Macquarie somewhat surprised by organisational reshuffle at Rio Tinto

22nd Jun 2016 12:10

(ShareCast News) - The decision of Andrew Harding, Rio Tinto's ex-Iron Ore chief to depart the company was not unexpected, but the organisational reshuffle of the company's organisational structure was "somewhat of a surprise", analysts at Macquarie said.Harding had been seen as a "strong" candidate to take over the helm of the firm so his decision to exit the company was logical after Jean-Sebastien Jacques was named to the post in March.As regards the reorganisation of the company's operating units, the Australian broker noted that the new Energy&Minerals division now included all the assets which Rio Tinto would be willing to sell, which now counted the Iron Ore company of Canada among them.Following its reorganisation, announced on the previous day, Rio Tinto now had four main divisions: Aluminium, Copper & Diamonds, Energy & Minerals and Iron Ore.More specifically, the most substantial shift according to the analysts was the company's addition to add Diamonds to the Copper unit, while lumping its coal operations into its Minerals arm.As well, new chiefs were named for the Iron Ore and Copper&Diamonds units.In the research note sent to clients on 21 June, Macquarie reaffirmed its 'outperform' recommendation and 2,040p target price on shares of Rio Tinto."We continue to favour RIO's superior balance sheet strength, which provides greater flexibility to pursue organic or external growth opportunities over BHP Billiton."