The Rio Tinto board reviewed the findings of an internal investigation into 2011 contractual arrangements with a consultant who provided advisory services on the Simandou iron ore project in Guinea.
The board concluded Energy & Minerals chief executive Davies and Legal & Regulatory Affairs group executive Valentine “failed to maintain the standards expected of them under our global code of conduct”.
Neither executive will be eligible for any short-term incentive plan awards for 2016. Gone too are all unvested incentive plan awards from previous years.
Davies said in a statement that the decision had come as a “great surprise and disappointment” and there were no grounds for the termination.
“I have not been privy to Rio Tinto’s internal investigation report, nor have I had any evidence of the reasons for my termination of my employment given,” he said.
“Rio Tinto has made no effort to abide by due process or to respect my rights as an employee and it has given me no opportunity to answer any allegations.
“This treatment of me and my past and recent colleagues is totally at variance with the values and behaviours of the company to which I have devoted my professional life.
“My rights are fully reserved, and I have been left with no option but to take the strongest possible legal action in response.”
Davies will be replaced as Minerals & Energy chief executive by Bold Bataar.
Bataar held a number of senior investment banking roles with JP Morgan before taking on chief executive positions with a gold mining company and a diversified investment management business in Mongolia.
He joined Rio Tinto in 2013 as Copper International Operations president and is the managing director Marine and vice-president Iron Ore Sales and Marketing.
Rio Tinto chief executive Jean-Sebastian Jacques said appointing Bataar to run the Energy & Minerals business would “add a fresh perspective to the product group”.
Chief financial officer Chris Lynch is temporarily assuming accountability for the Legal & Regulatory Affairs function.
