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    RIO   AU000000RIO1

RIO TINTO GROUP

(RIO)
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Rio Tinto may need to tap outsider for new chief

09/11/2020 | 04:38am EDT
The Rio Tinto mine in Boron, California

Four years after mining giant Rio Tinto swept out its veteran managers to make way for a new generation of business heads, its leadership team has come unstuck.

The world's biggest iron ore miner is looking for a new chief and iron ore boss after they allowed the blasting of ancient Aboriginal rock shelters to expand a mine in Western Australia against the wishes of the traditional owners.

Investors and analysts saw no clear internal candidates and said following the damage done to the company's reputation, it was likely Rio would tap an outsider to replace Frenchman Jean-Sébastien Jacques.

"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," said Macquarie analyst Hayden Bairstow.

Chairman Simon Thompson said on Friday the company was determined to "re-establish our reputation as a leader in communities and heritage management".

Aside from repairing the company's community relations, the board will need to look for someone who refocuses on operations and building the copper business, areas neglected as Jacques stripped out layers of management and focused on capital allocation, two fund managers said.

"Rio was the benchmark for operations, but in the last 18 months they've lost that title," said an investment manager who declined to be named.

Potential external candidates that analysts and investors pointed to included Anglo American CEO Mark Cutifani, Orica CEO Alberto Calderon, former Fortescue Metals Group boss Nev Power, and ex-Shell Australia chair Zoe Yujnovich, who previously ran Rio's Canadian iron ore business.

"Zoe has the relevant mining background, international management experience, government relationships, acute sensitivity to indigenous and remote community engagement, and strong Australian roots," said one analyst, who declined to be named as he does not cover Rio.

If the company wants to overhaul its culture, it might be tough to turn to former Rio executives, although several were seen as potential candidates: Newcrest Mining Chief Executive Sandeep Biswas, Aurizon CEO Andrew Harding, OZ Minerals CEO Andrew Cole and Fortescue Chief Operating Officer Greg Lilleyman.

One fund manager pointed to Rio's aluminium chief Alf Barrios as a potential candidate.

However analysts said the company may want to look beyond mining expertise to set a new vision for the company.

"You don't need to be able to do a mine plan for an iron ore pit to run Rio Tinto. Look at (former travel industry executive) Elizabeth Gaines' success at Fortescue," Bairstow said.

By Sonali Paul


ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
3I GROUP PLC 2.26% 1247 Delayed Quote.7.69%
ANGLO AMERICAN PLC 1.53% 3147 Delayed Quote.29.80%
AURIZON HOLDINGS LIMITED 1.30% 3.89 End-of-day quote.-0.26%
FORTESCUE METALS GROUP LIMITED 1.71% 23.22 End-of-day quote.-0.90%
MACQUARIE GROUP LIMITED -0.62% 151.56 End-of-day quote.9.45%
NEWCREST MINING LIMITED 3.06% 28.33 End-of-day quote.9.89%
ORICA LIMITED 1.06% 14.31 End-of-day quote.-5.54%
OZ MINERALS LIMITED 1.63% 25.63 End-of-day quote.35.75%
RIO TINTO GROUP 0.02% 124.94 End-of-day quote.9.76%
RIO TINTO PLC 1.61% 6119 Delayed Quote.11.86%
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Financials (USD)
Sales 2021 59 770 M - -
Net income 2021 21 240 M - -
Net cash 2021 1 875 M - -
P/E ratio 2021 6,79x
Yield 2021 11,3%
Capitalization 143 B 143 B -
EV / Sales 2021 2,37x
EV / Sales 2022 2,86x
Nbr of Employees 47 500
Free-Float 65,3%
Chart RIO TINTO GROUP
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Rio Tinto Group Technical Analysis Chart | MarketScreener
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Technical analysis trends RIO TINTO GROUP
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 89,03 $
Last Close Price 86,31 $
Spread / Highest target 47,6%
Spread / Average Target 3,15%
Spread / Lowest Target -30,9%
EPS Revisions
Managers and Directors
NameTitle
Jakob Stausholm Chief Executive Officer & Executive Director
Peter Lloyd Cunningham Chief Financial Officer
Simon Robert Thompson Chairman
Arnaud Soirat Chief Operating Officer
Megan Clark Independent Non-Executive Director
Sector and Competitors
1st jan.Capitalization (M$)
RIO TINTO GROUP9.76%143 278
BHP GROUP15.37%175 388
RIO TINTO PLC11.86%143 278
ANGLO AMERICAN PLC29.80%54 989
GRUPO MÉXICO, S.A.B. DE C.V.10.97%36 490
SAUDI ARABIAN MINING COMPANY (MA'ADEN)43.70%18 736