Former chief executive officer Tom Albanese and former energy head Doug Ritchie are the first two Rio staff to be consumed by the spectacular collapse of its once-grand Mozambique coal strategy.

Other senior staff will almost certainly go, or already have gone, because what’s happened with the Benga and Zambeze coal assets is one of the mining world’s worst ever examples of a botched corporate deal.

Everyone, including the government of Mozambique, Rio Tinto shareholders and Hogsback himself, were stunned by the astonishing $3 billion write-down on a $4 billion deal less than two years after it was completed.

Top of a long list of questions are:

• How much of the failure was caused by infrastructure shortcomings?
• How much was caused by poor geological analysis?
• Who conducted the due diligence into the coal assets?

There have not yet been satisfactory answers to those questions, with most public comment focused on the shock departure of Albanese and Ritchie and the appointment of an emergency CEO in the form of iron ore boss Sam Walsh.

But, deep inside Rio Tinto, you can bet your last dollar there is an investigation underway that will probe every document and turn over every rock to find out why the company paid such a high price for Riversdale Coal and whether correct due diligence procedures were followed.

A starting point in the post mortem will be the original takeover documents – including one that The Hog dug up during the week – to get an idea of why Rio was so excited by coal in the Moatize region of Mozambique that it handed over $4 billion to Riversdale shareholders as the entry price.

It is in the Riversdale target statement of January 24, 2011, that information can be found which might explain why Rio was so excited about the chance to get a big slice of Mozambique’s coal and a chance to build a metallurgical (coking) coal unit to rival that of BHP Billiton’s in Australia.

The Benga project, according to Riversdale’s statement, contained a resource of 4Bt of coal and a reserve of 502 million tonnes.

The adjoining Zambeze project contained an indicated resource of 2.36Bt and an inferred resource of 6.68Bt.

More important than those impressive tonnage numbers was the statement’s comment on Zambeze: “Approximately two-thirds of the production is anticipated to be premium hard coking coal and one-third an export thermal coal.”

There is no question that Riversdale believed what it said but it has to be noted that it was dealing with indicated and inferred resources, not proven reserves – a difference which indicates that more drilling was required to narrow the spaces between exploration holes and that more analysis was needed of what came out of the extra holes.

As well as wondering how much weight was assigned on the Riversdale data by the mergers and acquisitions team working for Rio at the time and how much fieldwork Rio conducted on its own behalf, there is the infrastructure and transport question.

Once again, the starting point for the post mortem will probably be in the Riversdale target statement because it is in that document that the question of barging down the Zambezi River is considered, along with rail options.

“Coal produced from the Zambeze project is currently expected to be transported by a combination of rail and river barging then loaded to ocean vessels,” the statement read.

It is history now that the barge option was rejected by the Mozambique government – precisely as predicted by South African analysts who visited the project in 2010 in a site inspection group that included The Hog, who clearly remembers people with local knowledge expressing severe doubts about Riversdale’s plans to dredge parts of a river which routinely causes immense damage when it floods.

So, it seems Rio picked up where Riversdale left off with the barge option that locals said would never be allowed and also picked up where Riversdale left off on the coal quality question – which is why comments from Rio Tinto last week are so interesting.

On Thursday Rio Tinto chairman Jan du Plessis said: “In Mozambique, the development of infrastructure to support the coal assets is more challenging than Rio Tinto originally anticipated.”

But no greater challenge than predicted by the locals!

“These infrastructure constraints, combined with a downward revision to estimates of recoverable coking coal volumes on the Rio Tinto Coal Mozambique tenements, have led to a reassessment of the overall scale and ramp-up schedule of RTCM,” du Plessis continued.

To which The Hog asks: a downward revision to whose estimates of recoverable coking coal volume?

Were they estimates by Rio’s own staff, or its consultants, or estimates by Riversdale?

Interesting, isn’t it?