Rio Tinto shares fell almost 3 per cent on Thursday after a $14bn writedown. Tom Albanese, the company's CEO, has gone, and so has Doug Ritchie - who was in charge of the Mosambique coal venture - which suffered a $3bn writedown.
Here's the Telegraph report:
The FTSE 100 miner bought its Alcan aluminium arm in 2007 for $38bn, shortly before the markets crashed, a bad deal which Mr Albanese has previously acknowledged happened “on my watch”. It has now written down a "staggering" $25bn of the price paid, noted analysts at Jefferies.
Mr Albanese last February said he would not take an annual bonus as the company posted an $8.9bn write-down on the value of the aluminum assets. Rio then said in November that more write-downs were expected at its aluminium arm, as the metal’s market continues to struggle with overcapacity and climbing costs.
The company on Thursday blamed the further decline in market conditions seen last year, as well as high energy and raw material costs and strong currencies in some countries, for the latest write-downs, which were focused at Alcan.
As for the $3bn Mozambique write-down, that reflected the bulk of the $4bn acquisition cost of Riversdale, its coal assets in the east of the African country.