Difference between revisions of "Rio Tinto Group"

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'''Rio Tinto Group''' is a British-Australian multinational metals and mining corporation with headquarters in London, in the United Kingdom, and a management office in Melbourne, Australia. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain, from the Spanish government.  Since then, the company has grown through a long series of mergers and acquisitions to place itself among the world leaders in the production of many commodities, including aluminium, iron ore, copper, uranium, coal, and diamonds.<ref name="PR-2008">http://www.riotinto.com/documents/Media/PR712g_Rio_Tinto_announces_underlying_earnings_of__10.3_billion.pdf</ref>   
 
'''Rio Tinto Group''' is a British-Australian multinational metals and mining corporation with headquarters in London, in the United Kingdom, and a management office in Melbourne, Australia. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain, from the Spanish government.  Since then, the company has grown through a long series of mergers and acquisitions to place itself among the world leaders in the production of many commodities, including aluminium, iron ore, copper, uranium, coal, and diamonds.<ref name="PR-2008">http://www.riotinto.com/documents/Media/PR712g_Rio_Tinto_announces_underlying_earnings_of__10.3_billion.pdf</ref>   
  
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Although primarily focused on extraction of minerals, Rio Tinto also has significant operations in refining, particularly for refining bauxite and iron ore.<ref name="RT-Prod"/>  The company has operations on six continents but is mainly concentrated in Australia and Canada, and owns gross assets valued at $81&nbsp;billion through a complex web of wholly and partly owned subsidiaries.<ref name="Chartbook">http://www.riotinto.com/documents/investors_databook/March_09_Chartbook.pdf</ref> Its head office in the United Kingdom is in the City of Westminster, London, while its Australian head office is in the city of Melbourne.<ref>"[http://www.riotinto.com/contactus.asp Contact Us]." Rio Tinto Group. Retrieved 9 April 2010.</ref><ref name="MelbourneCityMAP">"[http://www.melbourne.vic.gov.au/AboutMelbourne/CityMaps/Documents/City_of_Melbourne_suburb_and_postcode_boundary_map.pdf Suburbs & Postcodes]." City of Melbourne. Retrieved 5 April 2010.</ref>
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The company has operations on six continents but is mainly concentrated in Australia and Canada, and owns gross assets valued at $81&nbsp;billion through a complex web of wholly and partly owned subsidiaries.<ref name="Chartbook">http://www.riotinto.com/documents/investors_databook/March_09_Chartbook.pdf</ref> Its head office in the United Kingdom is in the City of Westminster, London, while its Australian head office is in the city of Melbourne.<ref>"[http://www.riotinto.com/contactus.asp Contact Us]." Rio Tinto Group. Retrieved 9 April 2010.</ref><ref name="MelbourneCityMAP">"[http://www.melbourne.vic.gov.au/AboutMelbourne/CityMaps/Documents/City_of_Melbourne_suburb_and_postcode_boundary_map.pdf Suburbs & Postcodes]." City of Melbourne. Retrieved 5 April 2010.</ref>
  
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The companys plan to mine [[lithium]] in [[Serbia]] being halted gave the Australian government reason to be uncooperative with [[Novak Djokovic]].
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Deep politician [[Lord Alfred Milner]] was an early chairman of Rio Tinto.<ref>https://www.cascade.app/studies/riotinto-strategy-study</ref>
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The halting of a company plan to mine [[lithium]] in [[Serbia]] gave the Australian government a pretext to be uncooperative with [[Novak Djokovic]].
  
 
==Formation==
 
==Formation==
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Since antiquity, a site along the Rio Tinto, in the [[Andalusia]]n [[Huelva (province)|Province of Huelva]] in Spain has been mined for copper, silver, gold, and other minerals.<ref name="Carleton">http://serc.carleton.edu/microbelife/topics</ref> Approximately 3000 BC, [[Iberians]] and [[Tartessos|Tartessians]] began mining the site, followed by the [[Phoenicia]]ns, [[Ancient Greece|Greeks]], [[Roman Empire|Romans]], [[Visigoths]], and [[Moors]]. After a period of abandonment, the mines were rediscovered in 1556 and the Spanish government began operating them once again in 1724.<ref name="Carleton"/>
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The company was founded with the purchase of a mine run by the Spanish government in 1873, at a price later determined to be well below actual value.<ref name="Huelva">http://www.andalucia.com/province/huelva/riotinto/home.htm</ref>  
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However, Spain's mining operations there were inefficient, and the government itself was otherwise distracted by political and financial crises,<ref name="Harvey">[http://books.google.com/?id=FgW09Y59CrkC Harvey, Charles E. (1981). The Rio Tinto Company: An Economic History of a leading international mining concern, 1873–1954. Alison Hodge Publishers. pp. 10–11, 23, 52, 89, 202, 207–215, 314–324. ISBN 0-906720-03-6, 9780906720035]</ref> leading the government to sell the mines in 1873 at a price later determined to be well below actual value.<ref name="Huelva">http://www.andalucia.com/province/huelva/riotinto/home.htm</ref> The purchasers of the mine were led by [[Hugh Matheson (industrialist)|Hugh Matheson]]'s Matheson and Company, which ultimately formed a syndicate consisting of [[Deutsche Bank]] (56% ownership), Matheson (24%), and railway firm Clark, Punchard and Company (20%). At an auction held by the Spanish government for sale of the mine on 14 February 1873, the group won with a bid [[Pound sterling|GB£]]3,680,000 ([[Spanish peseta|ESP]] 92,800,000). The bid also specified that Spain permanently relinquish any right to claim [[royalties]] on the mine's production. Following purchase of the mine, the syndicate launched the Rio Tinto Company, registering it on 29 March 1873.<ref name="Harvey"/> At the end of the 1880s, control of the firm was passed to the [[Rothschild family]], who greatly increased the scale of its mining operations.<ref>''The Rio Tinto Company: an economic history of a leading international mining concern'', Charles E. Harvey (1981), page 188</ref>
 
