The History of Rio Tinto: Mining Innovation and Global Controversy

For over a century, Rio Tinto has perfected the business of finding, mining, and processing natural resources.

For business owners, marketers, and anyone intending to learn from successful business stories, the history of Rio Tinto highlights the power of innovation and continuous improvement.

At Business2Community, we’ve consulted a wide range of sources to provide a comprehensive account of Rio Tinto’s journey to becoming a key player in the global mining sector. Keep reading to discover the mining company’s key milestones, ventures, and more.

Rio Tinto: Main Highlights

• Formation and Growth:
  • Established in 1873 in Huelva, Spain.
  • Global operations by 1963, spanning Australia, North America, UK, and Africa.
• Strategic Diversification:
  • Focus on strategic acquisitions during the 2000s.
  • Ceased coal production in 2017.
  • Third-largest mining company in the world as of July 2024, with a market cap of $110.91 billion.
• Ownership and Leadership:
  • Largest shareholder: Aluminium Corporation of China Limited (14.57%).
  • Current CEO: Jakob Stausholm (since January 2021).
• Key Historical Milestones:
  • From early copper production in Spain to a diversified global portfolio.
  • Expansion into uranium, bauxite, and iron ore sectors.
• Challenges and Controversies:
  • Leadership changes due to financial and ethical scandals.
  • Destruction of ancient rock shelters in Australia in 2020.
• Future Outlook:
  • Emphasis on renewable energy and sustainability.
  • Significant investments in low-carbon technologies and carbon capture partnerships.

Who Owns Rio Tinto?

As a public company, Rio Tinto is owned by various shareholders. The largest shareholder is Aluminium Corporation of China Limited with an ownership stake of 14.57%. This is followed by BlackRock Investment Management (UK) Ltd. which owns 6.142% of the company.

Rio Tinto’s story began when the Spanish government put the Rio Tinto mines in Huelva up for sale in 1869. A group of businessmen led by Hugh Matheson won the bid, and on March 29, 1873, the Rio Tinto Company was registered in London.

In 1995, the RTZ Corporation PLC (RTZ) merged with ConZinc RioTinto of Australia Ltd (CRA) to form RTZ-CRA in a dual-listed company structure in Australia and the United Kingdom.  The Rio Tinto Group officially listed Rio Tinto Limited on the Australian Securities Exchange and Rio Tinto plc on the London Stock Exchange in 1997.

Who is the Rio Tinto CEO?

The CEO of Rio Tinto is Jakob Stausholm. Appointed in January 2021, Stausholm joined the company in 2018 as an Executive Director and Chief Finance Officer.

Leveraging strategic, commercial, and governance expertise, he has focused on the following areas during his tenure as chief executive:

• Improving operational performance.
• Driving value-creating growth options.
• Remaining disciplined on capital allocation.
• Delivering returns for shareholders.

Stausholm is one of many CEOs who have lead Rio Tinto over the decades. Here are all of the CEOs in the history of Rio Tinto.

Rio Tinto’s strong leadership has been instrumental in its success. However, recent years have seen significant turmoil at the executive level.

In 2013, CEO Tom Albanese was forced to step down following a $14 billion write-down. His successor Sam Walsh resigned in the wake of a bribery scandal in 2016.

Notably, in September 2020, the company’s chief executive Jean-Sébastien Jacques along with two executives were forced to resign following Rio Tinto’s role in destroying two ancient rock shelters in the Pilbara region of Australia.

Growth and Development of Rio Tinto

Rio Tinto is a leading global mining and materials company that operates in 35 countries. The company’s main business is the production of raw materials including copper, iron ore, bauxite, diamonds, uranium, and industrial minerals including titanium dioxide.

As of July 5, 2024, Rio Tinto had a market cap of $110.91 billion, making it the third largest mining company in the world behind BHP and China Shenhua Energy. Below, we track decades of Rio Tinto history.

1873-1949: Rio Tinto is Born

Rio Tinto was formed by investors in 1873 to mine ancient copper workings at Rio Tinto near Huelva in Southern Spain. Using new technical methods, the team transformed the ancient mine.

It took 10 years of consistent funding and expansion for the Rio Tinto Mine to account for 10% of the world’s copper production.

