Barrick Gold Founder Reveals the Secrets of CSR
What does it take to run a successful mining operation? While many qualities have been identified over the years, one of the most important these days is a sense of corporate responsibility to your employees and the local communities surrounding your mine sites – but since this concept is relatively new, it can be hard to get it right.
Canadian gold mining company Barrick has been a pioneer of corporate social responsibility (CSR) for decades, thanks to founder Peter Munk who has made it a priority from the beginning:
“To give is part of Barrick’s DNA,” says Munk. “It’s part of who we are.”
In April, Munk retired from his role as chairman of the board at Barrick. But even now, we can still learn from his legacy of giving back and how to make following in his footsteps work for us.
Caring For Your Employees Creates Employees Who Care
In Barrick’s retrospective of the company’s CSR programs, a major focus has been on caring for its employees and their families. Those employees, who would stay with Barrick throughout their career, would look back on programs like scholarships and health care initiatives with fondness and pride:
While he has never met Peter Munk, [scholarship recipient Eric Pelletier] says that, given the opportunity, he would thank him. “Peter Munk, Bob Smith and Barrick cared about their employees,” he says. “Employees weren’t just people who did a job, they were individuals with families, and Barrick helped those families give their children a better future.”
That kind of care, that commitment to treating employees like valued individuals, creates fierce loyalty and can drastically reduce turnover. If you want your employees to stand by you for life, treat them like it.
Invest in the Future
According to Barrick, one of its first and most consistent forms of CSR has been its scholarship program – in the last five years, the company reports to have invested $24.6 million into scholarships for over 20,000 students.
Why scholarships? For one thing, it’s a very powerful gesture toward your employees, relieving some financial burden while helping their children reach their full academic potential. But there’s another deeper lesson that can also be learned from this action. The key lies in the example given of Gratien Pelletier, a mechanic at Barrick’s Holt-McDermott mine who put two sons through college with help from Barrick’s scholarship fund – both of those sons worked at Barrick for a time after graduation, and one is still in the mining industry to this day.
It can be easy to get caught up in the here and now, but the future generations are what will keep your business growing strong in the years (and, hopefully, decades) to come. By encouraging education in your field through scholarships, you’re not just providing students with new opportunities – you’re also building a bigger pool of qualified and educated talent to draw from, and putting yourself on that talent’s radar years before they enter the job market. When the time comes to grow your business, these two assets are invaluable. Once you look at your company’s growth through this broader lens, the importance of investing in those future generations becomes crystal clear.
Go All In
When it comes to corporate responsibility, many can talk the talk – but those who walk the walk as well are the ones who really make a difference for their communities and for the company. As Barrick shows, corporate responsibility doesn’t come cheap – according to the company’s own data, Barrick has reportedly spent $234 million on CSR activities just between 2007 and 2012. But Munk leads his company in truly believing that those investments, put toward everything from infrastructure to stewardship to scholarships, are well worth the effort:
“It’s important,” Munk says. “It helps the community. It helps everything.”
If you aren’t going in with that attitude, it will be much more difficult to fully commit to such an investment – and if you aren’t committed to an investment in CSR, it’s much more difficult to make a true impact. So when you make the commitment to CSR, go all in.
Copper, iron ore surge as Chinese investors unleash demand
The reopening of major industrial economies is sparking a surge across commodities markets from corn to lumber, with tin climbing above $30,000 a tonne for the first time since 2011 on Thursday.
In the wake of mounting evidence of inflation fuelled by higher raw materials prices, investors are also increasingly focused on when the U.S. Federal Reserve might start throttling back its emergency support.
Many banks say the rally has further to run, particularly for copper, which will benefit from rising investment in new energy sectors. Copper is at the highest in a decade, fueling bets it will rally further to take out the record set in February 2011. Steel demand is surging as economies chart a path back to growth just as the world’s biggest miners have been hampered by operational issues, tightening ore supply.
“The long-term prospects for metals prices are ‘too good’ and point to higher prices in the next few years,” said Commerzbank AG analyst Daniel Briesemann. “The decarbonization trends in many countries, which include switching to electric vehicles and expanding wind and solar power, are likely to generate additional demand for metals.”
Trading house Trafigura Group and several major Wall Street banks including Goldman Sachs Group Inc. and Bank of America Corp. expect copper to extend gains.
Copper rose as much as 1.6% to $10,108.50 a ton on the London Metal Exchange before trading at $10,080 as of 4:07 p.m. in London.
Benchmark spot iron ore prices rose to a record, while futures in Singapore and China climbed.
The boom comes as China’s steelmakers keep output rates above 1 billion tons a year, despite a swath of production curbs aimed at reducing carbon emissions and reining in supply. Instead, those measures have boosted steel prices and profitability at mills, allowing them to better accommodate higher iron ore costs.
Spot iron ore with 62% content hit $201.15 a ton on Thursday, according to Mysteel. Futures in Singapore jumped as much as 5.1% to $196.40 a ton, the highest since contracts were launched in 2013. In Dalian, prices closed 8.8% higher.
Erik Hedborg, Principal Analyst, Steel at CRU Group commented: “Recent production cuts in Tangshan have boosted demand for higher-quality ore and prompted mills to build iron ore inventories as their margins are on the rise. Iron ore producers are enjoying exceptionally high margins as well, around two thirds of seaborne supply only require prices of $50 /dmt to break even.”
Still, some analysts including Commerzbank’s Briesemann expect a short-term correction as metals become detached from fundamentals. There’s also a risk that China could engage in policies that may cool demand for iron ore and copper.
The metals rally has boosted concerns about short-term Chinese demand. Some manufacturers and end-users have been slowing production or pushing back delivery times after costs surged, while weaker-than-expected domestic consumption has opened the arbitrage window for exports.
Tin climbed as much as 2% to $30,280 a ton on the LME, boosted by rising orders for the soldering metal. Tin is at the highest since May 2011, with a 48% gain this year making it the best performing metal on the LME.