Navigating through Rio Tinto’s

 Annual and Strategic report

As of 2013, the UK’s regulatory reporting framework requires companies to produce a strategic report. The intention is to provide investors with the option of receiving a document which is more concise than the full annual report, and which is strategic in its focus.

The first 40 pages of Rio Tinto’s 2013 Annual report constitute its 2013 Strategic report. References to page numbers beyond 40 are references to pages in the full 2013 Annual report. This is available online at riotinto.com/reportingcentre2013 or shareholders may obtain a hard copy free of charge by contacting Rio Tinto’s registrars, whose details are set out on the inside back cover of this document.

In light of the new regulatory requirement to produce a strategic report in lieu of summary financial statements, and the Group’s focus on delivering greater value for shareholders, Rio Tinto is no longer producing an Annual review. Please visit Rio Tinto’s website to learn more about the Group’s performance in 2013.

This Annual report, which includes the Group’s 2013 Strategic report, complies with Australian and UK reporting requirements.

Copies of Rio Tinto’s shareholder documents – the 2013 Annual report and 2013 Strategic report, along with the 2014 Notices of annual general meeting – are available to view on the Group’s website: riotinto.com

Cautionary statement about forward-looking statements

This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Rio Tinto Group. These statements are forward-looking statements within the meaning of Section 27A of the US Securities Act of 1933, and Section 21E of the US Securities Exchange Act of 1934. The words “intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believes”, “expects”, “may”, “should”, “will”, “target”, “set to” or similar expressions, commonly identify such forward-looking statements.

Examples of forward-looking statements in this Annual report include those regarding estimated ore reserves, anticipated production or construction dates, costs, outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this document that are beyond the Group’s control. For example, future ore reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign currency exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and political uncertainty.

In light of these risks, uncertainties and assumptions, actual results could be materially different from projected future results expressed or implied by these forward-looking statements which speak only as to the date of this Annual report. Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results.

Introduction to Rio Tinto

Rio Tinto is a leading global mining group that focuses on finding, mining and processing the Earth’s mineral resources. Our vision is to be a company that is admired and respected for delivering superior value, as the industry’s most trusted partner.

With a view to sustaining returns to shareholders over time, we take a long-term approach to our activities. This means concentrating on developing Tier 1 orebodies into long-life, low-cost, expandable operations that are capable of providing competitive returns throughout business cycles.

We have a diverse portfolio and a global presence: our 66,000 people work in more than 40 countries. Our five product groups summarised below are supported by our Exploration and Technology & Innovation groups (also see pages 26 to 37). We are committed to creating a culture of high performance – providing challenging work and opportunities to grow, and rewarding those who help deliver superior value.

Sustainable development is integrated into everything we do. Our operations give us the opportunity to bring long-lasting positive change to the communities, regions and countries in which we work, and our metals and minerals are transformed into end products that contribute to higher living standards.

The safety of our people, and our values – accountability, respect, teamwork and integrity – are at the core of our way of working. Our responsible approach to mineral development ensures we gain and maintain our licence to operate. It means we provide confidence to our stakeholders, and improve our access to the mineral resources, people and capital we need.

Aluminium product group

Building on more than a century of experience and expertise, Rio Tinto Alcan is a global leader in the aluminium industry. Our fully-integrated facilities include high-quality bauxite mines, large-scale alumina refineries, and some of the world’s lowest-cost, most technologically-advanced primary aluminium smelters.

Products

Bauxite

Bauxite is the natural ore used to make aluminium. It is refined into alumina which is smelted into aluminium metal. Our wholly-owned and joint venture bauxite mines are located in Australia, Brazil and Guinea.

Alumina

Alumina (aluminium oxide) is extracted from bauxite via a refining process. Approximately four tonnes of bauxite are required to produce two tonnes of alumina, which in turn makes one tonne of aluminium metal. Our wholly-owned and joint venture alumina refineries are located in Australia, Brazil and Canada.

