Rio Tinto's 1997 Net Earnings Up 11 Percent.

LONDON--(BUSINESS WIRE)--Feb. 26, 1998--Rio Tinto plc (NYSE: RTP) today announced results for fiscal 1997, ended December 31, 1997. Rio Tinto's 1997 net earnings, at $1,220 million, were 11 per cent higher than in 1996.

-- Further volume growth, with six major projects coming into

production, contributed $210 million to 1997 earnings.

-- Widespread operating improvements and Group restructuring in

1997, together with other cost savings since the 1995 merger,

contributed $164 million to 1997 earnings.

-- Demand in 1997 was well ahead of 1996, even though the pace

slackened in the second half.

-- Share buy-backs approved in February 1998 allow for more

active balance sheet management.

Mr Robert Wilson, Rio Tinto plc's chairman, said: "Most of the growth in 1997 earnings came from increased production and sales, together with efficiency gains across the Group. Average prices for most of our principal products were little changed from 1996 but, as concern spread about the economic turmoil in Asia, many metal prices fell sharply in the latter part of the year. Our own continuing focus on production efficiency and cost, together with geographic and product diversity, means we are relatively well placed to weather periods of commodity price weakness." -0-

Full  Year to 31 December   -  1997       1996       Change
US dollars
Group sales revenue            $9,212m    $8,448m    + 9%
Profit before tax(a)           $1,983m    $1,731m    + 15%
Net attributable profit(a)     $1,220m    $1,096m    + 11%
Earnings per share(a)          87.1 cents 78.3 cents + 11%

(a) There were no exceptional items in either year All $ are US$, unless otherwise stated.

Final dividends equivalent to 35.5 US cents (21.55 pence and 53.36 Australian cents) per share have been declared. This makes the total dividends for the year 52.0 US cents (31.92 pence and 75.94 Australian cents) per share, compared with 51.0 US cents (31.71 pence and 65.05 Australian cents) per share in 1996.

1997 Review

Mr Leon Davis, Rio Tinto's chief executive, said: "1997 was a year of progress which set the scene for our next phase of development. From an operating standpoint, it was a year of substantial achievement.

"The foremost earnings improvements came in our aluminium and iron ore businesses. Comalco achieved significant cost reductions and increased aluminium output. Hamersley recorded further productivity gains as it achieved record iron ore production and shipments. Rio Tinto Iron & Titanium benefited from market growth and good operational performance. The Kennecott copper smelter was consistently operating at design capacity by year end although costs are currently too high. In coal, good efficiency gains were achieved at the newly integrated Cordero Rojo coal mine in the US as well as at operations in Queensland, but productivity improvements in New South Wales were at a slower pace.

"Efficiency improvement measures since the merger at the end of 1995 were reinforced by the Group's restructuring in 1997, and are now yielding cost savings running at a rate in excess of $300 million per annum before tax.

"Production growth continued and we completed six major projects during 1997. The full benefits are still to come and more projects offering excellent returns are in the pipeline. In copper, start up of the expansion at Grasberg, Indonesia is imminent, increasing throughput to more than 200,000 tonnes of ore per day. We also expect first copper cathode production from the Escondida, Chile oxide project towards the end of this year. Further ahead, the new $515 million Yandicoogina iron ore mine in Australia will initially produce about 5 million tonnes annually on start up in mid 1999. We are now considering a $400 million project to produce 5.5 million tonnes per year of high grade coking coal from 2001 at the Hail Creek deposit in Queensland, where we increased our interest to 92 per cent".

Outlook

Mr Wilson said: "It is still too early to assess the long term effects for our industry of the economic difficulties in Asia. Provided that there is continued strength in Western markets, especially the US, we doubt whether the outcome will be a decline in global consumption of metals and minerals, although a reduction in the rate of growth seems inevitable. We have already seen a fall in most metal prices, reinforced by the activities of speculative funds. Evidence of reduced metals consumption in Asia is accumulating but, with the exception of South Korea, the countries which have been hardest hit do not account for a large proportion of global demand. The major markets in Asia are, of course, Japan and China and events in these countries will be the main indicator of whether the problems have been contained.

"History has shown that uncertain market conditions can often result in good opportunities for companies strong enough to respond. In terms of our asset base, our structure and our financial strength, we believe that Rio Tinto is better prepared than ever to identify and pursue good opportunities.

