We use our expertise to harness resources, creating prosperity for our shareholders, employees, communities, governments and business partners.

Our direct economic contribution into the local and regional economies where we operate was US$44,844 million in 2009. This amount includes:

• US$6,696 million spent on wages and salaries.
• US$21,363 million in value add, equivalent to the sum of all labour payments, the taxes and royalties disbursed to governments and others, plus all returns to capital.

Supply chain

We adopt a life cycle view of our products so as to maximise the value to society while minimising negative impacts of products, and encouraging those along the supply chain to adopt similar practices.

In 2009, we spent US$23,481 million on goods and services with over 58,000 suppliers, a US$6,172 million reduction compared to last year, due to reduced capital spending, capacity curtailment and cost reductions. Our programme of supplier engagement includes sustainable development criteria in its contracts, and our statement of procurement principles is available on our website.

Payments to suppliers are a major benefit to the economy, generating employment and creating wealth. As an example in 2009 a US$200 million mining contract was awarded to a joint venture between native title holders the Eastern Guruma and a mining services company, NRW. The contract to build, mine and transport iron ore from Rio Tinto’s Western Turner Syncline deposit is the first significant mining joint venture for the Eastern Guruma people, and continues the comprehensive Rio Tinto commitment to indigenous contracting in the Pilbara region of Western Australia.

We develop and regularly update lifecycle assessments for all our major products, including aluminium, iron ore, copper, coal, uranium, gold and silver. By understanding the health and environmental impacts and benefits of our products over their complete life cycle, we gain knowledge on how to improve our processes, expand our information to the marketplace, and differentiate our products from our competitors.

This knowledge is also used to ensure compliance with new chemicals regulations, such as the European Union Registration, Evaluation, Authorisation and Restriction of Chemicals legislation and the UN Globally Harmonized System of Classification and Labelling of Chemicals.

Rio Tinto is engaged in industry wide stewardship initiatives to support responsible production and help develop leading practices and recognised standards. We are an active member of the Responsible Jewellery Council, and of stewardship initiatives for other commodities such as uranium, copper, steel and aluminium.

The supply of our products often involves marine transportation which can impact oceans, and we have joined the World Ocean Council to help create a responsible ocean business community. We completed a strategic review of environmental risk related to our shipping activities as part of our marine stewardship programme.

Non managed operations

Rio Tinto holds ownership interests in companies it does not manage. However, we remain closely engaged through membership of the boards of directors and of technical committees. We believe that the principles in The way we work are universal. In our dealings with joint venture partners and non controlled companies in which we participate, we therefore make every effort to ensure that the standards of conduct in The way we work are respected at all times.

Examples include Escondida copper mine in Chile, the Grasberg copper-gold mine in Indonesia, and the Oyu Tolgoi copper project in Mongolia.

Rio Tinto has a 30 per cent interest in Escondida, which is managed by BHP Billiton. Our seats on the mine’s Owners’ Council allow us regular input on strategic and policy matters. We also played a part in establishing the Escondida Foundation, which is funded by one per cent of the mine’s pre-tax profits and is the vehicle through which Escondida fulfils some of its social responsibilities.

The Grasberg mine is majority owned and operated by Freeport-McMoRan Copper & Gold. Rio Tinto has a 40 per cent joint venture interest in Grasberg’s 1995 mine expansion and is represented on the joint venture’s operating committee. There were two fatalities at Grasberg in 2009.

Both Rio Tinto and Freeport-McMoRan support the Voluntary Principles on Security and Human Rights and continue to work together to ensure practice is consistent with these principles. At least one per cent of the mine’s net sales are committed to support village based programmes which represents cumulative funding of US$400 million since 1996.

The mine continues to refine its management of its tailings discharge, including containment, understanding revegetation and long term closure options. There have been significant improvements in tailings management at the Grasberg mine, including construction of lateral dikes to limit the surface area disturbed by tailings deposition in the lowlands and protect adjacent river systems, diversion of the Ajkwa river system to preserve its water quality and enhance tailings retention within the deposition area, successful progressive rehabilitation of the now inactive tailings within the Ajkwa diversion area and of new islands forming at the mouth of the diversion area, and completion of an ecological risk assessment.

Rio Tinto and Ivanhoe signed an Investment Agreement with the Mongolian Government to develop the Oyu Tolgoi copper-gold project in 2009. As a result we increased our stake in Ivanhoe to 19.7 per cent.

This 30 year agreement commits all parties to supporting the regional development of the South Gobi region. It also commits Oyu Tolgoi to employing a minimum of 60 per cent Mongolian workers, including contractors, during construction and 75 per cent Mongolian workers, including contractors, during operations. It further commits Oyu Tolgoi to no less than a 90 per cent Mongolian workforce as direct employees of the business throughout the life of the operation. There was one fatality at Oyu Tolgoi in 2009.