Shock exit: Rio Tinto CEO Stausholm to step down

Rio Tinto (ASX, LSE: RIO) announced on Thursday the unexpected exit of CEO Jakob Stausholm later this year, ending a nearly five-year tenure marked by efforts to restore trust with stakeholders and expand into energy transition metals.

The company has already launched a search for his successor. Stausholm, who joined Rio in 2018 and became CEO in 2021, took over after the controversial destruction of 46,000-year-old Aboriginal rock shelters in Western Australia. His predecessor, Jean-Sébastien Jacques, resigned following backlash from Indigenous groups and investors.

Stausholm said in a LinkedIn post it has been “an honour” to lead the mining giant and said he was proud of the progress made during his time in charge. “I will stay as chief executive while a successor is appointed through a rigorous process already underway,” he wrote. “As this work progresses, it is business as usual.”

Rio Tinto didn’t give a reason for Stausholm’s departure. Internally, iron ore chief Simon Trott and chief commercial officer Bold Baatar are viewed as potential successors. Analysts had anticipated an external search, though Rio may face competition from BHP (NYSE, LSE, ASX: BHP), whose CEO Mike Henry is also preparing to step down in the next year.

Analysts surprised

“This news comes as a big surprise, and in our view was not expected,” Berenberg analyst Richard Hatch said. “The company cited this as a ‘natural moment’ to appoint a successor, but it doesn’t feel that natural to us.”

BMO’s Alexander Pearce echoed the sentiment, calling the decision “somewhat of a surprise,” particularly given Stausholm’s relatively short tenure. Pearce credited him with strengthening Rio Tinto’s position in future-facing commodities such as aluminium, copper, and lithium, while also advancing its environmental, social, and governance (ESG) practices.

Investors reacted negatively to the news. The stock closed slightly lower in Sydney at just under A$119 per share. In London, it fell more sharply, down 1.6% to £45.80 near the close of trading, bringing the company’s market capitalization to around £58.3 billion.

Iron, lithium 

During his leadership, the Danish executive expanded Rio Tinto’s iron ore portfolio beyond its Pilbara base, securing approvals for the massive Simandou iron ore project in Guinea, set to begin production this year. He also oversaw a $6.7 billion acquisition of Arcadium, and very recently a $900-million lithium joint venture with Chile’s state-owned Codelco. 

Stausholm also navigated shareholder pressure, including a campaign led by Palliser Capital and over 100 other investors to reconsider Rio’s dual listing structure in London and Sydney. The move was ultimately rejected by shareholders earlier this month.

Rio Tinto chair Dominic Barton praised Stausholm’s leadership, saying he “restored trust with key stakeholders, aligned our portfolio with the commodities where demand growth is strongest, built a diverse and talented management team, and set a compelling growth trajectory”.

Fortescue also sees top exit

The leadership shakeup coincided with another high-profile departure in the sector. Just an hour after Rio’s announcement, Fortescue (ASX: FMG) revealed that its energy chief Mark Hutchinson would step down. The 65-year-old is to continue to serve as a senior adviser to the board, while chief operating officer Shelley Robertson also plans to retire.

Former Argentinean rugby captain Agustin Pichot will take over Fortescue’s growth and energy division, focusing on the company’s green energy strategy.