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==Operating history==
 
  
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Following their purchase of the Rio Tinto Mine, the new ownership constructed a number of new processing facilities, innovated new mining techniques, and expanded mining activities.<ref name="Harvey"/>
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The purchasers of the mine were led by [[Hugh Matheson (industrialist)|Hugh Matheson]]'s Matheson and Company, which ultimately formed a syndicate consisting of [[Deutsche Bank]] (56% ownership), Matheson (24%), and railway firm Clark, Punchard and Company (20%). At an auction held by the Spanish government for sale of the mine on 14 February 1873, the group won with a bid [[Pound sterling|GB£]]3,680,000 ([[Spanish peseta|ESP]] 92,800,000). The bid also specified that Spain permanently relinquish any right to claim [[royalties]] on the mine's production. Following purchase of the mine, the syndicate launched the Rio Tinto Company, registering it on 29 March 1873.<ref name="Harvey"/> At the end of the 1880s, control of the firm was passed to the [[Rothschild family]], who greatly increased the scale of its mining operations.<ref>''The Rio Tinto Company: an economic history of a leading international mining concern'', Charles E. Harvey (1981), page 188</ref>
  
 
From 1877 to 1891, the Rio Tinto Mine was the world's leading producer of copper.<ref name="HJStevens">Stevens, Horace Jared (1908). The Copper Handbook. 8. Horace J. Stevens. p. 1547</ref>
 
From 1877 to 1891, the Rio Tinto Mine was the world's leading producer of copper.<ref name="HJStevens">Stevens, Horace Jared (1908). The Copper Handbook. 8. Horace J. Stevens. p. 1547</ref>
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===Early acquisitions===
 
===Early acquisitions===
  
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The company's first major acquisition occurred in 1929, when the company issued stock for the purpose of raising 2.5&nbsp;million pounds to invest in Rhodesian copper mining companies, which was fully invested by the end of 1930.  The Rio Tinto company consolidated its holdings of these various firms under the Rhokana Corporation by forcing the various companies to merge.<ref name="Harvey"/>
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The company's first major acquisition occurred in 1929, when the company issued stock for the purpose of raising 2.5&nbsp;million pounds to invest in Rhodesian copper mining companies, which was fully invested by the end of 1930.  The Rio Tinto company consolidated its holdings of these various firms under the Rhokana Corporation by forcing the various companies to merge.<ref name="Harvey">https://archive.org/details/riotintocompanye0000harv</ref>
  
 
Rio Tinto's investment in Rhodesian copper mines did much to support the company through troubled times at its Spanish Rio Tinto operations spanning the [[Spanish Civil War]], World War II, and Franco's nationalistic policies.  In [[1950s]] the political situation made it increasingly difficult for mostly British and French owners to extract profits from Spanish operations, and the company decided to dispose of the mines from which it took its name.<ref name="Harvey"/> Thus, in 1954 Rio Tinto Company sold two thirds of its stake in the Rio Tinto mines, disposing of the rest over the following years.<ref name="RTWeb"/>  The sale of the mines financed extensive exploration activities over the following decade.<ref name="RT-DLC">http://www.riotinto.com/documents/Investors/dlcsep06.pdf</ref>
 
Rio Tinto's investment in Rhodesian copper mines did much to support the company through troubled times at its Spanish Rio Tinto operations spanning the [[Spanish Civil War]], World War II, and Franco's nationalistic policies.  In [[1950s]] the political situation made it increasingly difficult for mostly British and French owners to extract profits from Spanish operations, and the company decided to dispose of the mines from which it took its name.<ref name="Harvey"/> Thus, in 1954 Rio Tinto Company sold two thirds of its stake in the Rio Tinto mines, disposing of the rest over the following years.<ref name="RTWeb"/>  The sale of the mines financed extensive exploration activities over the following decade.<ref name="RT-DLC">http://www.riotinto.com/documents/Investors/dlcsep06.pdf</ref>
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As of mid-February 2009, shareholders were geographically distributed 42% in the United Kingdom, 18% in North America, 16% in Australia, 14% in Asia, and 10% in continental Europe.<ref name="Chartbook"/>
 
