Rio Tinto CEO steps down as group admits incurred 14bn dollars in imparirments

Tom Albanese has stepped down as Chief Executive Officer of Rio Tinto and has been succeeded by Sam Walsh following an announcement by the company that it expects to recognise a non-cash impairment charge of approximately 14bn dollars in its 2012 full year results.

The impairments include an amount of approximately $3bn relating to Rio Tinto Coal Mozambique as well as reductions in the carrying value of Rio Tinto's aluminium assets in the range of $10-11bn.

The group further stated that it expects to report a number of smaller asset write-downs in the order of $500m.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

In addition to Albanese's resignation, Doug Ritchie, who led the acquisition and integration of Mozambique coal assets in his previous role as energy Chief Executive, has also stepped down by mutual agreement.

Rio Tinto Chairman Jan du Plessis said: "The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable. 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."

He praised both outgoing staff members' contribution to the company over their tenures, saying: "I would like to pay tribute to Tom for his considerable contribution to Rio Tinto over more than 30 years of service and for his integrity and dedication to the company. I would also like to thank Doug for his 27 years of service to the Group and particularly for his invaluable work in developing our relationships in China. I wish them both well for the future."

MF