Rio Tinto takes a big hit for aluminium purchase

Feb 9, 2012, 7:46 GMT

Sydney - Rio Tinto Ltd on Thursday reported a 59-per-cent fall in profits for 2011 to 5.8 billion US dollars from 14.2 billion dollars in 2010.

Revenues were up 10 per cent to 28.5 billion dollars from 25.9 billion dollars the previous year.

If the Anglo-Australian miner had not taken a big writedown on the Alcan Inc aluminium business it bought at the top of the market in 2007, chairman Jan du Plessis said in a statement, underlying earnings would have been up 11 per cent at 15.5 billion dollars.

'Whilst we have today reported excellent underlying earnings numbers, we also have to recognize that we have taken a significant impairment charge in relation to our aluminium business,' du Plessis said.

Chief executive Tom Albanese and another senior executive will forego their annual bonuses in atonement for their part in the overly generous Alcan purchase.

The chairman was cautious in his predictions for the current calendar year.

'We anticipate that uncertainty in the financial markets, particularly around the euro, together with elevated price volatility, will continue into 2012,' he said. 'This leads us to remain cautious about near-term prospects.'

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