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Rio Tinto posts unprecedented $2.99 bn loss

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(Globalpost/GlobalPost)

Anglo-Australian mining titan Rio Tinto on Thursday posted a US$2.99 billion annual net loss after US$14.4 billion in writedowns 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.

"Our business performed well in 2012, generating strong cash flows and underlying earnings of US$9.3 billion," said Rio chairman Jan du Plessis.

"However, we are deeply disappointed by the US$14.4 billion writedowns that we have taken in 2012, primarily in our aluminium and energy businesses, which led to the group recording a net loss of US$3.0 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$5.0 billion by the end of 2014 and reducing capital expenditure to US$13 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 off the bottom line.

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

ajc/mp/ao

http://www.globalpost.com/dispatch/news/afp/130214/rio-tinto-posts-unprecedented-299-bn-loss