Rio Says Director Leng Quits, Won’t Become Chairman

Feb. 9 (Bloomberg) -- Rio Tinto Group, the world’s third largest mining company, said director Jim Leng quit and will no longer become chairman as announced less than a month ago. Paul Skinner agreed to remain as chairman until mid-2009, London-based Rio said today in a statement. No reason for Leng’s departure was given in the statement and Amanda Buckley, a Melbourne-based spokeswoman for the company, declined to comment. Rio Tinto, struggling under $38.9 billion of debt after acquiring Alcan Inc. in 2007, is seeking to complete $10 billion in asset sales this year to repay loans. Rio said last week it was in talks with Aluminum Corp. of China, known as Chinalco, to raise cash by selling debt and stakes in some units. “The chairman-elect resigns with no explanation, and that coincides with rumors of a placement to Chinalco,” Prasad Patkar, who helps manage the equivalent of $800 million at Sydney-based Platypus Asset Management, said today by phone. “It makes you wonder if Rio’s board was fractured on how best to address the company’s need for debt reduction.” Rio, traded in Australia and the U.K., rose 5.8 percent to A$49.47 at 11:04 a.m. Sydney time on the exchange. It gained 6.5 percent to 19.57 pounds in London on Feb. 6. Mid-Year AppointmentThe process to appoint a new chairman has started and is expected to be completed by mid-2009, Rio said in the statement. Leng, deputy chairman of Tata Steel Ltd. and chairman of the Indian company’s European unit, was announced as Skinner’s successor on Jan. 14. He was chairman of Corus Group Plc from June 2003 before the company agreed to a 6.2 billion pound ($9.2 billion) takeover by Tata two years ago. Leng was also chief executive officer of chemicals maker Laporte Plc from 1995 to 2001 when it agreed to be acquired by German company Degussa-Huels AG. Paul Skinner, 63, may be hired by BP Plc as chairman, the Daily Telegraph reported in October. BP Chairman Peter Sutherland has agreed to remain in the post beyond his planned departure date in April, the Financial Times reported on Jan. 31.