Chairman's Stmt-Coal&Allied

Rio Tinto PLC
24 April 2001

     
 
The following was released in Australia earlier today by Rio Tinto's 72.7 per
cent owned subsidiary Coal & Allied Industries Limited.
 

                       Coal & Allied Industries Limited                       
                            Annual General Meeting                            
                              Chairman's address                              
 
The year 2000 saw Coal & Allied undergo some of the most significant and
far-reaching changes in our 150-year history in the Hunter Valley.
 
Your company achieved a record profit, undertook major strategic expansions
and reached new workplace agreements with employees to become the pre-eminent
coal producer in New South Wales.
 
As a result of these changes, the company now manages an annual output of
more than 37 million tonnes of coal and directly employs approximately 2000
people.
 
Total production for the year was 13.0 million tonnes, up 1.1 million tonnes
compared with 1999. Total sales were 13.4 million tonnes, up 1.5 million
tonnes.
 
Last year consolidated profit after tax was up more than 80% to A$123.5
million from A$67.6 million in 1999. The consolidated profit after tax but
before abnormal items was A$90.5 million compared with A$71.3 million in 1999.
 
The profit was also helped by the weakness of the Australian dollar compared
with the US dollar.
 
Throughout 2000, the coal market firmed compared with 1999 with upward
pressure on prices. By year's end spot prices for thermal coal had firmed to
equal term contract prices. 2001 has begun very well with prices rising
sharply. I will expand later on current market conditions.
 
NEW WORKPLACE AGREEMENTS 
Last year, Coal & Allied achieved two very significant breakthroughs in our
long running effort to obtain world class working arrangements at our mines.
 
In August, the company signed a new collective agreement with employees at
Mount Thorley Operations. Supported overwhelmingly by employees, the company
believes this new agreement will become the benchmark for productive working
in the coal industry.
 
In October, Hunter Valley Operations achieved a very similar agreement with
its employees.

These new agreements allow Coal & Allied the flexible and modern working
arrangements we need to be internationally competitive.
 
Improved productivity resulting from these new agreements enables the company
to continue to pay the very high incomes enjoyed by coal miners in the Hunter
Valley and still offer employees greater job security.
 
A NEW ERA OF GROWTH 
Having reformed our work and management practices over the last three years,
greater confidence in our competitiveness allowed long term decisions to be
made.
 
In the final weeks of 2000, Coal & Allied undertook its most significant
strategic expansion in many decades.
 
With the support of our major shareholder Rio Tinto, the company purchased
the Lemington mine in the Hunter Valley from the Exxon Corporation and signed
an agreement to buy all the Australian coal assets of the Peabody group for a
combined total investment of A$1.2 billion.
 
These acquisitions mean that Coal & Allied now has an unrivalled resource
base in the Hunter Valley with reserves to sustain open cut mining at current
or greater rates for more than 20 years.
 
EMPLOYEE HEALTH AND SAFETY 
Coal & Allied has set itself a target of achieving zero injuries in the
workplace.
 
During 2000 we made substantial progress towards achieving our goal. Overall
there were 20% fewer injuries recorded compared with the previous year and
some areas of the business achieved a 50% reduction.
 
Coal & Allied believes that all injuries are preventable and our performance
in 2000 shows that with sustained effort it is possible to sharply reduce
injuries in the workplace.
 
With this is mind, we recently embarked on a major program to upgrade
electrical systems for plant and equipment, some of which was installed more
than 20 years ago.
 
More than A$3 million was spent on new isolation standards for electrical and
mechanical equipment, which greatly enhanced safety levels.
 
Today Coal & Allied's mines are the first mines in the Hunter Valley to have
lockout installed so that every employee working on equipment has a personal
lock applied so that the equipment cannot be started until the individual
removes his lock.
 
Our aim always is not to be simply legally compliant but to ensure everyone
who comes to work goes home safely. We cannot achieve this without the
commitment and active participation of all our employees. The SMAT system
designed by DuPont and adopted by us is designed to engage our workforce and
engender a real change in behaviour.
 
Turning now to our various mine sites,
 
MOUNT THORLEY OPERATIONS 
In 2000 Mount Thorley Operations produced 4.4 million tonnes of soft coking
and thermal coal for use in power stations and steel mills, predominantly in
East Asia.
 
Following the signing of the new collective agreement in August, productivity
in the second half of the year was 49 % higher than for the same period in
1999.
 
As a result of the benefits flowing from the new agreements, the economic
life of the mine has been extended by approximately five years to 2012.
 
With a strong focus on safety, Mount Thorley achieved a 68% reduction in the
number of injuries compared with the previous year and exceeded company
targets for safety improvement.
 