"Our options for investment now include the ability to buy-back our own shares which, earlier this month, shareholders enthusiastically supported. This was facilitated by the UK Government's welcome announcement of the pending abolition of Advance Corporation Tax. As a consequence, we now have scope for more active management of our balance sheet".

1997 FINANCIAL RESULTS

Sales Revenue

Group sales revenue from continuing operations was 9 per cent higher in 1997 at $9,212 million (1996: $8,448 million), primarily reflecting higher sales volumes. Approximately one half of total sales revenue was derived from non-ferrous metals and the other half from iron ore, coal and industrial minerals. North America and Europe accounted for 47 per cent of sales by destination, Japan 21 per cent, and other Asian countries, including China, 20 per cent.

Revenue for the Copper group increased by $311 million to $2,339 million with higher sales due to improved performance at the Kennecott smelter and contributions from the Cortez/Pipeline gold and Greens Creek silver/zinc mines. Whilst the average copper price for 1997 was virtually unchanged from 1996, the average gold price was 15 per cent lower.

At Comalco, revenue increased $259 million to $1,480 million, reflecting volume improvement due to expanded aluminium smelting facilities and higher prices.

In the Iron Ore group, revenue was up $207 million, or 22 per cent, to $1,152 million. Strong demand, especially in Japan and China, resulted in record shipments.

In the Energy group, sales revenue declined $33 million to $1,615 million as the disposal of Kembla Coal & Coke properties and lower prices for internationally traded coal more than offset higher sales from the Group's US mines, following the acquisition of Caballo Rojo early in 1997.

Industrial minerals revenue was $55 million higher at $1,833 million, largely due to improvements in volumes.

Profit

Profit before tax at $1,983 million was up 15 per cent on the 1996 equivalent of $1,731 million. Before interest charges, the margin on sales was over 22 per cent compared with just under 21 per cent in 1996. The improvement in profit before tax reflects the increase in sales volumes and savings in operating costs, which more than offset the impact of inflation and higher depreciation.

The 1997 effective tax rate at 31.5 per cent was similar to the 31.7 per cent in 1996. The 1997 rate benefited to a similar extent as the previous year from favourable factors which will not necessarily recur.

Net earnings were $1,220 million in 1997, 11 per cent higher than the $1,096 million in 1996. Most of the improvement came from increased production and sales together with efficiency gains in most Group operations.

Taken together, price changes and exchange rate movements had little overall effect on 1997 earnings. The contribution to earnings from gains on disposals of undeveloped and mining properties, net of provisions against carrying values, was similar in 1997 to that in 1996 at some $100 million. The principal item in 1997 was the disposal of the Century Zinc project.

Net earnings in the second half of 1997 were $625 million compared with $595 million in the first half, an increase of 5 per cent. The second half was adversely affected by lower prices, particularly for copper (16 per cent lower) and gold (9 per cent lower). In addition, the low copper price at the year end impacted on provisionally priced shipments, which were priced at an average of 78 cents per pound compared to $1.10 per pound at the end of the first half, a fall of nearly 30 per cent. However, the second half benefited from higher sales volumes, particularly from iron ore, industrial minerals and Comalco. Operating costs continued to fall in the second half as the benefit of restructuring throughout the Group and further operational efficiencies were realised. The second half also benefited from the sale of Century Zinc.

Cash Flow

Cash flow from operating activities was $2,313 million, 16% above the 1996 level with higher sales volumes. In addition, dividends from associated companies and investments increased by 82 per cent, from $309 million in 1996 to $562 million in 1997.

Net capital expenditure reduced by $104 million to $1,666 million with several important projects reaching completion. These included the Boyne aluminium smelter expansion, the construction of the Fortaleza nickel mine in Brazil, and QIT's upgraded titanium dioxide slag project in Canada. The Grasberg mine expansion in Indonesia was also brought to an advanced stage by the end of the year. In return for its 40% interest in the expansion, the Group is providing loans to finance Freeport-McMoRan Copper & Gold's 60% per cent share of the capital investment in addition to funding its own share.

Disposal of companies less acquisitions generated $274 million of cash inflow during 1997. The most important of these transactions were the disposal of the Century Zinc project and the acquisition of the Caballo Rojo coal mine.

