I think I figured our your mistake; Yahoo mistakenly lists the # of shares as 31m and hence that is why the PE if at 3; these RIO shares always existed and included in Wall Street valuation of CLD. CLD may have had 57m shares, for a PE of around 6. Bottom-line there was not dilution, just whole lot of shares to be sold and digested by the market. Once digested, typically a day or so, it returns to prior valuation. In this case, once RIO shares sold the overhang that it would be coming is gone and hence quite positive. Plus, PE still in single digits which is less that peers.
No, it's not a Yahoo error. TD Ameritrade also shows 31 million shares, as does every research tool I can find. The Rio shares will nearly double (and dilute) the amount of total shares outstanding (31 + 26 = 57 million).
As for the low PE in the 3's, don't let that fool you. PE is determined by earnings in the last 4 quarters, and in the 4th quarter of 2009 CLD earned an abnormally high (20x typical) profit. When that atypical quarter is no longer included in the last 4 quarters, the PE is going to be around 20. When you figure in the dilution with the Rio Tinto shares, the PE is going to be around 35-40. Please do the math yourself if you're skeptical.