Sam WalshAO (born 27 December 1949) is an Australian businessman who was elected to the Mitsui & Co board as a non-executive Director on 21 June 2017. Prior to this he was chief executive officer (CEO) of London-based mining company Rio Tinto Group, from 2013 to 2016.[1][2]
Prior to becoming CEO of Rio Tinto, Walsh served as Rio Tinto chief of the Iron Ore group, and of Rio Tinto Australia. Based in the Australian city of Perth, he oversaw company's mining operations and expansions in Pilbara, Western Australia.[3]
Early life
Sam Walsh was born 1949 and he grew up in the Melbourne seaside suburb of Brighton. He was one of five children. As a boy he actively engaged in weekly church going, scouting, and learning to play the piano and the trumpet. When Walsh was 15, his father was ill and after a series of operations his father died suddenly of a heart attack. Walsh described the death of his father as a time when everything changed.[4]
"My mother had never even written a cheque, she had never looked after the bills and that was a role I stepped into. I was managing the home finances and being the leader of the family, which continued on. You lose a lot. You lose the father figure, the advice and counsel. There's something lost that you don't get back. But if I look back, it did throw me in the deep end early and I swam and swam well."[4]
Walsh attended Brighton Grammar School and Taylor's College in Melbourne.[5] He graduated with a Bachelor of Commerce from Melbourne University, and he completed a Fellowship Program at Kettering University in Michigan.[6] He became a Fellow of Australian Institute of Management, Australasian Institute of Mining and Metallurgy, Chartered Institute of Purchasing and Supply Management, Australian Institute of Company Directors, The Institute of Directors (UK) and Australian Academy of Technical Sciences and Engineering.[3]
After graduating in commerce from Melbourne University, Walsh began his career as a trainee buyer at General Motors.[4] During the next 20 years in the automotive industry, he was promoted to and held senior positions at General Motors and at Nissan Australia.
Mining
Walsh joined Rio Tinto in 1991. He subsequently held a number of management positions within Rio Tinto, including chief executive of the Aluminium group 2001-2004, and chief executive of the Iron Ore group 2004-2013.[3] His responsibilities covered operations and projects in Australia, Brazil, Canada, Guinea and India, as well as Dampier Salt and Rio Tinto Marine. During 2004-2009, he oversaw the rapid expansion of the Iron Ore group. More than US$20 billion was spent on mine expansions and major infrastructure developments with net earnings exceeding US$9 billion.[7]
Meanwhile, in 2005 Walsh was appointed a director of the Western Australian Chamber of Commerce and Industry, and he was appointed a director of Seven West Media in 2008.[6] The following year he was appointed a director of Rio Tinto.[3] Residing in Perth, Walsh actively supported the arts in Western Australia. In 2008, he became Chairman of WA chapter of Australian Business Arts Foundation, Chairman of the Chamber of Arts and Culture WA and Chairman of the Black Swan State Theatre.[6] He was also president of the Western Australian branch of Scouts Australia.[6]
In 2010, Walsh was appointed an Officer in the General Division of the Order of Australia.[6]
On 17 January 2013, Walsh was appointed CEO of Rio Tinto Group, London. In his first year at the helm, Walsh took the company from a US$3 billion loss to a US$3.7 billion profit.[8] According to the company annual report in March 2014, Walsh was paid US$9.1 million in 2013, up 44% from the $6.3 million he earned in 2012. The figure included salary, a cash bonus, shares and other benefits. His predecessor Tom Albanese was paid 4 million pounds ($6.7 million) in 2012.[8] In return, the company reported Walsh exceeded expectations. He promised to cut operating costs by $2bn last year and achieved $2.3bn. He said he would cut exploration and development costs by $750 million and he cut them by $1bn. He vowed to pull capital expenditure down from more than $17.5bn to $13bn, and he hit that target.[8]
Rio Tinto Chairman Jan du Plessis confirmed on 23 October 2014, the company had retained Walsh for the longer term and Walsh would continue as CEO of Rio Tinto beyond the end of 2015. Originally, he was given a three-year contract. Walsh described his retention as a time to turn around the company fortunes by engendering the successful culture of how the company handled business.[4] However, in March 2016 Walsh announced he was retiring on 1 July 2016. Du Plessis revealed Jean-Sebastien Jacques, whom Walsh appointed to head Rio Tinto copper and coal, would be the new CEO.[10]
According to resource analyst Tim Treadgold, "Mr Walsh was leaving the company in reasonably good shape. He was handed a very difficult job but he had a reputation for getting things done. I think Sam has been a breath of fresh air at Rio, he's cleaned up a lot of mistakes they've made. But it is probably time for a new and younger man to come in."[2]
It was reported, Walsh would receive $1.4 million to cover the remaining nine months of his contract.[10]
In November 2016, Walsh was one of two former Rio Tinto Chief Executives linked through leaked emails of former Rio Tinto executive Alan Davies to a payment of $10.5 million USD payment to a consultant Francois de Combret associated with the development of the Simandou iron ore mine in Guinea.
The SFO investigation is still on-going in October 2020, with Rio Tinto seeking a deferred prosecution agreement. In June 2020, ASIC indicated that Walsh was not a person of interest in their investigations. ASIC has since dropped their investigation of the matter.
[12][13][14][15]
Based on Rio Tinto submission to the Senate Enquiry, Sam Walsh was the CEO of Rio Tinto when the controversial decision of presenting only one mining plan to the PKKP people was made. This led to the destruction of Juukan 1 & 2 sacred sites in May 2020. 3 other mining plans were considered. They didn't involve disturbing the sites. The choice of the mining plan was driven by access to less than 10 Million Tonnes of high grade iron ore for an incremental value of $138m. During Walsh's term as CEO the Juukan Gorge was not disturbed following his verbal instruction not to mine the Gorge.
[16]
Carbon emissions & economic growth
Carbon emissions
Sam Walsh appeared on ABC 7.30 Report with presenter Leigh Sales ahead of the G20 Leaders Summit in Brisbane, November 2014. As CEO of the second largest mining company in the world, Walsh welcomed the deal between the US and China to reduce carbon emissions. The deal was announced at the Asia-Pacific leaders meeting in Beijing. Walsh viewed the focus of the announcement on technology advances as the key to solving carbon emissions.[17]
According to Walsh, Rio Tinto reduced carbon emissions during the previous five years by 25%. Walsh reported, Rio Tinto invested $1 billion on HIsmelt - a more environmentally-friendly way of producing steel – and Rio Tinto was continuing that work in the Netherlands and in China. As well, Rio Tinto spent $100 million on carbon sequestration projects.[17]
Walsh acknowledged Rio Tinto supported market based mechanisms to reduce carbon emissions. He said, “I think as you speak to leaders around the world on this issue, everybody is in agreement that you need to establish an international regime in terms of trading emissions.”[17]
Although Walsh viewed coal as an important ingredient for energy and power for the next 50 years, Walsh moved Rio Tinto out of Coal completely. He also viewed renewable sources of wind, solar, and tidal power as avenues that required focus.[17]
Economic growth
As a member of the B20, the business arm of the G20, Walsh regarded political stability worldwide as one of the issues the B20 team promoted. Political stability provided business with the certainty required to achieve the G20 finance managers target of increasing world GDP by two per cent for the following five years. Walsh also identified government infrastructure investment geared to trade, anti-corruption agreements, and tax reforms as important issues for economic growth.[17]
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