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Revision as of 11:22, 4 February 2020

Barrick Gold Corporation
Company typePublic
TSXABX
NYSEGOLD
S&P/TSX 60 component
IndustryMetals and mining
Founded1983; 41 years ago (1983)
FounderPeter Munk
Headquarters
Toronto, Ontario
,
Canada
Key people
John L. Thornton
(Executive Chairman)
Mark Bristow
(President)
ProductsGold
Silver
Copper
RevenueDecrease$7,243 million (2018)[1]: 101 
Decrease$308 million (2018)[1]: 101 
Decrease$-1,435 million (2018)[1]: 101 
Total assetsDecrease$22,632 million (2018)[1]: 104 
Websitewww.barrick.com

Barrick Gold Corporation is the second-largest gold mining company in the world[2], with its headquarters in Toronto, Canada.[3] The company has mining operations in Argentina, Australia, Canada, Chile, Côte d'Ivoire, Democratic Republic of the Congo, Dominican Republic, Mali, Papua New Guinea, Peru, Saudi Arabia, Senegal, Tanzania, the United States and Zambia.[4] In 2018, it produced 4.527 million ounces of gold at all-in sustaining costs of US$806/ounce and 383 million pounds of copper at all-in sustaining costs of $2.82/pound.[1] As of December 31, 2018, the company had 62.3 million ounces of proven and probable gold reserves.

History

Founding and early years

Barrick Gold Corporation evolved from a privately held North American oil and gas company,[5] Barrick Resources.[6] After suffering financial losses in oil and gas,[7] founder Peter Munk (1927–2018) decided to refocus the company on gold.[8] Barrick Resources Corporation became a publicly traded company on May 2, 1983,[9] listing on the Toronto Stock Exchange.[10]

1986 to 2005

Reflecting its identity as a North American producer, distinct from its South African competitors, the company's name was changed to American Barrick Resources in 1986.[11] It was listed on the New York Stock Exchange in February 1987.[12] Its name was changed to Barrick Gold Corporation in 1995.[13]

American Barrick became the third-largest gold mining company in the world when it acquired Lac Minerals in 1994, which owned mining properties in North and South America.[14] Two years later, in 1996, Arequipa Resources, owner of properties including the Pierina mine in Peru, accepted a takeover offer from the renamed Barrick Gold Corporation. A third acquisition followed in early 1999, when Barrick Gold acquired Sutton Resources Ltd., assuming ownership of properties in Tanzania.[15] In 2001, Barrick acquired Homestake Mining Company for $2.3 billion in stock, then one of the oldest mining companies in the United States.[16] The purchase made Barrick the second-largest gold producer in the world.[16]

Placer Dome acquisition

On December 2005, Barrick launched a hostile takeover bid valued at US$9.2 billion for rival Canadian gold miner Placer Dome.[17] The $10.4 billion transaction closed in December 2006.[18][19]

2006 to present

Barrick mines have spurred violent conflict around the world. The BBC reported in September 2012 that one person was killed and at least four more were injured at a Barrick mine in the northern Ancash region of Peru in clashes between police and members of a neighboring community who were protesting the mine’s alleged over-consumption and contamination of local water sources.[20] Two people were killed and 20 were injured in similar events at the same mine in 2006. Between 2010 and 2013, three people were killed and 50 were injured at Barrick’s Pueblo Viejo mine in the Dominican Republic. At Barrick’s Pascua Lama mine in Chile, 40 people were arrested following a demonstration against Barrick’s alleged pollution of local glaciers.[21]

In February 2010, Barrick Gold announced plans to create a separate company to hold its assets in Tanzania, called African Barrick Gold.[22] Barrick Gold would retain majority ownership in the new company, after its listing on the London Stock Exchange.[22] African Barrick Gold was listed on the London Stock Exchange in mid-March 2010, with an IPO valuation at US$3.6 billion.[23] The shares offered on the LSE raised just more than 500 million pounds.[24] In June the company was admitted to the FTSE 100 Index.[25]

