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Italian manager to take on the task of improving the struggling French luxury group

Luca de Meo is to step down as chief executive of Renault, as Kering hires the 58-year-old Italian to spearhead a turnaround of the struggling French luxury group, according to people briefed on the plan. 

The appointment marks a big change at Kering, owner of the Gucci and Saint Laurent brands, where François-Henri Pinault, a member of the family that controls the group, has been chair and chief executive for 20 years.

Kering’s poor performance in recent years has raised questions about its management and strategy.

Pinault, 63, has decided to split the roles of chair and chief executive at Kering, the people with knowledge of the situation said. It was unclear whether Pinault will remain chair.

Kering declined to comment. De Meo’s planned departure from Renault to lead Kering was first reported by French newspaper Le Figaro.

Kering’s shares have lost around 70 per cent of their value over the past three years, resulting in a market capitalisation of €21bn, as a turnaround at Gucci, the company’s biggest source of revenues and profits, failed to materialise.

A string of expensive acquisitions and real estate deals by Kering also unnerved investors, as did the appointment this year of controversial former Balenciaga designer Demna to be creative director of Gucci.

In a statement on Sunday, Renault said de Meo will “pursue new challenges outside the automotive sector” but will remain in place at the company until July 15. De Meo could not immediately be reached for comment. 

Since becoming Renault chief executive in 2020, de Meo has significantly strengthened the French carmaker’s product portfolio and cost structure, transforming it into one of the best-performing companies in the sector despite its limited size. 

Its Europe-focused geographic footprint has also left it relatively unscathed from US President Donald Trump’s sweeping tariffs, as well as increased competition from China, compared with larger rivals such as Stellantis and Volkswagen. 

The car industry has witnessed a number of top leadership changes over the past year with Stellantis, Nissan and Volvo Cars appointing new chief executives while the sector wrestles with the transition to electric cars and the rise of Chinese rivals.

Renault’s board has begun the process of appointing a new chief executive, the company said.

“The board of directors has expressed its confidence in the quality and experience of the management team to continue and accelerate Renault group’s transformation strategy into this new phase,” it added.

Cross-party group calls for ministers to consider bringing Thames Water under temporary state control

The UK government should explore different models of ownership in the embattled water industry, including the potential renationalisation of privatised companies, a cross-party group of MPs said on Monday.

In a highly critical report, the House of Commons environment, food and rural affairs committee called for “root and branch” reform of the sector and urged ministers to consider bringing Thames Water under temporary state control.

“We see merits in the argument that the current models of ownership in the water industry may not be bringing about the culture the sector needs,” the MPs said.

The report comes weeks before the Independent Water Commission, a government-commissioned review, delivers its findings on the future of a sector that has been the subject of public anger over pollution and executive pay.

Billed as the biggest review into the industry since privatisation more than 30 years ago and led by Sir Jon Cunliffe, former Bank of England deputy governor, it has ruled out nationalisation and is likely to focus on a regulatory overhaul.

Although the MPs acknowledged issues with state-owned utilities, they urged the Independent Water Commission to consider “all water company potential ownership models to determine which are more likely to lead to a thriving and responsible culture”.

Alistair Carmichael, Liberal Democrat MP and chair of the Efra committee, said: “The Water Commission has got the opportunity to draw up the root and branch reforms necessary to ensure that the issues plaguing the sector are resolved. It must not shy away from bold proposals.”

With Thames Water teetering on the brink of bankruptcy, the MPs cautioned that a £3bn rescue plan proposed by its lenders could result in customers paying “more in the long run” in bridging loans than if the heavily indebted utility were to be brought under the government’s special administration scheme.

Special administration is where the government takes temporary ownership of a business and can recoup costs through its sale, as in the case of Bulb Energy and its eventual sale to Octopus Energy.

“While a special administration should be a last resort . . . it is unclear whether allowing a failing company to struggle on and accumulate progressively more debt is a better outcome than assuming temporary national control more quickly, with the associated costs that it could incur,” the MPs said.

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Cat Hobbs, founder and director of We Own It, a campaign group, said that by demanding a “proper evaluation of different ownership models, the MPs were acknowledging public demands for renationalisation”.

