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Barrick Gold Faces Demonstration Against Abuses at Toronto AGM

Published by MAC on 2014-05-01
Source: Statement, Forbes, Mining.com, Now Toronto

Previous article on Barrick AGM: The bad habits of Peter Munk

Barrick Gold Faces Demonstration Against Human Rights, Environmental Abuses at Toronto AGM

Tim McSorley

http://desmog.ca/2014/04/30/barrick-gold-protesters-human-rights-environmental-abuses-toronto-agm

30 April 2014

Barrick Gold's shareholders will be greeted by a familiar sight in Toronto this morning: protesters are once again gathering outside the Annual General Meeting of the world's largest gold mining company to denouce the corporation's human rights and environmental abuses.

Sakura Saunders, of Protest Barrick and one of the demonstration's long-time organizers, told DeSmog that this year's AGM is happening amidst a "perfect storm" of controversies for the company.

"Everyone's angry at Barrick right now. Everyone's mad at [Barrick Chair and founder] Peter Munk because of botched deal after botched deal, fraudulent activity due to their Pascua-Lama mine, and they're also being sued in the British High Court for the killings that have happened with regularity at their North Mara mine," she said in a phone interview.

The perfect storm

Top of the list for Canada's most prolific mining company is a $6 billion class action lawsuit - totalling over a quarter of Barrick's market capitalization - from shareholders alleging fraud over the company's Pascua-Lama mine, located on the border between Argentina and Chile. Pascua-Lama was meant to be the company's flagship operation at the centre of the largest stock offering in Canadian history in 2009. Slated to start production in 2013, the project has instead been shuttered after ballooning costs and the Chilean government's decision to suspend the mine's license for violating environmental regulations.

The lawsuit, which still needs certification as a class action by the courts, alleges Barrick executives knew and hid information about these environmental concerns from shareholders, causing them to eventually lose millions of dollars in investments.

Barrick is denying the allegations, and has said it will "defend itself against any lawsuit vigorously."

Contravening environmental rules in Chile is just part of the accusations that human rights and environment activists have levelled against the company.

In Tanzania, there have been repeated shootings and killings of people in proximity of Barrick's North Mara mine by police who double as security. The company's subsidiary African Barrick Gold is now being sued in British courts by the families of men who have been killed by security agents, on the grounds that they used excessive force. And in Papua New Guinea, communities next to Barrick's Porgera mine are demanding the company pay for their resettlement after run-off and pollution from the site have made their villages unlivable.

With all these serious, documented abuses abroad, Saunders has mixed feelings about the fact that it is shareholders who are able to seek retribution in the courts, but not those directly impacted themselves.

"I just hope that these lies [about Pascua-Lama] expose the pathological culture at Barrick Gold. Which of course have many other consequences outside of shareholder value," she said.

Shareholder activism

MiningWatch Canada is also working to bring awareness to Barrick Gold's activities. This past March they issued a notice to investors about the company's actions in Tanzania. In it, they document various shootings, killings and rapes that have allegedly been committed by security forces and police in and around the mine. They are urging shareholders to recognize the harm being committed by the company and to pressure executives at the AGM.

"[Shareholders] need to pay at least as much attention to the accusations of ongoing human rights abuses and severe environmental damage at Barrick sites around the world, as to the financial predictions of the company's management based on reserves, pipelines and costs of production, as these severe harms caused by the company result in local-level conflict, opposition and legal action that presents real risks to their investment," said Catherine Coumans of MiningWatch by email.

Driving this point home, Saunders and Protest Barrick organized a pre-AGM event on April 28, to "help investors bankrupt Barrick." The group distributed information detailing how to join the class action lawsuit.

End of an era

Barrick's outspoken and controversial founder and chair Peter Munk will also be retiring this year, signalling what some have called the end of an era.

Munk has been ardent in his defense of the company's work, and in his refusal to take action to remedy the impacts of their mines, said Saunders. At the same time, neither she nor Coumans feels his leaving will mark much of a change at the company. "Maybe the company will finally agree to resettle people," said Saunders. But the problem isn't Munk, she said, "it's that this company continues to operate."

