NORWAY - The Government Pension Fund - Global has excluded Rio Tinto's equities from its portfolio, over concerns on the risk of contributing to "severe environmental damage" allegedly posed by the international mining group.
The Ministry said its Council on Ethics concluded Rio Tinto was directly involved, through its participation in the Grasberg mine in Indonesia, in the severe environmental damage caused by that mining operation.
Following no indications found by the Council the company's practices would be changed in future, Kristin Halvorsen, Norway's minister of finance, said the fund could not hold ownership interests in such a company.
In 2006 the fund excluded Freeport McMoRan Copper&Gold Inc., which is a joint venture partner in the Grasberg mine in Indonesia with the Rio Tinto Group, over environmental concerns.
The Ministry said the exclusion of Rio Tinto was largely due to the previous decision to exclude Freeport, taken over the risk of contamination of a natural river system caused by the company's mining activities in Indonesia.
At the end of 2007, the fund held equities valued at approximately NOK4,419m (US$781m) in Rio Tinto Plc. and NOK430m (US$76m) in Rio Tinto Ltd.
In addition, the Ministry has announced it decided not to exclude agricultural company Monsanto from the Government's pension fund portfolio, following its acknowledgement Norges bank's active ownership had contributed to the reduction in the use of child labour in India by the company.
The Ministry explained the continued exercising of Norges Bank's ownership rights would be an "important contribution to achieving actual improvement in conditions" in Monsanto's hybrid cotton seed production in India.
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