Rio Tinto andbiodiversityAchieving results on the ground

About Rio TintoRio Tinto is a leading global mining group,combining Rio Tinto plc, a public companylisted on the London Stock Exchange,and Rio Tinto Limited, which is listedon the Australian Securities Exchange.

We are involved in every stage of the miningbusiness. Products include aluminium, copper,iron ore, coal and uranium. Activities spanthe world but are concentrated in Australiaand North America.

Wherever we operate, the health and safetyof our employees, and a contributionto sustainable development are key values.We work closely with host countriesand communities, respecting their lawsand customs and ensuring a fair shareof benefits and opportunities.

Rio Tinto and sustainable developmentMining is a long term, capital intensive business, withassets often situated in remote locations. The extendedtimescale means that if Rio Tinto is to deliver financialreturns to shareholders, host governments and localcommunities, we need economic, environmental andsocial stability. Rio Tinto is committed to sustainabledevelopment not just because it is the responsibleand ethical approach to managing the earth’s naturalresources, but also because it makes soundbusiness sense.

Our business success is built on access to land, peopleand capital. Rio Tinto believes we can help to ensureaccess by building a strong and deserved reputationthrough our care for the environment, our socialpolicies and our contribution to economic prosperity.The concept of sustainable development is integratedinto all aspects of Rio Tinto’s business through ourcorporate and operational policies, standards,strategies, programmes and performance indicators.

Cover: New growth in the plant nursery at Rio Tinto's mining projectin Madagascar.

Foreword

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Since launching our Biodiversitystrategy four years ago, Rio Tinto hasbeen on a steep learning curve. Thisbooklet shares our approach to themanagement and conservation ofbiodiversity, our achievements todate, what we have learnt and whatwe plan to do next.

Rio Tinto recognises that biodiversity and ecosystemservice degradation are issues of global significancethat will have long reaching, negative effects forsociety if not addressed promptly and effectively.

These issues present new challenges to the miningindustry. Often in the past, the industry’s approachto environmental management was focused on whathappened within the mine’s boundaries. Today, awell managed mining business needs to understanda much broader context. This includes the currentand potential use of the land we manage, itsbiodiversity and social values, its connection withother habitats, and community expectations as tohow the land is developed and managed.

Four years ago, Rio Tinto made a public commitmentto biodiversity conservation and a goal of having a“net positive impact” on biodiversity. Put simply, weaim to ensure that biodiversity and its conservationultimately benefit from our presence in a region.We knew then and still realise today that this isan ambitious goal – one that attracts high levels ofinterest and scrutiny from many stakeholders. But thiscommitment also provides long term business value,by enabling us to better understand the issues andtheir local, regional and social context–so that wecan design and implement effective and sustainableprojects to manage biodiversity better.

We have invested the past four years in engagingfurther with the conservation and science community,building our capacity internally, increasing ourunderstanding of the issues and developing,implementing and revising a number of programmes.Achieving measurable results is now our biggestchallenge, and I’m pleased to say we are beginningto make progress – as this booklet illustrates.

Our goal for the next four years is to build on whatwe have learnt, continue to harness the return on ourinvestment with stronger biodiversity programmesand outcomes, and to re-examine the way in whichnatural capital is valued in our decision making.

I acknowledge we have a way to go, but by collaboratingwith others both internally and externally, I’m confidentwe can continue our learning, improve our performanceand contribute to global biodiversity conservation.

Tom Albanese, chief executive, Rio Tinto

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“Biodiversity” is a complex term, whichmeans different things to differentpeople. To Rio Tinto, biodiversityrefers to the variety of life on earth,the different animals, plants andmicro-organisms, their genes and theecosystems of which they are a part.Impacts on biodiversity make miningand processing projects potentiallysensitive for regulators, localcommunities, investors, nongovernment organisations (NGOs)and employees. Rio Tinto’s longterm business success dependson our ability to understand andmanage these issues.

Rio Tinto’s goal is to have a “net positive impact” (NPI)on biodiversity. This means minimising the impactsof our business and contributing to biodiversityconservation to ensure a region ultimately benefitsas a result of our presence. Our biodiversity strategywas launched in 2004 at the IUCN World Congressin Bangkok.

The biodiversity strategy and NPI goal is a voluntarycommitment Rio Tinto has made in response to bothchanging societal expectations and our understandingof business value.

To achieve NPI, we first seek to understand thebiodiversity elements of the regions where we operate,as well as the intrinsic and societal “values” placedupon those elements. We then prioritise our actions,focusing on the biodiversity elements that have thehighest conservation significance (described later inthis booklet).

The issues for each project or operation vary greatly,as do the opportunities for minimising negativeimpacts and creating positive outcomes. We arefocused on prioritising action at the projects andoperations facing the highest risks.

This booklet provides information about Rio Tinto’sbiodiversity strategy, our approach and progress in itsimplementation and the tools and processes we havedeveloped to help achieve our NPI goal. The bookletreplaces our 2004 biodiversity policy and guidancedocuments Rio Tinto’s Biodiversity Strategy: Sustaininga Natural Balance.

Plant nursery at Rio Tinto's Madagascar mining project

Joshua trees are members of the lily family and are only found inthe Mojave Desert. Rio Tinto Minerals - Boron Operations has beenin operation in the Mojave Desert of California since 1926.

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Biodiversity – a strategic issue for Rio TintoAs human related biodiversity loss continuesto increase, concern around mining’s impacts onbiodiversity will continue to grow. Rio Tinto ownsand manages more than 110 operations (refer toinside back cover for map of our operations) aroundthe world, located in six geographical regions acrossseven different climate zones.

