RT CEO Steps Down, $14b writedown looms
It does not seem to be related to Cu or RTQ/OT.
https://www.bloomberg.com/news/2013-01-17/rio-ceo-albanese-steps-down-company-sees-14-billion-impairment.html
By Elisabeth Behrmann
Jan 17, 2013
Rio Tinto Group (RIO), the world’s second- biggest mining company, said Chief Executive Officer Tom Albanese will step down as the company prepares to slash the value of acquisitions he oversaw by about $14 billion.
Sam Walsh, the head of the company’s most profitable division, will take over as CEO from today, London-based Rio said in a statement. Doug Ritchie, who led the A$3.9 billion ($4.1 billion) purchase of Mozambique coal producer Riversdale Mining Ltd. in 2011 will also step down as Rio will cut the value of the Mozambique coal assets by about $3 billion.
“Sam Walsh is well regarded,” said Ric Ronge, who helps manage the equivalent of $1.3 billion in stocks, including Rio and BHP Billiton Ltd. (BHP), at Pengana Global Resources Fund in Melbourne. “Iron ore is about 80 percent of Rio’s earnings - so he’s basically in charge of the bulk of the company’s earnings power. It makes sense that he would probably be the person to step-up if they were looking for an internal appointment.”
The bulk of the writedown, of $10 billion to $11 billion, will be off the company’s aluminum businesses, most of which were obtained through Albanese’s $38 billion purchase of Alcan in 2007. Rio has already reduced the value of the Alcan operations by $8.9 billion in February last year.
“The Rio Tinto board fully acknowledges that a writedown of this scale in relation to the relatively recent Mozambique acquisition is unacceptable,” Chairman Jan du Plessis said in the statement. “We are also deeply disappointed to have to take a further substantial writedown in our aluminum businesses, albeit in an industry that continues to experience significant adverse changes globally.”
Aluminum’s Decline
Aluminum futures in London have declined 8.3 percent in the past year, hurting producers such as United Co. Rusal and Alcoa Inc. (AA)
Albanese, 55, and Ritchie, while stepping down from today, will remain at the company until July 16. Neither of them will get a lump sum payment, or short term performance bonus for 2012 or 2013, the statement said.
“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,” du Plessis said. “I would also like to thank Doug for his 27 years of service to the group.”