A good day to bury bad news, perhaps? On Wednesday morning, Rio Tinto (RIO) announced it had suspended energy and minerals chief executive Alan Davies with immediate effect, following an internal investigation into its controversial iron ore project in Simandou, Guinea.
The commodities giant has also contacted regulators in the US, UK and Australia after discovering emails "relating to contractual payments totalling $10.5m (£8.5m) made to a consultant" who provided advice on Simandou. Rio first became aware of the emails, which date back to 2011, at the end of August. The internal investigation, led by external counsel, has also led to the resignation of Rio's long-serving legal and regulatory group executive Debra Valentine, who was due to step down next May.
Simandou, one of the world's largest unexplored high-grade iron ore resources, has been billed as transformational for the Guinean economy but has long been mired in disagreements over mining rights. Last month, Rio announced it would be exiting Simandou after reaching a non-binding agreement to sell its 47 per cent stake to Chinese aluminium miner and project partner Chinalco, in a deal worth up to $1.3bn.
