Rio Tinto annual profit slides on Alcan writedown

Rio Tinto's annual profit slides 59 percent due to writedown of Alcan aluminum business

Associated Press

SYDNEY (AP) -- Rio Tinto reported a 59 per cent slump in full year profit due to a writedown of its aluminum business.

The company, one of the world's biggest miners, on Thursday said net profit for 2011 fell to $5.8 billion from $14.3 billion the previous year.

Rio Tinto said the drop in profit was mainly due to an impairment charge of $8.9 billion ($A8.28 billion) for its aluminum business, Alcan, which has suffered lower aluminum prices.

Chief executive Tom Albanese said he would forgo a bonus for 2011 because the acquisition of Alcan happened on his watch. Rio Tinto bought Canada's Alcan in 2007 for $38 billion.

Excluding the writedown, earnings rose to $15.5 billion from $14 billion in 2010.

Chairman Jan du Plessis said uncertainty in financial markets, particularly in Europe, would continue this year, clouding the miner's business outlook.

"This leads us to remain cautious about near-term prospects," he said, echoing comments by rival mining giant BHP Billiton on Wednesday, when it reported a drop in first half profit due to lower commodity prices and production constraints.

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