As of mid-February 2009, shareholders were geographically distributed 42% in the United Kingdom, 18% in North America, 16% in Australia, 14% in Asia, and 10% in continental Europe.<ref name="Chartbook"/>
  
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==Operations==
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==Environment==
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Rio Tinto's main business is the production of raw materials including copper, iron ore, coal, bauxite, diamonds, uranium, and industrial minerals including titanium dioxide, talc, salt, gypsum, and borates.  Rio Tinto also performs processing on some of these materials, with plants dedicated to processing bauxite into alumina and aluminium, and smelting iron ore into iron.  The company also produces other metals and minerals as [[byproduct]]s from the processing of its main resources, including gold, silver, [[molybdenum]], [[sulphuric acid]], nickel, [[potash]], lead, and [[zinc]].<ref name="RT-Prod">http://www.riotinto.com/whatweproduce/218_our_products.asp</ref>  Rio Tinto controls gross assets of $81&nbsp;billion in value across the globe, with main concentrations in Australia (35%), Canada (34%), Europe (13%), and the United States (11%), and smaller holdings in Africa (3%), South America (3%), and Indonesia (1%).<ref name="Chartbook"/>
 
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===Copper and byproducts: Rio Tinto Copper===
 
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Copper was one of Rio Tinto Group's main products from its earliest days operating at the Rio Tinto complex of mines in Spain.  Since that time, the company has divested itself from its original Spanish mines, and grown its copper mining capacity through acquisitions of major copper resources around the world.  The copper group's main active mining interests are [[Escondida|Minera Escondida]] in Chile, the [[Grasberg mine|Grasberg Mine]] on Indonesia, [[Kennecott Utah Copper]] in the United States, [[Northparkes]] in Australia, and [[Palabora]] in South Africa.  Most of these mines are joint ventures with other major mining companies, with Rio Tinto's ownership ranging from 30% to 80%; only Kennecott is wholly owned.  Operations typically include the mining of ore through to production of 99.99% purified copper, including extraction of economically valuable byproducts.<ref name="RT-copper">http://www.riotinto.com/whatweproduce/copper_578.asp</ref>  Together, Rio Tinto's share of copper production at its mines totalled nearly 700,000 [[tonne]]s, making the company the fourth-largest copper producer in the world.
 
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Rio Tinto Copper continues to seek new opportunities for expansion, with major exploration activities at the [[Resolution Copper]] project in the United States, [[La Granja mine|La Granja Mine]] in Peru, and [[Oyu Tolgoi mine|Oyu Tolgoi]] in Mongolia.  In addition, the company is seeking to become a major producer of nickel, with exploration projects currently underway in the United States and Indonesia.<ref name="RT-copper"/>
 
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Although not the primary focus of Rio Tinto Copper's operations, several economically valuable [[byproduct]]s are produced during the refining of copper ore into purified copper.  Gold, silver, molybdenum, and sulphuric acid are all removed from copper ore during processing.  Due to the scale of Rio Tinto's copper mining and processing facilities, the company is also a leading producer of these materials, which drive substantial revenues to the company.<ref name="RT-copper"/>
 
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===Aluminium and related products: Rio Tinto Alcan===
 
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The Rio Tinto Group has consolidated its aluminium-related businesses in its Rio Tinto Alcan division.  Rio Tinto Alcan was formed in late 2007, when Rio Tinto purchased the Canadian company Alcan for $38.1&nbsp;billion.  Combined with Rio Tinto's existing aluminium-related assets, the new Rio Tinto Alcan vaulted to the world number one producer of bauxite, alumina, and aluminium.<ref name="RT-Alum">{http://www.riotinto.com/whatweproduce/452_aluminium_577.asp</ref>  Rio Tinto Alcan kept key leadership from Alcan, and the company's headquarters remain in Montreal.
 
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Rio Tinto Alcan divides its operations into three main business units.  The Bauxite and Alumina unit mines raw bauxite from locations in Australia, Brazil, and west Africa.  The unit then refines the bauxite into alumina at refineries located in Australia, Brazil, Canada, and France.  The Primary Metal business unit's operations consist of [[aluminium smelting|smelting aluminium]] from alumina, with smelters located in 11 countries around the world.  The Primary Metal group also operates several power plants in order to support the energy-intensive smelting process.  Finally, the Engineered Products unit processes aluminium into derivative products for speciality uses ranging from [[soda can|beverage containers]] to [[aerospace]] applications.<ref name="RT-Alum"/>
 
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Rio Tinto Alcan has interests in seven bauxite mines and deposits, six alumina refineries and six speciality alumina plants, 26 aluminium smelters, 13 [[power plant]]s, and 120 facilities for the manufacture of speciality products.<ref name="RT-Alum"/> The acquisition of Alcan operations in 2007 substantially increased Rio Tinto's asset base, revenues and profits: in 2008, 41% of company revenues and 10% of underlying earnings were attributable to Rio Tinto Alcan.<ref name="Chartbook"/>
 
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===Coal and uranium: Rio Tinto Energy===
 
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Rio Tinto is the third-leading producer of uranium in the world.
 
