Rio Tinto has named its chief financial officer, Jacob Stucholme, as its next CEO as an Anglo-Australian miner tries to rebuild his reputation after an international outcry over the destruction of an indigenous sacred site.
The promotion of Mr. Stucholm, a Danish citizen who joined Rio in 2018 from shipping company AP Moller-Maersk, will surprise many investors and analysts who have speculated that the company will select an external candidate.
Rio launched the search for a new CEO in September after Jean-Sebastian Jacques Step aside In the wake of investor backlash as two 46,000-year-old rock shelters were destroyed to make way for a mine expansion in Western Australia.
Canberra has asked Rio to choose an Australian as its next CEO, while investors have called on the company to focus more on a country that generates the bulk of its profits.
Several outside candidates associated with the job – including Anglo-American President Marc Cotefani, Newmont President Tom Palmer and Sandeep Biswas of Newcrest Mining – They excluded themselves.
Mr. Stucholm’s career included stints at Royal Dutch Shell, where he worked for 20 years in a number of roles, and the utility group ISS. He will take over the leadership of the $ 93 billion company, listed in London and Sydney, on January 1 and will receive a base salary of 1.15 million pounds.
Simon Thompson, Rio Chairman, said Stusholm’s blend of strategic and business expertise, strong values and collaborative leadership style were “perfect traits for our next CEO.”
This is a marked contrast to Jack who was known for his strict management style and unilateral approach to running one of the largest mining companies in the world.
Jack has never been welcomed by the Australian media or the investment community, which is a challenge Stucholm will face as well.
Mr Stucholm, who has said that restoring trust with indigenous groups and other stakeholders is a “key priority for the company”, faces a daunting task. Repair of Ryo’s reputation.
He will also have to remove an increasingly messy situation In MongoliaThe most important growth project in Rio, the $ 6.75 billion Oyo Tolgoi copper mine, has been hit by delays and a cost explosion that has sparked disputes with the country’s government and the company’s minority partners.
Additionally, Rio faces several regulatory issues including an investigation of payments to a consultant who helped the company secure the rights to an iron ore mine in Guinea.
Another focus will be on maintaining strong relationships with Rio’s biggest customers in China Trade tensions escalate Between Canberra and Beijing.
However, Stucholm wouldn’t have to worry about Rio’s financial condition. Thanks to high iron ore prices, the company has a solid balance sheet and is expected to generate about $ 10 billion in surplus cash this year.
During Mr. Jack’s four-year tenure, Rio delivered nearly $ 40 billion in cash to shareholders through dividends and share buybacks, avoiding big deals and a timely exit of coal.
Peter O’Connor, an analyst at Sydney-based brokerage Shaw and Partners, said the appointment was unexpected and may reflect the lack of a strong pool of in-house candidates with operational experience and the failure to persuade highly-qualified outside candidates to take over the post.
Most of the internal candidates who would have filled Jack’s shoes left the company during his tenure, including Alan Davis, the former head of the energy and minerals division of Rio.
“Jacob Stucholm has been very good in his current position as CFO and has collaborated with the investment community since his first trip here,” said Mr. O’Connor.
“He also gained a very detailed knowledge of the business, being able to answer precise questions in detail. But would I have seen him the natural man running the second largest mining company in the world? Probably not. His CV is more financial than practical.”
Mr O’Connor added that Rio may not have intentionally resisted the request of Australian Treasurer Josh Frydenberg Set the AustralianAnd it is more likely that he lacks suitable candidates.
“Is this a disturbing sign of how the company is positioned and how difficult the role is?” O’Connor asked.
Weekly newsletter twice
Energy is the world’s indispensable business and the source of energy is its newsletter. Every Tuesday and Thursday, straight to your inbox, Source Energy brings you essential news, analysis of forward thinking and inner intelligence. Register here.