Ground Breakers: Rio Tinto is not getting into space mining, Musk fanboys

Rio Tinto fronted shareholders at its second AGM in Melbourne this morning
CEO Jakob Stausholm and chair Simon Thompson faced a grilling on climate, ESG, Traditional Owner royalty payments and operations
To confirm, Rio is not getting into space mining

Rio Tinto (ASX:RIO) is holding its second AGM in Melbourne today and some of the questions are getting out there.

Along with customary queries on its board composition, iron ore production, payouts, its damning report into workplace culture and climate policy, there have been a number of pretty interesting ESG ones Rio is keen to keep under radar – the quality of water around its mineral sands mines in Madagascar, land use by nomadic herders around the Oyu Tolgoi copper mine in Mongolia, the funding of rehabilitation at the Ranger uranium mine in the NT and an underpayment scandal re: royalties at its Yandicoogina iron ore mine in the Pilbara.

Other questions fielded by outgoing chairman Simon Thompson, who made way for Canadian diplomat and consultant Dominic Barton, and CEO Jakob Stausholm, were more offbeat.

There was the octogenarian who skydived on her 80th birthday (a key point apparently) with advice from Tighes Hill TAFE on how to improve Rio’s relations with Aboriginal people.

The piece de resistance had to be the Monash engineering student who asked if Rio would consider “giving the land back to the Aborigines” (his words, not ours) and get into space mining.

He even offered an “Elon Musk can probably help you with that” at the end. Barf.

Full marks on this one for Stausholm, who mused about costs (Rio by the by is already fretting about inflation at its conventional mining operations) before wryly suggesting he go ask his question at the Tesla AGM.

What about the serious stuff?

Here are two interesting tidbits, both related to Rio Tinto’s Pilbara iron ore operations, the driving force behind its ridonkulous US$21 billion profit in 2021.

Stausholm played a dead bat to questions about Rio’s mine life in the Pilbara and whether it is planning to ramp up production.

It is expecting to ship 320-335Mt in 2022, but fell a long way behind that run rate on a weak first quarter. In that context its long term plans to send 360Mt a year from WA’s shores feel like a pipe dream.

Stausholm said the company expects to be producing more in the back half of the year after a significant renewal of its Pilbara mines, including the 43Mtpa Gudai-Darri mine, is complete, saying the operations had a strong long-term future.

Rio also faced a question from Justin Dhu, executive officer of the Gumala Aboriginal Corporation, about its ongoing dispute over underpaid royalties at its Yandicoogina mine.

The Australian reported this week the $400 million dispute remains ongoing after the underpayment was identified by Rio in the wake of the Juukan Gorge debacle in mid-2020.

The GAC has reportedly returned the initial $40 million identified by Rio after its own audit outlined some $400m in underpayments under the landmark agreement, which has now passed its 25-year anniversary.

Stausholm and Rio remain hopeful of a resolution, with Stausholm saying he is due back in Perth tonight.

Final details from votes across Rio’s Melbourne and London AGMs are due later.

The mining giant was facing a potential second strike to its remuneration report, something that could prompt a board spill, after its report last year was roundly rejected by 60% of shareholders in a protest vote following the response to Juukan Gorge.

Key proxy advisors however have indicated ahead of the AGM that they planned to recommend votes in favour of the report.