RESOLUTION

An investment of US$652 million (Rio Tinto share US$341 million) to support continued pre-feasibility studies is made on a large, tier-one copper project. Pre-feasibility studies are expected to be completed by 2012 with production at the new mine expected to start by 2020, eventually ramping up to 500,000 tonnes per annum of copper.

The project team was continuing to work through a prefeasibility study, including a proposed land exchange, an environmental impact study, further resource drilling and the sinking of two shafts to gain access to the mineralisation. Expenditure to the end of feasibility in 2011, if approved, is expected to be approximately US$700 million, with total capital to initiate production forecast to be about US$2.5 billion. While there are technical challenges with regard to depth and rock temperature, Resolution would be a mine producing copper at twice the rate of Kennecott Utah Copper (see spearate listing, as of Mar/07) for over 35 years. The Act supporting a land exchange programme was introduced in the Senate and House of Representatives during 2006, but the timing did not allow the Act to progress to point of Presidential signature. It was to be re-introduced in both Houses in early 2007.

The pre-feasibility study continued.