Rio Tinto CEO race: Labor’s Madeleine King wants Simon Trott or Kellie Parker to succeed Jakob Stausholm

Rio Tinto should be headquartered in Perth and run by a West Australian according to Madeleine King, who said: ‘I hope Rio Tinto think long and hard about who they choose’. Meanwhile, Jakob Stausholm and the board stay quiet on their divorce.

Rio Tinto's Western Range iron ore project in the Pilbara. Picture: Supplied

Federal resources minister Madeleine King urged mining giant Rio Tinto to think long and hard about chief executive Jakob Stausholm’s successor as the Dane deflected questions over the nature of his apparent falling out with the board.

The Labor minister also said Rio should consider moving its headquarters from London to Perth and evaluate the candidacy of executives Simon Trott and Kellie Parker, both West Australians, for the CEO race.

Mr Trott is a leading internal candidate being head of its biggest earner, iron ore.

But in his first public appearance since Rio disclosed on May 23 that its CEO would leave before the end of the year, Mr Stausholm erred on the side of diplomacy when asked about a conflict with chair Dominic Barton that led to his speculated ousting.

“I’m not commenting on anything. We have completely agreed between ourselves that it is the right time to look for succession, and I will be stepping down,” Mr Stausholm said on Friday in the Pilbara. “I’m very happy and proud about my what will be five years as CEO for this company.”

Rio Tinto CEO Jakob Stausholm and China Baowu Group chair Hu Wangming in the Pilbara. Picture: Brad Thompson

He agreed with Mr Barton that Rio needed to “double down” on operational excellence and project delivery, and had said as much himself at the company’s annual general meeting.

“This project here is an example,” he said of the Western Ridge iron ore mine in Western Australia. “This project is on time, on schedule. We are back there. We still have further potential to do in the best operator. I said that at the full year, and my chairman repeated that a couple of weeks ago,” Mr Stausholm said.

“It is very important to say we in the management team and the whole board is absolutely aligned around the values of Rio Tinto … our strategy and strategic choices, and about the assessment of our performance. So there is no misalignment.”

Asked if he had a hand in developing executive talent within Rio, he replied: “I hope so.”

The leadership upheaval exposed growing tension between Mr Stausholm and Mr Barton that is thought to have come to a head in London days before the exit announcement. Mr Stausholm is the fourth Rio CEO to leave on uneasy terms in 12 years.

Western Range is one of a series of replacement mines Rio needs to open in the Pilbara at a cost of $US13bn out to 2030 when the much-vaunted Rhodes Ridge project is due to start production.

Rio has also pumped $US6.2bn into the building the Simandou iron ore project in the African nation of Guinea alongside its Chinese partner.

Rio Tinto's Western Range: a model of Australian and Chinese co-operation, according to partner Baowu. Picture: Supplied

The Rio board is bracing for a political storm at the company’s already problematic Oyu Tolgoi copper mine following the resignation of Mongolian prime minister Oyun-Erdene Luvsannamsrai.

Oyu Tolgoi is 66 per cent-owned by Rio but it and the government remain embroiled in legal disputes around taxes, and Mr Oyun-Erdene had been a strong supporter of the mine.

Perth-based Mr Trott and Mongolian-born chief commercial officer Bold Baatar are frontrunners in the succession announcement expected before the release of Rio’s third quarter results in October.

Mr Trott was one of the big winners in the January 2021 leadership shake-up overseen by Mr Stausholm in the aftermath of Juukan Gorge when he was handed responsibility for running the iron ore operations.

Ms King said the Rio top job was one of the most important in the world to Australian business.

“So I hope Rio Tinto think long and hard about who they choose, and really important is that their ongoing connection, if they remain based in London, is with Western Australia,” she said.

“Simon Trott and Kellie Parker, two West Australians, have been great in restoring the reputation of this company after the tragedy of Juukan Gorge.”

Jakob Stausholm. Picture: Lyndon Mechielsen

Ms King argued Rio should be domiciled near its biggest customer: China.

Mr Trott, who hails from a farming family in the Wheatbelt town of Wickepin in WA, returned home from Singapore where he built strong ties with customers in China – including Baowu – as chief commercial officer.

On top of a decades-long relationship and the Western Range joint venture, Baowu and Rio are working together on developing the high-grade Simandou project in Guinea, which also involves Rio’s biggest shareholder Chinalco.

Mr Trott refused to comment on Friday when asked if he wanted the job.

Ms Parker is from Wickham on the Pilbara coast and is Rio’s chief executive in Australia.

Western Range needed design changes after Juukan Gorge to accommodate the heritage concerns of the Yinhawangka native title custodians. Rio (54 per cent) and Baowu (46 per cent) formed a joint venture to the develop the mine, investing $US2bn including $US1.3bn from Rio.

Western Range’s annual production capacity of 25 million tonnes will help sustain production for Rio as it battles declining grades at its ageing mines.

Rio and Baowu have a sales agreement at market prices covering up to 126.5 million tonnes of iron ore over approximately 13 years. Those tonnes represents Baowu’s 46 per cent interest in the anticipated 275 million tonnes of production from Western Range.

Baowu chairman Hu Wangming said Western Range was a model for China-Australian trade and economic co-operation.

The author travelled to the Pilbara as a guest of Rio.

Originally published as Rio Tinto CEO race: Labor’s Madeleine King wants Simon Trott or Kellie Parker to succeed Jakob Stausholm