And while he may be out of the building, the 86-year-old's presence will probably continue to be felt, said Coumans. "[Munk's] influence is likely to continue through his hand-picked co-chair, who will now become chair, and possibly through his son who is also on the board of directors," she wrote.

Accountability problem

While the biggest and often most visible violator of rights, Barrick is simply a reflection of problems in the mining industry. "Many of the negative impacts Barrick is causing locally, through human rights abuses and environmental degradation, and nationally through tax evasion and avoidance are quite widespread in the sector," explained Coumans. "Because of Barrick's sheer size and exposure globally, it is possible to expose a wide range of these harms related to one company, but we are seeing the same negative impacts by other Canadian mining companies."

And at the root of this widespread problem is the question of accountability. Canada has the largest mining sector in the world, in part because of weak disclosure laws and no legislation for trying Canadian companies for crimes committed abroad.

In an historic ruling last year, a case against Canadian mining company Hudbay for negligence leading to rapes and murders committed by its security personnel at its Fenix mine in Guatemala was allowed to go ahead by the Ontario Superior Court of Justice. But there are still no laws on the books clearly granting victims of Canadian companies' abuses abroad the right to sue them in Canadian court.

This has led to the Open for Justice campaign, started in 2013 and spearheaded by the Canadian Network on Corporate Accountability, to have Canadian parliament adopt legislation making it clear that Canadian companies can be sued by both Canadians and non-Canadians for offenses committed abroad, and the creation of an Ombudsperson to receive complaints and verify the compliance of Canadian extractive companies with legally-binding corporate accountability standards. It's only by bringing in this new legislation that Canada's mining sector - including Barrick - will be pushed to change their actions, said Saunders.

While waiting for legislation with more teeth, though, the plans are to continue protesting, which has seen success at pressuring Barrick and changing the debate on mining in Canada. Over the past few years, Saunders says she has seen her and fellow organizers' concerns go from fringe and rejected, to being seriously discussed in the mainstream press.

"Each year we've come, Barrick has had to admit to what we are saying," she said. "Each year I feel a lot of validation regarding the accusations against Barrick that have finally been accepted in the mainstream."

Barrick Financial Woes Related to Human Rights and Environmental Abuses Raised by Protestors at Yearly Annual Meetings - Shareholders Should Pay Attention!

MiningWatch Canada

30 April 2014

Toronto - As Barrick Gold struggles with deepening financial and management crises, it is time to squarely recognize the relationship between the decline of the corporation and the environmental and human rights abuses at Barrick projects around the world - which are protested against yearly outside and inside the annual shareholder meeting.

This year the Barrick Annual General Meeting will undoubtedly be dominated by the overdue departure of company founder and co-chair Peter Munk, as well as by this week's exchange of blame and insults between Barrick and US mining giant Newmont over their failed merger talks. But the AGM also takes place in the shadow of a recently filed notice of action for a 6 billion dollar shareholder class action suit in Canada that claims the company and several of its senior executives did not disclose the problems that eventually led to huge cost overruns at its Pascua Lama project in Chile in a timely fashion. These "problems" were both environmental in nature, rooted in concern for impacts of the project on downstream water resources, and driven by persistent multi-year protest by downstream indigenous communities whose concerns were responded to favourably by the Supreme Court of Chile and by environmental regulators, leading to project delays, cost overruns, and costly fines.

"This is a perfect illustration where shareholders were given every opportunity to know that the Pascua Lama project was in trouble, had they but paid attention to the protest outside and statements inside the AGM where members of the Diaguita Huascoaltinos came from Chile to protest the project," says Catherine Coumans of MiningWatch Canada, who attends the AGM and protests yearly. "Their presence, and the information groups like MiningWatch published on their plight, should have been a warning sign that all is not well and shareholders should have been questioning Barrick about local dissent and environmental concerns."

This week, another highly troubled Barrick project, in Papua New Guinea (PNG), is erupting in violence again, as the State has declared a state of emergency and reportedly sent over 100 special police forces and soldiers to the mine site to counter incursions into the mine by poor people seeking gold. In 2009, when a similar police action was ordered, at least 300 houses of local indigenous people were burnt down, prompting an investigation by Amnesty International, who declared the actions a gross violation of human rights.

