Rio Tinto Alcan confirmed as third major pillar of Rio Tinto Group

Pro forma 2007 underlying EBITDA of $4,813 million for Primary Metal and Bauxite & Alumina, making Rio Tinto Alcan the third major pillar of Group EBITDA along with iron ore and copper.
Pro forma 2007 underlying earnings for Primary Metal and Bauxite & Alumina of $2,092 million, representing 23 per cent of Rio Tinto's pro forma underlying earnings before corporate items and interest.
Pro forma capital expenditure for Primary Metal and Bauxite & Alumina of $2,296 million in 2007, reflecting continuing investment in value adding growth projects.
Pro forma share of production of 4.2 million tonnes of aluminium, 8.5 million tonnes of alumina and 32.0 million tonnes of bauxite in 2007.
Significant earnings momentum anticipated in 2008 with each 10 c/lb movement in the average annual aluminium price from the 2007 level of 120c/lb expected to change Rio Tinto Alcan's underlying earnings by $620 million. 2008 underlying earnings are also expected to be affected by exchange rate movements with a 10 US cent movement in the Canadian dollar rate expected to impact full year underlying earnings by $150 million. Rising energy, pitch, coke, oil and freight costs are also expected to partly offset any gain from higher LME prices.
Bauxite reserves totalling 1,387 million tonnes of recoverable mineral (Rio Tinto share) at the end of 2007 compared with 1,193 million tonnes at the end of 2006. The 2007 numbers incorporate the Rio Tinto assets and Alcan assets combined under the Rio Tinto Alcan name for the first time. Detailed bauxite reserves and resources data have been included within this release on pages 5 and 6.

Rio Tinto completed the acquisition of Alcan on 23 October 2007, and the new product group, comprising the combination of Alcan and the original Rio Tinto Aluminium businesses, was named Rio Tinto Alcan. In order to aid analysis of the Rio Tinto Alcan product group going forward this pro forma information is being provided illustrating the enlarged product group, as though Alcan were part of Rio Tinto for the whole of 2007. The above financial summary numbers exclude Packaging and Engineered Products. A sale process is underway for these assets. They have been excluded to present a view of the future Rio Tinto Alcan product group.

Tom Albanese, Rio Tinto's chief executive said, "These pro forma numbers reinforce the significance of the Alcan acquisition, which has transformed our aluminium group into an industry leader and the third major business within Rio Tinto. The strong fundamentals of the aluminium industry and the excellent long term demand outlook augur well for Rio Tinto Alcan's future financial performance. In addition to these earnings, we look forward to the synergies from the acquisition. Our internal target is $1.1 billion, exceeding the $940 million after tax synergies announced in November 2007."

Dick Evans, Rio Tinto Alcan chief executive said, "The combination of the Rio Tinto and Alcan assets has created a world leader in bauxite and aluminium production with a clear pathway to becoming the largest alumina producer. Our modern, low cost smelting assets benefit from a competitive hydro power position which is becoming ever more valuable in today's energy constrained world. This is a business which we intend to grow and from which we are ideally positioned to deliver value in the future."

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