Sunday, April 14, 2024

New Rio Tinto boss makes sweeping changes to top team

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Jakob Stausholm, the new Managing Director of Rio Tinto, has made sweeping changes to the miner’s management team, including the creation of two roles, as he seeks to mend relationships in Australia and improve operational performance .

Anglo-Australian society suffered enormous damage to his reputation last year, when it destroyed a sacred 46,000-year-old Aboriginal site at the heart of its flagship iron ore company to make way for the mine’s expansion.

The explosions at Juukan Gorge, in the Pilbara region of Western Australia, caused an uproar and cost former Rio CEO Jean-Sébastien Jacques and two senior lieutenants their jobs after investors and groups natives demanded accountability for the incident.

Mr. Stausholm, a Dane who was previously Rio’s chief financial officer, had been named general manager shortly before Christmas. He made rebuilding trust with indigenous groups and other stakeholders “a top priority”.

To that end, Kellie Parker, Head of Rio’s Pacific Aluminum Division, will join Rio’s Executive Committee as Managing Director Australia, a new role tasked with improving relationships in Australia.

Mr. Stausholm also created the post of Director of Operations, which will be occupied for the next 18 months by Arnaud Soirat, the current head of copper and diamonds, before retiring.

Jakob Stausholm: “As Rio Tinto continues to deliver strong operational performance and safety. . . there are improvements we can make across the company ”© Handout

For years Rio has been viewed as the premier operator in the mining industry, but in recent years operational setbacks in Australia and Mongolia have seen its crown slip away.

Mr. Soirat will be replaced by Bold Baatar, former investment banker of JPMorgan and citizen of Mongolia.

Another of the great tasks facing Mr Stausholm is to settle a disorderly situation in Mongolia, where Rio’s largest growth project, the $ 6.75 billion Oyu Tolgoi copper mine, has been hit by delays and cost explosions.

This sparked disputes with the Mongolian government and the company’s minority partners.

Mr Stausholm hopes Mr Baatar will be able to harmonize relations in Mongolia, which has just appointed a new young prime minister, Oyun-Erdene Luvsannamsrai, who has already crossed swords with Rio in his former post as cabinet secretary .

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

Among other changes announced on Wednesday, Simon Trott, currently commercial director, has been appointed general manager of the flagship iron company in Rio. The head of the company’s aluminum unit, Alf Barrios, will replace Mr Trott.

As part of the reshuffle, only one senior executive is leaving the company, Vera Kirikova, Director of Human Resources. Rio has yet to appoint a permanent replacement for Mr Stausholm as CFO.

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 choose an external candidate.

Mr Stausholm is expected to bring a collaborative leadership style to Rio than his predecessor Mr Jacques, which has never been adopted by the media or the Australian investor community, where the company is run from London.

After Mr Jacques resigned, Canberra asked Rio to pick an Australian as their next boss, while some Sydney-based investors called on the company to focus more on a country that generates most of its profits.


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