"Again, shareholders who are paying attention will remember that for four years between 2008 and 2011, indigenous Ipili people travelled from PNG to attend and speak at Barrick's AGM about systemic and long-standing violence by mine security guards and special police units who raped and gang-raped local women and shot at local men," says Coumans. "After years of denial, Barrick is now trying to get victims to sign away their legal rights in return for small benefit packages, but as the violence continues legal action remains a possibility."

Other risks associated with human rights abuses, severe environmental degradation, and lawsuits related to these that shareholders should be concerned about include:

"The above-mentioned concerns at Barrick mines really just scratch the surface," says Coumans, "but we hope that shareholders will start to dig a little deeper to get behind the glossy reports and slick presentations to better understand the real risks from environmental damage and human rights abuses that local people face at many of these mines. Their suffering is an unacceptable result of Barrick's mines, and therefore creates risk for shareholders."

As in past years, Catherine Coumans of MiningWatch will be at the Barrick AGM on April 30, 2014 and available to answer questions.

Contact: Catherine Coumans catherine[at]miningwatch.ca

Barrick Gold Profit Plunges 90% On Lower Precious Metal Prices, Currency Hit

Maggie McGrath

Forbes

30 April 2014

If there was ever any doubt that gold prices are low - the metal is not yet $1,000 an ounce but is more than 12% off its year-ago price and heading lower in response to new economic data - the first quarter earnings results from Canadian gold mining company Barrick Gold ABX -1.13% revealed Wednesday just how depressed precious metal prices are. Barrick's profit dropped 90% compared to the year-ago period, a plunge the miner attributed to lower production volume and, yes, the cost of gold. And unfortunately for Barrick, those prices aren't getting any higher, at least in Wednesday trading: gold futures and gold's spot prices dropped into the red after the Federal Reserve expressed confidence in the U.S. economy and cut back its monthly bond-buying purchases by another $10 billion.

Barrick reported Wednesday that it garnered $2.6 billion in first quarter revenue, a figure that met Street estimates but marks a 22.5% decline over the $3.4 billion reported as revenue for the same time in 2013. Excluding special items, net income came in at $238 million, or 20 cents per share, down from $923 million, or 92 cents per share, in the year-ago quarter. Including special charges, like a $113 million foreign currency loss, Barrick's first quarter profit came in at $88 million, down from $847 million in the year-ago quarter and resulting in earnings of 8 cents per share - a whopping 90% decline from the 85 cents per share reported the same time in 2013.

The company attributed the sharp decline to lower metal production and lower metal prices, but went on to say that it is attempting to stanch its spending and is on track to achieve its targeted $500 million in annual savings by the end of 2014.

"Barrick is a considerably different company today than it was a year ago - leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of $833 per ounce, $100 per ounce below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results," Jamie Sokalsky, Barrick president and CEO, said in a statement Wednesday, adding that his company is "decisively" addressing its under-performing operations as well as optimizing other aspects of its business. "It's clear that Barrick's optimized portfolio continues to deliver solid results, and we are pursuing a number of opportunities in Nevada to unlock further value from our high quality asset base."

Among the opportunities Sokalsky's referencing: at Nevada's Turquoise Ridge, there are 6.7 million ounces of gold available, and Barrick is considering adding an extra shaft in order to reduce haulage distances and increase production by 75% for five to eight years.

Despite this optimistic focus on future chances for business growth and cost savings, Barrick's near-term outlook is more measured, at least with regards to its copper production. The company revised its production guidance for full-year 2014 to an expected range of 410 million to 440 million pounds of copper, down from an original forecast for full-year copper production between 470 million and 500 million pounds.

The disappointing first quarter results are not the only thing to hit Barrick this week; on Monday the company was rebuffed in its attempt to acquire fellow gold miner and competitor Newmont Mining NEM -0.76%. Barrick and Newmont initiated merger discussions earlier in April, but those talks broke down on Monday, with Barrick claiming Newmont "sought to renege" on key elements that comprised early agreements, including the location of the headquarters of the combined companies, the assets that would be included in any spin-off company and certain governance arrangements - especially the role of the chairman, lead director and CEO.

