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| Rio Tinto boss Tom Albanese resigns over $14bn write-down | Rio Tinto boss Tom Albanese resigns over $14bn write-down |
| (about 3 hours later) | |
| The chief executive of mining giant Rio Tinto has resigned after the company announced a $14bn (£8.7bn) write-down. | The chief executive of mining giant Rio Tinto has resigned after the company announced a $14bn (£8.7bn) write-down. |
| The write-down relates to the company's aluminium and coal-mining businesses. | The write-down relates to the company's aluminium and coal-mining businesses. |
| Chief executive Tom Albanese stepped down by mutual agreement with the board, Rio Tinto said, and has been replaced by Sam Walsh, chief executive of the miner's iron ore business. | Chief executive Tom Albanese stepped down by mutual agreement with the board, Rio Tinto said, and has been replaced by Sam Walsh, chief executive of the miner's iron ore business. |
| In a statement, Rio Tinto chairman Jan du Plessis said the scale of the write-down was "unacceptable". | In a statement, Rio Tinto chairman Jan du Plessis said the scale of the write-down was "unacceptable". |
| The company's aluminium assets saw a write-down in the range of $10bn-$11bn. This is largely related to the company's purchase of Canadian aluminium giant Alcan in 2007. | |
| It spent $38bn buying the company shortly before the onset of the global financial crisis. | |
| Around $3bn of the write-down relates to Rio Tinto's coal mining operations in Mozambique, which only began shipping coal in June last year. | Around $3bn of the write-down relates to Rio Tinto's coal mining operations in Mozambique, which only began shipping coal in June last year. |
| Doug Ritchie, who led the acquisition of the Mozambique coal assets as head of Rio Tinto's energy division, has also resigned. | Doug Ritchie, who led the acquisition of the Mozambique coal assets as head of Rio Tinto's energy division, has also resigned. |
| "Tom is really taking the blame for a couple of bad acquisitions," said mining analyst John Meyer. | "Tom is really taking the blame for a couple of bad acquisitions," said mining analyst John Meyer. |
| "Alcan was a huge acquisition for its time. It was a raging bull market back then, [but] the world then headed into recession. | "Alcan was a huge acquisition for its time. It was a raging bull market back then, [but] the world then headed into recession. |
| "It was exactly the wrong type of business to have bought for a worsening economic environment. | "It was exactly the wrong type of business to have bought for a worsening economic environment. |
| "Rio Tinto didn't do its homework." | "Rio Tinto didn't do its homework." |
| Shares fall | Shares fall |
| Shares in the company, which is headquartered in UK, fell more than 3% when stock markets in London opened. | Shares in the company, which is headquartered in UK, fell more than 3% when stock markets in London opened. |
| "The Rio Tinto board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," Mr du Plessis said. | "The Rio Tinto board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable," Mr du Plessis said. |
| "We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally." | "We are also deeply disappointed to have to take a further substantial write-down in our aluminium businesses, albeit in an industry that continues to experience significant adverse changes globally." |
| The write-downs, which reflect a reduction in the value of assets, will be included in Rio Tinto's full-year results due on February 14. | The write-downs, which reflect a reduction in the value of assets, will be included in Rio Tinto's full-year results due on February 14. |