Rio Tinto scrambles to curb fallout from heritage site blasts

Simon Thompson, the chairman of Rio Tinto, has scheduled a series of meetings with UK investors as the group scrambles to contain the fallout from the destruction of a 46,000-year-old Aboriginal heritage site.

The world’s biggest iron ore miner blew up two sacred rock caves last month as part of a mine expansion, sparking an international outcry and calls for an overhaul of Australia’s heritage protection laws.

Legal & General, one of the 10 biggest shareholders in Rio, has spoken out against the incident. The first meetings are scheduled for this week.

“The chairman is conducting calls as part of his regular engagement with key investors and will use the opportunity to provide additional context in relation to Juukan Gorge and to hear the views of investors on this and other matters,” Rio said in a statement.

The blasts at Juukan Gorge come as big investors are increasingly focusing on environmental, social and governance metrics in deciding which companies to own and sell.

Last month Norway’s $1tn oil fund said it had sold out of Brazilian miner Vale after a deadly dam disaster as well as Glencore and Anglo American, after they had breached its guidelines on the use of coal.

“Managing social licence to operate is crucial for all mining companies,” said Nick Stansbury, portfolio manager at Legal & General, the UK’s largest asset manager. “We are disappointed by this incident and are concerned about the implications for the ongoing relationship with local communities.”

Rio and rivals BHP and Fortescue Metals Group make billions of dollars from producing iron ore, Australia’s most lucrative export.

Rio secured legal approval from the Western Australian government to level the site in 2013 as part of the expansion of its Brockman 4 mine in the Pilbara, the country’s main iron ore-producing region.

It has apologised for the blasts, with the head of its iron business Chris Salisbury telling state broadcaster ABC on Friday that the company thought it had a “shared understanding” with the traditional owners of the caves — the Puutu Kunti Kurrama and Pinikura people (PKKP) — that the area would be mined.

“Something [has] gone terribly wrong here and we’re committed to a comprehensive review of all our heritage processes,” he said.

However, that explanation has been challenged by representatives of the PKKP who say there was an expectation that Rio would not disturb sites of cultural and historical significance. 

Australia’s minister for Aboriginal affairs has since spoken of the need to strengthen the protection of indigenous sites Australia’s minister for Aboriginal affairs has since spoken of the need to strengthen the protection of indigenous sites © PKKP Aboriginal Corporation/AFP

But it is not clear if those concerns were ever formally voiced to Rio. The PKKP did not respond to an email seeking comment. 

“The traditional owners have vehemently rejected Rio’s suggestion that they had a ‘shared understanding’ of the future of the site,” said Brynn O’Brien, executive director of the Australasian Centre for Corporate Responsibility, a shareholder advocacy organisation. “Australian law is patently insufficient to protect indigenous people’s human rights around culture and consent.”

Another test for those laws is looming with Aboriginal groups in the Pilbara lobbying policymakers to save dozens of rock shelters in the path of another mine expansion planned by Fortescue Metals Group.

Australia’s minister for Aboriginal affairs, Ben Wyatt, has spoken of the need to strengthen the protection of indigenous sites in the wake of the Juukan Gorge blasts.

The Wintawari Guruma Aboriginal Corporation said in a statement: “Minister Wyatt assures the public that his new heritage laws, currently being drafted, will be better. And they may well be — the details remain to be seen. But to Aboriginal people all over the state it is what the minister chooses to do with the time and powers he has now that matters most.”