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Rio Tinto Energy is a business group of Rio Tinto dedicated to the mining and sale of coal and [[uranium]].<ref name="RT-coal">http://www.riotinto.com/whatweproduce/coal.asp</ref>
 
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The company focuses on both fuel coal for electricity generation in [[fossil-fuel power plant|coal power plants]], and [[coking coal]] for use in iron and [[steel mill]]s.  The company's coal operations are located in Australia and the United States, mainly operating under its subsidiaries such as [[Rio Tinto Coal Australia]] and [[Rio Tinto Energy America]].<ref name="RT-coal"/>  In 2009, Rio Tinto was engaged in an ongoing attempt to sell off assets of Rio Tinto Energy America.  In March 2009, the company agreed to sell a major asset, the [[Jacobs Ranch]] coal mine in Wyoming, to [[Arch Coal]] for $761&nbsp;million, and is continuing to seek buyers for remaining assets in an effort to reduce corporate debt.<ref name="Bloomberg-coal">{http://www.bloomberg.com/apps/news?pid=20601085&sid=aQRIkg28LZxA&refer=europe</ref>
 
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Rio Tinto's uranium operations are located at two mines: the [[Ranger Uranium Mine]] of [[Energy Resources of Australia]] and the [[Rössing Uranium Mine]] in Namibia.  The company is the third-largest producer of uranium in the world.  According to Rio Tinto's website, the company institutes strict controls and contractual limitations on uranium exports, limiting uses to peaceful, non-explosive uses only.  Such controls are intended to limit use of the company's uranium production to use as fuel for [[nuclear power plant]]s only, and not for use in the production of [[nuclear weapon]]s.<ref name="RT-uranium">http://www.riotinto.com/whatweproduce/452_uranium.asp</ref> Rio Tinto Energy was responsible for 12% of revenues and 18% of underlying earnings in 2008.<ref name="Chartbook"/>
 
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===Diamonds: Rio Tinto Diamonds===
 
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Rio Tinto Diamonds operates three diamond mines: the [[Argyle diamond mine|Argyle Diamond Mine]] in Western Australia (100% ownership), the [[Diavik diamond mine|Diavik Diamond Mine]] in the Northwest Territories of Canada (60% ownership), and the [[Murowa diamond mine|Murowa Diamond Mine]] located in Zimbabwe (78% ownership).  Together, these three mines produce 20% of the world's annual production of rough diamonds,<ref name="RTDiamond">http://www.riotintodiamonds.com/ENG/ourmines/index_ourmines.asp</ref> making Rio Tinto the world's third-largest producer of mined diamonds.
 
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The diamond business unit's most advanced exploration project is the [[Bunder Project]] in District [[Chhatarpur]], Madhya Pradesh, India, where Rio Tinto became the first foreign group to be granted a prospecting license there.<ref name="RTD-Exp">http://www.riotintodiamonds.com/ENG/exploration/index_exploration.asp</ref> Rio Tinto Diamonds generated 1% of revenues and earnings for Rio Tinto Group in 2008.<ref name="Chartbook"/>
 
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===Industrial minerals: Rio Tinto Minerals===
 
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Rio Tinto Minerals is a diverse business group with mining and processing interest in [[borate]]s, [[talc]], salt, and [[gypsum]]. [[Rio Tinto Borax]], with main operations in California and another mine in Argentina, supplies nearly half of the world's annual demand for refined borates, while the company's [[Luzenac Group]] subsidiary supplies 25% of global talc consumption. The Luzenac Group is also the only arm of the company with continuing active mining operations on the European continent: in addition to mines in North America and Australia, the company also operates a talc mine in southern France.<ref name="RT-Europe">http://www.riotinto.com/whatweproduce/europe.asp</ref>  The Minerals group is also majority owner of [[Dampier Salt]], which produces over 9&nbsp;million tonnes of salt and 1.5&nbsp;million tonnes of gypsum annually from its three facilities in northwest Australia.<ref name="DS">http://www.dampiersalt.com.au/tnpn002785/prod/dsl/dslhome.nsf</ref> Rio Tinto Minerals accounted for 6% of company revenues, and contributed 3% to earnings in 2008.<ref name="Chartbook"/>
 
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On 31 January 2010, the management of U.S. Borax locked out its hourly workforce, replacing the workers with nonunion workers and managers from other Rio Tinto operations. The 560 [[International Longshore and Warehouse Union]] Local 30 members immediately began a fireside vigil that garnered national and international labour attention.<ref name="boraxminers">http://www.boraxminers.com/</ref> ILWU filed several unfair labour practices against the company, including an illegal lock-out claim.<ref name="boraxminers" />
 
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===Iron products and titanium: Rio Tinto Iron and Titanium===
 
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Rio Tinto Iron and Titanium (RTIT) oversees the company's iron and titanium production. RTIT generated a large portion of the company's revenues and earnings in 2008, accounting for 27% and 52%, respectively, of company-wide operating results.<ref name="Chartbook"/>
 