In April 2011, Barrick beat a takeover offer for Equinox Minerals by China Minmetals.[26][27]

In 2018, John L. Thornton orchestrated a strategic “trust-based relationship” between Barrick Gold and Shandong Gold Group, a Chinese state-owned enterprise, establishing joint ownership of the Veladero mine to capitalize on Shandong’s investor base, capital suppliers, political connections and regional influence. In the press release announcing the partnership, Thornton said that Barrick and Shandong were looking forward to “sharing… capital in ways that will create added value for our respective owners, and our government and community partners in San Juan province”.[28]

In February 2019, Barrick Gold announced a hostile $19 billion bid to acquire Newmont Mining Corporation, an American company based in Denver, Colorado. [29][30]Newmont’s board immediately and unanimously rejected the offer, describing Barrick’s “egocentric proposal” as “designed to transfer value from Newmont shareholders to Barrick’s”.[31] Newmont also said that Barrick has “a comparatively ineffective operating model, a poor track record on delivering shareholder returns and unfavourable jurisdictional risk”.[32][33] Barrick’s third-quarter 2019 investor presentation cites Barrick’s risks of negative reputational and financial impact from Barrick’s “failure to comply with environmental and health and safety regulations”, “lack of certainty with regard to foreign legal systems, corruption” and negative “dealings with community groups”.[34] Newmont CEO Gary Goldberg said, “[O]ne of the major factors that hindered Barrick’s ability to create value in the past remains the same… John Thornton is still firmly in control.”[35]

In September 2018, Barrick Gold announced an all-stock merger with Randgold Resources in a deal valued at $6.5 billion.[36][37] Former RandGold CEO Mark Bristow became CEO of Barrick Gold with the merger, after his forced resignation from the board of Panthera, a wildlife conservation organization focused on protecting big cats. The Daily Mail revealed he was a trophy hunter, publishing photos of him posing next to animals he had shot, including elephants, an antelope, a gazelle, a lion, a hippo, a buffalo, a zebra and a leopard.[38]

On July 1, 2019, Barrick and Newmont Corporation launch Nevada Gold Mines.[39][40][41]

Operations

Asset Country Ownership Mine type Product(s) Attributable gold production, 2018 (ounces) Attributable copper production, 2018 (pounds)
Barrick Nevada  United States 100% open-pit mines (Pipeline, Cortez Hills, Betze-Post) and underground mines (Cortez Hills, Meikle, Rodeo) Gold 2.1 million
Pueblo Viejo  Dominican Republic 60% open-pit mine Gold, silver 581,000
Veladero  Argentina 50% open-pit mine Gold 278,000
Lagunas Norte  Peru 100% open-pit mine Gold 245,000
Porgera  Papua New Guinea 47.5% combined open-pit and underground mine Gold 204,000
Turquoise Ridge  United States 75% underground mine Gold 268,000
Hemlo  Canada 100% Open pit, underground Gold 171,000
Golden Sunlight  United States 100% open-pit mine Gold 32,000

Copper mines

Asset Country Barrick stake Copper production, 2018
Lumwana (copper)  Zambia 100% 224 million pounds
Zaldivar (copper)  Chile 50% (other 50% held by Antofagasta) 104 million pounds
Jabal Sayid (copper)  Saudi Arabia 50% (other 50% held by Maaden) 55 million pounds

Mines controlled through Acacia Mining

Tanzania's largest gold mining company, Acacia Mining Plc, formerly African Barrick Gold plc, is owned by Barrick, and operates three mines in Tanzania.

