THE CHIEF executive of miner Rio Tinto quit his post immediately yesterday, in a surprise move following a $14bn (£8.7m) write-down on two of his recent acquisitions.
Outgoing Tom Albanese, who joined Rio two decades ago, will be replaced by Rio Tinto’s iron ore chief Sam Walsh with immediate effect.
The $14bn charge includes around $3bn relating to Rio Tinto Coal Mozambique, as well as reductions in the carrying values of Rio Tinto’s aluminium assets in the range of between $10bn and $11bn.
It is thought his position as chief executive was untenable in light of the write-downs.
Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets when he was head of Rio’s energy division, has also stepped down.
The FTSE 100 miner also expects to report several other smaller write-downs to the tune of around $500m.
Rio chairman Jan du Plessis yesterday said that the board acknowledges the scale of the write-down is “unacceptable”.
“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,” he added.
Albanese yesterday conceded that accountability for “all aspects of the business” laid at the door of the chief executive.
The write-downs will be included in Rio Tinto’s full-year results on 14 February.
Earlier this week, the miner beat forecasts as it said global iron ore output hit 253m tonnes over 2012.
On the back of the announcement, Rio shares plunged yesterday morning, although had recovered some ground by the end of play, closing down just 0.53 per cent.
PROFILE: SAM WALSH
INCOMING Rio Tinto chief executive Sam Walsh, 62, has been chief executive of Rio Tinto’s iron ore division since 2004, where he overlooked operations in Australia, Canada and India.
Australian Walsh, who joined the miner in 1991 following a long career in the car industry with companies including General Motors and Nissan Australia, has held a number of management positions within the group, including chief executive of the aluminium group.
He was appointed as an executive director to the Rio Tinto board in 2009.
The incoming chief executive’s other appointments include non-executive director of Seven West Media and president of the Western Australia branch of Scouts Australia.
The veteran miner has a degree in commerce from Melbourne University, and is a fellow of the Australian Institute of Management and the Australasian Institute of Mining and Metallurgy, among others.