DBRS Confirms Rio Tinto at A (low) Stable; Removes From Under Review Developing

DBRS has today confirmed the rating of Rio Tinto Plc and Rio Tinto Ltd. (collectively, Rio or the Company) at A (low) with a Stable trend following the substantive completion of a $11.8 billion rights issue by Rio Tinto Plc announced on June 4, 2009. Combined with the expected completion of an additional fully underwritten $3.4 billion rights issue by Rio Tinto Ltd. next week, Rio will use the net proceeds of the equity issues to repay approximately $14.7 billion of debt related to the acquisition of Alcan Inc. (Alcan). DBRS expects that the new equity issuance and debt repayments will restore the Company’s credit metrics to levels that are more in line for an A (low)-rated resource company at a low point in the economic cycle. DBRS has therefore confirmed the Company at A (low) with a Stable trend, as indicated in our June 4, 2009, press release, and has removed the ratings from Under Review with Developing Implications.

Rio had made significant progress in alleviating much of the near-term pressure of the large Alcan acquisition-related debt repayments through the issuance of $3.5 billion in long-term notes in April 2009 and the announced sale of approximately $2.5 billion in assets. The Company currently has strong liquidity, with $1.7 billion in cash on hand and approximately $8.2 billion in available credit lines as at March 31, 2009.

The outlook for Rio’s operations is generally improving, with DBRS’s expectation that the worst of the current economic downturn has been seen and with many commodity prices trading well above their cyclical lows. Contract year prices for 2009-2010 for iron ore, thermal coal and steel-making coal are down significantly from the prior year, but still high compared with historic trends. DBRS expects Rio to generate net free cash flow in 2009, which will add to its ability to reduce debt.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Mining, which can be found on our website under Methodologies.

This is a Corporate rating.

Note: Rio Tinto Plc & Rio Tinto Ltd. provide cross guarantees for each of Rio Tinto Canada Inc., Rio Tinto (Commercial Paper) Ltd., Rio Tinto Finance (USA) Limited, Rio Tinto Finance Limited, Rio Tinto America Inc., Rio Tinto (Commercial Paper) Plc, and Rio Tinto Finance Plc.