Login

Former Rio Tinto executive back in the mining game months after controversial deal

Posted by David Ngenda on Thu 6 April, 2017

THE executive sacked by Australian mining giant Rio Tinto over a controversial $13.8 million payment to a consultant to an African president is back in the mining game.

Alan Davies, who was sacked in November, has re-emerged as the chief executive of a London-based outfit, Moxico Resources PLC, which is developing a large open-cut copper mine in the African nation of Zambia.

He has also established his own consultancy business, AJD Capital and Advisors Limited, according to London’s Companies House records.

Alan Davies is in a new role months after sensational sacking by Rio Tinto. Picture: Ian Waldie/Bloomberg via Getty Images

Companies House shows that Mr Davies, 46, was appointed as a director of Moxico on March 1, more than three months after his contract was terminated at Rio.

He is working with Peter F. Wynter Bee, a lawyer and former general counsel with KPMG, who is non-executive chairman of Moxico.

Moxico is developing the Mimbula II copper project in Zambia and has launched a feasibility study with plans to spend between $80 million and $118 million on the project, according to the Zambia Daily Star.

The Mimbula project was previously held by a London company, Konkola Copper Mines, which was in turn owned by Indian giant Vedanta Resources.

The chief executive officer of Vedanta is former Rio chief executive Tom Albanese, who was one of the men who discussed the payment to the consultant.

Rio Tinto's Sam Walsh (L), executive director and chief executive of their Iron Ore Group and CEO Tom Albanese.

Mr Davies, a dual Australian-UK national, was sacked from his London-based job as chief executive of Rio’s energy and minerals unit after a chain of emails emerged about a payment of US $10.5 million (AUS $13.8 million) to a French consultant, Francois de Combret.

Rio’s legal and regulatory affairs group executive Debra Valentine was also let go.

The emails from 2011 show Mr Davies discussing the proposed payments to Mr de Combret with then-CEO Mr Albanese, and senior executive Sam Walsh, who later took over from Mr Albanese as CEO.

Mr de Combret is a close associate of the President of the West African nation of Guinea, Alpha Conde and at the time, Rio was seeking to develop the $20 billion Simandou mining project in Guinea.

Mr Davies has strongly denied wrongdoing and it was never suggested he was personally profiteering.

Rio and other mining companies routinely use consultants to assist with large and difficult projects across the globe.

French investment banker Francois Polge de Combret received $13m for his services to Rio.

At the time of the terminations, Rio said its board had decided that: “the executives failed to maintain the standards expected of them under our global code of conduct.”

Rio also self-reported the payments to the Department of Justice in the United States, the Serious Fraud Office in the UK and the Australian Federal Police and ASIC.

In the emails leaked to the media last year, Mr Davies wrote to Mr Walsh: “We have reached a final point, where Francois has requested a fee for services on securing (parcels of land) 3 and 4 of the Simandou deposit of $US10.5m.

“Sam, I accept that this is a lot of money, but I also put forward that the result we achieved was significantly improved by Francois’ contribution and his very unique and irreplaceable services and closeness to the President.”

Mr Albanese also discussed the payments in the email chain.

Guinean President Alpha Conde. Picture: AFP/Sia Kambou

Rio several years later abandoned the project, citing poor iron ore prices, and has agreed to sell it to Hong-Kong listed Chinalco for up to $1.3 billion

Mr Davies declined to speak to News Corp this week, although his spokeswoman confirmed his appointment to Moxico.

At the time of his dismissal he said he would take the “strongest possible legal action’’ against Rio and had never been provided with any evidence for the reasons he was terminated.

“There are no grounds for the termination of my employment,’’ he said in November.

“Rio Tinto has made no effort to abide by due process or to respect my rights as an employee and it has given me no opportunity to answer any allegations.’’

His spokeswoman said this week there was no further updates to provide on his “exit’’ from Rio.

Rio has withheld millions of dollars in bonus payments from Mr Walsh, who retired last year, pending the outcome of the various inquiries across the three countries. - (News Corp)

By Ellen Whinnett,

RELATED: 

SO WHO IS NOT DYING IN AFRICAN MINING? THE ANSWER MAY SURPRISE YOU 

EU FUNDED PROJECT TO HELP ZAMBIA IMPROVE GOVERNANCE OF MINING SECTOR 

ZAMBIA MINING SECTOR REMAINS ATTRACTIVE FOR FDI 

ZAMBIA MINING INVESTMENTS PROMOTE ECONOMIC GROWTH 

DECLINE IN MINING CONTRIBUTION DUE TO LACK OF TRANSPARENT MECHANISM