Norway’s wealth fund to engage Rio Tinto, South32 over environmental concerns

Image: Mineração Rio do Norte

Norway’s sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), has decided to actively engage with mining companies Rio Tinto and South32 regarding their environmental practices, the fund operator said on Sunday.

The executive board of the largest sovereign wealth fund in the world said it arrived at this decision following a recommendation to sell its stake in the companies from the Council on Ethics, an independent adviser appointed by the government of Norway.

The fund owns an about 2.5% stake in Rio Tinto plc, 0.13% stake in Rio Tinto Ltd and a 2.6% stake in South32, according to LSEG data.

The council pointed to concerns over the companies’ involvement in the Mineração Rio do Norte (MRN) joint venture, a significant bauxite mine in the Amazon rainforest.

The executive board of the wealth fund said in a statement it decided to engage with the companies on their work to reduce serious environmental damage over a period of five to 10 years.

The Mineração Rio do Norte is a joint venture between Glencore which owns a 45% stake, Rio Tinto with a 22% satake and South32, which owns a 33% stake.

Seperately, the fund said it revoked the exclusion of German energy firm RWE AG, commending its shift towards renewable energy.

Meanwhile, it said decided to sell its shares in Mexican oil company Petroleos Mexicanos and Israeli firm Paz Retail and Energy, citing ethical concerns.

(By Adwitiya Srivastava; Editing by David Gregorio)