Traditionally environmental issues such as impactson biodiversity have been seen as a risk to a miningcompany’s licence to operate. However, since therelease of the biodiversity strategy in 2004, we arelearning that biodiversity can present opportunitiesto build business value – opportunities to build betterrelationships with our stakeholders, understandemerging ecosystem services markets and achieveour sustainable development goals.

Rio Tinto’s biodiversity strategyRio Tinto’s environmental management is governedby an internal policy and standards framework. Whenthe Group first adopted our statement of businesspractice in 1998, The way we work, we formallyrecognised the need to take account of environmentalfactors in gaining access to land and managing ouroperations, particularly in areas of high conservationvalue. In 2003, Rio Tinto’s policy on land access wasstrengthened, recognising the importance ofbiodiversity outside protected areas.

Rio Tinto’s biodiversity strategy supports our projectsand operations in their goal of achieving NPI. The keyelements of the strategy include Rio Tinto’s positionstatement and guiding principles on biodiversity.

Our positionstatement on biodiversity

Rio Tinto recognises that conservation and responsiblemanagement of biodiversity are important business andsocietal issues. Our goal is to have a net positive impacton biodiversity.

We are committed to the integration of biodiversityconservation considerations into environmental andsocial decision making in the search for sustainabledevelopment outcomes. We recognise that this mightmean that we do not proceed in some cases.

We want to be biodiversity leaders within the miningindustry, for the competitive advantage and reputationalbenefit this provides. Our performance on biodiversityconservation and management issues will create benefitsfor our business.

We are committed to:

• The identification of biodiversity values impactedby our activities.

• The prevention, minimisation, and mitigation ofbiodiversity risks throughout the business cycle.

• Responsible stewardship of the land we manage.• The identification and pursuit of biodiversity

conservation opportunities.• The involvement of communities and other

constituencies in our management of biodiversity issues.

Guiding principles tosupport our position

• Our goal is to have a net positive impact on biodiversityby minimising the negative impacts of our activitiesand by making appropriate contributions toconservation in the regions in which we operate.

• We are committed to the conservation of threatenedand endemic species and high priority conservationareas, and support local, national and globalconservation initiatives.

• We will seek equity and the reconciliation of differingperspectives and ideals in biodiversity decisionsand actions.

• We will enhance biodiversity outcomes throughconsultation, constructive relationships, andpartnerships with key stakeholders.

• We will integrate the identification, evaluation, andmanagement of biodiversity issues into the planning,decision making, and reporting processes throughoutthe business cycle.

• We will apply appropriate expertise and resources tobiodiversity issues, building internal and externalcapacity where necessary.

• Subject to appropriate consent, we promote thecollection, analysis, and dissemination of biodiversityinformation and knowledge.

Engaging with others

For Rio Tinto's biodiversity strategy to be successful,we need to have good working relationships withthose who are impacted by or have an interestin the decisions of our business. Indigenous landowners, affected communities, governments,regulators, international, regional and local NGOs,investors, the science and finance communities andour managers and employees all have interests andconcerns to which we must respond, and understand.Engagement helps us better understand issues andpriorities, and develop programmes and actions thatthe parties involved agree will provide value.

Through the establishment of formal partnershipswith leading global and regional conservation NGOs,we built a collaborative process that initially shapedthe policy elements of the biodiversity strategy andNPI goal. These relationships have continued toflourish since 2004 and have played a significant rolein the refinement of our understanding around NPIand the development of the methodologies and toolswe are using in the implementation of the strategy atour sites.

Rio Tinto’s biodiversity partners include:BirdLife International, Conservation International,Earthwatch Institute, Fauna & Flora Internationaland Royal Botanic Gardens, Kew.

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Stuart Ankin (left), senior tour guide with Arnhem Land Ecotourism, NorthernTerritory Australia, shares his local knowledge with Guy Dutson from BirdsAustralia (the Australian partner of Birdlife International).

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Achieving our goalBiodiversity is a very complex issue to both understandand manage in the context of mining, refining andsmelting. Since 2004, the concept of Rio Tinto achievinga net positive impact (NPI) on biodiversity has beenthe subject of much debate – both internallyand externally.

For the past four years, we have worked with the helpof others, including our conservation organisationpartners, to refine our understanding of the conceptsthat in turn govern the ongoing development of ourstrategy – concepts such as biodiversity “values”and “offsets”. This refinement will continue, as thepilot work at our projects and operations deliversnew learning and improved understandingof complex issues.

Rio Tinto and NPIRio Tinto believes that to achieve NPI we first needto reduce our impacts on biodiversity values throughavoidance, minimisation and rehabilitation.Collectively we describe these actions as “themitigation hierarchy”.

We then aim to achieve a positive impact with the useof biodiversity offsets and additional conservationactions. The cumulative effect of the mitigationhierarchy, biodiversity offsets and additionalconservation actions is illustrated below.

We are continually working to refine our understandingand implementation of the mitigation hierarchy,biodiversity offsets and additional conservation actions.

Biodiversityimpact

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Avoidance Avoidance Avoidance Avoidance Avoidance

Minimisation Minimisation Minimisation Minimisation

Rehabilitation Rehabilitation Rehabilitation Rehabilitation

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The mitigation hierarchy

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Our definitionsAvoidanceRio Tinto defines “avoidance” as activities that eitherchange or stop mining and refining actions beforethey take place, preventing their expected impactson biodiversity. Avoidance involves a decision tochange the expected or normal course of action.

