Shares in mining giant Rio Tinto (RIO) gained 1.3% to £48.47 after it announced the resignation of chief executive Jean-Sebastien Jacques, in an important moment for shareholder activism.

It comes after the world's biggest iron ore miner four months ago destroyed two sacred Aboriginal sites in Pilbara, Western Australia, blowing up the Juukan Gorge rock shelters despite the opposition of Aboriginal traditional owners.

The caves, seen as one of Australia’s most significant archaeological research sites, had shown evidence of continuous human habitation dating back 46,000 years and sat above around eight million tonnes of high-grade iron ore as Rio Tinto hoped to expand its mine in the area.


The firm was heavily criticised by some of its big pension fund investors, both for the destruction and its initial response in which it claimed there was a ‘misunderstanding’ and that it was not told of the cultural significance of the sites.

AJ Bell investment director Russ Mould said the scandal is ‘yet another example of how investors are no longer standing for bad corporate practices’, and added that respecting areas of cultural importance is a ‘textbook requirement’ for the mining sector.

Mould said, ‘The negative response from various shareholders following an inquiry into the incident highlights how investors are no longer standing for bad behaviour.

‘Normally one would associate shareholder activism with trying to change corporate strategy or blocking excessive remuneration, yet Rio Tinto is a broader example of how the wrong decision-making can make investors angry and cause them to flex their muscles.’


In a statement, Rio Tinto said Jacques would step down from his role in either March 2021 or when a successor is appointed, whichever is earlier.

Chris Salisbury, who runs the iron ore division responsible for 90% of Rio’s earnings, is stepping down with immediate effect and will leave the company on 31 December, while corporate relations boss Simone Niven will also depart.

Commenting on the changes, Rio Tinto chairman Simon Thompson said, ‘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 are also determined to regain the trust of the Puutu Kunti Kurrama and Pinikura people and other Traditional Owners.

‘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.’


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Issue Date: 11 Sep 2020