Aluminium

Aluminium is a unique and versatile modern metal. Light, strong, flexible, non-corrosive and infinitely recyclable, aluminium is one of the most widely-used metals in the world. Its largest markets are transportation, machinery and construction. Our smelters are mainly concentrated in Canada. We also have plants in France, Australia, New Zealand, Cameroon, Iceland, Norway, the UK and Oman.

Strategic advantages

Copper product group

Rio Tinto’s Copper product group is made up of four operating assets and two key development projects. Our operating assets are world-class and our project pipeline of longer-term opportunities will help ensure we will continue to be well positioned to meet demand for one of the world’s most sought-after resources.

Products

Copper

The world uses more than 26 million tonnes of copper every year. It is malleable, durable, resistant to corrosion, hygienic and an excellent conductor of heat and electricity, making it useful in a broad range of building, construction and electrical applications. Copper is a metal at the forefront of green innovation. Hybrid and electric cars rely on it, as do renewable energy sources such as solar power, wind farms, thermal and hydroelectricity. Copper is known for its antibacterial properties and is increasingly used in hospitals and other medical facilities.

Gold

Gold’s conductivity and non-corrosive properties make it a vital fabrication material in technology, electronics, jewellery, space exploration and dentistry. We are one of the world’s top 15 gold producers, and the largest among the diversified miners. We have interests in two copper-gold mines that rank among the world’s largest gold resources, at Oyu Tolgoi and Grasberg.

Silver

Silver has very good electrical and thermal properties. It is used in many electrical and electronic applications, such as photovoltaic cells, and is the principal ingredient of x-ray film. Silver is also regarded as a precious metal used for investment and in jewellery.

Molybdenum

Molybdenum is a metallic element frequently used to produce stainless steel and other metal alloys. It enhances the metal’s toughness, high-temperature strength and corrosion resistance.

Strategic advantages

Dear shareholders,

In 2013 your company was focused on improving the performance of the business, strengthening capital allocation processes and reducing our level of indebtedness – all with a view to ensuring a greater commitment to creating real value for shareholders.

I am pleased to report that substantial progress had been made on meeting these priorities. We achieved underlying earnings of US$10.2 billion and significantly improved cash flow by 22 per cent over 2012. We exceeded our cost reduction targets and set production records. Our net earnings performance of US$3.7 billion takes account of non-cash exchange rate losses and impairments.

We are deeply saddened by the deaths of three of our employees at our managed sites last year and improving safety at all of our operations during the year ahead is of paramount importance.

Our overall performance gave the board the confidence to raise the 2013 full year dividend by 15 per cent. This increased dividend represents an important milestone on the road to improved shareholder value.

Stronger business, creating options

During 2013 greater discipline and accountability was restored throughout the business, particularly in the allocation and management of capital. We simplified and strengthened our systems in this area and improved decision-making capability across the organisation.

Your board regularly evaluates opportunities put forward by the business against all competing uses for cash, striving to achieve the right balance between disciplined investment, strengthening our balance sheet and returning cash to investors.

The reduction in our net debt during 2013 is an indication of our commitment to a stronger balance sheet and provides flexibility in terms of returns and investment. We are building more resilience in our business, which gives your board greater flexibility to respond to macroeconomic developments as they arise.

Strategy development and disciplined delivery

During the year your board supported Sam Walsh on the implementation of his plan to improve performance, strengthen the balance sheet and deliver results. We worked with him on reviewing the company’s strategy and reaffirmed our commitment to invest in and operate long-life, low-cost, expandable mines and businesses. The board also took the time to visit our world-class iron ore operations in the Pilbara in Western Australia to get a deeper understanding of the strategic and operational issues at play.

Sam, his executive team, and all of our 66,000 employees across the world have worked hard during a challenging year and made a large contribution to restore the company to a position of strength. I thank all of our people for their efforts and commend Sam for this leadership during a tough time. But there is more we must do.

Amidst continued market uncertainty, impacts of quantitative easing and austerity programmes still washing through markets around the world, your board has tasked the executive team with ensuring they successfully execute our strategy and make sure the gains delivered are sustained. The discipline of 2013 must be carried forward into the year ahead and beyond, with a specific focus on delivering our growth projects and producing further productivity improvements at all of our sites.

