Earnings

Despite strong demand for our products, Rio Tinto Coal Australia's earnings and contribution to Rio Tinto decreased in 2007, compared with 2006, due primarily to infrastructure constraints.

In 2007, Rio Tinto Coal Australia contributed net earnings of $US246 million to Rio Tinto. This contributed approximately 3.36 per cent of Rio Tinto Group's revenue in 2007.

 RTCA total revenue reached $US2,272 billion and capital expenditure totalled $US226 million.

While 2007 earnings were disappointing, the demand for our product remains strong, particularly from south-east Asian markets. The Rio Tinto board's approval of the Kestrel Mine extension project in 2007, as well as the commencement of the construction of the Clermont Mine, will help maximise opportunities and capitalise on demand throughout 2008.

Coal & Allied reported a profit after tax of $A109.8 million in 2007. This compared with a result of $A207.6 million in 2006. Higher demurrage costs and production cutbacks due to port constraints meant Coal & Allied had to reduce production at its three operations, impacting on its final profit after tax.

However, Coal & Allied is well placed to take advantage of the strong market conditions when capacity becomes available in the Hunter Valley Coal Chain. We welcome the appointment of the former Premier of New South Wales, as facilitator in finding a resolution to the Hunter Valley Coal Chain constraint issues.

Read full results on the Coal & Allied website.