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Rio Tinto writes down $14bn, CEO quits

Jan 17 2013 10:23 AFP

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Sydney - Anglo-Australian mining giant Rio Tinto announced a $14bn writedown related to its Mozambique coal assets and ailing aluminium business Thursday, prompting its chief executive to resign.

Rio said it expected non-cash impairments of approximately $3bn relating to its Mozambique coal project, bought in 2011, and a further $10bn-$11bn related to its aluminium assets in its annual results due February 14.

"The Rio Tinto board fully recognises that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," said chairperson Jan du Plessis.

"We are also deeply disappointed to have to take a further substantial writedown in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally."

Du Plessis said CEO Tom Albanese had stepped down effective immediately "by mutual agreement with the Rio Tinto board" and would be succeeded in the top job by Rio Tinto's iron ore chief Sam Walsh.

Doug Ritchie, who led the acquisition of the Mozambique assets, previously known as Riversdale Mining Limited, also stood down, he said.

Neither would get a lump sum payout or outstanding bonuses.

"While I leave the business in good shape in many respects, I fully recognise that accountability for all aspects of the business rests with the CEO," Albanese said.

The announcement comes a day after the mining giant unveiled record production in 2012 and beefed up expansion plans for its flagship Australian iron ore operations.

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