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Rio sacks execs linked to Africa payments

AAP logoAAP 16/11/2016 Prashant Mehra

Rio Tinto has dismissed two top executives who it last week sidelined over their role in a payments scandal related to the Simandou iron ore project in West Africa.

The company has terminated the contracts of Alan Davies, the chief executive of its energy and minerals business, and Debra Valentine, the head of its legal and regulatory affairs.

Neither executive will be eligible for any short-term incentives for 2016 and the company will also cancel all unvested incentive plan awards from previous years.

Rio said its board had reviewed the findings of an internal investigation into the $US10.5 million payments made in 2011 to a consultant providing advisory services on the Simandou project in Guinea.

The miner's tough decision comes despite an ongoing external investigation into the matter. Rio said it was not trying to pre-judge that review, but its board concluded the two executives failed to maintain the standards expected of them under the company's code of conduct.

Rio has also flagged the issue to regulatory authorities in the US, UK and Australia.

Mr Davies had accountability for the Simandou project in 2011, and was last week suspended with immediate effect.

The London-based executive was in June appointed the head of the energy and minerals division amid a major management restructure by new chief executive Jean-Sebastien Jacques.

Mr Davies is believed to be considering legal action against Rio Tinto, according to media reports, in which he was quoted saying the company had not abided by due process, nor given him any opportunity to answer the allegations.

Ms Valentine was due to retire in May next year.

Bold Baatar, Rio's managing director for iron ore sales and marketing, will replace Mr Davies as head of the energy and minerals business. He joined the company in 2013 and has previously held senior investment banking roles with JP Morgan.

Chief financial officer Chris Lynch has temporarily assumed charge of the corporate legal and regulatory affairs, while the search for a new chief legal counsel has started, the company said.

Rio Tinto shares were up 51 cents, or 0.9 per cent higher at $57.45 at 1540 AEDT.

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