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Cost cutting, reduced debt to remain focus under new Rio boss

Rio Tinto has announced the retirement of chief executive Sam Walsh, and his succession by Copper & Coal chief executive Jean-Sébastien Jacques.

Walsh will retire on July 1, after almost seven years on the Rio Tinto board.

“I have been seriously fortunate to lead one of the world’s best companies,” Walsh said this week.

“I am very proud to have played my part, together with all of our employees around the world, in returning Rio Tinto to a position of industry leadership and strength.

“I have always wanted to make a difference and I believe we have achieved that.

“After 25 great and enjoyable years with Rio Tinto, now is the right time to pass the reins on to Jean-Sébastien.”

Jacques has been promoted to deputy chief executive with immediate effect, to work with Walsh through the transition period. Chairman Jan du Plessis praised Jacques’ experience, and “demonstrated track record”.

“He has run complex operations and projects across five commodities and five continents. J-S is a highly-regarded leader who shares Rio Tinto’s strong values and has embraced its culture,” du Plessis said.

“Today’s announcement is the culmination of a comprehensive and deliberate executive succession process. The board has decided that J-S is the right person to lead Rio Tinto in an increasingly complex world filled with both challenges and opportunities for our industry.”

Jacques said he looked forward to working with Walsh throughout the transition.

“Rio Tinto is a world-class company with some of the best tier one assets and people in the industry,” he said. “It is an honour and a great privilege to be given the opportunity to lead the company as we continue to develop the business and pursue the delivery of value for shareholders.”

Value for shareholders was the message in an internal email reportedly obtained by The Australian this week, in which Jacques said he will take a conservative leadership approach, focused on cost-cutting and debt reduction.

“There is no doubt I will continue to make safety a priority for the business and the focus on maintaining a strong balance sheet will be paramount,” Jacques is said to have written.

“We will also retain the heavy emphasis on the ongoing drive for cash in the business.”

One London-based analyst also told the AFR this week that the new Rio boss would likely increase the miner’s stake in the massive Oyu Tolgoi copper mine Mongolia.

“Rio will be very interested in Tier 1 copper assets, but it’s a crowded field,” Investec mining analyst Hunter Hillcoat was quoted by Fairfax. Rio currently owns 51% of Turquoise Hill, the Canadian firm which owns a 66% stake in Oyu Tolgoi.

Hillcoat predicts one of Jacques’ first major moves as CEO will be buying the remaining 49% of Turquoise Hill, to bolster Rio’s copper portfolio.

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