The cash outflow before management of liquid resources and financing, at $320 million, reflected continued high levels of investment and was much reduced from the $867 million in 1996. Cash flow was much stronger in the second half of 1997, producing a corresponding inflow of $416 million. This included the sale proceeds for Century Zinc, higher operating cash flow and a lower level of advances for the Grasberg expansion.

Balance Sheet

Shareholders' funds were reduced by $214 million to $7,337 million by currency translation effects. Net debt increased to $2,685 million from $2,403 million at the end of 1996, but was down from the $3,105 million at the 1997 half year. Net debt as a percentage of total capital rose to 25 per cent (1996: 22 per cent) having reached 27 per cent at the mid year. This allows substantial capacity for further investment and/or share buy-backs. Interest was covered 16 times by operating profit and dividends from associates and 22 times by operating cash flow and dividends from associates.

Dividends

1997 final dividends equivalent to 35.5 US cents per share have been declared by Rio Tinto. These, together with the interim dividends equivalent to 16.5 US cents per share, make a total for the year of 52.0 US cents per share.

Dividends continue to be determined in US currency but Rio Tinto Limited dividends are declared and paid in Australian dollars and Rio Tinto plc dividends declared and paid in pounds sterling, converted at the exchange rates applicable two days prior to the announcement of dividends.

Rio Tinto plc shareholders will be paid a final dividend of 21.55 pence per ordinary share as a Foreign Income Dividend (FID). In 1996, a final dividend of 21.11 pence was paid, of which 13.11 pence was a FID and 8.00 pence a conventional dividend. Together with the interim FID of 10.37 pence per share paid on 20 October, 1997, dividends for 1997 total 31.92 pence per share (1996: 31.71p).

Rio Tinto Limited shareholders will be paid a final dividend of 53.36 Australian cents per ordinary share (1996: 44.40 Australian cents) as a fully franked dividend. Together with the fully franked interim dividend of 22.58 Australian cents per share paid on 20 October, 1997, dividends for 1997 total 75.94 Australian cents per share (1996: 65.05 Australian cents), franked at the tax rate of 36 per cent.

The respective final dividends will be paid on 20 April, 1998 to Rio Tinto plc shareholders registered at close of business on 20 March, 1998 and to Rio Tinto Limited shareholders registered at close of business on 24 March, 1998 and to Rio Tinto plc bearer shareholders on or after 20 April, 1998 against coupon 78. The ex-dividend date for both companies will be 16 March, 1998. Dividends to Rio Tinto ADR holders will be paid on 21 April, 1998.

Dividends of 1.6625 pence per Rio Tinto plc `A' preference share and 1.75 pence per Rio Tinto plc `B' preference share for the first half of 1998 will be paid on 1 July, 1998 to holders registered on 5 June, 1998 and to `B' preference bearer shareholders on or after 1 July, 1998 against coupon 72. The ex-dividend date will be 1 June, 1998.

As previously announced, Rio Tinto plc intends to designate all future dividends paid before 6 April 1999 as FIDs. Under current legislation, it is not possible to offer a scrip dividend alternative to FIDs and, therefore, it is proposed to pay to relevant shareholders the cash balance which was carried forward under the scrip dividend plan in April, 1997. This payment will be made on 16 March, 1998.

Annual Report

The annual report will be sent to Rio Tinto shareholders on 26 March, 1998.

REVIEW OF OPERATIONS

(Production shown is the product group share of output unless otherwise stated.)

IRON ORE GROUP 1997 earnings $307 million, up 43%

Record production at 54.5 million tonnes,

or 58.4 million tonnes with all of Channar included.

Rio Tinto's Iron Ore group accounted for 13 per cent of Group sales revenue. Hamersley achieved record production. Total shipments, which include all of Channar's output, were 20 per cent higher at a record 61.8 million tonnes, in response to strong market demand from Japan and China. The Channar mine, a joint venture with a China Iron and Steel group subsidiary, increased production by 24 per cent, boosting Rio Tinto's share of production to 5.8 million tonnes. Channar ships all of its output to China.

Continuous improvements at Hamersley's port and mines, which are now managed and operated as one operation, successfully increased production capacity by nearly 3 million tonnes in 1997.

