Chief Executive of Rio Tinto steps down following announcement of US$3 billion write-down in Mozambique

18 January 2013

The chief executive of Anglo-Australian group, Tom Albanese, stepped down from his role following an announcement that the group’s accounts for 2012 would contain US$14 billion in write-downs, US$3 billion of which are related to its coal project in Mozambique.

A write-down reduces the book value of an asset to what is considered to be its fair market value.

The Mozambican write-down is related to the acquisition of the company now called Rio Tinto Coal Mozambique, previously owned by Australian group Riversdale Mining, and the remainder is related to the value of Rio Tinto Alcan and Pacific Aluminium, following a drop in the price of aluminium on world markets.

As well as Albanese, Doug Ritchie, who led the acquisition of coal assets in Mozambique, will also leave what is the world’s second largest mining company.

Rio Tinto Coal Mozambique’s coal production is limited by a lack of transport infrastructure as well as the fact that the Mozambican government has denied the possibility of transporting the coal along the Zambezi River, which is one of the transport routes proposed by the group.

The write-down of almost US$14 billion is expected to be reflected in its 2012 results, due to be published in February. (macauhub)