Rio Tinto CEO Leaves, Shares Up

Tom Albanese, the chief executive of Rio Tinto, has announced that he is stepping down. Despite the shock of the announcement, however, Rio Tinto shares increased two percent.

Albanese resigned because of the company’s $14-billion writedown, saying he is accountable for the loss from bad deals.

Sam Walsh has replaced Albanese. Industry analysts welcomed Walsh’s appointment although fears continue that he may not be able to find a long-term solution for Rio Tinto’s problems.

Rio Tinto’s shares jumped from $64.6 to 65.88.

The writedown included Rio Tinto’s aluminum and coal assets. Its aluminum assets in Alcan Pacific Aluminum are worth at least US$10 billion while its coal assets in Coal Mozambique are worth about US$3 billion.

Senior executive Doug Richie has joined Albanese in resigning as the former is the one who led in the purchase and integration of Coal Mozambique from Riversdale Mining.

Sam Walsh, the new chief executive officer of Rio Tinto, has been with the company since 1991. He was the head of the iron ore department before he was promoted to become CEO.

His appointment also means that he would be relocating to London to oversee the entire company. His base salary is expected to fetch $1.9 million while he is expected to receive a 15-percent increase in total remuneration.