TCL executives speak out
At the end of March 2006, CMJ editors interviewed the top Teck Cominco executives in their Vancouver offices, in preparation for this special centenary issue. What emerged was a snapshot of a vigorous enterprise poised for decades of new growth.
We spoke with the chairman, Norm Keevil; president and chief executive officer, Don Lindsay; senior vice-president of mining, Mike Lipkewich; and senior vice-president of environment and corporate affairs, Doug Horswill. Here is some of what they had to say about the company’s corporate culture, people and long-term prospects.
… on combining two famous names
CMJ: What made you think that Teck and Cominco would be a good combination?
Norm Keevil: In 1970 when we [Teck] had three little underground mines with two years of life, we moved to what was most important to us then, and still is, which is long-term ore reserves that are either in development or you can develop. Cominco had that in spades in the Red Dog mine. The importance of that acquisition was really to get our hands on the Red Dog deposit. We weren’t interested in buying into a smelter and a declining mine somewhere else, like Sullivan.
CMJ: The two companies were managed separately from 1986 until 2001. Talking with people in Vancouver, they said they were so separate that they were really in competition with each other, even though a lot of the same people sat on both boards. Is that true?
Norm Keevil: Yes, they were in competition because they had to be, as two public companies with separate sets of shareholders in part. They couldn’t be managed together. In terms of good corporate governance, you couldn’t combine them. What if we ever sold them? Even without the possibility of selling, you had different sets of shareholders. So Cominco would explore and Teck would explore. Reasonably often we’d explore jointly. We built Quebrada Blanca jointly, for example, in Chile. That aside, they had to be independent.
CMJ: Why was the time right to acquire the whole of Cominco in 2001?
Norm Keevil: The Street starting to think of us as a holding company. We had lots of good operating assets but when we had thirty or forty per cent of Cominco — even when we had fifty per cent and consolidated it — investors tended to discount us because we were a holding company. I remember in those days, every investment banker in the world would come in (as they still do), but in those days, they would say one of two things: either they’d have a big set of flip charts about why we should take out Cominco, or another set of flip charts on why we should take our gold stuff public.
CMJ: The result of the merger, you’ve just told me, was that it’s a bigger company. It’s very strong, and it’s reasonably diversified. Is there any other way you define it?
Norm Keevil: Financially strong, with an exceptional group of people including Don Lindsay, who’s really a perfect guy to carry on the tradition that my father established, I established, Bob Hallbauer established, David Thompson established.
CMJ: What makes Don Lindsay perfect to carry on?
Norm Keevil: He’s got the knowledge, the enthusiasm and just the right attitude. And he’s a great people person. When he [my father] was doing his best stuff, he was in his mid-forties. I have to say that I was doing my best and when Hallbauer was doing his best and when Thompson was doing his best, we were all in our mid-40s or early 50s. That’s where Don is right now. Age is not everything, but if you have the right person, that’s the perfect time. You have enough experience and still youthful enthusiasm.
… on corporate culture
CMJ: If you could think of one attribute that you’d like people to think of when they hear the name “Teck Cominco”, what would that be?
Norm Keevil: Strong engineering and financial prudence. They go hand in hand, and it really is people that make both.
Mike Lipkewich: Nothing is more important than people. If I look at our mining operations, the individual mines, what is absolutely critical is identifying the team that can provide the necessary skills. … And what we learn in one place, we use in subsequent operations. Hence, we select our senior management members for a new operation based on their proven ability to function effectively as a team, and generally a number of the members have been on a select team before.
Don Lindsay: I was hired to renew the team, so that’s what I’ve been doing. It’s an exciting time because we’ve changed some people at the top, and all in a very evolutionary manner, and that opens up opportunity for people in the middle ranks. There is one thing the industry is short of right now, and that’s people. The statistic that’s quoted frequently is that by the year 2015, sixty per cent of all geoscientists in Canada will be aged 65 or older. Here at Teck Cominco we have this great team, so we’d better make sure we develop it, encourage it and foster it. It can’t be on just care-and-maintenance; you have to put energy into it.
CMJ: Mr. Lindsay, how has your view of Teck Cominco changed in the year you have been at the helm?
Don Lindsay: I don’t know if there is any fundamental aspect that’s changed, but each of the conclusions I had previously come to from the outside [as an analyst] has been enhanced. The strength of the company is its operating culture. There’s a real core group of people and a core operating culture — they keep costs under control, they aren’t frivolous, they don’t go chasing the glamorous new stuff, and they don’t succumb to the sales pitches of people from outside.
The other thing is … I knew that the company was financially strong, but it turned out to be stronger than I thought. The interesting thing is that I had to show that to the board and current management. I don’t think they themselves believed that we could raise a billion dollars in the U.S. bond market or that we could accumulate three billion dollars in cash so quickly if we wanted to. And now we know we can.
CMJ: What change within the company has been a challenge?
Don Lindsay: One of the challenges was: Would I be able to change people’s mindsets in time to take advantage of the opportunities that we could? Because if everyone stayed in the mindset of 35-cent zinc, we’d miss it. If there is one single, most important thing that any CEO of a mining company must do, that any management team must do and board of directors must do, it is to either find, acquire or develop three to five core, long-life assets that renew the company on behalf of all of the stakeholders. We’ve got to do that.
One of the things we have put renewed energy into is the whole exploration end of the business and, within that, the concept of being the ‘partner of choice’, which was started by the Keevil family. When you say ‘partner of choice’ that means it’s all about relationships with people. It could be partnerships such as at Antamina with BHP, Mitsubishi and Falconbridge. But more so it is partnerships with junior entrepreneurial mining companies that are out there taking risks on the frontiers, finding properties and chasing their dreams. I’ve often said that the mining industry is all about a licence to dream.
… on a sustainable future
CMJ: What is your definition of sustainability?
Doug Horswill: Sustainability means utilizing resources today in a way that makes sure that future generations have the opportunity to enjoy a healthy environment and to use their own resources as they see fit. You’ve got to have concepts there of resource conservation. With a wasting asset or depleting asset, in effect mining turns today’s natural capital — an orebody — into financial and social capital — wages, taxes, and profits. This sustains current and future livelihoods.
We have to make sure that the development that occurs as
a consequence of our mining activity or investment leaves lasting economic benefits. You don’t want to give people a fish, you want to give them a fishing rod. And we want to do this in a way that preserves opportunities for future generations.
Sustainability, corporate responsibility, social responsibility — I think they are all names that mean generally doing the right thing and doing things right. Sustainable development is about balancing economic, social and environmental considerations.
What is sustainability? I think the common term today is ‘social licence to operate’. You can be the best at what you do, but if you don’t have the goodwill of the people who are affected by your activities, you can’t expect to operate successfully.
… on today’s Teck Cominco
CMJ: As your operations celebrate 100 years, at what stage of its life or growth is Teck Cominco?
Don Lindsay: Ah, the difficulty in answering that question is like Murphy’s Law. If you say one thing, then the opposite will have to happen, right? But I’d say the company is in its late-twenties, maybe early-thirties. Definitely it’s not as mature as a senior citizen or near retirement. The reality is that it’s had a lot of training, a lot of experience. It has been built up very successfully, and now it is right at the stage where it can really go forward, knowing it has all the skills and strengths, and the energy to go and do great things. We are looking forward to the future in a big way.