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Anglo-Australian mining titan Rio Tinto posted its first annual loss in 18 years Thursday, plunging US$2.99 billion into the red on hefty writedowns on its Mozambique coal and aluminium businesses.
The US$14.4 billion in impairments, announced last month, prompted the resignation of chief executive Tom Albanese and saw Rio slump 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."
The result for the 12 months to December 31 was a 151 percent plunge on last year's US$5.83 billion profit.
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, promising "aggressive" cost-cutting.
"Demonstrating this commitment, we will deliver our capital reduction and cost savings targets and improve performance across our business."
Rio said the full-year loss -- its first since becoming a dual listed company in 1995 -- had also been due to a dip in commodity prices which 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.
Rio's unpopular US$38 billion acquisition of Canadian firm Alcan in 2007 cost it dearly, with lagging profits from the metal eating into its bottom line and seeing full-year earnings slump 59 percent in 2012 to US$5.8 billion.
An impairment charge of US$8.9 billion from the aluminium business saw Albanese forgo his bonus last year, and Rio said conditions in the aluminium market had worsened further in 2012 due to high costs and currency swings.
Under his watch, Walsh said Rio would have an "unrelenting focus on pursuing greater value for shareholders," promising to invest only in projects that offer "attractive returns that are well above our cost of capital".
The new CEO offered an upbeat assessment of global prospects, saying Rio saw "the positive momentum in the fourth quarter of last year being sustained into 2013 with Chinese GDP growth returning to above 8 percent".
Rio said industry-wide cost pressures had also weighed on earnings, particularly the price of energy.
The mining giant offered shareholders a $1.67 dividend -- 15 percent higher than last year -- which du Plessis said reflected confidence in its prospects.
"The quality of our assets combined with our positive long-term outlook gives us confidence in the sustainable cash-generating abilities of our business," he said.
A slowdown in China and debt strains in Europe and the United States have weighed on mining companies in the past 12 months, with projects delayed or shelved as commodity prices have plunged on a drop in demand.