Mining & Energy
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Bloomberg / Patrick Hamilton (File photo) / Jan du Plessis, chairman of Rio Tinto Group, centre, pauses during a speech as Samuel "Sam" Walsh, outgoing chief executive officer, left, and Tim Paine, joint secretary, right, listen during the company's annual general meeting in Brisbane, Australia, on Thursday, May 5, 2016. Rio Tinto Group, the second-largest mining company, reaffirmed its goal to raise annual iron ore output in Australia to 360 million metric tons amid forecast growth demand in Asia.
Outgoing Rio Tinto Group Chairman Jan du Plessis said the company remains in talks with authorities concerning separate probes involving projects in Guinea and Mozambique.
“The outcome of these regulatory investigations, and any potential litigation, is uncertain,” Du Plessis, 63, said at the annual meeting of shareholders of the world’s second-biggest mining company in London on Wednesday. Rio has set up a board committee, led by Du Plessis, dedicated to monitoring the progress of the probes, he said.
In March, Australia’s federal police started an investigation into payments made by Rio relating to the $20 billion Simandou iron ore project in Guinea. Rio said in November it had alerted authorities including the U.S. Department of Justice and the U.K.’s Serious Fraud Office to a $10.5 million payment to an external consultant in 2011 for assisting with negotiations with Guinea’s President Alpha Conde.
Rio later terminated contracts of two senior executives, Alan Davies and Debra Valentine, arguing they had failed to maintain standards of the company’s code of conduct.
“To come across a situation where it appears perhaps we did not do the right thing was very upsetting for all of us to go through,” Du Plessis said Wednesday in response to a question from a shareholder. “I want you to know we have not admitted bribery. We have not once said we’ve admitted bribery. We’ve not once said we’ve admitted corruption.”
Rio exited the Simandou project in October, selling its stake to partner Aluminum Corp. of China, or Chinalco, after failing to attract the funding needed to develop it. Rio warned staff in November that the inquiries by authorities in the U.K., U.S. and Australia could last several years.
Separately, the U.S. Securities and Exchange Commission is investigating a $3 billion impairment charge Rio booked on a Mozambique coal deal almost four years ago.
“We have not discovered anywhere in the group similar issues,” Du Plessis said in response to a shareholder question on the possibility of additional investigations. “We are vigilant. We have looked at it very, very closely because once you have been hurt like that you really want to be sure that it hasn’t happened elsewhere.”
Du Plessis will start a new role as chairman of British telecommunications giant BT Group Plc later this year after more than eight years in the role for Rio. He steered the firm through the tail-end of an unprecedented commodity boom driven by China before an industrywide crisis in 2015 resulted in investors dumping mining stocks as commodity prices tumbled.Source: Bloomberg
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