INDUSTRIAL MINERALS GROUP 1997 earnings $382 million, up 9%

Borates production 581,000 tonnes, up 4%

TiO2 feedstock production 1.44 million tonnes, down 3%

Rio Tinto's Industrial Minerals businesses, which includes borax, titanium dioxide feedstock, diamonds, talc and industrial salt, accounted for 20 per cent of Group sales revenue.

Borax's contribution to Group earnings was 3 per cent lower at $134 million. Sales of borates in 1997 continued to benefit from underlying market strength in North America and Europe, but earnings were adversely impacted by currency factors.

Rio Tinto Iron & Titanium earnings in 1997 at $180 million were 22 per cent higher. The titanium dioxide pigment industry grew strongly after a lacklustre 1996. The market for chlorinatable feedstock remained tight, although new capacity came on line towards the end of 1997. Group production of titanium dioxide feedstock in 1997 was slightly lower than in 1996 when inventories were increased in preparation for the commissioning of the upgraded slag plant in Canada.

Rio Tinto's share of diamond production from Argyle was 4 per cent lower at 24 million carats, reflecting generally lower grades. The overall diamond market weakened in 1997. Demand was affected by economic uncertainty in the important Asian markets, but the US jewellery market showed strong growth.

Production of talc from Luzenac's mines in Europe and North America was 6 per cent higher at 1.2 million tonnes.

In response to increased demand, Rio Tinto's share of salt production at Dampier Salt's two operations in Western Australia rose to 3.2 million tonnes, almost 16 per cent higher than the 1996 level. During 1997, the capacity of the Dampier operation was expanded from 3.5 to 4.0 million tonnes per annum, and the new 1.5 million tonne per annum capacity gypsum operation at Lake MacLeod was commissioned.

COPPER GROUP 1997 earnings $365 million, down 3%

Mined copper almost unchanged at 756,800 tonnes

Mined gold at 1.4 million ounces, up 11%

Rio Tinto's Copper group accounted for 25 per cent of Group sales revenue of which 17 per cent was from copper and the remainder mostly gold. Healthy demand in the US and Europe led to a 3 per cent increase in copper consumption world wide. Over the year as a whole, the average price of copper was virtually unchanged from 1996 at 103 cents per pound. However, the Asian economic problems precipitated a sharp decline in prices towards the end of 1997 with the LME spot price touching a four year low at the end of December. Prices were also influenced by the market moving into surplus, with stocks rising sharply in the third quarter.

At Kennecott Utah Copper in the US, mine production for 1997 rose marginally to 305,100 tonnes of copper in concentrate. However, the mine has entered a period when ore grades will be significantly lower for the next three years. Refined production of copper for 1997 increased by 115 per cent whilst refined gold production increased 147 per cent. These were primarily due to improved performance following modifications to the flash converter and the installation of new anode casting wheels.

At the Escondida mine in Chile, improved ore grade increased Rio Tinto's share of production by 8.8 per cent to 278,400 tonnes of copper in concentrate.

Ore treated at Grasberg in Indonesia was virtually unchanged at 46.9 million tonnes but higher grade and improved recoveries raised Rio Tinto's share of production by 4 per cent to 57,600 tonnes of copper.

In South Africa, Rio Tinto's share of Palabora's mine production was down, at 52,000 tonnes of copper, but improved smelter performance increased the Group's share of refined copper production to 44,100 tonnes.

Despite improved mining methods at Neves Corvo in Portugal, Rio Tinto's share of production was unchanged at 52,100 tonnes of copper, due partially to industrial action following the introduction of changed working practices.

Mining at the Flambeau mine in the US ceased in March, 1997 at the end of its life. Excluding Flambeau, the Group's mined production of copper increased by 4 per cent in 1997.

At the US gold operations, full production at Cortez/Pipeline began in April, contributing 163,000 ounces of gold to Rio Tinto. Higher ore grades increased production at Barneys Canyon by 114 per cent to 135,000 ounces but output at both Ridgeway and Rawhide declined.

COMALCO 1997 earnings $153 million, up 325%

Bauxite production 6.8 million tonnes, up 2%

Aluminium metal 378,700 tonnes, up 19%

Comalco, Rio Tinto's 67 per cent owned Australian aluminium subsidiary, generated 16 per cent of Group sales revenue. Aluminium has so far weathered the financial fallout from the Asian markets better than most other metals. Prices weakened towards the end of the year, but with buoyant physical demand from the US and Europe, the average three month price for aluminium for the year was 73 cents per pound, up from the 1996 average of 70 cents per pound. Not only did 1997 see higher aluminium prices, but also improved operational performances and production increases at all of Comalco's smelters.

