Stausholm dismisses rift rumours as Rio opens $2B mine

[Ben Graham]

The opening of the Western Range mine could be Stausholm’s last visit to the Pilbara as CEO. (Image courtesy of Jakob Stausholm’s LinkedIn.)

Rio Tinto’s (LON: RIO) departing chief executive Jakob Stausholm insists there is no rift between him and chairman Dominic Barton, despite reports that have fuelled speculation about tensions within the board over strategic direction.

Speaking publicly for the first time since the announcement of his departure two weeks ago, Stausholm addressed the rumours at the official opening of Rio’s $2-billion Western Range iron ore joint venture with China’s Baowu in Western Australia’s Pilbara region. 

The executive said the management team and board remained “absolutely aligned” on the company’s values, strategy, and performance assessment, downplaying any suggestion of internal division. He also said his successor could “very well be” an internal candidate.

Stausholm, who joined Rio in 2018 and became CEO in 2021, stepped in after the company’s controversial destruction of 46,000-year-old Aboriginal rock shelters. The incident prompted the resignation of then-boss Jean-Sébastien Jacques following investor and Indigenous backlash.

Shock exit: Rio Tinto CEO Stausholm to step down

As chief executive, Stausholm pushed Rio beyond its traditional Pilbara iron ore base. He secured approvals for the long-delayed Simandou iron ore project in Guinea, expected to begin production later this year. Under his leadership, Rio also acquired Arcadium for $6.7 billion and launched a $900-million lithium joint venture with Chilean state-owned Codelco.

But while Rio’s workforce has grown by 22% to roughly 60,000 employees since his appointment, annual revenue has declined by nearly $10 billion. 

Iron ore prices, for years Rio’s key profit driver, are projected to fall further, prompting the board to demand greater focus on cost discipline and operational efficiency. 

Stausholm, who saw himself as a strategic thinker, not a cost-cutter, ultimately agreed to step aside.

He also faced mounting shareholder pressure, including a campaign led by Palliser Capital and over 100 investors to revisit the company’s dual listing in London and Sydney. Shareholders rejected the proposal earlier this month.

Some investors questioned Rio’s aggressive expansion into lithium amid a slump in prices. While demand forecasts for the battery metal remain strong into the next decade, the payoff on Stausholm’s bet remains uncertain.

The Western Range launch may be Stausholm’s final visit to the Pilbara as CEO. The new mine has a production capacity of up to 25 million tonnes of iron ore per year and is expected to sustain Rio Tinto’s Paraburdoo mining hub for roughly two decades. 

It also marks a milestone in cultural engagement, becoming the company’s first project to implement a co-designed Social, Cultural and Heritage Management Plan with the Yinhawangka traditional owners.