2007 US$m	2006 US$m
Net book value
At 1 January	841	1,020
Adjustment on currency translation	114	49
Additions	14,542	-
Disposals	-	(5)
Impairment charges	-	(223)
At 31 December	15,497	841
- cost	15,758	1,077
- accumulated impairment	(261)	(236)
At 1 January
- cost		1,034
- accumulated impairment		(14)

Impairment Tests for Goodwill

Goodwill, including that related to equity accounted units, is reviewed annually for impairment. The amounts as at 31 December 2007 disclosed above include goodwill of US$14,533 million (2006: nil) relating to the 2007 acquisition of Alcan Inc., goodwill relating to Australian Iron Ore of US$437 million (2006: US$394 million) and goodwill of US$231 million (2006: US$231 million) relating to Rio Tinto Energy America (RTEA). Australian Iron Ore comprises the business units located in the Pilbara region of Western Australia that mine iron ore, namely Robe River and Hamersley Iron.

The Group acquired Alcan Inc. on 23 October 2007. The recoverable amount of its provisionally determined goodwill has been assessed by reference to fair value less cost to sell, as determined from the observable purchase price paid by the Group. The allocation of the cost of the acquisition was based on the advice of expert valuers. This allocation was determined over the months following the acquisition, and no diminution in its value is considered to have occurred since the date of acquisition. The allocation of the goodwill to cash generating units, will be completed within one year of the acquisition.

The recoverable amount of the goodwill relating to Australian Iron Ore has been assessed by reference to value in use. Valuations are based on cash flow projections that incorporate best estimates of selling prices, ore grades, production rates, future capital expenditure and production costs over the life of each mine. In line with normal practice in the mining industry, the cash flow projections are based on long term mine plans covering the expected life of each operation. Therefore, the projections generally cover periods well in excess of five years.

Assumptions about selling prices, operating costs, exchange rates, and discount rates are particularly important in these valuations. Future selling prices and operating costs have been estimated in line with the policy in note 1(i). Long term average selling prices are forecast taking account of estimates of the costs of producers of each commodity. Forecasts of operating costs are based on detailed mine plans which take account of all relevant characteristics of the ore body.

Discount rates represent an estimate of the rate the market would apply having regard to the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. The Group's weighted average cost of capital is used as a start point for determining the discount rate with appropriate adjustments for the risk profile of the individual cash generating unit. Goodwill relating to Australian Iron Ore has been reviewed applying a discount rate of 6.5 per cent to the post-tax cash flows expressed in real terms.

The recoverable amount of the goodwill at RTEA has been assessed by reference to fair value less costs to sell. The determination of fair value less costs to sell was based on the estimated amount that would be obtained from sale in an arm's length transaction between knowledgeable and willing parties. This estimate was derived by discounting projections of cash flows, using valuation assumptions that a buyer might be expected to apply.

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Year ended 31 December 2007	Exploration and evaluation (a) US$m	Trademarks, patented and non patented technology US$m	Contract based intangible assets (b) US$m	Other intangible assets US$m	Total US$m
Net book value
At 1 January 2007	196	-	-	188	384
Adjustment on currency translation	9	12	7	22	50
Acquisition of subsidiary (note 41)	9	579	6,867	12	7,467
Expenditure during year	194	-	-	209	403
Amortisation for the year	-	(8)	(28)	(78)	(114)
Impairment	-	-	-	(21)	(21)
Disposals, transfers and other movements	(256)	-	(1)	(2)	(259)
At 31 December 2007	152	583	6,845	330	7,910
- cost	152	591	6,874	566	8,183
- accumulated amortisation	-	(8)	(29)	(236)	(273)

Year ended 31 December 2006	Exploration and evaluation (a) US$m	Trademarks, patented and non patented technology US$m	Contract based intangible assets (b) US$m	Other intangible assets US$m	Total US$m
Net book value
At 1 January 2006	113	-	-	107	220
Adjustment on currency translation	5	-	-	10	15
Expenditure during year	72	-	-	118	190
Amortisation for the year	-	-	-	(27)	(27)
Disposals, transfers and other movements	6	-	-	(20)	(14)
At 31 December 2006	196	-	-	188	384
- cost	196	-	-	310	506
- accumulated amortisation	-	-	-	(122)	(122)
At 1 January 2006
- cost	113	-	-	327	440
- accumulated amortisation	-	-	-	(220)	(220)