Newmont fired back at Barrick, releasing a letter its chairman, Vincent Calarco, sent to Barrick's board of directors and in which Calarco blasted Barrick's co-chairman, John Thornton. "While our team has found your management team's engagement to be constructive and professional, the same constructive nature cannot be said of our discussions with your Co-Chairman on certain fundamental strategic and structural issues over the past two weeks," Calarco wrote. "Our efforts to find consensus have been rejected out of hand repeatedly."

Barrick did not address the failed Newmont merger in its Wednesday earnings report.

Unsurprisingly, shares of Barrick fell in Wednesday trading after the contents of its earnings release - not to mention lowered production guidance - failed to incite a "buy" reaction among investors. The stock is currently down 0.6%; year-to-date, it's lost 3.5% of its value. Newmont Mining, too, traded in the red throughout Wednesday trading: it's currently down 0.86% but year-to-date has had a better time of things than Barrick, posting a 4.4% gain. Newmont's Wednesday declines are likely less related to Barrick and more tied to gold's downturn on the Fed's proclamation that "growth in economic activity has picked up recently." Gold futures are currently trading for $1,294 an ounce, or an 0.13% decline, while gold spot prices are hovering around $1,291 an ounce, or an 0.36% drop.

Barrick to launch 'vigorous defence' against Pascua Lama class action

Frik Els

Mining.com

4 May 2014

The world's number one gold miner Barrick Gold said over the weekend it would "vigorously defend" against a class action lawsuit over its troubled Pascua Lama project in South America.

The Merchant Law Group recently filed the lawsuits with courts in Ontario and Alberta on behalf of investors who acquired Barrick stock between May 7, 2009 and May 23, 2013.

Shares in the $22.3 billion company lost 44% of its value over that time period, with a large chunk of the losses coming in April and May last year when the Toronto-based firm tapped markets for $3 billion to pay down debts.

The class actions allege that Barrick Gold shareholders lost billions of dollars as a result of Barrick's "misrepresentations and failures" regarding the stalled $8.5 billion project and names the company as well as chief executive Jamie Sokalsky, chief financial officer Ammar Al-joundi and former chief executive Aaron Regent.

"The company is aware that a notice of action has been filed in the Ontario Superior Court of Justice. Barrick disputes the allegations, and will defend itself against any lawsuit vigorously," Barrick spokesperson Andy Lloyd said in an emailed statement to tells Mining Weekly .

Barrick gold stopped construction of Pascua Lama in October as part of its debt-reduction and cost-cutting program and after fierce opposition from local communities and environmental groups.

The project which straddles the Chilean-Argentinian border high in the Andes, suffered a number of defeats in Chilean courts about water use and the impact on glaciers in the area.

Argentina has been a vigorous backer of the project. While only around a fifth of the deposit is located in Argentina many of the above-ground facilities will be built on that side of the border. Barrick recently laid off 1,500 of the 5,000 workers on the Argentinian side.

If it goes into production the mine is expected to produce about 800,000 to 850,000 ounces of gold and 35 million ounces of silver in the first five years of its 25 year life.

Barrick is spending $300 million this year to mothball the project, but Pascua Lama has a long history that dates back to the mid-1990s.

Goodbye or good riddance for gold mining business?

Barrick CEO Peter Munk leaves dirty legacy

By Christian Peña

Now Toronto

8 May 2014

Barrick Gold founder and chairman Peter Munk said goodbye to the company he started more than 30 years ago at its annual shareholders' meeting in Toronto on April 30. His departure marks the end of an era for Barrick, but MiningWatch is much more concerned about the legacy the company is leaving behind internationally.

The protest crowd outside the meeting was smaller than usual, according to Catherine Coumans, a research coordinator with MiningWatch, a Canadian NGO that advocates for those affected by mining. That was because of "the overwhelming level of focus on the long-overdue resignation of Peter Munk."

Inside the meeting, Coumans, said she is "concerned that the legacy in developing countries is one of human rights abuses, environmental destruction and local conflicts that are very costly to communities."

