Rio Tinto (corporation)
Rio Tinto Group is a British-Australian multinational mining company headquartered in London, England, and Melbourne, Australia. It was founded in 1873 when a group of British investors purchased a mine complex on the Río Tinto, in Huelva, Spain, from the Spanish government. It has grown through a long series of mergers and acquisitions and is today a major producer of commodities such as copper, iron ore, aluminium and lithium.
Rio Tinto is a dual-listed company, traded on both the London Stock Exchange, where it is a component of the FTSE 100 Index, and the Australian Securities Exchange, where it is a component of the S&P/ASX 200 index. American depositary shares of Rio Tinto's British branch are also traded on the New York Stock Exchange, giving it listings on three major stock exchanges. In the 2020 Forbes Global 2000, it was ranked the world's 114th-largest public company. It was ranked the world's 274th largest company in the 2025 Fortune Global 500.
Rio Tinto has faced criticism by environmental groups as well as the government of Norway for the environmental impacts of its mining activities.
History
Formation
Since antiquity, a site along the Río Tinto in Huelva, Spain, has been mined for copper, silver, gold and other minerals. Around 3000 BC, Iberians and Tartessians began mining the site, followed by the Phoenicians, Greeks, 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.However, Spain's mining operations there were inefficient, and the government itself was otherwise distracted by political and financial crises, leading the government to sell the mines in 1873 at a price later determined to be well below actual value. The purchasers of the mine were led by Hugh Matheson's Matheson & Company, which ultimately formed a syndicate consisting of Deutsche Bank, Matheson and the civil engineering firm Clark, Punchard and Company. At an auction held by the Spanish government to sell the mine on 14 February 1873, the group won with a bid of £3.68 million. The bid also specified that Spain would 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. At the end of the 1880s, control of the firm passed to the Rothschild family, who increased the scale of its mining operations.
20th century expansion and development
Following their purchase of the Río Tinto Mine, the new ownership constructed a number of new processing facilities, innovated new mining techniques, and expanded mining activities.During the first years of the company's operation in Spain, the company practiced open-air pyrite calcination in blast furnaces. The toxic fumes released by this process had a negative impact on the farmland and the local agriculturists, which led to the company's workers and some local anarchists coming together to protest against this practice. On 4 February 1888, several thousand rank and file—agriculturalists, anarchists and mineworkers—marched to the Río Tinto town hall to deliver their petitions to the mayor. The civil guards, under perceived threat of mob violence, fired on the crowd, killing at least 13 and injuring 35.
From 1877 to 1891, the Río Tinto Mine was the world's leading producer of copper.
From 1870 through 1925, the company was inwardly focused on fully exploiting the Río Tinto Mine, with little attention paid to expansion or exploration activities outside of Spain. The company enjoyed strong financial success until 1914, colluding 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.
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 investment strategy and the introduction of organisational and marketing reforms. 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. Between 1925 and 1931, Geddes recruited two directors: JN Buchanan and RM Preston, as well as other executives involved with technical and other matters.
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 Northern 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.
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 General 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 allies Germany and Italy, forcing price controls on the company's production, restricting exports, and threatening nationalisation of the mines. Although company management 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.
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 the 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. 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. The sale of the mines financed extensive exploration activities over the following decade.
The company's exploration activities presented the company with an abundance of opportunities, but it lacked sufficient capital and operating revenue to exploit those opportunities. This situation precipitated the next, and perhaps most significant, merger in the company's history. In 1962, Rio Tinto Company merged with the Australian firm Consolidated Zinc to form the Rio Tinto – Zinc Corporation and its main subsidiary, Conzinc Riotinto of Australia. The merger provided Rio Tinto the ability to exploit its new-found opportunities, and gave Consolidated Zinc a much larger asset base.
Major acquisitions following the Consolidated Zinc merger included US Borax, a major producer of borax, bought in 1968, Kennecott Utah Copper and BP's coal assets which were bought from BP in 1989, and a 70.7% interest in the New South Wales operations of Coal & Allied, also in 1989. In 1993, the company acquired Nerco and the United States coal mining businesses of Cordero Mining Company.
The company was part of the uranium producers' cartel, Societe d'Etudes de Recherches d'Uranium, which operated from 1972 to 1976. The other cartel members were based in Australia, France, and South Africa. It was formed by the major non-United States uranium producers to mitigate the impacts of US policy on the uranium market; to do so, the cartel engaged in bid rigging, price fixing, and market sharing. Westinghouse filed an antitrust lawsuit against cartel members in 1976 and the cartel disbanded.
