Record earnings and better social governance for Rio Tinto
Friday, May 6th, 2022
Incoming Rio Tinto chairman Dominic Barton says the company is focused on rebuilding relationships and strengthening its social licence, while setting out a new strategy that seeks to re-establish it as a leader in an industry that has a critical role to play in creating a sustainable and prosperous future for people and for the planet.
Addressing the Rio Tinto annual general meeting in Melbourne, he said Rio Tinto had rolled out three new values – care, courage and curiosity – and a new strategy with the energy transition at its heart.
A Ugandan-born Canadian, Barton spent more than 30 years at McKinsey & Company, including nine as the Global Managing Partner and six as Asia Chairman. Most recently, he has been Canada’s Ambassador to China since 2019.
In the wake of the destruction Juukan Gorge in WA in 2020, Barton said 2021 was a year of transition.
“We appointed a new Chief Executive, a new Chief Financial Officer and nine members of ExCo took on new roles,” he said.
“We are now focused on delivering the strategy, in collaboration with our partners and other stakeholders. In 2021, we achieved our third fatality-free year in a row,” he said.
“While some countries adapted to life with COVID, the pandemic continued to exact a heavy toll during 2021, particularly in some of the developing countries where we operate. I am very proud of the resilience and care shown by everyone in the business, for each other, and for their local communities.
“Our responsibility for the wellbeing of our employees and contractors extends beyond the traditional areas of health and safety.
“In 2021, we launched the Everyday Respect initiative to help us create a safer, more respectful and more inclusive environment by preventing, and improving how we respond, to unacceptable behaviour in the workplace.
“I am grateful to Liz Broderick, former Australian Sex Discrimination Commissioner, for advising the Everyday Respect task force that we set up to drive this initiative, and to the more than 10,000 employees and contractors worldwide who participated in listening sessions and surveys as part of the discovery phase. The findings in the report are deeply confronting, and we are determined to implement all 26 recommendations set out in the report.
“It is clear, both from the findings of the Everyday Respect taskforce and the tragedy at Juukan Gorge, that we must create a work environment where everyone feels safe and empowered to speak up if something is not right.”
Barton said the 2021 operating and project development performance was negatively impacted by COVID-related travel restrictions, labour shortages, supply chain disruptions, as well as the transition to improved communities and heritage management processes in the Pilbara and elsewhere.
“Nevertheless, we achieved record financial results on the back of high commodity prices, with underlying earnings of US$21.4 billion and free cash flow of US$17.7 billion,” he said.
“The Group’s direct economic contribution to the countries where we operate, including payments to our employees, our suppliers, governments, local communities and our shareholders, amounted to US$67 billion. We paid US$13.3 billion in taxes and royalties globally, including A$14.8 billion, here in Australia.
“In view of this strong financial performance, we have paid a final dividend of US417 cents per share, and a special dividend of US 62 cents per share. This represents our highest ever total dividend of some US$16.8 billion, or $14.23 Australian per share.”
Barton replaces outgoing chairman Simon Thompson, who spent four years in the position.