Introduction to Rio Tinto

Rio Tinto is a leading internationalglobal mining group that focuses on finding, mining and processing the Earth’s mineral resources in orderresources. Our vision is to maximise shareholder value. be a company that is admired and respected for delivering superior value, as the industry’s most trusted partner.

With a view to sustaining returns to shareholders over time, we take a long-term approach to our activities. This means concentrating on developing Tier 1 orebodies into long-life, low-cost, expandable operations that are capable of providing competitive returns throughout business cycles.

We have a diverse portfolio and a global presence: our 71,00066,000 people work in more than 40 countries.

To Our five product groups summarised below are supported by our Exploration and Technology & Innovation groups (also see pages 26 to 37). We are committed to creating a culture of high performance – providing challenging work and opportunities to grow, and rewarding those who help deliver superior returns to shareholders over time, we take a long-term and responsible approach to our activities. This means concentrating on developing first-class orebodies into large, long-life and efficient low-cost operations, capable of providing competitive returns through business cycles.value.

Sustainable development is integrated into everything we do. Our operations give us the opportunity to bring long-lasting positive change to the communities, regions and countries in which we work, and our metals and minerals are transformed into end products that contribute to higher living standards.

The safety of our people, and our values – accountability, respect, teamwork and integrity – are at the core of our way of working. Our responsible approach to mineral development ensures we gain and maintain our licence to operate. It means we provide confidence to our stakeholders, and improve our access to the mineral resources, people and capital we need. Our five product groups summarised below are supported by our Exploration and Technology & Innovation groups (also see pages 22 to 31).

Aluminium product group

Building on more than a century of experience and expertise, Rio Tinto Alcan is a global leader in the aluminium industry. Our fully-integrated facilities include high-quality bauxite mines, large-scale alumina refineries, and some of the world’s lowest-cost, most technologically-advanced primary aluminium smelters.

Bauxite production (2012 vs 2011)

+11%

Products

Bauxite

Bauxite is the natural ore used to make aluminium. It is refined into alumina which is smelted into aluminium metal. Our wholly-owned and joint venture bauxite mines are located in Australia, Brazil and Guinea.

Alumina

Alumina (aluminium oxide) is extracted from bauxite via a refining process. Approximately four tonnes of bauxite are required to produce two tonnes of alumina, which in turn makes one tonne of aluminium metal. Our wholly-owned and joint venture alumina refineries are located in Australia, Brazil and Canada.

Aluminium

Aluminium is a unique and versatile modern metal. Light, strong, flexible, non-corrosive and infinitely recyclable, aluminium is one of the most widely-used metals.metals in the world. Its largest markets are transportation, machinery and construction. Our smelters are mainly concentrated in Canada. We also have plants in France, Australia, New Zealand, Cameroon, Iceland, Norway, the UK and the Middle East.Oman.

Key strengthsStrategic advantages

Dear shareholders,

In 2013 your company was focused on page 30.improving the performance of the business, strengthening capital allocation processes and reducing our level of indebtedness – all with a view to ensuring a greater commitment to creating real value for shareholders.

I am pleased to report that substantial progress had been made on meeting these priorities. We achieved underlying earnings of US$10.2 billion and significantly improved cash flow by 22 per cent over 2012. We exceeded our cost reduction targets and set production records. Our net earnings performance of US$3.7 billion takes account of non-cash exchange rate losses and impairments.

We are deeply saddened by the deaths of three of our employees at our managed sites last year and improving safety at all of our operations during the year ahead is of paramount importance.

Our overall performance gave the board the confidence to raise the 2013 full year dividend by 15 per cent. This increased dividend represents an important milestone on the road to improved shareholder value.

Stronger business, creating options

During 2013 greater discipline and accountability was restored throughout the business, particularly in the allocation and management of capital. We simplified and strengthened our systems in this area and improved decision-making capability across the organisation.

Your board regularly evaluates opportunities put forward by the business against all competing uses for cash, striving to achieve the right balance between disciplined investment, strengthening our balance sheet and returning cash to investors.

The reduction in our net debt during 2013 is an indication of our commitment to a stronger balance sheet and provides flexibility in terms of returns and investment. We are building more resilience in our business, which gives your board greater flexibility to respond to macroeconomic developments as they arise.

Strategy development and disciplined delivery

During the year your board supported Sam Walsh on the implementation of his plan to improve performance, strengthen the balance sheet and deliver results. We worked with him on reviewing the company’s strategy and reaffirmed our commitment to invest in and operate long-life, low-cost, expandable mines and businesses. The board also took the time to visit our world-class iron ore operations in the Pilbara in Western Australia to get a deeper understanding of the strategic and operational issues at play.

