Mick Davis leads contenders to become next Rio Tinto chairman
Former head of Xstrata poised to make comeback at Anglo Australian miner
Mick Davis, the former head of Xstrata, has emerged as a frontrunner to the next chairman of Anglo Australian miner Rio Tinto.
The South African-born businessman has held talks with Rio over the position, according to people familiar with the matter.
If Mr Davis is appointed it would be a stunning comeback for the South African-born businessman who built Xstrata into one of the world’s biggest mining companies before selling it to Glencore in 2012.
Last year, Mr Davis, who is chief executive of the ruling Conservative party in the UK, freed investors from financial commitments to his mining fund X2 Resources after it failed to pull off any deals during the depth of a commodity market downturn.
Mr Davis and Rio declined to comment on the talks, which were first reported by Sky News.
Rio has been looking for a new chairman since March when Jan du Plessis announced he would be joining BT Group. The company has said it wants to name a successor by the end of the year.
Its search has been complicated by several issues, including the resignation of the John Varley, the non-executive director tasked with finding a replacement for Mr du Plessis.
Mr Varley resigned in June after he was charged in the UK with fraud over his time as chief executive of Barclays. Ann Godbehere, another Rio board member, is now leading the search.
Rio has also been hit with fraud charges from US regulators who claim the company tried to hide a bungled acquisition of an African coal producer. The company was also fined nearly last month £25m by UK’s Financial Conduct Authority in connection with that deal for breaching its listing rules
The chairmanship of Rio, however, is still one of the most prestigious jobs in the mining industry and could appeal to Mr Davis.
Commodity markets are recovering from a brutal downturn that saw budgets and spending slashed to the bone.
Rio has emerged with one of the strongest balance sheets in the sector and is generating lots of cash from its iron ore mines in Australia.
Chief executive Jean-Sébastien Jacques, a hard charging French-born executive, has replaced nearly all of the top executive team since he was appointed in the summer of 2016.
Under Mr Jacques, Rio has sold assets, including most of its coal business, and returned billions of dollars to shareholders.
But many analysts say the company needs to diversify and bulk up its copper business, something it may have to do through acquisitions, an area where Mr Davis has plenty of experience.
Mr Davis could face competition for the job from internal candidates, however. Sam Laidlaw, the former head of UK gas company Centrica, sits on the Rio board and has been touted as a potential chairman, as has Simon Thompson, a former banker and mining executive.
Rio is also searching for a finance director to replace Chris Lynch, who has announced his intention to step down next year.