DON'T MISS : Talking Africa New Podcast – As #EndSARS escalates, Nigerians ask: who's in charge

Guinea’s Simandou iron ore project uncertain after Rio Tinto upheaval

By Christophe Le Bec
Posted on Friday, 18 September 2020 15:54

View of the Simandou deposit in Guinea.
View of the Simandou deposit in Guinea. ©Rio Tinto

Both the CEO and the iron ore division head will be leaving the Australian mining giant. Their exits could turn the tide of the company’s Guinea-based project.

On 11 September, the chairman of the Anglo-Australian mining giant announced the imminent departure of the group’s chief executive, Jean-Sébastien Jacques.

At the helm of the company since 2016, Jacques was ultimately unable to withstand the pressure, following four months of turmoil, of being lambasted by human rights organisations, Australian MPs, certain Rio Tinto shareholders and other mining industry professionals.

READ MORE Ghana miners get new finance options from Thyssenkrupp

His downfall?

The destruction on 24 May 2020 of two 46,000-year-old Juukan Gorge rock shelters – cave-like structures built and used by Aboriginal tribes in western Australia’s Pilbara region – during blasting to expand the Brockman 4 iron ore mine, which went ahead despite reports attesting to their significance to local communities.

The French engineer, educated at École Centrale Paris, had previously spearheaded the Oyu Tolgoi copper megaproject in Mongolia and pushed out Rio Tinto’s developers in charge of the Simandou iron ore deposit in Guinea, a project he didn’t believe in. Jacques will leave the group on 31 March 2021, allowing the company time to find a successor.

The destruction of the Juukan Gorge rock shelters has also toppled the Australian national and iron ore division CEO Chris Salisbury, as well as Simone Niven, group executive of corporate relations. They will exit the company by the end of the year.

Shareholders becoming more discerning

The fall of a major mining boss due to relations with local communities living adjacent to a mine site is a first for the extractive industry and a sign that shareholders have become more discerning about such issues, including in Africa.

READ MORE Governance crisis erupts at Africa-focused miner Vedanta

In fact, institutional investors – particularly the Australian government-backed Future Fund – were calling for the executives involved to face tougher punishments than just the loss of their bonuses as was agreed upon this past August.

The reshuffling will inevitably impact the group’s African assets.

In the iron ore division, whose boss is set to change, the new leader will have to decide the fate of the company’s Simandou assets, which Rio Tinto has not managed to sell to its Chinese partner Chinalco.

READ MORE Coronavirus: Pandemic is the needed catalyst for South Africa’s mines

The group also has operations on the continent through its mineral sands business, which is active in South Africa (Richards Bay) and in Madagascar (Fort Dauphin) and headed by the Mongolian national Bold Baatar.

Baater is well-known face at Mining Indaba, the world’s largest mining investment conference bringing together African mining industry professionals in Cape Town.

Rio Tinto’s new boss will have to find a way to calm the situation at the Richards Bay mine, which since the end of 2019 has been the site of several violent incidents involving neighbouring communities, even leading the business to suspend operations.

We value your privacy

The Africa Report uses cookies to provide you with a quality user experience, measure audience, and provide you with personalized advertising. By continuing on The Africa Report, you agree to the use of cookies under the terms of our privacy policy.
You can change your preferences at any time.