Reuters: New Boss of Rio Tinto Faces Dual Challenges of Cost Reduction and Transformation
Reuters, July 8th. The world's largest iron ore producer, Rio Tinto, is about to finalize its new chief executive officer (CEO) this month, with the final candidates presenting to the board in London this week, and the appointment expected to be announced as early as late July. According to two informed sources, Chairman Dominic Barton requires the new CEO to have the courage to push for "major acquisitions" while significantly cutting operating costs - the company's costs increased by 46.5% between 2020 and 2024, far outpacing BHP and Anglo American. Internal candidates include Simon Trott, head of iron ore, and Bold Baatar, Chief Commercial Officer. However, analysts point out that during Trott's tenure, Rio Tinto has remained the most expensive iron ore producer in Australia, with declining ore quality; Baatar had to adjust his copper mine development plan due to the Mongolian government's delayed issuance of mining permits. The new CEO needs to balance capital expenditures of $30-35 billion over the next ten years (including an investment of $8-9 billion in lithium mines in Chile) with the demand for a strategic shift toward copper mines. RBC analyst Kaan Peker emphasized, "The new appointee must first boost the stock price (which underperformed compared to peers during the current term) to gain an advantage in stock swap acquisitions." Barrenjoey analyst Glyn Lawcock added operational challenges: "It was extremely difficult to control costs over the past four years due to the Juukan Gorge incident and extreme weather."
Original article: https://www.toutiao.com/article/1837077992177673/
Statement: This article represents the views of the author.