Rio Tinto

Date founded: 1873

Industry: Mining

Corporate headquarters: London, England

Type: Public

The Rio Tinto Group is a global mining and mineral exploration conglomerate dating to 1873 and headquartered in London, England. Its two parent companies are Rio Tinto plc, a public company also headquartered in London, and Rio Tinto Ltd, a public company headquartered in Melbourne, Australia. Their primary business is the exploration, mining and processing of metals and minerals.

Rio Tinto's various divisions work across the globe. The Aluminium group operates aluminium and bauxite mines, refineries and smelters in Australia, Brazil, Canada, France, Guinea, Iceland, New Zealand and Oman. The Copper and Diamonds group operates in Australia, Canada, Chile, Indonesia, Mongolia and the United States. The Energy and Minerals group operates mines and refineries in Australia, Canada, Guinea, Madagascar, Mozambique, Namibia, Serbia, South Africa and the United States. It includes coal, industrial minerals, iron ore and uranium. Iron ore operations are located in Pilbara, Western Australia, and in Singapore. The Growth and Innovation business group, formed in 2016, works with the other groups throughout their product life cycle.

About half of Rio Tinto's global assets are located in Australia. Its aluminium operations include the Weipa bauxite mine in Queensland, the Bell Bay Aluminium, Boyne and Tomago Aluminium Smelters, the Yarwun alumina refinery in Queensland and the Gove Operations Bauxite Mine Alumina Refinery in the Northern Territory. The Amrun project in Queensland, which was being developed in the late 2010s, included a bauxite mine, processing plant and ferry port. Rio Tinto's Argyle diamond mine in East Kimberley, Western Australia, is a leading source of the world's diamonds. Its Australian iron ore operations in Pilbara include fifteen mines, a private rail system, four port terminals, six pastoral stations and an agricultural project. Energy and minerals operations include the Hail Creek and Kestrel coal mines in Queensland; the Energy Resources of Australia Ltd uranium mine at Ranger, on Mirarr land in the Northern Territory; and Damper Salt in Western Australia. Iron ore is mined at Hamersley, Hope Downs and Robe River in Western Australia.

History

On 14 February 1873, a group of investors led by Matheson and Company purchased the Rio Tinto mines in Spain from the Spanish government. Deutsche National Bank and Clark, Punchard and Company joined with Matheson and Company, and together, they established the Rio Tinto Company on 29 March 1873. Mining operations accelerated after the Rothschild family became a significant minority shareholder of the company in the late 1880s. The company built a railroad and pier to connect the mines and transport ore to the coast and processing facilities and villages for its employees. From 1877 to 1891, the Rio Tinto Company was the world's leading copper producer.

Around 1905, Rio Tinto formed the Consolidated Zinc Corporation as a waste treatment company in Victoria. The 1920s say the company increasingly globalise. In 1925, Rio Tinto formed several joint ventures, adopted new technologies and expanded into countries beyond Spain. In 1954, the company sold the original Rio Tinto mines and financed several exploration companies in Australia, Canada and Africa.

The 1940s through 1980s were a time of significant expansion for the company, particularly in Australia. In 1949, the Consolidated Zinc Corporation developed uranium mines at Rum Jungle and Mary Kathleen in Australia. Bell Bay Aluminium became the first aluminium smelter in the Southern Hemisphere in 1955, and the following year, a joint venture with American company Kaiser Aluminum opened the bauxite mine at Weipa. In 1970, bauxite mining began on the Gove Peninsula in North East Arnhem land, Northern Territory. The Argyle diamond field was discovered in 1979, and the mine began operations in 1983. Energy Resources of Australia also began mining uranium oxide at Ranger in the early 1980s.

The modern Rio Tinto resulted from numerous mergers. Rio Tinto Ltd was incorporated in 1959. A few years later, in 1962, British and Australian subsidiaries of the Rio Tinto Company and Zinc Corporation were reorganised into RTZ Corporation and CRA Limited. It went on to buy US Borax in 1968 and BP Minerals in 1989. Then, RTZ and CRA merged in 1995 to become RTZ-CRA, renamed Rio Tinto in 1997. A decade later, Rio Tinto purchased the Canadian company Alcan. In 2010 the company fended off a takeover by BHP-Billiton.

