BackRio Tinto writes down $14 billon, CEO resigns
Firm expects to take a $3 bn hit from its Mozambique coal project and $10-11 bn related to aluminium assets
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Sydney: Anglo-Australian mining giant Rio Tinto announced a $14 billion writedown related to its Mozambique coal assets and ailing aluminium business on Thursday, prompting its chief executive to resign.
Rio said it expected non-cash impairments of approximately $3 billion relating to its Mozambique coal project, bought in 2011, and a further $10-11 billion related to its aluminium assets in its annual results due 14 February.
“The Rio Tinto board fully recognises that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," said chairman Jan du Plessis.
“We are also deeply disappointed to have to take a further substantial writedown in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally."
Du Plessis said CEO Tom Albanese had stepped down effective immediately “by mutual agreement with the Rio Tinto board" and would be succeeded in the top job by Rio Tinto’s iron ore chief Sam Walsh.
Doug Ritchie, who led the acquisition of the Mozambique assets, previously known as Riversdale Mining Limited, also stood down, he said.
Neither would get a lump sum payout or outstanding bonuses.
“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 CEO," Albanese said.
The announcement comes a day after the mining giant unveiled record production in 2012 and beefed up expansion plans for its flagship Australian iron ore operations.
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