Rio hires new chairman to take up fight for Chinalco agreement

Jan Du Plessis faces battle to convince shareholders and regulators

Rio Tinto is set to make a new push to persuade shareholders of the merits of its $19.5bn financing deal with Chinalco, announcing yesterday that it has appointed a new chairman who will champion the arrangement.

Jan Du Plessis, currently chairman of British American Tobacco, is to replace Paul Skinner as Rio's chairman in April, the mining giant said. Mr Du Plessis is Rio's second attempt at replacing Mr Skinner in as many months. Last month, Jim Leng, Mr Skinner's then deputy, quit the miner's board just days after agreeing to become chairman, following a bust-up over whether the Chinalco deal was a better option for fundraising than a rights issue.

Mr Du Plessis, a 55-year-old South African national, who will continue for now as chairman of BAT, a post he has held since 2004, has relatively little experience of the mining sector, having only joined the company's board as a non-executive director in September. Crucially, however, Mr Du Plessis said yesterday that he backed Rio's position that the Chinalco agreement was its best bet as a strategy for weathering the global downturn.

Nevertheless, the Chinalco deal remains controversial. Designed to help Rio reduce its $39bn debt burden, the deal has sparked political concerns in Australia about key mining assets falling into Chinese hands and complaints from investors both in Australia and the UK who say Chinalco is being favoured over other shareholders by the terms of the deal.

Under the deal, the state-owned Chinalco would pay $12.3bn for stakes in Rio's iron ore, copper and aluminium assets and $7.2bn for convertible notes that would double its equity stake in Rio to 18 per cent.

"I am not sure the appointment of anyone would make getting the Chinalco deal through a shoo-in," said Richard Knights, an analyst at the stockbroker Numis. "There will be some objection from shareholders, and even from politicians."

One Australian politician took out television ads yesterday to push for the Chinalco deal to be blocked. "The Australian government would never be allowed to buy a mine in China. So why would we allow the Chinese government to buy and control a key strategic asset in our country?" Senator Barnaby Joyce said in adverts aired in Canberra and in his home state of Queensland, where Chinalco will get stakes in assets.

For the deal to go ahead, Australia's Treasurer needs to approve it on national interest grounds. On Monday, Australia's Foreign Investment Review Board, which advises the Treasurer, Wayne Swan, extended its review of the complex deal for up to 90 days, moving the deadline to June.

Another hurdle is that the Australian Senate is expected to endorse an inquiry into whether foreign investments in Australian companies are in Australia's national interest.

Assuming it gets legal approval from Australia, Rio Tinto plans to put the deal to a shareholder vote in an ordinary resolution, meaning it would need support from a simple majority for the deal to go ahead. However, British shareholders have said that the scope of the proposal, which would give Chinalco two seats on the board and joint venture rights on key assets, meant that Rio should put up a special resolution, which would require 75 per cent support. Rio Tinto is understood to be considering whether to do so.

Mr Du Plessis' appointment will allow Mr Skinner to leave the company in April, as he had originally planned. The move will put him back on the job market, where he had been mooted to take over as chairman of the oil giant BP, although a source there played down the chances of his returning to the fray.

Life and Style
The new Windows 10 Start Menu
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
books(and not a Buzzfeed article in sight)
Life and Style
fashionShame it had to end like that, says Alexander Fury
Arts and Entertainment
Mystery man: Ben Affleck and Rosamund Pike in '‘Gone Girl'
films... by the director David Fincher
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
ebooksAn unforgettable anthology of contemporary reportage
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
people'I’d rather have Fred and Rose West quote my characters on childcare'
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
Life and Style
Magic roundabouts: the gyratory system that has excited enthusiasts in Swindon
motoringJust who are the Roundabout Appreciation Society?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?