Norges Bank Investment Management has decided to engage with mining companies Rio Tinto and South32 regarding their efforts to mitigate serious environmental damage.
This decision follows a recommendation from the Council on Ethics to exclude the companies due to their involvement in the Mineração Rio do Norte joint venture (JV), which operates a bauxite mine in the Amazon rainforest.
The Mineração Rio do Norte JV is owned by Glencore, holding a 45% stake, Rio Tinto, holding a 22% stake and South32 with a 33% stake.
Norges Bank said in a statement: “The executive board has decided to ask Norges Bank Investment Management to engage through active ownership with the companies Rio Tinto Plc, Rio Tinto Ltd and South32 Ltd on their work to reduce serious environmental damage over a period of five to ten years.”
The fund owns around a 2.5% stake in Rio Tinto, a 0.13% stake in Rio Tinto Ltd and a 2.6% stake in South32, according to a report by Reuters.
A company spokesperson told Reuters in an email: “South32 notes the decision by Norges to engage with South32 in relation to the recommendation by the Council on Ethics.”
South32 will continue to engage with Norges on the matter, the spokesperson added.
Norges Bank’s executive board has not independently verified all aspects of these recommendations but is confident that the exclusion criteria have been met.
Before opting for exclusion, Norges Bank considers whether other measures such as exercising ownership rights may be more appropriate. However, in these cases, the executive board has determined that other measures are not suitable.
Earlier this month, Rio Tinto, in partnership with Indium, extracted the first primary gallium from bauxite processed at its Vaudreuil alumina refinery in Quebec, Canada.
