Under UK GAAP, no cost is accrued where the option scheme applies to all relevant employees and the intention is to satisfy the share options by the issuance of new shares. Prior to 2002, under US GAAP the Group accounted for share option plans under the recognition and measurement provisions of APB Opinion No. 25, 'Accounting for Stock Issued to Employees', and related Interpretations. In 2002, the Group adopted the fair value recognition provisions of FAS 123, ' Accounting for Stock-Based Compensation', which is considered by the SEC to be a preferable accounting method for share based employee compensation. As permitted by FAS 148, 'Accounting for Stock-Based Compensation - Transition and Disclosure' , all prior periods presented have been restated to reflect the compensation cost that would have been recognised had the recognition provisions of FAS 123 been applied to all awards granted to employees after 1 January 1995. An adjustment is therefore required to reflect the increased cost of the schemes under US GAAP compared to UK GAAP. Fair value is determined using an option pricing model.

A-60

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Proposed dividends
Under UK GAAP, ordinary dividends are recognised in the financial year in respect of which they are paid. Under US GAAP, such dividends are not recognised until they are formally declared by the board of directors or approved by the shareholders.

Other
Other adjustments to earnings include amounts related to differences between UK and US accounting principles in respect of depreciation of mining assets, revenue recognition, start up and close down and restoration costs (see below).

Depreciation of mining assets
Under UK GAAP, mining assets are fully depreciated over their economic lives or the remaining life of the mine if shorter. In some cases, mineral resources that do not yet have the status of reserves are taken into account in determining depreciation charges, where there is a high degree of confidence that they will be mined economically. For US GAAP, only 'proven and probable reserves' are taken into account in the calculation of depreciation, depletion and amortisation charges. As a result, adjustments have been made in 2002 to depreciation included in 'Other' that reduced Rio Tinto Group US GAAP pre tax earnings by US$10 million (2001: US$6 million), increased Rio Tinto plc pre tax earnings by US$3 million (2001: US$3 million) and reduced Rio Tinto Limited's pre tax earnings by US$20 million (2001: US$15 million).

Revenue recognition
Staff Accounting Bulletin No. 101 (SAB 101) 'Revenue Recognition in Financial Statements' has the result that, in some cases, sales recorded as revenue under UK GAAP are deferred and are not recognised as revenue under US GAAP until a future accounting period. Occasionally, sales of goods recorded as revenue for UK GAAP purposes may be kept in store by Rio Tinto at the request of the buyer. Under US GAAP, such transactions cannot be recognised as revenue unless the goods are physically segregated from the supplier's other inventory and certain additional criteria are met. Also, under UK GAAP, certain sales contracts are recognised as revenue when the goods are delivered to the ship for export to the customer; but do not qualify for recognition under US GAAP until they have reached the destination specified by the customer in the sales contract and title has passed. In 2002, such timing differences resulted in an adjustment, included in 'Other', that increased US GAAP pre-tax earnings of the Rio Tinto Group by US$4 million, Rio Tinto plc's pre-tax earnings by US$2 million and Rio Tinto Limited's pre-tax earnings by US$4 million (2001: increased US GAAP pre-tax earnings of the Rio Tinto Group by US$5 million, Rio Tinto plc US$4 million, Rio Tinto Limited US$1 million), (2000: reduced US GAAP pre tax earnings of the Rio Tinto Group by US$16 million, Rio Tinto plc US$11 million, Rio Tinto Limited US$9 million).

Start up costs
Under US GAAP, Statement of Position 98-5, 'Reporting on the Costs of Start-up Activities', requires that the costs of start up activities are expensed as incurred. Under UK GAAP, some of these start up costs qualify for capitalisation and are amortised over the economic lives of the relevant assets.

Provisions
Additional provisions were recognised for UK GAAP purposes on implementation of FRS 12 in 1999. There was no corresponding change in US accounting standards. The additional provisions are therefore reversed in the calculation of shareholders' funds under US GAAP.

Taxation
Rio Tinto has implemented FRS 19, the new UK Accounting Standard on deferred tax. This has resulted in a prior year adjustment under UK GAAP, which reduced shareholders’ funds at 1 January 2001 by US$133 million. Of this amount, US$46 million results from the requirement under FRS 19 to provide in full for deferred taxation on most timing differences. These additional provisions were already recognised under US GAAP.
The remaining US$87 million of the prior year adjustment relates to features of FRS 19 that give rise to new variations from US GAAP. Accordingly, this element of the prior year adjustment has been reversed in arriving at US GAAP shareholders’ funds. These variations, which also affect the determination of earnings under US GAAP, relate principally to the following:
(a) Under FRS 19, provision for taxes arising on remittances of earnings can only be made if the dividends have been accrued or if there is a binding agreement for the distribution of the earnings. Under US GAAP, provision must be made for tax arising on expected future remittances of past earnings.
(b) Under FRS 19, tax benefits associated with goodwill charged directly to reserves in 1997 and previous years must be accumulated in the deferred tax provision. This means that the tax benefits are not included in earnings until the related goodwill is charged through the profit and loss account on disposal or closure. For US GAAP, no provision is required for such deferred tax because the goodwill that gave rise to these tax benefits was capitalised and gives rise to amortisation charges against profit.

Deferred tax on acquisitions
Under UK GAAP, deferred tax is not provided in respect of upward fair value adjustments to tangible fixed assets and inventories made on acquisitions. Under US GAAP, deferred tax must be provided on all fair value adjustments to non monetary assets recorded on acquisition with a consequential increase in the amount allocated to mining properties or goodwill as appropriate.

