Barrick looks to Saudi Arabia, Pakistan for growth – exclusive interview with Mark Bristow

Managing risk while war wages in Europe, inflation stings and recession looms is a long-term task best tackled by improving education and living standards in developing nations, Barrick Gold (TSX: ABX; NYSE: GOLD) chief Mark Bristow says.

“Historically the mining industry has often invested not to make money for its in-country stakeholders and that game is over,” Bristow said in an exclusive interview with The Northern Miner on Wednesday at the Future Minerals Forum in Saudi Arabia. “The critical thing we’ve got to understand as miners is we’re actually managing a national asset — that’s the mine — so stakeholders should benefit.”

Barrick, the world’s largest gold producer after Newmont (TSX: NGT; NYSE: NEM), is promoting a focus on the people around its 16 operations across 13 countries as it develops the US$7-billion Reko Diq project in Pakistan. A push for critical minerals in clean energy may help the environment, but mining can also help transform societies, the Barrick leader says.

The region is not without risk. Separatists in Pakistan’s southwestern Balochistan province have killed Chinese nationals working in the mining industry there and threatened Barrick.

Bristow, speaking on the sidelines of the three-day Future Minerals Forum said Barrick would press ahead in Pakistan, noting the provincial government is a 25% partner in the project. He cited the company’s and his experience leading South Africa’s Randgold (before Barrick bought it in 2018) as helping parts of the developing world. He compared the situation to how mining investment continues in Mexico despite widespread violence by criminal gangs.

“We’re not investing in those (separatist) people, we’re investing in the people of Balochistan,” Bristow said. “We will really unlock that endowment that the Balochistan people always point to but are frustrated that it’s never been able to participate in.”

Barrick also announced an expansion of its holdings in Saudi Arabia on Wednesday, as did Ivanhoe Electric (TSX: IE; NYSE-AM: IE). Barrick signed new 50:50 joint-venture agreements with state-owned Ma’aden for Jabal Sayid South and Umm Ad Damar exploration licences. The licences are near the Jabal Sayid copper mine Barrick already owns with Ma’aden and operates.

While the Future Minerals Conference attended by some 12,000 people in mining highlights the need to develop the battery metals projects helping the transition to cleaner power sources, Bristow said that push goes hand in hand with mining’s ability to lift developing nations out of poverty by sponsoring better schools. The surge of jobless youth in the developing nations of Africa and Asia needs the industry’s help in building infrastructure where the underemployed can learn skills. 

“Everyone’s focused on emissions and carbon reduction, but what about the poor people in this world,” he said. “We have a responsibility and with that we also come with uplifting people, improving education.” 

The CEO said Barrick is concentrating on developing Reko Diq, expanding the Pueblo Viejo gold mine, a 60:40 joint venture with Newmont in the Dominican Republic, and increasing output from the Lumwana copper mine in Zambia. They’re all major projects in Barrick’s pipeline developed without acquisitions, said Bristow, downplaying his company’s need to purchase others, while noting the wider precious metals sector is ripe for it.

“The gold industry should consolidate, but it’s a consolidation of necessity because there are too many assets spread across a thin management structure,” Bristow said. “The Abitibi is a really big focus for us and northern Canada as well.”

However, he said Canadian assets become expensive when they’re developed into mines.  
“Canada doesn’t deliver tier-one assets so you’ve got to find a long-life tier-two asset,” he said. “That’s very clearly our objective and discovery is our focus.”

During a forum session, Bristow praised the Saudi Arabia Minister of Finance, Mohammed Al-Jadaan, who criticized so-called windfall taxes imposed by some countries on companies after output increases and prices rise. Al-Jadaan called the taxes “short-term, selfish and unproductive.” The audience of several hundred applauded.

“You’ve just attracted all the mining capital you can get,” said Bristow, who was on the same panel as the minister.

Later in the interview he said: “It’s fantastic to get on a platform with a minister from an emerging market who understands the importance of attracting long-term capital into his economy.”

The Barrick chief sees continuing strength in the price of gold as economists forecast recessions around the world this year after central banks raised interest rates to slow inflation. The collapse of cryptocurrencies has allowed gold to maintain its position as a sensible component of personal investment portfolios, he said. Bristow values the role of copper in Barrick’s production as demand for its use in clean energy technologies gathers pace, but says it shouldn’t just be about electric vehicles.

“We’re missing the point about this transition,” he said. “We should have a first focus on greening the grid and then we can go on and do everything else, otherwise we’re going to have EVs powered by hydrocarbons or even coal. Copper is as strategic as gold is precious.”