Rio Tinto’s New CEO Looks to Take More Risks – by Rhiannon Hoyle (Wall Street Journal – February 17, 2021)

https://www.wsj.com/

SYDNEY—The new chief executive officer of Rio Tinto PLC wants to change a risk-averse culture at the world’s second-largest mining company that could see it pursue commodities vital to the energy transition more aggressively.

Jakob Stausholm said mining companies had become too cautious after overpaying for deals around a decade ago during a rush to feed China with metals and minerals vital to its industrialization, which left them vulnerable to hefty asset write-downs when commodity prices fell.

Facing an investor backlash at the time, companies including Rio Tinto moved to prioritize dividends to shareholders and buying back shares over deals or investments in new mines that could turn sour.

Rio Tinto’s annual result on Wednesday continued that trend. A 22% rise in net profit to $9.77 billion paved the way for a record final dividend and a special dividend in what was Mr. Stausholm’s first earnings update since succeeding Jean-Sébastien Jacques as CEO on Jan. 1.

Mr. Jacques was ousted last year amid the fallout from the destruction of ancient rock shelters in a remote part of Australia.

For the rest of this article: https://www.wsj.com/articles/rio-tinto-annual-net-profit-up-22-to-pay-special-dividend-11613541720

 

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