For example: a haulage road may be redesignedduring project development or expansion to avoidthe clearance of habitat with high conservationsignificance, resulting in longer haul distances.

Minimisation“Minimisation” reduces the severity of impacts onbiodiversity that result from mining and processingactions already under way. These actions reducethe likelihood or magnitude of biodiversity impacts,but cannot completely prevent them. It can sometimesbe difficult to demarcate between avoidance andminimisation because some actions have aspectsof both.

For example: the confined deposition of benigntailings material to create beaches on which wetlandscan be established.

Rehabilitation1

“Rehabilitation” involves the preparation of safe andstable landforms on sites that have been disturbedby our activities, followed by re-vegetation with theaim of establishing a specific habitat type. Restorationis the term used when the original habitat type isrecreated. To qualify in NPI calculations, the site shouldbe restored to a state where its biodiversity values equalthose of the original disturbed habitat, or better.

For example: the restoration of littoral forest habitaton recreated dune systems, following ilmenite sandmining. Another example could be a site beingrehabilitated to an area rich in biodiversity, withinclusion of wetlands etc, whereas restoring it to itsoriginal state may have meant replacing farmlandor other habitats of low conservation significance.

OffsetsBiodiversity "offsets" are conservation actions designedto compensate for the unavoidable impacts onbiodiversity caused by mining and refining. Offsetsshould never be employed in the place of appropriateon-site avoidance and minimisation measures, butrather seek to address any residual gap2. Offsets takethe form of either “averted disturbance” of habitat(the offset must demonstrate that the disturbancewas inevitable without our intervention) or restorationof degraded habitat.

For example: preventing unsustainable forest usethrough community based conservation, establishinga protected conservation reserve, restoring nativegrassland by removing competition from exoticgrasses and on this land, establishing aconservation covenant.

Additional conservation actions (ACAs)“Additional conservation actions” include a broadrange of activities which are intended to benefitbiodiversity, where the effects or outcomes can bedifficult to quantify. While the biodiversity outcomesof these actions are difficult to measure, these kindsof intangible assets will always form an essential partof Rio Tinto’s contribution to biodiversity conservation.

For example: helping to build capacity in conservationorganisations to enable better biodiversity conservationoutcomes on projects they are involved with. This mightinclude supporting their participation in environmentalmanagement and development programmes.

1 Rehabilitation and restoration are two terms that have sometimes been erroneouslyused interchangeably. In the context of Rio Tinto’s biodiversity strategy, restorationrefers to actions taken on degraded habitat, either disturbed by our activities or byothers, that restores its biodiversity value.

2 Adapted from ten Kate K, Bishop J, Bayon R (2004). Biodiversity offsets: views,experience and the business case. Insight Investment and IUCN.

Achieving resultson the ground

Opportunities for reducing negativeimpacts on biodiversity and creatingpositive outcomes differ significantlyfrom one operation to another.A number of Rio Tinto’s operationsare located in some of the mostbiodiversity-rich regions of the world,while others are located in regionsof low biodiversity value.

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Since launching our biodiversitystrategy in 200�, we have undergonea continuous learning process –both in defining and understandingthe principles and concepts ofresponsible conservationmanagement, and in developing,testing and refining the tools andprocesses that we need to do so.

Tools for the jobA series of methodologies and tools have beendeveloped to help our operations identify, plan forand manage biodiversity programmes based on theneeds of the business and the biodiversity valuesof the regions in which they operate. Tools include:

• A Groupwide biodiversity valuesassessment protocol.

• A biodiversity action planning tool.• An offset design tool.

Prioritising global action for Rio TintoAssessing Rio Tinto’s interaction with biodiversityand the size of our biodiversity footprint is animportant first step in the successful implementationof our biodiversity strategy and progress towardsachieving a net positive impact (NPI) on biodiversity.

One of the ways we do this is through evaluatingdata collected in Rio Tinto’s annual internal socialand environmental survey. The survey is used toevaluate performance across the Group on a rangeof issues, from biodiversity and water management,safety and occupational health through to greenhousegas emissions and product stewardship. Our reportingframework supports the Global Reporting Initiativeand is influenced by internal and external feedback,as well as various compliance issues resultingfrom legal and regulatory requirements andvoluntary agreements.

Another way we assess our interaction is throughthe Groupwide biodiversity values assessmentprotocol. The protocol was developed in 2007 toassess the biodiversity values of Rio Tinto’s landholdings and surrounding areas to help prioritiseaction. The protocol assesses operations’biodiversity values based on:

• Land in proximity to biodiversity-rich habitats.• Species of conservation significance.• Additional site-specific biodiversity values

and/or threats.• The external conservation context.

Operations were ranked as having either “very high”,“high”, “medium” or “low” biodiversity values. Resultsfrom the assessment of 73 of our operations canbe seen below3. Grouping operations on this basisenables resources and action planning assistanceto be given to our highest priority operations.