HUNTER VALLEY OPERATIONS 
During 2000, the Hunter Valley No.1 and Howick assets were fully integrated
to form the Hunter Valley Operations. The Carrington deposit was developed in
the second half of the year and began delivering coal in early 2001.
 
On 31 March this year the adjoining Lemington mine was absorbed into Hunter
Valley Operations to produce a single mine delivering more than 13 million
tonnes to the export market.
 
Following the Lemington integration, Hunter Valley Operations now employs
around 700 people. With the new collective agreement in place until late
2003, Hunter Valley Operations is now capable of delivering world class
levels of performance.
 
THE FORMER PEABODY ASSETS 
The Peabody assets include the Ravensworth, Bengalla, Warkworth and Narama
mines in the Hunter Valley and the Moura mine in Queensland. The purchase was
completed in late January 2001.
 
The former Peabody mines in the Hunter produce a combined total of
approximately 15 million tonnes of coal annually.
 
The process of fully integrating the mines into Coal & Allied is well
underway. A new management structure is in place and Peabody's administrative
functions are being amalgamated with Coal & Allied's shared services.
 
In bringing the two companies together, our management is working to maximise
the strengths of both organisations and is sensitive to the needs of all
employees in this period of transition.
 
We are also working closely with our various joint venture partners to
protect shareholder value going forward.
 
ENVIRONMENTAL SERVICES 
Throughout 2000, Coal & Allied continued to apply the best contemporary
environmental practices across all our operations. We recognise the
importance that the community places on achieving environmental excellence
and are committed to balancing economic growth with environmental protection.
Our environmental policy and management systems were continually upgraded
throughout the year allowing the company to lower water use, minimise impacts
from noise, expand our rehabilitation programs and reduce energy consumption.
 
In 2000 our commitment to the environment was recognised at the NSW Mineral
Council's Premier's awards for Environmental Excellence.

COMMUNITY RELATIONS 
Coal & Allied is strongly committed to the communities of the upper and lower
Hunter Valley. We recognise that community support for our work is an
essential part of our role.
 
Our extensive community relations programs focus on strengthening the
long-term sustainability of the region and assisting Hunter Valley people to
respond to community needs.
 
The Coal & Allied Community Trust was established in 1999 with a fund of A$3
million dollars to assist people in the Upper Hunter address economic
development, education and social issues.
After 18 months the Trust has committed nearly A$1.5 million to ten community
led projects. The projects range from school based programs to agribusiness
and economic development.
 
Coal & Allied also continued to work in close consultation with the
Aboriginal communities of the Hunter Valley to ensure sites of significance
are protected.
 
Through our strong relationship with the Wonnarua people, Coal & Allied has
developed policies which successfully balance economic, cultural and
archaeological needs and allow mining operations to continue with the support
of local Aboriginal people.
 
We believe these initiatives will help strengthen our relationship with the
broader community and it is in our interests to operate within a strong
economic and sound environment in the Upper Hunter
 
MARKETING 
For the past several years the market for coal has been dynamic with price
falls in 1999 and 2000 of approximately 30%, which reflected the global
oversupply of thermal and coking coal.
 
The company responded to the difficult trading conditions in 2000 by
continuing to focus on cost reduction and improved productivity from existing
resources rather than seeking volume increases.
 
There was more positive news recently with Australian producers achieving a
20% increase in the headline price of thermal coal to Japanese customers.
Spot prices rose sharply in late 2000 and early 2001 and are currently equal
to the renegotiated contract prices.
 
The outlook remains positive with global growth and consequent energy demand
for coal fired electricity continuing steadily. This also reflects the
competitiveness of coal with alternative energy fuels such as oil or gas.
 
GOING FORWARD

The changes and achievements of 2000 transformed Coal & Allied into a much
larger, more productive and more efficient company, which is now a
significant contributor to global coal markets.
The company has taken on new responsibilities and obligations to employees,
customers, shareholders and the community.
 
Throughout 2001 we will be working to integrate successfully the people and
the mines acquired during the year while maintaining a strong focus on cost
control, employee safety and shareholder return.
 
We will strive to ensure Coal & Allied becomes the preferred supplier to
customers, the preferred developer and operator to government and
communities, the preferred employer to people who seek challenge and
recognition, and a preferred investment opportunity for shareholders.
For further information, please contact:
 

                                                                  
              LONDON                     AUSTRALIA                
              Media Relations            Media Relations          
              Lisa Cullimore             Ian Head                 
              + 44 (0) 20 7753 2305      [phone]      
              Investor Relations         Investor Relations       
              Peter Jarvis               Dave Skinner             
              + 44 (0) 20 7753 2401      [phone]      
              Jonathan Murrin            Daphne Morros            
              + 44 (0) 20 7753 2326      [phone]      

Website: www.riotinto.com