BEN HARVEY: Why Rio Tinto’s next boss should be Simon Trott

Rio Tinto chief executive Jakob Stausholm is leaving the company he joined five years ago.

The suddenness of the announcement (usually these things are “socialised” weeks or months in advance) has tongues wagging about whether it was his call to go or the Rio board Jerry Maguired him.

The job of running the world’s second-biggest mining company in 2025 is very different to what it was when Jakob became the big kahuna.

If you had chanced upon his to-do list on the first day at work you would have seen one line and one line only: FIX JUUKAN CLUSTERF..K

Dealing with the fallout from the Juukan Gorge disaster — which saw Rio destroy ancient Aboriginal shelters in an ill-advised blasting program — took longer than expected because, well, there was a lot of fallout.

There were more parliamentary inquiries and more independent investigations than you could poke a stick at.

Rio wanted to bleach that event from history and so got rid of anyone who was within a long distance phone call of the crime.

As Joe Pesci’s character in Casino observed, it’s always better without witnesses.

Jakob was a good choice to lead the company in the wake of Juukan.

An affable Dane with an almost hippy way about him, he was at the opposite end of the personality spectrum to the bloke he replaced — the foppish and effortlessly punchable Frenchman Jean-Sebastien Jacques.

Rio recovered from Juukan and things were going swimmingly courtesy of a post-COVID iron ore price so buoyant that Elmo could have run a mining company and not mess things up.

Jakob soon had the board reaching for the Mylanta courtesy of two very big calls.

The first was signing off on Rio’s $10 billion investment in the giant Simandou iron ore mine in Guinea.

This is a country whose rulers arbitrarily cancelled 50 mining licences in one month yet Jakob reckoned presented no undue sovereign risk because he counts the Guinean Government and China as joint venture partners.

Sceptical? So am I.

Rio’s now in a devil’s threesome with whatever military junta ends up running Guinea in five years and Xi Jinping, who could decide to take over the whole thing just because he can.

Jakob raised Rio’s risk profile further by taking a $20 billion punt on lithium — a commodity eschewed by other tier-one miners and whose value has been in the toilet ever since the world realised electric cars are actually a bit of a pain in the arse.

Rio directors obviously signed off on those big decisions, so it’s unlikely Jakob is getting heat from the board because of those calls.

The word among analysts who follow Rio is Jakob was being put under the pump by chairman Dominic Barton.

The Canadian wanted the Dane to get a handle on operations — which is code for cutting costs — because BHP had quietly become the cheapest producer in the Pilbara.

Dominic knows a lot about cutting costs because he spent a large chunk of his working life at McKinsey and Co.

That’s the management consultancy which in the late 1990s changed Disneyland from being the happiest place on earth to a death zone, courtesy of a recommendation that it “rationalise” maintenance.

And he knows a lot about making money, having led McKinsey when the firm helped the manufacturer of OxyContin devise new and innovative ways to get the United States hooked on hillbilly heroin.

Analysts have Rio’s chief commercial officer Bold Baatar as one the internal front runners for the top job. Other internal candidates include Sinead Kaufman, who oversees the broadly termed “minerals” division and copper chief executive Katie Jackson.

There are a lot of external candidates but if Rio looks outside the tent it’ll be competing with BHP for talent because the Big Australian is rumoured to be hunting for a new chief executive to succeed Mike Henry.

Rio’s head of iron ore, Simon Trott, should get the gig.

Here’s why.

Rio talks about how it’s a transnational miner with interests around the world.

Its global headquarters are in London’s ever-so posh St James Square and its Australian headquarters are in Melbourne’s ever-so conservative Collins Street.

But boil this business down and you’ll find it’s a dirty and dusty old West Australian iron ore company.

Four dollars in every five that Rio makes in profit comes out of the Pilbara. Take West Australian iron ore out of Rio and the company wouldn’t make the ASX’s top 20.

I suspect if you crunched the numbers hard it probably wouldn’t be in the top 100, rather languishing as a penny dreadful being punted by spivs in West Perth.

It makes sense that a West Australian iron ore company (and that’s what Rio is) should be run by a West Australian iron ore executive who lives in the same time zone as his business’s most important customer, China.

Let’s see whether Rio has the guts to appoint yet another white, middle-aged male to the top job.