Profit contribution from equity accounted operations
Under US GAAP, investments in affiliates are accounted for using the equity method, and the reporting entity's share of the after tax profits and losses of its affiliates is included in the income statement as a single line item. Under UK GAAP, the reporting entity's share of the trading results of its associates and joint ventures is split in the profit and loss account between its share of their operating profits/losses, interest receivable/payable and taxation.
The Group's share of the after tax profits and losses of associates and joint ventures is shown in its 'Statement of Total Recognised Gains and Losses'.

Consolidated statement of cash flows
The consolidated statement of cash flows prepared in accordance with FRS 1 (revised) presents substantially the same information as that required under US GAAP. Under US GAAP, however, there are certain differences from UK GAAP with regard to the classification of items within the cash flow statement and with regard to the definition of cash and cash equivalents. Under US GAAP, tax paid and interest would form part of operating cash flow. Similarly, deferred stripping costs which are shown as capital expenditure under UK GAAP are included in operating cash flow for the purposes of the US GAAP cash flow disclosure. Under UK GAAP, cash for the purposes of the cash flow statement is defined as cash on hand and deposits repayable on demand with any qualifying financial institution, less bank borrowings from any qualifying financial institution repayable on demand. Deposits are repayable on demand if they can be withdrawn at any time without notice and without penalty or if a maturity or period of notice of not more than 24 hours or one working day has been agreed. Under US GAAP, cash equivalents comprise cash balances and current asset investments with an original maturity of less than three months and exclude bank borrowings repayable on demand.

A-61

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Unrealised holding gains and losses
UK GAAP permits current asset investments to be valued at the lower of cost and net realisable value. Under US GAAP, FAS 115 requires that unrealised holding gains and losses on investments classified as 'available for sale' are excluded from earnings and reported instead within a separate component of shareholders' funds until realised.

Adjusted earnings
As permitted under UK GAAP, adjusted earnings and adjusted earnings per share have been presented excluding the impact of exceptional charges to provide a measure that reflects the underlying performance of the Group. This is in addition to the presentation of earnings and earnings per share, which include the exceptional charges. In accordance with US GAAP, earnings and earnings per share have been presented based on US GAAP earnings, without adjustment for the impact of exceptional charges. Such additional measures of underlying performance are not permitted under US GAAP.

New US accounting standards
In July 2001, the Financial Accounting Standards Board ('FASB') issued FAS 143, 'Accounting for Obligations Associated with the Retirement of Long-Lived Assets'. FAS 143 will be effective for the financial year ending 31 December 2003. The standard requires that the obligation for close down and restoration costs is capitalised at the time of recognition. The asset is subsequently amortised over its useful life and the discount on the liability is unwound. The Group is currently evaluating the impact of this statement on its results of operations and financial position, however, the expectation is that the current GAAP difference relating to closure provisions made under the UK standard FRS 12 will be largely eliminated.

In July 2002, the FASB issued FAS 146, 'Accounting for Costs Associated with Exit or Disposal Activities'. The statement requires companies to recognise costs associated with certain exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. FAS 146 will be applied by the Group prospectively to applicable exit or disposal activities initiated after 31 December 2002. The adoption of FAS 146 is not expected to have a material effect on the reported financial position, results of operations or cash flows of the Rio Tinto Group.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45) ‘Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others’. FIN 45 elaborates on the existing disclosure requirements for most guarantees and requires entities to recognise, upon issue of a guarantee, an initial liability for the fair value, or market value, of the associated obligation with disclosure of that information in its interim and annual financial statements. FIN 45 will be effective, on a prospective basis, to guarantees issued or modified after 31 December 2002. The adoption of FIN 45 is not expected to have a material effect on the reported financial position, results of operations or cash flows of the Rio Tinto Group.

The disclosure requirements of FIN 45 apply to these accounts and the following information is given in response to these.

Note 29 to the financial statements discloses indemnities and other performance guarantees totalling US$145 million on which no material loss is expected. This includes US$15 million relating to the Group's commitment to pay deferred consideration in relation to acquisitions of mining properties in 2002 and previous years. This does not include guarantees of payment of US$341 million entered into by the Group relating to deferred consideration arising from such acquisitions because the deferred consideration has been recognised as a liability within the Group's balance sheet. The disclosure in note 29 also includes guarantees for up to US$32 million relating to the costs of infrastructure financed by certain government authorities, which would be subject to reimbursement by the Group if the facilities are not completed or certain tests relating to the related project are not met. Of the remaining US$98 million disclosed in note 29, US$25 million would be subject to reimbursement by a third party in the event that the Group was required to make payment under the guarantees.

In addition to the above, the Group has issued guarantees and indemnities totalling US$546 million relating to its close down, restoration and environmental remediation obligations. These are not disclosed as contingent liabilities because the obligations are included in the amounts recognised in the balance sheet as provisions for liabilities and charges.

A Group company has guaranteed that the quality of product from a joint venture in which it participates will be in accordance with agreed specifications. It has also undertaken to make up any shortfalls from minimum ore reserve quantities over the life of the joint venture. Currently, no shortfalls are anticipated.

As explained in note 14 to the financial statements, the Group has a partnership interest in the Colowyo Coal Company and has undertaken, via a subsidiary company which entered into a management agreement, to cause the partnership to perform its obligations under certain coal supply contracts. The debt of US$173 million owed by the Colowyo Coal Company is to be serviced and repaid out of the proceeds of these contracts.

In January 2003, the FASB issued interpretation No. 46, 'Consolidation of Variable Interest Entities' (FIN 46). Under FIN 46, certain entities labelled “Variable Interest Entities” (VIE), must be consolidated by the “primary beneficiary” of the entity. The primary beneficiary is generally defined as the party exposed to the majority of the risks and rewards arising from the VIE. For VIE’s in which a significant variable interest is held that is not a majority interest, certain disclosures are required. Full implementation of this interpretation is required in the Group’s financial statements for the year to 31 December 2004; but certain disclosures are required in the meantime, which are set out below.

