Rio Tinto paid $4B for Mozambique coal — sold it for $50M three years on

Rio Tinto announced a takeover offer for Riversdale Mining in December 2010 and completed the acquisition in August 2011, paying over US$4 billion for its Mozambique coal assets — including the Benga mine in Tete Province, which Rio regarded as a long-life, large-scale, tier-one coking coal resource. Within roughly eighteen months that view had collapsed: infrastructure constraints and a cut to recoverable reserves meant the assets were, in the words of Australia's corporate regulator, no longer economically viable as such a resource.

ASIC later found that Rio Tinto knew this between 21 December 2012 and 17 January 2013 and failed to tell the Australian Securities Exchange. On 17 January 2013 Rio announced an impairment of approximately US$3 billion against Rio Tinto Coal Mozambique, part of a roughly US$14 billion group-wide write-down in its full-year results. On 30 July 2014 it sold the Mozambique coal assets, including Benga, to Indian Coal Ventures — a consortium of Indian state-owned companies — for US$50 million, roughly one percent of what it had paid.

The regulatory bill arrived nine years after the write-down. In February 2022 the Federal Court of Australia found Rio Tinto had breached its continuous disclosure obligations over the Mozambique coal assets, ordered it to pay a A$750,000 penalty and ASIC's costs, and dismissed the claims against two former officers by consent. The acquisition had cost over US$4 billion; the market got the truth four weeks late; and the exit cost was the price of a rounding error.