RTZ and CRA were separately managed and operated, with CRA focusing on opportunities within Australasia and RTZ taking the rest of the world. However, the companies continued to trade separately, and RTZ's ownership of CRA dipped below 50% by 1986. The two companies' strategic needs eventually led to conflicts of interest regarding new mining opportunities, and shareholders of both companies determined a merger was in their mutual best interest. In 1995, the companies merged into a dual listed company, in which management was consolidated into a single entity and shareholder interests were aligned and equivalent, although maintained as shares in separately named entities. The merger also precipitated a name change; after two years as RTZ-CRA, RTZ became Rio Tinto plc and CRA became Rio Tinto Limited, referred to collectively as Rio Tinto.
Early 21st century
In 2000, Rio Tinto acquired North Limited, an Australian company with iron ore and uranium mines, for $2.8 billion. The takeover was partially motivated as a response to North Limited's 1999 bid to have Rio Tinto's Pilbara railway network declared open access. The Australian Competition & Consumer Commission regulatory body approved the acquisition in August 2000, and the purchase was completed in October of the same year. That year, Rio Tinto also bought North Limited and Ashton Mining for US$4 billion, adding additional resources in aluminium, iron ore, diamonds and coal. In 2001, it bought the Australian coal businesses of the Peabody Energy.In 2000, Rio Tinto faced a federal lawsuit on behalf of Papua New Guinea due to the harm the company's mining operations at the Panguna Mine had to the environment for decades. Local communities filed this suit claiming that the local Kawerong-Jaba river delta was used as a dumping site for "more than one billion tons of mine waste". According to the lawsuit, the citizens are claiming that the mining giant used harmful chemicals and bulldozers to destroy the environment and specifically the rainforest and used their waterways as a dumping site for the chemicals and runoff caused by their mining operations.
On 14 November 2007, Rio Tinto completed its largest acquisition to date, purchasing Canadian aluminium company Alcan for $38.1 billion, as of 2014, "the largest mining deal ever completed". Alcan's chief executive, Jacynthe Côté, led the new division, renamed Rio Tinto Alcan with its headquarters situated in Montreal.
Activity in 2008 and 2009 was focused on divestments of assets to raise cash and refocus on core business opportunities. The company sold three major assets in 2008, raising about $3 billion in cash. In the first quarter of 2009, Rio Tinto reached agreements to sell its interests in the Corumbá iron ore mine and the Jacobs Ranch coal mine, and completed sales of an aluminium smelter in China and the company's potash operations, for an additional estimated $2.5 billion.
On 5 July 2009, four Rio Tinto employees were arrested in Shanghai for corruption and espionage. One of the arrested, Australian citizen Stern Hu, was "suspected of stealing Chinese state secrets for foreign countries and was detained on criminal charges", according to a spokesman for the Chinese foreign ministry. Stern Hu was also accused of bribery by Chinese steel mill executives for sensitive information during the iron ore contract negotiations.
In 2009, Chinese authorities began investigating allegations against Rio Tinto in what became known as the Rio Tinto espionage case. These included bribing executives from 16 of China's biggest steel mill companies to get hold of secret information. On 29 March 2010 four Rio Tinto employees including Australian citizen Stern Hu were found guilty of these charges and of accepting millions of dollars in bribes. They were ordered to pay hundreds of thousands of dollars in fines, and sentenced to 7 to 14 years in jail.
On 19 March 2010 Rio Tinto and its biggest shareholder, Chinalco, signed a memorandum of understanding to develop Rio Tinto's iron ore project in the Simandou mine in Simandou, Guinea. On 29 July 2010, Rio Tinto and Chinalco signed a binding agreement to establish this joint venture covering the development and operation of the Simandou mine.
Under the terms of the agreement, the joint venture maintains Rio Tinto's 95% interest in the Simandou project as follows: By providing US$1.35 billion on an earn-in basis through sole funding of ongoing development over a two-to-three-year period, Chalco, a subsidiary of Chinalco, would acquire a 47% interest in the joint venture. Once the full sum was paid, Rio Tinto would be left with a 50.35% interest in the project and Chalco would have 44.65%. The remaining 5% would be owned by the International Finance Corporation, the financing arm of the World Bank. On 22 April 2011 Rio Tinto, its subsidiary Simfer S.A., and the Guinean Government signed a settlement agreement that secured Rio Tinto's mining rights in Guinea to the southern concession of Simandou, known as blocks 3 and 4. According to the agreement, Simfer would pay US$700 million and receive mining concession and government approval of the proposed Chalco and Rio Tinto Simandou joint venture.