Rio Tinto’s (RIO) chief executive Jean-Sébastien Jacques will leave the group by the end of March 2021, following the destruction of an ancient Aboriginal rock-shelter site at the Juukan Gorge in May. The miner has faced intense criticism over the incident and “significant stakeholders have expressed concerns about executive accountability for the failings identified”.
Rio blew up the 46,000-year-old Juukan site as part of the expansion of an iron ore mine in Western Australia’s Pilbara region. While the group had received legal consent to do so in 2013, further excavations revealed that the site was of great cultural and archaeological importance. The destruction took place against the wishes of the Puutu Kunti Kurrama and Pinikura people (PKKP). Amid an ongoing backlash, the group has given information about what happened to an Australian parliamentary inquiry.
Rio is on the look-out for a replacement for Mr Jacques, who is stepping down “by mutual agreement”. He is not the only member of management set for departure. Chris Salisbury will vacate his role as chief executive of the iron ore business with immediate effect, and leave the group by the end of 2020. Simone Niven – group executive of corporate relations – will also leave on 31 December. Rio Tinto is setting up a new social performance assurance position, designed to improve oversight of communities and heritage practices.
Chairman Simon Thompson said: “What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance never occurs again at a Rio Tinto operation.”
He added that the group is “determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other Traditional Owners” – but recognises investor concerns that “a lack of individual accountability undermines the group's ability to rebuild that trust”. Mr Thompson thanked Mr Jacques and his colleagues for their contributions to Rio over the years.
Mr Jacques, who previously served as the head of Rio’s copper and coal divisions, took over from Sam Walsh in July 2016 just as the mining industry was emerging from a multi-year slump in commodity prices.
Until this year, shareholders can count his tenure a qualified success. Powered by a programme of coal asset disposals and the group’s supremely profitable iron ore operations, Rio’s London-listed shares have risen 105 per cent and distributions have more than doubled since Mr Jacques took the helm.
Buoyant iron ore prices also allowed the outgoing CEO to drastically cut back on gearing, though the group’s Oyu Tolgoi copper operations in Mongolia have been dogged by capital expenditure overrun issues, and profits from the aluminium division have weakened substantially. Consensus analyst forecasts are for second-half earnings to contract to 214¢ (165p) per share, with 2021 earnings predicted to decline 8 per cent year-on-year to 436¢.
