Rio Tinto approves feasibility study for new Hope Downs mine

21 December 2007

The Hope Downs Joint Venture (managed by Rio Tinto) has approved a feasibility study to expand the Hope Downs 4 project as part of the Rio Tinto programme to reach a Pilbara annual capacity of 320 million tonnes of iron ore by 2012.

The study, which will cost an estimated US$71 million, will assess the deposit as an extension of the existing Hope Downs Joint Venture (50:50 owned by Rio Tinto and Hope Downs Iron Ore Pty Ltd.). The study will incorporate the recently completed 50,000 metre in-fill drilling programme at Hope Downs 4.

Rio Tinto Iron Ore chief executive Sam Walsh said: "The Hope Downs 4 deposit offers excellent potential as part of our extension into the east Pilbara region, especially as we ramp up towards 320 Mtpa capacity over the next five years.

"This potential highlights the degree of flexibility that Rio Tinto enjoys to capitalise on existing infrastructure through the development of new world-class mines. This is an advantage that we emphasised in our annual investor presentation on 26 November."

Hope Downs Iron Ore Pty Ltd chairman Mrs Gina Rinehart said: "Following on from our initial pre-feasibility studies, we hope the expanded study will successfully support our vision for the area, which includes more mines being developed adjacent to Hope Downs 4, and the extension of the Lang Hancock Railway to them."

The Hope Downs 4 deposit is located 35 kilometres northwest of the town of Newman and 45 kilometres east of the Hope Downs 1 mine. This mine began production in November 2007 and is expected to reach 30 Mtpa capacity in early 2009.

The proximity of Hope Downs 4 to other deposits fully or part-owned by Rio Tinto promises significant potential synergies and option value for Rio Tinto Iron Ore.

The Hope Downs 4 deposit consists of three main areas of mineralization of approximately equal size extending over a length of eight kilometres. The deposit has been re-estimated after completion of an 18,000-metre in-fill drilling programme in 2006. The contained high grade Resource (>=60% Fe) is made up of 98.6Mt @ 62.3% Fe of Indicated Mineral Resource and 206.1Mt @ 62.4% Fe of Inferred Mineral Resource.

A range of government and environmental approvals would be required before development of a Hope Downs 4 mine could proceed.

The Resource for Hope Downs 4 has been prepared in accordance with the JORC Code (2004) by suitably qualified competent person, as detailed below:

* Competent Person Resources: John Phillips a full time employee of RTIO with 20 years' experience in geology roles, of which 13 years are in Iron Ore. BSc (Geology) 1987. Member AusIMM - No. 210415

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