Rio Tinto holds course as it looks inward for new chairman

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Global miner Rio Tinto signaled on Monday it will stick with its “value over volume” strategy, outlining further moves to boost shareholder returns and appointing a new chairman from within its board.

Rio ended months of speculation by naming Simon Thompson to succeed chairman Jan du Plessis, who will step down after almost nine years at the helm of the Anglo-Australian mining house.

Thompson, a former investment banker and senior executive with Anglo American, and the chairman of Rio’s remuneration committee will take on the new role on March 5, 2018.

The appointment follows a flurry of speculation that Rio might turn to former Xstrata chief Mick Davis, renowned as an astute dealmaker, to take over from du Plessis who is moving to chair British telecom BT Group.

“Thompson is well-versed in the Rio Tinto culture, which was very different to that of Xstrata,” said a fund manager on the side of a Rio Tinto investment seminar in Sydney, who asked not to be named.

“I’d expect this to be received positively by the market and investors,” he added.

Rio Tinto, which is expected to boost revenue by about 15 percent in 2017 to 39 billion US dollars, according to Thomson Reuters forecast data, has focused on driving down costs at its iron ore, copper and other businesses in a bid to boost returns to shareholders amid volatile commodity markets.

“Rio Tinto is in a strong position. Our value over volume strategy is working,” Chief Executive Jean-Sebastien Jacques told investors at a briefing on Monday.

Jacques said Rio would hold the line with its current strategy with the appointment of Thompson.

“This is by no means a structural shift for us,” Jacques told Reuters. “With Simon, we are continuing on the same successful course we have already laid out to our shareholders for maximizing our operations and growth.”

Source(s): Reuters