Albanese steps down as head of Rio Tinto

Rio Tinto's head of iron ore Sam Walsh is the new CEO of Rio Tinto following Tom Albanese's shock exit last night.

According to the miner "Tom Albanese has stepped down as chief executive by mutual agreement with the Rio Tinto Board, and Iron Ore chief executive Sam Walsh has been appointed as his successor with effect from today".

Rio Tinto's energy chief Doug Ritchie has also been caught in the management cull, stepping down today by "mutual agreement".

Many believe it is the miner's expectation of a non-cash impairment of around US$14 billion for its 2012 full year results that was the impetus behind the corporate reshuffle.

"These impairments include an amount of approximately US$3 billion relating to Rio Tinto Coal Mozambique (RTCM), as well as reductions in the carrying values of Rio Tinto’s aluminium assets (mostly Rio Tinto Alcan (RTA) but also Pacific Aluminium) in the range of US$10-11 billion," it said in a statement.

"The group also expects to report a number of smaller asset write-downs in the order of US$500 million.  The final figures will be included in Rio Tinto’s full year results on 14 February 2013."

This is despite Rio posting a record production from its Pilbara iron ore mines, producing 253 million tonnes of iron ore for the year; a 4% increase on last year's results.

Regarding the predicted loss, Rio Tinto chairman Jan du Plessis said the board "acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition 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 went on to "pay tribute to Tom for his considerable contribution to Rio Tinto over more than 30 years of service and for his integrity and dedication to the company.  I would also like to thank Doug for his 27 years of service to the Group and particularly for his invaluable work in developing our relationships in China".

Sam Walsh, the head of the company's well performing iron ore division, will step into the role immediately.
"We are fortunate to have such a capable and highly experienced executive as Sam to take over and to ensure there will be a rapid and seamless transition. He is ideally placed to cast a fresh eye over how we address the challenges and opportunities in the business, and derive greater value from it," du Plessis said.

As Albanese stepped down, he stated that "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. I am pleased that someone of Sam’s calibre and values has been chosen to succeed me as chief executive.  This is a great company and Sam will do an outstanding job".

The company declined to state who would be stepping into the now vacant role of head of Rio Tinto's energy division.

Albanese has been with Rio Tinto for more than three decades, and Ritchie served the company for close to 30 years.

This is the second major shift in mining company management in the past month, with fellow Australian Mark Cutifani stepping into the role of CEO at Anglo American.
 

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