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Rio Tinto picks CFO to replace chief exec

Jakob Stausholm to replace Jean-Sebastien Jacques following resignation over the Juukan Gorge destruction
December 17, 2020
  • Jakob Stausholm to take chief executive role after two years as finance boss
  • Rio Tinto facing crisis in its all-important iron ore division over agreements with Aboriginal land owners

Taking the helm of one of the world's biggest miners should not be a major challenge when iron ore is over $150 (£110) a tonne (t) and copper close to $8,000/t, but incoming Rio Tinto (RIO) chief executive Jakob Stausholm will have plenty to do when he takes over from Jean-Sebastien Jacques in two weeks. 

The Rio board has promoted the Dane from the finance chief role, a job he previously held for global shipping company A.P. Møller – Mærsk (Den:Maersk-B). 

Rio chairman Simon Thompson said Mr Stausholm was chosen because of his "strategic and commercial expertise, strong values and a collaborative leadership style".

For shareholders, he is part of a management team that has returned billions to shareholders through dividends and buybacks. He arrived once the mining bust years were over and Mr Jacques had cut costs, as has served during a time in which cash flow has surged as the iron ore price climbed beyond $100/t. 

Outgoing chief executive Mr Jacques resigned in September over Rio's decision to blow up a sacred Aboriginal site in the Pilbara while expanding an iron ore mine. 

An interim parliamentary report into the destruction, which was legal but against the wishes of the local Aboriginal people, found Rio "knew the value of what they were destroying but blew it up anyway". The Australian government had called for a local chief executive to run Rio, which has a dual Australia-London listing but a UK head office. 

Mr Stausholm also faces getting the Oyu Tolgoi underground expansion finished while managing the frustrations of minority investors and the Mongolian government. Rio also remains under investigation for a payment it made to a banker close to the president of Guinea a decade ago. In July, the Financial Times reported the company was considering a deferred prosecution agreement, which could lessen the impact on the company itself. 

Rio is both scrambling to restore all-important First Nation relations in Australia, the agreements for which are now under review, and watching the billions of dollars in iron ore sales flow in. Mr Stausholm's immediate priority should be the former, as bungling this again will make the company's life much harder and restrict access to that massive cash flow in the future. Hold at 5,649p. 

Last IC View: Hold, 5,604p, 16 Dec 2020