Rio Tinto chairman Dominic Barton to probe CEO Jakob Stausholm’s future

Rio Tinto’s new chairman will reportedly review the position of chief executive Jakob Stausholm to determine whether he is the right person to lead the overhaul of the miner’s toxic work culture.

News agency Reuters has cited sources as saying that Dominic Barton, a former diplomat who takes the chair in May, could remove Mr Stausholm if he decides Rio would be better served by an outside leader not seen as linked to the executive team who oversaw the group in recent years.

It appears a strange bit of timing given that Mr Stausholm commissioned the recently-released external report that shone a light on a company culture rife with sexual harassment, racism and bullying over the past five years.

Reuters noted that Rio Tinto won praise from many investors for publishing the damning report by former Australian sex discrimination commissioner Elizabeth Broderick, and pledging to implement all 26 recommendations, including creating an independent confidential unit to address reports of harmful behaviour.

The two sources, who declined to be named, said Mr Barton had not yet made a judgment on Mr Stausholm’s position. Mr Barton will weigh whether the fact Mr Stausholm has held senior management roles since 2018 made him unsuitable to lead a clean-up of the company’s culture, they said.

The Reuters report surfaced as investors prepare for annual and half-year profit reports from Rio Tinto and other big miners amid signs mounting cost pressures and the impacts of slowing Chinese growth could further erode record earnings.

Rio Tinto, Vale, BHP, Glencore and Anglo American may see combined December-half earnings of $US73 billion ($102.2b), down from $US82 billion in the June half-year.

Although elevated prices for metals mean profits remain robust on a historical basis, the dip is reflective of the headwinds that developed over the period, Bloomberg said.

“That’s going to be a theme: With the bumper profits that they’re enjoying, they are rewarding shareholders with dividends rather than ploughing it back into expansion,” David Bassanese, chief economist at fund manager BetaShares, said.

“That shows that there’s not a lot of confidence” for the longer-term, with uncertainty about China at the forefront of concerns, he said.

Threats to economic growth in the world’s largest metals consumer are clouding the outlook for miners — and especially iron ore companies.

The pandemic has been a double-edged sword for the mining sector in the six months to December, with stimulus packages igniting demand for commodities like iron ore, copper and aluminium and driving prices higher, but also inflating costs and squeezing labour resources.