Asset Country Barrick stake Type of mine Gold production, 2017
North Mara Gold Mine (operated by Acacia Mining)  Tanzania 100% combined open-pit and underground mine 323.6 koz
Buzwagi Gold Mine (operated by Acacia Mining)  Tanzania 100% open-pit mine 268.8 koz
Bulyanhulu Gold Mine (operated by Acacia Mining)  Tanzania 100% underground mine 175.5 koz

Selected former operations

Asset Country
Bald Mountain mine  United States
Round Mountain Gold Mine, (50%)  United States
Ruby Hill  United States
Kalgoorlie Super Pit  Australia
Cowal, New South Wales  Australia
Plutonic Gold Mine  Australia
Pierina, Ancash  Peru
Tulawaka  Tanzania

Mining practices

Papua New Guinea

In 2011, Human Rights Watch (HRW) published a report alleging that the private security force at Barrick's Porgera mine in Papua New Guinea had carried out "gang rapes and other violent abuses", which include repeated acts of mass rape and other sexual abuse, murder, arson, forcible eviction and other forms of violence against community members near the Porgera Joint Venture mine over a period of several years.[42][43][44][45][46] The tension between Barrick and the local community stems from impoverished locals illegally trespassing on Barrick property to scavenge for bits of gold in the mine's waste dumps. Barrick employs the local police to keep community members off company-owned land. Numerous community members, men and women, said they were raped, beaten or otherwise assaulted on Barrick property when they were caught trespassing.[43] Human Rights Watch said Barrick should have "acted long before Human Rights Watch conducted its research and prompted them into action".[47][48] Barrick Gold revealed in 2013 that, after an independent investigation, the company was paying indemnities to 14 women raped by mine security guards in Tanzania. In addition to cash, the women were also receiving therapy, job training, relocation, and child education expenses.[49]

Sarah Knuckey[50], human rights lawyer and Director of the Columbia Law School Human Rights Clinic, described the rapes as “some of the most vicious assaults [she’s] investigated anywhere in the world”. A joint report by Harvard University and Columbia University revealed that Barrick offered the women less than $6,000.00 each. A group of 11 rape survivors rejected Barrick's initial offer and received significantly larger settlements after they obtained legal representation in the United States.[51]

In June 2014, Amnesty International reported that Barrick Gold's security guards from the Porgera mine burned more than 200 homes in a raid on June 6, 2014.[52]A police officer involved in the raid said that Barrick had ordered police to burn the houses.[53]

Tanzania

Human Rights Violations

Security guards hired by Acacia Mining, a subsidiary of Barrick Gold, have shot and killed 22 people at the North Mara gold mine since 2014, and injured 69 others.[54]Tanzanian human rights groups estimate as many as 300 mine-related civilian deaths since the mine's opening in 1999. Acacia included only 17 civilian deaths at North Mara in their annual report in 2014, and six civilian deaths in the 2016 report. No Acacia security guards have been killed on duty.[55] The Financial Times reported, “In 2015, without admitting liability, Acacia settled out of court for an undisclosed sum after a case was brought against it in the London High Court following an incident in which six people were allegedly killed by police hired by Acacia. The company admits to providing per diem expenses for the police at its mine”.[55] The International Council of Jurists said, after a September 2017 visit to the North Mara mine, that they were “deeply concerned about the gravity of many of [the] allegations and the difficulties [victims] experienced in accessing any adequate remedy and reparation”.[56]

Multiple women claim to have been raped at the North Mara gold mine.[57] In July 2018, a 9-year-old girl was crushed and killed by a mine vehicle driven by the police as the driver took a short-cut. Afterward, four women who came to sit by the girl's body were injured by teargas canisters as the police sought to disperse the crowd.[58] In June 2019, Acacia's grievance process at the North Mara mine was found to not comply with the United Nations Guiding Principles on Business and Human Rights, the international standard for corporations.[59]

Corruption

Beginning in 2013, Barrick-controlled Acacia Mining reportedly bribed Tanzanian government officials, Adam Yusuf and Jerry Minja, and others responsible for valuing land near the North Mara gold mine that it wanted to buy. The alleged bribes totaled more than $400,000.00 and were paid in cash. Jerry Minja, a district land officer who received cash payment, stated that his agreement with Barrick prevents him from commenting on the details of the arrangement.[60] The Wall Street Journal reported that the original whistleblower intended to report the payments to the Foreign Corrupt Practices Act units of the United States Justice Department and the U.S. Securities and Exchange Commission. Tanzanian authorities charged three Barrick affiliates with conspiracy, organized crime, forgery, money laundering and corruption.[61] The Wall Street Journal reported in 2018 that the British Serious Fraud Office had opened an investigation into Barrick's business in Tanzania, despite Barrick's insistence that the payments were legal.[62]

