Rio Chief Executive Quits After Australia Controversy

Key executives resign after destruction of an Aboriginal site in May 2020, an incident that flags up the ESG risks mining company investors face

James Gard 11 September, 2020 | 11:01AM

Rio Tinto chief executive

The chief executive of FTSE 100 mining company Rio Tinto (RIO) and a number of key executives have resigned following the controversy over the destruction of an Aboriginal site in Australia in May. Jean-Sebastien Jacques is to step down as chief executive but will remain in the role until March 2021 until a successor is found, while Chris Salisbury, chief executive of iron ore has resigned with immediate effect. Simone Niven has also resigned as group executive of corporate relations and will leave the company at the end of the year. The controversy has reignited the debate about mining companies’ environmental, social and governance practices – as well as how they can attempt to put things right after a high-profile incident occurs.

In May this year two sacred cave sites dating back 46,000 years were destroyed in Pilbara, Western Australia, after an explosion while the company mined for iron ore. Local community leaders had raised objections to the activity before the sites were destroyed. The incident has caused great controversy in Australia and has been the subject of a parliamentary inquiry. Rio Tinto itself conducted a board review and decided that top executives would forfeit bonuses worth £4 million. But some Australian pension funds said this move was not enough to hold the companies’ top executives to account – even though at the time the company’s chairman Simon Thomspn said that “no single individual or error was responsible for the destruction”.

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James Gard  is content editor for Morningstar.co.uk

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