Albanese out in Rio shake-up
AUSTRALIAN Sam Walsh is the new chief executive of mining giant Rio Tinto after the shock resignation of Tom Albanese on Thursday night.
Mr Albanese stood down from the role on the back of $US14 billion worth of new impairments that will be lodged against Rio Tinto's books when it reports its full-year results on February 14. The impairments come on top of $US8.9 billion of impairments one year ago, and the combination of those write-downs was enough to end Mr Albanese's stint of almost six years in the job.
The new impairments will include a charge of close to $US11 billion on Rio's ailing aluminium assets, several of which are in the Australia-Pacific region.
A further $US3 billion impairment charge will be lodged against Rio's coal assets in Mozambique.
Rio Tinto chairman Jan du Plessis said the decision for Mr Albanese to step down was mutually agreed by the board. "The Rio Tinto Board fully 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 said. "I would like 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."
Like he did when announcing the impairments last year, Mr Albanese said he had to accept responsibility for decisions taken on his watch.
"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," he said.
Mr Albanese won't be the only executive to step down, with Doug Ritchie - the man who lead the Mozambique acquisition - also quitting.
Mr Walsh is currently based in Perth, where he leads Rio's iron ore division, which easily ranks as the company's biggest revenue spinner.
Mr Walsh cut his teeth in the car industry with Nissan, and is known to have a passion for collecting antique milk jugs.
He is credited with introducing the efficient, factory-style operations that exist in car industry into mining, and Rio is considered an industry leader in running its iron ore mines from thousands of kilometres away in Perth using control centres with video cameras and other technology.
"I am honoured to be given the opportunity to lead this wonderful business," he said. "I have great respect for Tom and the many positive attributes he brought to the role, and I am grateful for the experience of working closely with him over many years. I will be working flat-out to build an even stronger, more valuable Rio Tinto business for shareholders and for our many other stakeholders."
The changes continue an extraordinary period of change at the highest ranks of the world's biggest miners, and come ahead of an expected change at the top of rival BHP Billiton, where chief executive Marius Kloppers is widely expected to depart within 18 months.