New boss for Rio Tinto
Sam Walsh is the new chief executive of mining giant Rio Tinto after the shock exit of Tom Albanese last night.
The Sydney Morning Herald reported that under pressure from Rio's board, Mr Albanese stood down from the role on the back of US$14billion worth of new impairments that will be lodged against the mining giant's books when it reports its full-year results on February 14.
New Zealand Aluminium Smelters community relations officer Andrea Carson told The Southland Times today she could not say how Mr Albanese's exit would affect the Tiwai Point smelter.
''We are unable to comment on Rio Tinto matters,'' Ms Carson said.
The impairments come on top of US$8.9billion 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 US$11billion on Rio's ailing aluminium assets, several of which are in the Australia-Pacific region.
A further US$3billion charge will be lodged against Rio's coal assets in Mozambique.
The announcement came after the Australian market closed. Rio's shares were off 1.5 per cent in early trade in London last night.
Rio chairman Jan du Plessis said the decision for Mr Albanese to step down was mutually agreed by the board.
''The 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 du Plessis 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,'' Mr Albanese said.
Doug Ritchie, the man who lead the Mozambique acquisition, also quit.
While stepping down from today, both remain at the company until July 16. Neither of them will get a lump sum payment, or short term performance bonus for 2012 or 2013.
The shake-up means that 2013 will be a year of massive change at the top of the company, given that chief financial officer Guy Elliott has already announced his intention to depart by December at the latest.
Mr Walsh is based in Perth, where he leads Rio's iron ore division, which easily ranks as the company's biggest revenue spinner.
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.
"Sam Walsh is well regarded," said Ric Ronge a fund manager with Pengana Global Resources Fund.
"Iron ore is about 80 per cent of Rio's earnings - so he's basically in charge of the bulk of the company's earnings power. It makes sense that he would be the person to step-up if they were looking for an internal appointment''.
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. – Sydney Morning Herald/Bloomberg
The Southland Times