While Albanese’s departure sounds a little on the harsh side based on ‘substantial’ write-downs of the company’s aluminium and coal assets, a press release issued by Rio Tinto two days before the announcement, effectively tells a different story.
Albanese himself is quoted as saying, “This was another year of strong operational performance across the group” and that, despite the markets remaining volatile, ‘our business continues to perform well’.
Two days later and Albanese is on his way without so much as a golden handshake.
A Rio Tinto spokeswoman told Aluminium International Today that the key reason behind Albanese’s departure was write-downs of the company’s coal assets in Mozambique and some of its global aluminium assets.
Rio Tinto bought a company called Riversdale and set about developing what it thought was a viable coal mining operation. However, after failing to gain approvals to transport coal by barge along the Zambezi and discovering that the quality of the coal in the ground was of a questionable quality, things began to fall apart. “It was not our finest hour,” Rio Tinto’s spokeswoman admitted, adding that Albanese’s tenure was no longer sustainable.
Also in Rio Tinto’s firing line was Doug Ritchie, the man who masterminded the company's Mozambique adventure. He too leaves without a golden handshake.
Following Rio Tinto’s acquisition of Alcan in 2007 – when the aluminium industry as a whole was doing a lot better than it is today – things took a slide for the worse as the global downturn took hold and an over-supply scenario led to the fall of LME prices, which are still severely depressed today.
Sam Walsh takes over from Tom Albanese. The former Rio Tinto iron ore CEO picks up an AUD$1.9 million salary and a target annual bonus of 120% of his base salary, not forgetting a long-term share incentive plan at 190% of his base salary. He also has to relocate to the United Kingdom from Australia.
Rio Tinto chairman Jan du Plessis said the write-downs on the company’s balance sheets were unacceptable, although he wished Messrs Albanese and Ritchie well for the future. Both men had almost a combined 60 years of service with the company.
In his parting comment, Albanese said that, in many respects, he leaves the business in good shape. He realises, however, that as CEO the buck stops with him and, therefore he takes the rap for both Mozambique and Rio Tinto’s aluminium assets.