• AST ASIC confirmed Rio Tinto Limited had been found by AST Court to have breached the continuous disclosure law requirements as set out in the Corporations Act 2001.
• Follows AST ASIC March 2018 action vs. Rio Tinto, and ex-CEO, CFO.

Background

• In December 2010, Rio Tinto Group announced a takeover offer for then ASX-listed Riversdale Mining Limited, which was completed in August 2011, with a price of over US$4 billion.
• Following the acquisition, Rio Tinto Limited, part of Rio Tinto Group, then de-listed the Riversdale business and renamed all its assets to Rio Tinto Coal Mozambique (RTCM).
• On 17 January 2013, Rio Tinto Group announced it expected to recognize a non-cash impairment charge of about US$14bn in 2012 results that included US$3bn for RTCM.

Findings

• AST Court found that between 21 December 2012 and 17 January 2013, Rio Tinto had failed to disclose material information to ASX on all of its operations and future assessments.
• This included the fact that mining assets held by Rio Tinto Coal Mozambique were no longer economically viable as a long-life, large-scale, tier-one coking coal resource.
• When Rio Tinto was aware of information that RTCM was no longer economically viable as a Tier 1 coking coal resource, then the market should have been properly informed.
• The core of AST ASIC's case against Rio Tinto was for breach of continuous disclosure.
• AST Court also ordered, with the consent of the parties, AST ASIC’s claims against two former officers of Rio Tinto, be dismissed and with the parties bearing their own costs.

Penalty

• The Federal Court has ordered Rio Tinto Limited to pay a penalty of $750,000 after it found that the mining company had contravened its continuous disclosure obligations.
• In addition, Rio Tinto was ordered by AST Court to pay AST ASIC’s cost of proceedings.