At Boyne Island, in Queensland, construction and successful commissioning of the new $750 million reduction line was on budget and six months ahead of schedule. Production increased by 39 per cent, with Rio Tinto's share totalling 121,300 tonnes. The original two reduction lines achieved their best ever operating efficiencies despite the expansion activities.

Rio Tinto's share of Tiwai Point, New Zealand, production increased by 9 per cent to 165,000 tonnes. 1997 was the first full year of operation following the $230 million upgrade of the smelter. This incorporates new Comalco developed technology resulting in decreased smelter emissions.

The Bell Bay smelter in Tasmania operated at record levels in 1997, due mainly to increased energy from the new power contract. Production increased by over 15 per cent to boost Rio Tinto's share to 92,400 tonnes. Increased production, higher productivity and lower costs of consumables, improved unit costs.

In December, Comalco increased its interest in Eurallumina's alumina refinery in Sardinia, Italy from 26.9 per cent to 56.2 per cent. As a result Comalco's alumina entitlements will increase to approximately 514,000 tonnes. Comalco has a contract to supply and the refinery's bauxite requirements for 1998 and beyond.

ENERGY GROUP 1997 earnings $189 million, down 2%

Coal production 82.7 million tonnes, up 23%

Uranium oxide production 2,349 tonnes, up 19%

Rio Tinto's Energy group accounted for 18 per cent of Group sales revenue. In Australia, Rio Tinto's share of coal production was similar to that of 1996 at 21 million tonnes making it the largest steaming coal producer in the country. In Queensland, improved productivity at Blair Athol increased Rio Tinto's share of production to a record level of almost 6.5 million tonnes. The Tarong mine, which supplies the nearby power station, maintained annual production of 5.4 million tonnes. At the Hunter Valley operation in New South Wales, disruption associated with changing work practices contributed to a 30 per cent drop in production. The Mount Thorley mine increased its production by more than 33 per cent.

In 1997, the Kaltim Prima coal mine in Indonesia, increased total production by over 13 per cent, raising Rio Tinto's share to 5.6 million tonnes.

In the US, Kennecott Energy's production increased by 37 per cent to 56.1 million tonnes. This was primarily due to the acquisition of Caballo Rojo in January 1997 and its subsequent integration with the adjacent Cordero mine, forming the Cordero Rojo complex whose combined production in 1997 totalled almost 25.5 million tonnes. Strong demand for higher calorific coal pushed Antelope mine production to record levels.

At the Rossing mine in Namibia, uranium oxide production increased by 19 per cent to 2,349 tonnes to meet current contract sales. After peaking at $16 per pound in late 1996, spot prices for uranium oxide fell during 1997 to $12 per pound. Due to poor market conditions and uncertainty over long term prices, Rossing has delayed plans to return to full capacity.

GOLD & OTHER MINERALS GROUP 1997 earnings $56 million, down 26%

Gold production 752,000 ounces, up 9%

Rio Tinto's Gold & Other Minerals group accounted for 8 per cent of Group sales revenue. Most of the operations showed healthy production performance throughout the year. However, the price of gold fell to a 12 year low towards the end of 1997, and the average gold price for 1997 was $331 per ounce, down 15 per cent from that in 1996.

In May 1997, the Lihir gold mine in Papua New Guinea successfully began processing oxide ore as scheduled. By year end, commissioning of the whole complex was well under way and sulphide ore was being treated in the plant. The mine produced 233,000 ounces of gold during 1997, of which Rio Tinto's share was 40,000 ounces.

Kelian achieved record mine production, plant throughput, and gold output, increasing Rio Tinto's share by nearly 7 per cent to 436,000 ounces of gold.

NEW PROJECT DEVELOPMENT UPDATE

Commissioning of Iron & Titanium's $310 million upgraded slag (UGS) plant in Canada proceeded throughout the second half of 1997. Production of both UGS and the intermediate HTS product continues to increase. Shipments of HTS are being made on a regular basis and commercial shipments of UGS began in the first quarter of 1998 and will build up progressively throughout the balance of this year.

