Chief executive's statement

Why is sustainable development relevant to Rio Tinto and does it matter?

Metals and minerals are essential to life, and play an important part in economic activity.

The way Rio Tinto extracts, rehabilitates and interacts with its neighbours and the country is vital to its ongoing success. I would like to think that our performance in these areas makes us a preferred developer.

How did the Group perform in 2006 with regard to sustainable development?

Generally better than in 2005, but not as well as we would have liked. Many of our performance measures are moving in the right direction and, broadly speaking, we were on target. However, we will be redoubling our efforts on improving energy and greenhouse gas efficiency. On a more positive note, the year saw us gaining valuable external recognition for our programmes to tackle climate change and promote biodiversity. In the safety arena, we continued to reduce the frequency rate of lost time injuries and of all injuries. Regrettably, however, our 2006 safety record was marred by three fatalities at sites that we manage.

What is the most important issue you face?

The connection between fossil fuel energy and climate change is gaining widespread recognition. This has been especially evident in Australia and the US, where the political mood is shifting towards the concept of carbon pricing. We believe that the energy challenge can best be met by companies, governments and society working together on all fronts: fossil fuels, nuclear and the so-called "new energy" sources.

The goal in each case should be to continually improve the cost-security- cleanness equation, by fully recognising and addressing the risks involved and benefits achievable. Technology development will be at the heart of improved energy solutions.

What are you doing to make sustainable development a reality in Rio Tinto?

We make a fundamental contribution to sustainable development by producing metals and minerals such as aluminium and copper that are durable and can be recycled and re-used. However, we can and will do more.

In 2006 we assessed the current status of sustainable development practice in the Group. We have set ourselves the goal of being a sustainable development leader.

Our revised strategy pinpoints the areas we need to focus on to get us there, one of them being the creation of a culture among employees that mirrors our concern for safety. In 2006, we introduced training and awareness raising tools across the Group. We are also developing key performance indicators, improving our communications channels and determining the role sustainable development plays in supply chain management, risk management and long term planning.

Can you point to a practical example of your contribution?

After more than 20 years of research, along with our joint venture partners we have developed a new iron making technology, HIsmelt® that is revolutionary in concept and will make a contribution to sustainable development. It produces high quality pig iron in a way that addresses the global challenge of climate change, resulting in much reduced air pollution and greenhouse gases. The first commercial plant is now ramping up production in Australia.

What are your links with the broader transition to sustainable development?

There are many, but one example is our membership of the International Council on Mining and Metals (ICMM), of which I am currently chairman. The council's members are committed to superior business practices in sustainable development. Or again, we have long been an active member of the World Business Council for Sustainable Development, an organisation whose members are drawn from all sectors of industry and commerce, but who share a common belief in acting sustainably.

What's new about this year's 2007 Sustainable Review, Access to resources?

We have thought long and hard about what information we should provide and we have listened to what our stakeholders have been telling us about their needs and interests.

The contents of Sustainable Review reflect this thinking. The most significant change is that we have aligned with Application Level A+ of the new generation (G3) of Global Reporting Initiative (GRI) guidelines.

How do you know what to report?

During the course of 2006, and following the GRI G3 requirements, we developed a new, more formal process to identify what we should report, the information being selected on the "materiality principle" - one that considers all the possible areas we could report on and selects those most significant to our business and stakeholders.

As a result, we affirm that Access to resources presents a balanced and reasonable presentation of our social, environmental and economic performance.