At the opening last week of the Western Range iron ore mine in the remote Pilbara region of Australia, Jakob Stausholm gave one of his final speeches as head of the world’s second-largest mining company.
“When I was interviewing for the job as CEO, I said succession planning starts on day one,” the Rio Tinto chief told reporters. Standing behind him in the red dirt was Simon Trott, head of the company’s iron ore division and a frontrunner for the role.
Yet such planning had not been apparent just a few weeks earlier when Rio announced Stausholm’s departure after almost five years at the helm. The news took both investors and senior figures at the Anglo-Australian company by surprise, with the fact that the board did not have a successor lined up raising eyebrows across the industry.
Rio is not the only major mining company looking for a new chief executive. Its search is part of changing of the guard taking place across the senior ranks of the industry, with all four of the world’s biggest iron ore producers either undergoing, or poised for, a shake-up at the top.
This next generation will lead an industry at a crossroads, as demand for iron ore — traditionally their most profitable product — flatlines and miners look to other metals and minerals linked to high-tech industries and the energy transition.
The pace of leadership change “is unprecedented, in terms of that turnover, in such a short period of time”, said Bob Brackett, mining analyst at Bernstein.
As well as Stausholm at Rio, BHP, the world’s largest miner, is expected to seek a new chief executive next year when Mike Henry steps down, while Brazil’s Vale welcomed its new head, Gustavo Pimenta, late last year. Australia’s Fortescue has also shuffled its top leadership after Dino Otranto, head of the company’s metals division, had his role expanded.
The management changes coincide with the imminent first production from Rio’s huge Simandou mine in Guinea, which is expected to keep iron ore prices in check.
Meanwhile, the shift to newer metals and minerals has led to Rio placing more than $10bn in bets on lithium during Stausholm’s tenure via acquisitions, joint ventures and capital expenditures.
BHP is investing heavily in potash, with its Jansen mine in Canada set to start production of the fertiliser next year, as well as placing a huge wager on copper demand with large investments in South Australia and Latin America.
The race to secure access to copper — the red metal essential for wiring and electricity grids — has been the driving force behind several mega-deal attempts, though the largest efforts have so far been unsuccessful. BHP made a £39bn bid for Anglo American but was rejected, while Glencore and Rio also last year held secret merger talks that did not progress.
Rio’s board and Stausholm failed to see eye-to-eye on the Glencore merger, according to people familiar with their discussions. Speaking at Western Range, Stausholm said there had been “no misalignment” between himself and the board, when asked about reports of tension with Rio chair Dominic Barton, but added that it was “the right time to look for a successor”.
George Cheveley, portfolio manager at investment group Ninety One, said M&A would remain high on the agenda across the big miners, noting “frustration in boards” about the need to move faster.
“The companies need to get bigger — both from an investors’ demand point of view, and because of the need for bigger projects — and the only way to do that is through consolidation,” Cheveley said. “There’s a feeling that they need someone who can be more assertive with M&A.”
At Rio, the selection process for the next chief executive is well under way, with internal frontrunners including Trott, Jérôme Pécresse, head of aluminium, and chief commercial officer Bold Baatar, according to people close to the company.
Trott is a long-serving Australian who has run Rio’s iron ore operations since 2021 and held the role of chief commercial officer prior to that. He declined to comment at the Western Range opening whether he had applied for the job or whether his prominent role in the ceremony was a dress rehearsal for the position.
Pécresse, a French citizen who joined Rio only two years ago, is considered to have a strong if short record improving operations at the company’s aluminium business. He was previously chief executive of GE Renewable Energy.
Baatar, a former banker, joined Rio in 2013 and ran its copper business, before becoming chief commercial officer. He is credited with sorting out the ownership of the Oyu Tolgoi copper mine in Mongolia, and getting Simandou on track.
Who takes the helm at Rio is of huge consequence for Australia, where the company employs 23,000 people, almost half the company’s headcount.
Madeleine King, Australia’s mining minister, also highlighted the role that the current leadership had played to repair relations with the indigenous community after the destruction of ancient rock shelters at Juukan Gorge, an event that was the catalyst for the last change at the top at Rio.
“The global leader of Rio Tinto is an extremely important role and the person that does that . . . is of enormous importance to Western Australia, and therefore Australians,” King told the Financial Times.
Stausholm said he hoped to “pass the baton” on to the new chief when the appointment was made later this year, putting the transition in the context of the ethos of the region’s indigenous community.
“What you learn [from them] is we’re all just a small part of the puzzle,” he said. “Learning from the past and bringing it to the future.”
