Rio Tinto plans to recruit more resident Australians and people with mining expertise onto its board of directors but is unlikely to shift its London head office.
Rio Tinto plans to recruit more resident Australians and people with mining expertise onto its board of directors but is unlikely to shift its London head office.
Chairman Simon Thompson told shareholders at the company’s annual general meeting in Perth today that Australia was Rio’s most important country.
It is home to half the company’s employees and half its leadership team are Australian citizens.
He was asked if Rio would consider moving its head office to reflect the high proportion of group profits coming from Australia, and especially from the Pilbara.
Mr Thompson said the London head office was very small, with only 130 people, and it was not involved in operational decisions.
He added that Rio has been systematically moving people out of UK to get them closer to the company’s operations in cities such as Montreal, Brisbane, Perth, and Singapore.
Mr Thompson said the recent restructure of the executive committee had appointed Kellie Parker as chief executive Australia, based in Melbourne.
“We will be stepping up our presence in the Melbourne office,” he said.
Regarding the board, Mr Thompson said further changes were afoot, including his own plans to retire next year after accepting responsibility for the Juukan Gorge issue.
Responding to a shareholder question, he said the board was focused on getting more mining expertise onto its ranks, to challenge and hold management to account.
Australian director Simon McKeon, who is considered a contender to replace Mr Thompson, acknowledged that Rio did not have the right relationship with Australia 12 months ago.
“Residency and connection and influence in this country is important,” Mr McKeon said.
“After this meeting, we will not have enough resident Australians on the board.”
At the time of publishing this article, the voting results from Rio’s AGM had not been released.
They are expected to show a substantial vote against the remuneration report, as a protest against the company’s performance.
In his speech to the meeting, Mr Thompson said all of the company’s operational and financial achievements were overshadowed by events at Juukan Gorge in May last year.
“The destruction of the Juukan rock shelters was a breach of both our values as a company and of the trust placed in us by the Puutu Kunti Kurrama and Pinikura people and other traditional owners of the lands on which our business operates,” he said.
Mr Thompson said he would use the next year to drive improvements.
“I will use my remaining time with Rio Tinto to provide continuity and support to our new chief executive Jakob Stausholm and the new executive team, and to oversee the implementation of the recommendations of the board review and the parliamentary inquiry," he said.
“To ensure that the destruction of a site of such exceptional cultural significance never happens again at a Rio Tinto operation.”
While Rio has previously outlined detailed plans to improve its relations with traditional owners and management of Aboriginal heritage, shareholders used the AGM to again press for details on the company’s plans in this regard.
Commenting on the business generally, Mr Thompson said it remained exceptionally strong, with outstanding people, world-class assets and a resilient balance sheet.
“After a period of profound change at all levels in the organisation, 2021 is all about stability and execution, recommitting to our purpose of producing essential materials in a way that creates value for all our stakeholders; safeguards the environment; and respects our host countries and communities," he said.
Chief executive Jakob Stausholm said 2020 was a year of extremes.
“It had its dark days, most notably our destruction of the ancient rock shelters at Juukan Gorge – a terrible chapter in our history,” he said.
“Perhaps this cannot be said enough, so let me say it again: the rock shelters at Juukan Gorge should not have been touched. We are so sorry.”
Mr Stausholm said Rio needed to become a more outward looking company, more in tune with society.
“This is our social licence to operate. It is judged by others. And it is essential for our long-term success," he said.
“All of us, are determined to learn and heal from the events of 2020, to strengthen our culture and see Rio Tinto emerge even stronger.
“We have a long road ahead of us and I am not underestimating the time and effort this will take.”
