Part 3

Legal proceedings

Neither Rio Tinto plc nor Rio Tinto Limited nor any of their subsidiaries is a defendant in any proceedings which the directors believe will have a material effect on either Company's financial position or profitability.

Exploration, research and development

The Group carries out exploration, research and development in support of its activities as described more fully under Operational and Technical Excellence and Exploration respectively.

Notwithstanding significant increases in cash expenditure, the amounts charged for the year for exploration and evaluation were US$237 million (2005: US$250 million) and for research and development were US$15 million (2005: US$20 million).

Auditors and disclosure of information to auditors

PricewaterhouseCoopers LLP and PricewaterhouseCoopers are the auditors of Rio Tinto plc and Rio Tinto Limited respectively.

PricewaterhouseCoopers LLP have indicated their willingness to continue in office as auditors of Rio Tinto plc and a resolution to reappoint them as auditors of Rio Tinto plc will be proposed at the 2007 annual general meetings of Rio Tinto plc and Rio Tinto Limited. PricewaterhouseCoopers will continue in office as auditors of Rio Tinto Limited.

PricewaterhouseCoopers, as the auditors of Rio Tinto Limited, are required to provide an Auditor's Independence declaration to the directors under Section 307C of the Australian Corporations Act 2001. A copy is set out on the Australian Corporations Act - summary of ASIC relief page.

No person who was an officer of Rio Tinto during the year was a former partner or director of either Company's auditors.

Each of the directors at the time this report was approved has confirmed that:

• so far as he or she is aware, there is no relevant audit information (ie information needed by the Companies' auditors in connection with preparing their report) of which the auditors are unaware; and
• he or she has taken all steps that they ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the auditors are aware of that information.

Principal accountant fees and services

The amounts payable to the Group's principal auditors, PricewaterhouseCoopers, were:

Rio Tinto has adopted policies designed to uphold the independence of the Group's principal auditors by prohibiting their engagement to provide a range of accounting and other professional services that might compromise their appointment as independent auditors. The engagement of the Group's principal auditors to provide statutory audit services, other services pursuant to legislation, taxation services and certain other services are pre approved. Any engagement of the Group's principal auditors to provide other permitted services is subject to the specific approval of the Audit committee or its chairman.

Prior to the commencement of each financial year the Group's finance director and its principal auditors submit to the Audit committee a schedule of the types of services that are expected to be performed during the following year for its approval. The Audit committee may impose a US dollar limit on the total value of other permitted services that can be provided. Any non audit service provided by the Group's principal auditors, where the expected fee exceeds a pre determined level, must be subject to the Group's normal tender procedures.

However, in exceptional circumstances the finance director is authorised to engage the Group's principal auditors to provide such services without going to tender, but if the fees are expected to exceed US$250,000 then the chairman of the Audit committee must approve the engagement.

The Audit committee adopted policies for the pre approval of permitted services provided by the Group's principal auditors during 2003. All of the engagements for services provided by the Group's principal auditors since the adoption of these policies were either within the pre approval policies or approved by the Audit committee.

The directors are satisfied that the provision of non audit services by PricewaterhouseCoopers is compatible with the general standard of independence for auditors imposed by relevant regulations, including the Australian Corporations Act 2001, on the basis set out in the Report of the Audit committee.

Financial instruments

Details of the Group's financial risk management objectives and policies and exposure to risk are described in the Financial review on page 35 of the 2006 Annual report and financial statements.

Value of land

Most of the Group's interests in mining properties and leases, and in other land and buildings have been included in the financial statements at cost in accordance with its accounting policies. It is not possible to estimate the market value of such interests in land as this will depend on product prices over the long term which will vary with market conditions.

Creditor payments

It is the Group's policy to agree terms of payments with suppliers when entering into contracts and to meet its obligations accordingly. The Group does not follow any specific published code or standard on payment practice.

At 31 December 2006, there were 22 days' (2005: 35 days) purchases outstanding in respect of Rio Tinto Limited and 30 days' (2005: 18 days) purchases outstanding in respect of Rio Tinto plc, based on the total invoiced by suppliers during the year.

Income and Corporation Taxes Act 1988

The close company provisions of the UK Income and Corporation Taxes Act 1988 do not apply to Rio Tinto plc.

The Directors' report is made in accordance with a resolution of the board.

Directors' attendance at board and committee meetings during 2006

Notes

1. A = Maximum number of meetings the director could have attended; B = Number of meetings attended
2. Eight of the board meetings were scheduled and one was called at short notice.
3. Tom Albanese was appointed on 7 March 2006.
4. Michael Fitzpatrick was appointed on 6 June 2006 and became an Audit committee and Remuneration committee member on the same date.

Paul Skinner Chairman 23 February 2007	Leigh Clifford Chief Executive 23 February 2007	Guy Elliot Finance Directo 23 February 2007