The Group has a 20% general partnership interest in the Colowyo limited partnership, which was acquired for US$25 million in December 1994. This joint venture may fall within the definition of a Variable Interest Entity set out in FIN 46. The Colowyo joint venture produces coal, which is sold under long-term contracts. Colowyo’s total sales revenues for 2002 were US$108 million and its total assets as at 31 December 2002 were US$101 million. It is included in the Group accounts on the equity accounted basis and the carrying value of the net investment at 31 December 2002 was US$8 million under US GAAP.

Colowyo has bonds in issue with outstanding capital of US$173 million at 31 December 2002. These are repayable by instalments up to 2016 with interest at rates between 9.56% and 10.19% per annum. The bonds are to be serviced and repaid exclusively out of the net revenues from certain specified sales contracts relating to coal supplies by Colowyo. The bondholders bear the risks of loss that might arise if the revenues are interrupted due to failure of the purchasers or force majeur. The Rio Tinto Group is responsible under a management contract in which it agreed, for the sole and exclusive benefit of the bondholders, to cause Colowyo to perform its obligations under the specified coal sales contracts.

New UK accounting standards
Mandatory implementation of FRS 17 - 'Retirement Benefits' has been delayed until 2005 but additional disclosures are required for 2001 and 2002 which are included in note 40 to the financial statements.

A-62

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Post Retirement benefits

Information in respect of the net periodic benefit cost and related obligation determined in accordance with FAS 87,106 and 132 is given below.

Benefits under the major pension schemes are principally determined by years of service and employee remuneration.

Pension scheme funding policy is based on annual contributions at a rate that is intended to fund benefits as a level percentage of pay over the working lifetime of the scheme's participants. The assets of the UK schemes are invested primarily in UK and overseas equities and UK fixed interest stocks. The assets of the Australian schemes are invested primarily in Australian and overseas equities and fixed interest stocks.

The assets of the most significant pension schemes outside the UK and Australia are invested primarily in common stocks, corporate and treasury bonds, real estate or real estate investment funds, under the direction of investment managers.

Other post retirement benefits are provided to employees who meet the eligibility requirements, and their beneficiaries and dependants, through unfunded self insurance arrangements. The majority of these plans are for employees in the US. The plans are non contributory, although some contain an element of cost sharing such as deductibles and co-insurance.

Assumptions used to determine the net periodic benefit cost and the year end benefit obligation for the major pension schemes varied within the limits shown below. The average rate for each assumption has been weighted by benefit obligation. The assumptions used to determine the end of year benefit obligation are also used to calculate the following year's cost.

	2002 Cost	Year end benefit obligation

Discount rate	6.5% to 12.0% (Average: 7.0%)	5.8% to 12.0% (Average: 6.7%)
Long term rate of return on plan assets	6.5% to 12.0% (Average: 7.3%)	6.5% to 12.0% (Average: 7.2%)
Increase in compensation levels	4.0% to 11.0% (Average: 5.0%)	3.3% to 11.0% (Average: 4.8%)

The actuarial calculations in respect of the UK plans assume a rate of increase of pensions in payment of 2.5 per cent per annum. The actuarial calculations in respect of Australian plans assume a rate of increase of pensions in payment of 2.5 per cent per annum. These assumptions are consistent with the expected rates of return and salary increase assumptions in the respective valuations. Appropriate assumptions were made for plans in other countries.

The weighted average discount rates used in determining the benefit obligation for the major post retirement benefit plans other than pension schemes were 7.5 per cent and 6.5 per cent as of 30 September 2001, and 30 September 2002, respectively. A healthcare cost trend rate of 8.5 per cent, decreasing to 5.0 per cent by the year 2009, was used for 2002 costs. A healthcare cost trend rate of 8.0 per cent, decreasing to 5.0 per cent by the year 2009 was used to determine the benefit obligation at 30 September 2002.

The components of net benefit expense are detailed in the table below.

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

Pension Benefits	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Service cost	(42	)	(45	)	(42	)	(55	)	(47	)	(42	)	(97	)	(92	)	(84	)
Interest cost on benefit obligation	(147	)	(138	)	(138	)	(60	)	(57	)	(39	)	(207	)	(195	)	(177	)
Expected return on plan assets	197		210		202		61		69		51		258		279		253
Net amortisation and deferral:
- transitional obligation	10		12		14		-		-		-		10		12		14
- recognised gains/(losses)	18		4		15		(8	)	(4	)	(2	)	10		-		13
- prior service cost recognised	(21	)	(18	)	(18	)	(1	)	(1	)	(1	)	(22	)	(19	)	(19	)

	7		(2	)	11		(9	)	(5	)	(3	)	(2	)	(7	)	8

Net periodic benefit (cost)/credit	15		25		33		(63	)	(40	)	(33	)	(48	)	(15	)	-
Curtailment and settlement (cost)/credit	(8	)	(4	)	-		-		-		-		(8	)	(4	)	-

Net benefit credit/(expense)	7		21		33		(63	)	(40	)	(33	)	(56	)	(19	)	-

	Rio Tinto plc -						Rio Tinto Limited -
	part of Rio Tinto Group						part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

Other Benefits	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Service cost	(6	)	(6	)	(6	)	(1	)	-		-		(7	)	(6	)	(6	)
Interest cost on benefit obligation	(23	)	(21	)	(23	)	(2	)	(3	)	(1	)	(25	)	(24	)	(24	)
Net amortisation and deferral:
- recognised gains/(losses)	8		8		9		-		3		-		8		11		9
- prior service cost recognised	1		1		1		-		-		-		1		1		1

