Diamond and Minerals

Full-year EBITDA in the segment jumped 12% to $1.19 billion from $1 billion last year as there was record production and earnings. $563 million was also approved for expansion underground development.

In addition, there were strong earnings for borates and TiO2 from Asian markets.

Metal Prices

Metal price continued to rise from the emerging markets, with copper prices increasing six times the 2006 levels and aluminium prices trebling from 2006 prices.

During the year, there was also a 9.5% increase in the benchmark price of iron ore on higher consumption.

Molyddeum prices also averaged $30/lb throughout 2007, up 20% from a year earlier.

Inflation in Mining Inputs

Inflation in mining input rose as mining labor rates increased 8% year-on-year, while contract labour grew 12% and consumables rose 4% from the previous year.

Freight rates in the fourth quarter rose to 10,000 from 7,000 a year ago.

Outlook

Rio Tinto is bullish on prospects for 2008 as commodity prices continue to rise. China is increasingly replacing the U.S. on the global consumption market.

According to the company, aluminium consumption is expected to rise from 23% in 2006 to 42% in 2011, while copper pieces are expected to gain from 20% in 2006 to an estimated 25% by 2011.

Iron Ore consumption is forecasted to grow from 50% in 2006 to 57% by 2011.

On the overall, Rio Tinto believes China’s GDP will fall by less than 1% even if the U.S. slips to a recession.