RTZ tarnished by scandal at Sumitomo

The Sumitomo copper scandal slashed profits last year at RTZ-CRA, the mining giant, which also yesterday announced it was reverting to its historic name of Rio Tinto. The group said the fall in metals prices in 1996, mostly copper and aluminium, had cost $311m (pounds 190m) in lost earnings, while adverse exchange movements, particularly the Australian dollar had shaved a further $38m from the bottom line.

The group is also facing continuing problems with the commissioning of its new copper smelter at Bingham Canyon, Utah, which represents the last phase of a $2bn investment programme instituted since the operation was acquired from BP in 1989.

Underlying earnings, stripping out exceptional items, slumped 24 per cent to $1.1bn (pounds 701m) in the year to December. The group has moved to reporting its results and dividends in dollars, the main currency of its operations, which would have resulted in a flat final dividend this year, the chairman, Robert Wilson, said. But in view of the recent appreciation of sterling the group has upped the final payment from 13p to 13.11p, payable as a foreign income dividend, as a gesture to shareholders. Even so, the total rises only marginally from 31.5p to 31.71p.

Mr Wilson said the name change would be put to shareholders at annual meetings of both companies. RTZ-CRA "really is too much of a mouthful", he said. The new name "has the great advantage of not becoming an acronym".

It harks back to the group's origins when it was floated on the stock market in 1873 as a developer of the ancient Rio Tinto copper mines near the river of the same name near Seville in southern Spain.

At the end of 1995, RTZ, as it became, bought in its minority associate in Australia, the former Conzinc Riotinto of Australia, to form the current group.

Comment, page 21

Investment column, page 22