“The report calls for ‘root and branch reform’ of the water sector. We all know the ‘root’ cause of the water crisis is privatisation. So by ignoring public ownership as a solution, we will only ever get reform of the ‘branches,” she added.

The Department for Environment, Food and Rural Affairs said it had secured “the largest investment into the water sector in history” and “banned unfair multi-million-pound bonuses for bosses”.

Water UK, which speaks for the sector, said: “Everyone agrees that the water system is not working, and we have been calling for fundamental reforms which allow investment to get quickly to where it needs to go.”

The Water Commission did not respond to a request for comment.

EU seeks to sever nuclear energy ties with Russia

Brussels will set out plans to end all Russian fossil fuel imports but it delays measures to wean bloc off uranium products

Brussels will this week set out legal measures to put a complete stop to Russian fossil fuel imports into the EU.

But it has delayed plans to wean the bloc off a smaller but far more tricky reliance: Russian nuclear technology.

Since Moscow’s full-scale invasion of Ukraine, EU countries have paid more than €200bn to Russia for fuel. Coal and oil imports have been sanctioned and gas should be phased out by 2027. Nuclear fuel accounted for only about €700mn of the €22bn paid to Russia in 2024, according to the think-tank Bruegel. But officials have warned that the risk to EU energy security is huge if Moscow suddenly cut off supplies.

Tackling Russian nuclear imports is far more complicated.

“Technically speaking the uranium supply chain is very complex”, said Ben McWilliams, affiliate fellow in climate and energy at Bruegel. Therefore a gradual phaseout would be needed, he said.

The EU has 101 nuclear reactors of which 19 are Soviet “VVER” designs. The bloc relies on Russia for about 20-25 per cent of its natural, converted and enriched uranium. Reactors across the EU often buy in Russian spare parts or require maintenance expertise.

The European Commission ideally would like the European nuclear sector to be free of Russian imports by the 2030s, EU officials have said. But in a document published on Friday it warned that €241bn of investment was needed to build out the domestic nuclear supply chain.

EU ministers will discuss nuclear investments at a meeting on Monday.

The move to phase out Russian imports is in line with efforts in other western countries. Canada has banned all Russian uranium imports and the UK has put 35 per cent tariffs on Russian enriched uranium. The US last May passed a law to stop Russian uranium imports from 2028. In April 2023, G7 countries agreed to develop nuclear capacities in order to move away from Russian fuel.

But Russia’s dominance of the sector poses a severe challenge. “[Russian state nuclear company] Rosatom is one of the biggest companies in all sectors of nuclear markets,” said Dmitry Gorchakov, nuclear adviser at the non-governmental organisation Bellona.

The move also coincides with a renaissance in interest in nuclear power in Europe to reach stretching climate targets, adding to pressure on supply chains.

Phaseout plans face strong opposition from Hungary and Slovakia, two of the five member states with VVER reactors, alongside the Czech Republic, Bulgaria and Finland.

In a joint statement, Hungary and Slovakia’s ministers for EU affairs said that the 2030s phaseout ambition would lead to “higher and more volatile prices” and threatened the security of their energy supplies.

Officials in Brussels say that with a slow phaseout, jumps in prices throughout the fuel cycle should be avoided.

The EU has been working since 2022 on diversifying its sources of uranium to countries such as Kazakhstan, Canada and Niger.

But instability in Niger, the world’s seventh-biggest uranium producer, has raised some concerns among EU officials about security of imports and competition from other players.

More troubling is the conversion of mined uranium into a more easily handled gas, a relatively low-margin and dirty business that EU countries have been happy to outsource.

The challenge would be building up an EU conversion industry that could compete with Rosatom’s vastly lower prices, EU officials said. Investments into conversion capacities were “lagging”, Friday’s document said.

Russia also dominates 55 per cent of the global enrichment market, the next step after conversion in which the number of reactive uranium-235 isotopes is increased.

Orano and Urenco, two European companies, make up about 40 per cent of global enrichment capacity, alongside the Russians and Chinese.

Boris Schucht, chief executive of Urenco, said that the company had already started refurbishing existing enrichment centrifuges in the EU “which was originally not intended” to meet increased demand.

He is most concerned about circumvention of any potential trade measures. “We can already see here and there Russia selling volumes to China and China selling volumes that would not otherwise have been available in the rest of the world,” he said.

