Rio Tinto taps finance head as new CEO

Jakob Stausholm will assume the CEO role at Rio Tinto in January 2021. Credit: Rio Tinto.

Rio Tinto (NYSE: RIO; LSE: RIO; ASX: RIO) has named finance head Jakob Stausholm as its next chief executive, replacing incumbent Jean-Sébastien Jacques who had to step down following an international outcry over the miner’s destruction of sacred Aboriginal rock shelters.

Stausholm, a Danish national who joined the company in 2018 from shipping company AP Moller-Maersk, will be tasked with rebuilding the world’s second-largest miner’s reputation.

Rio Tinto fell out of favour with the general public, including investors, following its decision to blast two 46,000-year-old Aboriginal rock shelters at Juukan Gorge to expand an iron mine in Western Australia.

The move, while legal, sparked a global backlash and shined a spotlight on how the company’s internal culture may have contributed to the regrettable incident, which cost Jacques the post.

It also triggered a parliamentary inquiry, which recently called on Rio Tinto to pay restitution to Indigenous Australians affected by the destruction and also fully reconstruct the damaged site.

Stausholm’s promotion came as a surprise to some Australian investors, who have argued that a new CEO should have local experience and be based in the country that provides 85% of Rio’s profits.

Edward Sterck, a metals and mining analyst at BMO Capital Markets, approved of the appointment. “We think Mr. Stausholm is an excellent, cool-headed and sensible appointment, albeit unexpected as most observers were expecting an Australian appointee,” he wrote in a research note. “We do not expect an immediate change in Rio Tinto’s corporate strategy, but we do anticipate a transformation in corporate culture over time.”

RBC’s Tyler Broda also said the appointment was a “clear positive,” but noted that Rio Tinto could face criticism from some investors who see the change as insubstantial relative to the magnitude of the Juukan Gorge incident.

Stausholm, who said restoring trust with indigenous groups and other stakeholders was “a key priority for the company,” will have to face a complex situation at Rio Tinto’s biggest growth project in Mongolia.

The vast Oyu Tolgoi copper-gold mine has been plagued by delays and cost blowouts that have triggered disputes with the country’s government and Rio Tinto’s partner on the project, Turquoise Hill Resources (TSX: TRQ; NYSE: TRQ).

Rio Tinto’s new boss will also inherit a messy situation in Guinea, as the company is the subject of a probe into payments to a consultant who allegedly helped it secure rights to the northern blocks of the giant Simandou iron ore project.

Stausholm will have to simultaneously ensure his Chinese customers remain happy, given the ongoing trade tension between Canberra and Beijing.

And while Rio Tinto has committed to spend US$1 billion over the next five years to reduce its carbon footprint, its incoming boss will face stakeholder pressure to also tackle its “Scope 3” emissions — those generated by customers through the use of its products.

Rio Tinto is the latest top miner to make key executive changes. Mike Henry, BHP’s (NYSE: BHP; LSE: BHP; ASX: BHP) chief executive officer, has been at the job only since January 2020.

Top commodities trader and miner Glencore (LSE: GLEN) is waving its long-term boss Ivan Glasenberg good-bye. The executive has announced his retirement and will be replaced by insider Gary Nagle.

This article first appeared in, part of Glacier Resource Innovation Group.


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