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Rio Tinto’s new chief overhauls top leadership team

Rio Tinto PLC

Rio Tinto’s new chief overhauls top leadership team

Jakob Stausholm aims to rebuild relations in Australia and resolve Mongolia muddle

Oyu Tolgoi in Mongolia: the $6.75bn copper mine has been hit by delays and cost blowouts © Bloomberg

Jakob Stausholm, Rio Tinto’s new chief executive, has announced a wide-ranging overhaul of the miner’s senior leadership team, including creating two roles, as he seeks to repair relations in Australia and improve operational performance.

The Anglo-Australian company suffered enormous reputational damage last year when it destroyed a 46,000-year-old sacred Aboriginal site in the heartland of its flagship iron ore business to make way for a mine expansion.

The blasts at Juukan Gorge in the Pilbara region of Western Australia caused an uproar and cost Rio’s former chief executive Jean-Sébastien Jacques and two senior lieutenants their jobs after investors and indigenous groups demanded accountability for the incident.

Mr Stausholm, who was previously Rio’s finance chief, was named chief executive shortly before Christmas. He has made restoring trust with indigenous groups and other stakeholders “a key priority”.

To that end, Kellie Parker, the head of Rio’s Pacific Aluminium business, will join Rio’s executive committee as chief executive Australia, a new role tasked with improving relations in the country. 

Mr Stausholm has also created the role of chief operating officer, which will be filled for the next 18 months by Arnaud Soirat, head of copper and diamonds, before he retires. Mr Soirat will be replaced by Bold Baatar, a former JPMorgan investment banker.

Jakob Stausholm: ‘While Rio Tinto continues to deliver strong safety and operational performance . . .  there are improvements we can achieve across the business’ © Handout

For years, Rio has been regarded as the mining industry’s top operator, but recent setbacks in Australia and Mongolia have seen its crown slip.

Another big task facing Mr Stausholm is a messy situation in Mongolia, where Rio’s most important growth project, the $6.75bn Oyu Tolgoi copper mine, has been hit by delays and cost blowouts.

That has prompted disputes with the Mongolian government and the company’s minority partners.

Mr Stausholm will be hoping that Mr Baatar, a Mongolian citizen, will be able to ease relations in Mongolia, which has just appointed a young prime minister, Oyun-Erdene Luvsannamsrai, who has already crossed swords with Rio in his former position as cabinet secretary. 

“While Rio Tinto continues to deliver strong safety and operational performance, despite the ongoing challenges of Covid-19, there are improvements we can achieve across the business,” Mr Stausholm said in a statement. “I want to re-establish Rio Tinto as a trusted partner for host communities, governments and other stakeholders.”

Among the other changes announced on Wednesday, Simon Trott, chief commercial officer, was named chief executive of Rio’s frontrunner iron business. The head of the company’s aluminium unit, Alf Barrios, will replace Mr Trott.

As part of the reshuffle, only one senior executive is leaving the company, Vera Kirikova, chief people officer. Rio has yet to appoint a permanent replacement for Mr Stausholm as chief financial officer.

The promotion of Mr Stausholm, a Danish national who joined Rio in 2018 from shipping company AP Moller Maersk, surprised many investors and analysts who expected the company to pick an external candidate.

Mr Stausholm is expected to bring a more collaborative leadership style to Rio than his predecessor, Mr Jacques, who was never embraced by Australia’s media or investment community, where there is resentment that the company is run from London.

After Mr Jacques’ resignation, Canberra asked Rio to select an Australian as its next chief, while some Sydney-based investors had called on the company to sharpen its focus on a country that generates the bulk of its earnings.

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