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Rio Tinto is the world's second-largest supplier of iron ore, producing over 153&nbsp;million tonnes in calendar year 2008.<ref name="PR-2008"/>  The company's major iron ore mines and development projects are located in Australia, South America, Canada, India, and Guinea. Major subsidiaries held within RTIT include [[Hamersley Iron]], majority interest in the [[Pilbara Iron]] mines, and the [[Iron Ore Company of Canada]].<ref name="RT-Ironore">http://www.riotinto.com/whatweproduce/572_iron_ore.asp</ref> The company also runs smelting facilities for the production of iron and steel—limited in size in comparison to the massive amount of iron ore produced—at [[QIT-Fer et Titane]] in Canada<ref name="QIT-Fer">http://www.qit.com/eng/index.asp</ref> and [[HISmelt]] in Australia.<ref name="RT-Ironore"/>
 
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Titanium dioxide is mined at three locations in Canada, South Africa, and Madagascar, and refined at QIT-Fer et Titane's Canadian facilities.<ref name="QIT-Fer"/> Major subsidiaries include [[Richards Bay Minerals]] of South Africa and [[QIT Madagascar Minerals]].<ref name="RT-Titanium">http://www.riotinto.com/whatweproduce/452_titanium_dioxide.asp</ref> In 2008 Rio Tinto produced 1.524&nbsp;million tonnes of titanium dioxide,<ref name="PR-2008"/> or approximately 27% of the estimated global production of 5.6&nbsp;million tonnes.<ref>http://digital50.com/news/72931</ref>
 
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==Public impact==
 
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===Involvement with Axis powers in World War II===
 
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Rio Tinto's status as a mainly British-owned company, located in Spain and producing pyrites – an important material for military applications – created a complicated set of circumstances for the company's operation in the [[1930s]] and 1940s. During the [[Spanish Civil War]], the region in which Rio Tinto's mines were located came under the control of [[Francisco Franco|Franco]]'s nationalists in 1936.  However, Franco increasingly intervened in the company's operations, at times requisitioning pyrite supplies for use by Spain and its [[Axis powers|Axis]] allies Germany and Italy, forcing price controls on the company's production, restricting exports, and threatening nationalisation of the mines.  Although company management (and indirectly, the British government) managed to counteract some of these efforts by Franco, much of the mine's pyrite production was channelled to Axis powers before and during World War II.  Nonetheless, Franco's meddling caused the mine's production and profitability to fall precipitously during and after the war, leading the company to ultimately exit from its Spanish operations in 1954.<ref name="Kutney">http://books.google.com/?id=O4rzzkUQyzIC</ref>
 
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===Criticisms===
 
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====Environment====
 
 
Rio Tinto Group has been widely criticised by environmentalist groups for its mining activities.  Opposition to the company focuses on its mining methods due to environmental degradation, the company's coal operations for their contribution to [[global warming]], and uranium operations for environmental and nuclear technology concerns.
 
Rio Tinto Group has been widely criticised by environmentalist groups for its mining activities.  Opposition to the company focuses on its mining methods due to environmental degradation, the company's coal operations for their contribution to [[global warming]], and uranium operations for environmental and nuclear technology concerns.
  
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Rio Tinto disputes the claims of environmental damage at the Grasberg mine, and states that the company has long maintained an excellent record on environmental issues.<ref name="BBC-env">http://news.bbc.co.uk/2/hi/business/7608097.stm</ref>
 
Rio Tinto disputes the claims of environmental damage at the Grasberg mine, and states that the company has long maintained an excellent record on environmental issues.<ref name="BBC-env">http://news.bbc.co.uk/2/hi/business/7608097.stm</ref>
  
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====Labour and human rights====
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==Labour and human rights==
 
Safety and labour rights concerns have been raised against Rio Tinto by unions and political action groups, in particular the [[Construction, Forestry, Mining and Energy Union]] (CFMEU). The CFMEU ran a campaign against the company after it tried to de-unionise its workforce after the introduction of the [[John Howard|Howard Government]]'s [[Workchoices|Workplace Relations Act 1996]].
 
Safety and labour rights concerns have been raised against Rio Tinto by unions and political action groups, in particular the [[Construction, Forestry, Mining and Energy Union]] (CFMEU). The CFMEU ran a campaign against the company after it tried to de-unionise its workforce after the introduction of the [[John Howard|Howard Government]]'s [[Workchoices|Workplace Relations Act 1996]].
  
