Halloween for Barrick Gold
The world’s largest gold miner, Barrick Gold has perhaps had the most haunted Halloween with several disputes scaring investors, seeing the share price drop hard on October 31st.
Most significantly, the company found itself under the glare of the Argentinian government after ‘rumours’ that it was permanently closing the Andean Pascua Lama project. The situation is perhaps typical of miners’ communication issues: on Thursday, Barrick said they were indefinitely suspending the project, but Friday saw CEO Jamie Sokalsky claim ‘there’s a rumor that we are going to cancel the project but that’s not the company’s intent… The project has been, and continues to be, a top priority for the company, and also our biggest challenge.’ As of today there has been no further clarification of the status of the mine, even though the markets have already made their mind up.
Barrick is also feeling the pressure in the Philippines as the fallout from its Placer Dome acquisition continues. Placer Dome was responsible for the worst environmental disaster in the Philippines: the Marcopper mining disaster on Marinduque Island in 1996. Barrick bought the company ten years later and took on the lawsuit being filed by the islanders resulting from the disaster. Barrick offered US$20million to the inhabitants of Marinduque, which was rejected by the population however, as being inadequate.
Barrick’s difficulties were echoed in an op-ed in the Ottawa Citizen on the weekend about the failure of Canada’s wordy ‘Office of the Extractive Sector Corporate Social Responsibility Counsellor’, which ended last week after the counsellor, Marketa Evans, resigned. In 4 years, no complaints (of which there were just 6) received any remedy. Canada is perhaps the leading government on CSR development, holding seminars and funding a CSR Centre for Excellence as part of an official ‘action plan’. Yet it has the highest number of blacklisted companies on the World Bank corruption index: one sixth of companies are Canadia.
The contradiction is strange, and our CSR survey does not suggest that Canadian miners are any worse than in London or South Africa. That Barrick is suffering from ‘rumours’ - and Canada struggles with company reputation - suggests above all a failure of the public engagement imagination.