Notes
Exploration and evaluation: useful life not determined until transferred to property, plant & equipment. The Group acquired Alcan Inc. on 23 October 2007. Alcan Inc. benefits from certain intangible assets including power supply contracts, customer contracts and water rights. The water rights are expected to contribute to the efficiency and cost effectiveness of operations for the foreseeable future: accordingly, these rights are considered to have indefinite lives and are not subject to amortisation. These water rights constitute the majority of the amounts in the column of the above table entitled 'Contract based intangible assets'. The intangible assets with indefinite lives have been valued based on the advice of expert valuation consultants, and no diminution in their value is considered to have occurred since the date of acquisition. There are no intangible assets either pledged as security or held under restriction of title.

Exploration and evaluation expenditure

The charge for the year and the net amount of intangible assets capitalised during the year are as follows:

	2007 US$m	2006 US$m
Cash expenditure in year (net of proceeds on disposal of undeveloped properties) (a)	576	345
Changes in accruals (including non-cash proceeds on disposal of undeveloped properties)	(61)	(36)
Amount capitalised during year	(194)	(72)
Charge for year	321	237

Notes
Exploration and evaluation costs are stated net of gains on disposal of undeveloped properties totalling US$253 million (2006:US$46 million).

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Year ended 31 December 2007	Mining properties and leases(a) US$m	Land and buildings US$m	Plant and equipment US$m	Capital works in progress US$m	Total US$m
Net book value
At 1 January 2007	6,127	2,540	10,839	2,701	22,207
Adjustment on currency translation	511	261	1,163	266	2,201
Capitalisation of additional closure costs (note 27)	284	-	-	9	293
Interest capitalised (b)	-	-	91	31	122
Acquisition of subsidiary (note 41)	598	4,415	11,485	1,784	18,282
Other additions	207	169	1,754	2,462	4,592
Depreciation for the year (a)	(496)	(191)	(1,314)	-	(2,001)
Impairment (charges)/reversals	(203)	11	297	(189)	(84)
Disposals	(12)	(33)	(38)	-	(83)
Transfers and other movements (c)	484	(183)	1,428	(1,611)	118
At 31 December 2007	7,500	6,989	25,705	5,453	45,647
- cost	11,280	8,952	38,015	5,813	64,060
- accumulated depreciation	(3,780)	(1,963)	(12,310)	(360)	(18,413)
Fixed assets held under finance leases (d)	-	30	42	-	72
Other fixed assets pledged as security (e)	31	-	1,792	-	1,823

Year ended 31 December 2006	Mining properties and leases(a) US$m	Land and buildings US$m	Plant and equipment US$m	Capital works in progress US$m	Total US$m
Net book value
At 1 January 2006	5,224	2,019	8,678	1,699	17,620
Adjustment on currency translation	261	88	411	105	865
Capitalisation of additional closure costs (note 27)	619	-	-	-	619
Interest capitalised (b)	5	-	3	52	60
Other additions	436	194	986	2,278	3,894
Depreciation for the year (a)	(432)	(159)	(891)	-	(1,482)
Impairment (charges)/reversals	(166)	90	752	(2)	674
Disposals	(25)	(13)	(50)	(21)	(109)
Transfers and other movements (c)	205	321	950	(1,410)	66
At 31 December 2006	6,127	2,540	10,839	2,701	22,207
- cost	9,166	4,454	21,553	2,835	38,008
- accumulated depreciation	(3,039)	(1,914)	(10,714)	(134)	(15,801)
At 1 January 2006
- cost	7,686	3,824	19,382	1,838	32,730
- accumulated depreciation	(2,462)	(1,805)	(10,704)	(139)	(15,110)
Fixed assets held under finance leases (d)	-	39	38	-	77
Other fixed assets pledged as security (e)	35	-	1,154	-	1,189

Notes
Mining properties include deferred stripping costs of US$718 million (2006: US$778 million). Amortisation of deferred stripping costs of US$34 million (2006: US$40 million) is included within 'Depreciation for the year'. Interest is capitalised at a rate based on the Group's cost of borrowing or at the rate on project specific debt, where applicable. 'Transfers and other movements' includes reclassifications between categories. The finance leases under which these assets are held are disclosed in note 23. Excludes assets held under finance leases. Fixed assets pledged as security represent amounts pledged as collateral against US$291 million (2006: US$339 million) of loans, which are included in note 22. At 31 December 2007 the net balance sheet amount for land and buildings includes freehold US$6,821 million (2006: US$2,445 million); long leasehold US$163 million (2006: US$92 million); and short leasehold US$5 million (2006: US$3 million).

