Barrick ABX-T chief executive officer Mark Bristow is refusing to shut the door on accepting new investment from state-controlled Chinese companies, and questioned the move by Canada and the U.S. to clamp down on such investment in the North American mining sector.
Last year, in an effort to bolster the domestic critical-minerals industry, the federal government said it would not allow any more investment by China, except on exceptional grounds, owing to national-security concerns.
Ottawa has also signalled its distaste for gold investment by China into Canada. In 2020, the government blocked the acquisition of Canadian gold miner TMAC Resources by state-controlled Shandong Gold Mining Co. Ltd.
Shandong is one of two large Chinese joint-venture partners that Barrick has in mines around the world. Barrick also has a Chinese partner in Zijin Mining. Barrick has raised billions from both Chinese investors to fund its Veladero mine in Argentina and its Porgera operation in Papua New Guinea
Mr. Bristow said he has talked to senior political figures in the U.S. and Canada to try to impress on them that the current move to deglobalize and friendshore is misguided, because it potentially chokes off an important source of capital for the global mining industry. For North America, friendshoring narrows international trade to like-minded jurisdictions, such as Western Europe and Australia, and restricts trade from jurisdictions deemed hostile, such as Russia and China.
“It’s impossible to exclude the Chinese out of the minerals and metals industry, or anything at the moment. This world is so integrated, and politicians are trying to divide it,” Mr. Bristow said.
Any attempt to restrict Barrick from raising money from the Chinese would also put the company at a competitive disadvantage, he added.
“We’ve trained ourselves to be China-centric, or obsessed with China. But at the end of the day, we are actors in this world. And as a Canadian company, we are extremely competitive around the globe. So is Newmont as an American company.”
Over the past five years, Canadian and American relations with China have deteriorated as Beijing adopts an increasingly authoritarian position. Both North American governments have serious concerns about China’s poor record on human rights and its tightening grip globally on the critical-minerals industry, particularly its stranglehold on battery metals.
Barrick’s relationship with China was primarily forged by its executive chairman John Thornton whose ties to the Asian superpower go back many decades.
A well-known China supporter, Mr. Thornton was chairman of Goldman Sachs-Asia from 1996 to 1998. He is co-chair of the Asia Society and sits on the The International Advisory Council with Chinese Investment Corp, (CIC) a massive Chinese sovereign wealth fund.
CIC has come to the fore in recent weeks as Canadian critical-minerals miner Teck Resources Ltd. TECK-B-T fights off a hostile takeover offer from Glencore PLC of Switzerland.
As Teck’s biggest shareholder, CIC was instrumental in burying Teck’s chances of splitting the company. The Globe and Mail reported earlier this week that CIC voted against Teck’s proposed separation.
Glencore had actively been trying to persuade Teck’s shareholders to vote the deal down, and had the split been approved, Glencore would have dropped its pursuit of Teck.
Ottawa has already signalled that it has concerns over a potential takeover of Teck by Glencore, with Prime Minister Justin Trudeau, Finance Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Natural Resources Minster Jonathan Wilkinson all citing Teck’s importance to the domestic critical-minerals industry.
Mr. Bristow wrote off any chance that Barrick might bid for Teck and reach a “made-in-Canada” solution that might be palatable to politicians, as well as Teck’s management. Citing Teck’s heavy coal exposure, its high debt and the lack of valuable synergies, a deal with Teck makes little sense for Barrick, he said.
Glencore is the obvious buyer for Teck, he believes, given that it is one of the few global mining companies that wants to acquire coal assets. Mr. Bristow also pointed to the cost savings in putting the two companies together, because Teck’s massive QB2 mine is located near a large existing Glencore project in Chile.
The South-African-born Mr. Bristow said he has been captivated by the deal that involves two fellow South Africans, Glencore CEO Gary Nagle and Ivan Glasenberg, Glencore’s biggest shareholder.
Mr. Bristow knows both men, says he’s talked to Mr. Glasenberg on more than one occasion about his pursuit of Teck, and called Glencore a “wily trader.”
As Barrick stands on the sidelines in mergers and acquisitions, a more pressing priority for the company over the next few quarters is improving its abysmal safety record.
The company reported three fatalities at its mines in January. That’s on top of five fatalities last year, two in 2021 and one in 2020.
Barrick’s record under Mr. Bristow who joined as CEO in 2019 is far worse that its larger competitor Newmont, which reported no fatalities during that timeframe.
In a conference call on Wednesday, Mr. Bristow said Barrick has recently taken a “long hard look” at its safety protocols and practices, as he vowed to do better.