Rio Needs a CEO to Fix Its Reputation. Here Are Some Candidates www.bloomberg.com
Rio Tinto Group is hunting for a new leader to restore relations with the communities where it mines after Jean-Sebastien Jacques was forced out over the destruction of ancient Aboriginal heritage sites.
Rio announced Friday that Jacques and two other senior executives will leave after investors and Indigenous groups demanded stronger action and accountability over the explosions that tore through the 46,000-year-old landmarks in May. The company had previously planned to only levy financial penalties on the executives but that proved insufficient at a time when investors and activists are wielding increasing clout.
“The reputational damage has been enormous and they now need to work on rebuilding trust,” said Camille Simeon, a Sydney-based investment manager at Aberdeen Standard Investments, which holds Rio shares and manages assets worth about $563 billion.
London-based Rio, the world’s second-biggest miner, is reviewing internal and external options for a new chief executive officer and will prioritize candidates with the skills to repair the company’s tarnished standing, Chairman Simon Thompson said Friday in a phone interview.
“They will have to take responsibility for what is going to be a process running over months, if not years, of restoring confidence in our ability to manage communities and heritage effectively, and that will be one of the key criteria,” he said.
Here are some of the prospective candidates to become Rio’s new CEO that are being discussed by investors and analysts:
Tom Palmer, Newmont Corp.
The Newmont CEO spent two decades at Rio before joining one of the world’s biggest gold miners and is viewed as well-regarded by the board. Palmer, 52, is an Australian, educated in Melbourne, and was chief operating officer of Rio’s iron ore business -- the company’s main profit driver and the unit responsible for the incident that brought down Jacques.
Baatar is seen as one of the leading internal candidates for the top job. The Mongolian is a former investment banker, having worked for JPMorgan Chase & Co. before joining Rio in 2016. He runs the company’s energy and minerals business and also overseas its dealmaking Ventures unit. Baatar is viewed as a strategic thinker whose responsibilities include mapping out which commodities will be crucial to the company’s future.
Beaven, the current CFO at Rio’s larger rival, is leaving BHP at the end of the year. He was long seen as the frontrunner to get the top job there, before Mike Henry took over at the start of the year. He was born in Portugal and grew up in countries including South Africa, is an accountant by training and held the No. 2 role at BHP since 2014. BHP also has huge iron ore operations in Western Australia, so the former banker will be familiar with Rio’s business there, and he’s well known by investors and politicians.
Sandeep Biswas, Newcrest Mining Ltd.
Sandeep BiswasPhotographer: Carla Gottgens/Bloomberg
Biswas has been the CEO of Australia’s biggest gold miner for six years. Like Palmer, he’s a former Rio employee, having worked for the company in both Australia and Canada.
Kerr is the CEO of South32, a diversified miner spun out by BHP in 2015. The Australian was CFO at BHP before being picked to run the new business and was long touted as a potential candidate to run the world’s biggest miner. He’s currently based in Perth in Western Australia, home to Rio’s iron ore business.
Other Rio Insiders
Other internal candidates will likely include, Alf Barrios, the former oil executive who runs the company’s aluminum business, head of copper and diamonds Arnaud Soirat and CFO Jakob Stausholm, who joined from shipping giant AP Moller Maersk in 2018.
Rio’s hunt for a successor to 48-year-old Jacques comes at a time of wider upheaval in the top ranks of the mining industry, as it confronts growing shareholder activism over climate change and governance. Leadership changes are expected in the near future at Anglo American Plc and Glencore Plc, while BHP installed Henry as its new CEO in January.
“You have to listen to the expectations of society around you, that can be investors, it can be the broader public and governments,” Henry said Friday in an interview. “I want to ensure that BHP is attuned to those expectations and sensing the world around it.”
— With assistance by Gina Turner