Rio Tinto CEO Defends London Listing, Unveils Strategic Growth Plans

Rio Tinto, a global mining giant, is under pressure from activist investor Palliser Capital to abandon its primary London listing. Palliser argues that the discount in the UK-listed shares, currently at 19%, hinders Rio Tinto's ability to fund acquisitions and grow organically. However, Rio Tinto CEO Jakob Stausholm has defended the company's dual-listed structure, citing operational and tax implications that make unifying the listing in Australia a costly option.

Stausholm maintains that unifying the listing would cost "mid-single digit billions of dollars" in tax, which could destroy shareholder value. The company's shareholder Chinalco is also constrained by a national interest limit set by the Australian government, preventing it from holding more than 14.99% of Rio's London shares. These constraints make a unified listing in Australia challenging for Rio Tinto.

Despite the pressure from Palliser, Rio Tinto is focused on its long-term growth strategy. The company plans to invest up to $3 billion annually in growth projects to meet the expected new demand of up to 25% across its key products by 2035. Major projects include the Oyu Tolgoi copper mine in Mongolia, the Rincon lithium project in Argentina, and the Simandou high-grade iron ore project in Guinea.



Stausholm emphasizes that Rio Tinto's strong balance sheet, cash flows, and assets position the company well to invest for the long term. The company is committed to delivering attractive shareholder returns while investing in growth projects aligned with the energy transition. This focus on growth and strong performance has contributed to Rio Tinto's stable dividend policy and consistent shareholder returns.

In conclusion, Rio Tinto's CEO has defended the company's dual-listed structure, citing operational and tax implications that make unifying the listing in Australia a costly option. Despite the pressure from activist investors, Rio Tinto is focused on its long-term growth strategy, with plans to invest in major projects like Oyu Tolgoi, Rincon, and Simandou. The company's commitment to delivering attractive shareholder returns while investing in growth opportunities aligned with the energy transition underscores its strong position in the minerals and metals sector.