Top iron ore producer Rio Tinto Group has hired resigning Canadian ambassador to China Dominic Barton as its new chairman, in a bid to bolster the relationship with its top customer amid frayed diplomatic relations between Beijing and Canberra.
Barton is to replace Simon Thompson, who earlier this year announced his intent to retire following a scandal around the miner’s destruction of ancient rock shelters in Australia’s Juukan Gorge.
Barton, who spent more than three decades at McKinsey & Co, announced earlier this month that he would step down from his envoy role at the end of the year, just weeks after the resolution of a diplomatic crisis between Canada and China.
Photo courtesy Kimberley Land Council via Reuters
Barton has the skills and experience that Rio needs, chief executive officer Jakob Stausholm said in a statement, including “his wealth of experience across Asia in both a business and diplomatic capacity.”
Rio generates the bulk of its revenue from ore sales to China’s steelmakers and is exposed to market gyrations caused by policy shifts in Beijing.
Prices have halved since hitting record peaks of more than US$230 per tonne in May after the authorities imposed production curbs to meet tougher environmental standards.
Photo: Reuters
Barton would have “immense diplomatic skills and experience in dealing with crisis situations, and most importantly avoiding them,” said Gavin Wendt, a mining analyst at consultancy MineLife Pty Ltd.
Barton’s contacts in Beijing would also be “enormously useful” to Rio, Wendt added.
China has banned a range of Australian commodities imports, including coal, barley and wine, as part of an escalating diplomatic spat with the government in Canberra.
Iron ore, which accounts for about one-third of Australia’s total export revenue, has so far not been targeted, reflecting a lack of alternative sources of the steel-making ingredient.
Barton would also have the task of mending Rio’s reputation in the communities where it operates, particularly in Western Australia’s Pilbara region, home to its giant ore operations.
The fallout from Rio’s actions at the region’s Juukan Gorge led to the departure of former CEO Jean-Sebastien Jacques and other senior executives.
Stausholm, who was appointed in December last year, has reshuffled top management.
However, the company faces local opposition to major projects in Arizona, Mongolia and Serbia.
Barton, a former chairman of Teck Resources Ltd, would take over from Thompson on May 5.
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