letter-from-the-president

Introduction

More than two years ago, Barrick set out to return the company to its original DNA: a high-performance, partnership culture, characterized by disciplined capital allocation, operational excellence, and continual self-improvement. My letter in Barrick’s 2016 Annual Report describes in detail these changes and our financial and operational progress.

Our partnership culture is at the heart of these changes. What made Barrick unique and drove our early success were the relationships our people developed among themselves and with host communities, governments, and others.

This could not be more relevant today and our new sustainability vision reflects this: 

We will partner with host governments and communities to transform their natural resources into sustainable benefits and mutual prosperity. We aim to be a welcome and trusted partner of host governments and communities, the most sought-after employer, and the natural choice for long-term investors.

Through this vision, we are intentionally challenging preconceived ideas about mining — that our industry, by definition and by deed, can only extract value. We have a fundamentally different view. Barrick seeks out opportunities to add value and create prosperity for our employees, for our government and community partners, and for our shareholders.

We do this in three ways: by managing our impacts on people and the environment; by sharing the benefits of mining; and by working respectfully with others. In the paragraphs below, I share highlights of our progress and our challenges over the past year.  

People and Environment

We are a company of more than 11,000 people. In 2016, we created a program that made every employee at Barrick a shareholder. In doing so, we became a company of owners. Ownership carries with it a dimension that goes far beyond just a job. It is a whole different level of involvement. Owners, as our Chairman, John L. Thornton, has often said, are “all in.” They are all in emotionally and financially, and we felt this was a critical step towards replicating our original partnership culture, updated for the twenty-first century.

As our most valued asset, nothing is more important than the safety, health and well-being of our people. I am therefore pleased that we met our 2016 target for a total recordable injury frequency rate (TRIFR) of 0.40 at our mines— the lowest TRIFR in our history.

However, this was overshadowed by the death of Meckson Kakompe, a haul truck driver at our Lumwana mine in Zambia. Meckson was killed in a truck fire. He was just 32 years old and is survived by his wife and five children. Our goal is for all of our people to go home safe and healthy every day. That is an expectation, not a target. That we did not meet this goal in 2016 is unacceptable.

We disappointed ourselves, and our partners, at our Veladero mine in Argentina. Over the past two years, we’ve experienced three incidents involving processing solution at the mine’s heap leach pad area in spite of continuing efforts to implement and monitor environmental protections. These incidents hurt our credibility with community and government partners and weakened the trust that we had spent more than a decade developing.

We are now working hand-in-hand with local authorities to implement a newly engineered plan designed with the intention that Veladero operates to the highest possible standards. We have also installed high-definition cameras to monitor the leach pad and other areas of the operation. Providing a live feed, and making it accessible to the general public, enable real-time monitoring and put our commitment to transparency into action. Such technology will help improve our operational performance and can help in rebuilding trust. However, we know that this will take time.

These incidents are a reminder that it will be an ongoing journey to re-establish Barrick’s original values. At the same time — and this is not meant in any way to downplay our challenges in Argentina — we believe the situation is the exception and that, as a Company, we are on the correct path.

For example, the Company developed a new Water Strategy Management Framework in 2016. The cornerstone of the Framework is an enterprise-wide approach to water stewardship. As we roll out the Framework in 2017, it will focus on identifying water risks and opportunities, creating partnerships, and being transparent in both our successes and setbacks. The Framework is described in further detail here.

In 2016, the Company also launched a cross-functional Climate Change Committee composed of senior leaders, including our Chief Financial Officer, Chief Sustainability Officer and Chief Investment Officer. The Committee will help us better manage climate change risks and opportunities that have the potential to impact our investors, stakeholders, and operations. Barrick also joined the Carbon Pricing Leadership Coalition — the first Canadian gold mining company to do so. The Carbon Pricing Leadership Coalition is an international, voluntary partnership between businesses, governments, and civil society organizations. It aims to strengthen carbon pricing policies and provide a place for thoughtful discussion on carbon pricing and collaboration.

