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UPDATE 2-Rio Tinto appoints new CEO at its aluminium business
May 27, 2014 / 2:36 PM / 3 years ago

UPDATE 2-Rio Tinto appoints new CEO at its aluminium business

* Barrios experience in trading could benefit Rio-analyst

* Cote with Alcan since 1988

* Some fear Rio focusing less on aluminium (Adds comments from Canaccord analyst, details)

By Silvia Antonioli

LONDON, May 27 (Reuters) - Rio Tinto , the world’s second-largest diversified miner, said on Tuesday it had appointed an oil industry executive as the new head of its aluminium business, starting from June 1.

Alfredo Barrios, 48, who has held various senior positions at BP Plc since joining the UK oil company in 1992, will replace aluminium industry veteran Jacynthe Cote, who will leave to pursue other interests, Rio Tinto said in a statement.

Barrios’ most recent role was at the joint venture TNK-BP, one of Russia’s biggest vertically integrated oil and gas companies, where he was in charge of the refining, trading, supply, logistics and marketing businesses.

Some think bringing in an outsider could offer Rio fresh ideas on how to improve its aluminium business. The business, like others in the market, suffers from a supply glut which is weighing on prices.

“Given the fact that he comes from the trading, logistics and marketing side he may bring some new ideas on how they can further improve those parts of the business within aluminium and take a bit of extra margin by being more creative,” said Canaccord analyst Peter Mallin-Jones.

Others, however, felt that Cote’s departure might signal Rio’s reduced commitment to aluminium. After abandoning efforts to sell the loss-making Pacific Aluminium business last year, Rio executives have ruled out any new investments in the near term in aluminium.

“The fact that Cote left, in my opinion, confirms that aluminium has a limited timeframe within the Rio group. She has been there too long to either watch it being sold off piecemeal or underinvested in. That is probably rather unacceptable to her,” a second company analyst, who declined to be named, said.

“I don’t see the background or the fit with Barrios for the aluminium business so it probably says that the split up or the divestment of the aluminium business is higher up in Rio’s agenda than people anticipated.”

Cote had been with aluminium producer Alcan since 1988 and joined Rio when it bought Alcan in 2007. She has been chief executive of Rio Tinto Alcan since 2009 and will continue in an advisory role until Sep. 1 to ensure a smooth transition, Rio said.

Barrios will be based in Montreal, subject to immigration approvals, Rio Tinto said.

Aluminium accounts for about 4 percent of Rio’s earnings before interest and tax, against almost 90 percent from its iron ore division. (Editing by Susan Thomas and Keiron Henderson)

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