The parts and knowledge needed to maintain the remaining Soviet reactors, the earliest of which went into use in 1977, is another problem. Building up the skills and confidence among smaller businesses such as welders or pipe manufacturers to produce for the nuclear sector, with its steep safety requirements, is a long process.

The biggest “elephant in the room”, said Bruegel’s McWilliams, were Hungary’s plants in Paks, 100km south of Budapest.

Hungary has long doubled down on Russian nuclear technology, opting in 2014 to build two new Rosatom-designed power blocks, doubling the capacity of its 1980s four-unit nuclear plant at Paks. The two plants together should supply up to three-quarters of the country’s electricity needs.

Despite pressure from the EU and talks with French and US suppliers, Hungary has yet to attempt a switch away from Russian nuclear fuel and parts. EU officials say this is the most sensitive issue to deal with, particularly given Hungary’s typically pro-Russia stance.

The commission has indicated that it would use trade measures to phase out Russian nuclear supplies. These would only require a weighted majority of member states to approve, rather than sanctions which need unanimous approval and risk being vetoed by Hungary and Slovakia.

Sama Bilbao y León, director-general of the World Nuclear Association, said that revenue raised from tariffs should be funnelled back into the industry as an incentive to build up the supply chain.

Frédéric Lelièvre, a senior executive vice-president at Framatome, a subsidiary of state-controlled power utility EDF, told a conference last week that Europe must speed up its domestic industry: “We need to have these facilities and with the IP [intellectual property] in Europe to make sure we can deploy the programmes we want to deploy and not rely on anybody else.”

Asian Development Bank considers lifting funding ban for nuclear power projects

Shift comes as stakeholders Japan and Germany pivot on atomic energy to meet growing electricity demand

The Asian Development Bank is reviewing whether to lift a ban on funding nuclear power projects to help meet a surge in demand for energy across the region.  

The talks between officials at Asia’s largest multilateral lender and government stakeholders reflect growing support for the emissions-free energy source among global policymakers as they search for solutions to meet fast-rising electricity demands and climate commitments.

It follows a decision by the board of the World Bank last week to remove its decades-long prohibition on funding nuclear energy as well as policy shifts on nuclear energy from critical shareholders Japan and Germany.

“As part of a mandatory review of the policy scheduled for this year, we are discussing with our shareholders the possibility of expanding engagement in nuclear energy,” said Priyantha Wijayatunga, senior director for energy at the ADB.

“The energy policy review will consider amendments in response to changes in the external environment,” he told the Financial Times.

The ADB is the largest multilateral development bank in Asia. Last year, it committed $24.3bn in funding to promote development in Asia and the Pacific.

The bank is prohibited from financing nuclear energy projects, although its policies allow it to provide some forms of technical assistance such as energy planning and analysis.

But there is growing appetite among the ADB’s stakeholders for nuclear energy. Japan, the joint-largest shareholder in the bank alongside the US, has dramatically shifted its position on nuclear energy since the development bank finalised its current energy policy in 2021.   

Nuclear energy power provided 30 per cent of Japan’s power before the Fukushima Daiichi nuclear disaster in 2011, which led to the closure of all the nation’s 54 nuclear reactors.

About a quarter of those facilities have since reopened, and Japan’s national energy plan to 2040 adopted in February pledged to “maximise” the use of nuclear power for first time since the disaster. Tokyo also said it would consider the construction of new reactors at existing nuclear power sites.

Japan’s pivot on nuclear energy has been spurred by higher than expected forecasts for electricity demand, thanks to the expansion of power-hungry semiconductor factories and data centres.

Meanwhile, Germany’s new government, led by Chancellor Friedrich Merz, signalled in May that it had dropped the nation’s long-standing opposition to nuclear power.

The US under Donald Trump has also been a vocal advocate of nuclear energy. Last month, the president signed a series of executive orders directing the government to fast-track construction of nuclear reactors, with the aim of quadrupling the country’s atomic energy capacity by 2050.

The orders also included targets for US energy exports and development of civil nuclear projects globally.

Washington has been calling for multilateral lenders to back nuclear projects, which it argues would help western companies compete with state-owned nuclear enterprises in Russia and China that are expanding overseas.