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Rio Tinto was also accused of planning and funding the murder of RTI activist Shehla Masood in Bhopal, India. Apparently she was protesting illegal diamond mining done by Rio Tinto in connivance with government officers. The case was however solved and no connection to Rio Tinto was established, though popular opinion still perceives them as the possible culprit.<ref>http://daily.bhaskar.com/article/MP-BHO-shehla-masood-case-solved-twitterati-slams-congress-2922727.html</ref><ref>http://ibnlive.in.com/news/mystery-behind-shehla-masoods-murder-deepens/177484-3.html</ref><ref>http://www.outlookindia.com/article.aspx?278128</ref><ref>http://articles.timesofindia.indiatimes.com/2011-08-16/india/29891770_1_rti-activist-anna-hazare-gun-shot</ref>     
 
Rio Tinto was also accused of planning and funding the murder of RTI activist Shehla Masood in Bhopal, India. Apparently she was protesting illegal diamond mining done by Rio Tinto in connivance with government officers. The case was however solved and no connection to Rio Tinto was established, though popular opinion still perceives them as the possible culprit.<ref>http://daily.bhaskar.com/article/MP-BHO-shehla-masood-case-solved-twitterati-slams-congress-2922727.html</ref><ref>http://ibnlive.in.com/news/mystery-behind-shehla-masoods-murder-deepens/177484-3.html</ref><ref>http://www.outlookindia.com/article.aspx?278128</ref><ref>http://articles.timesofindia.indiatimes.com/2011-08-16/india/29891770_1_rti-activist-anna-hazare-gun-shot</ref>     
  
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Rio Tinto is not, however, universally condemned for its ethical behaviour.  The company has won an award for ethical behaviour, the Worldaware Award for Sustainable Development in 1993.<ref name="Worldaware-Tate">http://www.worldaware.org.uk/awards/awards1993/riotinto.htm</ref> The award, although given by an independent committee, is sponsored by another multinational corporation (in this case, the sponsor was [[Tate and Lyle]]). Rio Tinto has, in turn, sponsored its own WorldAware award, the Rio Tinto Award for Long-term Commitment.<ref name="RT-Worldaware">http://www.worldaware.org.uk/awards/awards1999/shell.html</ref> The British charity Worldaware ceased to exist in March 2005.<ref>http://www.worldaware.org.uk/about/index.html </ref> These awards, awarded to extractive industries who make some environmental commitments in order to deflect the more general criticisms of their operations, are referred to by corporate watchdog groups as "[[Greenwashing]]".<ref>http://www.clientearth.org/media-briefing-rio-tintos-greenwash-challenged-in-first-big-test-of-uks-company-reporting-regulator</ref><ref>http://www.dailyutahchronicle.com/opinion/rio-tinto-greenwashing-bad-record-1.847509</ref><ref>http://www.corpwatch.org/article.php?id=1348#37</ref>
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==Greenwashing==
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Rio Tinto is not, however, universally condemned for its ethical behaviour.  The company has won an award for ethical behaviour, the Worldaware Award for Sustainable Development in 1993.<ref name="Worldaware-Tate">http://www.worldaware.org.uk/awards/awards1993/riotinto.htm</ref> The award, although given by an "[[independent]]" committee, is sponsored by another multinational corporation (in this case, the sponsor was [[Tate and Lyle]]). Rio Tinto has, in turn, sponsored its own WorldAware award, the Rio Tinto Award for Long-term Commitment.<ref name="RT-Worldaware">http://www.worldaware.org.uk/awards/awards1999/shell.html</ref> The British charity Worldaware ceased to exist in March 2005.<ref>http://www.worldaware.org.uk/about/index.html </ref> These awards, awarded to extractive industries who make some environmental commitments in order to deflect the more general criticisms of their operations, are referred to by corporate watchdog groups as "[[Greenwashing]]".<ref>http://www.clientearth.org/media-briefing-rio-tintos-greenwash-challenged-in-first-big-test-of-uks-company-reporting-regulator</ref><ref>http://www.dailyutahchronicle.com/opinion/rio-tinto-greenwashing-bad-record-1.847509</ref><ref>http://www.corpwatch.org/article.php?id=1348#37</ref>
  
 
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Latest revision as of 03:45, 7 October 2024

Group.png Rio Tinto Group   Powerbase Sourcewatch Twitter WebsiteRdf-entity.pngRdf-icon.png
Rio Tinto.jpg
Formation1873
HeadquartersLondon, Melbourne
Type commercial
Subgroups Rio Tinto Alcan
Staff66,331
InterestsRothschild family
Member ofFriends of Europe
British-Australian multinational metals and mining corporation with headquarters in London

Rio Tinto Group is a British-Australian multinational metals and mining corporation with headquarters in London, in the United Kingdom, and a management office in Melbourne, Australia. The company was founded in 1873, when a multinational consortium of investors purchased a mine complex on the Rio Tinto river, in Huelva, Spain, from the Spanish government. Since then, the company has grown through a long series of mergers and acquisitions to place itself among the world leaders in the production of many commodities, including aluminium, iron ore, copper, uranium, coal, and diamonds.[1]

The company has operations on six continents but is mainly concentrated in Australia and Canada, and owns gross assets valued at $81 billion through a complex web of wholly and partly owned subsidiaries.[2] Its head office in the United Kingdom is in the City of Westminster, London, while its Australian head office is in the city of Melbourne.[3][4]

Deep politician Lord Alfred Milner was an early chairman of Rio Tinto.[5]

The halting of a company plan to mine lithium in Serbia gave the Australian government a pretext to be uncooperative with Novak Djokovic.

