Rio chairman backs Albanese

RIO Tinto's new chairman, Jan du Plessis, has defended embattled managing director Tom Albanese in the face of continuing calls for Mr Albanese to quit. The calls for his head come in the wake of Rio's disastrous Alcan acquisition and Mr Albanese's about-face on the aborted recapitalisation deal with Chinalco, the latter at a "break-fee" cost to Rio of $US195 million ($A246 million). In a London briefing on Rio's $US21 billion recapitalisation plans, which include a 50-50 joint venture with former arch enemy BHP Billiton in the Pilbara, Mr du Plessis said it would be pointless to make anyone pay in a symbolic way for Rio's Alcan-imposed debt woes and the Chinalco pull-back. Mr du Plessis' defence of the managing director followed Mr Albanese's own defence of his job, in the briefing on Friday. In riding to Mr Albanese's defence, Mr du Plessis said since the $US19.2 billion Chinalco deal was announced in February, financial markets had improved significantly. "This has had two consequences: firstly, the financial terms of the Chinalco transaction became markedly less valuable and, secondly, our ability to raise a level of equity appropriate for our needs on attractive terms has improved very considerably," Mr du Plessis said. "Tom is a great chief executive," he said. But Australian and London analysts and institutional shareholders say Mr Albanese's future will continue to come under scrutiny. The poor performance of the group's aluminium business will make sure of that. Enlarged with the $US38 billion acquisition of Alcan in 2007, Rio's aluminium unit posted a $US481 million loss in the three months to the end of March. That was a $US811 million reversal from the $US330 million profit in the previous corresponding period. The plunge into loss was due to the collapse in aluminium prices from the peak levels of when Rio secured the Alcan acquisition. But Rio's new deal and the role Mr du Plessis played in brokering the iron ore compact with BHP gives the chairman's defence of Mr Albanese weight in the investment community. Even so, comments by Robert Talbut, chief investment officer at Royal London Asset Management, and others suggest debate on Mr Albanese's role will continue. "Looking ahead, it's perfectly reasonable for a new chairman to want to review the rest of the board to ensure it's the right team to take the business forward," Mr Talbut said. Rio's biggest institutional shareholder, Legal & General Investment Management, said in a statement last Friday: "We are pleased that Rio Tinto have decided to pursue a conventional rights issue; it is important that companies of significant standing choose to honour shareholder rights." source：business.theage.com.au