	9		9		10		-		3		-		9		12		10

Net periodic benefit cost	(20	)	(18	)	(19	)	(3	)	-		(1	)	(23	)	(18	)	(20	)
Curtailment and settlement cost	(2	)	-		-		-		-		-		(2	)	-		-

Net benefit expense	(22	)	(18	)	(19	)	(3	)	-		(1	)	(25	)	(18	)	(20	)

A-63

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Accumulated foreign currency translation gains and losses recorded directly in shareholders' funds under US GAAP

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	US$m		US$m		US$m

At 1 January 2002	(1,189	)	(428	)	(1,436	)
Current period change	318		167		422

At 31 December 2002	(871	)	(261	)	(1,014	)

At 1 January 2001	(935	)	(313	)	(1,111	)
Current period change	(254	)	(115	)	(325	)

At 31 December 2001	(1,189	)	(428	)	(1,436	)

At 1 January 2000	(631	)	37		(606	)
Current period change	(304	)	(350	)	(505	)

At 31 December 2000	(935	)	(313	)	(1,111	)

Additional US GAAP cash flow information

A summary of Rio Tinto's operating, investing and financing activities classified in accordance with US GAAP is presented below:

Funded status of the Group's principal schemes.

	Rio Tinto plc -				Rio Tinto Limited -
Pension Benefits	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Benefit obligation at end of year	(2,377	)	(1,903	)	(989	)	(900	)	(3,366	)	(2,803	)
Fair value of plan assets	2,256		2,271		910		917		3,166		3,188

Plan assets (below)/in excess of benefit obligation	(121	)	368		(79	)	17		(200	)	385
Unrecognised prior service cost	155		149		4		4		159		153
Unrecognised net loss/(gain)	239		(252	)	225		158		464		(94	)
Unrecognised transitional asset	(27	)	(35	)	(2	)	(2	)	(29	)	(37	)
Company contributions in fourth quarter	2		1		5		3		7		4

Net amount recognised	248		231		153		180		401		411

Comprising:
- benefit prepayment	212		270		134		187		346		457
- benefit provision (including additional minimum liability)	(236	)	(124	)	(83	)	(75	)	(319	)	(199	)
- intangible asset	53		32		-		-		53		32
- amount recognised through accumulated other
comprehensive income	219		53		102		68		321		121

Net amount recognised	248		231		153		180		401		411

	Rio Tinto plc -				Rio Tinto Limited -
	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

Other Benefits	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Benefit obligation at end of year	(396	)	(323	)	(41	)	(39	)	(437	)	(362	)
Fair value of plan assets	-		-		-		-		-		-

Benefit obligation in excess of plan assets	(396	)	(323	)	(41	)	(39	)	(437	)	(362	)
Unrecognised prior service cost	(2	)	(2	)	-		-		(2	)	(2	)
Unrecognised net loss/(gain)	(40	)	(96	)	-		-		(40	)	(96	)

Net amount recognised at end of year	(438	)	(421	)	(41	)	(39	)	(479	)	(460	)

Comprising:
- benefit provision	(438	)	(421	)	(41	)	(39	)	(479	)	(460	)

Net amount recognised	(438	)	(421	)	(41	)	(39	)	(479	)	(460	)

Change in additional minimum liability before tax:
	2002		2001

	US$m		US$m
Accrued pension benefit expense	221		148
Increase in intangible asset	(21	)	(32	)

Other comprehensive income before tax	200		116

Change in benefit obligation
	Rio Tinto plc -				Rio Tinto Limited -
Pension Benefits	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Benefit obligation at start of year	(1,903	)	(2,033	)	(900	)	(861	)	(2,803	)	(2,894	)
Service cost	(42	)	(45	)	(55	)	(47	)	(97	)	(92	)
Interest cost	(147	)	(138	)	(60	)	(57	)	(207	)	(195	)
Contributions by plan participants	(3	)	(2	)	(6	)	(4	)	(9	)	(6	)
Actuarial (losses) and gains	(246	)	90		42		1		(204	)	91
Benefits paid	141		125		54		70		195		195
Plan amendments	(16	)	(12	)	-		-		(16	)	(12	)
Inclusion of defined contribution liabilities	-		(2	)	-		(61	)	-		(63	)
Currency translation	(161	)	114		(64	)	59		(225	)	173

Benefit obligation at end of year	(2,377	)	(1,903	)	(989	)	(900	)	(3,366	)	(2,803	)

A-64

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

	Rio Tinto plc -				Rio Tinto Limited -
Other Benefits	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Benefit obligation at start of year	(323	)	(315	)	(39	)	(40	)	(362	)	(355	)
Service cost	(6	)	(6	)	(1	)	-		(7	)	(6	)
Interest cost	(23	)	(21	)	(2	)	(3	)	(25	)	(24	)
Actuarial losses	(48	)	(8	)	-		-		(48	)	(8	)
Benefits paid	14		11		2		2		16		13
Plan amendments	(2	)	-		-		-		(2	)	-
Currency translation	(8	)	16		(1	)	2		(9	)	18

Benefit obligation at end of year	(396	)	(323	)	(41	)	(39	)	(437	)	(362	)

Change in plan assets
	Rio Tinto plc -				Rio Tinto Limited -
Pension Benefits	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Fair value of plan assets at start of year	2,271		2,840		917		1,024		3,188		3,864
Actual return on plan assets	(108	)	(296	)	(42	)	(44	)	(150	)	(340	)
Contributions by plan participants	3		2		6		4		9		6
Contributions by employer	13		9		17		13		30		22
Benefits paid	(141	)	(125	)	(54	)	(70	)	(195	)	(195	)
Inclusion of defined contribution assets	-		2		-		61		-		63
Currency translation	218		(161	)	66		(71	)	284		(232	)

