• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 8 minutes The Inconvenient Truth Of Electric Cars
  • 12 minutes The Plastics Problem
  • 3 mins SHALE MAGIC: Let the oil flow: US to lead oil output growth through 2030: ConocoPhillips chief economist
  • 5 mins To be(lieve) or Not To be(lieve): U.S. Treasury Secretary Says U.S.-China Trade Deal Is 90% Done
  • 2 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
  • 3 hours Magic of Shale: EXPORTS!! Crude Exporters Navigate Gulf Coast Terminal Constraints
  • 2 hours IMO 2020
  • 13 hours Here we go folks, the wish of so many: Pres. Trump threatens to lessen US security role in Strait of Hormuz, unveils sanctions
  • 4 hours EIA reports 12 mm bbls Inventory draw . . . . NO BIG DEAL . . . because U.S. EXPORTED RECORD 12 MILLION BARRELS DAY OF CRUDE + PETROLEUM PRODUCTS ! ! ! THAT'S HUGE !
  • 4 hours Its called reality: Economic, policy challenges to make Asia's energy transition painfully slow
  • 3 hours Ireland To Ban New Petrol And Diesel Vehicles From 2030
  • 13 hours Looks like Trump is putting together a "Real" Coalition to protect Persian shipping lanes. Makes perfect sense. NO Fake "Coalition's of the Willing" UPDATE REUTERS Pompeo "Sentinel Program"
  • 8 hours On the hobby side of things
  • 15 hours Cap and trade: What could Oregon’s carbon policy cost you?
The Last U.S. Oil Major In Venezuela

The Last U.S. Oil Major In Venezuela

Chevron is the last U.S.…

The West Just Made A Big Mistake In Middle East

The West Just Made A Big Mistake In Middle East

Recent decisions from the U.S.…

Rio Tinto CEO Fired After Horrendous Blunder in Mozambique Deal

Back at the beginning of 2011 coal was in very high demand, especially from steelmakers who were struggling to find supplies on the market as heavy flooding at Australian mines had slowed exports from the country. The drop in supplies on the global market, as well as the strong demand from China meant that many companies were buying coal at double the previous year’s price. New discoveries in Mozambique led the UN to announce the African nation as having some of the world’s richest deposits; demand was hot.

The coal explorer Riversdale Mining found a sizeable coal deposit in the Zambezi region, and managed to draw the attention of several large mining and energy companies, including Rio Tinto.

Riversdale chairman, Michael O’Keefe, watched in delight as the high demand for his company’s coal saw its stock rise from just A$1 a share in 2004, to A$16.50 a share in 2011.

Related Article: Sell US Coal to China and Watch Carbon Emissions Fall

Rio Tinto, led by its CEO Tom Albanese, declared their interest in Riversdale and made a $4 billion offer for the mining company which was readily accepted.

Less than two years later Albanese had been fired and Rio Tinto was facing $3 billion in unforeseen impairments for its purchase of Riversdale.

Rio Tinto’s problem was thinking that it’s tried and tested model for developing coal mines in Australia would work in Mozambique, but Mozambique is one of the world’s poorest countries and lacks the infrastructure to set up major mining projects. It was also not helped by the fact that in two years the price of coal used by steelmakers had fallen by 50%.

By. Joao Peixe of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News