Rio Tinto board looks for new CEO who knows mining better

According to me-metals cited from mining.com, Then, Stausholm, a sober Dane who came to Rio as chief financial officer after time at AP Moller-Maersk A/S and Shell Plc, stepped into the least desirable job in mining. He has repaired relationships and edged the company toward new investments, including lithium — a battery material most of his rivals have shunned.

But the company, whose board asked Stausholm to stand down, is now looking for a boss that can make the most of Rio’s crucial growth assets, including the Oyu Tolgoi copper and gold mine in Mongolia and the vast Simandou iron ore deposit in Guinea. To set a path for the coming decades will mean prioritizing operational expertise and a track record, according to people familiar with the company.

That could put Simon Trott, head of Rio’s iron ore business, in the running alongside aluminum executive Jérôme Pécresse to replace Stausholm when he leaves later this year, according to the people. They asked not to be named as the conversations are not public.

“It’s not something that you are candidate for, it’s something that you’re eligible” for, Pécresse said Friday in an interview on BNN Bloomberg Television. “It’s for the board to decide who is eligible and who is not.”

Chief commercial officer Bold Baatar, a former investment banker who has been instrumental in bringing Simandou to production after years of delays, is also being considered but is not thought to be a front-runner, the people said.

“Stausholm came on board at a time of crisis and he’s resolved many of the strategic issues that the company was hampered by at the time,” said Rob Stein, a Macquarie Group Ltd. research analyst. “Now the strategic priority appears to be growth, and the new CEO may be a growth-oriented leader — as opposed to Jakob who was a cultural change agent.”

Rio’s ability to run its mines and aluminum smelters significantly improved under Stausholm, but right from the start of his tenure there were tensions with some investors around his lack of technical expertise. By comparison, Stausholm’s peers at BHP Group, Anglo American Plc and Glencore Plc have spent decades in the industry.

As the mining company prepares for its next major push, board members increasingly felt more operational experience was required at the top of Rio. Stausholm’s departure caught the market by surprise, but the people familiar with the firm said the exit was expected.

Trott, who helped repair relationships in Australia after the social responsibility disaster of Juukan Gorge five years ago, is widely seen as having strong relationships and diplomatic skills, the people said.

Pécresse only joined Rio in October 2023, but is credited with turning around the aluminum unit, long a headache for the company.

The miner’s “next five years appear very operation driven,” said Matthew Haupt, portfolio manager at Wilson Asset Management, which holds the company’s stock. “It’s probably a good time for Jakob to find a new challenge.”

As the mining sector begins to shift its focus to expansion and deals, Stausholm took the first step toward bringing Rio back to the fray, with the acquisition of Arcadium Lithium Ltd. last year, and has invested in projects including Rincon in Argentina. It’s a major bet on a commodity, which rivals like BHP Group consider to be too small and geologically abundant, at a time of dismal prices thanks to a persistent global glut.

It was still a first step toward easing the company’s heavy dependence on iron ore, the steelmaking ingredient which accounts for more than 80% of underlying earnings. The commodity has generated billions in cash flow, but its future is less certain as China’s growth plateaus.

Still, Stausholm’s successor will also have to face big questions on Rio’s deal strategy and what role the company will play in any major consolidation.

Stausholm was directly involved in talks about a potential deal with Glencore Plc last year that went on for months, which could have created the world’s biggest miner.

While Rio has never publicly discusses the talks, its willingness to engage with Glencore jolted many in the industry. The deal ultimately fell down with the two sides far apart on valuation, the people said, rather than any strong divisions with Rio on the combination.

In an internal message to Rio Tinto employees, Stausholm said the company expected to announce a successor before third-quarter production results, typically published in October.

source: mining.com