Rio Tinto CEO Steps Down Amid $14B Write-Off

By FOXBusiness

Rio Tinto (NYSE:RIO), which unveiled $14 billion in write-off charges Thursday related to its recent Mozambique acquisition, announced that CEO Tom Albanese has stepped down as per a mutual agreement with its board of directors.

The London-based minerals explorer said Albanese will be replaced immediately by Iron Ore CEO Sam Walsh.

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Doug Ritchie, who has been with Rio for 27 years and led the acquisition and integration of the Mozambique coal assets as Energy chief, has also agreed to step down.

"The Rio Tinto Board fully acknowledges that a write-down of this scale in relation to the relatively recent Mozambique acquisition is unacceptable,” said Rio Tinto chairman Jan du Plessis.

The company, he added, is “deeply disappointed” to have to take a further substantial write-down in its aluminum business, especially as the industry continues to undergo “significant adverse changes globally.”

Rio Tinto said the impairment charges, which will be recorded as one-time special items in its fiscal 2012 results, include a $3 billion charge related to Rio Tinto Coal Mozambique as well as reductions in the carrying values or Rio’s aluminum assets in the range of $10 to $11 billion.

A bundle of other smaller asset write-downs to the tune of $500 million are also expected.

Rio said its underlying business and balance sheet remain in good health and the company is taking actions to improve its competitive position further with an aggressive cost reduction plan.

While Albanese and Ritchie have stepped down, the two will remain on board through mid-July to assist with the transition.

Shares of Rio Tinto traded virtually flat Thursday around $54.94.