Rio Tinto replaces chief Sam Walsh with copper boss

The world's second largest miner has named its copper and coal division head to succeed current chief Sam Walsh, marking a shift in the giant that has long depended on iron ore, local media reported Friday.

Walsh, 66, will be replaced by Jean-Sebastien Jacques when he retires on July 2016. But to ensure an effective and efficient transition, Jacques has been appointed to Rio's board and made deputy chief executive effective immediately.

The 44-year-old Jacques, who's been praised for running Rio's difficult Oyu Tolgoi project - the world's largest gold and copper mine - and acquiring the 4.4 billion U.S. dollar financing agreement for its expansion, will become the first copper man to run the global miner that sources 90 percent of earnings from iron ore in decades.

Rio has been facing calls to look to later cycle commodities, such as copper, while the steel-making iron ore continues its downward slide. The appointment of Jacques has lead analysts to suggest Rio is looking to further copper deals in the current base-commodity slump.

"The board has decided that J-S is the right person to lead Rio Tinto in an increasingly complex world filled with both challenges and opportunities for our industry," Rio chairman Jan du Plessis said in a statement during the European trading session.

"Jean-Sébastien is a very experienced executive with a demonstrated track record and brings a unique blend of strategic and operational expertise. He has run complex operations and projects across five commodities and five continents."

Walsh, the company's former iron ore chief, took Rio's reins at a challenging time for the giant following the shock sacking of then chief executive Tom Albanese after a string of costly investments didn't perform.

Walsh has been a steady pair of hands for the miner through the downturn in iron ore prices caused by ramping supply by Rio and its rivals that is outpacing demand for steel, driving down production costs, limiting capital expenditure and implementing structural reform despite slumping to a loss in 2015.

"After 25 great and enjoyable years with Rio Tinto, now is the right time to pass the reins on to Jean-Sébastien," Walsh said.

"I am very proud to have played my part, together with all of our employees around the world, in returning Rio Tinto to a position of industry leadership and strength."

Jacques was one of four internal candidates to replace Walsh following a carefully planned and long-term succession process. Prior to joining Rio in 2011, the new chief executive worked for more than 15 years across Europe, South East Asia, India and the United States in a range of operational and functional positions in the aluminium, bauxite and steel industries.

At 1224 local time, Rio's shares surged 1.30 Australian dollars (99.64 U.S. cents), or 2.97 percent, to 45.03 Australian dollars (34.51 U.S. dollars). Endit