Barrick is implicated in alleged gang rapes and other violent abuses by private security guards employed at the Porgera Gold Mine in Papua New Guinea, according to a report by Human Rights Watch. Another controversial Munk project, the Pascua-Lama open-pit site in northern Chile, which has been in development for 20-plus years, is currently suspended due to environmental violations by Barrick.

In response to what Barrick's communications president, Andy Lloyd, calls "credible allegations of sexual assault" in Papua New Guinea, the company launched an investigation, terminated the employees implicated in the allegations and turned over the results of its investigation to police. Barrick has since implemented a "remedy program that provides compensation to women who were victims of sexual assault."

At 86, Munk is a legend in the gold industry. He told the capacity audience at the Metro Toronto Convention Centre that he recognized "it was time for a change and new start."

Munk promised he would help incoming Barrick chairman John Thornton, saying, "You can take Munk out of Barrick. But you can't take Barrick out of Munk."

Today Barrick is worth about $22 billion. With more than a dozen mines globally, it's the largest gold company in the world.

Regardless, the company is now trying to recover from one of its worst years ever. Its acquisition of Equinox Minerals forced the company to write down (reduce its net income by) about $4 billion. Both Pascua-Lama and Equinox have seemingly hurt the company and plunged it further into debt, contributing to the loss of its AAA credit rating.

One of Barrick's most outspoken critics, Toronto mining justice organizer Sakura Saunders, says that while Munk can be linked to some of the the company's more egregious business decisions, his departure will have little impact on its direction.

"He has done a horrible job - their share prices are down - but the company is not resolving the issues I care about, whether he's in power or not."

The Norwegian Government Pension Fund divested its Barrick holdings in 2009 over the Porgera Mine's pollution of a 600-kilometre river system. But that mine remains in operation, and human rights violations there continue to mount. Last year, an illegal miner was killed in a confrontation with security forces employed by Barrick.

In Chile, in addition to strong community protests, lawsuits have been filed against Barrick and millions of dollars in environmental fines imposed by a Chilean court. Barrick spent $6.7 billion on the mine site before the shutdown last October, but costs have now increased to an estimated $8 to $8.5 billion.

To top it all off, a multi-billion-dollar securities class action suit was launched in April on behalf of shareholders against the company and several of its senior officers, including Munk, over the losses on Pascua-Lama.

Munk's retirement comes just after talks collapsed between Barrick and its main rival, Newmont Mining, over what could have been one of the biggest mergers in gold mining history.

Both companies took to the media to blame each other. "That's the kind of people they are, and that's why it's so difficult to make a deal. They are not shareholder-friendly," Munk said about Newmont in a National Post interview.

Newmont chair Vincent A. Calarco wrote in a letter to new chairman Thornton that Munk had killed the merger by calling it "dead," making the board unanimously decide not to pursue the deal. Clearly, Munk's retirement will leave a noticeable absence of audacious leadership, but if this letter is any indication, he's still the same man known for his bold business decisions.

"It's like two kids playing in a sandbox" says John Ing, president and gold analyst of Maison Placements Canada. "The logic for this deal is still there, but when you get down to each other's personalities, it's a different kettle of fish.

"Barrick is a company that has been built on mega-deals throughout its history. That's how they have grown as a company. However, with mega-deals come mega-problems and mega-writeoffs."

At the shareholders' meeting, Barrick CEO Jamie Sokalsky took to the stage to explain that after a year of transformation, Barrick is leaner and stronger. "Returns will drive production - not production will drive returns," said Sokalsky as he repeated the same message from 2013.

It's been said that Munk should have left the company sooner and that he was pushed out by shareholder pressure over Barrick's two years of missteps.

Ing disagrees. "I don't think there was shareholder pressure for him to leave. Politicians overstay their time. Only the individual knows when is the right time to leave."

After all was said and done, Munk stood up and waved to the audience one last time before he put on his fedora and walked off the stage. Love him or you hate him, many are hoping there will never be another one like him in our lifetime. His retirement may take the pressure off him for now, but the company's activities, if the status quo continues, will face scrutiny for many years to come.

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