Rio Tinto refuses to give in to mounting pressure to delist in London and move price exclusively to Australia
Rio Tinto refuses to give in to mounting pressure to delist from London and shift its course exclusively to Australia.
The mining giant is a dual-listed company – two separate companies that operate as one company and are listed on two exchanges. The stock is traded in Sydney and London, where it is a member of the prestigious FTSE100 index.
If Rio were to scrap its London quote, it would deal a devastating blow to the LSE, which is known as a home for miners.
Digging deep: If Rio cut its London quote, it would deal a devastating blow to the LSE, known as a home for miners
City sources told the Mail that Rio faced calls to leave London after it blew up two 46,000-year-old Aboriginal caves in Western Australia last year to expand an iron ore mine.
The tragedy prompted a purge of the board of directors, which included then chief executive Jean-Sebastien Jacques, and a parliamentary inquiry. And it prompted campaigners, politicians, local communities and investors to urge Rio to put more emphasis on Australia, where it does much of its mining operations. They claimed the company had no contact with the indigenous peoples who lived on the most lucrative land.
Some have pressured the company to simplify its structure and reduce it to one company in Australia as it tries to restore its reputation.
But the bosses don’t flinch, citing the fact that 76 percent of investors own shares in the London-listed company, compared to 24 percent in the Australian entity.
A Rio spokesperson said: “We remain very comfortable with our dual-listed corporate structure.”
But the question could be raised again if Rio hires an Australian to replace chairman Simon Thompson, who will resign at next year’s annual meeting.
Rio’s bosses also insist that the company is different from its rival BHP, which last month announced it was severing its dual structure after the sale of its oil and gas business.
The LSE still suffers from the move – which will knock out one of the largest companies on the index.