Rio Tinto CEO Tom Albanese Quits

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Shares in Rio Tinto are expected to slide today after Tom Albanese stepped down from his chief executive post last night, The Australian reported.

Mr Albanese has been replaced by Sam Walsh, Rio Tinto’s Australia-born iron ore chief who has been with the company for 22 years.

An impairment charge totalling approximately US$14 billion (AU$13.3 billion) is expected to be taken when the company posts its annual results on February 14.

Reports reveal that at least $10 billion will be written off the value of Rio Tinto’s aluminium assets, which are largely comprised of the Canadian company Alcon Inc. acquired by Rio Tinto for US$38 billion in 2007.

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A further $3 billion will be written off the value of its coal assets in Mozambique, acquired for $4 in 2011.

According to the Wall Street Journal, both acquisitions were meant to support Rio Tinto’s efforts to lessen its dependence on iron ore, but high energy costs and development delays hindered the strategy.

The mining company’s London-listed shares dropped immediately after the market opened yesterday, but settled at 1.5 per cent down late last night.

Doug Richie, Rio’s head of strategy who led the Mozambique acquisition, has also left the company.

"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,” Mr Albanese told the media.

Mr Walsh appears prepared for the challenges ahead: "I have great respect for Tom and the many positive attributes he brought to the role," Mr. Walsh told the WSJ. "I will be working flat out to build an even stronger, more valuable Rio Tinto."

[Photo sourced from Industry Leaders Magazine]