Gina Rinehart says Rio Tinto chief should be based in Perth

Rio Tinto partner Gina Rinehart has urged Rio to let its new chief executive Simon Trott stay in Perth, while casting shade on its African iron ore project.

Simon Trott at Rio Tinto’s Baowu Western Range opening in June.

Mining colossus and Rio Tinto partner Gina Rinehart has backed Simon Trott’s promotion to chief executive but taken a swipe at the company’s venture into iron ore in Africa.

Mrs Rinehart, Australia’s richest person off the back of her private company’s Roy Hill iron ore mine in Western Australia and nearby mining partnerships with Rio, congratulated Mr Trott on his appointment.

However, she reignited her campaign for Rio to base its chief executive in WA, where it continues to depend on iron ore for most of its earnings. Mr Trott is based in Perth but will move to London in his new role.

“When Sam Walsh went from iron ore chief to CEO of Rio, I suggested that he transfer Rio headquarters to where it makes most of its money, WA,” Mrs Rinehart said.

“Still think this would be good for WA, and much safer than Guinea.”

Rio’s venture into iron ore in Guinea alongside Chinese partners that include major Rio shareholder Chinalco has been a sore point for Mrs Rinehart’s Hancock Prospecting.

Mr Trott has flagged blending Rio’s share of high-grade iron ore from the Simandou operations Guinea with WA product once it lands in China.

The Simfer mine at Simandou is expected to start sending iron ore to China before the end of 2025 and to build up to annual production of 60 million tonnes, with Rio’s share 27 million tonnes, by 2028.

Mrs Rinehart repeated her warning about falling business investment in Australia last month after Rio pulled the trigger on building a new $US1.6bn ($2.4bn) iron ore mine in partnership with Hancock Prospecting.

The new mine, an extension of Rio and Hancock’s Hope Downs joint venture, is expected to start production in 2027 with the project known as Hope Downs 2 expected to support about 1000 full-time jobs.

Hancock encouraged Rio to push ahead with Hope Downs 2 and also wants Rio to develop other deposits that sit within their joint venture sooner rather than later under Mr Trott’s leadership.

Rio started the approval process for the Hope Downs 2 project in 2021, a year after it earned international condemnation for blowing up 46,000-year-old rock shelters at Juukan Gorge in WA’s Pilbara.

The fallout resulted in Jean-Sebastien Jacques, who succeeded Mr Walsh in July 2016, losing his job, along with iron ore boss Chris Salisbury.

Mr Trott was installed to run the WA iron ore operations by Jakob Stausholm, whom he replaces as chief executive from August 25.

Rio has faced bigger mine approvals hurdles and more complex traditional owner negotiations since Juukan Gorge, leading to doubts about its capacity to deliver on its target of a new mine a year until 2030 in the Pilbara, where it faces problems with declining grades at existing operations.

The Hope Downs 2 project reinforced Rio’s relationship with Mrs Rinehart that is founded on their Hope Downs joint venture that currently includes the Hope Downs 1 and 4 and Baby Hope mines.

Mr Trott led the transaction team that pulled together the Hope Downs joint venture with Hancock signed in 2006.

The other deposits covered by the joint venture that Hancock wants to see developed are known as Hope 3, 5 and 6. These deposits are not part of Rio’s current mine replacement timetable, which runs to the end of the decade.

Rio has earmarked $US13bn for spending on new mines, plant and equipment in the Pilbara over the next three years as Mr Trott and the board ponder his replacement as iron ore boss.

Rio is counting on the Rhodes Ridge project, which sits close to the Hope Downs mines, to become the backbone of its Pilbara operations from 2030 and produce about 40 million tonnes a year.

Rhodes Ridge was at the centre of legal battles between Hancock and the heirs to the fortune of Peter Wright, including billionaire Angela Bennett, with Wright Prospecting eventually winning control. Mrs Rinehart’s father, Lang Hancock, and Wright were business partners who helped pioneer the iron ore industry in WA.

Wright’s descendants sold most of their stake in Rhodes Ridge to Japanese conglomerate Mitsui for $8bn earlier this year. They are currently locked in a bitter court battle with Mrs Rinehart that involves royalties from the Hope Downs joint venture.

Originally published as Gina Rinehart says Rio Tinto chief should be based in Perth