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Summary balance sheet (Rio Tinto share)	2007 US$m	2006 US$m
Rio Tinto's share of assets
Non current assets (c)	9,462	3,654
Current assets	1,643	1,029
	11,105	4,683
Rio Tinto's share of liabilities
Current liabilities	(1,154)	(763)
Non current liabilities	(2,913)	(1,685)
	(4,067)	(2,448)
Rio Tinto's share of net assets	7,038	2,235

Notes
Further details of investments in jointly controlled entities and associates are set out in notes 38 and 39. At 31 December 2007, the quoted value of the Group's share in associates having shares listed on recognised stock exchanges was US$410 million (2006: US$368 million). Investments in equity accounted units at 31 December 2007 include goodwill of US$2,822 million (2006: US$39 million), which primarily relates to Alcan Inc. and is based on a provisional allocation of the cost of the acquisition on 23 October 2007.

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	2007 US$m	2006 US$m
Raw materials and purchased components	1,078	448
Consumable stores	1,054	581
Work in progress	1,727	459
Finished goods and goods for resale	1,701	1,151
	5,560	2,639
Comprising:
Expected to be used within one year	5,382	2,540
Expected to be used after more than one year	178	99
	5,560	2,639

	Non current 2007 US$m	Current 2007 US$m	Non current 2006 US$m	Current 2006 US$m
Trade receivables	-	4,927	56	2,133
Provision for doubtful debts	-	(70)	(20)	(6)
Amounts due from equity accounted units	-	249	-	156
Other debtors	266	900	35	479
Pension surpluses (note 49)	705	31	329	31
Prepayment of tolling charges to jointly controlled entities (a)	555	-	492	-
Other prepayments and accrued income	336	442	91	145
	1,862	6,479	983	2,938

Notes
Rio Tinto Aluminium has made certain prepayments to jointly controlled entities for toll processing of bauxite and alumina. These prepayments will be charged to Group operating costs as processing takes place. There is no material element of trade and other receivables that is interest bearing. Due to their short term maturities, the fair value of trade and other receivables approximates to their carrying value.

As of 31 December 2007, trade receivables of US$70 million (2006: US$56 million) were impaired. The amount of impairment was US$70 million (2006: US$26 million). The ageing of these receivables is greater than 90 days overdue.

As of 31 December 2007, trade receivables of US$364 million (2006: US$46 million) were past due but not impaired. The ageing of these receivables is as follows:

	2007 US$m	2006 US$m
less than 30 days overdue	270	31
between 30 and 60 days overdue	62	9
between 60 and 90 days overdue	29	2
greater than 90 days	3	4

These relate to a number of customers for whom there is no recent history of default and other indicators of impairment.

With respect to trade receivables that are neither impaired nor past due, there are no indications as of the reporting date that the debtors will not meet their payment obligations.

The carrying amounts of the Group's trade receivables (net of provisions for doubtful debts) are denominated in the following currencies:

	2007 US$m	2006 US$m
United States dollar	3,329	1,713
Sterling	134	2
Australian dollar	90	101
Canadian dollar	13	43
South African rand	25	31
Euro	904	55
Japanese yen	97	118
New Zealand dollar	17	27
Other	248	73
Total	4,857	2,163

The provision for doubtful trade receivables increased by US$44 million in 2007, of which US$40 million was due to the acquisition of Alcan Inc. and US$4 million from increases in provisions charged within other external costs.

