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AustralianSuper gives Rio Tinto slap on the wrist

Rio Tinto got a talking to from AustralianSuper in relation to it blowing up a 40,000 year old Aboriginal heritage site, but the fund won't be selling down its $1 billion dollar stake.

AustralianSuper chief investment officer and deputy chief executive Mark Delaney revealed the country's largest super fund, responsible for $167 billion in retirement savings, has no plans to sell down its stake in Rio Tinto despite the Juukan Gorge controversy.

AustralianSuper has a $1.047 billion stake in Rio Tinto. About $910 million of that is from the fund's accumulation accounts and the rest is across retirement diversified, Australian equities and member direct options.

The majority, 79% or $715 million, of that holding comes from member money in AustralianSuper's default MySuper investment option.

The mining giant is the fund's 10th largest Australian equities holding.

"We've had two or three conversations with Rio Tinto about this issue, expressing our disappointment and the importance of the issue with senior management and the board," Delaney said during a Bloomberg webinar.

Asked whether AustralianSuper might sell down even part of their holding in Rio Tinto if the company was not responsive to engagement, Delaney said it was unlikely.

"I don't think we're at that position yet. The company has been listening, there's no doubt this was the wrong thing to do," he said.

Delaney implied that RioTinto might not have blown up Juukan Gorge if it knew about the heritage site.

"The company, if it had its time again, would not be in this position," Delaney said.

"They have been quite approachable about the issue and we are working through the issue with them."

Asked about the same issue with other mining companies, Delaney said AustralianSuper has a large ESG team which has "great" engagement with companies and that this issue would be raised with other mining companies.

BHP has been dragged into the Juukan Gorge controversy after it was found to have plans to expand its South Flank iron ore mine which may destroy up to 86 significant Aboriginal heritage sites.

After public outcry, BHP said it would "consult" with traditional owners on 40 out of the 86 sites.

BHP is AustralianSuper's third largest Australian equities holding, the company represents 1.4% of AustralianSuper's MySuper investment option. It has a $1.9 billion stake in the company.

Read more: AustralianSuperRio TintoBHPJuukan GorgeMySuperBloombergESGMark DelaneyRioTintoSouth Flank
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