Black China Blog

Rio Tinto Alcan will restart operations at its cathode production centre (CPC) at the Arvida smelter in Saguenay, Quebec.

“The CPC restart is taking shape thanks to an agreement with employees regarding the implementation of a work organisation adapted to the CPC’s new business context. The CPC therefore remains well positioned to maintain its leadership in American markets and develop new products that meet our customers’ criteria,” said Dominique Bouchard, vice president, Primary Metal, Saguenay-Lac-Saint-Jean, Rio Tinto Alcan.

The CPC was temporarily idled in spring 2009. The restart is a part of our global cathode production strategy and will allow the facility to meet the needs of both internal and external customers.

Cathodes are a basic material for pot lining in aluminium smelters. They cover the bottom of the pot shell and serve as a buffer between the metal and electrolytic bath during the smelting process. They also serve as an electrode, with electric current flowing from the anode to the cathode, and enable the transfer of energy from one pot to another.

The following article is one of many that appeared in the world’s newspapers following Rio’s press release of last Friday.   This one comes from Australia’s Farifax newspapers.

It illustrates that the reporter doesn’t really understand how Rio Tinto’s organisation structure works.   Bauert’s role is not a front line role at all.   He is in charge of the China presence of Rio, but has no operational responsibilities.    His duties include such things as control of the accounting, HR and other back-end roles.   Of course, Government Relations are at the top of that list, but the alumina, iron ore and other divisions of Rio have no reporting line through to him.

Rio Tinto has turned to company stalwart and China expert Ian Bauert to fill the management and representative void in China created by the shock arrest of its Stern Hu-led iron ore marketing team in July last year.

Mr Bauert has been appointed Rio’s managing director for China, based in Shanghai. He was most recently managing director of sales and marketing for iron ore, based in Australia and Singapore. But for the past six months, Mr Bauert has spent most of his time in Shanghai repairing relationship bridges for Rio.

The group’s relationships in China were put under severe stress last year when Rio walked away from a refinancing deal with China’s state-owned Chinalco, preferring to cosy up to BHP Billiton in a proposed joint venture in the Pilbara. Rio then led the way for the Pilbara iron ore producers to secure a much higher iron ore price than the Chinese steel industry, now the world’s biggest, thought was reasonable.

All that was followed by the July arrest of Mr Hu – an Australian citizen – and his colleagues on charges that have since been downgraded from crimes against the state to industrial espionage and bribery. While his new position is more senior, Mr Bauert is effectively replacing the Shanghai-based role of Anthony Loo. Mr Loo has since relocated to the US where he remains as a consultant to Rio on China and elsewhere in Asia.

Mr Bauert is a Rio veteran of more than than 30 years, a fluent Mandarin speaker, and was responsible for opening Rio’s first office in China in 1983. His appointment is the most senior for Rio in China, a country that accounts for close to 20 per cent of group sales.

Being a Chinese expert, Mr Bauert was one of the first to alert the investment community to China’s seemingly insatiable appetite for Australian resources. In a 2006 presentation in Perth, he quoted a Chinese proverb, believing it to demonstrate that Rio was uniquely placed to meet China’s demands, compared with the ambitions of new entrants to the industry: ”You can’t satisfy hunger by painting a cake.”

Rio managing director Tom Albanese said Mr Bauert’s appointment underlined the ”importance the company places on enhancing its relationship with China”.