At the Grasberg mine, the fourth concentrator project is almost complete. This will allow for more than 200,000 tonnes of ore to be treated per day. Total capital cost for this expansion will be below the budgeted amount of $1 billion.

Construction of the Fortaleza nickel mine, mill and smelter complex was nearly complete in 1997. Start up of the smelter began in early 1998 with full production scheduled by mid 1999. At full production, annual output is projected at approximately 500,000 tonnes of ore, yielding 17,800 tonnes of nickel bearing matte and 140,000 tonnes of sulphuric acid. All of Fortaleza's output is to be sold as matte, containing approximately 10,000 tonnes of nickel per year, for the next ten years.

At Escondida, the first copper cathode from the $470 million oxide leaching project is expected to be produced in December 1998. The Phase 3.5 expansion was also approved, with commissioning planned for late 1998. This will increase the ore treatment capacity to 127,000 tonnes per day.

Following the completion of engineering studies, approval was given for the development of the Yandicoogina iron ore deposit at a cost of $515 million. The initial production rate will be approximately 5 million tonnes per year, rising to 15 million tonnes per year in line with market demand. The target date for commissioning is mid-1999.

A major advance in the HIsmelt process was made in 1997 with the successful commissioning and operation of a new vertical reactor. The process employs a new technology which can use lower grade iron ore and coal to produce a premium grade metal.

Work on the Comalco alumina project focussed on the development of an economic energy supply for an alumina refinery at Gladstone in Queensland, Australia or at Bintulu in Sarawak, Malaysia. Feasibility studies in 1998 to establish the value to Comalco of the proposed refinery will lead to a decision on whether to proceed with the development.

Rio Tinto and Rio Tinto Zimbabwe have formed a joint venture to consider the development of a 6 million tonnes per year coal mine on Rio Tinto Zimbabwe's Gokwe North property. Production from the mine would supply a nearby 4 x 350MW coal-fired power station which could begin operations in January 2004.

A joint venture agreement to combine Oreganal with the Centrale Cerrejon coal properties in Colombia, in which Rio Tinto will have a one third share, is scheduled to be completed during the first quarter of 1998.

During the year, Rio Tinto's interest in the Hail Creek coking coal project in Queensland increased to 92 per cent. Consideration of this project is at an advanced stage; Hail Creek could produce up to 5.5 million tonnes a year.

Pre-feasibility work on the Diavik diamond project in the Northwest Territories of Canada continued. Additional drilling and resource modelling supported earlier volume and grade estimates for the two main diamond bearing ore pipes. Preliminary mining and engineering studies progressed according to plan. Environmental and socio- economic studies were completed in preparation for the start of the formal regulatory review of the project, expected to begin in the near future.

EXPLORATION

Rio Tinto's exploration charge to earnings in 1997 was $141 million after tax, $25 million lower than in 1996. The on-going review of exploration in 1997 resulted in a greater concentration of effort on fewer exploration projects around the world.

In Australia, base metal exploration continued in the Carpentaria Region of north west Queensland, at Curnamona in South Australia, and in the Bangemall Basin of Western Australia. Rio Tinto is also evaluating iron ore opportunities with exploration focussed on the identification of lump ore deposits in the Hamersley Ranges of Western Australia.

At the Pukaqaqa prospect in Peru, seven holes have been drilled on the property with varying grades of copper intersected.

The Nim Ka Thana Prospecting Licence in India was awarded by the Government of Rajasthan in mid-December. Work on the hydrothermal copper-gold mineralisation will commence with an airborne geophysical survey and follow up exploration on the ground.

Extensive exploration work continues at Grasberg, Indonesia. Drilling continued on the Kucing Liar, Kucing Liar Deep, DOZ West and Mill projects. At Kucing Liar, delineation drilling continued whilst visual logging indicates that mineralisation continues on all sections. Near surface gold continued to be reported at Wabu.

