Jakob Stausholm, Rio Tinto’s new chief executive, has made sweeping changes to the miner’s senior leadership team, including the creation of two roles, as he seeks to repair relations in Australia and improve its operational performance.
The Anglo-Australian company suffered enormous reputational damage last year when it destroyed a 46,000-year-old sacred Aboriginal site in the heartland of its flagship iron ore business to make way for a mine expansion.
The blasts at Juukan Gorge in the Pilbara region of Western Australia caused an uproar and cost Rio’s former chief executive Jean-Sébastien Jacques and two senior lieutenants their jobs after investors and indigenous groups demanded accountability for the incident
Mr Stausholm, a Dane who was previously Rio’s finance chief, was named chief executive shortly before Christmas. He has made restoring trust with indigenous groups and other stakeholders “a key priority”.
To that end, Kellie Parker, the head of Rio’s Pacific Aluminium business, will join Rio’s executive committee as chief executive Australia, a new role tasked with improving relations in Australia.
Mr Stausholm has also created the role of chief operating officer, which will be filled for the next 18 months by Arnaud Soirat, the current head of copper and diamonds, before he retires.
For years Rio has been regarded as the mining industry’s top operator but in recent years operational setbacks in Australia and Mongolia have seen its crown slip.
Mr Soirat will be replaced by Bold Baatar, a former JPMorgan investment banker and a Mongolian citizen.
Another of the big tasks facing Mr Stausholm is to sort out a messy situation in Mongolia, where Rio’s most important growth project, the $6.75bn Oyu Tolgoi copper mine, has been hit by delays and cost blowouts.
That has prompted disputes with the Mongolian government and the company’s minority partners.
Mr Stausholm will be hoping that Mr Baatar will be able to smooth relations in Mongolia, which has just appointed a new young prime minister, Oyun-Erdene Luvsannamsrai, who has already crossed swords with Rio in his former position as cabinet secretary.
“While Rio Tinto continues to deliver strong safety and operational performance, despite the ongoing challenges of Covid-19, there are improvements we can achieve across the business,” Mr Stausholm said in a statement. “I want to re-establish Rio Tinto as a trusted partner for host communities, governments and other stakeholders.”
Among the other changes announced on Wednesday, Simon Trott, currently chief commercial officer, was named chief executive of Rio’s flagship iron business. The head of the company’s aluminium unit, Alf Barrios, will replace Mr Trott.
As part of the reshuffle only one senior executive is leaving the company, Vera Kirikova, chief people officer. Rio has yet to appoint a permanent replacement for Mr Stausholm as chief financial officer.
The promotion of Mr Stausholm, a Danish national who joined Rio in 2018 from shipping company AP Moller-Maersk, surprised many investors and analysts who expected the company to pick an external candidate.
Mr Stausholm is expected to bring a collaborative leadership style to Rio than his predecessor Mr Jacques, who was never embraced by Australia’s media or investment community, where there is resentment that the company is run from London.
After the resignation of Mr Jacques, Canberra asked Rio to select an Australian as its next chief, while some Sydney-based investors had called on the company to sharpen its focus on a country that generates the bulk of its earnings.