Rio Tinto won’t allow UK investors to vote on Mineral Council issue

A move urging Rio Tinto to rethink its funding of the fossil fuel lobby has suffered a setback – the Anglo-Australian mining company has refused to present a shareholder motion on the issue to its annual general meeting in the UK.

Last week, institutional investors who manage a combined $84bn in funds – and hold about $100m of Rio Tinto shares – filed a motion to the Australian arm of Rio Tinto, calling for a review of the company’s funding of industry association memberships.

They said some of those groups lobbied for outcomes that hindered sensible climate and energy policy, and therefore harmed the financial position of the company.

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The move followed a similar motion filed at BHP, which won a significant minority of votes and resulted in the company announcing it would quit the World Coal Association and reconsider its membership of the Minerals Council of Australia.

Like Rio, BHP is dual-listed in the UK and Australia, and it presented the motion to its annual general meetings in both countries.

But it has emerged that Rio Tinto will not allow its UK shareholders to vote on the motion. Neither BHP nor Rio were legally obliged to present the motion to their UK AGMs, since they were filed only to the Australian arms of the companies.

“That demonstrated BHP is not afraid of hearing from its shareholders on these issues,” said Brynn O’Brien, executive director of the Australasian Centre for Corporate Responsibility, which organised the BHP and Rio Tinto motions.

She said it was best practice for dual-listed companies to present issues such as these, which related to the global business, to the entire company.

By allowing only the Australian arm of the company to vote on the motion, the company appeared to be taking a position against its content, she said.

O’Brien said she understood Rio Tinto had told major investors on a conference call that the motion was related to the Australian business, and so was not relevant to the UK entity.

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“The attempt to frame this as a local, Australian-specific issue is misguided and inaccurate,” she said. “It is a global issue and there is a concern from shareholders that Rio Tinto does not have any appropriate governance structure in place to make sure the organisations it funds it funds are acting in its financial interests.

“What we have in Australia, and also globally, is a government leadership vacuum on climate and energy policy. And that vacuum runs counter to big companies and big energy users.

“One of the reasons for that vacuum is the influence of this stratum of fossil fuel lobbies. In Australia that space is occupied by the Minerals Council of Australia, the NSW Minerals Council and the Queensland Resources Council, as well as other industry lobby groups. Those lobby groups are influencing government policy on climate and energy to the point where we have a stalemate. That is played out in other countries and also globally.”

Rio Tinto has been approached for comment.