18 operations “very high”

11 operations “high”

17 operations “medium”

27 operations “low”

Biodiversity value

3 This data was collected before the completion of the Rio Tinto acquisition and integrationof the Alcan group operations and therefore does not record the landholding data for theformer Alcan sites that are now part of the Rio Tinto Group. For more information aboutRio Tinto’s biodiversity impact, see Rio Tinto and biodiversity – Group biodiversity profile. 0�

Results from Rio Tinto's Groupwide biodiversityvalues assessment

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Creating Wyoming’s first conservationeasement on mining landRio Tinto Energy America (RTEA) operates a numberof coal mines in the Intermountain West of the US,including the Jacobs Ranch Mine. Rehabilitatingdisturbed lands is very important to RTEA in its effortsto mitigate the effects of mining. After mining iscomplete, layers of soil and topsoil are replacedand contoured to match the pre-existing landscape,seeded with native plants and then monitored andmaintained until plant growth returns to pre-miningland use levels.

At Jacobs Creek, an extensive and productive wildlifehabitat was created on a mosaic of rehabilitatedand undisturbed lands. The mine donated the 295hectares of rehabilitated land plus an additional100 hectares to the Rocky Mountain Elk Foundationand agreed to the creation of The Rochelle HillsConservation Easement.

This land is the first easement – a parcel of landwith an agreed purpose – on reclaimed mine landsin Wyoming, and the first Rocky Mountain ElkFoundation easement on rehabilitated landsanywhere in the US. The land contains high qualitygrazing land, four reservoirs that serve as watersources for wildlife, and a diversity of topographyand habitat types that includes over four hectaresof woodland. The easement now provides valuablehabitat for the Rochelle Hills elk herd, made upof more than 400 animals.

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The Rochelle Hills elk herd is made up of more than 400 animals.

Creating exclusion zonesto provide protectionRio Tinto Iron Ore’s Mesa A and Mesa K projects arelocated in the Pilbara region of Western Australiaand are part of a series of mesa formations createdtens of thousands of years ago by an ancient riverchannel. The discovery of troglofauna – microscopiccave-dwelling, air-breathing invertebrates – withinthe cavities of the iron ore formation presentedsignificant environmental challenges for the projects.

Sampling led to the discovery of troglofauna withinother mesa formations in the region, however, DNAwork revealed each troglofauna species was unique toeach individual mesa formation. For the Mesa A andMesa K projects, this meant any potential impact onthe troglofauna from mining activities could not beoffset by preservation of other mesa formations.

To ensure compliance with Western Australia’slegislation, regulators and Rio Tinto standards,changes were made to the mine plans to ensurethat the troglofauna species considered at riskwere protected in designated conservation areas.These conservation areas (known as the MiningExclusion Zones or MEZ) were removed from theproposed mine plan and designed to connect withadditional habitat outside the proposed miningarea. A minimum buffer of 50 metres has alsobeen designed around poorly represented species.Rio Tinto believes the final MEZ designs at MesaA and K provide protection for all known troglofaunataxa and habitat types.

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Home to many of Rio Tinto Iron Ore's operations, the Pilbara region of WesternAustralia is well known for it’s biodiversity-rich landscape.

To achieve our NPI goal, our operations need tounderstand clearly the biodiversity features of theareas in which they operate and the values placedon those features. An operation must be able to:

• Identify the important biological values on andoff site at the species, habitat and ecosystemservice level.

• Understand what impacts mining activities andinfrastructure have on these features.

• Develop a plan to mitigate the impact (consideringavoidance, minimisation, rehabilitation, offsets andadditional conservation actions).

The biodiversity action planning (BAP) tool has beendeveloped to help operations complete all of thesesteps in a standardised way, enabling conservationapproaches to be compatible with operations’management systems.

Guidance for the BAP was developed in partnershipwith Fauna & Flora International (FFI) through trialsat four Rio Tinto sites with different needs, complexityand resources: Rössing, Namibia; Palabora, SouthAfrica; QIT Madagascar Minerals (QMM), Madagascar;and, Corumbá, Brazil. By trialling BAP in a number ofenvironments, from a Namibian desert to a Brazilianwetland, both Rio Tinto and FFI are confident thistool can accommodate the diversity of Rio Tinto’soperational environments with the rigour expectedfrom the conservation community.

The BAP process has seven stages, as illustrated onpage 13.

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Dune rehabilitation at Richards Bay Minerals in South Africa. Wind breaks, facingthe prevailing winds, are erected to protect the emerging seedlings from damage.

Stage1: Review Groupwide values assessmentKey outputs• Review results of values assessment• Business case for site BAP developed

Stage 2: Develop the biodiversity baselineKey outputs• Key stakeholders identi!ed• Data compiled from existing sources, eg surveys• Gaps in available data identi!ed• Work plan produced to gather additional data and work commissioned• Information gathered• Biodiversity context and baseline section of the BAP produced

Stage 3: Risk assessmentKey outputs• Biodiversity features identi!ed for site and surrounding area, and prioritised• Identi!cation of potential impacts of operation and wider drivers of environmental change• Determination of direct and indirect effects of impacts on features of interest• Initial risk assessment completed• Verify with stakeholders and review plan

Stage 4: Set objectives, targets and actions for the siteKey outputs• Objectives and actions de!ned using the mitigation hierarchy• Actions identi!ed will include costs, timetables and methods. Indicators are selected to help

in monitoring progress, and warning of remedial action• Integrate into environmental management systems and business planning processes

Stage 5: ImplementationKey outputs• Identify appropriate implementation mechanisms for the BAP• Review other mine management objectives to ensure no con"icts exist, and if con"icts do exist, resolve them• Agree and allocate resources and responsibilities for each area or feature• There is an understanding that the BAP is a "live process" that will be updated regularly

Stage 6: Management, monitoring and evaluationKey outputs• Indicators used to monitor performance and outcomes• Objectives, actions and risks are reviewed based on monitoring results

Stage 7: ReportingKey outputs• Identify opportunities for reporting and implement

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Rio Tinto's biodiversity action planning process

Taking a regional approach tobiodiversity managementRio Tinto Coal Australia (RTCA) operates threecoal mines in the Bowen Basin region of CentralQueensland, Australia, with a fourth currentlyunder development. While the business alreadyhas a good understanding of its landholding’sbiodiversity features, it recently developed a newregional biodiversity action plan (BAP) as part of theimplementation of Rio Tinto’s biodiversity strategy.

