Leadership Shift Signals Strategic Change
Rio Tinto has started searching for a new chief executive as Jakob Stausholm prepares to step down later this year. The board made the decision following internal discussions about the company’s future direction.
Stausholm joined Rio Tinto as chief financial officer and became CEO after the 2020 Juukan Gorge destruction. The company destroyed a 46,000-year-old Aboriginal site and faced global criticism.
Figure 1: Jakob Stausholm to step down as CEO after 5 years of excellence
Stausholm Repaired Relationships, Pushed New Investments
Stausholm focused on repairing stakeholder trust and advancing new projects. He helped guide Rio’s expansion into lithium, a material avoided by rivals.
He also contributed to major projects like the Oyu Tolgoi copper and gold mine in Mongolia and the Simandou iron ore deposit in Guinea.
Board Prioritises Operational Experience
Rio’s board now seeks a leader with operational strength and proven mining experience. This marks a shift toward growth-focused leadership.
People familiar with the company said the next CEO must maximise Rio’s growth assets over the coming decades.
Figure 2: The board seeks a leader with operational strength and mining experience
Potential Candidates Emerge from Within
Simon Trott, Rio’s iron ore head, is considered a strong candidate due to his industry knowledge and stakeholder relationships.
Trott led reconciliation efforts following the Juukan Gorge incident. He is known for his diplomatic abilities, according to people close to the firm.
Jérôme Pécresse, head of aluminium, is also a contender. He joined Rio in October 2023 and turned around the aluminium division.
“It’s not something that you are candidate for, it’s something that you’re eligible” for, Pécresse said Friday on BNN Bloomberg Television. “It’s for the board to decide who is eligible and who is not.”
Bold Baatar Also Considered
Chief commercial officer Bold Baatar is also under consideration. He played a key role in advancing Simandou after long delays.
Despite his achievements, Baatar is not viewed as a frontrunner, according to sources with knowledge of the internal discussions.
Figure 3: Bold Baatar is also under consideration, but not a frontrunner
Investor Pressure Focuses on Technical Expertise
Stausholm improved the performance of Rio’s mines and smelters, but some investors raised concerns about his technical background.
Peers at BHP, Anglo American and Glencore have decades of mining experience. This comparison increased pressure on Rio’s board.
Rob Stein, a Macquarie Group analyst, said Stausholm resolved several key issues during a challenging time. “Now the strategic priority appears to be growth, and the new CEO may be a growth-oriented leader — as opposed to Jakob who was a cultural change agent.”
Market Reacts to Leadership News
The decision surprised markets, but insiders said it had been expected within the company. Board members believed operational experience was now essential.
Matthew Haupt, portfolio manager at Wilson Asset Management, said: “The next five years appear very operation driven. It’s probably a good time for Jakob to find a new challenge.”
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Rio Prepares for Expansion and Deals
Stausholm repositioned Rio for growth, beginning with the acquisition of Arcadium Lithium Ltd. in 2023. He also invested in Argentina’s Rincon project.
This marked Rio’s entry into lithium, a commodity often dismissed by competitors as oversupplied and low value.
BHP and others have avoided lithium due to its geological abundance and volatile pricing.
Iron Ore Remains Core Business
Iron ore continues to generate over 80% of Rio’s underlying earnings. The steelmaking material has supported the company’s strong cash flow.
However, as China’s economic growth slows, the long-term outlook for iron ore remains uncertain.
Rio aims to reduce reliance on iron ore through diversification and strategic investments.
Unfinished Business Includes Deal Strategy
Stausholm’s successor will also oversee Rio’s approach to mergers and acquisitions. Rio previously engaged in discussions with Glencore.
The talks lasted months and could have led to the creation of the world’s largest mining firm.
While the deal failed over valuation differences, it demonstrated Rio’s willingness to consider large-scale consolidation.
New CEO Announcement Expected by October
In an internal message, Stausholm told staff that a new CEO should be in place before October’s production results.
This transition comes at a critical time for Rio, as the miner pursues long-term projects and prepares for market shifts.
The board continues internal discussions to select a leader with the experience to guide Rio through its next growth phase.
