Rio Tinto simplifies structure into three businesses

(Sharecast News) - Mining giant Rio Tinto announced on Wednesday that it was simplifying its product group structure into three businesses - iron ore, aluminium & lithium, and copper. "This focused structure and leadership positions each business to deliver excellence for customers and maximise competitive advantages and growth potential, while benefitting from the diversified group," it said.

The unified portfolio will integrate Rio Tinto's Western Australian iron ore operations with the Iron Ore Company of Canada and the Simandou project in Guinea.

Rio said Matthew Holcz has been appointed chief executive of the iron ore segment. Holcz was most recently managing director of the Pilbara Mines, overseeing Rio Tinto's 18 iron ore mines in the region.

"This will combine the proven performance of the company's established iron ore operations with the potential of Simandou, sharing safety best practices, cutting-edge technologies and operational experience across the entire iron ore portfolio to create an even stronger global business," Rio said.

The lithium business will move into the aluminium product group under the leadership of Jérôme Pécresse and the combined product group will consist of three businesses: Atlantic Operations Aluminium, Pacific Operations Aluminium and Lithium.

"This will deliver a streamlined structure, bringing together businesses centred on processing capability and downstream exposure, while enabling the shared deployment of productivity initiatives, such as the Safe Production System, which have been a key driver of improved performance in the aluminium business," Rio said.

The copper business will be led by Katie Jackson and remains "well positioned to capitalise on the global energy transition, focused on the successful ramp up of Oyu Tolgoi, the stabilising of Kennecott and advancing future options, including the Resolution project in the USA and partnerships such as Nuevo Cobre in Chile".

Rio CEO Simon Trott said: "A simplified business structure, grounded in our fundamental commitment to safety and with sharper focus on the most compelling opportunities we have, will enable us to deliver new standards of operational excellence and value creation. It will bring greater accountability and focus to our teams, underpinned by a more disciplined approach to operational performance and capital investment.

"We have delivered resilient results this year, remain on track to deliver strong mid-term production growth, and continue to make progress against our objectives. Our focus now is on unlocking further shareholder value, putting both our capital and talent where it will deliver the greatest returns."

Neil Wilson, UK investor strategist at Saxo Markets, said: "Profits recently slumped to a five-year low amid lower iron ore prices - new chief executive Simon Trott wants to clear the decks and lower costs."