(Repeats story from late Friday, no changes to text)
By Sonali Paul and James Regan
MELBOURNE/SYDNEY, March 18 (Reuters) - Top investors in Rio
Tinto RIO.L RIO.AX say they want the global miner's new boss
to proceed cautiously on acquisitions, focusing on the core,
cash-generating iron ore business and on developing his own
copper mines before looking for new assets.
Jean-Sebastien Jacques, who will take over from Rio's
veteran boss Sam Walsh in July, was previously the head of its
copper and coal business. His appointment on Thursday has been
read by some as an effort to rebalance the iron ore-focused
miner and a pointer - given his negotiating credentials -
towards deals.
The front-runner for the job had been iron ore boss Andrew
Harding, whose division generated nearly 90 percent of the
group's earnings in 2015. Jacques' copper and coal unit made up
just 6 percent of the total.
But shareholders said Jacques should tread with care.
While the Frenchman may be taking over as more than $30
billion worth of mine comes onto the block amid the toughest
mining downturn in decades, it is unlikely that many assets will
be of the high quality, large, long-life calibre - so-called
"tier one assets" - they said.
"We don't want them to be going out and aggressively
acquiring stuff," said Andy Forster, a portfolio manager at Argo
Investments, the second-largest Australian stakeholder in Rio.
Outgoing CEO Walsh said in February the most desirable
copper assets were locked in the hands of other big miners and
it would take a longer period of weak copper prices before those
players crack.
Bankers have named mines including Cobre Panama, owned by
First Quantum Minerals FM.TO , Freeport McMoRan's FCX.N Cerro
Verde in Peru and Grasberg in Indonesia, which is co-owned by
Rio Tinto , or Anglo American's AAL.L Los Bronces and
Collahuasi in Latin America as potential targets.
Among the easier options would be taking control of Grasberg
and mopping up Rio Tinto subsidiary Turquoise Hill Resources
TRQ.TO , which holds the majority stake in the massive Oyu
Tolgoi copper mine in Mongolia.
The more ambitious, according to some bankers, could include
a tilt at indebted Anglo American AAL.L , or at least some of
its assets.
But Rio investors that Reuters spoke to wanted more of the
old, conservative approach and less of the boom year mega-deals
like Rio's acquisition of Alcan aluminium group and Mozambican
coal, two debacles which led to the exit of Walsh's predecessor
and brought in a period of conservatism.
TIGHTEN THE SCREWS
While Jacques has built a reputation as a sharp negotiator,
working on the Oyu Tolgoi project in Mongolia, he is also seen
as an astute salesman, having overseen the sale of the
Northparkes copper mine and the Bengalla coal mine in Australia
- both at higher than expected prices.
"We would be more impressed by what he divests, more coal,
uranium, etc. than acquisitions - and how he tightens the screws
on underperforming assets," said Peter O'Connor, a mining
analyst with Shaw & Partners in Sydney.
"Whilst some desire a 'growth junkie', we would like a CEO
who inspires the optimisation of return on invested capital from
every existing asset."
In the meantime, shareholders say they are braced for some
reshuffling at the top. Several said they would not be surprised
to see iron ore chief Harding and Chief Financial Officer Chris
Lynch eventually leave after missing out on the top job.
Chairman Jan du Plessis too, after seven years in the job
and having resolved the chief executive role, may also move on,
company executives said.
"Short-term sentiment might be affected, but there are
plenty of good people out there looking for jobs," said Tim
Schroeders, a portfolio manager at Pengana Global Resources
Fund.