Rio Tinto Sacks Boss Amid £9bn Write-Off

Rio Tinto Sacks Boss Amid £9bn Write-Off

The boss of one of the world's biggest miners has been sacked as the company takes a $14bn (£8.75bn) write-down relating to his acquisitions.

London-listed Rio Tinto's share price dived by 4.5% when the FTSE 100 opened for business on news of the write-down.

Tom Albanese, who joined Rio two decades ago, will be replaced by the company's iron ore boss Sam Walsh.

The company said his departure was by "mutual agreement".

Mr Albanese, who became chief executive in 2007, had until now largely survived the consequences of his damaging $38bn (£23.7bn) acquisition of aluminium group Alcan that same year.

The deal was seen as at the 'top-of-the-market' when Rio was under pressure from rivals to bulk up or be acquired.

The group has since seen years of losses in aluminium and took a $8.9bn (£5.6bn) charge a year ago.

Rio also bought Mozambique-focused coal miner Riversdale in 2011.

Doug Ritchie, who led the acquisition and integration of the Mozambique coal assets when he was head of Rio's energy division, has also stepped down.

Rio said on Thursday the non-cash impairments would include a charge of around $3bn (£1.9bn) relating to the Mozambique business, as well as reductions in the carrying values of Rio's aluminium assets of up to $11bn (£6.9bn).

Chairman Jan du Plessis said: "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."

Mr Albanese added: "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."

He and Mr Ritchie will receive their entitlement to pay, benefits and pension contributions but will not an annual short-term performance bonus for 2012 or 2013 or the long-term share award for 2013.