Fair value of plan assets at end of year	2,256		2,271		910		917		3,166		3,188

	Rio Tinto plc -				Rio Tinto Limited -
Other Benefits	part of Rio Tinto Group				part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Fair value of plan assets at start of year	-		-		-		-		-		-
Contributions by employer	14		11		2		2		16		13
Benefits paid	(14	)	(11	)	(2	)	(2	)	(16	)	(13	)

Fair value of plan assets at end of year	-		-		-		-		-		-

Sensitivity to change in healthcare trend

The healthcare cost trend rate assumption has a significant effect on the amounts reported. Changing the healthcare cost trend rates by one per cent would result in the following annual effects:

Rio Tinto Group	1% increase				1% decrease
	2002		2001		2002	2001

	US$m		US$m		US$m	US$m
(Increase)/decrease in service cost plus interest cost	(5	)	(5	)	4	4
(Increase)/decrease in benefit obligation at 30 September	(48	)	(39	)	40	34

Rio Tinto plc - part of Rio Tinto Group

(Increase)/decrease in service cost plus interest cost	(5	)	(5	)	4	4
(Increase)/decrease in benefit obligation at 30 September	(43	)	(34	)	35	30

Rio Tinto Limited - part of Rio Tinto Group

(Increase)/decrease in service cost plus interest cost	-		-		-	-
(Increase)/decrease in benefit obligation at 30 September	(5	)	(5	)	5	4

A-65

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

	Rio Tinto plc - part of Rio Tinto Group						Rio Tinto Limited - part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000
	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m

Net cash flow from operating activities	1,536		1,108		1,213		1,379		1,327		1,431		2,640		2,326		2,510
Net cash flow from investing activities	(1,042	)	(1,122	)	(396	)	(592	)	(1,277	)	(3,616	)	(1,663	)	(2,113	)	(4,012	)
Net cash flow from financing activities	(507	)	(17	)	(973	)	(948	)	(87	)	2,218		(1,151	)	(281	)	1,379

(Decrease)/increase in cash and cash equivalents per US GAAP	(13	)	(31	)	(156	)	(161	)	(37	)	33		(174	)	(68	)	(123	)

(Decrease)/increase in cash per UK GAAP	(16	)	6		(78	)	(114	)	34		34		(130	)	40		(44	)
Increase in non qualifying liquid resources for
US GAAP	(2	)	(31	)	(138	)	(25	)	(26	)	(57	)	(27	)	(57	)	(195	)
(Decrease)/increase in bank borrowings repayable on demand included in cash under UK GAAP	5		(6	)	60		(22	)	(45	)	56		(17	)	(51	)	116

(Decrease)/increase in cash and cash equivalents per US GAAP	(13	)	(31	)	(156	)	(161	)	(37	)	33		(174	)	(68	)	(123	)

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Cash and cash equivalents under US GAAP:
Cash per balance sheet under UK GAAP	174		364		151		315		325		679
Qualifying liquid resources less non qualifying deposits	(1	)	(135	)	(44	)	(48	)	(45	)	(183	)

Cash and cash equivalents under US GAAP	173		229		107		267		280		496

There was an exchange loss for the Rio Tinto Group of US$47 million, an exchange loss for Rio Tinto plc of US$28 million and for Rio Tinto Limited an exchange loss of US$19 million (2001: gain for the Group of US$1 million, gain for Rio Tinto plc US$2 million, loss for Rio Tinto Limited US$1 million) relating to US GAAP cash and cash equivalents during the year.

Deferred tax credit/(charge)

	Rio Tinto plc - part of Rio Tinto Group						Rio Tinto Limited - part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
The credit/(charge) for deferred taxation arises as follows:
- accelerated capital allowances	158		168		(23	)	28		39		10		186		207		(13	)
- pension prepayments	(1	)	(39	)	(29	)	12		9		5		11		(30	)	(24	)
- provisions	20		68		(25	)	(14	)	(27	)	18		6		41		(7	)
- provision against AMT credits and US tax losse	(228	)	(144	)	(26	)	-		-		-		(228	)	(144	)	(26	)
- other timing differences	30		5		(5	)	11		(47	)	(30	)	41		(42	)	(35	)

	(21	)	58		(108	)	37		(26	)	3		16		32		(105	)

A-66

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Fixed asset investments

The aggregates of the profit and loss accounts and balance sheets of equity and gross equity accounted companies on a 100 per cent basis are set out below:

	Rio Tinto plc - part of Rio Tinto Group						Rio Tinto Limited - part of Rio Tinto Group						Rio Tinto Group

	2002		2001		2000		2002		2001		2000		2002		2001		2000

	US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m		US$m
Profit and loss account:
Sales revenue	9,295		9,966		8,921		1,841		1,643		922		6,622		6,313		5,961
Cost of sales	(6,826	)	(6,873	)	(5,686	)	(1,217	)	(1,066	)	(629	)	(4,384	)	(4,068	)	(3,889	)

Operating profit	2,469		3,093		3,235		624		577		293		2,238		2,245		2,072
Profit of equity accounted companies	325		320		183		-		-		-		-		-		-
Net interest	(475	)	(534	)	(544	)	(49	)	(67	)	(36	)	(377	)	(392	)	(429	)

Profit before tax	2,319		2,879		2,874		575		510		257		1,861		1,853		1,643
Taxation	(911	)	(963	)	(966	)	(91	)	(163	)	(69	)	(579	)	(604	)	(583	)
Profit attributable to outside shareholders	90		(115	)	(119	)	-		-		-		(36	)	(43	)	(37	)