Formation

The company was founded with the purchase of a mine run by the Spanish government in 1873, at a price later determined to be well below actual value.[6]

The purchasers of the mine were led by Hugh Matheson's Matheson and Company, which ultimately formed a syndicate consisting of Deutsche Bank (56% ownership), Matheson (24%), and railway firm Clark, Punchard and Company (20%). At an auction held by the Spanish government for sale of the mine on 14 February 1873, the group won with a bid GB£3,680,000 (ESP 92,800,000). The bid also specified that Spain permanently relinquish any right to claim royalties on the mine's production. Following purchase of the mine, the syndicate launched the Rio Tinto Company, registering it on 29 March 1873.[7] At the end of the 1880s, control of the firm was passed to the Rothschild family, who greatly increased the scale of its mining operations.[8]

From 1877 to 1891, the Rio Tinto Mine was the world's leading producer of copper.[9]

From 1870 through 1925, the company was inwardly focused on fully exploiting the Rio Tinto Mine, with little attention paid to expansion or exploration activities outside of Spain. The company enjoyed strong financial success until 1914, cooperating with other pyrite producers to control market prices. However, World War I and its aftermath effectively eliminated the United States as a viable market for European pyrites, leading to a decline in the firm's prominence.[7]

The company's failure to diversify during this period led to the slow decline of the company among the ranks of international mining firms. However, this changed in 1925, when Sir Auckland Geddes succeeded Lord Alfred Milner as chairman. Geddes and the new management team he installed focused on diversification of the company's investments and operations and reformation of marketing strategy. Geddes led the company into a series of joint ventures with customers in the development of new technologies, as well as exploration and development of new mines outside of Spain.[7]

Perhaps most significant was the company's investment in copper mines in Rhodesia, which it eventually consolidated into the Rhokana Corporation.[7] These and later efforts at diversification eventually allowed the company to divest from the Rio Tinto mine in Spain. By the 1950s, Franco's nationalistic government had made it increasingly difficult to exploit Spanish resources for the profit of foreigners.[7] Rio Tinto Company, supported by its international investments, was able to divest two-thirds of its Spanish operations in 1954 and the remainder over the following years.[10]

Major mergers and acquisitions

Early acquisitions

The company's first major acquisition occurred in 1929, when the company issued stock for the purpose of raising 2.5 million pounds to invest in Rhodesian copper mining companies, which was fully invested by the end of 1930. The Rio Tinto company consolidated its holdings of these various firms under the Rhokana Corporation by forcing the various companies to merge.[7]

Rio Tinto's investment in Rhodesian copper mines did much to support the company through troubled times at its Spanish Rio Tinto operations spanning the Spanish Civil War, World War II, and Franco's nationalistic policies. In 1950s the political situation made it increasingly difficult for mostly British and French owners to extract profits from Spanish operations, and the company decided to dispose of the mines from which it took its name.[7] Thus, in 1954 Rio Tinto Company sold two thirds of its stake in the Rio Tinto mines, disposing of the rest over the following years.[10] The sale of the mines financed extensive exploration activities over the following decade.[11]

Stock structure and ownership

Rio Tinto Group is structured as a dual-listed company, with listings on both the London Stock Exchange[12] and the [[Australian Securities Exchange][13] The dual-listed company structure grants shareholders of the two companies the same proportional economic interests and ownership rights in the consolidated Rio Tinto Group, in such a way as to be equivalent to all shareholders of the two companies actually being shareholders in a single, unified entity. This structure was implemented in order to avoid adverse tax consequences and regulatory burdens. In order to eliminate currency exchange issues, the company's accounts are kept, and dividends paid, in United States dollars.[11]

As of mid-February 2009, shareholders were geographically distributed 42% in the United Kingdom, 18% in North America, 16% in Australia, 14% in Asia, and 10% in continental Europe.[2]

Environment

Rio Tinto Group has been widely criticised by environmentalist groups for its mining activities. Opposition to the company focuses on its mining methods due to environmental degradation, the company's coal operations for their contribution to global warming, and uranium operations for environmental and nuclear technology concerns.

Perhaps the most significant environmental criticism to date has come from the Government of Norway, which divested itself from Rio Tinto shares and banned further investment due to environmental concerns. Claims of severe environmental damages related to Rio Tinto's engagement in the Grasberg mine in Indonesia led the Government Pension Fund of Norway to exclude Rio Tinto from its investment portfolio. The fund, which is said to be the world's second-largest pension fund, sold shares in the company valued at Template:NOK (US$ 855 million) to avoid contributing to environmental damages caused by the company.[14]

Exclusion of a company from the Fund reflects our unwillingness to run an unacceptable risk of contributing to grossly unethical conduct. The Council on Ethics has concluded that Rio Tinto is directly involved, through its participation in the Grasberg mine in Indonesia, in the severe environmental damage caused by that mining operation.[15]

—Kristin Halvorsen, Norwegian Minister of Finance

Rio Tinto disputes the claims of environmental damage at the Grasberg mine, and states that the company has long maintained an excellent record on environmental issues.[16]

Labour and human rights

Safety and labour rights concerns have been raised against Rio Tinto by unions and political action groups, in particular the Construction, Forestry, Mining and Energy Union (CFMEU). The CFMEU ran a campaign against the company after it tried to de-unionise its workforce after the introduction of the Howard Government's Workplace Relations Act 1996.