As geopolitical and social risk increase, we remain convinced that businesses which form effective relationships and partnerships around the world will prosper over the longer term. Rio Tinto has always taken its role as a responsible business very seriously and throughout the year ahead we will continue to build our capabilities in stakeholder engagement and sustainable development. We believe earning the trust of our host communities and governments is vital in creating sustainable shareholder value.

Maintaining good governance

Good governance is essential for the long-term success of the Group. In 2013, we have seen a greater level of focus, discipline and accountability throughout the organisation. This continues to be underpinned by your board’s oversight of a robust corporate governance framework to support our business and strategic delivery.

My role as chairman is to lead the board and to ensure it is focused on its oversight of management and the delivery of our strategy. Sam Walsh’s role as chief executive is to focus on sustained operational excellence and growth of the business – and to do so with safety top of mind. Our roles are complementary but distinct. The separation of executive and non-executive accountabilities is essential to good governance: the executives have an operational role, whereas the non-executives have an oversight role, ensuring accountability and exercising strong and deliberate challenge through the board decision-making process to ensure appropriate control mechanisms are in place to safely implement our strategy and plans.

Your board devotes much of its time to reviewing, debating and challenging proposals for investment from management, as well as dealing with a wide range of other issues including safety and the Group’s strategic direction, monitoring business performance, optimising capital allocation and expenditure whilst carefully evaluating the wide range of risks facing the business.

Leadership

Leadership is critical at all levels – at board level, at executive level, and throughout the business. We are committed to effective succession planning at both the board and executive level. My goal is to make sure your board combines the diverse blend of skills and international experience that is available to it now and to enhance it further for the future. Rio Tinto’s board should have the best blend of appropriately skilled and experienced people from our industry, but also outside of it.

2013 saw a number of changes to the executive team, starting with the appointment of Sam Walsh as chief executive. Following Guy Elliott’s decision to retire at the end of 2013, your board appointed Chris Lynch as chief financial officer with effect from April 2013. The board announced the promotion of Jean-Sébastien Jacques as chief executive, Copper, following Andrew Harding’s move to become chief executive, Iron Ore and appointed Greg Lilleyman as Group executive, Technology & Innovation with effect from 1 January 2014, following the retirement of Preston Chiaro from the Executive Committee at the end of 2013.

Preston retires as an executive on 1 April 2014. I would like to thank Guy and Preston for their significant contributions to Rio Tinto over their many years with the Group and we wish them well in their retirement as executives.

Moving forward, I am very pleased to announce today the appointment of two new non-executive directors. Anne Lauvergeon and Simon Thompson will bring a wealth of experience to your board given their combined experience in a number of leading international businesses. We also announced today that Vivienne Cox will stand down at the end of the annual general meeting in London in April, after nine years on the board. I would like to thank Vivienne for her significant contribution to Rio Tinto over this time and wish her well for the future.

We are a balanced and diverse board, comprising myself as chairman, two executive directors and eight (soon to be nine after the new appointments and Vivienne Cox’s retirement) independent non-executive directors, all of whom are rigorously assessed to ensure they continue to meet strict independence criteria. The directors bring with them truly international experience from a wide range of professional, business and public office backgrounds.

Dear shareholders,

2013 was a challenging and very rewarding year for Rio Tinto. I was proud to be appointed chief executive of your company a year ago at a time when shareholders had lost some confidence in the business. Change was needed. Trust and confidence in management had to be rebuilt. While I was determined that Rio Tinto would not repeat the mistakes of the past, I also recognised the solid foundations of an outstanding company with extremely good people and assets.

Transforming our business to focus on greater value for shareholders

So, while Rio Tinto was in many ways an outstanding business, we needed to refocus on meeting the expectations of the owners of our company. I defined our 2013 goal as delivering greater value for our shareholders and during the year, I personally met with and listened to hundreds of investors and analysts, as well as our employees, customers and suppliers across the world.

