Rio Tinto to Book $14 Billion Write Down; CEO Replaced

Rio Tinto to Book $14 Billion Write Down; CEO Replaced

HONG KONG–Rio Tinto, the Anglo-Australian mining giant, said Thursday that it would book a $ 14 billion write down in its 2012 results and that its long-serving chief executive, Tom Albanese, had stepped down.

The company blamed falling prices of aluminum for $ 10 billion to $ 11 billion of the non-cash charge, citing strong currencies and high energy and raw material costs as other factors leading to the write down.

Another $ 3 billion was attributed to lowered estimates of the value of its coal business in Mozambique, after the company failed to secure key government approvals to ship coal it mined in the African country.

Announcing the humongous financial hit, Rio Tinto said that Mr. Albanese, a three-decade veteran of the company, was replaced as chief executive on Thursday by Sam Walsh, who was head of the company’s iron ore business. Rio Tinto also said Doug Ritchie, the executive who oversaw the acquisition of the coal business in Mozambique, had stepped down by mutual agreement.

‘‘The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable,’’ chairman Jan du Plessis said in a news release. ‘‘We are also deeply disappointed to have to take a further substantial write-down in our aluminum businesses, albeit in an industry that continues to experience significant adverse changes globally.’’


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