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Rio Tinto CEO to leave over Indigenous Australian cave destruction

Tom Belger
·Finance and policy reporter
·3-min read
Pilbara, the region of western Australia where Rio Tinto iron more expansion led to the destruction of an historic Indigenous Australian heritage site. Photo: Rio Tinto
Pilbara, the region of western Australia where Rio Tinto iron more expansion led to the destruction of an historic Indigenous Australian heritage site. Photo: Rio Tinto

The CEO of Rio Tinto (RIO.L) is to leave his post “by mutual agreement” over the destruction of an Indigenous heritage site in Western Australia.

The FTSE 100 (^FTSE) mining giant faces a parliamentary inquiry in Australia over the caves, an important site for the Puutu, Kunti Kurrama and Pinikura (PKKP) peoples. The caves showed evidence of continued inhabitation for 46,000 years.

Two other senior figures are also set to leave the company, it said in a statement on Friday. “Significant stakeholders have expressed concerns about executive accountability for the failings identified,” the company said.

Jean-Sebastien Jacques, who has led Rio Tinto since 2016, will step down from his post as executive director and chief executive. He will remain in post until a successor is found or by 31 March next year.

READ MORE: Rio Tinto boss to lose bonus over cave destruction

Chris Salisbury, chief executive of iron ore, will step down with immediate effect and leave Rio Tinto on 31 December.

Simone Niven, group executive for corporate relations, will also step down and leave on the same date after an “orderly transition.”

The three senior figures had already been told in late August they would not receive their performance-related bonuses this year under its short-term incentive plan. A 2016 award Jacques had been due to receive next year under its long-term incentive plan was set to be reduced by £1m ($1.3m).

READ MORE: Rio Tinto may tap outsider for new CEO

But the latest decision comes as the fallout has grown from the publication of the Anglo-Australian company’s review into the damage caused by the expansion of an iron ore mine at Juukan Gorge, in the Pilbara region.

The review found some of Rio Tinto’s systems, decision-making processes and governance “failed to work as they should have.”

But the company said there had been no single root cause or error that directly led to the site being blown up. “It was the result of a series of decisions, actions and omissions over an extended period of time, underpinned by flaws in systems, data sharing, engagement within the company and with the PKKP, and poor decision-making.”

READ MORE: Traditional owners say Rio Tinto knew the importance of caves

Rio Tinto’s chairman Simon Thompson said in a statement on Friday: “What happened at Juukan was wrong and we are determined to ensure that the destruction of a heritage site of such exceptional archaeological and cultural significance never occurs again at a Rio Tinto operation.

“We have listened to our stakeholders' concerns that a lack of individual accountability undermines the Group's ability to rebuild that trust and to move forward to implement the changes identified in the Board Review."

He added that all three senior figures “deeply regret” the destruction of caves.

Ivan Vella, currently managing director of rail, port and core services within the iron ore division, will replace Salisbury on an interim basis. Meanwhile Simon McKeon, a non-executive director, will be appointed to a newly created board role of senior independent director, to “enhance board engagement” in Australia.

Investors and analysts say there are no clear internal candidates, and an outsider is likely to be brought in to change its culture and shore up its reputation, Reuters reports.