US SEC dismisses Mozambique coal lawsuit

The US Securities and Exchange Commission (SEC) has dismissed its lawsuit against a former Rio Tinto CFO, ending a long-running fraud case over a bad investment in a Mozambique coal project by one of the world’s largest mining companies. In a Manhattan federal court filing, the SEC said it was dismissing its civil case against Guy Elliott ‘in the exercise of its discretion’, without addressing the merits of its remaining claims, reports the Club of Mozambique. The dismissal ends a more than eight-year-old case in which Rio Tinto agreed to pay a $28m civil fine and former chief executive Tom Albanese accepted a $50 000 fine, both in 2023. Elliott denied wrongdoing. In a joint statement, his lawyers called the dismissal ‘a complete defence victory’. The SEC did not immediately respond to requests for comment. In its October 2017 complaint, the SEC accused Rio Tinto of deceiving investors about the value of Rio Tinto Coal Mozambique, which the Anglo-Australian company bought in 2011 for $3.7bn through a takeover of the former Riversdale Mining. Rio Tinto later raised more than $5.5bn from unsuspecting US fixed-income investors by overvaluing the coal assets, despite an internal assessment showing that the assets were worth negative $680m, the SEC said. The internal calculation valued the assets negatively after Mozambique Government rejected Rio Tinto’s proposal for barging, a means to transport coal. Rio Tinto took a more than $3bn write-down for Mozambique in 2013, and sold the assets the following year for $50m.