Rio Tinto and Alcan today announced they have reached an agreement for Rio Tinto to make an offer to acquire all of Alcan’s outstanding common shares for US$101 per common share in a recommended, all cash transaction. The offer represents a total equity consideration for Alcan of approximately US$38.1 billion.

The offer represents a premium of 65.5 per cent to Alcan’s all time high closing share price of US$61.03 on 4 May 2007 prior to the Alcoa offer. It also represents a premium of 32.8 per cent to the value of Alcoa’s current offer of US$76.03, based on Alcoa’s closing share price on 11 July 2007.

The combined aluminium product group, to be named Rio Tinto Alcan, will be a new global leader in the aluminium industry with large, long life, low cost assets worldwide. The combined Group’s access to significant bauxite reserves, competitive alumina refining, low cost hydro power, leading smelter technology, and a deep and diverse talent pool provides an excellent position to capitalise on the favourable demand fundamentals of the aluminium industry. Rio Tinto Alcan will also have a strong portfolio of growth projects.

Rio Tinto expects to file the offer and takeover bid circular containing the full terms, conditions and other details of the offer with the Canadian Securities regulatory authorities and the Securities and Exchange Commission of the United States on or about 23 July 2007.

The offer is subject to a number of conditions including valid acceptances of not less than 66 % of Alcan shares on a fully diluted basis and the approval of Rio Tinto shareholders.

The acquisition of Alcan will be financed by Rio Tinto through newly committed bank facilitiesunderwritten by The Royal Bank of Scotland, Deutsche Bank, Credit Suisse, and SociétéGénérale. The offer will not be conditional on financing. Rio Tinto’s goal is to maintain asingle A rating. The commitment to a progressive dividend policy will be maintained. Theexisting Rio Tinto buyback programme will be discontinued.