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 company said.
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 million.
The final impairment charge will be reflected when Rio Tinto reports full-year results on Feb. 14.
"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 company said.
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 Bulletin.