Conflict Management Lessons From Goldcorp's Big Win in Chile
Big news in Chile for Canadian mining company Goldcorp this week: the Copiapó court of appeals in northern Chile has unanimously voted to toss out an injunction filed in 2012 by local indigenous groups fighting excavation at Goldcorp’s El Morro mining site. The rejection of this injunction by Copiapó’s appeals court means that Goldcorp can resume construction at El Morro, a gold-copper mining project in which Goldcorp has a 70 percent stake (as part of a $3.9 billion 70-30 joint venture with mining company New Gold).
In its green light to proceed, Goldcorp have triumphed. But in terms of effective conflict resolution, did Goldcorp follow the best possible path? What can other mining companies learn about conflict resolution from Goldcorp’s win?
1. Could Collaboration Have Helped?
It’s easier to ask for forgiveness than for permission – but is it always the most productive way to go about things? Goldcorp’s El Morro project has been at a standstill since 2012, when Northern Chile’s indigenous Diaguita group first began filing injunctions under the claim that a.) Goldcorp did not do the required consultation necessary to gain its mining license for the land in question, and b.) the El Morro project could possibly pollute a nearby river. That’s nearly two years that were not filled with construction and excavation, where Goldcorp and joint venture partner New Gold were potentially losing revenue.
In the world of conflict management, there are five widely recognized styles: accommodating, avoiding, collaborating, compromising, and conflicting. According to experts, the main drawback of the conflict management tactic known as “collaboration” is that it requires a time commitment that some opponents may not want to deal with – if collaboration had been employed effectively, perhaps the legal battle could have been avoided and mining would be well underway by now, saving Goldcorp valuable time while helping them develop a stronger and more favorable relationship with nearby residents.
2. You Don’t Always Need to Compromise
Of course, collaboration can only get you so far. According to reports, it was already ruled in October of 2013 (ahead of the Diaguita community’s latest injunction) that Goldcorp had sufficiently done its due diligence and done adequate consultation with the region’s residents. If this is accurate, it seems fair to question whether any further collaboration would have gotten Goldcorp any farther along in the process. At that point, you have to question whether it’s best to compromise – described as giving the opposition what they want, it can seem like a good idea in order to make troublesome problems and disputes go away. Experts agree that there is a time and a place for compromising, such as when you are trying to build good will with your opponent or when you have more to lose than they do. But in cases where you have been proven to be in the right, as a court had previously found Goldcorp to be, it can be in your company and shareholders’ best interests to move full-steam ahead.
3. Competing Can Work
The last of the conflict management styles, conflicting, can get a bad reputation for the fact that there will always be a clear winner and a clear loser once the dust has settled from a dispute handled in this way. It’s always a risk to choose the competing method, because there’s a chance that your side could end up the losing team – in this case, Goldcorp had a multibillion dollar project hanging in the balance, with the risk of having to shelve the project entirely.
But in the end, Goldcorp’s win has proved that taking a gamble on the competing method can pay off.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.