Gunslinger in Rio’s executive suite?

Perhaps the tune reflects a hint of the Wild West injected by Albanese into the venerable London-based mining house Rio Tinto, after he became its first American CEO in 2007.

It could be a laconic nod to the effect of small fluctuations in commodity prices on the fortunes of Rio, the world’s third-biggest miner, and the growing worries about the outlook for the markets.

It would certainly have been awkward had the phone gone off during one of the company’s annual meetings in May, where 37% of shareholders voted against the lucrative pay packages dished out to Albanese and his fellow executives.

But as he takes a seat in a conference room at Rio’s Sandton offices, the 53-year-old New Jersey native has more pressing priorities.

Along with most of its peers, Rio was taken by surprise by a commodities slump driven by the financial crisis of late 2008, and found itself saddled with debt from the purchase of Canadian aluminium producer Alcan at the top of the market in mid-2007.

More recently, Albanese encountered another unpleasant shock, when the Australian government pledged to implement a new supertax on mining profits.

Rio and other mining giants responded ruthlessly, running a big-budget advertising campaign designed to inspire panic about the tax’s effect on the Australian economy. Before long, Kevin Rudd — until recently an impressively popular prime minister — was out of a job.

Could the mining companies’ public relations assault be viewed as an attempt to undermine the policy decisions of a democratically elected government?

Albanese has long since honed his response to this question. “This is not about politics; it’s strictly about what we believe to be poor tax policy. It was important — particularly given there was some misleading information being presented in a number of quarters — for us to present factually the fact that we do pay a 35% royalty rate in Australia; we have reinvested over the last 10 years everything we made on an after-tax basis in Australia; and the fact that we’d want to continue to invest in Australia. But the tax as proposed would have harmed our ability to make those investments.”

The new prime minister, Julia Gillard, immediately pledged to resolve the dispute with the miners, and opened the possibility of moderating the measures mentioned in the tax proposal. Albanese has been impressed by Gillard’s willingness not only “to engage （but） to negotiate”， he says.

A few days after our meeting, the government unveiled a revised bill, with a less onerous “rent tax”， to be imposed only on coal and iron ore projects. But the new bill is still likely to raise the miners’ effective tax rates by about a third — potentially encouraging them to look elsewhere for opportunities.

Australia’s loss could be Africa’s gain. Only about 3% of Rio’s assets are in this continent, and Albanese acknowledges that the company is “underinvested” in Africa. “Over the last two months, the relative attractiveness of non-Australian investments has improved vis-à- vis Australian investments… I’d like to do more exploration, I’d like to do more mine development, I’d like to see more opportunities in Africa.”

As to the precise nature of those opportunities, Albanese is reticent — although whether this is because of discretion or a detachment from the African expansion programme, it’s hard to say. Certainly, he seems less than fully up to speed with the situation in Zimbabwe, where Rio owns 78% of the Murowa diamond mine. The country suspended all diamond exports in late May pending the results of an inquiry by the Kimberley Process, the industry regulator, into allegations of human rights abuses at the Marange field.

How has Murowa adapted to the fact that it is not currently able to export the diamonds it produces?

“My understanding is that we are. My understanding is that （the export ban） was an interim measure that’s no longer in place,” Albanese replies.

“Erm, no,” an aide interrupts. “We’re not currently exporting.”

Albanese doesn’t miss a beat. “Okay: on the record, I’m just clarifying my point — we’re not currently exporting.”

Some might call that an ambitious use of the word “clarifying” — but if anyone can pull off such an audacious piece of CEO-speak, it’s Albanese. He is almost a caricature of the unflappable, public relations- savvy modern executive: every question is met with the same measured, nasal tones, full of references to competitiveness, transparency and — most important of all — community development.

Speaking to Albanese, one might think his job was to further social progress in developing countries, rather than to generate profits for his shareholders. Last year’s decision to shelve the Coega aluminium smelter, near Port Elizabeth, was widely ascribed to Rio’s concerns that Eskom’s travails would affect the operation’s profitability. But that wasn’t really it at all, says Albanese; rather, the decision was inspired by the noble sentiment that “the best use of scarce electricity and of future power capacity would be to meet the current needs in SA, rather than for it to be diverted into intensive industrial consumption”。

That concern for human welfare might seem to sit oddly with Rio Tinto’s willingness to pursue a lucrative iron-ore project in Simandou, Guinea, even after government forces killed dozens of unarmed protesters in a stadium massacre last October.

But even there, Albanese maintains, Rio is among the good guys. “We have constructively invested on a transparent basis in Guinea as we have all over the world — it’s a key part of the way we work. I think we were actually a key part of community development in the surrounding area around Simandou during that period.”

ONE shouldn’t read too much into a person’s cellphone ringtone, but Tom Albanese’s choice — the theme from Sergio Leone’s western For a Few Dollars More — makes the exercise irresistible.

There’s no disguising Albanese’s underlying pragmatism, however. Rio’s relations with China’s government suffered last year after the failure of a tie-up with Chinalco, a state-owned aluminium producer.

Then, this March, China jailed four Rio Tinto employees for bribery. There’s no evidence that the two were linked, and Albanese says he’s convinced the men were guilty as charged.

But a sustained cooling in its relationship with Beijing would have been disastrous for Rio, which is pinning its growth strategy on supplying China’s unrelenting thirst for commodities.

So when the miner announced in March that it was bringing Chinalco into its Simandou project, it looked like an attempt to curry favour with China — an interpretation that Albanese does not deny. “The Chinalco agreement is a good agreement in itself to move the Simandou project forward. But from a broader perspective, this will be a step along the way to build a strong, constructive relationship with China, which is going to be increasingly important to Rio … in the decades to come.”

There’s just enough time for a discussion of whether fears for the Chinese economy are grounded （they’re not） and whether Rio will bow to calls to beneficiate resources in Africa （it won’t）, before Ennio Morricone’s haunting cowboy soundtrack rings out, bringing our meeting to an end.

There might be plenty of the bad and the ugly in the fiercely competitive global mining industry — but this consummate 21st-century CEO is determined to show only the good.