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Rio Tinto CEO steps down after taking a $14bn charge
Edited by : AL CIRCLE
2 min read
Global miner Rio Tinto has announced the surprise resignation of its chief executive Tom Albanese after taking a $14bn (£8.75bn) charge in connection with the company's Mozambique coal and aluminium acquisitions.
A mining veteran, who joined Rio two decades ago, Albanese will be replaced by iron ore boss Sam Walsh.
Albanese, who became chief executive in 2007, had until now largely survived the consequences of his damaging $38bn acquisition of aluminium group Alcan that same year, a top-of-the-market deal when Rio was under pressure from rivals to bulk up or be acquired.
The group has since seen years of losses in aluminium and took a $8.9bn charge a year ago. It had planned to shrink the division by hiving off most of its Australian and New Zealand assets for sale, but buyers have not flocked.
Rio bought Mozambique-focused coal miner Riversdale in 2011.
Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets when he was head of Rio's energy division, has also stepped down.
Rio said on Thursday the non-cash impairments would include a charge of around $3bn relating to the Mozambique business, as well as reductions in the carrying values of Rio's aluminium assets in the range of $10bn to $11bn.
The group also expects to report a number of smaller asset writedowns in the order of $500m. The final figures will be included in Rio Tinto's full year results on 14 February.
"The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," Rio Tinto chairman Jan du Plessis said.
"We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally."
A mining veteran, who joined Rio two decades ago, Albanese will be replaced by iron ore boss Sam Walsh.
Albanese, who became chief executive in 2007, had until now largely survived the consequences of his damaging $38bn acquisition of aluminium group Alcan that same year, a top-of-the-market deal when Rio was under pressure from rivals to bulk up or be acquired.
The group has since seen years of losses in aluminium and took a $8.9bn charge a year ago. It had planned to shrink the division by hiving off most of its Australian and New Zealand assets for sale, but buyers have not flocked.
Rio bought Mozambique-focused coal miner Riversdale in 2011.
Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets when he was head of Rio's energy division, has also stepped down.
Rio said on Thursday the non-cash impairments would include a charge of around $3bn relating to the Mozambique business, as well as reductions in the carrying values of Rio's aluminium assets in the range of $10bn to $11bn.
The group also expects to report a number of smaller asset writedowns in the order of $500m. The final figures will be included in Rio Tinto's full year results on 14 February.
"The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," Rio Tinto chairman Jan du Plessis said.
"We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally."
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