Coal & Allied AGM – Chairman’s address

Tuesday, 02 May 2006

Coal & Allied Industries (Rio Tinto 75.7 per cent) issued the following address by the chairman, Chris Renwick, following the annual meeting of shareholders in Australia today. Dollar amounts are in Australian currency.

2005 was a good year for Coal & Allied, characterised by very strong demand for coal and a continuation of the improved financial performance we reported in the last half of 2004.

The high price achieved for export coal sales has dominated our business in 2005.

The gains were somewhat offset by the relatively high operating cost of Coal & Allied’s mines, a burden shared by most Hunter Valley operators. Much of this cost pressure is due to unprecedented competition for many of the necessary business inputs.

In 2005 our production was aligned to available port and rail capacity. A capacity balancing system remains in place to manage vessel queues at Port Waratah.

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