Note 35 - Contingent liabilities and commitments

2007 Financial statements

Note 35 - Contingent liabilities and commitments

	2007 US$m	2006 US$m
Capital commitments (excluding those related to joint ventures and associates)
Contracted capital expenditure: property, plant and equipment	2,857	1,912
Other commitments	75	163
Capital commitments relating to joint ventures and associates (a)
Capital commitments incurred by the Group	238	155
Capital commitments incurred jointly with other venturers (Rio Tinto share)	808	183

Operating leases

The aggregate amount of minimum lease payments under non cancellable operating leases are as follows:

	2007 US$m	2006 US$m
Within 1 year	283	62
Between 1 and 5 years	985	123
After 5 years	514	242
	1,782	427

Unconditional purchase obligations

The aggregate amount of future payment commitments under unconditional purchase obligations outstanding at 31 December was:

	2007 US$m	2006 US$m
Within 1 year	1,525	903
Between 1 and 2 years	814	713
Between 2 and 3 years	757	498
Between 3 and 4 years	561	343
Between 4 and 5 years	518	317
After 5 years	3,096	826
	7,271	3,600

Unconditional purchase obligations relate to commitments to make payments in the future for fixed or minimum quantities of goods or services at fixed or minimum prices. The future payment commitments set out above have not been discounted and mainly relate to commitments under 'take or pay' power and freight contracts. They exclude unconditional purchase obligations of jointly controlled entities apart from those relating to the Group's tolling arrangements.

	2007 US$m	2006 US$m
Contingent liabilities (excluding those relating to joint ventures and associates)
Indemnities and other performance guarantees	235	79
Contingent liabilities relating to joint ventures and associates (a)
Share of contingent liabilities of joint ventures	6	5
Incurred in relation to interests in joint ventures	435	372
Incurred in relation to other venturers' contingent liabilities	63	45


Notes	Expand
Amounts disclosed include those arising as a result of the Group's investments in both jointly controlled assets and jointly controlled entities. The disagreement with the Australian tax office relating to certain transactions undertaken in 1997 to acquire franking credits was settled on 14 June 2007, resulting in an additional tax charge of US$46 million for the year to 31 December 2007. There are a number of legal claims currently outstanding against the Group. No material loss to the Group is expected to result from these claims. On 22 February 2008, Alcan Inc. and certain of its subsidiaries ('Alcan') were served with a Statement of Objections by the European Commission alleging an infringement of Article 82 EC Treaty in relation to the licensing of smelter cell technology. Alcan contests the allegation that its conduct has been anti-competitive and will continue to co-operate with the Commission's investigation.