Rio Tinto's new CEO seen grabbing bigger slice of Mongolia's Oyu Tolgoi copper

Jean-Sebastien Jacques has been named as the new CEO of Rio Tinto, a job that iron ore boss Andrew Harding had been ...
Jean-Sebastien Jacques has been named as the new CEO of Rio Tinto, a job that iron ore boss Andrew Harding had been widely tipped to get. Photo: Philip Gostelow

Rio Tinto's incoming chief executive, Jean-Sebastien Jacques, has been tipped to boost the miner's stake in the vast Oyu Tolgoi copper mine in Mongolia when he replaces incumbent Sam Walsh in July.
Mr Jacques, the current chief of Rio's copper and coal division, has hinted he will further the strategy of prioritising the revamp of its balance sheet and cost base as the miner navigates a crunch in the price of many of the key commodities it produces.
But one London-based analyst says Rio will almost certainly look to boost its 33 per cent stake in the copper deposit considered as the company's most exciting growth project.
Rio holds a 50.79 per cent stake in the Canadian-listed Turquoise Hill, which owns 66 per cent of Oyu Tolgoi, and broker Investec said mopping up the balance of the Turquoise Hill shares would be a low-risk priority for the big miner given the strong competition for other Tier 1 copper assets around the globe.

"Rio will be very interested in Tier 1 copper assets but it's a crowded field," said Investec mining analyst Hunter Hillcoat.  "The only specific target would be consolidation of Oyu Tolgoi and I see it as buying out the balance of Turquoise Hill."
It is thought the miner could buy the balance of Turquoise Hill stock for around US$2.3 billion ($3 billion).
Mr Hillcoat added he expected the Mongolian government to retain its 34 per cent stake in Oyu Tolgoi although an election timed for June, just weeks before Mr Jacques assumes the chief executive reigns, will undoubtedly have a bearing on the timing of any potential move by Rio.
Several landmarks in 2015 have handed Rio the confidence to grow its stake in Turquoise Hill including the development agreement for the second stage of Oyu Tolgoi that was struck with the Mongolian government in May, and the $US4.4 billion debt package that was secured for the mine expansion in December.
Mr Jacques's elevation to the top role at Rio surprised many in the market as the iron ore division boss, Andrew Harding, was seen as the most logical successor to Mr Walsh, who himself was promoted to the top job three years ago after heading the iron ore unit.
With iron ore constituting about 90 per cent of Rio's earnings, the division remains hugely significant in the company's commodity stable and Mr Hillcoat said he expects Mr Harding may stay on in his current role despite missing out on the top job given volatility elsewhere in the resources sector.
"Andrew will be disappointed I'm sure," said Mr Hillcoat. "But this is not the bull market it used to be. Any new CEO role he could take on would likely involve trying to resuscitate a struggling, debt-ridden, once-major-now-minor miner versus the comfort of running an existing world class operation."
In an internal email to staff on Friday, Mr Walsh emphasised the achievements over his tenure as boss which included $US1.8 billion ($2.35 billion) in asset sales and generating cost reductions of almost $US2 billion.
"We have delivered what we said we would. We have improved safety, we have lowered costs, we have reduced capital and working capital, we have focused on cash, we have strengthened the balance sheet and we have delivered returns to shareholders," said Mr Walsh.
"But perhaps most importantly, we are now all acting as owners of the business. I am seriously proud of the value we have delivered together, and I look forward to seeing what's to come."

Source:The Sydney Morning Herald


Post a Comment

Facebook page

Powered by Blogger.


Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Israel Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Kyrgyzstan Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and US Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive