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Rio Tinto posts mammoth loss

Feb 14 2013 09:30 AFP
Mining

The mining industry, the bedrock upon which the country was built, is going through something like an existential crisis. (Picture: Shutterstock) (Shutterstock)

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Sydney - Anglo-Australian mining titan Rio Tinto on Thursday posted a $2.99bn annual net loss after $14.4bn in writedowns on its Mozambique coal assets and ailing aluminium businesses.

The impairments, announced last month, prompted the resignation of chief executive Tom Albanese and saw Rio slump into the red on underlying earnings of $9.3bn.

"Our business performed well in 2012, generating strong cash flows and underlying earnings of $9.3bn," said Rio chairperson Jan du Plessis.

"However, we are deeply disappointed by the $14.4bn writedowns that we have taken in 2012, primarily in our aluminium and energy businesses, which led to the group recording a net loss of $3.0bn."

Incoming chief Sam Walsh, who is to formally replace Albanese at the helm in July, said the company was targeting cash savings of more than $5.0bn by the end of 2014 and reducing capital expenditure to $13bn this year.

"My immediate priority is to build more focus, discipline and accountability throughout the organisation," said Walsh.

"Demonstrating this commitment, we will deliver our capital reduction and cost savings targets and improve performance across our business."

Rio said the full-year results had been hit by a dip in commodity prices that had wiped $5.3bn off the bottom line.

Iron ore plunged 24% compared with 2011, copper was 10% lower and aluminium was down 16%.

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