Rio Tinto posts mammoth loss

Billions in write-downs, primarily in its aluminium and energy businesses, led to a more than N$26 billion net loss for Rossing owners Rio Tinto last year.

Anglo-Australian mining titan Rio Tinto on Thursday posted a US$2,99 billion (N$26,9 billion) annual net loss, after US$14,4 billion (N$129,6 billion) in write-downs on its Mozambique coal assets and ailing aluminium businesses.

The impairments, announced last month, prompted the resignation of chief executive Tom Albanese and saw Rio slump into the red on underlying earnings of US$9,3 billion (N$83,7 billion).

“Our business performed well in 2012, generating strong cash flows and underlying earnings of U$9,3 billion,” said Rio chairperson Jan du Plessis.

“However, we are deeply disappointed by the US$14,4 billion write-downs that we have taken in 2012, primarily in our aluminium and energy businesses, which led to the group recording a net loss of US$3 billion.”

Incoming chief Sam Walsh, who is to formally replace Albanese at the helm in July, said the company was targeting cash savings of more than US$5 billion (N$45 billion) by the end of 2014 and reducing capital expenditure to US$13 billion (N$117 billion) this year.

“My immediate priority is to build more focus, discipline and accountability throughout the organisation,” said Walsh.

“Demonstrating this commitment, we will deliver our capital reduction and cost savings targets and improve performance across our business.”

Rio said the full-year results had been hit by a dip in commodity prices that had wiped US$5,3 billion (N$47,7 billion) off the bottom line.

Iron ore plunged 24% compared with 2011, copper was 10% lower and aluminium was down 16%.

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