By 1929, the company had ventured into Zambia’s copper belt, first indirectly through Minerals Separation Ltd and then through the formation of Rhokana Corporation Ltd.

During World War II, Rio Tinto held onto these African copper assets, which ultimately saved the company.

1950-1969: Rio Tinto Regroups After the War

After the war, the company was restructured and by 1953, it had expanded its exploration into South Africa, Canada, and Australia. In 1954, the Rio Tinto mines were sold back to the Spanish government with the company retaining a one-third shareholding in the Spanish operations.

In the late 50s, Rio Tinto began to explore uranium opportunities in Canada and Australia.  In 1956, the company signed a lucrative, first-of-its-kind uranium oxide contract with the Canadian government.

In 1962, The Rio Tinto Company Limited and Consolidated Zinc Corporation Limited merged to form the Rio Tinto-Zinc Corporation (RTZ), and Consolidated Zinc Pty Ltd and the Rio Tinto Mining Company of Australia Ltd combined their Australian assets to form ConZinc Rio Tinto of Australia Ltd (CRA).

A year later, commercial bauxite mining began in Weipa, Australia. By then, the company had grown into a global company with its Australian operations taking the lead, followed by North America, the UK, and Africa. Expanding its reach, the company signed a sales contract with Japanese steel mills in 1965 for 65.5 million tonnes over the next 16 years.

In 1967, a large, low-grade copper deposit was discovered in Bougainville, Papua New Guinea. This became the largest individual mining development yet undertaken by the company with predicted total costs of approximately $400 million.

1970-1979: Rio Tinto Company Goes Global

Throughout the 1970s, Rio Tinto focused on becoming a global investment house. The company added to its aluminum operations in the UK, Australasia, Canada, and Europe.

By the mid-1970s, Rio Tinto had bought a majority stake in Coal & Allied, the largest coal producer in New South Wales. It also increased its salt operations through the Dampier Salt acquisition. The company also set up its first Environmental Affairs Group, to report environmental concerns to shareholders.

By the end of the decade, Rio Tinto had sent its first shipments of steel to China and iron ore from its Pilbara iron ore mine to Korea. Production was also underway at the Rössing Uranium Mine in Namibia – the world’s largest mine of its kind at the time.

1980-1989: Rio Tinto Mines Diamonds

As the company entered the 1980s, it discovered rich diamond deposits at Smoke Creek in Western Australia. In an important step in its relationship with China, the company set up an office in Beijing in 1983.

Rio Tinto expanded its copper operations in 1985 via a joint venture with BHP for the Minera Escondida mine in Chile and the Neves Corvo copper and zinc mine in Portugal.  That same year, the Argyle Diamond Mine was fully operational, with a sales office in Antwerp.

Combining its lead, zinc, and silver interests with North Broken Hill Peko, Rio Tinto formed the new company Pasminco Ltd in 1988. The next year, the company set up its Mumbai office. In the push towards prioritizing its mining portfolio, Rio Pinto sold all its oil and gas assets.

The company acquired Kennecott’s Bingham Canyon copper and gold mine located just outside Salt Lake City, Utah, making it one of the world’s largest gold producers outside of South Africa. The purchase also made the company a significant player in titanium dioxide feedstock used by the pigment industry.

Through the deal, Rio Tinto inherited a complex set of environmental problems. The now wholly-owned Kennecott operation was one of the largest emitters of toxic pollutants in the country. The company was hit with hefty fines for improper use of transformers using PCBs. It was also repeatedly charged with groundwater contamination violations, eventually signing a $20 million consent decree with the US Department of Justice.

1990-1999: Rio Tinto Focuses Solely on Mining

Rio Tinto’s operations at the Panguna Mine in Bougainville, New Guinea, were shut down in 1990 after local protests over the disbursement of revenue from the mine degenerated into a civil war that killed as many as 20,000 people.

In 1991, Rio Tinto owned 200 subsidiaries in 40 countries. By 1993, Rio Tinto had set up its energy interests in America, sold RTZ Pillar, and divested its uranium businesses in Canada and Australia to focus solely on its mining-related activities.

With a turnover of $10.8 billion in 1996, Rio Tinto was one of the largest mining companies in the world. It controlled 55% of the market for borates, 15% of industrial diamonds, 8% of uranium, and significant percentages of world copper, bauxite, and iron ore production.

