SEC said to probe Rio Tinto on Mozambique deal impairments

The investigation is ongoing and is separate to an internal Rio review into payments company made to a consultant regarding Guinea iron ore project

Gulf News

London: The US Securities and Exchange Commission is investigating a $3 billion impairment (Dh11 billion) charge Rio Tinto Group booked on a Mozambique coal deal almost four years ago, according to a person familiar with the matter.

The investigation is ongoing and is separate to an internal Rio review into payments the company made to a consultant regarding an iron ore project in Guinea, said the person, who asked not to be identified because the investigation is private.

The probe was earlier reported by the Australian Financial Review. A spokesman for the SEC declined to comment.

Rio acquired Riversdale Mining Ltd. in 2011 in an all-cash deal for A$3.9 billion ($2.9 billion), before writing the value of the assets down by $3 billion two years later. The charge, part of a wider $14 billion in asset write downs, led to the departure of then Chief Executive Officer Tom Albanese. The company later sold the assets for $50 million.

Separately, Rio is investigating a $10.5 million payment it made in connection with its Simandou project in Guinea to a French banking consultant who was a university friend of President Alpha Conde of Guinea.

The company said Nov. 9 that following a review by an external law firm, it decided to report the findings to the US Justice Department, the SEC, the U.K.’s Serious Fraud Office and Australia’s Securities and Investments Commission. Rio subsequently fired two of its top executives in connection with the matter.

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