Rio Tinto’s Mine of the Future™ programme was unveiled in January 2008 and initially focused on the Group’s Pilbara iron ore operations. The programme is designed to create next generation technologies for mining operations that result in greater efficiency, lower production costs, improved health, safety and environmental performance, and more attractive working conditions.

Projects such as Resolution Copper in Arizona and Oyu Tolgoi in Mongolia will use an underground block cave mining method. This method requires construction of significant underground infrastructure prior to ore production. In anticipation of this need, Rio Tinto Technology and Innovation has been engaged in a long-running development programme to improve significantly both the safety and speed of constructing underground infrastructure such as shafts and tunnels.

The two new tunneling concepts from Atlas Copco and Aker Wirth will enable fast and cost effective tunnel creation. The shaft boring machinery being developed by Herrenknecht will combine rock excavation, rock transport and structural support – currently three separate processes – into a single system. All three new concepts are a result of civil tunneling industry technologies combined with input from Rio Tinto mining experts and contractor partners Redpath and Cementation.

John McGagh, Rio Tinto Head of Innovation, said, “At the heart of our Mine of the Future™ programme is industry-leading work to pioneer new technologies. The partnerships announced today will help us fundamentally change the world of underground mining by further improving safety and allowing more rapid construction of new underground mines. Our new partners will be very valuable in helping us to solve the challenges of developing block cave mines.”

The Rio Tinto, Atlas Copco and Herrenknecht teams will present information on their respective mining breakthroughs at the upcoming Society for Mining, Metallurgy and Exploration conference on 1-3 March 2010 in Phoenix, Arizona.

The consideration payable by Cape Lambert for its increased investment in Marampa is the issue of 17 million fully paid ordinary Cape Lambert shares to Marampa. These shares are to be issued to Marampa under the Company’s 15% threshold in accordance with the ASX listing rules.

Prior to entering into the Initial Marampa Agreement on 1 October 2008, the Company conducted extensive due diligence on the Marampa Project and believes that the Project has the potential to become a significant iron ore project, and as such, the Company could return such value to the Company and its shareholders.

This view has been enhanced by discussions with potential off-take partners and other parties interested in the joint development of the Marampa Project and/or related infrastructure and desktop studies of the Marampa Project by Cape Lambert technical advisors.

For predominately these reasons the directors of Cape Lambert feel it timely to increase the Company’s investment in Marampa.

On 1 October 2008, Cape Lambert announced that it had entered into an agreement to make a 30% investment in Marampa, owner of the Marampa Iron Ore Project, through the issue of 44 million Cape Lambert shares and agreement to sole fund the first US$25 million toward a definitive feasibility study at the Marampa Project (“Initial Marampa Agreement”).

The Company notes that its announcement of 1 October 2008 incorrectly stated that the 44 million Cape Lambert shares, issued pursuant to the Initial Marampa Agreement, were issued to African Minerals. These shares were in fact issued to Marampa.

Under the Initial Marampa Agreement, the Company also holds an exclusive option to invest further in Marampa by acquiring from African Minerals the outstanding shares in Marampa, which would result in Marampa becoming a wholly-owned subsidiary of Cape Lambert, at a price of US$200 million, less the aggregate of (i) US$25 million and (ii) the value of the 44 million Cape Lambert shares (already issued) and the 17 million shares (to be issued) as at the date of closing of the transaction. The option may be exercised at any time during the feasibility study period and for a period of three months immediately after its finalisation.

As manager of the Marampa Project, Cape Lambert has completed planning and definition of the initial work program, which included recruitment of several expatriate project management personnel, who have now mobilised and are in country.

The initial work program at Marampa has commenced, which will involve regional mapping, geophysics, drilling and metallurgical test work on the tailings (including recovery of a bulk sample for pilot scale work in Australia) and drill testing of the known geophysical anomalies.

The Company has also held discussions with parties interested in joint development of the Marampa Project and/or the development of the related infrastructure. These parties will visit the Marampa Project in the coming weeks so as to progress these discussions.