They all told me, we want to see Rio Tinto return to a position of strength. Similarly, I too want Rio Tinto to be a company admired and recognised not just for superior performance but for embodying our values in all that we do. In February 2013, I set out my plan to improve and build upon the strong foundations of the company. This included creating a tightly-run, and more disciplined and accountable business. In 2013, we have done just this and forged ahead with a single-minded emphasis on delivering our priorities to improve performance, strengthen the balance sheet and deliver results in every market in which we operate, everywhere around the world.

Our performance in 2013 reflects the efforts of all of our 66,000 employees to turn this business around. I am humbled by the enthusiasm, passion and talent I have seen, and the willingness of all our people to embrace the change required and improve performance. Against a backdrop of continuing market uncertainty, we have improved earnings and cash flows. We have reduced costs, net debt and capital expenditure. We have delivered greater value for you, our shareholders, which is reflected in the 15 per cent increase in our 2013 full year dividend.

In short, last year, we did what we said we would do. But we are restless to improve further. Our 2013 net earnings reflected impairments on some of our assets and we are absolutely focused on making sure we improve project execution and deliver further business improvements. This, together with improving our safety performance, will be our continuing focus in 2014.

Building a safer business

While we can look back with pride at the many successes we delivered in 2013, we failed to meet our critical goal of no fatalities in our business. Three of our colleagues died working at Rio Tinto managed operations last year. Thirty seven people died at non-managed operations, including 33 at the Grasberg mine in Papua, Indonesia. These are terrible tragedies. With regard to Grasberg, we are continuing to work with our joint venture partner to share our safety capabilities and learnings so we can both improve our safety performance, and this process is ongoing.

All of these deaths weigh heavily on me personally and I, and my management team, feel enormous sorrow for the families and friends of these colleagues. I was also deeply saddened by a further fatality at Grasberg and another at the Gove refinery this year. I am determined that we will turn our safety performance around. We have made significant gains over the course of our safety journey but we have more to do. Strong safety leadership, improved management of critical risks, and learning from all significant incidents are of paramount importance.

Delivering our strategy

We are still operating in a volatile macroeconomic environment. Despite more optimistic signs coming through from OECD economies, and growth remaining

relatively strong in developing economies, the underlying structural fragilities remain. With volatility expected to continue over the short term, we will stand by the priorities we set for ourselves a year ago: to improve performance, strengthen the balance sheet and deliver results. These priorities have already proved effective in making us a more robust organisation, and with continuing focus, we will grow stronger still.

1. Improving performance

We exceeded our targets for reducing operating cash costs and exploration and evaluation expenditure in 2013. These results demonstrate the exceptional work being done across the business to address our cost base. These efforts will continue in 2014, in order to reach a US$3 billion improvement in operating cash costs versus 2012. Our aim is to sustain exploration and evaluation spend at around 2013 levels in 2014 and beyond.

Our 2013 performance was further bolstered by increased production. We set new production records in bauxite, thermal coal and iron ore, and across the Group, our total production grew by nine per cent in 2013 on a copper equivalent basis. Our focus on productivity will persist in 2014, in tandem with our keen eye on costs. Our efforts to reduce costs and increase performance, resulted in improved underlying earnings of US$10.2 billion, up ten per cent on 2012.

2. Strengthening our balance sheet

The excellent performance achieved in reducing costs, together with volume growth, is leading to stronger cash flows. Combined with cash inflows from divestments and lower capital expenditure, we were more than able to reverse the increase in net debt we saw in the first half of the year.

In November, we announced our breakthrough pathway for expanding our Pilbara operations towards 360 million tonnes per annum at a US$3 billion lower capital cost than previously planned. This is a clear example of our disciplined approach to capital allocation. I am confident we have stronger, stricter processes in place for how we allocate capital. As we move forward with reinforced systems embedded at the core of our investment approach, you have my absolute commitment that each and every dollar we are investing on your behalf is being rigorously scrutinised.

Our focus for the year ahead will be to continue to pay down debt and further strengthen the balance sheet. Our aim is to provide the board with options for how best to deliver value to you, whether this is through value-accretive growth, or returning cash, or a combination of both.

