Bougainville

Bougainville Copper Limited (BCL) is an independent company incorporated in Papua New Guinea and listed on the Australian Securities Exchange. It is majority owned by Rio Tinto (53.8 per cent). The Papua New Guinea Government holds a 19.06 per cent interest and public shareholders 27.14 per cent.

BCL conducted production operations at the Panguna Mine on Bougainville Island from 1972 until cessation of operations in 1989. It did so in accordance with agreements made with local landowners, the Australian Government and, following independence, the PNG Government. This includes responsible management of the environment and being a positive influence on Bougainville that produced benefits for all stakeholders in the project. The mine ceased operations in 1989 as a result of armed attacks upon BCL property and personnel.

In November 2000 a class action complaint was commenced by a firm of US lawyers, acting on a contingency basis, against Rio Tinto plc and Rio Tinto Limited in the US Ninth Circuit District Court. The complaint relates to the development and operations of the Panguna mine and the civil unrest that closed the mine.

The complaint alleges that Rio Tinto is liable for claimed environmental damage and racial discrimination during the operation of the mine and indirectly for war crimes and human rights abuses allegedly committed by the PNG Security Forces after BCL closed the mine and left the island.

Rio Tinto denies the allegations against it which are not only untrue but also defamatory. Rio Tinto is vigorously defending itself against the action, which is just one of a string of similar class actions against foreign multinationals in which none of the issues or parties have had any connection with the US. If the matter ever gets to trial, Rio Tinto will show that the allegations against it are wholly false and malicious.

A 2006 decision of the Court of Appeals of the Ninth Circuit concerned only procedural issues about whether the claims are justiciable under the US Alien Tort Statute. In deciding to reinstate the lawsuit, the justices were required by law to take all allegations as proven even though no evidence has been submitted by the plaintiffs in support of their contentions.

Rio Tinto has always adopted best practice in its operations. Group companies contribute to sustainable development, and to the economic prosperity and social well being of host societies. This and stewardship of the environment takes place within a framework of overall corporate governance distilled in the Group's statement of business practice The way we work.