Rio Tinto, the world’s second-largest mineral and mining company, said on Friday that chief executive Jean-Sébastien Jacques would step down “by mutual agreement,” bowing to months of shareholder pressure after the company blew up two ancient rock shelters in Western Australia. Two other senior executives will also leave the company.
– Rio Tinto RIO, +1.80% detonated in May an ancient habitat at Juukan Gorge with traces of 46,000 years of life. It did so legally, but against the fierce opposition of traditional Aboriginal owners. The blast gave the company access to $135 million worth of high-grade iron Ore.
– The original reaction of the board, who found in an earlier review that no individual mistake had been committed and only recommended to cut the short-term bonuses of a few executives, had created an uproar among activist shareholders, Aboriginal people and environment organizations.
– French-born Jacques, who became chief executive in 2016, will remain until a successor is found, but no later than the end of March, 2021.
– Rio Tinto shares were up 1.8% in midday trading, against a stable London market measured by the FTSE 100 UKX, +0.32% index.
The outlook: Jacques’ departure illustrates the rising power of activist investors or pension funds demanding that companies comply with cultural, social and environmental standards, and start looking beyond their strict bottom line. The big mining groups, often operating in every region of the world on land owned by Indigenous people, are a natural target for such activism. The delayed response of Rio Tinto may however mean that the board’s problems with demanding shareholders are far from over.
Originally published on MarketWatch