By 1999, the company, now officially known as Rio Tinto:

• Began explorations for iron ore in the Republic of Guinea
• Acquired the world’s largest ilmenite deposit in Lac Tio, Quebec
• Acquired the Metallurgical Complex at Sorel-Tracy

To show its commitment to sustainability, the company established the Global Mining Initiative involving the mining industry and external organizations in 1999.

2000-2009: Rio Tinto Makes Strategic Acquisitions

During the 2000s, Rio Tinto turned to strategic acquisitions to diversify its portfolio. In 2000, the company acquired North Ltd and Ashton Mining expanding its iron ore, diamond, and coal assets. The next year, the company began construction at the Diavik Diamond Mine in Canada’s Northwest Territories.

In 2005, the company invested $1 billion to develop mining facilities and build a port at QIT Madagascar Minerals (QMM). The next year, a strategic partnership with Ivanhoe Mines to mine copper in Mongolia, was established. Following the formation of Rio Tinto Alcan, the company became the world’s leading producer of aluminum in 2007.

By 2008, the company had became a global leader in fully integrated, autonomous mining through its Mine of the Future project. That same year, 18 lives were tragically lost at the La Granja copper project in Peru and Rio Tinto’s mines across the world. At the end of the decade, two major deals fell through: the $19.5 billion strategic partnership with Chinalco and a joint venture with BHP Billiton.

2010-2015: Rio Tinto Prioritizes Energy Efficiency

In 2010, Rio Tinto started managing the Oyu Tolgoi project in Mongolia. To meet increasing iron demand, the Dampier Port was upgraded to produce iron ore amounting to 0.23 billion tons annually.

In 2011, Rio Tinto registered Chinalco Rio Tinto Exploration Co. Ltd (CRTX), a joint venture for exploration in China. The company also doubled its holding in the Richards Bay Minerals (RBM) South African mineral sands mining and processing facilities, buying out BHP Billiton’s 37% ownership stake.

By 2012, the company had rolled out automated haul trucks in partnership with Komatsu in Pilbara, Western Australia. Rio Tinto also installed solar energy systems across 30 sites across Australia, the US, and Africa.  Its 4-turbine wind farm at Diavik Diamond Mine went online, offsetting the mine’s diesel use by more than 38 million liters.

While the company had initially seen its Mozambique coal assets as the world’s next major coal basin, it announced impairments worth $3 billion relating to Rio Tinto Coal Mozambique. This was primarily due to a lack of approvals and challenging development conditions. In 2014, Rio Tinto divested all of its coal assets in the country.

At the beginning of 2015, Rio Tinto’s policies on worker safety were called into question after fatalities in Madagascar and at the company’s Grasberg mine in Indonesia.

That same year, Rio Tinto signed the Paris Pledge for Action on Climate Change and committed to extend its greenhouse gas emissions intensity target period to 2020 and a 24% reduction from the 2008 baseline.

2016-2020: Rio Tinto Abandons Coal

In 2016, Rio Tinto adjusted its product group structure into four distinct groups:

• Aluminium
• Copper and diamonds
• Energy and minerals
• Iron ore

This was done to better align its assets with its business strategy and efficiency goals. That same year, Rio Tinto launched the industry’s first certified low-carbon aluminum, RenewAl.

Following the divestment of Coal & Allied in 2017, Rio Tinto became the first major mining company to stop producing coal.

Meanwhile, Britain’s Financial Conduct Authority fined Rio Tinto £27.3 million ($28.59 million at the time) for failing to conduct an impairment test for Rio Tinto Coal Mozambique as required by International Accounting Standards.

In 2018, Rio Tinto formed a 50:50 joint venture with Minmetals to search for world-class mineral deposits in China. Additionally, the company completed its first shipment of Monazite, a rare earth element used in renewable energy technologies from its Mandena site in Madagascar.

Rio Tinto also formed ELYSIS, an active partnership with Alcoa, Apple, and the governments of Canada and Quebec, to work on disruptive technology that eliminates all direct greenhouse gas emissions from the aluminum smelting process.

The company also committed to net zero by 2050 and accelerated its decarbonization targets to 15% by 2025 and 50% by 2030. The move was backed by the formation of a new Rio Tinto Energy Development team.