Net profit on ordinary activities (100 per cent basis)	1,498		1,801		1,789		484		347		188		1,246		1,206		1,023

	Rio Tinto plc - part of Rio Tinto Group				Rio Tinto Limited - part of Rio Tinto Group				Rio Tinto Group

	2002		2001		2002		2001		2002		2001

	US$m		US$m		US$m		US$m		US$m		US$m
Balance sheet
Intangible fixed assets	988		942		1		1		194		196
Tangible fixed assets	15,942		15,549		2,758		2,491		12,086		11,765
Investments	1,235		983		3		3		166		162
Working capital	(434	)	(363	)	86		194		593		516
Net cash less current debt	(2,658	)	(2,031	)	(33	)	(97	)	(835	)	(164	)
Long term debt	(5,667	)	(6,098	)	(1,005	)	(1,181	)	(5,406	)	(5,838	)
Provisions	(2,648	)	(2,853	)	(361	)	(377	)	(1,658	)	(1,949	)
Outside shareholders' interests	(847	)	(902	)	-		-		(290	)	(249	)

Aggregate shareholders' funds (100 per cent basis)	5,911		5,227		1,449		1,034		4,850		4,439

For Rio Tinto plc the above disclosures include 100 per cent of the profit and loss account and balance sheet of Rio Tinto Limited

Acquisitions
The following information gives pro forma effect to the acquisitions of North, Ashton and the Comalco minority made by Rio Tinto Limited during 2000 as if those acquisitions had taken place on 1 January 2000 as required for the purposes of preparing the unaudited pro forma combined results ('the pro forma') for 2000. The pro forma contains the consolidated results of Rio Tinto Limited and its acquisitions after giving effect to certain adjustments. These adjustments include estimates of the effect on the pro forma of Rio Tinto Limited's accounting policies, as applied to the results of the acquisitions, the fair value adjustments calculated at the acquisition date; and the increased net interest expense, together with the associated tax effects, as a result of financing the acquisition. The pro forma does not necessarily reflect the results of operations as they would have been if Rio Tinto Limited and the acquired companies had constituted a single entity during 2000.

	Rio Tinto plc - part of Rio Tinto Group		Rio Tinto Limited - part of Rio Tinto Group		Rio Tinto Group

	Year ended 31 December		Year ended 31 December		Year ended 31 December

	Unaudited		Unaudited		Unaudited

	2000		2000		2000

	US$m		US$m		US$m
Gross turnover	7,545		5,267		10,803
Consolidated turnover	3,993		4,660		8,653
Operating profit	2,075		1,581		3,037
Net earnings	1,062		765		1,501

Combined earnings per share - basic	99.9	c	141.4	c	109.3	c
Combined earnings per share - diluted	99.8	c	141.4	c	109.2	c

A-67

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Unrealised holding gains and losses
Under FAS 115, unrealised holding gains and losses on investments classified as 'available for sale' are excluded from earnings and reported instead within a separate component of shareholders' funds until realised.

The following tables show the investments in debt and equity securities which are held as 'available for sale' in accordance with FAS 115 for the Rio Tinto Group, Rio Tinto plc and Rio Tinto Limited.

Rio Tinto Group	FAS 115 net book value	Unrealised holding gains	Unrealised holding losses		Market value	Net unrealised holding gains/(losses)

	US$m	US$m	US$m		US$m	US$m
At 1 January 2002	70	3	(10	)	63	(7	)
Change in unrealised holding gains/(losses)	-	2	5		7	7

At 31 December 2002	70	5	(5	)	70	-

Rio Tinto plc	FAS 115 net book value	Unrealised holding gains	Unrealised holding losses		Market value	Net unrealised holding gains/(losses)

	US$m	US$m	US$m		US$m	US$m
At 1 January 2002	56	-	(4	)	52	(4	)
Change in unrealised holding gains/(losses)	-	-	3		3	3

At 31 December 2002	56	-	(1	)	55	(1	)

Rio Tinto Limited	FAS 115 net book value	Unrealised holding gains	Unrealised holding losses		Market value	Net unrealised holding gains/(losses)

	US$m	US$m	US$m		US$m	US$m
At 1 January 2002	14	3	(6	)	11	(3	)
Change in unrealised holding gains/(losses)	-	2	2		4	4

At 31 December 2002	14	5	(4	)	15	1

Share Option Plans

At 31 December 2002, Rio Tinto plc and Rio Tinto Limited have a number of share based option plans, which are described below:

Fixed Share Option Plans

Under these plans, the exercise price of each option equals the market price of the Company's shares on the date of grant less a 20% discount and the maximum term of the option is between 2 and 5 years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in 2000, 2001 and 2002:

	2002			2001			2000

	Risk-free	Expected	Dividend	Risk-free	Expected	Dividend	Risk-free	Expected	Dividend
	interest rate	volatility	yield	interest rate	volatility	yield	interest rate	volatility	yield

	%	%	%	%	%	%	%	%	%
Rio Tinto plc	4.41	31.82	4.48	4.60	42.57	2.98	5.23	33.24	3.57
Rio Tinto Limited	5.35	26.13	2.58	5.38	26.02	3.30	-	-	-

A summary of the status of the Companies’ fixed share option plans as at 31 December 2000, 2001 and 2002, and changes during the years ending on those dates is presented below:

	Rio Tinto plc Share Savings Plan

	2002			2001			2000

			Weighted			Weighted			Weighted
			average			average			average
	Number		share price	Number		share price	Number		share price

			£s			£s			£s
Options outstanding at 1 January 2002	2,010,403		7.74	1,285,340		6.32	1,462,462		6.14
Granted	509,954		8.76	975,577		9.50	159,294		8.55
Exercised	(278,134	)	5.96	(181,581	)	7.27	(222,693	)	6.73
Cancelled	(162,378	)	8.85	(68,933	)	7.59	(113,723	)	6.36

