Rio Tinto in $43m Mozambique settlement

afr.com:

Rio Tinto has agreed to pay $US28 million ($42.7 million) to end an American regulatory probe into its Mozambique coal debacle, in a settlement that closes a dark chapter in the miner’s history.

The $US28 million settlement was reached on November 17 with the United States Securities and Exchange Commission, which had accused Rio of fraudulently concealing problems with its Mozambique coal investment and delaying the announcement of impairments against the asset.

The Securities and Exchange Commission headquarters in Washington; it dropped its most serious charges in 2019. Graeme Sloan/Bloomberg

The SEC filed the charges in late 2017, accusing former Rio executives Tom Albanese and Guy Elliott of being too slow to impair the assets acquired through the $US3.7 billion takeover of Riversdale Mining in 2011.

The settlement means no fraud charges will be recorded against Rio nor its former executives, with the SEC’s case being pruned of its most serious charges in 2019.

But in addition to paying $US28 million and the years of reputational damage caused by the trial, Rio will be forced to hire an independent consultant to check whether the company’s modern approach to impairments and disclosure is adequate.

Mr Albanese – who was Rio chief executive between May 2007 and January 2013 – also struck a settlement with the SEC on the same day, agreeing to pay $US50,000 to end the probe.

Once Mr Albanese and Rio’s respective settlements are ratified by the court, the only outstanding matters will be two minor claims against Mr Elliott, who served as Rio’s chief financial officer under Mr Albanese.

Mr Elliott’s lawyers have asked the New York court to swiftly dismiss those remaining matters in light of the SEC’s settlements with Rio