Rio Tinto boss says mining industry must win back trust of local communities - ABC Online

Posted November 25, 2016 17:36:39

Rio Tinto chief executive Jean-Sébastien Jacques says the mining industry must win back the trust of local communities in the wake of the scandal over consultancy payments in Africa.

The company sacked two top executives following an internal probe into $US10.5 million in payments given to a consultant who helped it secure rights to its iron ore project in Guinea in 2011.

In a speech on Friday to the Melbourne Mining Club, Mr Jacques said the issue of licence to operate was make or break for the mining industry.

"The mining industry has a challenge. We need to be able to explain to the local communities what the benefits we are providing," the Ro Tinto boss said.

"We have not done it in a very effective way and therefore I think there is a need for us to step up our game."

Mr Jacques did not respond specifically to a question about whether Rio had discovered questionable practices at other projects.

He repeated twice the statement he made to an investor briefing on Thursday in response to questions from journalists about the Guinea scandal.

"I'm very clear, I take integrity very seriously, I take our code of conduct very seriously, for me it's absolutely non-negotiable," Mr Jacques said.

The Guinea payments have been referred to authorities in the US, the UK and Australia including the US Justice Department and the Australian Securities and Investments Commission.

Rio has signed an agreement to sell its stake in the Simandou project in Guinea to Chinese state backed firm Chinalco in a deal worth up to $US1.3 billion.

Mr Jacques would not comment on when Rio expected to receive its first payment from Chinalco, only saying that the deal had not been completed yet.

Mr Jacques also said that the mining industry could gain from the election of Donald Trump as the next US president.

"The permitting process in the US is very very slow. If the Trump administration intention is to cut through red tape then there could be some significant benefits for all of us," Mr Jacques said.

The Rio boss also restated the company's opposition to calls by the National Party in Western Australia to increase the state's mining lease fee.

Mr Jacques argued the $5-a-tonne proposal could see Australia lose business to lower-taxing countries like Brazil.

He denied the big miner was merely trying to protect its profits by arguing against a higher charge.

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