Rio Tinto sacks execs in Guinea payment probe

PERTH (miningweekly.com) – Mining major Rio Tinto has terminated the contracts of energy and minerals chief Alan Davies and legal and regulatory affairs group executive Debra Valentine amid the furore caused by a $10.5-million payment to a consultant in Guinea.

Rio in November suspended the two staff members and contacted authorities in the US, the UK and Australia, after becoming aware of email correspondence from 2011 relating to the contractual payment to a consultant providing advisory services on the Simandou iron-ore project.

Rio told shareholders on Thursday that the company’s board had reviewed the findings to date of an internal investigation into the matter, and had taken the decision to terminate the contracts of both Davies and Valentine.

The company said that while the decision to terminate their employ did not pre-judge the course of any external inquiries into the matter, the board concluded that the executives failed to “maintain the standards expected from them” under the company’s global code of conduct.

Neither Davies, nor Valentine would be eligible for any short-term incentive plan awards for 2016, and Rio would also cancel all unvested incentive plan awards from previous years.

Davies, for his part, expressed surprise with his dismissal, saying he had not been privy to the company’s internal investigation report, nor had he been given any indication concerning the reason for it.

“There are no grounds for the termination of my employment,” the Australian Financial Review quoted Davies as saying.

He said the company had made no effort to abide by due process or to respect his rights as an employee, giving him no opportunity to answer to any allegations.

“This treatment of me and my past and recent colleagues is totally at variance with the values and behaviours of the company to which I have devoted my professional life.

“My rights are fully reserved, and I have been left with no option but to take the strongest possible legal action in response,” Davies said.

Meanwhile, Rio announced that Davies would be replaced by Bob Baatar, who would join the executive committee as energy and minerals CEO.

Baatar joined Rio in 2013 as copper international operations president, and is the MD of marine and VP of iron-ore sales and marketing.