Rio Tinto’s new CEO vows to restore trust

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Rio Tinto Plc [RIO-NYSE, LSE, ASX] has appointed Jakob Stausholm as CEO, effective January, 2021.  Stausholm, 52, replaces Jean-Sebastien Jacques, who resigned following a public outcry over the company’s decision to blow up two ancient Aboriginal rock shelters in Western Australia.

The site had evidence of continuous human occupation dating back 46,000 years.

“Rio Tinto’s purpose is to produce the materials essential to human progress and I remain deeply committed to this after difficult times we have faced during 2020,” Stausholm said in a press release Thursday December 16. “I am acutely aware of the need to restore trust with Traditional Owners and our stakeholders, which I view as a priority for the company.”

Since joining Rio Tinto as an executive director and Chief Financial Officer in 2018, Stausholm has played a leading role in the Group’s strong performance, maintaining capital allocation discipline and delivering significant shareholder returns, while strengthening the balance sheet.

In a previous role, Stausholm was Chief Strategy, Finance and Transformation Officer with Maersk Group. He was also a non-executive director of Statoil (now Eqinor).

As CEO at Rio Tinto, he is entitled to a base salary of 1.15 million pounds sterling (US$1.56 million), and an annual bonus with a target of 100% of base salary and a maximum of 200%.

Given the effective date of Stausholm’s appointment, Jean-Sebastien Jacques will step down from his role as executive director and chief executive of Rio Tinto on January 1, 2021. He will leave the Group on March 31, 2021.

Rio Tinto is a leading copper producer with a portfolio that includes the Oyu Tolgoi mine in Mongolia and the Kennecott operation in the U.S. The company reduced its refined copper outlook for fiscal 2020, citing a delay in restarting a smelter at the Kennecott mine, which has been in production for over 75 years.

The Anglo-Australian miner recently cut its full year copper production guidance for the second time this year, a move that has helped to push the price of the red metal above US$3/lb.

US$3/lb has been a major inflection level for copper over the past decade. The red metal has been trading close to a 7-year high (US$3.60/lb on Thursday), as investors gravitate to assets that offer exposure to a post-pandemic economic recovery.

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