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	2007 US$m	2006 US$m
At 1 January	2,114	2,142
Adjustment on currency translation	278	97
Deferred tax of acquired companies	3,954	-
Credited to the income statement	(203)	(54)
Credited to SORIE (a)	(203)	(94)
Other movements (b)	(39)	23
At 31 December	5,901	2,114
Comprising:
- deferred tax liabilities (c)	6,486	2,339
- deferred tax assets (c)	(585)	(225)

Deferred tax balances for which there is a right of offset within the same jurisdiction are presented net on the face of the balance sheet, as permitted by IAS12. The closing deferred tax liabilities and assets, prior to this offsetting of balances, are shown below.

	UK tax US$m	Australian tax US$m	Other countries' tax US$m	2007 Total US$m	2006 Total US$m
Deferred tax liabilities arising from:
Accelerated capital allowances	96	1,986	6,479	8,561	3,181
Post retirement benefits	118	3	4	125	94
Unremitted earnings	-	-	330	330	226
Other temporary differences	3	275	318	596	121
	217	2,264	7,131	9,612	3,622
Deferred tax assets arising from:
Capital allowances	-	-	-	-	(100)
Provisions	(112)	(542)	(1,141)	(1,795)	(735)
Post retirement benefits	(76)	(2)	(861)	(939)	(285)
Tax losses	(162)	-	(706)	(868)	(301)
Other temporary differences	-	(109)	-	(109)	(87)
	(350)	(653)	(2,708)	(3,711)	(1,508)
(Credited)/charged to the income statement
(Decelerated)/accelerated capital allowances	9	165	(266)	(92)	280
Provisions	(7)	(192)	(20)	(219)	(5)
Post retirement benefits	1	(1)	59	59	16
Tax losses	(148)	-	43	(105)	(280)
Tax on unremitted earnings	-	-	34	34	(2)
Other temporary differences	(5)	10	115	120	(63)
	(150)	(18)	(35)	(203)	(54)

Notes
The amounts credited directly to the SORIE relate to tax relief on share options, provisions for tax on exchange differences on intra group loans qualifying for reporting as part of the net investment in subsidiaries, on cash flow hedges and on actuarial gains and losses on pension schemes and post retirement healthcare plans. '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 equity accounted unit to which it relates. The deferred tax liability of US$6,486 million (2006: US$2,339 million) includes US$6,238 million (2006: US$1,764 million) due in more than one year. The deferred tax asset of US$585 million (2006: US$225 million) includes US$240 million (2006: US$139 million) receivable in more than one year. US$1,360 million (2006: US$763 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, the majority of which relate to capital losses, recovery of which depends on realisation of capital gains in future years. Deferred tax is not recognised on the unremitted earnings of overseas subsidiaries and jointly controlled entities where the Group is able to control the timing of the remittance and it is probable that there will be no remittance in the foreseeable future. If these earnings were remitted, tax of US$1,921 million (2006: US$1,711 million) would be payable. There is a limited time period for the recovery of US$62 million (2006: nil) of tax losses which have been recognised as deferred tax assets in the accounts.

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Assets and liabilities held for sale comprise the Alcan Packaging group and the Tarong Coal mine, which was in the Energy product group. In the announcement of Rio Tinto's offer for Alcan on 12 July 2007, it was stated that Rio Tinto and Alcan had agreed to divest the Packaging business of Alcan. As the Packaging group was acquired with a view to resale, its results are excluded from the Group Income Statement. The Tarong mine was sold on 31 January 2008 for an amount in excess of its carrying value.

	Non current 2007 US$m	Current 2007 US$m	Non current 2006 US$m	Current 2006 US$m
Currency and commodity contracts: designated as hedges	34	100	42	36
Derivatives and embedded derivatives not related to net debt: not designated as hedges (a)	-	480	-	122
Derivatives related to net debt	-	39	3	352
US Treasury bonds	21	-	20	-
Equity shares and quoted funds	53	321	125	51
Other investments, including loans	472	-	184	-
Other liquid resources (non cash equivalent)	-	6	-	6
	580	946	374	567

Notes
Derivatives and embedded derivatives not designated as hedges include amounts of US$117 million (2006: US$82 million) which mature beyond one year.