Activist groups have also expressed concern regarding Rio Tinto's operations in Papua New Guinea, which they allege were one catalyst of the Bougainville separatist crisis. The British anti-poverty charity War on Want has also criticised Rio Tinto for its complicity in the serious human rights violations which have been occurred near the mines it operates in Indonesia and Papua New Guinea.[17] The 2001 British documentary The Coconut Revolution tells the story of the eventual success of the local indigenous peoples in overcoming the plans of the company and the New Papuan army.

On 31 January 2010, Rio Tinto locked out nearly 600 workers from a mine in Boron, California, USA.[18] The workers, represented by the local International Longshore and Warehouse Union, had rejected a contract proposal, claiming it would scrap their seniority system and allow the company to hire more nonunion employees.

Rio Tinto was also accused of planning and funding the murder of RTI activist Shehla Masood in Bhopal, India. Apparently she was protesting illegal diamond mining done by Rio Tinto in connivance with government officers. The case was however solved and no connection to Rio Tinto was established, though popular opinion still perceives them as the possible culprit.[19][20][21][22]

Greenwashing

Rio Tinto is not, however, universally condemned for its ethical behaviour. The company has won an award for ethical behaviour, the Worldaware Award for Sustainable Development in 1993.[23] The award, although given by an "independent" committee, is sponsored by another multinational corporation (in this case, the sponsor was Tate and Lyle). Rio Tinto has, in turn, sponsored its own WorldAware award, the Rio Tinto Award for Long-term Commitment.[24] The British charity Worldaware ceased to exist in March 2005.[25] These awards, awarded to extractive industries who make some environmental commitments in order to deflect the more general criticisms of their operations, are referred to by corporate watchdog groups as "Greenwashing".[26][27][28]


 

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References

  1. ↑ http://www.riotinto.com/documents/Media/PR712g_Rio_Tinto_announces_underlying_earnings_of__10.3_billion.pdf
  2. ↑ a b http://www.riotinto.com/documents/investors_databook/March_09_Chartbook.pdf
  3. ↑ "Contact Us." Rio Tinto Group. Retrieved 9 April 2010.
  4. ↑ "Suburbs & Postcodes." City of Melbourne. Retrieved 5 April 2010.
  5. ↑ https://www.cascade.app/studies/riotinto-strategy-study
  6. ↑ http://www.andalucia.com/province/huelva/riotinto/home.htm
  7. ↑ a b c d e f g https://archive.org/details/riotintocompanye0000harv
  8. ↑ The Rio Tinto Company: an economic history of a leading international mining concern, Charles E. Harvey (1981), page 188
  9. ↑ Stevens, Horace Jared (1908). The Copper Handbook. 8. Horace J. Stevens. p. 1547
  10. ↑ a b http://www.riotinto.com/whoweare/timeline.asp
  11. ↑ a b http://www.riotinto.com/documents/Investors/dlcsep06.pdf
  12. ↑ http://www.londonstockexchange.com/en-gb/pricesnews/prices/system/detailedprices.htm?sym=GB0007188757GBGBXSET10718875RIO
  13. ↑ http://www.asx.com.au/asx/research
  14. ↑ http://www.regjeringen.no/en/dep/fin/Press-Center/Press-releases/2008/the-government-pension-fund-divests-its-.html?id=526030&epslanguage=EN-GB
  15. ↑ http://www.guardian.co.uk/business/2008/sep/09/riotinto.ethicalbusiness
  16. ↑ http://news.bbc.co.uk/2/hi/business/7608097.stm
  17. ↑ {http://www.waronwant.org/attachments/Fanning%20the%20Flames.pdf
  18. ↑ http://www.reuters.com/article/idUSTRE61O0CV20100225
  19. ↑ http://daily.bhaskar.com/article/MP-BHO-shehla-masood-case-solved-twitterati-slams-congress-2922727.html
  20. ↑ http://ibnlive.in.com/news/mystery-behind-shehla-masoods-murder-deepens/177484-3.html
  21. ↑ http://www.outlookindia.com/article.aspx?278128
  22. ↑ http://articles.timesofindia.indiatimes.com/2011-08-16/india/29891770_1_rti-activist-anna-hazare-gun-shot
  23. ↑ http://www.worldaware.org.uk/awards/awards1993/riotinto.htm
  24. ↑ http://www.worldaware.org.uk/awards/awards1999/shell.html
  25. ↑ http://www.worldaware.org.uk/about/index.html
  26. ↑ http://www.clientearth.org/media-briefing-rio-tintos-greenwash-challenged-in-first-big-test-of-uks-company-reporting-regulator
  27. ↑ http://www.dailyutahchronicle.com/opinion/rio-tinto-greenwashing-bad-record-1.847509
  28. ↑ http://www.corpwatch.org/article.php?id=1348#37
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