Adopting a regional approach to managing biodiversityrisks and opportunities enables RTCA to both managesite-specific issues as well as implement programmesthat could deliver conservation outcomes across theBowen Basin. For example, these could includeenhancing regional populations and corridor andhabitat connectivity, which includes species or habitatsfound across several RTCA sites – such as brigalow(Acacia harpophylla), bluegrass communities and koalas(Phascolarctos cinereus).

As part of the BAP process, RTCA focused on gainingan understanding of the flora and fauna communitiesand species known (or suspected) to be presenton and adjacent to its four sites. Each speciesor community was summarised by its legislativestatus and then assessed on its vulnerability andirreplaceability.

By taking a risk assessment approach, the speciesor communities with the highest biodiversity riskfor RTCA have been identified and appropriateactions prioritised.

RTCA’s BAP will be rolled-out across all four BowenBasin operations. Proposed actions includesite-specific enhancement and restoration activities,academic research to improve understanding ofspecies lifecycle requirements, and activities thatseek to enhance regional conservation outcomes.

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Rio Tinto Coal Australia's Blair Athol Mine in central Queensland.

Building local knowledge and skillsThrough its global partnership, Rio Tinto andEarthwatch Institute work together to buildknowledge and skills among the conservationcommunity and to support scientific research inAfrica. Since 1999, the partnership has supportedmore than 200 African scientists, conservationists,reserve managers, students and governmentemployees from more than 16 countries toparticipate in Earthwatch Institute projects.

Under the guidance of a lead scientist, participantscontribute to field research while increasing theirscientific understanding and learning new techniques.Some projects include skills training, such as the useof Geographic Information Systems (GIS), or focus onspecific issues, for example the role of the communityin conserving Madagascar’s ruffed lemurs.

A range of projects have been supported, fromidentifying and cataloguing South Africa’sinvertebrate species, to exploring Kenyan mangroveforest restoration methods and benefits for ecosystemsand communities. In terms of helping Rio Tinto toreach its goal of having a net positive impact onbiodiversity, capacity building is an additionalconservation action (see page 07). Research findingsmay also be incorporated into mitigation andoffset planning.

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Early career African and Asian scientists research mangrove forest restorationin Gazi Bay, Kenya, as part of Eathwatch’s Capacity Building programme.

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When implementing the biodiversitystrategy and NPI goal, we focus ouractions on aspects of biodiversitythat have an importance or “value”that adds to their significance. Thisconcept was used to good effect inour Groupwide biodiversity valuesassessment, and it is key in theeffective management of biodiversityat an operation or project.

We developed our separate "site biodiversityvalues assessment" to identify and prioritise thekey biodiversity values of relevance to an operation.This site assessment is generally, but not always,undertaken as part of an existing operation’s broaderBAP process or a new project’s environmentalimpact assessment.

The assessment, held in consultation with stakeholders,considers the different levels of biodiversity – species,habitats and ecological processes – and then considersif these are important in their own right (having"intrinsic values", such as rare species), or if theyare important in a utilitarian sense (having "servicevalues", such as fuel wood and medicinal plants, orprocesses like water purification). Careful completionof the assessment is critical to ensure all significantbiodiversity features are identified, as they underpinthe subsequent biodiversity management at the site.

In general the prioritisation process gives higherpriority to species, habitats and ecosystem servicesthat are either important to local communitiesand/or have regional, national or globalconservation significance.

Species Habitats/Communities Ecosystem processes

Intrinsic Irreplaceability and Irreplaceability and vulnerability. Ecosystem health andvalues vulnerability of species Also exemplary habitats functioning. Evolutionary

diversification

Service Food, fibre, fuel, Hunting, gathering and fishing Air quality, climatevalues genetic resources, habitats. Culturally valued regulation water purification

totem/cultural species landscapes eg sacred groves

The biodiversity values matrix4

4 For an example of the application of this matrix, see the case study on page 20.

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Biodiversityoffsets

Offset design and implementationThe use of offsets to compensate for biodiversityloss is increasingly being practised widely andrequired by legislation in a number of countrieswhere Rio Tinto operates. We believe that, at certainoperations, the development of an integratedpackage of offsets, as well as additional conservationactions, can help us to achieve our NPI goal, whilemeeting legal requirements and maximisingconservation gains. As with all other aspects of ourbiodiversity strategy, we continue to grow and refineour understanding of offsets.

Since 2004 we have piloted offset methodologiesat some of our sites, including QMM in Madagascarand Corumbá in Brazil. In addition, we have beeninvolved in external biodiversity offset initiatives,such as the Business and Biodiversity OffsetProgramme. As a result of the pilots and externalconsultation, we have developed an offset designmethodology based on seven key steps (see below).

Offsets can take the form of:

• Averted disturbance – involves identifying an areaof land of the same or better biodiversity valueand reducing and/or eliminating existing externalimpacts or risks. For example: reducing or stoppingdeforestation activity.