3. Delivering results

In keeping with our strategy, 2013 saw the completion of five major capital projects that have already started delivering results: the Oyu Tolgoi copper-gold mine; the first phase of our Pilbara iron ore expansion; the Argyle underground diamond mine; the Kestrel coal mine extension; and the AP60 aluminium smelter. We expect to deliver strong returns from these key assets in our portfolio over the coming years.

Ongoing commitment

In 2013 we rose to the challenge and navigated difficult times to emerge as a leaner and much stronger company. 2014 will be about locking in the gains achieved last year and continuing to strengthen the business.

I would like to close by paying tribute to all of our employees across the world. Without their efforts we would not have been able to turn around the performance of the business and I am energised by the effort, enthusiasm and passion for improvement which I have seen first-hand in every part of our organisation. Over the next 12 months and beyond we will remain focused on safety and upholding our values wherever we operate in the world. Above all, we will continue our single-minded focus on delivering greater value for you, our shareholders.

External pressures

The mining industry is cyclical and, following a decade-long growth phase, it is now experiencing a period of lower prices and compressed margins. Meanwhile, volatility – a characteristic of the macroeconomic environment since the global financial crisis – has been ongoing and is expected to continue, bringing with it further short-term risk.

Our response to this has been to focus on costs, cash flow and capital discipline. Others in the sector have embarked upon similar paths. Inefficiencies are also being exposed, and so reductions in costs and capital expenditure, productivity improvements, and project deferrals and cancellations have become a prominent part of mining industry strategy.

Despite the uncertain conditions that we currently face, the long-term outlook for our sector remains positive.

The world’s population is forecast to increase by 30 per cent in the next 40 years. Seventy million people enter the middle classes every year. In China alone, around 170 million people are expected to move to an urban environment by 2025. These factors are driving demand for the minerals and metals we produce, as essential ingredients of modern life. They make our business a good and valuable one to be in.

Consistent strategy, sharper focus

Rio Tinto’s vision is to be a company that is admired and respected for delivering superior value as the industry’s most trusted partner.

The world we operate in today, and the future we are preparing for, require us to have a clear and consistent strategy. In 2013, we reaffirmed our direction of

travel and recommitted to the strategy that has worked for us for many years: to invest in and operate long-life, low-cost, expandable operations in the most attractive industry sectors. This strategy will allow us to take advantage of the opportunities ahead, and we are confident that it is the right one for Rio Tinto.

In 2013 we reset our focus on executing the strategy by becoming a leaner, more cash-oriented and tightly-run business. We refocused our Group on improving performance, strengthening our balance sheet, and delivering results – to deliver greater value for shareholders.

We are doing what we said we would: reliably and relentlessly executing our strategy. We are making every dollar count, looking for ways to do things safer, smarter and better, and ensuring that we only invest in activities that add value.

2013 marked our 140th year in business. We have been around this long by being very good at what we do. Looking to the future, disciplined execution of our strategy is vital to building on our recent successes, and our industry-leading capabilities will equip us to do this.

We have world-class people and assets, and have developed pioneering and industry-leading systems and technologies. We pride ourselves on being innovative – finding solutions that help us operate more efficiently, sustainably and responsibly. We are recognised and respected for our exploration and operations expertise, for our values and our commitment to safety, and for creating benefits for our diverse stakeholders.

While these things will not change, our sharpened focus aims to transform us into the highest performer in our sector and will make sure we are fighting fit for the next 140 years and beyond.

How we create value

We create and preserve value by investing in and operating long-life, low-cost, expandable operations in the most attractive industry sectors. From the earliest stages of exploration, during our assets’ productive lives, and throughout the closure and restoration phase beyond, we commit to high standards of sustainable development. Read more on pages 18 to 25.

Explore and evaluate

Our experienced in-house exploration team has a proven track record of discovering Tier 1 orebodies: the highest-value deposits that are profitable throughout the commodity cycle.

We maximise opportunities by exploring for and evaluating deposits in new geographies (such as the La Granja copper project in Peru). We also explore the orbits of our current operations (like the Caliwingina iron ore deposit in the Pilbara), which sustains the value of our existing businesses. We operate the majority of exploration programmes ourselves rather than outsourcing, so we can keep focus on targets that are important to Rio Tinto. We will, however, partner with others if it gives us access to attractive opportunities, or skills, that we do not possess in-house.

