Sydney - Rio Tinto's chief executive Sam Walsh, who led the firm through a painful commodity price plunge, is to retire and be replaced by Frenchman Jean-Sebastien Jacques in July, the mining giant said on Thursday.
Walsh, who has helmed the Anglo-Australian firm for just over three years and overseen a cost-cutting drive as the mining sector battles through tough times, will also depart Rio's board at the same time.
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London-based Jacques, who is currently global head of the firm's copper and coal division, will become deputy chief executive in the interim and joins the board “with immediate effect”, the world's number-two miner said.
“Today's announcement is the culmination of a comprehensive and deliberate executive succession process,” Rio Tinto chairman Jan du Plessis said in a statement after the market closed in Sydney.
“The board has decided that J-S is the right person to lead Rio Tinto in an increasingly complex world filled with both challenges and opportunities for our industry.”
The changeover at the top came as Rio - which is heavily reliant on iron ore - posted an annual net loss of $866 million in 2015 due to tumbling commodity prices, which have squeezed the bottom lines of small and big players alike.
Rio has been tightening its belt to combat the commodities crash, and last month announced a further slashing of costs by $1.0 billion this year and another $1.0 billion in 2017. It also slashed capital spending.
“It probably is a bit of a surprise to the market, but it wasn't unexpected,” Fat Prophets resources analyst David Lennox told AFP.
“From our point of view, Sam came out of the iron ore division and Rio is now solidly entrenched in that particular operation. He would have been the best man to remove the costs out of that particular operation.”
Walsh was appointed in January 2013 after the ouster of Tom Albanese on the back of Rio's first annual loss in 18 years in 2012 amid hefty writedowns on its Mozambique coal and aluminium businesses and a dip in commodity prices.
Du Plessis said Walsh transformed the business against the backdrop of a volatile economic environment, leaving it “a much stronger company, with a bright future”.
Jacques, who has been involved in Rio's giant but controversial Oyu Tolgoi mine project in Mongolia, was hailed by du Plessis as a “very experienced executive with a demonstrated track record”.
“He has run complex operations and projects across five commodities and five continents. J-S is a highly-regarded leader who shares Rio Tinto's strong values and has embraced its culture.”
Rio shares closed 2.44 percent higher to A$43.73 in Sydney ahead of the announcement on Thursday.
AFP