	2007 US$m	2006 US$m
Cash at bank and in hand	579	555
Short term bank deposits	1,066	181
	1,645	736
Bank overdrafts repayable on demand (unsecured)	(104)	(14)
Balance per Group cash flow statement	1,541	722

Notes
Cash and cash equivalents include US$93 million (2006: US$55 million) for which there are restrictions on remittances.

	Note	Non current 2007 US$m	Current 2007 US$m	Non current 2006 US$m	Current 2006 US$m
Borrowings at 31 December
Syndicated bank loans (a)		33,263	4,466	-	-
Other bank loans		97	1,749	157	156
Commercial paper		-	644	-	-
Other loans
Finance leases	23	104	19	96	25
Rio Tinto Finance (USA) Limited Bonds 2.625% 2008 (d) swapped		-	596	586	-
Rio Tinto Finance (USA) Limited Bonds 7.125% 2013		100	-	100	-
Colowyo Coal Company L.P. Bonds 9.56% 2011		32	8	40	7
Colowyo Coal Company L.P. Bonds 10.19% 2016		100	-	100	-
Alcan, Inc. Debentures 6.25% due 2008		-	203	-	-
Alcan, Inc. Debentures 6.45% due 2011		415	-	-	-
Alcan, Inc. Global Notes 4.875% due 2012 (d) swapped		489	-	-	-
Alcan, Inc. Global Notes 4.50% due 2013		476	-	-	-
Alcan, Inc. Global Notes 5.20% due 2014		492	-	-	-
Alcan, Inc. Global Notes 5.00% due 2015 (d) swapped		479	-	-	-
Alcan, Inc. Debentures 7.25% due 2028		110	-	-	-
Alcan, Inc. Debentures 7.25% due 2031		441	-	-	-
Alcan, Inc. Global Notes 6.125% due 2033		736	-	-	-
Alcan, Inc. Global Notes 5.75% due 2035		280	-	-	-
European Medium Term Notes (c)		384	76	430	1,195
Other secured loans		346	27	241	7
Other unsecured loans		270	321	257	100
Total borrowings		38,614	8,109	2,007	1,490

Notes

In support of its acquisition of Alcan Inc., the Group arranged for US$40 billion in term loans and revolving credit facilities, which were fully underwritten and subsequently syndicated (the 'Syndicated bank loans'). The Syndicated bank loans are divided into four facilities, as follows: Facility A Facility B Facility C Facility D Facility amount (US$ billions) 15 10 5 10 Type Term Loan Revolving Credit Facility Revolving Credit Facility Term Loan Due October 2008(b) October 2010 October 2012 October 2012 Repayment Bullet Bullet Bullet Bullet As at 31 December 2007, facilities A, B and D have been fully drawn, and US$2.14 billion remains undrawn on facility C. The amounts outstanding under these facilities are shown net of the unamortised costs of obtaining the facilities. Facilities A and B are subject to mandatory prepayment to the extent of the net proceeds from disposals of assets and from the raising of funds through capital markets, under specific thresholds and conditions. The Group has the option to extend final maturity on the outstanding balance of Facility A for an additional year. Rio Tinto has a US$10 billion (2006: US$3 billion) European Medium Term Note (EMTN) programme for the issuance of debt, of which approximately US$0.4 billion was drawn down at 31 December 2007 (2006: US$1.6 billion). The Group's EMTNs are swapped to US dollars. The fair value of currency swaps at 31 December 2007 was a liability of US$7 million. Details of the major currency swaps are shown in note 34 (d). In 2007, other EMTNs of US$31 million relate to Alcan Inc. US$1.2 billion of these fixed rate borrowings shown is swapped to floating rates. The fair value of the interest rate swap at 31 December 2007 was US$31 million. The Group's borrowings of US$46.7 billion (2006: US$3.5 billion) include some US$4.7 billion (2006: US$0.7 billion) which relates to borrowings of subsidiaries that are without recourse to the Group, some of which are subject to various financial and general covenants with which the respective borrowers are in compliance as of 31 December 2007.

