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Release Date: 17th October 2017

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Rio Tinto plc £27,385,400 for breaching Disclosure and Transparency Rules. The fine was imposed due to Rio Tinto’s failure to conduct an impairment test and recognise an impairment loss on the value of mining assets in Mozambique in their 2012 interim results, despite clear indicators of impairment. This resulted in inaccurate and misleading financial reporting until the impairment was finally disclosed in January 2013, leading to an 80% write-off of the investment value.

Rio Tinto acquired the Mozambique mine for US$3.7 billion in August 2011, planning to barge coal to the coast. By mid-2012, it became evident that barging was not feasible, necessitating higher-cost transport alternatives. Financial modelling indicated a negative value for the Mozambique assets, but Rio Tinto chose not to perform the required impairment test, maintaining the acquisition price valuation despite evident indicators of impairment. The FCA deemed this a serious lapse in judgement and a breach of international accounting standards.

Key Takeaways for Other Firms:

In conclusion, the FCA’s fine on Rio Tinto underscores the importance of rigorous compliance with disclosure and transparency regulations. Firms must ensure accurate financial reporting and adherence to accounting standards to uphold market integrity and avoid severe penalties.

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