Rinto Tinto executive suspended over payments to consultant
Rio Tinto, the Anglo-Australian mining company, has suspended the head of its energy and minerals division and alerted authorities in the UK and US after discovering payments of $10.5m to a consultant working on the Simandou iron ore project in Guinea. Alan Davies has been suspended “with immediate effect,” whilst legal and regulatory affairs executive Debra Valentine, has resigned. The company sold its 46.6% stake in Simandou for $1.3bn to Chinalco last month. Analysts claim that the effect on the company is likely to be limited.

Mining group Rio Tinto has suspended a senior executive and alerted US and UK authorities after uncovering $10.5m (£8.4m) of payments to a consultant who worked on its Simandou iron ore project in west Africa.

The Anglo-Australian company said it had launched an investigation after discovering in late August emails from 2011 relating to “contractual payments totalling $10.5m made to a consultant providing advisory services on the Simandou project in Guinea”.

Alan Davies, the head of Rio Tinto’s energy and minerals division, who was responsible for the Simandou project in 2011, has been suspended “with immediate effect”. Another senior official, legal and regulatory affairs executive Debra Valentine, who was due to leave next May, has stepped down.



The group, which has its headquarters in the UK and is listed on the London and New York stock exchanges, has notified authorities in both countries and is in the process of alerting Australian officials.

“Rio Tinto intends to cooperate fully with any subsequent inquiries from all of the relevant authorities,” it said.

Analysts said the impact on the business should be limited. Shares in Rio Tinto rose more than 2% to £29.34.

RBC Capital Markets analyst Paul Hissey said: “Given the scale of Rio Tinto, it would appear unlikely that this development would have a material impact from a monetary perspective, though we will have to see if anything eventuates from this in the future.”

Rio sold its 46.6% stake in the Simandou project to Chinalco for up to $1.3bn last month. It previously had to give up part of the iron ore deposit in Guinea – the world’s largest untapped resource of the steelmaking ingredient – to BSG Resources, a Guernsey-registered company controlled by the Israeli billionaire Beny Steinmetz. BSG’s multibillion-dollar deal with the Guinean government later became the subject of an international investigation and an agent for BSG received a jail sentence.

Other mining companies have become embroiled in corruption scandals in recent years. Last year BHP Billiton was fined $25m for violating US anti-bribery law by treating 60 foreign government officials and their spouses to trips to the 2008 Beijing Olympics.

BHP, the world’s biggest mining group, is currently dealing with the fallout of the Samarco dam collapse a year ago that left 19 people dead and hundreds homeless, amid accusations that the company put profit before safety. Eight of its employees face criminal charges.