Rio CEO to exit miner after pressure over heritage blasts

Bloomberg | Updated on September 11, 2020 Published on September 11, 2020

Jean-Sebastien Jacques, chief executive officer of Rio Tinto Ltd   -  Bloomberg

A board-led inquiry found no single individual was at fault for the blasts and reprimanded senior executives by trimming bonus payments

Rio Tinto Group Chief Executive Officer Jean-Sebastien Jacques will exit the miner in the wake of concerted investor pressure to step up its response to the destruction of ancient Aboriginal heritage sites in Australia.

The change comes only weeks after Chairman Simon Thompson said Jacques had the board’s backing to lead the response to the company’s destruction of the more than 40,000-year old sites. Chris Salisbury, iron ore unit CEO, and Simone Niven, group executive of corporate relations, will also exit the company. Jacques will step down and remain in his role until the end of March next year, or a successor is appointed, Rio said on Friday in a statement.

Rio’s reversal follows further talks with investors and community leaders who criticised a board-led inquiry that found no single individual was at fault for the blasts and reprimanded senior executives by trimming bonus payments. The explosions to open up a mining area impacted the Juukan Gorge rock shelters in the Pilbara region of Western Australia, sites that were among the most significant of their type in the country, according to studies for Rio by archaeologists.

“We have listened to our stakeholders’ concerns that a lack of individual accountability undermines the group’s ability to rebuild that trust and to move forward to implement the changes identified in the board review,” Thompson said in the statement.

Jacques had served as CEO since July 2016. His successor will be tasked with restoring London-based Rio’s strained relations with Indigenous communities and convincing investors, regulators and legislators in Western Australia that it can address governance failings in its iron ore unit — the division that accounted for more than 90 per cent of first-half earnings. The new CEO will also need to deliver a flagship copper mine expansion that’s been beset by delays and a budget blowout.

The departure of Jacques, 48, who joined Rio in 2011, comes amid wider upheaval in the top ranks of the mining industry, as the sector prepares for a longer-term slowdown in demand from China and navigates moves to decarbonise the global economy. Top miner BHP Group installed Mike Henry as its new CEO in January, while leadership transitions are seen looming at both Anglo American Plc and Glencore Plc.

Under Jacques’s leadership, Rio’s London-listed shares have doubled, beating gains by BHP and the Bloomberg World Mining Index, amid a revival in iron ore prices in the last couple of years. His tenure also saw Rio hand back record amounts of cash to investors as the company prioritised returns over deals, and completed about $13 billion in asset sales, including an exit from coal production.

Salisbury and Niven will leave Rio on December 31, while Ivan Vella will be appointed as Rio’s new head of the iron ore division, the company said.

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Published on September 11, 2020
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