By Alex MacDonald
LONDON--U.K.-listed, India-focused Vedanta Resources PLC
(VED.LN) said Monday it has appointed Rio Tinto PLC's (RIO) former
chief executive, Tom Albanese, as chairman of its main operating
subsidiary, Vedanta Resources Holdings Ltd.
In his role, Mr. Albanese will be actively involved in
developing the company's strategy, policies and growth objectives,
Vedanta said in a statement. Vedanta Resources Holdings is the main
subsidiary that is responsible for Vedanta's Zambian unit, Konkola
Copper Mines PLC, and Sesa Sterlite, the newly restructured holding
company for all of Vedanta's non-Zambian assets.
Mr. Albanese previously served as CEO of mining titan Rio Tinto
for six years until he stepped down earlier this year following a
$14 billion writedown against the value of its aluminum and
Mozambique coal purchases. The charge was among the largest charges
ever in an industry increasingly rocked by runaway costs.
Mr. Albanese, a New Jersey-born engineer, had previously worked
at Rio Tinto since 1993 before becoming CEO in 2007, just as the
miner was in the throes of its $38.1 billion purchase of Canadian
aluminum maker Alcan Inc. He later oversaw the company's $3.7
billion purchase of Mozambique-focused coking coal company Mining
Ltd. in 2011. Rio wrote down the value of the purchase by $2.86
billion earlier this year as part of the $14 billion write
down.
Mining analysts welcomed Mr. Albanese's appointment.
While "it remains unclear what influence he will have in
strategy given (that Vedanta's Executive Chairman) Anil Agarwal has
kept the top job, we expect the news to be taken positively," said
Liberum Capital analysts in a note. "Tom Albanese brings his
experience as CEO of some of the best mining operations in the
world and hopefully his presence... should bring clarity to
Vedanta's sometimes muddled message," they added.
Citigroup analysts said in a note that the appointment, "as Mr.
Albanese being a geologist, not only brings in his technical
expertise but also the experience of leading a company like Rio
Tinto, which is well regarded for its best practices in running the
assets. This is likely to improve VED's image as a more
sustainable, development-oriented organization."
Write to Alex MacDonald at alex.macdonald@wsj.com
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