- Rio Tinto receives a fine of $750,000 after the Federal Court found the mining company had breached its continuous disclosure obligations
- The court said Rio Tinto failed to disclose material information to the ASX which included mining assets held by Rio Tinto Coal Mozambique which were no longer economically viable as long-life, large-scale, tier-one coking coal resources
- The court dismissed ASIC’s claims against former CEO Mr Tom Albanese and former CFO Mr Guy Elliot, both of whom signed the 2011 annual report
- In a statement, Rio Tinto welcomed the closure of the case on “appropriate and reasonable terms”
- This follows Rio Tinto’s fine of £27.4 million (A$48.7 million) by the UK Financial Conduct Authority for failing to recognise an impairment loss on the value of the Mozambique business in its 2012 half year report
The Federal Court has issued a fine of $750,000 to Rio Tinto after it found the mining company had breached its continuous disclosure obligations.
The court said between December 21, 2012 and January 17, 2013, Rio Tinto failed to disclose material information to the ASX. This included mining assets held by Rio Tinto Coal Mozambique which were no longer economically viable as long-life, large-scale, tier-one coking coal resources.
ASIC Deputy Chair Sarah Court said that “Rio Tinto had obligations to the market to keep it adequately informed about its mining projects overseas”.
“When Rio Tinto was aware of information that Rio Tinto Coal Mozambique was no longer economically viable as a long-life, large-scale, Tier 1 coking coal resource, the market should have been properly informed in a timely manner.
“The core of ASIC’s case against Rio Tinto was its continuous disclosure breach, and we are pleased the matter has been finalised with a penalty ordered.”
The orders were made by consent after ASIC and Rio Tinto agreed to resolve the proceedings and filed joint penalty submissions. Rio Tinto was ordered to pay ASIC’s cost of the proceeding.
With the consent of the parties, the court also ordered that ASIC’s claims against former CEO Tom Albanese and former CFO Guy Elliott, be dismissed and with both officers bearing their own costs.
In a statement, Rio Tinto welcomed the closure of the case on “appropriate and reasonable terms”. The mining giant noted that “there were no findings of fraud or any systemic or widespread failure by Rio Tinto”.
This is not Rio Tinto’s first fine about Mozambique, having been fined £27.4 million (A$48.7 million) by the UK Financial Conduct Authority (FCA) in 2017 for failing to recognise an impairment loss on the value of the Mozambique business in its 2012 half-year report.
The company is still fighting the United States Securities and Exchange Commission (SEC) in the Federal Court in Manhattan for allegedly inflating the value of the Mozambique business.
Rio Tinto said the resolution of the ASIC case does not impact the SEC proceedings and vowed to “defend itself vigorously against the SEC’s allegations”.