Gap in talent: global mining companies face looming successor crisis
Four of th...
With the majority of CEOs in the mining industry at or nearing the age of retirement, the sector is facing a harsh reality: a gap in talent.
Four of the top executives at the world’s 10 biggest public mining companies are over 60. Rio Tinto, First Quantum, Freeport-McMoRan and New Gold have CEOs who are well over 60, but have refrained from commenting on retirement.
Visions of retirement packages and riding off into the sunset is becoming more appealing for executives as the industry continues to get battered by everything from sinking commodities prices to a general lack of financing. The end of innocence, for the mining industry, is here.
"There is a shortage of potential CEOs because the industry doesn't invest in people," said Mark Bristow, the 56-year-old Chief Executive of mid-tier gold miner Randgold Resources.
"Some companies will not survive because they don't have enough competence to operate as a standalone company,” said Bristow.
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According to Reuters, industry executives, recruiters and analysts worry there isn’t enough people with the right skills and experience to replace the old guard.
"It's a very limited supply of experienced people who know the industry and who have the capability of getting it out of the very difficult place it is in today," said John Byrne, managing partner at global recruiter Boyden World Corp.
Douglas Groh, a portfolio manager at Tocqueville Asset Management, said mining companies typically focus on building projects when they plot the future, not career paths.
"The industry is not good at succession planning. It is more in the moment.”
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The nature of the mining industry is undoubtedly a boom-bust situation, which in return makes recruiting and cultivating future workforces challenging.
"We have an industry where our core skill is eating our own seed corn. We don't bother to plant the corn, we eat it," said Benjamin Cox, the CEO of junior miner Aston Bay Holdings. "I'm a second generation mining executive; I wonder if there will be a third."
As more executives continue to contemplate retirement the need to concentrate on talent management has never been more prevalent.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.