Rio Tinto Ltd (LSE:RIO) announced a major restructuring of its operations into three primary divisions—Iron Ore, Aluminium & Lithium, and Copper—to simplify its business and focus on its most profitable assets.
Matthew Holcz has been appointed CEO of the newly consolidated Iron Ore division, which will merge the company’s operations in Western Australia with its Canadian business and Guinea’s Simandou project upon completion. The Aluminium & Lithium division, led by Jérôme Pécresse, will combine Atlantic and Pacific aluminium operations with the Arcadium Lithium business acquired earlier this year. Katie Jackson will continue to oversee the Copper division, concentrating on ramping up production from the Oyu Tolgoi mine.
Operations outside these three key areas, including Borates and Iron & Titanium, will be reviewed under the chief commercial officer, with future plans to be announced. Earlier reports indicated that Rio was considering the sale of its titanium unit due to low returns.
Shares in Rio Tinto closed 1% higher in Australia following the announcement. As part of the leadership changes, Sinead Kaufman, currently head of the Minerals division, will leave in October after nearly three decades with the company, and the chief executive Australia role, held by Kellie Parker, will be eliminated.
The changes follow the appointment of Simon Trott as CEO on Monday, succeeding Jakob Stausholm. Trott, who formerly led Rio’s iron ore operations in Western Australia, has pledged to deliver enhanced value for both shareholders and communities. His promotion was well received by investors given his track record in leading Rio’s most profitable segment, which accounts for more than half of the company’s earnings.
“A simplified business structure, grounded in our fundamental commitment to safety and with sharper focus on the most compelling opportunities we have, will enable us to deliver new standards of operational excellence and value creation,” Trott said in the announcement.
“We have delivered resilient results this year, remain on track to deliver strong mid-term production growth, and continue to make progress against our objectives. Our focus now is on unlocking further shareholder value, putting both our capital and talent where it will deliver the greatest returns.”
Rio Tinto is also increasing investment in its iron ore business, including the Simandou project in Africa and several new mines in Australia, while pursuing a target of producing 1 million metric tons of copper annually by 2030.
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