Rio Tinto CEO calls for ‘United Nations of the mining industry’

Copyright © 2017 Rio Tinto

Rio Tinto chief executive officer Jean-Sebastien Jacques has told reporters at a conference in the United States that mining requires a formal partnership across the industry like the United Nations.

Jacques delivered a speech at the Bank of America Merrill Lynch (BAML) conference in Miami, Florida, this week where he fielded questions from the media.

When asked if forming partnerships was a potential solution to battling rising commodity prices and resource nationalism, Jacques said that they “absolutely” were, and that where partnerships had previously been seen as “value leakage” due to the rise of the commodities supercycle, they should instead be seen as “risk mitigation”.

“Going forward, we need to spread the risk,” he said. “In some very challenging jurisdictions, we will have to build the United Nations of the mining industry.”

The subject of Jacques’ speech at BAML’s Metals & Mining conference focused on Rio Tinto’s 2017 company performance; Jacques said the company had improved its EBITDA margins to their best level in a decade, divested $2.7 billion of its portfolio (with a further $5 billion of divestments announced for 2018), and declared $9.7 billion in cash returns, including a record $5.2 billion dividend.

“In 2017, Rio Tinto was responsible for half of the total cash return across the sector,” he said. “We again delivered the highest return, in both absolute and relative terms. And our solid financial position gives us a real competitive edge.”

Other topics broached include the aforementioned issue of “resource nationalism”, the death of a worker at the company’s Sorel-Tracy site in Quebec, and productivity growth, with a $1.5 billion drive of additional yearly free cash flow to be implemented from 2021.