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	Non current 2007 US$m	Current 2007 US$m	Non current 2006 US$m	Current 2006 US$m
Trade creditors	-	3,145	-	1,291
Amounts owed to equity accounted units	-	219	-	143
Other creditors (a)	176	575	190	212
Employee entitlements	-	915	-	187
Royalties and mining taxes	-	325	-	264
Accruals and deferred income	126	1,481	107	595
Government grants deferred	201	7	65	1
	503	6,667	362	2,693

Notes

'Other creditors' include deferred consideration of US$209 million (2006: US$179 million) relating to certain assets acquired. 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 other accounts payable and accruals are non interest bearing. Due to their short term maturities, the fair value of trade and other payables approximates to their carrying value.

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	Non current 2007 US$m	Current 2007 US$m	Non current 2006 US$m	Current 2006 US$m
Forward commodity contracts: designated as hedges	490	283	214	162
Derivatives related to net debt	6	9	19	4
Other derivatives and embedded derivatives: not designated as hedges	-	537	-	27
Other financial liabilities	-	49	-	-
	496	878	233	193

Notes
Detailed information relating to other financial liabilities is given in note 34.

	Pensions and post retirement healthcare	Other employee entitlements	Close down and restoration/ environmental	Other	2007 Total	2006 Total
	US$m	US$m	US$m	US$m	US$m	US$m
At 1 January	770	393	3,359	146	4,668	4,186
Adjustment on currency translation	59	36	211	14	320	113
Amounts capitalised	-	-	293	-	293	619
Acquisition of subsidiary (note 41)	2,550	126	1,518	444	4,638	-
Charged/(credited) to profit:
- new provisions	-	1	9	9	19	25
- increases to existing provisions	102	259	127	10	498	277
- unused amounts reversed	-	(5)	(200)	(4)	(209)	(242)
Amortisation of discount	-	1	164	1	166	137
Utilised in year	(119)	(49)	(82)	(33)	(283)	(271)
Transfer to liabilities of disposal groups held for sale	-	(12)	(124)	-	(136)	-
Liability incurred as a result of acquisition	-	-	-	189	189	-
Actuarial gains recognised in equity	(87)	-	-	-	(87)	(245)
Transfers and other movements	-	-	(4)	(54)	(58)	69
At 31 December	3,275	750	5,271	722	10,018	4,668
Balance sheet analysis:
Current	80	304	215	184	783	366
Non current	3,195	446	5,056	538	9,235	4,302
Total	3,275	750	5,271	722	10,018	4,668

Notes

The main assumptions used to determine the provision for pensions and post retirement healthcare, and other information, including the expected level of future funding payments in respect of those arrangements, are given in note 49. The provision for other employee entitlements includes a provision for long service leave of US$107 million (2006: US$86 million), based on the relevant entitlements in certain Group operations. It also includes the provisions relating to the Group's cash-settled share-based payment plans of US$219 million (2006: US$43 million), which are described in note 48. The Group's policy on close down and restoration costs is described 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 the relevant operation. Remaining lives of mines and infrastructure range from 1 to over 50 years with an average, weighted by closure provision, of around 19 years. Although the ultimate cost to be incurred is uncertain, the Group's businesses estimate their respective costs based on feasibility and engineering studies using current restoration standards and techniques. Provisions of US$5,271 million (2006: US$3,359 million) for close down and restoration costs and environmental clean up obligations, include estimates of the effect of future inflation and have been adjusted to reflect risk. These estimates have been discounted to their present value at an average rate of approximately five per cent per annum, being an estimate of the long term, risk free, pre-tax cost of borrowing. Excluding the effects of future inflation, and before discounting, this provision is equivalent to some US$8.1 billion (2006: US$4.7 billion). Some US$214 million (2006: US$50 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 clean up expenditure includes the issue described in (e) below. 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 remedial design document was completed in 2002. A joint proposal and related agreements with the State of Utah Natural Resource Damage Trustee, the State of Utah and the Jordan Valley Water Conservancy District were approved in 2004. KUC entered into a formal agreement with the EPA in 2007 on the remedial action. The provision was reduced by US$101 million during 2007 (2006: US$37 million) following a reassessment of the expected cost of remediation to reflect recent experience. The ultimate cost of remediation remains uncertain, being dependent on the responsiveness of the contamination to pumping and acid neutralisation. Other provisions deal with a variety of issues and include US$191 million relating to the Rio Tinto Alcan Foundation commitment in Canada, involving payments of C$200 million over a five year period. Provisions for close down, restoration and environmental obligations increased by US$279 million in 2006 as the result of a reduction in the discount rate. Of this amount, US$221 million is included in 'Amounts capitalised'.