Our orebody knowledge allows us to find value-enhancing ways of developing our resources and positioning our products in the market. Our geological expertise gives us the confidence to keep hunting for the most elusive discoveries. And we have a strong tradition of developing and applying innovative technologies to resolve specific exploration challenges.

Develop

We develop orebodies for long-term value delivery. We aim to deliver projects on time and on budget – such as commissioning the first major expansion phase of our Pilbara iron ore operations and the Oyu Tolgoi concentrator in 2013. Through our reinforced capital allocation process, we approve investment only in assets that, after prudent assessment, offer attractive returns that are well above our cost of capital.

During this phase, we plan the most efficient configuration for developing the orebody and for getting the products to market. We work closely and strategically with our customers, to create demand for the optimal suite of products, thus maximising value over the deposit’s lifetime. Once the value of the orebody is confirmed, and internal and external approvals are received, the project moves into implementation and construction.

Mine and process

We create value by safely and efficiently operating assets that fit with our Group strategy. Our global operating model allows us to implement standard processes and systems across the Group, for instance in procurement, operations and maintenance. This globally-consistent approach reduces our use of consumables, increases the life of our equipment and optimises the extraction of ore. In turn, we enjoy higher production and reduced costs, and we maximise value.

We use world-class technologies during mining and processing to increase our efficiency and productivity, and to produce material that is tailored to our customers’ needs. Through networked partnering with academia, technology suppliers and other experts, we gain access to knowledge and technical prowess that augment our own capabilities.

Market and deliver

Our diverse portfolio of metals and minerals allows us to respond to demand across the development cycle: we supply basic raw materials and refined products that are the building blocks of added-value goods. Most of our

customers are industrial companies that process our products further and supply numerous sectors – including construction and infrastructure, automotive, machinery, energy and consumer goods.

We innovate and improve our products and services to maximise value to customers. We are constantly adding to our market knowledge, allowing us to improve our investment decision-making process. In many cases, we are responsible for delivering product to our customers, and do so efficiently, reliably and cost-effectively. We have significant in-house logistical capability, including through our own networks of rail, ports and ships.

Close down and rehabilitate

We integrate closure planning throughout an asset’s life cycle, from the earliest stages of project development. When a resource reaches the end of its life, we seek sustainable and beneficial future land uses, to minimise financial, social and environmental risks. By partnering with external conservation organisations, we access expertise that helps us improve our rehabilitation performance. Our approach helps us to maintain a positive reputation for sustainable development and ensures we meet the expectations of our current and future stakeholders.

Delivering value for our stakeholders

Rio Tinto’s primary focus is on the delivery of value for our shareholders. We balance disciplined investment with prudent management of our balance sheet and cash returns to shareholders. We offer a long-term investment opportunity, and commit to sustainable growth in cash returns to shareholders through our progressive dividend policy. As we work, fixed on this core aim, our activities also give us the opportunity to create value for our other stakeholders, in a variety of ways.

Customers

We supply our customers with the right products at the right time. They then add further value, by turning them into the end products that society needs to make modern life work.

Communities

Our operations create employment and career development opportunities for our local communities, as well as business opportunities for local suppliers. Communities often benefit from the infrastructure we put in place to serve our facilities and, once our operations are closed, we restore the sites – often for community use, new industry, or back to native vegetation.

Our people

We invest in our people throughout their careers, offering diverse employment prospects, opportunities for development, and competitive rewards and benefits that have a clear link to performance. As employees spend their wages, the value we share with them is spread more widely.

Governments

We are often a major economic contributor to the local, state and national jurisdictions in which we operate. Our tax and sovereign equity contributions enable governments to develop and maintain public works, services and institutions. We work together to facilitate growth of diverse and sustainable economies that endure far beyond the active life of our operations.

Suppliers

By seeking a balance of global, national and local supply capability we drive value for our shareholders and deliver economic benefits for the communities in which we operate.