Corus chairman quits Rio Tinto's board; rules out joining it

09 February 2009

Corus chairman Jim Leng has resigned as non-executive director of Rio Tinto, ruling out becoming the chairman of mining giant, Rio Tinto after having been named to the job less than a month ago, as differences erupted in the board on the route the company should take to reduce its huge debt of $38.9 billion.

Last month, Leng, who is also deputy chairman of Tata Steel, announced that he would step down to become the chairman of the world's third largest mining group, once its present chairman, Paul Skinner leaves in March. The miner had appointed Leng as non-executive director with immediate effect. (See: Tata Steel loses Corus chairman to Rio Tinto)

In a statement issued late last night, Rio said that Leng has resigned as non-executive director with immediate effect and would not be taking up the chairmanship of the company in April but did not cite any reasons for the sudden resignation.

It also said that the present chairman Paul Skinner, who had announced his retirement from the board of Rio Tinto and was rumoured to take over the reins of the oil giant, British Petroleum, on the retirement of  Peter Sutherland in April, will remain as chairman until mid-2009, so that a new successor could be appointed.

Analysts view the sudden resignation of Leng as differences with Rio's chief executive Tom Albanese along with certain board members, on the route the miner should take to reduce its huge debt of $38.9 billion.

In December, Rio Tinto, had said that it will axe more than 14,000 jobs globally, slash $5 billion in spending and increase asset sales as part of an aggressive cost cutting campaign to reduce its debt by $10 billion from the then $42 billion by the end of 2009. (See: Major shake up at Rio Tinto to reduce debt)