Barrick Gold CEO troubled by ‘nationalistic’ response to Glencore’s bid for Teck Resources

Barrick Gold Corp. chief executive Mark Bristow, who heads the world’s second-largest gold mining company, said the “nationalistic” political rhetoric around Glencore PLC’s bid for Teck Resources Ltd. could hurt the country’s mining industry in the long run.

“We are proudly Canadian and we are desperate to grow in Canada,” said Bristow. “But at the same time, we do big deals around the world and imagine if our host countries around the world denied us the ability to access their markets and industries,” he continued. “I guess it’s the sign of the times as we sort of become more inward looking and nationalistic.”

Bristow was reacting to statements from various Canadian politicians in recent weeks that imply that Switzerland’s Glencore might have to work harder than usual to convince Canadian authorities to approve a potential deal – provided Vancouver-based Teck agrees to sell in the first place.

Teck has so far rejected two takeover offers from the Swiss mining giant, but Glencore hasn’t backed down. Chief executive officer Gary Nagle has vowed to bypass Teck’s management and take an improved offer directly to Teck’s shareholders if management continues to refuse to negotiate.

Prime Minister Justin Trudeau told Bloomberg Television on April 28 that any takeover bid for Teck would have to get through a “rigorous process.” Earlier, three federal cabinet ministers — Finance Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson — said in a letter to the Greater Vancouver Board of Trade that they were watching the bid closely and stressed the importance of Teck to Canada.

Also, Pierre Poilievre, leader of the Conservative party, called on the federal government to block Glencore’s proposal, stressing the need to protect minerals such as copper and lithium, which are in high demand and will play a crucial role in the world’s transition away from fossil fuels.

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Teck, Canada’s largest diversified miner, is a big copper producer and is working on nearly doubling its production of the red metal, a key component of electrification.

Some have touted Teck as possibly one of the last big Canadian miners and said that it would be a loss for the industry if a foreign company were to take it over.

Bristow said he understood the sentiment, but wasn’t certain if this was a “good long-term strategy for a country that’s played such a big role in the development of the global mining sector.”

Trudeau’s government has taken a number of steps in the past year to ensure Canadian mining projects involving critical minerals remain under Canadian control — or at least the control of democratic allies.

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In October, the federal government said that in future any attempt by a state-owned enterprise to purchase critical mineral assets in Canada could be subject to extended reviews. Weeks later, the government ordered three Chinese companies to exit the three Canadian lithium miners in which they had invested.

Glencore doesn’t fall into that category. It already runs nickel, copper, coal and zinc mining operations in Canada, and employs about 9,000 people. Still, all foreign investments, regardless of size or level of control, are subject to a national security review.

`We don’t like debt’

Bristow’s comments came in an interview after Barrick reported lower net earnings in the first quarter amid maintenance at some mines.

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As analysts assessed the power struggle for control of Teck, they said they wouldn’t be surprised if other big miners started circling. Barrick’s name has come up in speculation, but Bristow doused that notion during a conference call with analysts on May 3.

“Teck is not a super producer, but it does have some assets … and it’s got coal and it has got a lot of debt,” Bristow said. “Given the current situation, there is no logic for us to get involved in anything like that because we don’t have coal, we don’t like debt.”

Bristow did, however, say that Glencore’s aggressive bid for Teck suggests that miners haven’t invested enough in the future and are taking urgent steps to buy existing mines, rather than go through the painstaking process of developing new ones.

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“The demand for metals suddenly has caught the industry flat-footed and the industry is scrambling,” Bristow said in the interview. He characterized that response as short-sighted because it does nothing to increase overall supply. By contrast, Barrick is aggressively seeking new projects, including exploring for copper in non-traditional mining areas such as Pakistan and Saudi Arabia, Bristow said.

Courting controversy

The push to expand has put Barrick in the crosshairs of activists that question its commitment to protecting the government and treating local communities fairly.

Critics such as the Mining Watch and Earth Works Action alleged ahead of Barrick’s annual meeting in Toronto on May 2 that the company is guilty of environment contamination and the coercion of government authorities at a number of its mining projects, including in Pakistan and Papua New Guinea.

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About two dozen protestors stood at the Toronto meeting with placards and distributed pamphlets to Barrick’s shareholders. One protestor was escorted out of the meeting after he repeatedly interrupted Bristow during the question-and-answer session.

“Barrick always makes that promise that this is going to be good for the community, good for jobs, good for people and yet you go and look whereabout the mine is operating for 30 years and you are just horrified,” said Mining Watch Canada’s Catherine Coumans. “The company doesn’t fulfill its promises.”

Coumans and other groups demanded that Barrick conduct independent audits of its mines abroad.

Bristow said that Barrick has conducted several independent audits.

“We do it all the time,” he said. “We don’t exploit a country because of less stringent rules. We adhere to the very best.”

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