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Sustainability > Society

Social & Economic Development

Barrick has an opportunity to contribute significantly to social and economic development in the communities and countries where we operate.

Communities and host governments rightly expect to share in the benefits of mining.  When we live up to their expectations, we are partners with host governments and communities in their own development, contributing to a more stable and prosperous society and a more secure license to operate.

We share the benefits of mining in a number of ways, including buying and hiring locally ? Local is defined in consultation with external stakeholders. In general, it includes nearby communities most impacted by mine activities or ancillary properties (such as power lines). , investing in education and health, helping diversify livelihoods, and paying our fair share of taxes.

in taxes and royalties
in community investments
in payments to our people
Local
Regional
National
International
Local / Regional / National / International Goods & Services

Barrick has established company-wide systems, standards and targets to help us live up to the expectations of our community and government partners:

  • Barrick has a Local Procurement and Contracting Standard, which requires our Community Relations and Supply Chain teams to develop the capacity of local and regional suppliers and help them improve their access to mine contracts and supplier opportunities.
  • Barrick requires site Community Relations and Human Resources teams to develop Local Employment Plans, which help create more opportunities for local people to work at our mines.
  • Our Local Content Framework helps sites use more local labor and buy more local goods and services. The framework is a guide, outlining the steps to develop local employment and local procurement programs and referencing best international practice. It helps sites be better partners in community and socio-economic development, which ultimately helps build a more secure license to operate.
  • The significant taxes and royalties derived from mining operations are important sources of government revenue, used for infrastructure projects, health care, education, and other important public services. Our Tax Management Policy sets out global standards and provides guidance on tax risk management. Everywhere we operate, we pay our fair share of taxes and royalties to all levels of government.

By doing this, we add value and create prosperity for our people, our government and community partners, and our shareholders.

Local Purchases

We believe that responsible economic development can and should improve the lives of stakeholders in the regions where we operate. When done responsibly, economic development is a contributor to a broad spectrum of positive impacts. Through local procurement, the presence of our operations can directly help host communities and individuals enjoy the rights to work, to food and property, and to an adequate standard of living. Barrick’s Local Procurement and Contracting Standard requires Community Relations and Supply Chain teams to develop the capacity of local and regional suppliers and increase their access to mine contracts and supplier opportunities.

To support these efforts, Barrick has put in place a Local Content Framework. This framework outlines the steps needed to develop local employment and local procurement programs, referencing best international practice and embedding lessons learned from other Barrick sites. It helps sites be better partners in community and socio-economic development, which ultimately helps build a more secure license to operate. The development of the framework was a collaboration with all groups impacted by local content policies, including Supply Chain leads, Community Relations, Human Resource leads, mine General Managers, country Executive Directors, construction managers, and Project Directors. An important emphasis is on engaging with internal end users on the mine site, and making sure local content programs align with their needs and concerns.

Along with buying locally whenever possible, Barrick often works with regional government economic development committees, where they exist, to help our suppliers diversify so that the eventual closure of a mine will not impose undue hardships on local businesses.

Local Purchasing

Barrick made approximately $351 million in local purchases near our mine sites in 2017—approximately 11% of our total procurement spend.

2017

Purchases of goods and services

Local Employment

A diverse workforce encourages creativity and innovation. We draw our workforce from many countries around the world, and our global workforce is extremely diverse in terms of national and ethnic backgrounds.  However, we are also committed to the localization of our workforce, and many of our sites have explicit targets for local employment. To achieve these aims, Barrick requires sites to develop plans to guide local employment efforts over the life of the mine, and in 2017 approximately 60% of our workforce was from the local areas near our operations. In addition, approximately 97% of our people are nationals of the countries where we operate.

Our Human Resources teams develop and lead these local employment plans, supported by the Community Relations group. In general, these plans integrate recruitment and retention of local people into the broader human resources approach. This includes an assessment of the skills and capabilities available in the local community, the development of recruitment and retention programs targeted specifically at local communities, guidance on helping address skills shortages, and the creation of a culturally appropriate work environment.

In addition to the Local Procurement and Contracting Standard, we have also developed a Local Content Framework to further support the efforts of our Supply Chain and Human Resources teams. The Framework details the steps that sites can take to develop effective local employment and local procurement programs, which reflects international best practice.

Partnership

At our Hemlo site in Canada, Barrick has partnered with a construction company jointly owned by our the neighboring Biigtigong Nishnaabeg and Pic Mobert First Nations for the 2017-2018 construction of the Tailings Management Facility perimeter dams.

Community Investments

Community development programs undertaken in collaboration with—and reflecting the interests of—host communities, governments, civil society, suppliers, and others can help mitigate social risk, improve our ability to sustain a license to operate, and generate long-term, sustainable value.

Barrick’s community development programs are designed to fulfill social obligations, mitigate social impacts and social risks, and support community priorities. Our community development activities are also planned with future closure in mind.

We take a partnership approach to our community investments, which relies on knowing what matters to our partners—including communities, governments, and NGOs—and reflecting those interests in our programs, partnerships, and initiatives. This means clearly defining roles, responsibilities and resources, and spelling these out in Memoranda of Understandings.