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	2007 Number(m)	2006 Number(m)	2007 US$m	2006 US$m
Issued and fully paid up share capital
At 1 January	1,071.49	1,071.02	172	172
Ordinary shares issued (a)	0.31	1.27	-	-
Own shares purchased and cancelled (b)	-	(0.80)	-	-
Special Voting Share of 10p (d)	1 only	1 only	-	-
DLC Dividend Share of 10p (d)	1 only	1 only	-	-
At 31 December	1,071.80	1,071.49	172	172
- shares repurchased and held in treasury (b)	74.55	47.82
- shares held by public	997.25	1,023.67
Shares held by public
At 1 January	1,023.67	1,068.42
Ordinary shares issued (a)	0.31	1.27
Own shares purchased and cancelled (b)	-	(0.80)
Shares reissued from treasury	0.97	1.12
Shares repurchased and held in treasury (b)	(27.70)	(46.34)
Shares held by public	997.25	1,023.67
Unissued share capital
Ordinary shares of 10p each	349.43	349.74	51	51
Equalisation Share of 10p (d)	1 only	1 only	-	-
Total authorised share capital	1,421.23	1,421.23	223	223

Notes

311,458 Ordinary shares were issued, and 969,435 Ordinary shares reissued from treasury during the year resulting from the exercise of options under Rio Tinto plc employee share based payment plans at contracted prices between 808.8p and 2,799p (2006: 2,382,591 shares issued at prices between 808.8p and 1,925p). At the 2007 annual general meeting, the shareholders renewed the general authority for the Company to buy back up to ten per cent of its Ordinary shares of 10p each for a further period of 12 months. The share buyback programme was suspended on 12 July 2007 at the time the Alcan offer was announced. Rio Tinto is seeking renewal of this approval at its annual general meeting in 2008. During the year to 31 December 2007, 27,700,000 shares were bought back and held in treasury (2006: 46,340,000) at an average buy back price of £30.05 per share (2006: £27.27). No shares were cancelled during the year ended 31 December 2007 (2006: 800,000 shares bought back at an average buy back price of £27.36 and cancelled). The total consideration paid was US$1,648 million (2006: US$2,394 million). The aggregate consideration received for shares issued during 2007 was US$13 million (2006: US$31 million). The aggregate consideration received for treasury shares reissued was US$24 million (2006: US$24 million). 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. Information relating to share options and other share based incentive schemes is given in note 48 on share based payments.

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	2007 Number(m)	2006 Number(m)	2007 US$m	2006 US$m
Share capital account
At 1 January	285.75	285.75	1,099	1,019
Adjustment on currency translation	-	-	120	80
Special Voting Share of 10p (c)	1 only	1 only	-	-
DLC Dividend Share of 10p (c)	1 only	1 only	-	-
At 31 December	285.75	285.75	1,219	1,099
Share capital held by Rio Tinto plc	171.07	171.07
Total share capital (c)	456.82	456.82

Notes

In May 2006, shareholders authorised Rio Tinto Limited to buy back ordinary shares during the following 12 months whether on market or via off-market buy back tenders, but only to the extent that such purchases would not exceed 28.5 million Rio Tinto Limited shares during that 12 month period. Rio Tinto Limited is also authorised to buy back Rio Tinto Limited shares held by Tinto Holdings Australia Pty Limited (a wholly owned subsidiary of Rio Tinto plc). The share buyback programme was suspended on 12 July 2007 at the time the Alcan acquisition was announced. Rio Tinto Limited is seeking renewal of these approvals at its annual general meeting in 2008. No shares were bought back during the year to 31 December 2007 (2006: nil). No new shares were issued during 2007 (2006: nil). The 'Special Voting Share' was issued to facilitate the joint voting by shareholders of Rio Tinto Limited and Rio Tinto plc 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. Share options exercised during the year to 31 December 2007 under various Rio Tinto Limited employee share option schemes were satisfied by the on-market purchase of Rio Tinto Limited shares by a third party on the Group's behalf. Information relating to share options and other share based incentive schemes is given in note 48 on share based payments.