• Restoration – takes place from scratch, wherecleared or degraded land is planted and restored,or management practices of existing habitat arechanged to restore its biodiversity status.

While we recognise the importance of “like-for-like”offsets, from a conservation, regulatory andaccounting point of view, we believe that in certainsituations, they may be unrealistic, inappropriateor do not result in optimal outcomes.

As the concept of offsets continues to evolve, werecognise that “out-of-kind” offsets may resultin greater conservation benefits. For example:offsetting common habitat that is in localabundance, such as Australian spinifex grassland,with a habitat that is of higher conservationsignificance, such as lowland Mulga woodlands.

Conversely we recognise that “worse-for-like”offsets (where the biodiversity value of the offsetsite is lower than the impact site) do not compensatefor the residual impact of our operations.

Conduct key biodiversity valuesrisk assessment

Calculate amount of biodiversity loss(the residual impact)

Select possible offset sites usingbiological criteria

Select realistic offset sites usingsocio-political and economic criteria

Design conservation interventions tocreate suf!cient biodiversity gains

Obtain approval/negotiate withregulator or authority

Enter offset implementation process

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Seven steps in offset design

Minimising impact and creating newhabitats for Wabush LakeThe Iron Ore Company of Canada (IOC) operatesa mine in Newfoundland, Canada, in an area ofvaluable native ecosystems, including an extensivesystem of lakes, wetlands and boreal forests. For40 years, IOC discharged up to 23 million tonnesof finely grained rock tailing into Wabush Lake.Although in compliance with regulatory requirements(the tailing is inert and non-toxic) the tailing washaving a significant effect on the physical andbiological balance of the lake. So in response toconcerns within Rio Tinto, from the local communityand regulatory changes, IOC considered a number ofoptions to minimise the tailing’s impact on the lakeand surrounding environment.

With community input, the decision was madeto change the way tailing was discharged into theWabush Lake. Through a creative use of the tailing –a mixture of rock and sand – new land forms anda wetland are being created across the disposal areaand planted with a diverse variety of local vegetation.Low-lying areas form a mosaic of wetland basins,riparian zones and uplands, providing a varietyof habitats for native wildlife.

Now, a new project is underway to restore WabushLake’s colour and recover lost fish habitat. The overallproject is rehabilitating 15 hectares of mining residueinto a self-sustaining ecosystem.

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The Iron Ore Company of Canada operates a mine in Newfoundland, Canada, in anarea of valuable native ecosystems, including an extensive system of lakes, wetlandsand boreal forests. A new project is now underway to rehabilitate 15 hectares ofmining residue into a self-sustaining ecosystem for the local community.

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actDeveloping a methodology to measurean operation’s progress against NPIis the most complex and difficult issuewe face. It is however a criticalelement of the biodiversity strategy.

The first significant task was identifying anacceptable date from which progress towardsNPI should be assessed. Many of our sites havebeen collecting biodiversity data for several years,but we needed to be able to set a Groupwidebaseline. Following discussion with key internaland external stakeholders, biodiversity data will becollected from Rio Tinto operations throughout 2009with the aim of setting a Group benchmark at theend of 2009. With the baseline established, this datawill be used in the Group's target reporting process.

Biodiversity has no single currency. Today, climatechange impacts are measured in terms of tonnesof CO2 equivalents. Many scientists and organisationshave attempted to develop a similar metric forbiodiversity, using various aggregations, selectionsand weightings of different biodiversity componentsand values. However, no single methodology standsout as being appropriate in the Rio Tinto context.

To be effective, a biodiversity metric needs to be:

• Workable, meaningful and based on sound science.• Within the technical capacity of operations.• Able to be understood by stakeholders.• Supportive of the NPI goal.• Complementary to the BAP and other biodiversity

strategy tools and methodologies.

To date, testing different NPI calculation methodologieshas primarily been conducted at our QIT MadagascarMinerals (QMM) project. At this site the NPI concepthas been defined in terms of a baseline date, thesphere of the project’s influence, types of impacts,the types and number of biodiversity features andboth intrinsic and service values. The case study onpage 20 illustrates aspects of the development andtesting of our work.

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"Hydroseeding" to restore vegetation involves spraying a mixture ofseeds, water, fertilisers and mulch onto newly relaid topsoil. Withina month growth will be fully germinated and flourishing.

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Measuring NPI at QITMadagascar Minerals (QMM)Standardisation of ways to measure loss and gainof biodiversity is essential. The NPI process at QITMadagascar Minerals (QMM) has required the developmentof a set of currencies which are appropriate for eachgroup of biodiversity values, be they threatened species,rare habitats or non-timber forest products.

A combination of the area in which a value was foundand the quality of that area in supporting the value wasfound to be a universally appropriate currency for bothintrinsic and service values. Different measurementmethods and metrics were used, as appropriate, for eachtype of biodiversity feature, to provide data for the “Areax Quality” currency.

For example: the measurement of the quality of littoralforest required the development of a standardised forestcondition metric, scaled from pristine to heavily degraded,based on habitat structure; the density of key reptile speciesis being determined by pitfall trapping or habitat type;and the quality of forest for various non-habitat timberforest products was measured using community assistedbotanical transects.

In some of these latter cases the direct human-use naturalproducts can be expressed as volumes or masses, such as“1,000kg charcoal”. For convenience the Area x Qualitycurrency is being referred to as “Quality Hectares”.

