Rio Tinto resorts to leadership overhaul after excessive pressure from shareholders
- Rio Tinto resorts to leadership overhaul after excessive pressure from shareholders.
- CEO Jean-Sebastien Jacques will exit the role by 31st March 2021.
- The Anglo-Australian miner to raise £390 million via additional lending.
Rio Tinto plc (LON: RIO) made two of its deputies and the CEO step down on Friday after excessive pressure from its shareholders that have been outraged on Rio’s mine expansion in Western Australia that ruined two historically significant ancient caves.
Shares of the company were reported almost flat in premarket trading on Friday. On market open, however, Rio Tinto gained about 2% to hit an intraday high of £48.70 per share. On a year to date basis, the stock is now over 7% up in 2020. Earlier this year in March, Rio Tinto had slid to £29.68 per share due to COVID-19 disruptions. Trading stocks online is easier than you think. Here’s how you can buy shares online in 2020.
CEO Jean-Sebastien Jacques will exit the role by 31st March
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Rio had originally charged financial penalties on its CEO and executives last month in a bid to avoid leadership overhaul. But the shareholders continued to criticise what they called was an insufficient response.
The British miner said on Friday that its CEO Jean-Sebastien Jacques will exit the role by 31st March 2021. Its head of corporate relations, Simone Niven, and head of iron ore, Chris Salisbury, will also step down in the upcoming months.
Executive Director Brynn O’Brien of Australasian Centre for Corporate Responsibility commented on the news on Friday and said:
“The executive changes should be a wake-up call for the Australian iron ore sector and mining companies worldwide on their relationships with First Nations people.”
In his remarks on Friday, Chairman Simon Thompson of Rio Tinto said that the Anglo-Australian mining corporation is committed to restoring its reputation in heritage management. According to analyst Hayden Bairstow of Macquarie:
“Clearly, from the comments of the chairman, they want to reset the culture, which would imply an external candidate would be more likely than an internal one.”
Rio Tinto to raise £390 million via additional lending
In related news, Rio Tinto expressed plans on Thursday of raising roughly £390 million via additional lending.
The raised money, as per the world’s 2nd largest miner of metals, will be directed at developing Oyu Tolgoi (giant copper mine) located in Mongolia. Rio’s subsidiary, Turquoise Hill Resources Ltd, has a 66% stake in the Mongolian project.
At the time of writing, the London-based miner has a market cap of £60.68 per share and a price to earnings ratio of 14.14.