Tax Evasion

In 2016, a Tanzanian government tribunal ruled that Barrick Gold had organized a “sophisticated scheme of tax evasion” in Tanzania[63] and fined Acacia Mining, as reported by Bloomberg, for under-declaring export revenues from the Bulyanhulu and Buzwagi mines since 2000.[64] Barrick Chairman John L. Thornton told The Globe and Mail that “Acacia never paid a dime of income tax” to the Tanzanian government.[65][66]

In May 2017, the government of Tanzania accused a Barrick Gold subsidiary (Acacia Mining of “underreporting its gold exports by a factor of ten”. The investigation revealed that Acacia declared the presence of gold, copper and silver in its mineral sand exports, but did not declare other precious metals. The committee found that the exports included amounts of undeclared sulfur, iron, iridium, titanium and zinc. The report stated that Acacia declared 1.1 tons of gold in a container that actually contained up to 15 tons of gold. The Tanzanian government then imposed a ban on the export of gold and copper concentrates. The accusation and ban halved Acacia’s market value.[67] In October 2017, Thornton met with John Magufuli, the president of Tanzania, for six hours, and negotiated a deal that included a $300 million payout from Acacia to the Tanzanian government, as well as the Tanzanian government taking a 16% stake in Acacia’s mines.[68]Thornton reportedly did not tell Acacia the terms of the settlement until after the deal was announced, even though Acacia would be responsible for the payment.[69]Shortly after Thornton’s deal with Magufuli was announced, Acacia’s top executives – CEO Brad Gordon, CFO Andrew Wray and COO Mark Morcombe – resigned.[70]

In 2017, Canadian Journalists for Free Expression reported that journalists in Tanzania had been threatened and persecuted for reporting on Barrick and Acacia mines by agencies working for Barrick Gold.[71]

Barrick subsidiary Acacia Mining was fined $2.4 million in May 2019 for alleged pollution at its North Mara mine in Tanzania. Tanzania's National Environment Management Council issued an environmental protection order relating to pollution from the mine's tailings dam.[72]

United States

In 2008, the company negotiated an agreement with four of five regional Western Shoshone tribes, providing financial resources for education and wellness initiatives, including a long-term scholarship program, allocated at the Tribes' discretion.[73] A former tribal chairman of the Duck Valley Shoshone spoke of the company as "a pretty progressive entity."[74] In British Columbia the Tahltan Nation has thanked the company for encouraging local sustainable development while operating the Eskay Creek mine from 2001 to 2008.[75][76]

Through 2009 and into 2010 Barrick Gold's Cortez Hills project was the subject of litigation in Nevada, seeking to block the project.[77] Opponents appealed to the United States Court of Appeals for the Ninth Circuit, challenging a ruling in the United States District Court for the District of Nevada, which denied the bid to block the project.[78] The Appeals Court "upheld a federal judge's finding that opponents of the mine failed to prove they were likely to prevail on claims the mine would cause visual harm to Mount Tenabo and create a substantial burden on the tribes' ability to exercise their religion" but ruled the U.S. Bureau of Land Management's previous environmental review of water and air pollution impacts "was inadequate under the National Environmental Policy Act" and ordered the District Court to provide "appropriate" injunctive relief while the Bureau of Land Management conducted further study.[79] In March 2011 the Bureau of Land Management approved a subsequent study on environmental impacts, allowing the mine to operate as originally proposed.[80]

Argentina

In March 2014, Barrick Gold spilled over one million liters of cyanide solution into five rivers near Barrick's Veladero site in the San Juan province of Argentina.[81] Barrick waited six days to report the spill and initially neglected to identify the leaked chemical solution as containing cyanide,[82] but eventually connected the million-liter spill to “a frozen valve and a sluice gate that was left open at the time of the valve failure.” Some Argentine provinces ban mining processes that involve cyanide.[82]

