ARGYLE MINE

The AK1 pit experienced a wall failure at the end of 2007, which significantly reduced ore volumes from the mine. As a result, lower grade stockpiled ore was processed through the recovery plant. Diamonds recovered decreased to 15.1 million carats in 2008 from 18.7 million carats in 2007

Rio Tinto reported on 2007 operating performance for the Argyle Mine in Western Australia. Due to lower grades, diamonds recovered decreased to 18.7 million carats in 2007 from 29.1 million carats in 2006 despite a two per cent increase in the volume of ore treated. Mine productivity was lower due to mining at lower elevations in the pit. Improvement programmes are in place to mitigate the cost pressures brought about by the resources boom in Western Australia.

Argyle's production remained low in Q3 2007 due to continued low feed grade associated with current mining locations. Variability in feed grade and production rates will continue as the open-pit operation approaches the end of its life and the mine transitions to an underground operation. At the end of 2006, 10,600 metres of underground development in four main access declines had been completed as the mine changes from open-pit to an underground operation. In late 2006 the first of the underground declines reached the required depth for ore extraction. The underground block cave undercut is expected to be initiated on schedule in 2008.