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Trott, 50, who currently runs the company's biggest and most profitable mines, takes on the role after Rio sought a new leader with more operational experience. Rio is in broadly good shape — it has a slew of major projects coming online, a strong balance sheet and a much improved culture — but the new CEO faces some big decisions and challenges.
The mining industry is struggling for relevance with investors, with valuations stagnant and companies searching for a new narrative after China's commodity supercycle came to an end. US President Donald Trump's policies are also roiling global trade, while the company faces questions over its deal strategy after talks last year to buy Glencore Plc went nowhere.
While Rio considered external alternatives to replace Jakob Stausholm, the top candidates were widely considered to be internal — including Jérôme Pécresse, CEO of the aluminum unit, and Chief Commercial Officer Bold Baatar.
Rio rose 0.1% in London trading, broadly in line with its peers.
Trott was seen as a good fit for the role as head of Rio's biggest and most profitable division — even if he only assumed leadership of iron ore four years ago. Prior to that, he was chief commercial officer and had spent nearly two decades in a range of operational and business development roles at the company.
'Simon came into our iron ore business at a time of significant challenges and has been instrumental in rebuilding culture, strengthening external relationships and setting us on a pathway for growth,' Rio Chair Dominic Barton said in a statement. Trott will start as CEO on Aug. 25.
Stausholm joined Rio in 2018 before being propelled to CEO after Rio blew up a 46,000-year-old sacred site in Western Australia. Despite early criticism, he successfully rebuilt the company's tattered reputation and reset relationships with traditional owners, while also unlocking new areas of growth.
Rio's board believes Stausholm laid a solid foundation, turning around many parts of a company that was in crisis when he arrived, but that fresh ideas are now needed.
Trott is expected to simplify a business that has become overly complex, remove unnecessary costs and continue to improve the operational performance at mines that span Australia, Mongolia and the US.
Trott was seen by many investors as Stausholm's natural successor as he's expected to maintain the company's current strategy.
'It's good that they've got for someone internal,' said Duncan Hay, metals and mining analyst at Panmure Liberum. 'It should suggest that there is not a huge change in culture. If they were bringing in an external guy with massive-transaction M&A you'd be worried.'
Growth Areas
The new leader faces his own challenges, taking the helm of a giant miner that's preparing for a new leg of growth.
In iron ore, the company is set to bring into production its massive Simandou project in Guinea in West Africa, while also spending billions over the next three years in maintaining and boosting output from Australian mines. It is also building a lithium business.
Rio completed the acquisition of Arcadium Lithium Ltd. earlier this year, a rare bet by a major diversified miner on the battery metal. That move marked a return to acquisitions for a company that had shied away from deals for years after previous debacles during earlier boom times.
Growth will be top of the agenda for Trott in his new role. Last year, Rio was in talks about a potential merger with Glencore, which would have seen the birth of a combined company even bigger than rival BHP Group Ltd. The deal ultimately fell down with the two sides far apart on valuation.
While Rio has never publicly discussed the talks, its willingness to engage with Glencore jolted many in the industry and showed that Rio is now prepared to consider major deals. Trott is expected by the board to be open minded about potential deals.
For many investors, including Matthew Haupt, portfolio manager at Wilson Asset Management, Trott has the right credentials to take the company forward.
'Rio's portfolio is largely set now and they need an operationally driven CEO to extract maximum value from their portfolio,' said Haupt. 'Also an Australian back at the top job would be welcomed by local investors.'
--With assistance from Katharine Gemmell and Sybilla Gross.
(Updates with details throughout. An earlier version of this story corrected Trott's previous job title.)
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