Walsh revolutionised miner's biggest money-spinner
"People think miners as people with pick axes and shovels, but this is no longer the case" ... Sam Walsh, the new chief executive for Rio Tinto. Photo: Bloomberg
IF anyone can kill the stereotype of the mining industry being a rough and tumble boys’ club, Sam Walsh can.
A refined lover of the arts, Walsh gives the impression that his collection of antique milk jugs are his proudest achievement in life.
‘‘I just about have a heart attack when someone sort of swings (one of his jugs) around the table without realising it is 400 years old or 2000 years old,’’ he told Fairfax Media in a recent interview.
‘‘I jokingly say 2000, but I do actually have one that is that old.’’
But after the shock events of Thursday, Walsh surely has something beyond his 350 milk jugs upon which to hang his hat.
The 63-year-old grandfather became the chief executive of one of the world’s most influential companies shortly after 6pm, when he replaced Tom Albanese at the helm of Rio Tinto.
Born in Melbourne and educated at Brighton Grammar before studying at the University of Melbourne, Walsh already knows Rio well, having run its most important division - iron ore – for more than eight years.
He has been with Rio for almost 22 years, having served in multiple divisions including aluminium.
But despite decades of exposure to an industry that is supposedly dominated by a blokey, dust-soaked culture, Walsh remains anything but the stereotypical miner.
He sits at the helm of Perth’s Black Swan Theatre company, the WA chapter of the Australian Business Arts Foundation, and counts opera music as one of his true loves.
He speaks with an accent that belies his years of exposure to WA’s working class Pilbara region, and he has no time for the popular perceptions of his industry.
‘‘People think of miners as people with pick axes and shovels, but that is no longer the case ... it is a very sophisticated, high-tech business,’’ he said, in the same October interview with Fairfax Media’s Boss Magazine.
Personality is not the only way Walsh defies the stereotypes of his sector.
His influence on Rio’s business has been to transpose the lessons learned during his years in the car industry with General Motors and Nissan.
The notion that Rio’s disparate iron ore operations in the Pilbara are just one big factory has revolutionised the company’s biggest money spinner, and turned traditional after-thoughts like ‘‘efficiency’’, ‘‘sequencing’’ and ‘‘debottlenecking’’ into highly-held goals.
Rio’s Pilbara operations are now run from an office outside Perth Airport, thousands of kilometres away, where workers sitting at air conditioned desks break rocks using cameras, and control train movements via big-screens.
The approach continues to find extra tonnes of export capacity again and again, as proved in November when Rio revealed its operations were capable of producing an extra 7 million tonnes of iron ore than previously thought, simply by optimising and better synchronising its existing assets.
The thirst for technological improvement within Walsh is not slaked, with Rio’s iron ore division soon to introduced high-tech autonomous trucks.
Ascension to the top job at Rio will see Walsh’s base salary rise by 15 per cent to $1.9 million.
Once that base is added to relocation allowances for shifting from Perth to London, bonuses and share incentives, he is expected to earn about $7.8 million per year.
Walsh, who is married with three kids, was in Rio’s offices in the London’s Paddington when the announcement was made.
His only public comments last night were through a statement issued by the company.
“I am honoured to be given the opportunity to lead this wonderful business. I have great respect for Tom and the many positive attributes he brought to the role and I am grateful for the experience of working closely with him over many years. I will be working flat out to build an even stronger, more valuable Rio Tinto business for shareholders and for our many other stakeholders,” he said.