SINGAPORE Rio Tinto Plc
chief executive officer Tom Albanese has stepped down after the
miner announced it faced a $14-billion write-down, including up
to $11 billion against its troubled aluminum business.
Sam Walsh, chief executive of
Rio Tintos iron ore and Australian operations, has been
named as Albaneses successor, effective Jan. 17, the
Energy chief Doug Ritchie has
also stepped down, the miner said.
"While I leave the business in
good shape in many respects, I fully recognize that
accountability for all aspects of the business rests with the
(chief executive officer)," Albanese said in a statement.
The $14-billion charge includes
about $3 billion relating to Rio Tinto Coal Mozambique (RTCM),
as well $10 billion to $11 billion as reductions in the
carrying values of Rio Tintos aluminum assetsmostly
Rio Tinto Alcan, but also Pacific Aluminium.
Rio Tinto also said it would see
a number of smaller asset write-downs for about $500
The final impairment charge will
be reflected when Rio Tinto reports full-year results on Feb.
"Rio Tintos 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," chairman Jan
du Plessis said.
Both Albanese and Ritchie
resigned by mutual agreement with Rio Tintos board and
will leave the company July 16. During this period, they will
receive base pay, benefits and pension contributions, the
In respect of both individuals,
there will be no lump-sum payment, no annual short-term
performance bonus for 2012 or 2013 and no long-term share award
for 2013, Rio Tinto added.
Rio Tintos global iron ore
production, on an attributable basis, slipped 1.3 percent to 52
million tonnes in the fourth quarter of 2012 from the record
high achieved in the preceding three months.
"Since the price of iron ore
dropped to a low of less than $90 per tonne last September
prices rebounded strongly, reaching a level of around $150 per
tonne earlier this week, albeit in an environment of continuing
volatility," Du Plessis added.
A version of this article was
first published by AMM sister publication Metal