The twenty-first century also brought several shifts in production. Production at the Yarwun alumina refinery began in 2004. One of the pits at Ranger ended operations in 2012 and the Gove Peninsula facility ceased operations in 2014. The following year, 2015, saw the launch of the Amrun bauxite project.

Impact

Rio Tinto has announced its commitment to sustainable development and protecting the environment. It recognised the effects of its operations on climate change and has worked to reduce its carbon dioxide emissions. In 2008, it set a target to reduce its greenhouse gas emissions by 10 per cent by 2015. It surpassed that goal, with an overall 20.3 per cent reduction. Rio Tinto has increased its use of hydropower, with slightly more than 65 per cent of its 2016 electricity sourced from hydropower. It signed the Paris Pledge for Action in 2015 and began searching for solutions to lower carbon dioxide emissions further. In 2017, it sold coal subsidiary Coal & Allied Industries Ltd.

Rio Tinto has formed land use partnerships with traditional owners not only in Australia but also in other countries such as Namibia. The company has also introduced autonomous vehicles and other sophisticated computing technology and worked with government and vocational schools to train mining operators.

In October 2017, the US Securities and Exchange Commission sued Rio Tinto, alleging that it had committed fraud by inflating the value of the Rio Tinto Coal Mozambique assets and failed to disclose its actual value accurately. Rio Tinto first disclosed the impairment of a 2011 financial transaction in its 2012 full-year report instead of in its 2011 full-year report or August 2012 report. The United Kingdom also filed a complaint about the same issues. Rio Tinto and the United Kingdom's Financial Conduct Authority (FCA) settled with no finding of guilt of fraud. The FCA did, however, fine Rio Tinto plc £27 million as a penalty for the delayed impairment disclosure. The Australian Securities and Investments Commission launched its own investigation as well.

Bibliography

Danckert, Sarah. "ASIC Flags Legal Action against Rio Tinto over Alleged Mozambique Fraud." The Sydney Morning Herald, 26 Oct. 2017, www.smh.com.au/business/mining-and-resources/asic-flags-legal-action-against-rio-tinto-over-alleged-mozambique-fraud-20171025-gz8eeb.html. Accessed 27 Nov. 2017.

Harvey, Charles E. The Rio Tinto Company: An Economic History of a Leading International Mining Concern, 1873–1954. Alison Hodge, 1981.

McHugh, Babs. "Robots and Tech Get Vocational Training Tick as Rio Tinto Joins TAFE in Reskilling Mine Workers." Australian Broadcasting Corporation, 26 Oct. 2017, www.abc.net.au/news/rural/2017-10-27/rio-tinto-joins-tafe-in-developing-training-of-mine-workers/9080222. Accessed 27 Nov. 2017.

Partnering for Progress: 2016 Sustainable Development Report. Rio Tinto, www.riotinto.com/documents/RT‗SD2016.pdf. Accessed 27 Nov. 2017.

Regan, James. "Rio Opens Books to over Half-Dozen Possible Suitors for Australia Coal Mines." Reuters, 20 Oct. 2017, www.reuters.com/article/us-rio-tinto-coal-divestiture/rio-opens-books-to-over-half-dozen-possible-suitors-for-australia-coal-mines-sources-idUSKBN1CP0MV. Accessed 27 Nov. 2017.

Rio Tinto in Australia. Rio Tinto, www.riotinto.com/documents/Rio‗Tinto‗in‗Australia‗brochure.pdf. Accessed 27 Nov. 2017.

"Rio Tinto Projects and Operations: Australia." Rio Tinto, www.riotinto.com/australia/projects-and-operations-9561.aspx#energy%20&%20minerals. Accessed 27 Nov. 2017.