Rio Tinto exec suspended over $10.5m payment

Will Green is news editor of Supply Management
10 November 2016

Rio Tinto has suspended a senior member of staff following an inquiry into a $10.5m payment made to a consultant on a mining project in West Africa.

The company said it launched an investigation, led by an external counsel, in August 2016 after it discovered email correspondence from 2011 showing “contractual payments” made to a consultant providing “advisory services” on the Simandou scheme in Guinea.

Rio Tinto said energy and minerals chief executive Alan Davies, who had accountability for the Simandou project, had been suspended with immediate effect.

At the same time legal and regulatory affairs group executive Debra Valentine, who had intended to retire in May 2017, has stepped down from her role.

“Based on the investigation to date, Rio Tinto has notified the relevant authorities in the United Kingdom and United States and is in the process of contacting the Australian authorities,” said the company.

“Rio Tinto intends to co-operate fully with any subsequent inquiries from all of the relevant authorities. Further comment at this time is therefore not appropriate.”

Separately, Rio Tinto has agreed to sell its stake in the Simandou iron ore mine to Chinalco, another stakeholder in the project, for a sum between $1.1bn and $1.3bn.

Rio Tinto has described Simandou as the “largest planned integrated mining and infrastructure development contemplated in Africa”, providing access to “one of the world’s largest untapped high-grade iron ore resources”.

The $20bn project includes a railway, port, access roads and power generation.

“The project has the potential to transform the Guinean economy and bolster the West African nation’s global competitiveness as an attractive and stable investment destination,” said Rio Tinto.

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