Rio Tinto, the mining giant, experienced the resignation of its boss, Tom Albanese, today, after Rio Tinto divulged a near £9 billion charge linked to two major acquisitions. The Rio Tinto chief’s resignation emanates from a considerable write-down on the worth of its aluminium assets and on the 2011 acquisition of a Mozambique coal business. Tom Albanese had been the boss of Rio Tinto since 2007 and is acknowledged as a veteran of the global mining industry.
As per Rio Tinto, Tom Albanese had quit his position by mutual agreement and will be substituted by iron ore boss, Sam Walsh.
Tom Albanese had received criticism for Rio Tinto’s ill-omened acquisition of Alcan in 2007, which has produced immense losses for Rio Tinto in recent years on account of the global economic downturn. The ill-fated purchase of the aluminium group, Alcan, has been interpreted as a professional setback for Tom Albanese.
Rio Tinto has remarked that it was writing down the worth of its aluminium possessions, in the range of £6.2 billion to £6.9 billion. Nonetheless, the Rio Tinto chairman, Jan du Plessis, has characterised the £1.9 billion write-down, on the recent Mozambican coal deal, as unfortunate. Jan du Plessis was referring to the agreement for the Mozambique-based coal miner, Riversdale.
The Rio Tinto chairman expressed his dissatisfaction over having to do a further considerable write-down in their aluminium businesses. Tom Albanese’s service for Rio Tinto, over more than three decades, was lauded by Jan du Plessis. The chairman has voiced that Rio Tinto’s fundamental business and balance sheet remain in a nice condition. The mining giant was adopting an aggressive cost-cutting plan to enhance its competitiveness.
Tom Albanese, the outgoing Rio Tinto chief executive, has stated that he leaves the business in fine shape in several respects. But he comprehends that responsibility for all facets of Rio Tinto rests with the chief executive.
Doug Ritchie, who headed the purchase/integration of the Mozambican coal assets as energy chief executive, has also quit his post by mutual consent. Ritchie and Albanese will attain their entitlement to pay, welfares and pensions but not a yearly short-term performance bonus (2012 or 2013).