Performance

Rio Tinto's Iron ore group is the second largest supplier to the world's seaborne iron ore trade based on 2008 production. It has a global supply capacity to serve both Pacific and Atlantic markets. RTIO has established a global integrated platform of mines and rail and port infrastructure, which is designed to respond rapidly to changes in demand for iron ore.

In January 2009 it agreed to sell the Corumbá mine in Brazil for US$750 million. RTIO's most significant mineral resource base is located in the Pilbara in Western Australia. Its portfolio of operations also includes production in Canada, a major development project in West Africa and a project in India. RTIO operations, supported by integrated and technologically advanced infrastructure linking mines to port, will maintain its ability to supply the largest and fastest growing markets. RTIO's Australian portfolio also includes the HIsmelt® plant south of Perth, which applies innovative technology to convert iron ore fines with significant impurities into high quality pig iron. RTIO took responsibility for managment of Dampier Salt during 2008 due to the proximity of salt operations in Western Australia. All 2007 numbers have been restated to include Dampier Salt.

RTIO believes it is well positioned to meet the challenges posed by recent developments in major steel markets, including the economic slowdown in China amid the severe downturn in global financial markets. Following a programme of continuing investment, and a transition in shorter term focus from production growth to cost control, RTIO's portfolio of long life, low cost assets positions it to withstand cyclical fluctuations and take advantage of the eventual rebound.

At 31 December 2008, the Iron ore group had operating assets of US$7,632 million, which accounted for 13 per cent of the Group's operating assets and compared to US$9,311 million of operating assets at 31 December 2007. In 2008, the Iron ore group contributed US$16,527 million in revenue and US$6,017 million in underlying earnings, which accounted for 28 per cent and 58 per cent of the Group's gross sales revenue and underlying earnings, respectively, compared to US$9,193 million of revenue and US$2,664 million of gross sales revenue and underlying earnings in 2007. At year-end RTIO employed 7,660 people in Western Australia and 11,109 worldwide.

Sam Walsh, chief executive Iron ore, is based in Perth, Western Australia.

*A reconciliation of the net earnings with underlying earnings for 2006, 2007 and 2008 as determined under EU IFRS is set out in the Group financial performance.
All amounts presented by the product groups exclude net interest and other centrally reported items.