By Peter Milne
Rio Tinto chair Dominic Barton has defended activists pushing the global miner to do better on environmental, social and governance issues.
Asked how the miner’s board would counter a “scourge” of “ESG zealots” acting against the interests of small shareholders, Barton told the miner’s annual general meeting he had a different view.
Rio Tinto chairman Dominic Barton was a consultant at McKinsey for more than 30 years.Credit: NYT
“You don’t have long-term shareholder value if you’re not impeccable on your ESG,” he said.
“Just in case you think I’m a bit soft on capitalism, I believe I’m a hardcore capitalist.”
The global miner has been reinventing itself since it destroyed 46,000-year-old culturally significant rock shelters at Juukan Gorge in the Pilbara four years ago, also blasting a hole in its social licence to operate where it earns more than half its revenue from mining iron ore.
Barton said yesterday in Perth that the Anglo-Australian miner would need to make some difficult trade-offs to balance providing the materials needed for global growth and the energy transition with ESG expectations.
The world needs to mine as much copper in the next 20 years as has been produced in human history.Credit: Bloomberg
Rio Tinto is facing that dilemma in Arizona in the US where, with BHP, it is developing the Resolution Copper mine that is opposed by local Apache tribes.
The world needs to mine as much copper in the next 20 years as has been produced in human history – 700 million tonnes of copper – to meet the Paris Agreement climate goals, according to the International Energy Agency.
“We are getting immense pressure to proceed because of the copper reserves,” he said.
The deposit at Oak Flat, Arizona, holds 25 per cent of US reserves of the metal crucial for the electrification of the economy.
Rio Tinto chief executive Jacob Stausholm said a number of US senators were pushing to classify copper as a critical mineral.
Stausholm said the US produces less than half the two million tonnes of copper it uses each year and demand is expected to double within 10 years, and the Resolution Copper mine is the best project to help fill the gap.
“But ultimately, it’s a societal choice,” he said.
“We are super, super sensitive about the 11 first nations who have connection to the land.”
Stausholm said the large mine with high-grade ore would have less environmental impact than a series of lower grade smaller operations.
Barton, a Canadian who has chaired Rio for a year, is bullish about demand from China as it pushes to urbanise and decarbonise. He said few people appreciated the scale of China’s efforts in renewable energy.
Barton also said Rio needed to provide more detail on how it would reduce its Scope 3 emissions produced by customers using its products.
“We’re nervous about putting up numbers that we actually can’t control,” he said.
“We do not want to do any greenwashing, and we’re religious about that.”
Rio was challenged at the AGM on its record of taking care of the land it has mined with just 16 square kilometres rehabilitated in 2022 of the about 1700 square kilometres that could be done now.
“You’re right to raise the scale of what we need to do,” Barton said, “there’s a lot of effort and focus on it.”
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