Several worked examples of the current and projectedQuality Hectares values for several NPI measures relevantto the QMM project are considered. For simplicity, at present,only losses through mining and gains through offset areconsidered, because of the current uncertainty over the sizeand nature of rehabilitation efforts for indigenous foresttypes and many species.

The two biodiversity values considered are:

1. Littoral forestThe St Luce forests and Mahabo are both offsets for impactson littoral forest. These sites are extremely important for thishabitat and most of its constituent species. In fact, NPI isnot possible at QMM without these two sites appropriatelymanaged as offsets. Here we map out its projected gain andloss over the next 25 years, which is the approximateexpected mine life for the Mandena deposit.

2. LLeeppttoollaaeennaa ppaauucciiflfloorraa - Quality HectaresThis locally endemic plant is known from the Mandena minesite and also occurs at the offset sites of St Luce and Mahabo.It will suffer some losses through mining over the next 25 years. Much of these are already avoided through the Mandena conservation zone (230ha) on the lease, aprotected forest tract which is now a nationally recognisedprotected area. Residual losses are more than compensatedfor through its occurrence at two offset sites (St Luce andMahabo). These NPI calculations are conservative andprecautionary because restoration efforts will add greatergains in the future.

Figure 01. Quality Hectares of littoral forest gained and lost until2032. By 2008, there have been few losses (red points) of littoralforest and some small gains (orange points: upper) which comethrough avoided deforestation at two offset sites (St Luce andMahabo). By 2017, net impact (blue points) will be highly positive for littoral forest because avoided deforestation gains have continued(2008-2017) but mining will not clear much forest over this perioddue to the uneven distribution of forest fragments across the minepath. By 2032, at mine closure, after some mine clearance losses,littoral forest is predicted to be net positive on account of offsetsalone. This is a precautionary conservative estimate that does notinclude habitat restoration efforts which are likely to add another 200 hectares of littoral forest to the gains.

Figure 02. Losses, gains and net impact mapped through the minelife in terms of Quality Hectares for a locally endemic plant,Leptolaena pauciflora. The projected changes for this species aresimilar to the littoral forest habitat in which it is found – thisdemonstrates the value of using forest area and quality as surrogate for some biodiversity values such as this species. The blue pointsindicating net impact are conservative because they do not includegains likely to be made through restoration efforts; however evenwith the current precautionary approach NPI is possible for this andmany other key species.

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Figure 01Projected “Quality Hectares” of littoral forest lost and gained over mine life

Figure 02Projected “Quality Hectares” of Leptolaena pauciflora lost and gained over mine life

“Quality Hectares” losses for littoral forrest

“Quality Hectares” gains for littoral forrest

Gains - Losses for this NPI metric

“Quality Hectares” losses for Leptolaena pauciflora

“Quality Hectares” gains for Leptolaena pauciflora

Gains - Losses for this NPI metric

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Rio Tinto’s biodiversity strategycontinues to be refined throughinternal and external engagement.All involved recognise the enormouschallenge we have set for ourselves.

Measuring biodiversity and the success ofconservation programmes is a challenging task,with the conservation and science communitiesstill working to determine an agreed framework.Achieving and demonstrating NPI for Rio Tintois not an easy task but, by working with ouroperations and the conservation and sciencecommunities, we aim to develop dynamicmethodologies and processes that can be improvedover time. We believe these will not onlydemonstrate our commitment to the environmentbut also raise the bar for biodiversity conservationmanagement within the mining sector andcontribute to broader knowledge of the field.

Looking forward, we are committed to:

• Transitioning our pilot programmes to fullimplementation across our operations.

This will include:

-Further refining our tools and methodologiesto work with existing operational managementsystems.

-Developing communication and awarenessprogrammes targeting operations’ managementand specialists. This work will begin in late 2008and continue into 2009.

• Furthering discussion and engagement aroundkey concepts such as biodiversity offsets andmeasuring NPI.

• Exploring emerging markets, such as ecosystemservices and how they can be used to meet ourNPI goal.

Rio Tinto recognises that we do not have the remit,skills or resources to assume sole responsibilityfor the long term biodiversity protection andconservation of the areas where we work. Wewill therefore continue to work with communities,governments and conservation NGOs that also havea stake in the outcomes of programmes.

The next four years are critical to our progress inmeeting our NPI goal, and we will communicateour successes and failures at the next IUCNWorld Congress.

SouthAmerica

NorthAmerica

ExplorationThe Exploration groupis organised into !vegeographically based teamsin North America, SouthAmerica, Australasia, Asiaand Africa/Europe anda sixth project generationteam that searches theworld for new opportunitiesand provides specialisedgeological, geophysical andcommercial expertise to theregional teams. The Asiateam was formed in 2006,re"ecting a signi!cantexpansion in explorationeffort in Russia, Mongoliaand the Former Soviet Union.

Technology andInnovationTechnology and Innovation,previously Operational andTechnical Excellence, hasbases in Australia, Canada,the UK and the US. Its role isto identify and promote bestoperational technologypractice across the Groupand to pursue step changeinnovation of strategicimportance to orebodies ofthe future.

AluminiumRio Tinto’s Aluminium productgroup is the wholly owned, integratedaluminium subsidiary, Rio Tinto Alcan,which owns and manages operationspredominately located in Canadaand Australia, with other signi!cantinterests in the UK, France, New Zealand,Brazil, Guinea, China, Iceland, Ghana,Norway and the US. The group iscurrently organised into four businessunits – Bauxite & Alumina, PrimaryMetal, Engineered Products andPackaging. Rio Tinto announced in2007 the intention to divest both theEngineered Products and Packagingbusiness units. Sites relating to thesebusinesses are not shown above.

