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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Rio Tinto Group    RIO   AU000000RIO1


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Rio Tinto stops short of axing leaders over sacred caves blast

08/24/2020 | 02:44am EST
The Rio Tinto mining company's logo is photographed at their annual general meeting in Sydney

Rio Tinto said on Monday it will cut the short-term bonuses of some senior executives but stopped short of leadership overhaul following review of the company's destruction of two ancient caves in Australia.

Chief Executive Jean-Sébastien Jacques and two other leaders will take financial penalties after the world's biggest iron ore miner legally destroyed two historically significant sacred caves in Western Australia state - against the wishes of Aboriginal traditional owners - as part of a mine expansion.

Rio said it would reduce the short-term bonuses of Jacques, Chief Executive of Iron Ore Chris Salisbury and Group Executive, Corporate Relations, Simone Niven in 2020 by about $3.7 million in total.

Jacques' long-term incentive plan award would also be reduced by about 1 million pounds ($1.3 million). He was paid 5.8 million pounds last year.

"The Rio Tinto board has come to an informed judgment that the sanctions that have been applied to senior executives are appropriate," Michael L'Estrange, who led the review, told Reuters.

The destruction in May sparked public outrage and an Australian government enquiry that senior Rio leadership faced early this month. The penalties were well short of management change pushed for by some investor groups who have criticised Rio's leadership for a lack of accountability.

"Irreplaceable cultural heritage has been lost and the only consequence for any of the senior leadership at Rio is the loss of a bonus -- not even their job," said shareholder advocacy group the Australasian Corporate Centre for Responsibility.

"Rio's board could have acted decisively. This soft touch, public relations-oriented review calls into question the suitability of every board member, especially the Chair Simon Thompson and the head of the review Michael L'Estrange."

L'Estrange told Reuters he was confident Rio's board had made the correct decision that was in line with community expectations, even as investor pressure on boards for greater accountability grows.

"The board has thought very, very deeply on this... Now we will consult with investors and others," he said.

Australian wealth manager AMP Ltd saw a leadership shakeup on Monday after investors were unhappy with board decisions around accountability over allegations of inappropriate conduct.

"The review found no single root cause or error that directly resulted in the destruction of the rockshelters. It was the result of a series of decisions, actions and omissions over an extended period of time," Rio said.

The Aboriginal traditional owners, the Puutu Kunti Kurrama and Pinikura people did not comment. They have previously said they were too distressed to comment.

Rio is reviewing the organisational structure of its communities function that will report to Mark Davies, who joined the executive committee in charge of safety and technical projects in July, after it previously reported to corporate affairs.

The miner also said that it was reviewing the terms of its existing 2011 agreement with the PKKP, in relation to consent to "reflect evolving practice."

Rio did not tell the PKKP, the traditional owners of the two caves destroyed to mine iron ore, about three alternative mine plans, Jacques told the government enquiry, despite saying it had won fully informed consent for blasting.

($1 = 0.7637 pounds)

By Melanie Burton

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
3I GROUP PLC -0.56% 1075 Delayed Quote.-1.55%
RIO TINTO GROUP 1.12% 104.28 End-of-day quote.3.86%
RIO TINTO PLC -2.66% 4918.5 Delayed Quote.12.21%
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Financials (USD)
Sales 2020 42 560 M - -
Net income 2020 9 722 M - -
Net Debt 2020 3 413 M - -
P/E ratio 2020 7,85x
Yield 2020 8,84%
Capitalization 82 553 M 111 B -
EV / Sales 2020 2,02x
EV / Sales 2021 2,03x
Nbr of Employees 46 000
Free-Float 65,2%
Duration : Period :
Rio Tinto Group Technical Analysis Chart | RIO | AU000000RIO1 | MarketScreener
Technical analysis trends RIO TINTO GROUP
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 24
Average target price 65,57 $
Last Close Price 49,19 $
Spread / Highest target 94,6%
Spread / Average Target 33,3%
Spread / Lowest Target -11,5%
EPS Revisions
Jean-Sébastien Jacques Chief Executive Officer & Executive Director
Simon Robert Thompson Chairman
Jakob Stausholm Chief Financial Officer & Executive Director
Michael Gerard L'Estrange Independent Non-Executive Director
Megan Clark Independent Non-Executive Director
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