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Investing.com -- Rio Tinto Ltd (ASX:RIO) (LON:RIO) announced plans to restructure its business into three main divisions—Iron Ore, Aluminium & Lithium, and Copper—as part of a strategy to simplify its operations and concentrate on its most profitable assets.
Matthew Holcz has been appointed chief executive of the newly consolidated iron ore unit, which will bring together the miner’s operations in Western Australia with its Canadian business and Guinea’s Simandou project once completed.
The Aluminium & Lithium division, headed by Jérôme Pécresse, will combine Atlantic and Pacific aluminium activities with the Arcadium Lithium business acquired earlier this year.
Katie Jackson will continue leading the Copper business, with a focus on scaling up output from the Oyu Tolgoi mine.
Operations outside these three core areas, including Borates and Iron & Titanium, will move under the chief commercial officer for review, with an update on their future to follow. Earlier this year, Reuters reported that Rio was considering selling the titanium unit due to weak returns.
Rio Tinto shares closed 1% higher in Australia.
As part of the shake-up, Sinead Kaufman, who currently oversees the Minerals division, will leave the company in October after nearly 30 years. Rio also said the chief executive Australia role, held by Kellie Parker, will be scrapped.
The changes follow Simon Trott’s appointment as CEO on Monday, succeeding Jakob Stausholm. Trott, who previously ran Rio’s iron ore business in Western Australia, pledged to deliver more value for shareholders and communities.
His promotion was welcomed by investors given his track record leading the company’s most profitable segment, which generates more than half of Rio’s earnings.
"A simplified business structure, grounded in our fundamental commitment to safety and with sharper focus on the most compelling opportunities we have, will enable us to deliver new standards of operational excellence and value creation," Trott said in the announcement.
“We have delivered resilient results this year, remain on track to deliver strong mid-term production growth, and continue to make progress against our objectives. Our focus now is on unlocking further shareholder value, putting both our capital and talent where it will deliver the greatest returns."
Rio is stepping up investment in its iron ore business, including the giant Simandou project in Africa and a slate of new mines in Australia, while continuing to pursue a target of producing 1 million metric tons of copper annually by 2030.