By Melanie Burton and Clara Denina
MELBOURNE/LONDON (Reuters) -Rio Tinto named Simon Trott, who heads the firm’s most profitable iron ore unit, its new chief executive on Tuesday, placing trust in the 20-year veteran to rein in costs at its operations and drive long term growth.
Trott, 50, will replace Jakob Stausholm, who announced his intention to step down in May.
The Australian national, who has led the iron ore unit, Rio’s engine of profit, for the past four years, will take over at the helm of the company beginning August 25.
Trott’s appointment came swiftly on the heels of the unexpected news of Stausholm’s departure. He will relocate to London for the role.
"It’s a relatively safe appointment," said Kaan Peker at RBC in Sydney.
"He knows the iron ore business very well and that’s the main driver of free cashflow and earnings. Obviously he has proven himself in the eyes of the chair."
Hailing from a farming family in the Western Australian wheatbelt town of Wickepin southeast of Perth, Trott, who is married with children, enjoys cycling around the city’s streets on weekends.
He has spent time at Rio’s global operations, including three years as chief commercial officer in Singapore, and has managed its salt, uranium, borates and diamonds units across Australia, Namibia, United States, Canada, and Serbia.
BIGGEST IRON ORE MINE
In Western Australia, Trott brought to market Rio Tinto (NYSE: RIO )’s biggest iron ore mine in more than a decade.
"Simon and the Board are aligned that Rio Tinto’s next phase is about unlocking significant value for shareholders from our portfolio, driven by operational performance, and cost and financial discipline," chair Dominic Barton said in a statement.
Trott has faced some pushback from investors because the quality of ore in Rio’s exports has dropped during his tenure and costs have climbed, while the miner has struggled to reach the top end of its production forecast.
However, the unit has met its production guidance every year since Trott took the reins at the division, after missing it in five of the seven preceding years.
Stausholm, who oversaw a big bet on lithium and expansions in iron ore and copper , was named chief executive in 2020 as the miner grappled with legal, public and investor angst over the destruction of Australia’s ancient Juukan Gorge rock shelters, which led to the ousting of its former CEO.