Dual listed companies structure

In December 1995, Rio Tinto shareholders approved the terms of the dual listed companies merger ('the DLC merger') which was designed to place the shareholders of both Companies in substantially the same position as if they held shares in a single enterprise owning all of the assets of both Companies. As a condition of its approval of the DLC merger, the Australian Government required Rio Tinto plc to reduce its shareholding in Rio Tinto Limited to 39 per cent by the end of 2005. The current holding is approximately 37.5 per cent.

Following the approval of the DLC merger, both Companies entered into a DLC Merger Sharing Agreement ('the Sharing Agreement') through which each Company agreed:

to ensure that the businesses of Rio Tinto plc and Rio Tinto Limited are managed on a unified basis,
to ensure that the boards of directors of each Company is the same, and
to give effect to certain arrangements designed to provide shareholders of each Company with a common economic interest in the combined enterprise.

In order to achieve this third objective the Sharing Agreement provided for the ratio of dividend, voting and capital distribution rights attached to each Rio Tinto plc share and to each Rio Tinto Limited share to be fixed in an Equalisation Ratio which has remained unchanged at 1:1. The Sharing Agreement has provided for this ratio to be revised in special circumstances where for example certain modifications are made to the share capital of one Company, such as rights issues, bonus issues, share splits and share consolidations, but not to the share capital of the other. Outside these specified circumstances, the Equalisation Ratio can only be altered with the approval of shareholders under the 'Class Rights Actions' approval procedure described under Voting at shareholders meetings. In addition, any adjustments are required to be confirmed by the auditors.

One consequence of the DLC merger is that Rio Tinto is subject to a wide range of laws, rules and regulations across multiple jurisdictions. Where these rules differ, in many instances it means that, as a Group, Rio Tinto complies with the strictest level.

Consistent with the creation of a single combined enterprise under the DLC merger, directors of each Company are to act in the best interests of the Rio Tinto Group. Identified areas where there may be a conflict of the interests of the shareholders of each Company must be approved under the 'Class Rights Actions' approval procedure.

To ensure that directors of each Company are the same, resolutions to appoint or remove directors must be put to shareholders of both Companies voting as a joint electorate (as described under Voting at shareholders meetings) and it is a requirement that a director of one Company must also be a director of the other Company.

Dividend rights

The Sharing Agreement provides for dividends paid on Rio Tinto plc and Rio Tinto Limited shares to be equalised on a net cash basis, that is without taking into account any associated tax credits. Dividends are determined in US dollars and are then, except for ADR holders, translated and paid in sterling and Australian dollars. The Companies are also required to announce and pay their dividends and other distributions as close in time to each other as possible.

In the unlikely event that one Company did not have sufficient distributable reserves to pay the equalised dividend (or the equalised capital distribution), it would be entitled to receive a 'top up payment' from the other Company. The top up payment could be made as a dividend on the DLC Dividend Share or by way of a contractual payment.

If the payment of an equalised dividend would contravene the law applicable to one of the Companies then they may depart from the Equalisation Ratio. However should such a departure occur then the relevant Company would put aside reserves to be held for payment on the relevant shares at a later date.

Rio Tinto shareholders have no direct rights to enforce the dividend equalisation provisions of the Sharing Agreement.

The DLC Dividend Share can also be utilised to provide the Group with flexibility for internal funds management by allowing dividends to be paid between the two parts of the Group. Such dividend payments would be of no economic significance to the shareholders of either Company, as they would have no effect on the Group's overall resources.

Voting at shareholders' meetings

Under the Group's DLC structure, shareholders of Rio Tinto plc and Rio Tinto Limited take decisions on significant matters, including the appointment of directors, through a joint electoral procedure. Such matters are submitted for approval by shareholders of both Companies at separate meetings, but voting as a joint electorate.

This is achieved through the special arrangements whereby votes cast at a Rio Tinto plc shareholders' meeting are reflected at the corresponding Rio Tinto Limited shareholders' meeting, and vice versa. As part of the special voting arrangements, the shares in Rio Tinto Limited held by Rio Tinto plc are used solely to reflect the Rio Tinto plc shareholder vote at the corresponding Rio Tinto Limited meeting. Voting on joint decision matters are by poll at each shareholder meeting with each poll being left open long enough to allow the votes cast at the other meeting to be carried with the poll at the corresponding meeting.

Matters which are not of concern to one set of shareholders or which affect the two Companies' shareholders differently will require the separate approval of one or both sets of shareholders.

ADR holders may instruct JPMorgan how to vote the shares represented by their ADRs.

After 27 April 2007, the votes of the joint electorate and the results of votes on which separate approvals are required will be announced to the stock exchanges and advertised in the Financial Times and The Australian. The results may also be obtained on the shareholder helpline, in the UK Freephone number 0800 435021, or in Australia toll free (within Australia) 1800 813 292, or from the Rio Tinto website.