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Rio's Albanese steps down as impairments weigh on company

17 Jan 2013
PERTH ( - Mining giant Rio Tinto on Thursday made the shock announcement that CEO Tom Albanese would step down after the company reported a $14-billion impairment for 2012.

Iron-ore chief Sam Walsh has been appointed as his successor, effective immediately.

Rio’s energy chief Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets, has also stepped down by mutual agreement.

“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 on Thursday.

The impairment charges included some $3-billion relating to the Mozambique coal operations, as well as a reduction in the carrying value of Rio’s aluminium assets, in the order of between $10-billion and $11-billion.

The group also expected a number of smaller asset write-downs in the order of $500-million.

“The Rio Tinto board fully acknowledges that a write-down of this scale, in relation to the relatively recent Mozambique acquisition, is unacceptable,” chairperson Jan du Plessis said.

“We are also deeply disappointed to have to take a further substantial write-down in our aluminium business, albeit in an industry that continues to experience significant adverse changes globally.”

Du Plessis paid tribute to both Albanese and Ritchie, who have been with the company for 30 and 27 years, respectively.

“We are fortunate to have such a capable and highly experienced executive as Walsh to take over and ensure there will be a rapid and seamless transition. He is ideally placed to cast a fresh eye over how we address the challenges and opportunities in the business, and derive greater value from it,” Du Plessis said.

He added that the company’s underlying business and balance sheet remained in good health, and noted that Rio was taking decisive action to improve its competitive position further with an aggressive cost reduction plan.

Incoming CEO Walsh said his focus would be on building a stronger, more valuable Rio for shareholders and the company’s many stakeholders.