In Laos, work on the Sepon gold project progressed with current emphasis on delineating resources of both oxide and sulphide material. In addition, copper potential in the area has been found. -0- Profit and loss account Years ended 31 December

   1997   1996    1997      1996
    A$m    A$m  (pounds)m (pound)m
--------------- -------  -------

 12,427 10,797   5,624    5,408    Group Turnover
 (2,017)(1,753)   (913)    (878)   Share of associates' turnover
--------------- -------  -------

 10,410  9,044   4,711    4,530    Turnover
 (8,376)(7,495) (3,791)  (3,755)   Operating costs
--------------- -------  -------

  2,034  1,549     920      775    Operating profit
    745    707     337      354    Share of associates' profit
--------------- -------  -------
                                  Profit on ordinary activities before
  2,779  2,256    1,257    1,129   interest
   (104)   (42)    (47)     (21)   Net interest payable
--------------- -------  -------
                                  Profit on ordinary activities before
  2,675  2,214   1,210    1,108    taxation

   (843)  (700)   (382)    (351)   Taxation
--------------- -------  -------
                                   Profit on ordinary activities
  1,832  1,514     828      757     after taxation
                                  Attributable to outside shareholders
   (186)  (111)    (84)     (56)    (equity)

--------------- -------  -------

  1,646  1,403     744      701    Profit for the financial year

   (982)  (887)   (444)    (444)   Dividends to shareholders
--------------- -------  -------
                                    Retained profit for the financial
    664    516     300      257     year
--------------- -------  -------


  117.6c 100.2c   53.1p    50.1p   Earnings per ordinary share
                                   Dividends per share
                  31.92p   31.71p  - Rio Tinto plc
  75.94c 65.05c                   - Rio Tinto Limited

                                   Financial ratios
                                    - Profit before interest/group
                                      turnover
                                    - Interest cover (times)
                                    - Tax rate
                                    - Net profit/average shareholders'
                                        funds
                                      - Net debt to total capital


                                                   1997        1996
                                                   US$m        US$m
                                                 -------   ---------

Group Turnover                                    9,212       8,448
Share of associates' turnover                    (1,495)     (1,372)
                                                 -------   ---------

Turnover                                          7,717       7,076
Operating costs                                  (6,209)     (5,865)
                                                 -------   ---------

Operating profit                                  1,508       1,211
Share of associates' profit                         552         553
                                                 -------   ---------

Profit on ordinary activities before interest     2,060       1,764
Net interest payable                                (77)        (33)
                                                 -------   ---------

Profit on ordinary activities before taxation     1,983       1,731

Taxation                                           (625)       (548)
                                                 -------   ---------

Profit on ordinary activities after taxation      1,358       1,183
Attributable to outside shareholders (equity)      (138)        (87)
                                                 -------   ---------

Profit for the financial year                     1,220       1,096

Dividends to shareholders                          (728)       (694)
                                                 -------   ---------

Retained profit for the financial year              492         402
                                                 -------   ---------


Earnings per ordinary share                          87.1c       78.3c
Dividends per share
 - Rio Tinto plc                                     52.0c       51.0c
 - Rio Tinto Limited                                 52.0c       51.0c

Financial ratios
 - Profit before interest/group turnover             22.4%       20.9%
 - Interest cover (times)                            16          21
 - Tax rate                                          31.5%       31.7%
 - Net profit/average shareholders' funds            16.4%       15.1%
 - Net debt to total capital                         25.0%       22.4%


(a)  For the purpose of calculating earnings per share, the weighted
     average number of Rio Tinto plc and Rio Tinto Limited shares
     outstanding during the period was 1,400.2 million, being the
     average number of Rio Tinto plc shares outstanding (1,071.5
     million) plus the average number of Rio Tinto Limited shares
     outstanding not held by Rio Tinto plc (328.7 million).

(b)  There were no exceptional items or exceptional tax items in
     either year. Therefore adjusted earnings are the same as profit
     for the financial year.
-0-
Cash flow statement
Years ended 31 December

  1997    1996      1997    1996
   A$m     A$m  (pounds)m (pounds)m
------- -------  -------- -----
                                   Net cash flow from operating
 3,121   2,561     1,411  1,281    activities (see below)
                                   Dividends from associated
   758     395       343    198    companies and investments
   254     281       115    141    Interest received
  (401)   (378)     (181)  (190)   Interest paid
   (96)   (134)      (43)   (67)Dividends paid to outside shareholders
------- -------  ---------------
                                   Returns on investment and
   515     164       234     82    servicing of finance

  (429)   (400)     (194)  (200)   Tax paid
                                   Purchase of property,
(2,184) (1,937)     (988)  (971)   plant and equipment
                                   Funding of Group share of
                                   associates' capital