Rio Tinto’s subsidiary, Rio Tinto Iron & Titanium, has begun production of ilmenite at its QMM mineral sands operation at Fort Dauphin in Madagascar.

The development (owned 80 per cent by Rio Tinto and 20 per cent by the Madagascar government) began as an exploration project in the 1980s and is the second largest investment on the island. Ilmenite from Madagascar will be shipped for processing at Rio Tinto’s metallurgical complex in Sorel-Tracy, Quebec, which has upgraded its facilities to process this product.

The total cost of the investment in Madagascar and Canada is US$1.2 billion. Madagascar ilmenite contains 60 per cent titanium dioxide making it higher quality than most other global sources. It will be upgraded in Canada to produce a new 90 per cent titanium dioxide chloride slag suitable for global titanium feedstock markets where it is used in the manufacture of pigments for the paint and plastics industries.

Tom Albanese Rio Tinto CEO

Rio Tinto chief executive Tom Albanese commented: “This first production is a major landmark in a project which, notwithstanding many complex challenges, has been described as a model for future projects in Africa and elsewhere in the developing world.”

Harry Kenyon-Slaney, managing director of Rio Tinto Iron & Titanium, added: “The project will bring enormous benefits to the region. The floating dredge and wet plant, successfully launched in November, and the dry mill launched in December are producing concentrate at target quality. We are still in the early commissioning stage but expect to increase production over the coming months.”

The current mine site is at Mandena, to the north of Fort Dauphin, and production in phase one will eventually ramp up to 750,000 tonnes per annum. Later phases will be at Ste Luce and Petriky and there is potential to expand production to 2.2 million tonnes a year.

The first shipment of ilmenite to Quebec for processing is expected in March 2009, when work is completed on the new port of Ehoala to the south of Fort Dauphin. The construction of a new port is a public/private partnership executed by QMM that has benefited from a government grant of $35 million, funded by an IDA (International Development Association) loan from the World Bank. It will be a multi-user port capable of attracting other industry to the area and also providing a destination point for cruise ships.

The port, which can handle vessels up to 60,000 tonnes, is expected to promote existing local industries such as sisal growing, lobster fishing and harvesting of medicinal plants and fruits, and attract investors to a 400 hectare industrial zone nearby.

The social and environmental programme set up by QMM in the region includes a 620 hectare conservation zone that has been excluded from the mining area to protect the surviving littoral (coastal) forest and management of 31,275 hectares of legally protected biodiversity offsets.

Rio Tinto has worked closely with organisations such as Kew Gardens (with native species seeds being sent to the Millennium Seed Bank), Birdlife International (for the establishment of protected areas), Conservation International, Flora and Fauna International, Missouri Botanical Gardens and the Malagasy government. The aim of this work is to achieve a net positive impact on biodiversity and to rehabilitate and restore the land and eco systems affected by operations.

Community and social programmes have also been conducted in partnership with a range of national and international NGOs and development agencies, including Population Services International, USAID and UNDP among others. QMM seeks to promote local employment opportunities and small enterprise development as well as to improve health and education outcomes for its communities.

50 metres at 58.6% Fe 0.12 % P, 4.98% SiO2 and 1.58% Al2O3 from 16 metres
48 metres at 59.0 % Fe, 0.11% P, 4.00% SiO2 and 1.17% Al2O3 from 14 metres
46 metres at 58.1% Fe 0.14% P, 4.85% SiO2 and 1.72% Al2O3% from 12 metres
42 metres at 59.6% Fe, 0.07% P, 4.50% SiO2 and 1.41% Al2O3 from 4 metres

Wodgina, which is part of the Greater Abydos Project, is strategically well placed abutting the Great Northern Highway, the FMG Railway line and the BHPB Railway line. “A discovery like this, 100 kilometres from a world class iron ore port and less than 10 kilometres from road and rail is a real win for Atlas” commented David Flanagan, Atlas Iron’s Managing Director.