RIO TINTO LTD

Forecast commodity prices, including carbon prices, incorporated into

our Conviction scenario are used to inform critical accounting

estimates included as inputs to impairment testing, estimation of

remaining economic life for units of production depreciation and

discounting closure and rehabilitation provisions. These prices

represent our best estimate of actual market outcomes based on the

range of future economic conditions regarding matters largely outside

our control, as required by IFRS. As the Conviction scenario does not

represent the Group’s view of the goals of the Paris Agreement, our

commodity price assumptions used in accounting estimates are not

consistent with the expectation of climate policies required to

accelerate the global transition to meet the goals of the Paris

Agreement. As described above, we use our Aspirational Leadership

scenario to help us better understand the pathways to meet the Paris

Agreement goal, and what this could mean for our business.

Closure dates and cost of closure are also sensitive to climate

assumptions, including precipitation rates, but no material changes

have been identified in the year specific to climate change that would

require a material revision to the provisions in 2024. For those

commodities with higher forward price curves under the Aspirational

Leadership scenario, it may be economical to mine lower mineral

grades, which could result in the conversion of additional Mineral

Resources to Ore Reserves and therefore longer dated closure.

We completed the divestments of our coal businesses in 2018 and no

longer mine coal, but retained a contingent royalty income from these

divestments. Recent favourable coal prices exceeded contractual

benchmark levels and resulted in the cash royalty receipt of

US$45 million during 2024 (2023: US$38 million). We also carry

royalty receivables of US$252 million on our balance sheet at

31 December 2024 (2023: US$214 million), measured at fair value

(note 24). The fair value of this balance may be adversely impacted in

the future by a faster pace of transition to a low-carbon economy, but

this impact is not expected to be material.

Overall, based on the Aspirational Leadership scenario pricing

outcomes, and with all other assumptions remaining consistent with

those applied to our 2024 financial statements, we do not currently

envisage a material adverse impact of the 1.5°C Paris-aligned

sensitivity on asset carrying values, remaining useful life, or closure

and rehabilitation provisions for the Group. It is possible that other

factors may arise in the future, which are not known today, that may

impact this assessment.

Additional commentary on the impact of climate change on our

business is included in the following notes:

i. New standards issued and effective in the current

year

Our financial statements have been prepared on the basis of accounting

policies consistent with those applied in the financial statements for the

year ended 31 December 2023, except for the accounting requirements

set out below, effective as at 1 January 2024.