Rio Tinto boss says Anglo deal could “derail” company

Jakob Stausholm, CEO, Rio Tinto

JAKOB Stausholm said mergers and acquistions could knock his company Rio Tinto off course after spending the last decade repairing its balance sheet and restoring its reputation among communities.

Rio Tinto’s boss cited a potential takeover of Anglo American, saying it would be “all consuming” for his company. While he declined to comment on whether an offer for Anglo was being considered, he told the Financial Times deals of this magnitude “can derail the whole company”.

“That doesn’t mean I’m ruling out big M&A, not at all,” said Stausholm. Rio Tinto had room to grow in copper but the market had become overheated, he added. “It’s not an easy market to buy into,” he said.

Lithium was another commodity that Rio Tinto was interested in developing. It’s Jadar project in Serbia was handed back its permits last month. “Could we add more [lithium projects]? Absolutely,” Stausholm told the Financial Times. “But obviously I don’t want to add more assets than what my team are able to develop.”

In May, BHP ended takeover talks with Anglo American but it’s possible the discussions could be renewed once Anglo had completed a restructuring. Anglo meanwhile has been associated with the possible takeover of Teck Resources in Canada. Vale might also be interested in Teck, according to a report by Bloomberg News.

On July 31, BHP and Lundin Mining Corp. unveiled the joint purchase of Toronto-listed copper exploration firm Filo Corporation for C$4.1bn in cash. Mike Henry, CEO of BHP said the deal “aligns with BHP’s strategy to acquire attractive early-stage copper projects”.