Rio Tinto CEO Tom Albanese departs after big loss in Mozambique

 

The boss of mining giant Rio Tinto was ousted today after the company disclosed a near £9 billion charge relating to two major acquisitions.

The surprise resignation of Tom Albanese, who has been chief executive since 2007, stems from a substantial write-down on the value of its aluminium assets and on the 2011 purchase of a coal business in Mozambique.

Rio said the mining industry veteran had stepped down by "mutual agreement" and will be replaced by iron ore boss Sam Walsh.

He has carried the can for Rio's ill-fated acquisition of aluminium group Alcan in 2007, which has generated big losses for the company in recent years due to the economic downturn.

In today's update, Rio said it was writing down the value of its aluminium assets in the range of $10 billion to $11 billion (£6.2 billion to £6.9 billion).

However, chairman Jan du Plessis described the scale of the $3 billion (£1.9 billion) write-down on the recent deal for the Mozambique-based coal miner Riversdale as "unfortunate".

He added: "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."

Mr du Plessis paid tribute to Mr Albanese for his contribution to Rio Tinto over more than 30 years' service.

He said: "Rio Tinto's underlying business and balance sheet remain in good health, and we are taking decisive action to improve our competitive position further with an aggressive cost reduction plan."

Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets in his previous role as energy chief executive, has also stepped down by mutual agreement.

The two departing executives will receive their entitlement to pay, benefits and pension contributions but will not an annual short-term performance bonus for 2012 or 2013 or the long-term share award for 2013.

Mr Albanese said: "While I leave the business in good shape in many respects, I fully recognise that accountability for all aspects of the business rests with the chief executive."

The company, which specialises in aluminium, copper, diamonds and minerals, energy and iron ore, has its headquarters in London but the majority of its assets are in Australia and North America.

PA

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