Partnership

Barrick invested more than $6.3 million in educational programs in 2017, including providing more than 470 scholarships.

As part of its commitment to education, Barrick is deepening its partnership with Cisco’s NetAcad to bring digital training and skills development to our people, their families, and communities. For example, in 2017, Barrick, Cisco, and Great Basin College formally launched their partnership to bring Cisco’s NetAcad technology skills development courses, free of charge, to groups in the community. Two for-credit, teacher-led foundational classes began in September 2017 at the college.

Taxes and Royalties

Paying the appropriate amount of tax under the law is essential to putting our sustainability vision into practice. The taxes and royalties we pay can be a significant source of revenue, helping to build infrastructure and fund social programs, driving both economic growth and social development.

Barrick believes in proactively building relationships with the local tax authorities on the basis of transparency and open communications. Barrick also seeks to organize its tax affairs in the most tax-effective and tax-efficient manner possible within the law and in relation to Barrick’s business operations and commercial objectives. We take advantage of any concessions offered to improve the attractiveness of investment.

Transparency

Barrick believes that revenue transparency can be a powerful tool against corruption and in support of ethical business conduct. Barrick was the first Canadian mining company to be a signatory to the Extractive Industries Transparency Initiative (EITI). Since 2006, we have voluntarily reported detailed country-by-country information, including environmental and social data, and the taxes and royalties we have paid to governments around the world.

In 2014, Barrick joined with our industry peers, NGOs, and the Canadian government to advocate for and develop comprehensive legislation in Canada on revenue transparency in the extractive industry. The resulting legislation—the Extractives Sector Transparency Measures Act (ESTMA)—has entered into force.

To put these principles into action, Barrick has in place a Company-wide tax management policy. The policy sets out global standards and provides guidance on tax risk management. The aim is for Barrick to be a low-risk company by having tax analysis and factual due diligence completed on ongoing tax matters to mitigate any risk associated with interpretation of local tax laws, as well as political and reputational risks.

With operations and projects in multiple countries, Barrick is subject to various tax regimes. The taxes we pay each year can be affected by a number of factors including capital investment and allowances; gold and copper prices; operating costs; debt repayment; mining allowances; foreign currency exchange rates; and changes in the tax laws.

COUNTRY CORPORATE TAX GOVERNMENT ROYALTY OTHER TAXES

Argentina

35%1

3% modified net smelter royalty

 

Canada

25% (15% federal + 10% Ontario manufacturing rate [otherwise 11.5%])

Ontario mining tax – 8.5% (after application of minimum processing allowance)

Chile

25.5% for 2017 and 27% for 2019 and subsequent years (distribution regime)

Combined corporate and shareholder level tax remains at 35%

Mining Royalty ranges from 5% to 14% based on operating margin (operating results / gross sales); rate applied to operating income

Dominican Republic

Special Lease Agreement – 25% (27% per general regime)

3.2% net smelter royalty (for gold and silver)

Net profit interest –28.75% generally applied on cash flow includes a deduction for income tax but interest expense is not deductible

Peru

29.5% for 2017 and subsequent years

As Lagunas Norte is subject to 2.51% NSR royalty, general mining royalty regime is not applicable

Specific Tax on Mining, marginal rates ranging from 2% to 8.4% applicable on operating margin

United States

Higher of 35% regular tax and 20% alternative minimum tax (federal only)2

Nevada net proceeds tax ranges from 2% to 5%; Barrick’s Nevada operations are subject to the maximum 5% rate

Zambia

30% income tax rate

Mining royalty rates are 4% for copper below $2.04/lb; 5% at copper prices between 2.04 and 2.72/lb; and 6% at a copper price of 2.72/lb and above, of gross metal value determined with reference to the monthly average London Metal Exchange cash price

Export tax of 10% on copper concentrates unless processed by Zambian smelters

1 For 2018 and 2019, the blended income tax and dividend withholding tax rate will be 34.9% and for 2020 and onwards, the blended income tax and dividend withholding tax rate will be 34.75%.

2 For 2018 and onwards, the rate is 21%, and there is no alternative minimum tax after 2017.

Indirect Economic Impacts

Indirect economic impacts are the result of the interactions we have with stakeholders and are an important part of our overall economic contribution. While difficult to precisely quantify, these include the impacts of our people, contractors, and the employees of supplier industries spending their payments, wages, and salaries. They also reflect economic impacts associated with improvements in community health and livelihoods (e.g., access to clean water, medical support and education facilities). A recent study by the World Gold Council found that a median multiplier of 1 could be factored into mining’s indirect contribution to a country’s gross value added (GVA).1 For example, in 2013, mining contributed about US$171.6 billion GVA globally – US$83.1 billion directly and US$88.6 billion indirectly. The same study identified that a median employment multiplier of 2.7 could be attributed to indirect job creation.  In other countries, for example Argentina, this employment multiplier can be as high as three (according to recent research by KPMG). This means that every job we create at one of our Argentinian mines, for example, could contribute to an additional three jobs in Argentina.

1 Gross value added (GVA) is a term that refers to the value added to the goods and services produced in an area.