(Reuters) -Anglo-Australian miner Rio Tinto said on Wednesday that it will streamline operations into three business units, Iron Ore, Aluminium & Lithium, and Copper, with Matthew Holcz appointed to
Rio Tinto's CEO Trott Unveils Strategic Three-Division Overhaul
Rio Tinto's Strategic Business Revamp
By Clara Denina and Melanie Burton
New Division Structure
LONDON/MELBOURNE (Reuters) -Rio Tinto's new CEO Simon Trott made public his first strategic shift on Wednesday, three days after being appointed, saying he would divide the miner into three core business units to focus on its most profitable assets.
Leadership Changes
As part of the revamp, effective from Wednesday, the Anglo-Australian miner named Matthew Holcz as chief executive of its iron ore division, the company's biggest profit driver.
Strategic Review of Other Units
The other two divisions in the new structure will cover aluminium and lithium and copper.
Trott, who took over as the company's CEO on August 25 and previously led the iron ore business, is seeking to simplify the miner's structure in a shift previously reported by Reuters, designed to cut costs as iron ore and lithium prices fall.
The new unified iron ore division will integrate Rio Tinto's Western Australian operations with Canada's iron ore operations. It will also include the Simandou project in Guinea when that is completed.
Jerome Pecresse, who leads the aluminium division, will also take on lithium, including the miner's Arcadium Lithium business whose acquisition it completed in March. Katie Jackson will continue to head the copper division focused on the ramp-up of the Oyu Tolgoi mine in Mongolia.
Beyond the core units, Rio Tinto's borates and iron and titanium businesses will be transferred to Chief Commercial Officer Bold Baatar's portfolio for a strategic review, with further updates on their future to be provided.
Rio Tinto has been considering selling the titanium unit because of weak prices and low returns, sources have told Reuters.
The business is part of the minerals division headed by Sinead Kaufman, who will leave Rio Tinto at the end of October after almost 30 years, the company said.
RBC Capital Markets analysts said the scope of the strategic review seemed "relatively narrow" and that they would have expected more divestments in aluminium, iron ore and lithium.
However, they said, placing borates and titanium under review could be seen "as low-hanging fruit to optimise the portfolio" when capital allocation will have to be prioritised given the group's pipeline of lithium projects.
The role of Chief Executive Australia held by Kellie Parker, which covers health and safety and mine closures, will be made redundant, Rio Tinto said.
Parker will remain in the role during the transition to transfer her responsibilities, it added.
(Reporting by Clara Denina, Roushni Nair and Melanie Burton in Melbourne; Editing by Rashmi Aich, Sherry Jacob-Phillips, Christian Schmollinger and Barbara Lewis)