Sharing the benefits of mining

Our sustainability vision calls on us to develop partnerships with host governments and communities that transform their resources into mutual prosperity.

That prosperity comes in a number of forms such as the taxes and royalties that we pay, which totaled more than $1.1 billion in 2016. Governments use these funds to invest in important infrastructure like roads and to improve basic services like health and education.

Prosperous partnerships also generate jobs – both directly and indirectly – and via the good salaries that we pay to our 11,000-plus employees; in 2016, those wages were almost $1.4 billion. I am pleased about the emphasis that we continue to put on local hiring. Currently, more than 97 percent of our workforce comes from the countries where we work, and just over half come from the communities where we operate. Our Supply Chain, Human Resources, and Community Relations teams continue to improve the opportunities for local people to participate either directly in our operations or as suppliers to our business.

Prosperity also comes from the goods and services we purchase from our more than 20,000 suppliers, both big and small. In 2016, these in-country purchases totaled almost $2.7 billion, including $220 million from suppliers in our local communities. While these are significant numbers, they become even more meaningful when I think about the individual people behind them. Like Javier Illanes, who repairs and recharges fire extinguishers for the Veladero mine, or CEFORMOMAL, a non-governmental organization in the Dominican Republic that has been working with women entrepreneurs to supply cleaning products to the Pueblo Viejo mine since 2008.

Working respectfully with others

Relationships are at the heart of our ability to operate – relationships between our employees, with communities and governments, with industry peers, civil society, and others.

We are finding more ways to leverage digital technology to bring our operations and our host communities closer together. One example is at our Pascua-Lama project, located on the border of Chile and Argentina. Knowing the importance of water quality to local communities and governments, we now publicly share real-time water monitoring data from Chile’s Estrecho River with everyone. In the near future, we see a host of other performance metrics also being made publicly available in real time, along with virtual mine site tours to bring information about our mining activities to as many people as possible.

Traditional approaches are still important too. Community environmental monitoring programs bring Barrick’s Environment and Community Relations teams together with local community members to monitor water quality, air quality, dust, and other environmental factors. And we continue to open up our performance to third-party scrutiny, including through the ISO 14001 re-certification process, International Cyanide Management Code audits, and annual third-party human rights impact assessments.

Our active role in multi-stakeholder groups is also important, such as in the Extractive Industry Transparency Initiative, the UN Global Compact and the Global Compact Network Canada, the Voluntary Principles on Security and Human Rights, and the Carbon Pricing Leadership Coalition. Our affiliation with these groups not only exposes us to different perspectives, it has led to unique partnerships, including a collaboration between Barrick, UNICEF, and the Government of Canada in 2016 to help improve children’s rights (described in further detail here).

Please read our Sustainability Report for more information on our progress and performance over the past year. Making such progress is essential. From improved community relations to innovations in water and energy management, managing sustainability is at the heart of our ability to generate value for our partners, so we can all advance, together. 

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July 24, 2017 files/design/bodybg/white.jpg
Home > Peter Munk
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Operations > North America > Cortez
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Operations > North America > Goldstrike
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Operations > South America > Veladero
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Operations > Australia Pacific > Porgera
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Operations > Cooper
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Operations > Projects > Cerro Casale
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Operations > Projects > Reko Diq
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Operations > Projects > Kabanga
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Operations > Projects > Donlin Gold
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Responsibility
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Gold  $ 1,284.70 +0.85 +0.07% Volume: August 16, 2017
ABX NYSE  $ 16.91 +0.36 +2.17% Volume: 9,399,317 August 16, 2017
ABX TSX  $ 21.34 +0.23 +1.09% Volume: 2,373,284 August 16, 2017
Gold  $ 1,284.70 +0.85 +0.07% Volume: August 16, 2017

Our vision is the generation of wealth through responsible mining — wealth for our owners, our people, and the countries and communities with which we partner.

World Gold Council MemberMember of ICMM

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