The Rio Tinto Limited (ASX: RIO) CEO is going to leave the miner because of what happened with the Juukan rockshelters.
What happened?
The Rio Tinto board has been talking extensively with shareholders, Traditional Owners, Indigenous leaders and other stakeholders. The miner said that significant stakeholders have expressed concerns about executive accountability for the failings identified from the Juukan rockshelters in May 2020.
It has been agreed that J-S Jacques will step down from his roles as CEO and executive director. A process for searching for a new CEO is underway, though he will remain in his role until a new person is appointed, or 31 March 2021 – whichever comes first. Rio Tinto said this would ensure business continuity.
Chris Salisbury will step down as chief executive of iron ore with immediate effect and will leave the company on 31 December 2020, to be replaced on an interim basis by Ivan Vella.
Simone Niven will step down as group executive of corporate relations and will leave on 31 December 2020.
Rio Tinto said the separation terms, including the long term incentive rewards, for all in line with its remuneration policies and their applicable contractual terms. They will continue to be subject to the financial penalties previously disclosed in the board review.
Rio Tinto is establishing a new social performance assurance function, reporting to Mark Davies, to strengthen oversight of communities and heritage practices and performance within the operations.
Chairman comments
Rio Tinto chairman Simon Thompson said: “What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance never occurs again at a Rio Tinto operation. We are also determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other Traditional Owners.
“We have listened to our stakeholders’ concerns that a lack of individual accountability undermines the group’s ability to rebuild that trust and to move forward to implement the changes identified in the board review.”
Mr Thompson went on to say that Rio Tinto is a financially and operationally robust business with world-class assets, a clear strategy and outstanding people.
Summary
The Rio Tinto share price is down 0.5% in early trading. The overall ASX 200 is down 1%, so it’s not surprising the miner has dropped.
Normally a difficult period like this could be an opportunistic time to buy shares of a troubled business. However, the iron ore price remains high from large demand from China as well as COVID-19 output difficulties in Brazil.
For that reason, I don’t think it’s the right time to buy iron ore miners like Rio Tinto. Other ASX dividend shares seem better value and more reliable to me like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which does actually offer some resources exposure too.
