Canada’s ambassador to China is leading the race to be the next chair of Rio Tinto, the global miner that draws the bulk of revenues from supplying the Asian country’s vast steel industry with iron ore.
Dominic Barton, who ran McKinsey for nine years until 2018, has emerged as the frontrunner to replace Simon Thompson, according to people with knowledge of the situation.
Barton’s strong links to China and experience chairing Vancouver-based miner Teck Resources have convinced the board of the FTSE 100 company of his credentials. A decision could be made as early as next week.
Barton did not respond to a request for comment. Rio declined to comment.
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, saying 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,” he said at 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 then Rio chief executive Jean-Sébastien Jacques and two other senior executives.
Former Centrica boss Sam Laidlaw and Simon McKeon have been leading the search for his successor.
Potential candidates are understood to have included Mark Cutifani, the outgoing chief executive of Anglo American, people familiar with the matter have said. Cutifani told the Financial Times in November that 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 a series of scandals over political corruption.
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, along with John Thornton, chair of Barrick Gold.
Rio makes most of revenues selling iron ore, the key ingredient needed to make steel, to Chinese steel mills. The company counts state-backed Aluminum Corporation of China as its biggest shareholder.
Rio, whose other big business unit is its Canadian aluminium business Alcan, has been without a Canadian on its board since the departure of David Constable a year ago.
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. These include changing Rio’s corporate culture.
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 this week offered to write off $2.3bn owed by the Mongolian government as the global miner seeks to complete the development of the huge 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 took up the role in January and has announced the company will spend $7.5bn decarbonising its operations.
