Rio Tinto’s strategy chief resigns on eve of investor day

Rio Tinto’s head of strategy and development is leaving the company after eight years, the second senior executive to leave the miner since Jakob Stausholm was appointed chief executive in January.

The departure of Peter Toth, who is joining gold heavyweight Newmont in a similar role, comes on the eve of a major presentation on strategy to analysts and investors in London.

Stausholm is expected on Wednesday to sketch out his long-term vision for the company and his thinking on issues facing the Anglo-Australian miner.

“They have lots of questions to answer,” said Richard Hatch, analyst at Berenberg. “Operationally there are a lot of problems at Rio and not only in Australia. Mongolia is clearly a big issue.”

Rio has lost its crown as the industry’s best miner and is trying to rebuild trust with indigenous groups after destroying two 46,000-year-old sacred Aboriginal sites last year to make way for a mine expansion in Western Australia.

The company last week cut production guidance for its flagship Australian iron ore business and several other divisions after what Stausholm described as a “difficult” third quarter. It also revealed another delay at its most important growth project, a huge underground copper mine in Mongolia’s Gobi desert.

After hitting £64 in May, shares in Rio have dropped to £50, weighed down by a sharp decline in the price of iron ore, its key commodity.

Toth joined Rio as head of strategy in 2014 from OM Holdings, an Australian integrated manganese and silicon company where he was chief executive.

A year later he became head of corporate development with responsibility for corporate strategy — including climate change — and business development.

Rio said Toth’s responsibilities would be divided between current executives and that he would remain in an advisory role until the end of the year before leaving the company in April.

He is the second member of Rio’s executive committee to resign. Barbara Levi, chief legal officer, is due to depart later this month.

Stausholm, Rio’s former finance director, replaced Jean-Sébastien Jacques as chief executive, with the latter forced to step down after an investor backlash over the Australian blasts.

The appointment surprised many analysts and investors because of Stausholm’s lack of experience in the mining industry. He joined Rio in 2018 from shipping company Maersk.

Wednesday’s briefing is the first investor day Rio has held in two years and, according to Liam Fitzpatrick, analyst at Deutsche Bank, it will be a chance for the new leadership team to lay out a long-term strategy, “particularly with regards to emissions abatement, future portfolio shape and growth”.

But Rio, which is also looking for a new chair to replace Simon Thompson, will face questions about its operating performance and the impact of tightening regulation in Australia.

An Australian parliamentary report published on Monday into Rio’s destruction of the Juukan Gorge sites called for an overhaul of the country’s cultural heritage laws, including giving indigenous groups the power to sue mining companies.

The schedule for Rio’s Winu copper project in Western Australia has slipped because of increased Aboriginal heritage considerations.

Elsewhere in Rio’s copper business, underground expansion of the Oyu Tolgoi mine in Mongolia has stalled amid a dispute with the government on cost overruns and delays, while plans to develop a giant deposit in Arizona have run into opposition from a local tribe and politicians.