Risks & Rewards

It’s been 16 years since Barrick Gold Corporation first expanded outside of North America, with the acquisition of Lac Minerals marking the company’s major entry into South America. Today, the Toronto-based company is still working far away from home in its relentless search for more gold and other precious metals.

In fact, outside Canada is where Barrick has worked almost exclusively since the late-1980s, when it began developing the massive Goldstrike mine in Nevada. Unlike many other successful Canadian mining companies, it’s made most of its money by working on large projects on foreign lands. A world view is one of the many reasons why the company is the top gold producer on the planet.

Barrick is unarguably one of the world’s most prolific miners with about 140 million ounces of gold in reserves, plus an additional 6.1 billion pounds of copper reserves and 1.06 billion ounces of contained silver within gold reserves. Barrick will produce between 7.65 and 7.85 million ounces of gold this year and with the price of gold at all-time highs, and possibly going higher, it has plenty of money in the bank. So much, in fact, that its strong financial position has earned it the gold industry’s only “A” credit rating.

But aside from its world ranking and those massive reserves and staggering financials, what makes Barrick truly valuable as a world-class mining company is the amount of effort and money that it actually reinvests into the places where it works. As difficult as it’s been at times to dig for gold in someone else’s backyard, the company is convinced that one of the reasons it has been allowed to do so over all of these years is because of its commitment to share the wealth with its host countries and ensure its neighbours prosper alongside its operations.

Today, Barrick’s investments are helping countries like Peru, the Dominican Republic, Papua New Guinea and Tanzania to modernize their economies. Governments in these countries recognize they have a responsible partner to develop their country’s natural resources.

In Tanzania, African Barrick Gold (ABG) operates four of the country’s six largest mines. Out of the total revenue ABG generated in 2009, roughly 70% was retained in the country. The company’s $1.6 billion investment in Tanzania is triggering unprecedented opportunities for economic development and contributing to a higher standard of living in a country where severe poverty exists.

Like most other responsible Canadian mining companies working in foreign countries, Barrick has made a concentrated effort to draw from local communities to provide a workforce for its mining operations. Consistent with its “hire local” policy, Barrick invests in skills training programs around the world. To date, more than 13,000 participants have taken part in training at its Pueblo Viejo (Dominican Republic) and Pascua-Lama (Chile/ Argentina) mining projects alone.

While the company invests millions of dollars each year on community programs, two programs, in particular, stand out. In Chile, Barrick and a group of Chilean NGOs formed an alliance called the Atacama Commitment to improve housing, technology, education and health services in the country’s Atacama region, near the company’s Pascu-Lama project. The Atacama region is home to some of Chile’s most impoverished and isolated communities. “These programs will help to address some of the most difficult conditions encountered by people living in poverty, ultimately reaching about 4,000 people,” says Regent.

Eliminating substandard housing and building new homes is one of the cornerstones of the Atacama Commitment. Barrick is working with Un Techo para Chile on a project to provide 700 families with new homes in safe neighbourhoods. Construction is also now underway on a $5 million rehabilitation centre for children with disabilities, with Barrick funding the management of the centre for a five-year period.

In Tanzania, African Barrick Gold has established The Lake Zone Health Initiative, a public-private sector program that is helping to combat high rates of HIV/AIDS, malaria and tuberculosis. The company has implemented a comprehensive HIV/AIDS prevention program and makes TB screening available for its employees and the wider community. It also has put in place a residual spraying program to help control mosquitoes and the spread of malaria.

Providing jobs and a better way of life for local communities is often overlooked by critics of Canadian mining companies working abroad, but if it wasn’t for companies like Barrick and its concern for people -and its financial capabilities to help them -the world would be far worse off.

CMJ