Rio Tinto (ASX: RIO) is a leading global mining and metals company, operating across more than 30 countries. It produces key commodities such as iron ore, aluminium, copper, and lithium, essential to global infrastructure and energy transition.
At its Annual General Meeting (AGM) on May 1, 2025, Rio Tinto faced a communications blunder and growing shareholder activism regarding its corporate structure. The meeting, held in Perth, spotlighted mounting scrutiny over governance practices and Indigenous relations, underscoring complex challenges for one of the world’s largest mining companies.
Mistaken Vote Count Sparks Confusion
A critical error occurred during the announcement of voting results on a shareholder resolution backed by activist fund Palliser Capital. Rio Tinto initially reported that 80.65% of shareholders supported a motion to initiate an independent review of the company’s dual-listed structure (DLC). If true, this would have been a staggering rebuke to the board’s authority.
However, within hours, the company corrected the announcement, revealing that only 19.35% of votes were in favour of the proposal. The incorrect figure was uploaded to the ASX before the error was caught and replaced. While the mistake was rectified quickly, the incident raised serious questions about internal verification processes and communication accuracy at a high-stakes corporate event.
The Dual-Listed Company (DLC) Structure Under Fire
The failed resolution called for an independent strategic review of Rio Tinto’s DLC structure, which consists of two parent entities: Rio Tinto plc, listed in London, and Rio Tinto Limited, listed on the ASX. Palliser and its supporting investors argued that a unification under the Australian entity could significantly enhance shareholder value due to a higher valuation premium and possible tax advantages.
Proxy advisory firms such as ISS and Glass Lewis, along with institutional holders like Norges Bank Investment Management, supported the proposal. Despite this, the final tally fell short of the 20% threshold that would have triggered broader UK regulatory consultation.
The board, led by Chairman Dominic Barton, strongly opposed the resolution. Rio Tinto claimed that the estimated cost of unification between $7 billion and $15 billion would outweigh any perceived benefits. Additionally, the board warned of the potential loss of franking credits and the risk of significant share price volatility.
Indigenous Concerns Reignite Historical Tensions
In parallel with the corporate governance debate, Rio Tinto came under renewed pressure from Indigenous representatives. The Robe River Kuruma Aboriginal Corporation alleged that the company had failed to modernise agreements and properly compensate communities tied to the Mesa J mine in the Pilbara region.
The group claimed that Mesa J was excluded from the financial agreements made with Rio Tinto, resulting in 17 years of unpaid royalties. They accused the company of breaching its post-Juukan Gorge commitments to engage transparently and fairly with Aboriginal stakeholders.
Chairman Barton acknowledged the community’s frustration and reaffirmed the company’s commitment to addressing legacy issues and building more equitable relationships. Nevertheless, the episode serves as a stark reminder that reputational wounds from past controversies remain unhealed.
Broader Shareholder Sentiment: Dissatisfaction Lingers
Although the board technically prevailed on the dual-listing issue, the 19.35% support for Palliser’s resolution represents a notable contingent of dissatisfied investors. That level of backing signals that concerns over Rio Tinto’s structure and capital efficiency are unlikely to vanish.
Strategic Outlook
Rio Tinto now faces a dual-front challenge: defending its corporate architecture against restructuring demands and repairing trust with Indigenous communities still scarred by past grievances. While the company succeeded in averting a binding shareholder mandate on the DLC review, the push for reform is likely to resurface in future AGMs or through private negotiations.
In parallel, expectations for reconciliation and equity from traditional landowners remain high. Rio Tinto’s social license to operate particularly in resource-rich areas of Western Australi depends on its ability to forge stronger, more inclusive agreements.
The fallout from the AGM highlights the delicate balance between shareholder value creation and social responsibility. Rio Tinto’s leadership will need to adopt a more transparent and collaborative stance if it wants to navigate both shareholder scrutiny and Indigenous reconciliation in a sustainable manner.
