MONTREAL, Dec. 14 /PRNewswire/ - Rio Tinto Alcan and the Administracion Nacional de Electricidad (ANDE) have signed a Letter of Intention to confirm that they will begin negotiations regarding a power purchase agreement for a potential aluminium smelter in Paraguay.

"We are very pleased to be taking this first step towards a project that would further both our goal of investing in top-tier projects and Paraguay's desire for sustainable economic development," said Sandeep Biswas, Senior vice president, Business Development and Growth, Rio Tinto Alcan. "This potential aluminium smelter project would benefit from both our clean, efficient, world-class technology, and our expertise in sustainable development. Our leading technology and production processes are respected throughout the industry."

Under the terms of this agreement, Rio Tinto Alcan will be working with ANDE to develop an energy and development agreement that balances a competitive electricity price for a state-of-the-art aluminium smelter and its contribution to Paraguay's social and industrial development priorities.

"Safety, environment, and ethical business practices are key commitments at Rio Tinto Alcan. Our operations would seek to contribute to long-term employment and industrial development in Paraguay," added Mr. Biswas.

Rio Tinto Alcan is the global leader in the aluminium industry. Its operations in Latin America include shares in both the Porto Trombetas bauxite mine and Alumar refinery in Brazil. Rio Tinto's regional experience includes a 30 per cent share of Escondida, the world's largest copper mine, in Chile and development of the wholly-owned La Granja copper project in Peru.

About Rio Tinto

Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.

Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.

SOURCE RIO TINTO ALCAN - EN

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