	Year ended 31 December 2007				Year ended 31 December 2006
Summary statement of changes in equity	Attributable to shareholders of Rio Tinto US$m	Outside interests US$m	Total US$m		Attributable to shareholders of Rio Tinto US$m	Outside interests US$m	Total US$m
Opening balance	18,232	1,153	19,385		14,948	791	15,739
Total recognised income for the year	9,407	470	9,877		8,514	468	8,982
Dividends (note 10)	(1,507)	(164)	(1,671)		(2,573)	(193)	(2,766)
Own shares purchased from Rio Tinto shareholders:
- Under capital management programme (a)	(1,348)	-	(1,348)		(2,658)	-	(2,658)
- To satisfy share options	(64)	-	(64)		(49)	-	(49)
Ordinary shares issued	13	-	13		31	-	31
Outside interests in acquired companies	-	55	55		-	-	-
Shares issued to outside interests	-	38	38		-	69	69
Employee share options charged to income statement	39	-	39		23	-	23
Other movements	-	-	-		(4)	18	14
Closing balance	24,772	1,552	26,324		18,232	1,153	19,385

Notes
The charge to equity for shares bought back in 2006 included US$288 million in respect of a commitment entered into before the financial year end to purchase, from a bank, Rio Tinto plc shares that the bank could buy in the market during the period up to the preliminary announcement of the Group's results. The commitment was settled during 2007.

	2007 Total US$m	2006 Total US$m
Share premium account
At 1 January	1,919	1,888
Premium on issues of ordinary shares	13	31
At 31 December	1,932	1,919
Retained earnings
At 1 January	14,401	11,893
Parent and subsidiaries' profit for the year	7,058	7,440
Equity accounted units' retained profit for the year	254	(2)
Actuarial gains	135	338
Dividends	(1,507)	(2,573)
Own shares purchased from Rio Tinto shareholders under capital management programme	(1,348)	(2,658)
Employee share options charged to income statement	19	12
Tax recognised directly in statement of recognised income and expense	21	(45)
Other movements	-	(4)
At 31 December	19,033	14,401
Hedging reserves (b)
At 1 January	(133)	(77)
Parent and subsidiaries' net cash flow hedge fair value losses	(197)	(178)
Equity accounted units' cash flow hedge fair value losses	(4)	-
Parent and subsidiaries' net cash flow hedge losses transferred to the income statement	89	63
Tax on the above	71	59
At 31 December	(174)	(133)
Available for sale revaluation reserves (c)
At 1 January	31	20
Gains on available for sale securities	49	14
Gains on available for sale securities transferred to the income statement	(16)	(4)
Tax on the above	(7)	1
At 31 December	57	31
Other reserves (d)
At 1 January	8	42
Own shares purchased from Rio Tinto shareholders to satisfy share options	(64)	(49)
Employee share options: value of services	20	11
Deferred tax on share options	55	4
At 31 December	19	8
Foreign currency translation reserve (e)
At 1 January	735	(9)
Currency translation adjustments	1,796	748
Exchange losses	(30)	(8)
Currency translation reclassified on disposal	-	4
Tax on exchange adjustments	13	-
At 31 December	2,514	735
Total other reserves per balance sheet	2,416	641

Notes

Retained profit and movements in reserves of subsidiaries include those arising from the Group's share of proportionally consolidated units. The hedging reserve records gains or losses on cash flow hedges that are recognised initially in equity, as described in note 1(p). The available for sale revaluation reserves record fair value gains or losses relating to available for sale securities, as described in note 1(p). Other reserves record the cumulative amount recognised in respect of options granted but not exercised to acquire shares in Rio Tinto Limited less, where applicable, the cost of shares purchased to satisfy share options exercised. The estimated effect of unexercised options to acquire shares in Rio Tinto plc is recorded in retained earnings. Exchange differences arising on the translation of the Group's net investment in foreign controlled companies are taken to the foreign currency translation reserve, as described in note 1(d), (net of translation adjustments relating to Rio Tinto Limited share capital). The cumulative differences relating to an investment would be transferred to the income statement if the investment were disposed of.

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