Options outstanding at 31 December 2002	2,079,845		8.14	2,010,403		7.74	1,285,340		6.32


Weighted-average fair value of options granted during the year			2.78			3.98			3.17

A-68

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

	Rio Tinto Limited - Share Savings Plan

	2002			2001			2000

			Weighted			Weighted		Weighted
			average			average		average
	Number		share price	Number		share price	Number	share price

			A$'s			A$'s		A$'s
Options outstanding at 1 January 2002	1,380,826		27.86	-		-	-	-
Granted	1,245,639		25.57	1,393,415		27.86	-	-
Exercised	(2,130	)	27.86	-		-	-	-
Cancelled	(378,161	)	27.86	(12,589	)	27.86	-	-

Options outstanding at 31 December 2002	2,246,174		26.59	1,380,826		27.86	-	-


Weighted-average fair value of options granted during the year			7.59			11.34		-


	Rio Tinto plc - Share Savings Plan

As at 31 December 2002:	Options outstanding			Options exercisable

		Weighted	Weighted		Weighted
		average	average		average
Range of exercise prices	Number	remaining life	ex price	Number	ex price

		years	£'s		£'s
£5.20 - £7.80	560,972	0.9	5.46	3,554	7.44
£7.85 - £10.70	1,518,873	2.3	9.05	-	-

£5.20 - £10.70	2,079,845	1.9	8.08	3,554	7.44

At 31 December 2001 and 31 December 2000 there were no options exercisable

	Rio Tinto Limited - Share Savings Plan

	Options outstanding			Options exercisable


		Weighted	Weighted		Weighted
		average	average		average
Range of exercise prices	Number	remaining life	ex price	Number	ex price

		years	A$'s		A$'s
A$20 - A$26	1,245,639	3.8	25.57	-	-
A$27 - A$30	1,000,535	2.8	27.86	-	-

A$20 - A$30	2,246,174	3.4	26.59	-	-

At 31 December 2001 and 31 December 2000 there were no options exercisable.

Performance Based Share Option Plan
Under its 1998 Executive Share Option Scheme and Share Option Plan, the Company grants selected executives and other key employees share option awards vesting of which is contingent upon increases in the Company's earnings per share above certain predetermined target levels. The exercise price of each option, which has a 10-year life, is equal to the market price of the Company's shares on the date of grant.

	2002			2001			2000

	Risk-free	Expected	Dividend	Risk-free	Expected	Dividend	Risk-free	Expected	Dividend
	interest rate	volatility	yield	interest rate	volatility	yield	interest rate	volatility	yield

	%	%	%	%	%	%	%	%	%
Rio Tinto plc	5.22	30.84	2.83	4.76	30.04	3.18	5.28	30.5	3.59
Rio Tinto Limited	6.51	25.92	2.76	5.27	26.02	2.98	6.76	25.3	3.61

A summary of the status of the Company's performance-based share option plan as of 31 December 2001 and 2002, and changes during the years ending on those dates is presented below:

	Rio Tinto plc - Share Option Plan

	2002			2001			2000

			Weighted			Weighted			Weighted
			average			average			average
	Number		share price	Number		share price	Number		share price

			£'s			£'s			£'s
Options outstanding at 1 January	5,785,625		9.97	4,381,611		8.66	2,926,822		8.14
Granted	2,095,314		14.59	1,931,747		12.66	1,534,306		9.65
Exercised	(540,568	)	8.16	(392,021	)	8.20	-		-
Cancelled	(154,117	)	14.72	(135,712	)	10.86	(79,517	)	8.61

Options outstanding at 31 December	7,186,254		11.35	5,785,625		9.97	4,381,611		8.66


Weighted-average fair value of options granted during the year			4.99			4.52			3.06

A-69

Back to Contents

42 Reconciliation to US Accounting Principles (continued)

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

	Rio Tinto Limited - Share Option Plan

	2002			2001			2000

			Weighted			Weighted		Weighted
			average			average		average
	Number		share price	Number		share price	Number	share price

			A$'s			A$'s		A$'s
Options outstanding at 1 January	1,694,730		28.09	853,188		22.13	586,691	21.26
Granted	1,003,849		39.87	932,265		33.01	266,497	24.07
Exercised	(208,528	)	20.15	(78,775	)	21.15	-	-
Cancelled	(50,721	)	37.65	(11,948	)	32.53	-	-

Options outstanding at 31 December	2,439,330		33.42	1,694,730		28.09	-	22.13


Weighted-average fair value of options granted during the year			13.71			11.10		7.50


	Rio Tinto plc - Share Option Plan

As at 31 December 2002:		Options Outstanding		Options exercisable

		Weighted	Weighted		Weighted
		average	average		average
Range of exercise prices	Number	remaining life	ex price	Number	ex price

		years	£'s		£'s
£8 - £10	3,388,982	0.3	8.78	1,933,796	8.13
£12 - £15	3,797,272	5.7	13.64	-	-

£8 - £15	7,186,254	3.1	11.35	-	8.13

At 31 December 2001 there were 1 million (2000: nil) options exercisable with a weighted average exercise price of £8.20

	Rio Tinto Limited - Share Option Plan

	Options Outstanding			Options exercisable

		Weighted	Weighted		Weighted
		average	average		average
Range of exercise price	Number	remaining life	ex price	Number	ex price

		years	A$'s		A$'s
A$20 - A$25	565,243	0.3	23.00	318,273	22.18
A$30 - A$40	1,874,087	5.7	36.56	-	-

