By Rhiannon Hoyle

PERTH, Australia--Rio Tinto shareholders voted against an independent review of the miner's dual-listed structure, rejecting an activist investor's proposal aimed at getting the company to drop a decades-old primary London listing.

The miner, the world's second biggest by market value, said Thursday that 80.65% of shareholder votes were cast against Palliser Capital's call for a transparent review of Rio Tinto's dual-listed structure.

Still, with nearly 20% of votes in favor of the review, the company said it will continue to engage with shareholders and "carefully consider the feedback provided."

Palliser, a U.K.-based hedge fund, wants Rio Tinto to become a wholly Australian company with a primary listing in Sydney. It argues that Rio Tinto's structure is outdated and inefficient, restricting the miner's ability to pursue stock-based deals and fully utilize Australian tax credits--claims the miner rejected.

Rio Tinto said it completed a comprehensive review of its dual listing last year and concluded that collapsing its current structure would incur large tax costs and waste credits passed to Australian shareholders with dividend payments. A public review would disclose commercially sensitive information in a way that could hurt shareholders' interests, the miner said.

"We have considered this topic regularly and objectively over many years," Rio Tinto Chairman Dominic Barton told shareholders in Perth on Thursday.

Barton said directors will continue to regularly examine the merits of the dual listing.

Rio Tinto consists of two companies: Rio Tinto PLC in the U.K. and Rio Tinto Ltd. in Australia. They are separate legal entities but share a common board and single management team.

The miner has been structured this way since 1995, when the group was created by the merger of U.K.-listed RTZ and Australia's CRA.

The London stock accounts for about 77% of shareholders, but the company today generates most of its revenue running mines in Australia.

Palliser's resolution needed 75% of votes to pass. Under U.K. rules, however, shareholders expect a company will engage further if 20% or more of votes are cast in favor of a resolution.

Ahead of the vote, Palliser's campaign received backing from shareholder advisers Glass Lewis and Institutional Shareholder Services, or ISS.

Palliser previously said it owns a roughly $300 million stake in Rio Tinto, which has a market capitalization of around $100 billion.

Palliser's request for an independent and transparent review is "simple and reasonable," Palliser founder and Chief Investment Officer James Smith said Thursday, before the outcome of the vote was published. He has previously described Palliser as a long-term holder of Rio Tinto shares.

Rio Tinto said investors have told the company they want the board to remain focused on its strategic goals, which include raising output of commodities expected to be essential for the energy transition.

"We have listened to our shareholders carefully, and we believe the direction to us is clear," said Barton, the company's chairman. "The group's priority should be on delivery against the widely supported strategy."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

May 01, 2025 04:50 ET (08:50 GMT)

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