Dominic Barton enters Rio Tinto fray, with China ties front and centre
In the few words that Dominic Barton used to introduce himself to Rio Tinto shareholders as their new chairman, he made it clear he saw the times as pivotal for the 149-year-old miner.
Barton was the global managing partner of McKinsey and has first-hand experience in elephant-bumping superpower geopolitics.
At the company’s annual meeting on Thursday, emissions, community relations and work culture were well aired. Managing the geopolitics around Rio’s huge projects expected to deliver for decades was rather underdone.
China comes first, both as Rio’s major export market for iron ore and because Chinese state-owned aluminium producer Chinalco is its largest shareholder.
A native Canadian, Dominic Barton was Canada’s ambassador in Beijing.
Asked at the annual meeting if Rio could contemplate stopping shipments of iron ore to China as Western companies have halted trade with Russia, his view was grownup.
Russia and China’s relationship with the West was very different. The integration of China’s economy with the world in trade and technology was deep and complicated.
He pointed out that in his three years in Beijing during tense relations between China and Canada over the detaining of Hua Wei’s chief financial officer and daughter of the telco’s founder, trade actually went up.
Last month, the Rio board signalled support for the Simandou project in Guinea. The largest untapped iron ore project in the world is a joint venture between Chinalco and Rio but for years it has been plagued by geopolitics. One fund manager likened the saga to a John Grisham thriller. African iron ore will be going to China and Rio will help deliver that. Barton grew up as a small boy in West Africa.
In Mongolia there is another historic quagmire with the giant copper opportunity in Oyu Tolgoi. Rio chief executive Jakob Stausholm is shifting the dial through the company’s proposed buyout of the Canadian company Turquoise Hill that owns 66 per cent of the mine.
Both Guinea and Mongolian governments are powerful players in these projects.
And in Serbia the $2.4bn Jadar lithium project was blocked by the government in January. Serbian law requires that an environmental impact statement is not published until after government approval is given but environmental protests erupted during the election campaign. Jadar is one of Rio’s largest projects and is future facing. It also could contribute 4 per cent to Serbia’s GDP.
Barton told shareholders he started his career in Australia in the late 1980s. Later as head of McKinsey in Asia he was in Australia 10 times a year. His wife is Australian and two of his four children live in Australia. He looks forward to spending significant time in-country.