Russia’s Rosatom is building nuclear plants in Turkey, Bangladesh, China, India and Iran, while China National Nuclear Corporation is building reactors in Pakistan.

“The status quo of backroom nuclear deals only helps Russia and China,” said Todd Moss, executive-director at the Energy For Growth Hub, a think-tank that has advocated for western development banks to invest in nuclear energy.

Moss added that development banks could “work with governments to identify the best models for their needs and procure them competitively”.

He said the ADB was in a particularly important position because of its links with countries in south and south-east Asia that relied on coal power.

Rio Tinto’s CEO search marks changing of the guard at big miners

Surprise exit of Rio chief mirrors restructures at top of all four of world’s largest iron ore producers

• Rio Tinto CEO Stausholm steps down, sparking leadership change across major miners.
• No clear successor named; Trott, Pécresse, and Baatar are top contenders.
• Miners shift focus from iron ore to lithium, copper, and potash.
• Boards push for faster M&A to meet investor and project demands.

(Full Article)

At the opening last week of the Western Range iron ore mine in the remote Pilbara region of Australia, Jakob Stausholm gave one of his final speeches as head of the world’s second-largest mining company.

“When I was interviewing for the job as CEO, I said succession planning starts on day one,” the Rio Tinto chief told reporters. Standing behind him in the red dirt was Simon Trott, head of the company’s iron ore division and a frontrunner for the role.

Yet such planning had not been apparent just a few weeks earlier when Rio announced Stausholm’s departure after almost five years at the helm. The news took both investors and senior figures at the Anglo-Australian company by surprise, with the fact that the board did not have a successor lined up raising eyebrows across the industry.

Rio is not the only major mining company looking for a new chief executive. Its search is part of changing of the guard taking place across the senior ranks of the industry, with all four of the world’s biggest iron ore producers either undergoing, or poised for, a shake-up at the top.

This next generation will lead an industry at a crossroads, as demand for iron ore — traditionally their most profitable product — flatlines and miners look to other metals and minerals linked to high-tech industries and the energy transition.

The pace of leadership change “is unprecedented, in terms of that turnover, in such a short period of time”, said Bob Brackett, mining analyst at Bernstein.

Rio Tinto chief executive Jakob Stausholm, left, and head of its ore division Simon Trott © Matt Jelonek/Rio Tinto

As well as Stausholm at Rio, BHP, the world’s largest miner, is expected to seek a new chief executive next year when Mike Henry steps down, while Brazil’s Vale welcomed its new head, Gustavo Pimenta, late last year. Australia’s Fortescue has also shuffled its top leadership after Dino Otranto, head of the company’s metals division, had his role expanded.

The management changes coincide with the imminent first production from Rio’s huge Simandou mine in Guinea, which is expected to keep iron ore prices in check.

Meanwhile, the shift to newer metals and minerals has led to Rio placing more than $10bn in bets on lithium during Stausholm’s tenure via acquisitions, joint ventures and capital expenditures.

BHP is investing heavily in potash, with its Jansen mine in Canada set to start production of the fertiliser next year, as well as placing a huge wager on copper demand with large investments in South Australia and Latin America.

Jérôme Pécresse, head of aluminium at Rio © Simon Dawson/Bloomberg

The race to secure access to copper — the red metal essential for wiring and electricity grids — has been the driving force behind several mega-deal attempts, though the largest efforts have so far been unsuccessful. BHP made a £39bn bid for Anglo American but was rejected, while Glencore and Rio also last year held secret merger talks that did not progress.

Rio’s board and Stausholm failed to see eye-to-eye on the Glencore merger, according to people familiar with their discussions. Speaking at Western Range, Stausholm said there had been “no misalignment” between himself and the board, when asked about reports of tension with Rio chair Dominic Barton, but added that it was “the right time to look for a successor”. 

George Cheveley, portfolio manager at investment group Ninety One, said M&A would remain high on the agenda across the big miners, noting “frustration in boards” about the need to move faster.

“The companies need to get bigger — both from an investors’ demand point of view, and because of the need for bigger projects — and the only way to do that is through consolidation,” Cheveley said. “There’s a feeling that they need someone who can be more assertive with M&A.”

Rio’s chief commercial officer Bold Baatar © F. Carter Smith/Bloomberg

At Rio, the selection process for the next chief executive is well under way, with internal frontrunners including Trott, Jérôme Pécresse, head of aluminium, and chief commercial officer Bold Baatar, according to people close to the company.

