Western fund managers should follow the footsteps of sovereign wealth funds that are investing in mining projects in some of the world's riskiest jurisdictions, Mark Bristow of Barrick Gold (NYSE:GOLD; TSX: ABX) said in an interview with the Financial Times.
He singled out funds like BlackRock and Vanguard which run some of the world’s biggest passive funds and are also shareholders in Barrick.
Barrick's chief executive specifically mentioned Saudi Arabia’s Public Investment Fund (PIF) as an example of an investor considering projects that "may not deliver short-term returns" but would help the production of vital metals for the clean energy transition.
“The western world has become extremely myopic, driven by instant gratification,” Bristow said, referring to the tendency of western fund managers to track markets rather than actively pick stocks and assets, which he believes is “not conducive for mining investments.”
Instead, the sovereign wealth funds like PIF "come with a much longer horizon” creating a “very exciting” opportunity for his company, the Barrick boss added.
Bristow's criticism of western funds follows up last week's comments stating that he is open to bringing in Saudi Arabia's wealth fund as one of its partners in the Reko Diq gold and copper mine in Pakistan, in which the gold miner has a 50% interest.
In a Reuters interview, he stated that while his company will not dilute its equity in the project, he “will not mind” if PIF buys out the 25% stake held by the Pakistan government.
“There is a strong relationship between Saudi and Pakistan and since we control the project we have the first right of refusal,” Bristow told Reuters, adding that he will support PIF coming into the mine through Pakistan’s 25% equity stake.
Reko Diq is currently the largest foreign direct investment in Pakistan, and one of the world’s largest undeveloped copper deposits. However, it is also a risky project because of its location in Balochistan, a province next to Iran and Afghanistan, which has suffered violence and insurgencies from anti-government rebels.
Earlier this month, our sister title MINING.COM reported that Pakistan hosted officials from Saudi Arabia at a mining conference in its capital Islamabad, where Barrick officials were present. Barrick and Saudi’s state-owned mining company Ma’aden jointly operate a copper project in Jeddah.
“The interest that Saudi has is supporting the Pakistan side of the register,” Bristow told FT on Tuesday, while re-emphasizing his company's openness to a partnership with PIF. “Would we support Saudi becoming involved in Reko Diq on the Pakistan side? We would say absolutely,” he said.
Saudi's PIF has been looking to invest in copper projects across the world, as part of its drive towards funding energy transition projects. Headlining its investment spree is the acquisition of a 10% stake in Brazilian mining company Vale's base metals business.
THIS STORY FIRST APPEARED ON MINING.COM.
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