Rio Tinto takes large Alcan writedown

MONTREAL – Rio Tinto’s chief executive is foregoing his annual bonus after the global mining giant’s net earnings dropped by 59 per cent last year due to an US$8.9 billion writedown of its aluminum business.

“As the acquisition of Alcan happened on my watch, I felt it only right not to be considered for an annual bonus this year,” Tom Albanese said Thursday.

The Anglo-Australian miner purchased Canada’s Alcan in 2008 for US$38.1 billion. It subsequently sold off parts of the operations to reduce the debt and has now taken US$19 billion of charges for Alcan.

It’s not clear the size of bonus Albanese could have received, but he was awarded 1.6 million pounds (today worth about $2.5 million) last year when his total remuneration was 5.5 million pounds (about $8.6 million).

Also foregoing his bonus is chief financial officer Guy Elliott.

Rio Tinto (NYSE:RIO), which reports in U.S. dollars, said its net profit for 2011 fell to $5.8 billion from $14.32 billion the previous year.

via Metro – Rio Tinto takes large Alcan writedown.