Rio Tinto has offered its shareholders a clear mea culpa over its infamous 2007 takeover of aluminium producer Alcan, but urged them not to overlook the good work being undertaken at the company.
Addressing the annual meeting of Rio's London shareholders, chairman Jan du Plessis delivered some of the clearest comments to date on the Alcan purchase, which has prompted more than $US27 billion worth of impairments over the past four years and helped end the tenure of former chief executive Tom Albanese.
"In hindsight, this project was not only badly timed at the top of the market, but major structural changes over the last year or two have put the global aluminium industry under tremendous pressure," he said.
"We therefore have to acknowledge that the acquisition has had a significant negative impact on shareholder value and, as our owners, you have every right to expect that we do better."
But Mr du Plessis said angry shareholders should not forget the strong performance that had been achieved in other divisions, particularly iron ore.
"It is important that we retain a balanced perspective of your company's overall performance over the period of almost six years since the acquisition was first announced," he said.
The $US14.4 billion worth of impairments reported by Rio Tinto earlier this year was a hot topic among the hostile group of London shareholders, and no doubt helped inform their votes on a motion to alter the system for awarding long-term bonuses to executives.
The motion was designed to make it easier for the company to claw back bonuses paid to executives and to force them to own more Rio Tinto shares.
Voting results from the London meeting have been kept private until after Rio's Australian shareholders have had their chance to vote at the annual meeting in Sydney on May 9.
Arguably the biggest priority for the company this year is to bring the Oyu Tolgoi mine in Mongolia into commercial production.
That is supposed to occur by June, but that schedule has been threatened by a disagreement between Rio and the Mongolian government over the cost of the project and the royalty rate that will be paid.
Mongolia's Finance Minister, Chultem Ulaan, said his government was conducting an audit on Rio's spending on the project, including on equipment and other aspects of the mining process.
"We are checking procurement documents and expenditures," he said."No one understands why the project has gone $US2 billion over budget so we are checking this."
The Mongolian government believes that Rio has outstanding tax debts from last year, and a World Bank audit of Mongolia's budget for this year revealed that the developing nation has already factored in $US303 million worth of extra cash flows from Oyu Tolgoi that are still under dispute.