‘Deep regret’: Rio Tinto (ASX:RIO) share price climbs as chair quits

Simon Thompson was under enormous pressure over his handling of the Juukan Gorge disaster last year. Now he’s gone.

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Rio Tinto Limited (ASX: RIO) shares are on the rise following news the company’s chair Simon Thompson will leave the board at this year’s annual general meetings.

At the time of writing, the ASX Rio Tinto share price has climbed 2.09% to $129.84.

The mining giant revealed the move before market open on Wednesday, with the senior directors of Rio Tinto Limited and Rio Tinto plc (LON: RIO) to lead a search for a new chair.

Thompson had faced a torrent of public and shareholder pressure over the past eight months for his handling of the Juukan Gorge disaster.

Rio Tinto destroyed the historically and culturally significant Western Australia site in May, despite protests from Indigenous groups and archaeologists.

The company later defended the explosion, citing that it had not acted illegally and was not blaming any individuals for the decision.

Following shareholder lobbying, the chief executive and two senior executives departed Rio Tinto, albeit with golden handshakes so large they would never need to work again.

Many shareholders and commentators also called for Thompson’s head, but he had resisted until now.

The outgoing chair on Wednesday acknowledged the events of the past few months.

“The tragic events at Juukan Gorge are a source of personal sadness and deep regret, as well as being a clear breach of our values as a company,” Thompson said.

“Successes were overshadowed by the destruction of the Juukan Gorge rock shelters at the Brockman 4 operations in Australia and, as chairman, I am ultimately accountable for the failings that led to this tragic event.”

Australian Council of Superannuation Investors chief executive Louise Davidson welcomed Thompson’s departure.

“Today’s announcement is a step towards the company rebuilding relationships with traditional owners,” she said.

“Today’s announcement means the board can be renewed. In particular, investors would like to see the board increase its connection with Australian operations and communities, as well as an increase in mining experience.”

Rio share price has gone gangbusters

Thanks to rising commodity prices, The ASX Rio Tinto share price has risen by more than 46% in the past year. In London, the stock has gained in excess of 68%.

Overnight, London Rio shares were up 2.11%.

The company also announced Wednesday that board member Michael L’Estrange would retire at the AGMs, citing health reasons.

“I wish [CEO] Jakob and the new executive well for the future as they build on Rio Tinto’s many strengths and continue to implement the critical changes aimed at ensuring that an occurrence such as the destruction of the Juukan Gorge rock shelters never happens again,” he said.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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