Changes in Rio Tinto's energy use per tonne of product can result from changes in both the balance of our product mix and in the energy used in our production processes. For example, in 2001 there was a significant reduction in Rio Tinto's energy use per tonne of product as a result of the acquisition of iron ore and coal mining operations. These operations use very low levels of energy to produce a tonne of product and as such, they reduced the Group's average energy use per tonne of product. We refer to this product mix related change as an intensity effect. On the other hand, if waste heat is captured and reused instead of electrical heating, an operations' overall energy requirement is reduced. We call this change efficiency related. Rio Tinto considers efficiency changes, not intensity changes, to be better measures of underlying performance. Therefore, the information presented in this section is based on changes in efficiency only.

Energy use per tonne of product increased by 3.7 per cent in 2003, offsetting improvements since 1999. Reasons for the increase since 2002 include:

• Cathode production decreased at Kennecott Utah Copper due to an unplanned smelter shutdown for three weeks to repair the double contact acid plant, a critical pollution control device for capturing sulphur. The mine and concentrator continued at normal operating rates, maintaining energy use levels;
• IOC Carol Project increased energy use in mining and milling iron ore relative to production increases. In addition, they produced a greater proportion of energy intensive product and there were changes in the specific energies of fuel used; and
• Declining product yields at Lihir which resulted in decreased efficiency of fuel use.

Over the past five years there has been a 3.4 per cent increase in energy use per tonne of product. This reinforces the need for quantitative and specific targets to drive improvement. Our target is a five per cent reduction in energy used per tonne of product between 2003 and 2008, based on efficiency improvements.