Rio Tinto backgrounder 1

The RIO TINTO Campaign site

BACKGROUNDER No. 1

March 1998

RIO TINTO - THE COMPANY, ITS GLOBAL OPERATIONS

Rio Tinto Zinc was founded in 1873 and took its name from its copper mining operations in the Rio (River) Tinto region of southern Spain. In 1962 Rio Tinto took a controlling interest in Conzinc of Australia (which became Conzinc Rio Tinto of Australia (CRA) The present day Rio Tinto corporation was formed through the merger in 1995 of RT and CRA. It is now the world's largest private mining company with assets of over A$17.7 billion. The “dual listed" company is based in the UK and in Australia, with control being exercised by the parent company in London.

In spite of the complex nature of dual listed companies, Rio Tinto is for all practical purposes a single business entity, with the same board of directors, a unified management, identical corporate strategies and policies in the field of industrial relations, community relations, occupational health and safety and environmental standards. Exploration, research and technology are all centrally managed.

Rio Tinto directly employs 51,000 people, with many more employed as subcontractors or through other company activities. Either directly, through subsidiaries or through joint ventures, the company produces and/or refines aluminium/bauxite, borates, coal, copper, diamonds, gold, iron ore, molybdenum, salt, silica, silver, talc, tin, titanium dioxide, uranium, zinc and other industrial metals.

Rio Tinto operates over 60 mines and processing plants in 40 countries, including: Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, France, Guinea, Indonesia, Italy, Namibia, Netherlands, New Zealand, Norway, Papua New Guinea, Portugal, South Africa, the UK, the US and Zimbabwe. The company is also undertaking exploration and development work in many of the above countries, as well as in Ecuador, Finland, India, Laos, Madagascar, Mexico, Peru, Sweden, Spain and Tanzania.

Copper and gold account for nearly 40% of the company's sales, iron ore and industrial minerals for 35%, aluminium and coal for roughly 10% each and the other operations the remainder. In February 1998 it was reported that Rio Tinto's global profits had increased from A$1.4 billion in 1996 to A$1.65 billion in 1997. However, 1997 profits were substantially below 1995 profits of A$1.95 billion and represent only a 9.3% return on assets of over A$17.7 billion. A year ago financial analysts at Merrill Lynch and Barclays de Zoete Wedd forecast the company would have profits of around A$2 billion in 1997.