Dominic Barton appointed Rio Tinto chair

Canada’s departing ambassador to Beijing has been appointed chair of Rio Tinto, the global miner that draws the bulk of its revenues from supplying China’s steel industry with iron ore.

Dominic Barton, who is best known for leading the management consultancy McKinsey over nine years until 2018, will replace Simon Thompson after the company’s AGM in May.

In a statement, Barton said he was looking forward to working with Rio’s board to implement a strategy that puts “decarbonisation at the heart of the business” and focuses on “building and sustaining trust with host communities”.

Rio cited his strong links to China, experience chairing Vancouver-based miner Teck Resources and “proven ability to lead a Board” as reasons for his appointment.

The Anglo-Australian group launched the search for a new chair in March after Thompson announced he would not stand for re-election at its AGM in 2022. He said he “was ultimately accountable for the failings” that led to the destruction of a sacred Aboriginal site in Australia.

“The tragic events at Juukan Gorge are a source of personal sadness and deep regret, as well as being a clear breach of our values as a company,” Thompson said at the time.

Rio’s board faced a storm of criticism over its initial decision not to fire any executives after the incident in May 2020.

Pressure from Australian pension funds and other investors eventually forced the resignations of chief executive Jean-Sébastien Jacques and two other senior executives. The miner has since been trying to repair its relations with indigenous groups.

Former Centrica boss Sam Laidlaw and Simon McKeon have been leading the search for Thompson’s successor. Potential candidates are understood to have included Mark Cutifani, the departing chief executive of Anglo American, people familiar with the matter said. Cutifani told the Financial Times in November he was not interested in the position.

During Barton’s time at McKinsey annual revenues doubled. But his tenure was marred by the company’s dealings in South Africa, where it was embroiled in political corruption scandals.

Barton has strong links to China. He was previously based in Shanghai as McKinsey’s Asia chair and sits on the advisory board of China Development Bank Capital Group. He has also served as an adjunct professor at Tsinghua University in Beijing.

Rio makes most of its revenues selling iron ore, the main ingredient for steel making, to Chinese mills. The company counts state-backed Aluminum Corporation of China as its biggest shareholder.

Rio, whose other big unit is its Canadian aluminium business Alcan, has been without a Canadian on its board since the departure of David Constable a year ago.

Barton, who was appointed as Canada’s ambassador to China in September 2019, resigned earlier this month. This followed the resolution of a diplomatic crisis between the two countries, after Beijing released two Canadians from custody.

He resignation will take effect at the end of the month allowing him to take up the position at Rio, one of the most prestigious in the mining industry.

As well as maintaining strong relations with Rio’s biggest customers in China amid rising trade tensions between Canberra and Beijing, Barton will have to address a number of issues including changing the group’s culture.

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Rio faces several regulatory issues including an investigation into payments to a consultant who helped the company secure the rights to an iron ore deposit in Guinea, which the company must decide whether to develop.

Rio offered last week to write off $2.3bn owed by the Mongolian government as the global miner seeks to complete development of the Oyu Tolgoi copper project in the Gobi Desert.

Thompson, a British former investment banker and senior executive at Anglo American, joined Rio’s board in 2014 and became chair four years later.

One of his final tasks was to appoint Rio’s finance director Jakob Stausholm as chief executive. Stausholm began in January and has announced the company will spend $7.5bn decarbonising its operations.