The 10-foot-tall papier mâché puppet of Peter Munk has been a fixture at anti-mining protests outside Barrick Gold’s annual general meetings, and this year’s at the Metro Toronto Convention Centre on April 26 was no different. Munk is still considered the main villain, a powerful symbol of Barrick’s human rights and environmental transgressions abroad.
But the man himself is no longer with the company, having stepped down last year amid shrinking profits, a lukewarm response to a $3 billion share offering and uncertainty about the future of projects mired in controversy abroad.
For the first time since his departure, Munk sat in the audience, watching from the sidelines the meeting of the company he created almost 33 years ago, often shaking his head at the activists who took to the microphones during the Q&A portion. They were questioning the company’s operations, in particular at its Valedero mine in Argentina, where last September more than 1 million litres of cyanide solution spilled into the Potrerillos River.
For several years, the Q&A has been dominated by activists reading statements on behalf of members of communities adversely affected by Barrick’s operations abroad.
This year saw fewer fireworks than in years past inside the Convention Centre’s John Bassett Theatre. No major crisis was debated, and no one from affected communities had travelled to speak directly to the board and shareholders.
Munk once famously intoned that “Bad times bring out more people.” Despite the lighter showing by activists, the last five years have been very bad indeed for the world’s largest goldmining company.
Construction has been suspended since 2013 at its massive Pascua-Lama project straddling the Chile-Argentina border. Barrick is dealing with a series of legal cases in Chile related to some two dozen environmental violations at the site, as well as several class action lawsuits brought by disgruntled shareholders from the U.S. and Canada alleging the company concealed problems at the mine.
Since Munk’s departure as chair, his replacement, John Thornton, has overhauled the senior management team, cut Barrick’s massive debt load and shrunk head office staff from 240 to 150 employees.
“If you remember nothing from this morning, remember three things: Barrick is back, gold is here to stay, and Barrick is a company you will hold forever,” Thornton told shareholders.
The changes, says Andy Lloyd, Barrick’s vice president of communications, in a phone conversation with NOW, are all part of a culture shift at the company.
“Part of that change is being transparent with our owners and stakeholders and being more upfront about the realities and some of the challenges we face – to share the good and bad news.
“In the last few years we really hurt our credibility with our investors and our ability to execute on some things we have always been good at, such as project development, Pascua-Lama being the example,” says Lloyd.
The company also spent a whopping $7.6 billion acquiring Equinox Minerals in 2011 and is currently trying to pay down the debt that’s accumulated from that deal. At the same time, the price of gold has dropped, causing Barrick’s share price to go from a high of $54.99 in September 2011 to an all-time low of $7.90 by September 2015.
“The kind of growth the market was asking for was clearly not sustainable in a profitable way. And now you are seeing a bit of a reckoning for the industry,” says Lloyd.
Shareholders were not pleased with Barrick’s recent performance, plummeting share price, massive spending on acquisitions and ongoing problems at some mine sites, but Thornton has seemingly set a different tone since taking over. The outrage that met news of Thornton’s compensation at last year’s meeting seems to have subsided.
“Munk and Barrick grew too large in these last few years and spent way too much money. I believe Thornton is a better manager of the company,” one 20-year shareholder told me.
But Kelsey Ross, a member of the Mining Injustice Solidarity Network, argues that some of the restructuring Barrick has undertaken in the name of transparency may actually lead to less accountability.
“Its decentralized model is problematic for a variety of reasons,” says Ross. “There are simply no mechanisms in place to ascertain if the company is upholding its standards of transparency, accountability and environmental controls.”
She points to the Veladero mine spill – and misinformation from the company about the size of the spill – as a case in point.
A week after that incident, Barrick said that “no risks to human health were identified” and “no cyanide has been detected in the river system downstream.” The company blames the spill on a valve failure. But an Ar-gentine court has ordered nine Barrick employees to face criminal charges for their role in the spill and the company to pay a $10 million fine.
Lloyd had this to say about the initial estimate of the size of the spill and water quality today:
“It was a very preliminary assessment, and the investigations were still under way. The motivation was to try to provide the most up-to-date information, but in an evolving situation the facts do change as you gain more info. It did take a number of days for engineers and hydrology experts to do the calculations.”
A local court asked Barrick to provide water to affected communities, which fuelled locals’ fears.
Back at the Metro Toronto Convention Centre, Munk rose from his seat at the end of the meeting to approach board members sitting at a table at the front of the theatre.
He was asked if he’d like to comment on some of the criticisms Ross had levelled at the company.
“We do our best and we do it totally and only with the approval of the local government,” Munk said. “If the people [in San Juan province] feel that way, then they should change their government. [But] clearly, the people don’t feel that way, as this is not a representative opinion. Yet they [mining opponents] are undermining the spirit and the credibility of the people who work for us. I just think it’s very unfair, especially if [their accusations are] untrue. If they were true, we would be doing something about them,” he says. And with that he was out the door.
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