Trott is a long-serving Australian who has run Rio’s iron ore operations since 2021 and held the role of chief commercial officer prior to that. He declined to comment at the Western Range opening whether he had applied for the job or whether his prominent role in the ceremony was a dress rehearsal for the position. 

Pécresse, a French citizen who joined Rio only two years ago, is considered to have a strong if short record improving operations at the company’s aluminium business. He was previously chief executive of GE Renewable Energy.

Baatar, a former banker, joined Rio in 2013 and ran its copper business, before becoming chief commercial officer. He is credited with sorting out the ownership of the Oyu Tolgoi copper mine in Mongolia, and getting Simandou on track. 

Australia’s mining minister Madeleine King speaking at the opening of Western Range last week © Matt Jelonek/Rio Tinto

Who takes the helm at Rio is of huge consequence for Australia, where the company employs 23,000 people, almost half the company’s headcount.

Madeleine King, Australia’s mining minister, also highlighted the role that the current leadership had played to repair relations with the indigenous community after the destruction of ancient rock shelters at Juukan Gorge, an event that was the catalyst for the last change at the top at Rio. 

“The global leader of Rio Tinto is an extremely important role and the person that does that . . . is of enormous importance to Western Australia, and therefore Australians,” King told the Financial Times.

Stausholm said he hoped to “pass the baton” on to the new chief when the appointment was made later this year, putting the transition in the context of the ethos of the region’s indigenous community.

“What you learn [from them] is we’re all just a small part of the puzzle,” he said. “Learning from the past and bringing it to the future.”

Was Iran really developing nuclear weapons?

Experts question Israel’s claim Tehran had begun an atomic bomb programme but warn it has become a ‘threshold’ state

Armed with a cartoon-style drawing of a bomb with a lit fuse, Benjamin Netanyahu took to the UN General Assembly podium in 2012 to try to convince the world of the threat posed by Iran’s nuclear programme.

The Israeli prime minister said the Islamic republic was enriching uranium at such a pace that it was on track to be able to produce sufficient fissile material for a nuclear weapon within months. With a marker pen, he drew a red line across the bomb to highlight the stage of the process where Iran had to be stopped, warning that “the future of the world” was at stake.

Fast-forward 13 years, and Netanyahu says Tehran has moved far beyond his red line by establishing a programme to develop nuclear weapons and is using that as his prime pretext for Israel’s devastating assault on Iran.

“In recent months, Iran has taken steps that it has never taken before — steps to weaponise this enriched uranium,” the prime minister said as the first Israeli bombs fell in the early hours of Friday.

But experts say that while Iran has been dramatically increasing its stockpile of uranium enriched to close to weapons-grade, there is no evidence it has decided to build a nuclear bomb.

“Netanyahu is always keen on dangling evidence in front of cameras, whether it’s nuclear secrets or pieces of Iranian drones,” said Ali Vaez, an Iran expert at Crisis Group. “But he offered no such evidence for that claim.”

US intelligence director Tulsi Gabbard told the US Congress in March that America’s intelligence community continued to assess that Iran was not building a nuclear weapon. The International Atomic Energy Agency, which has inspectors in Iran who frequently visited the republic’s two main enrichment facilities at Natanz and Fordow, has also found no evidence to suggest the Islamic regime is developing a weapons programme.

Experts have, however, warned that Iran’s recent advances mean it has become a “threshold state” — a nation with technical expertise and capacity to weaponise its nuclear programme if it chooses.

Days before Israel launched its assault, the IAEA’s board for the first time in two decades passed a resolution saying Iran was in breach of its non-proliferation obligations.

Iran always insists its nuclear programme — initially developed by the last Shah with US assistance — is for peaceful civilian purposes.

But according to US intelligence assessments, Iran had begun initial work on a weapons programme more than two decades ago. Back then it was still in the early stages of uranium enrichment and the programme was halted in 2003, according to the assessments.

A decade later, Iran began talks with the Obama administration that culminated in a landmark 2015 accord signed with the US and other world powers. The agreement, implemented in January 2016, severely limited Iran’s nuclear activity, with a strict IAEA monitoring mechanism, in return for sanctions relief.

