FORMER Rio Tinto chief Tom Albanese has been hired as the new head of Vedanta Resources, the Indian conglomerate said yesterday.
Albanese left FTSE 100-quoted mining giant Rio in January 2013 after the firm’s misjudged acquisitions in the midst of the commodities boom led to a $14bn (£8.36bn) writedown.
He will take up his new role from 1 April, replacing MS Mehta, who is retiring at the end of March.
It is intended that he will also be appointed as the chief executive of Vedanta’s main operating subsidiary Sesa Sterlite.
Yesterday’s announcement did not surprise the market, following Albanese’s appointment as chairman of Vedanta Resources Holdings, a subsidiary of the FTSE 100 company, back in September. “Vedanta has been perceived by the market as an Indian-centric company and the appointment of Albanese, in our view, should help to globalise the business and remove this perception,” said Citi research.
“A key concern, however, will be whether Albanese would have enough powers given the controlling stake held by Agarwal family.”
Vedanta, which is still 65 per cent controlled by founder and chairman Anil Agarwal, underwent a restructuring last year to simplify the group’s structure and enable it to cut down its debt better.
This, along with Albanese’s appointment, has suggested that the company is looking to build its empire outside of India.
Vedanta’s shares closed up four per cent at 892.5p yesterday.
TOM ALBANESE | VEDANTA RESOURCES
■ Albanese was boss of Rio Tinto from May 2007 to January 2013. Rio’s $14bn writedown after he left was almost entirely due to the firm’s acquisitions of aluminium firm Alcan and coal firm Riversdale under his leadership.
■ “After the problems related to some of the acquisitions he was involved with, I think he is more likely to be more cautious rather than going out and buying everything in sight,” said Charles Stanley analyst Tom Gidley-Kitchin.
■ He joined gold firm Franco Nevada Corporation’s board in August 2013.
■ A New Jersey native, he is married with two daughters.