Rio Tinto Names Simon Thompson to Succeed Chairman Jan du Plessis -- Update
MELBOURNE, Australia -- Rio Tinto PLC has turned to Simon Thompson, a boardroom veteran with mining-industry experience under his belt, to succeed Jan du Plessis as chairman from next year.
Mr. Thompson, a director at Rio Tinto since 2014, will take over when Mr. du Plessis steps down in March after about nine years as chairman, the mining company said Monday.
A former executive at Anglo American PLC who has served as a director with miners including AngloGold Ashanti Ltd. and Newmont Mining Corp., Mr. Thompson will assume the helm of a revitalized Rio Tinto but also a company with a dented corporate reputation.
The U.K.-Australian company swung back to profit last year as prices for iron ore rebounded, allowing it to resume dividend payouts as the company focused on slashing costs and improving productivity at its portfolio of mines. Backed by the exit from unwanted assets, it has slashed debt and has been buying back shares to return cash to shareholders.
However, it was hit with a U.S. lawsuit in October alleging the company and former executives misled investors about the value of assets in Mozambique, a further cloud for a company already grappling with a number of investigations in the U.S., U.K. and Australia into a $10.5 million payment made to a consultant who helped secure rights to a large iron ore deposit in Guinea. The company said it would defend itself against the Securities and Exchange Commission's suit, arguing claims of fraud were unwarranted. The miner said it was cooperating with authorities in the Guinea investigation and has handed over emails and information to investigators.
"Rio Tinto is in great shape, with a strong management team, world-class assets and a successful strategy," Mr. Thompson said.
Mr. du Plessis said in March he was stepping down to join British telecommunications firm BT Group PLC, where he became chairman last month. At the time, the company said the search for his successor had begun in mid-2016, when Mr. du Plessis agreed to remain in the role a further two years following the appointment of Jean-Sebastien Jacques as chief executive.
"I am really pleased to be succeeded by Simon, especially given how closely we have worked together since he joined the board some three years ago," Mr. du Plessis said.
Between 1995 and 2007, Mr. Thompson worked in a number of roles for Anglo America, including as head of its base metals division and chairman of the exploration division. Early in his career he held investment-banking positions at S.G. Warburg and N M Rothschild, and he has been chairman of international investment manager 3i Group PLC since 2015. From 2012 until earlier this year he was chairman of Tullow Oil PLC.
Mr. du Plessis said he was handing over the baton at a time when Rio Tinto was in great shape.
At a presentation to investors in Sydney on Monday, executives said the company remained focused on delivering "superior" cash returns to shareholders by working assets harder.
Mr. Jacques said a $5 billion productivity program was expected to drive value over the next five years, targeting $1.5 billion in additional free cash flow a year from 2021.
The company has a number of expansion opportunities being considered to expand the company, including an iron-ore project in Australia's remote Pilbara, aluminum operations in Canada, copper in the U.S. and its Jadar lithium project in Serbia, he said.
Still, while the company said it remains optimistic about the medium to longer-term outlook for China, the world's biggest consumer of commodities stretching from copper to iron ore, it cautioned there could be a slowdown over the next six months due to weakening construction, infrastructure and automotive demand.
Rio Tinto has sold almost $8 billion worth of assets since 2013, including this year's exit from its Coal & Allied coal business in Australia, and has slashed debt to $7.6 billion from $14.5 billion in mid-2013. Net profit in the first half of this year jumped to $3.31 billion from $1.71 billion the year before.
In Monday's presentation, it said it now expected capital expenditure this year of less than $4.5 billion, where it previously anticipated it would be about $5 billion, before it rises to $5.5 billion in 2018 and $6 billion in each of the following two years.
Write to Robb M. Stewart at email@example.com
(END) Dow Jones Newswires
December 03, 2017 19:12 ET (00:12 GMT)