CopperThe Copper group comprisesKennecott Utah Copper and KennecottMinerals in the US, and interestsin the copper mines of Escondidain Chile, Grasberg in Indonesia,Northparkes in Australia, Palaborain South Africa. Projects underevaluation include the Resolution,Pebble and Eagle projects in the US,Oyu Tolgoi in Mongolia, La Granjain Peru and Sulawesi in Indonesia.

Copper and goldOperating sitesBougainville (not operating) (54%)Cortez/Pipeline (40%)Escondida (30%)Grasberg joint venture (40%)Kennecott Utah CopperNorthparkes (80%)Palabora (58%)Rawhide (51%)

ProjectsLa GranjaOyu Tolgoi (10%)Pebble (10%)Resolution (55%)

NickelProjectsEagleSulawesi

Zinc, lead, silverOperating sitesGreens Creek (70%)

KeyMines and mining projectsSmelters, re!neries andprocessing plants remotefrom mine

AluminiumOperating sitesAlmaAlouette (40%)Alucam (Edea) (47%)Anglesey Aluminium (51%)ArvidaAwasoBeauharnoisBecancour (25%)Bell BayBoyne Island (59%)CBG SangarediDunkerqueGardanneGove alumina re!neryGove bauxite mineGrande-BaieISALJonquiereKitimat

LaterriereLochaberLynemouthNingxia (50%)Porto Trombetas (MRN)Queensland Alumina Limited (80%)Sao Luis (Alumar) (10%)SebreeShawiniganSORAL (50%)St-Jean-de-MaurienneTiwai Point (79%)Tomago (52%)WeipaYarwun

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Australiaand Asia

Iron OreThe Iron Ore group’s interestscomprise Hamersley Iron andRobe River in Australia, Iron OreCompany of Canada, the Corumbámine in Brazil and the Simandou,Guinea, and Orissa, India,projects. The group includes theHIsmelt® direct iron making plantin Australia.

EnergyThe Energy group is representedin coal by Rio Tinto Coal Australiaand Coal & Allied in Australia and byRio Tinto Energy America in the US.It also includes uranium interests inEnergy Resources of Australia andthe Rössing Uranium mine inNamibia.

The Diamond and Industrial Mineralsgroup comprises Rio Tinto’s diamondinterests in the Diavik mine inCanada, the Argyle mine in Australia,and the Murowa mine in Zimbabwe,served by diamond sales of!ces inBelgium and India. Rio Tinto’s industrialminerals businesses compriseRio Tinto Minerals, made up of borateand talc operations in the US, SouthAmerica, Europe and Australia, andsalt in Australia, as well as Rio TintoIron & Titanium interests in NorthAmerica, South Africa and Madagascar.

DiamondsOperating sitesArgyleDiavik (60%)Murowa (78%)

Iron oreOperating sitesCorumbáHamersley Iron mines:BrockmanChannar (60%)Eastern Range (54%)Hope Downs (50% joint venture)MarandooMt Tom PriceNammuldiParaburdooYandicoogina

HIsmelt® (60%)Iron Ore Company of Canada (59%)Robe River mines: (53%)PannawonicaWest Angelas

ProjectsIOC Pellet Plant (59%)Orissa (51%)Simandou (95%)

CoalOperating sitesAntelopeBengalla (30%)Blair Athol (71%)Colowyo (20%)Cordero RojoDecker (50%)Hail Creek (82%)Hunter Valley Operations (76%)Jacobs RanchKestrel (80%)Mt Thorley Operations (61%)Spring CreekWarkworth (42%)

ProjectsClermont (50%)Mt Pleasant (76%)

UraniumOperating sitesERA (68%)Rössing (69%)

ProjectsKintyreSweetwater

SaltOperating sitesDampier (68%)Lake MacLeod (68%)Port Hedland (68%)

BoratesOperating sitesBoronCoudekerque PlantTincalayuWilmington Plant

PotashProjectsRio Colorado Potash

TalcOperating sites(only major sites are shown)LudlowTalc de LuzenacThree SpringsYellowstone

Titanium dioxide feedstockOperating sitesQIT-Fer et Titane Lac AllardQIT-Fer et Titane Sorel PlantRichards Bay Minerals (50%)

ProjectsQIT Madagascar Minerals (80%)

Diamonds and Industrial Minerals

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Also in this series:Rio Tinto and biodiversity – Biodiversity offset designRio Tinto and biodiversity – Group biodiversity profile

Case studies:• The BirdLife International – Rio Tinto Partnership• The Conservation International – Rio Tinto Partnership• The Earthwatch Institute – Rio Tinto Partnership• Fauna & Flora International – Rio Tinto Partnership• Royal Botanic Gardens, Kew – Rio Tinto Partnership• Protecting biodiversity at Great Salt Lake – On the ground at Kennecott Utah Copper• Provide for today, protect for tomorrow – On the ground at Rio Tinto Energy America• Managing biodiversity in Guinea – On the ground at Rio Tinto’s Simandou project

Rio Tinto Limited120 Collins StreetMelbourne, Victoria 3000Australia

T +61 (0)3 9283 3333

Rio Tinto plc5 Aldermanbury SquareLondonEC2V 7HRUnited Kingdom

T +44 (0)20 7781 2000www.riotinto.com

For further information contact:

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