2020-Present: Rio Tinto Focuses on Renewable Energy

Despite a challenging year with the pandemic, Rio Tinto delivered net earnings of $9.8 billion in 2020 compared to $8 billion in 2019. The company also paid out dividends of $9 billion for a total shareholder return of 110% compared to 49.6% in 2019.

The company’s strong performance in 2020 was overshadowed by the destruction of two ancient rock shelters in the Juukan Gorge. By breaching the trust of the Traditional Owners of the lands, the company also lost its Reconciliation Action Plan (RAP) partner status and was suspended from the program.

Additionally, in September 2020, the Human Rights Law Centre filed a complaint against Rio Tinto on behalf of 156 Bougainville residents for serious human rights violations and other injustices that occurred during its mining operations in the 1980s.

Following these controversies, Rio Tinto focused on rebuilding relationships and strengthening its social license throughout 2021. In addition to maintaining its 3-year zero fatality record, and meeting the global need for renewable power sources through its new battery materials business, the company doubled its net earnings to over $21 billion.

Rio Tinto redefined its purpose and pledged to find better ways to provide the materials the world needs in 2022. This included expanding its offering of low-carbon aluminum solutions and forming strategic partnerships. One notable partnership was with Carbfix to implement a technology for capturing carbon and permanently storing it underground at the ISAL aluminum smelter in Iceland.

At the beginning of 2023, Rio Tinto agreed to pay a $22 million penalty to the Securities and Exchange Commission (SEC) for paying a $10.5 million bribe to a friend of former Guinean President Alpha Condé to retain iron ore rights.

During the year, the company continued to work on technologies and global partnerships to:

• Decarbonize steel and aluminum production
• Supply copper and other essential minerals more efficiently
• Create innovative products from waste

These initiatives delivered revenues of $54 billion and a total shareholder return of 134%, despite macroeconomic challenges.

In April 2024, locals, civil society, and environmental groups accused Rio Tinto of pollution, displacing local communities, destroying livelihoods, and failing to honor its promises to employ locals at its QMM mining operation in Madagascar.

Against this backdrop, Rio Tinto had stable operating results in the first quarter. The company made significant strides in expanding its energy-transition materials business. It also took major steps to decarbonize by signing power purchase agreements for renewable energy solutions at its Gladstone operations — a crucial move in achieving its 2030 emissions targets.

Rio Tinto Dividend History

Rio Tinto shares are listed on several major stock exchanges including the London Stock Exchange under the ticker symbol RIO:L, the Australian Securities Exchange under RIO: AX, and the New York Stock Exchange under RIO. Over the years, Rio Tinto’s shares have appreciated in value, reflecting the company’s continuous growth and success.

Rio Tinto has a long history of paying dividends and maximizing shareholder value. In 2016, the company committed to paying dividends of 40% to 60% of underlying earnings and has successfully done so at the top end of the range for seven years.

The company’s trailing twelve-month (TTM) dividend payout as of July 05, 2024, was $5.15, while its dividend yield was 7.61%.

History of the Rio Tinto Logo

Due to Rio Tinto’s complex ownership structure throughout the decades, a unified logo and branding didn’t exist until its consolidation and official renaming in 1997. Following the milestone, Rio Tinto adopted a distinctive wordmark featuring the company’s name in a bold, modern typeface.

While the inspiration behind the wordmark logo is unknown, it aptly conveys the company’s position as a leading mining and metals company.

The Future of Rio Tinto

Rio Tinto’s history highlights the power of innovation and continuous improvement. By leveraging these principles, Rio Tinto has evolved into a mining powerhouse with a diverse and profitable global portfolio.

Unfortunately, its legacy also reflects a pattern of placing profits before people and the planet. Rio Tinto has been accused of profiting from extractive industries. It has also developed a long-standing reputation for exploiting natural resources with little regard for the local environment and communities.

As the world looks to more renewable forms of energy, Rio Tinto aims to be a crucial player in the transition. Looking ahead, the company will need to address its past wrongdoings and show a genuine commitment to responsible practices.

By building collaborative partnerships with governments, communities, and other industry leaders, Rio Tinto can secure its position as a crucial partner in the global effort for sustainable and equitable energy solutions.

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