Iran was complying with the deal, which limited its uranium enrichment to 3.67 per cent and capped its stockpile of the fissile material at 300kg, with any excess shipped offshore.

But after US President Donald Trump abandoned the deal in 2018 and imposed sanctions on the republic, Tehran responded by increasing its activity, developing and installing thousands of far more advanced centrifuges that it is using to produce highly enriched uranium.

For four years, it has been enriching uranium to 60 per cent — its highest-ever level and a short step away from the 90 per cent required for a nuclear weapon.

In May, an IAEA report said Iran’s stockpile of 60 per cent enriched uranium had swelled to more than 400kg — enough fissile material for about 10 weapons if further enriched to 90 per cent — while its total stockpile of enriched uranium exceeded 8,400kg.

Tehran had for more than a year reached “near-zero breakout time”, giving it the capacity to produce sufficient fissile material required for several nuclear bombs within days, said Kelsey Davenport of the Arms Control Association. But it would still need to develop the technology to build weapons.

“The actual weaponisation process, that’s more challenging to accurately estimate. But it likely would have taken months, possibly up to a year, to convert weapons-grade uranium to fit it with an explosive package, then actually be able to deliver it via a missile,” Davenport said. “So there was no imminent threat of a nuclear bomb.”

The IAEA still has inspectors in the republic, but their access has been restricted after Tehran reduced co-operation with the UN nuclear watchdog. Israel, which is the Middle East’s only nuclear-armed state although it does not admit to its programme, has bombed Natanz. Iran says it also targeted Fordow.

Experts said there was a risk Tehran had secretly set up advanced centrifuges at facilities not monitored by the IAEA where scientists could raise some of its stocks of highly enriched uranium to weapons-grade.

“Iran has produced thousands of advanced centrifuges and the IAEA has no idea where they all are,” said Vaez. “So there is a real possibility that Iran has, as part of its contingency plans, constructed clandestine facilities”.

In April, Ali Shamkhani, an adviser to supreme leader Ayatollah Ali Khamenei, said that if the republic faced continued external threats, it could take “deterrent measures”, including expelling the IAEA.

Shamkhani, who was seriously wounded in Israel’s first wave of strikes on Friday, which killed at least 10 nuclear scientists, added that Tehran could also transfer enriched material “to safe and undisclosed locations”.

Davenport said any secret facility would be more difficult to detect and could enrich material to weapons-grade “very quickly”, adding: “It would only have to remain illicit for weeks.”

Over the past year, as hostilities between Israel and Iran ratcheted up, Iranian officials have also issued ambiguous warnings about the possibility of changing Tehran’s nuclear doctrine.

“In the past year, we’ve seen an erosion of a decades-long taboo in Iran on discussing nuclear weapons in public, likely emboldening nuclear weapons advocates within Iran’s decision-making apparatus,” Gabbard told Congress in March.

Still, the IAEA said in a report last month it had “no credible indications of an ongoing, undeclared structured nuclear programme” and noted “the statements of the highest officials in Iran that the use of nuclear weapons is incompatible with Islamic law”.

Khamenei’s calculations could change, however, if the regime believes it now faces an existential threat and needs nuclear weapons to restore deterrence. And Israel’s strikes mean IAEA inspectors are unable to visit Natanz and Fordow, leaving the world blind to Iran’s activities for as long as Israeli bombing continues.

“The attacks will drive further discussion about the security value of nuclear weapons,” said Davenport. “My more immediate concern is that, in the absence of regular inspections, given the chaos that’s been caused in the strikes, the damage at the facilities, did Iran move any of its 60 per cent enriched uranium?”

Vaez believed the regime would still be cautious, saying Iran was “in a weak spot and doesn’t want to make a bad situation worse by bringing the US in”.

But he added that once the dust settled, Iran could feel the need to restore “leverage” ahead of any future talks with the US, including possibly withdrawing from the international nuclear non-proliferation treaty.

“Only then I think we would hear Iran declaring its intention to change its nuclear doctrine. Israel has diminished Iran’s nuclear leverage, they would have to regain some,” Vaez said. “But we’re not there yet.”

Davenport said one thing Israel could not do was “bomb away the knowledge”.

“So Iran can rebuild and they can rebuild more quickly now,” she said.