Coal & Allied proposal

Rio Tinto Limited (“Rio Tinto”) (ASX: RIO) notes the announcement made by Coal & Allied Industries Limited (“Coal & Allied”) (ASX: CNA) today relating to an indicative, conditional, incomplete and non-binding proposal from Rio Tinto, under which Rio Tinto and Mitsubishi Development Pty Ltd (“Mitsubishi Development”), a wholly-owned subsidiary of Mitsubishi Corporation (TSE: 8058; LSE: MBC), would acquire all of the shares in Coal & Allied they do not already hold under a joint takeover (“Proposal”).

Rio Tinto confirms that it approached the Coal & Allied board on 6 August 2011 in relation to the Proposal.

The Proposal is for a cash offer price of A$122.00 per Coal & Allied share. In addition shareholders will be entitled to retain the dividend of A$1.20 per share scheduled to be paid on 26 August 2011. The total cash amount of A$123.20 per share represents a:

• 35.4 per cent premium to Coal & Allied’s closing price of A$91.00 on 5 August 2011, which was the last trading day before Rio Tinto’s approach; and a
• 21.9 per cent premium to the one month volume weighted average price of Coal & Allied shares of A$101.04 as at 5 August 2011.

Perpetual Limited, the largest institutional shareholder of Coal & Allied, has indicated that it is supportive of the Proposal in the absence of a superior proposal emerging.

There can be no certainty as to whether or not this Proposal will result in any form of transaction and the discussions remain subject to a number of matters including regulatory approvals and Rio Tinto and Mitsubishi Development entering into joint bid and other arrangements in relation to the Proposal on agreed terms (“Joint Bid Arrangements”). It is contemplated that any offer made under the Proposal will be subject to the Joint Bid Arrangements being approved by Coal & Allied shareholders (other than Rio Tinto and Mitsubishi Development) under section 611 item 7 of the Corporations Act 2001 (Cth).

Rio Tinto confirms that on 7 August 2011, Rio Tinto and Mitsubishi Development entered into a standstill deed under which each has undertaken to the other not to acquire further shares in Coal & Allied, except as otherwise agreed, for a period of two months. A copy of the standstill deed will be annexed to the substantial holder notice filed by Rio Tinto with the ASX. To date, other than the standstill deed, no agreement, arrangement or understanding has been reached between Mitsubishi Development and Rio Tinto in relation to any joint bid proposal or otherwise in relation to Coal & Allied or Coal & Allied shares.

Rio Tinto, through a wholly-owned subsidiary, is Coal & Allied’s largest shareholder, currently holding 75.71 per cent of Coal & Allied shares. Mitsubishi Development currently holds 10.20 per cent of Coal & Allied shares.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.