Sam, his executive team, and all of our 66,000 employees across the world have worked hard during a challenging year and made a large contribution to restore the company to a position of strength. I thank all of our people for their efforts and commend Sam for this leadership during a tough time. But there is more we must do.

Amidst continued market uncertainty, impacts of quantitative easing and austerity programmes still washing through markets around the world, your board has tasked the executive team with ensuring they successfully execute our strategy and make sure the gains delivered are sustained. The discipline of 2013 must be carried forward into the year ahead and beyond, with a specific focus on delivering our growth projects and producing further productivity improvements at all of our sites.

As geopolitical and social risk increase, we remain convinced that businesses which form effective relationships and partnerships around the world will prosper over the longer term. Rio Tinto has always taken its role as a responsible business very seriously and throughout the year ahead we will continue to build our capabilities in stakeholder engagement and sustainable development. We believe earning the trust of our host communities and governments is vital in creating sustainable shareholder value.

Dear shareholders,

2013 was a challenging and very rewarding year for Rio Tinto. I amwas proud to be leadingappointed chief executive of your company a year ago at a time when shareholders had lost some confidence in the business. Change was needed. Trust and am committedconfidence in management had to building a strongerbe rebuilt. While I was determined that Rio Tinto would not repeat the mistakes of the past, I also recognised the solid foundations of an outstanding company with extremely good people and assets.

Transforming our business focusedto focus on pursuing greater value for you, our shareholders.shareholders

My more than 20 years’ experience withSo, while Rio Tinto including as a memberwas in many ways an outstanding business, we needed to refocus on meeting the expectations of the boardowners of our company. I defined our 2013 goal as delivering greater value for our shareholders and during the past four years, has shownyear, I personally met with and listened to hundreds of investors and analysts, as well as our employees, customers and suppliers across the world.

They all told me, we want to see Rio Tinto return to a position of strength. Similarly, I too want Rio Tinto to be a company admired and recognised not just for superior performance but for embodying our values in all that we do. In February 2013, I set out my plan to improve and build upon the strong foundations of the company. This included creating a tightly-run, and more disciplined and accountable business. In 2013, we have great assets, outstanding peopledone just this and the right strategy. We will now haveforged ahead with a single-minded focusemphasis on how wedelivering our priorities to improve performance, strengthen the balance sheet and deliver this strategyresults in every market in which we operate, everywhere around the world.

Our performance in 2013 reflects the efforts of all of our 66,000 employees to turn this business around. I placeam humbled by the highest importance on upholdingenthusiasm, passion and talent I have seen, and the willingness of all our valuespeople to embrace the change required and ensuring safetyimprove performance. Against a backdrop of continuing market uncertainty, we have improved earnings and cash flows. We have reduced costs, net debt and capital expenditure. We have delivered greater value for you, our shareholders, which is paramountreflected in everything we do.the 15 per cent increase in our 2013 full year dividend.

In 2012, whileshort, last year, we did experience safety improvements, there were two fatalities at our managed operations and, earlier this year, a fatality at our La Granja project in Peru. I will never let up in my constant effortswhat we said we would do. But we are restless to improve safety, to reinforce our strong safety culture, and to ensure that every employee and contractor plays their part in making our workplaces safer.

Highlights of 2012

The pattern of market uncertainty and volatility we have seen since the global financial crisis continued in 2012. Yet despite this, our underlying financial results were solid, indicating the fundamental strength of our businesses.

This was mainly driven by a strong operational performance fromfurther. Our 2013 net earnings reflected impairments on some of our businesses. Our iron oreassets and we are absolutely focused on making sure we improve project execution and deliver further business improvements. This, together with improving our safety performance, will be our continuing focus in 2014.

Building a safer business

While we can look back with pride at the many successes we delivered record productionin 2013, we failed to meet our critical goal of no fatalities in our business. Three of our colleagues died working at Rio Tinto managed operations last year. Thirty seven people died at non-managed operations, including 33 at the Grasberg mine in Papua, Indonesia. These are terrible tragedies. With regard to Grasberg, we are continuing to work with our joint venture partner to share our safety capabilities and shipments,learnings so we can both improve our safety performance, and this process is ongoing.

All of these deaths weigh heavily on me personally and I, and my management team, feel enormous sorrow for the families and friends of these colleagues. I was also deeply saddened by a further fatality at Grasberg and another at the Gove refinery this year. I am determined that we will turn our copper business showed a second half recovery in copper volumes.safety performance around. We have made significant gains over the course of our safety journey but we have more to do. Strong safety leadership, improved management of critical risks, and learning from all significant incidents are of paramount importance.

Delivering our strategy

We also experiencedare still operating in a volatile macroeconomic environment. Despite more optimistic signs coming through from OECD economies, and growth remaining