Rio Tinto/Jean-Sébastien Jacques: no shelter

Rio Tinto mines iron ore in Pilbara, Australia. Photo / Getty Images

Lex COMMENT

The Australian Dream chronicles the struggles of Adam Goodes, an Aboriginal Australian footballer, against postcolonial discrimination. Rio Tinto's chief executive Jean-Sébastien Jacques may have missed the release of the movie last year. His resignation gives him a chance to catch up with a cause re-energised in Australia by the worldwide Black Lives Matter campaign.

Jacques is leaving Rio following a disastrous error, the destruction of two 46,000-year-old Aboriginal rock shelters in Western Australia. Though he takes the blame, a vacillating response by the Anglo-Australian miner's chairman has put the entire company to shame.

A board-led investigation into the destruction of a sacred site in May effectively exonerated everyone except Rio itself. Reports on the significance of Juukan Gorge existed and were ignored or simply missed by senior management.

The company had previously negotiated native title agreements with the Puutu Kunti Kurrama and Pinikura people, giving it rights to mine the area. But that came before archaeologists found important artefacts. After this, Rio — a victim of its committed thinking — failed to abandon development.

Attempts to atone by the mining group were misguided and late. Yes, bonuses of senior figures including Jacques were slashed by £4 million ($7.6m) last month. But the very act of putting a monetary value on irreplaceable indigenous heritage made matters worse. Chairman Simon Thompson then threw his board a hospital pass two weeks ago when he insisted Rio had no intention of removing Jacques.

The destruction of the rock shelters was a rare mis-step by Jacques. Shareholders cannot fault the return on their investment during his leadership of over four years. Rio's share price has outpaced the FTSE World Mining index by a wide margin. A large chunk of that return came via the miner's plentiful dividends.

A massive bull run for iron ore — which touched six-and-a-half year highs this week at US$126 ($189.06) per tonne — made Jacques' job a lot easier. Even so, Rio's return on invested capital averaged 14 per cent during his tenure, several percentage points ahead of rivals BHP and Vale, according to Bloomberg data.

Jacques' nascent legacy has been obliterated by the dynamiting of Juukan Gorge, along with the rock shelters themselves. Regulations to protect remaining sites will tighten. Mining bosses will tread more warily. Mine development will be slower. In the scheme of things — 46,000 years and counting — that will make very little difference.

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