Rio Tinto Group is a British-Australian mining group with its headquarters in London, and a management office in Melbourne. Founded in 1873, the group has grown to become one of the world’s leading producers of a range of commodities, including aluminium, iron ore, copper, uranium, coal, and diamonds. The company has operations on six continents but is mainly concentrated in Australia and Canada, and owns gross assets valued at US$81 billion.
Rio Tinto’s giant Mongolian mine gets new chief executive
The top copper marketing executive at Rio Tinto will take over as the head of Oyu Tolgoi, the giant Mongolian copper and gold mine controlled by Rio Tinto, Oyu Tolgoi said.
Oyu Tolgoi’s board, including three new Mongolian members, approved the appointment of Craig Kinnell as president and chief executive, replacing Cameron McRae from October 1. McRae is leaving Rio Tinto.
Kinnell takes over at a tricky time as Rio Tinto is trying to resolve disputes with the Mongolian government over terms for US$4.2 billion in project financing to fund an expansion at Oyu Tolgoi, which is crucial to Rio’s and Mongolia’s growth.
Rio put the US$5 billion expansion project on hold in August and said it would have to cut up to 1,700 jobs due to the project financing dispute.
The board is meeting in Ulan Bator this week to try to resolve some of the issues. Some analysts have speculated that Mongolia’s concerns about Rio Tinto’s management fee, capital costs for the open pit mine, which is now producing, and the planned underground mine, will be hard to resolve.
“The best we can determine is that all stakeholders want the outstanding issues to be resolved and are confident they will be, but a number of items still need to be agreed before the OT board can go back to the project finance syndicate members,” analysts at Resource Investment Capital said in a note on Wednesday.
There had been speculation Rio Tinto may appoint a Mongolian to head Oyu Tolgoi to help smooth relations with the government.
“Craig’s years of experience running mines and selling minerals at international market prices make him the perfect choice to successfully lead the project in the coming years,” Oyu Tolgoi Chairman Batsukh Galsan said in a statement.