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Rio Tinto CEO steps down after $14bn writedowns | Rio Tinto CEO steps down after $14bn writedowns |
(about 1 hour later) | |
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. | 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. | 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. | 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. | 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. | 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. | 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's 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." | "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." |