The drop was attributed to lower prices and a change in sales mix.

Last year’s production of thermal and semi-soft coal was 5% higher than 2008, primarily due to an increase in port allocations.

Rio’s two Australian coal developments remain on target with the Kestrel expansion scheduled for production in 2012 and Clermont, a replacement for Blair Athol, on target for first coal this quarter.

Clermont will ramp up to full capacity of 12.2 million tonnes per annum by 2013.

In the US, earnings from Rio’s coal segment were $257 million, $110 million above 2008 thanks to improved prices and lower cash costs offsetting the impact of lower volumes due to the listing of part of Cloud Peak Energy and the sale of Jacobs Ranch.

Rio now holds a 48.3% interest in the Antelope, Cordero Rojo and Spring Creek mines, and a 24.1% interest in the Decker mine.

In group results, a decision Rio Tinto made last year to recapitalise its balance sheet and reduce operating costs saw the mining heavyweight post earnings of $US6.3 billion for 2009.

This was down by 39% compared to earnings in 2008 of $10.3 billion.

Moves by the major to divest non-core assets and focus on improving cash flows, along with proceeds from a rights issue, also saw it slash net debt by $US20 billion to $US18.9 billion.

Strong volume gains, primarily from record iron ore sales and a significant increase in copper and gold production, boosted earnings by $652 million year-on-year.

Chief executive Tom Albanese said the group delivered an exceptional operating performance, with its rigorous cost-reduction program delivering $2.6 billion in savings.

“Following the recapitalisation of the balance sheet, we are bringing forward some of our premier growth options through a disciplined program of investment, and for 2010 we expect our capital expenditure to be at least $5 billion with potential for this to rise to $6 billion.”

A final dividend of US45c per share or $US882 million was also declared.