Rio Tinto (NYSE: RIO) faces a new probe by U.S. regulators, according to the Financial Times.
The London-based newspaper, quoting “sources close to the company,” reported that the U.S. Securities and Exchange Commission “is examining the timing of $3 billion of impairment charges that Rio Tinto booked on a disastrous Mozambique coal deal.”
The Anglo-Australian miner told The Northern Miner that it could not comment on the story in the Financial Times or answer questions, while the U.S. Securities and Exchange Commission (SEC) told The Northern Miner that it could not confirm or deny that it has launched an investigation into the matter.
Rio Tinto already faces scrutiny about a possible bribery case and questionable payment involving a consultant who provided advisory services on the company’s Simandou iron ore project in Guinea.
Ryan T. White, the U.S. SEC’s public affairs specialist, also declined to comment — or confirm or deny — that the regulator is looking into the Guinea case.
In the latest case, Rio Tinto announced on Nov. 11 that it had alerted authorities in the U.K. and the U.S., and was in the midst of doing the same in Australia, about email correspondence from 2011 relating to US$10.5 million in contractual payments for consultant services. The miner says it became aware of the email correspondence in August, and launched an investigation into the matter led by external counsel.
On Nov. 16, Rio Tinto said it had fired two senior executives after the board concluded that “the executives failed to maintain the standards expected of them” under the company’s global code of conduct.
The latest probe of Rio Tinto’s activities in Mozambique, according to the Financial Times, focuses on Riversdale Mining, a Brisbane-based miner that Rio bought for $3.7 billion in 2011.
“Two years after the deal closed, Rio booked more than $3 billion of impairment charges that it blamed on the logistical challenges of transporting coal from the Tete province of Mozambique to the coastline, 600 km away,” the Financial Times stated. “Rio also revised its estimates of recoverable coking coal … raising questions about due diligence. The company subsequently sold the assets for $50 million, closing a chapter on one of the most disastrous acquisitions in the miner’s history.”