Rio Tinto appoints Canadian envoy to China as president


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Leading iron ore producer Rio Tinto Group has hired resigning Canadian Ambassador to China Dominic Barton as the new chairman, in a bid to deepen relations with its main client amid unstable diplomatic relations between Beijing and Canberra.

Barton is set to replace Simon Thompson, who earlier this year announced plans to retire amid a scandal surrounding the miner’s destruction of old rock shelters in Juukan Gorge in Australia.

Barton, who spent more than three decades at McKinsey & Co, announced earlier this month that he would step down as envoy at the end of the year, just weeks after a diplomatic crisis was resolved between Canada and China.

Photo courtesy of Kimberley Land Council via Reuters

Barton has the skills and experience Rio needs, Managing Director Jakob Stausholm said in a statement, including “his rich experience across Asia in both business and diplomacy.”

Rio generates most of its revenue from sales of ore to Chinese steelmakers and is exposed to market fluctuations caused by policy changes in Beijing.

Prices have halved since reaching record highs of over US $ 230 a tonne in May, after authorities imposed production restrictions to meet stricter environmental standards.

Photo: Reuters

Barton would have “immense diplomatic skills and experience in handling crisis situations, and most importantly in avoiding them,” said Gavin Wendt, mining analyst at consultancy MineLife Pty Ltd.

Barton’s contacts in Beijing would also be “extremely useful” in Rio, Wendt added.

China has banned a series of imports of Australian staples, including coal, barley and wine, as part of a diplomatic escalation with the Canberra government.

Iron ore, which accounts for around a third of Australia’s total export earnings, has so far not been targeted, reflecting the lack of alternative sources of the steel ingredient.

Barton is also said to be on a mission to restore Rio’s image in the communities where it operates, particularly in the Pilbara region of Western Australia, which is home to its gigantic ore operations.

The fallout from Rio’s actions in the Juukan Gorge in the region led to the departure of former CEO Jean-Sébastien Jacques and other senior executives.

Stausholm, who was appointed in December last year, has reshuffled senior management.

However, the company faces local opposition to major projects in Arizona, Mongolia and Serbia.

Barton, former chairman of Teck Resources Ltd, would replace Thompson on May 5.

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