Raman Autar, a former senior manager of global maintenance for Barrick Gold in 2013 and 2014, was abruptly dismissed from his role in March 2014 after raising concerns about maintenance and safety risks at the Veladero mine. He alleged that he was fired for being a whistleblower. Numerous organizations – including Friends of the Earth International, Chile's National Water Commission, Argentina's Center for Human Rights and Environment and the National Environment Management Council – have demanded Barrick stop environmentally destructive mining practices, citing noncompliance with environmental laws resulting in contaminated water and other environmental devastation.[81]

In March 2016, Barrick shareholders brought a class-action lawsuit against Barrick Gold, accusing the company of distorting facts and knowingly misleading shareholders regarding the company's compliance with environmental regulations in Argentina and Chile. There was another cyanide spill in March 2017, as Barrick had failed to complete improvements to the mine that could have prevented the spill. Operations were partially suspended for the third time in 18 months and local regulators opened an investigation into past negligence and demanded that Barrick overhaul its environmental and operating processes.[83] Barrick Chairman John L. Thornton flew to Argentina to meet with the Minister of Energy, Juan José Aranguen, who demanded that Barrick put in place a new strategy for the mine or else its license would be rescinded. The Argentine government demanded the closure of the original project site. This coincided with the sale of 50% of the Veladero mine for $960 million to Shandong Gold Group, a Chinese mining company. Thornton was reported to have been the principal negotiator in the deal.[84]

Voluntary Principles on Security and Human Rights

In 2010, Barrick Gold Corporation became the 18th company to join the Voluntary Principles on Security and Human Rights[85] which provides "guidance to extractives companies on maintaining the security of their operations in a manner that respects human rights and fundamental freedoms."[86] Admission follows an eight step process that requires approval by the Voluntary Principles plenary,[87] the main decision-making body, consisting of all active members, drawn from participating governments, companies and non-governmental organizations.[88] Barrick Gold participates in a number of corporate social responsibility programs, such as the United Nations Global Compact.[89] The company is a signatory to the Extractive Industries Transparency Initiative.[90] It also participates in The Global Reporting Initiative, Business for Social Responsibility[91] and The Global Business Coalition on HIV/Aids, Tuberculosis and Malaria.[92] On September 7, 2007, Barrick was added to the Dow Jones Sustainability Index.[93] The company is a member of The International Leadership Council (ILC) of The Nature Conservancy.[94] In Papua New Guinea, the Porgera Joint Venture participated in the development of a wildlife conservation area in the Kaijende Highlands.[95]

Canada

In February 2010, lawyers for Barrick Gold threatened to sue the Canadian publisher Talonbooks for defamation if it proceeded with plans to publish the book Imperial Canada Inc.: Legal Haven of Choice for the World's Mining Industries by Alain Deneault.[96] Publisher Karl Siegler described this as "libel chill," pointing out that since the book had not yet been published, Barrick Gold could not know whether or not its contents actually constituted defamation.[97] Subsequently, Talon decided to publish the work (ISBN 9780889226357)[98] and "issued a statement saying they 'intend to show the complete manuscript to Barrick prior to the book's release, to allow Barrick the opportunity to "correct" any "falsehoods" about how they conduct their business affairs, worldwide, that they feel it may contain.'"[99]

A 2011 decision in Quebec Superior Court had ruled that Barrick Gold had to pay $143,000 to authors Alain Deneault, Delphine Abadie, William Sacher and publisher Les Éditions Écosociété Inc, to prepare their defense in a "seemingly abusive" strategic lawsuit against public participation. Despite the Québec ruling, a book "Noir Canada" documenting the relationship between Canadian mining corporations, armed conflict and political actors in Africa was never published as part of a settlement which, according to the authors, was only made for the sole purpose of resolving the three-and-a-half year legal battle.[100]

See also

References

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Further reading

  • Rohmer, Richard (1997). Golden Phoenix: The biography of Peter Munk. Toronto: Key Porter Books. ISBN 1-55013-912-6.