A$20 - A$40	2,439,330	4.4	33.42	318,273	22.18

At 31 December 2001 there were 0.2 million (2000: nil) options exercisable with a weighted average exercise price of A$20.14

	Rio Tinto plc - Executive Share Option Scheme

	2002			2001			2000

			Weighted			Weighted			Weighted
			average			average			average
	Number		share price	Number		share price	Number		share price

			£'s			£'s			£'s
Options outstanding at 1 January	130,786		8.09	238,336		7.89	277,067		7.55
Exercised	(68,786	)	7.73	(107,550	)	7.65	(38,731	)	5.45

Options outstanding at 31 December	62,000		8.49	130,786		8.09	-		7.89


Number of options exercisable at year end	62,000			130,786			238,336
Weighted-average exercise price of options exercisable at year end			8.49			8.09			7.89

As at 31 December 2002, Rio Tinto plc has 0.06 million performance options outstanding under the 1998 Executive Share Option Scheme with exercise prices between £6.89 and £8.61. These options have vested and have a weighted average remaining life of 1.3 years.

A-70

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)
The following supplements segmental information provided elsewhere in this report to provide additional information required under US GAAP

Property, plant and equipment by location
	Rio Tinto Group

	Restated		Restated
	2002	2001	2002	2001

	%	%	US$m	US$m

North America	42.7	48.3	5,204	5,566
Australia and New Zealand	48.5	44.0	5,912	5,071
South America	0.9	1.2	112	139
Africa	5.0	3.6	608	420
Indonesia	0.4	0.5	50	52
Europe and other countries	2.5	2.4	297	264

	100.0	100.0	12,183	11,512

Tax charge by product group

	Rio Tinto Group

	2002		2001		2000

	US$m		US$m		US$m
Iron Ore	(215	)	(239	)	(191	)
Energy	(197	)	(212	)	(125	)
Industrial Minerals	(200	)	(219	)	(224	)
Aluminium - Comalco	(107	)	(160	)	(211	)
Copper	(118	)	(154	)	(182	)
Diamonds and Gold	(59	)	(43	)	(53	)
Tax on exploration	18		26		28
Other items, including tax relief on asset write downs	170		283		139

	(708	)	(718	)	(819	)

Covenants
Of the Rio Tinto Group's medium and long term borrowings of US$2.7 billion, some US$0.6 billion relates to the Group's share of non-recourse borrowings which are the subject of various financial and general covenants with which the respective borrowers are in compliance.

Intangible assets under US GAAP (Rio Tinto Group and Rio Tinto plc)
The implementation of FAS 141 resulted in the reclassification of US$340 million from goodwill to finite lived intangible assets at 1 January 2002. The accumulated cost relating to these intangible assets at 31 December 2002 was US$714 million and accumulated amortisation was US$394 million. The total amortisation expense was US$68 million of which US$20 million is related to the amortisation of goodwill previously written off to reserves under UK GAAP now reclassified as finite lived intangible assets under US GAAP. The remaining US$48 million relates to the amortisation of goodwill included as an asset on the UK GAAP balance sheet but now reclassified as finite lived intangible assets under US GAAP. The estimated amortisation charge relating to intangible assets for each of the next five years is US$68 million.

A-71

Back to Contents

RIO TINTO PLC - RIO TINTO LIMITED
NOTES TO FINANCIAL STATEMENTS - (continued)

42 Reconciliation to US Accounting Principles (continued)

Accounting for derivative instruments and hedging activities

During 2002, the following movements, pre tax and minorities, took place in Other comprehensive income (OCI) and earnings in relation to net derivative liabilities:

	Net		Recorded		Recorded
	derivative		in OCI		in retained
	liabilities				earnings
	US$m		US$m		US$m

Net derivative liabilities on balance sheet at 31 December 2001	(332	)	(181	)	(151	)
Less: net derivative liabilities marked to market through OCI at 1 January 2002
relating to contracts maturing in 2002 (a)	31		31		-
Less: net derivative liabilities marked to market through retained earnings at
1 January 2002 relating to contracts maturing in 2002 (b)	40		-		40
Add: mark to market of net derivative liabilities designated as FAS 133
cash flow hedges at 31 December 2002 (c)	90		90		-
Add: mark to market of net derivative liabilities not designated as hedges under
FAS 133 at 31 December 2002 (d)	117		-		117

On balance sheet at 31 December 2002	(54	)	(60	)	6

(a)	During 2002, net losses of US$31 million relating to derivatives designated as cash flow hedges under FAS 133 were transferred from accumulated OCI to US GAAP earnings on maturity of the contracts.
(b)	During 2002, accrued losses of US$40 million relating to derivatives that were not designated as hedges under FAS 133 were realised on maturity of the contracts.
(c)	The fair value of net derivative liabilities designated as cash flow hedges under FAS 133 reduced by US$90 million during 2002 resulting in a closing debit balance related to cash flow hedging activities of US$60 million in OCI. These cash flow hedges hedge the Group's exposure to the US dollar in relation to future trading transactions. The Group expects to reclassify US$18 million of this amount as reductions in earnings over the next twelve months as these contracts and the transactions which they hedge mature. As at 31 December 2002, the Group had US$102 million of cash flow hedge derivative liabilities and US$42 million of cash flow hedge derivative assets. The cash flow hedges extend to 2010.
(d)	Certain of the Group's derivative contracts do not qualify for hedge accounting under FAS 133, principally because the hedge is not located in the entity with the exposure. The fair value of these net derivative liabilities reduced by US$117 million during 2002. As at 31 December 2002, the Group had US$102 million of assets relating to derivatives which do not qualify for hedge accounting under FAS 133, and US$96 million of liabilities.

A-72

Rio Tinto (RIO) 20-F/A2002 FY Annual report (foreign) (amended)