Based on the career of Marie Inkster, someone looking for adventure in business might want to consider accounting. Once a CA with Deloitte Canada, Inkster went to work for Geac Computer Corp. in the late 1990s. When her boss left for Nortel, Inkster smartly decided not to join her. Instead, in 2002, she found herself in the three-person office of LionOre, being lured into a life in mining. Soon she was travelling the world. By 2009 she was CFO at Lundin Mining, a rising mid-tier miner run by the audacious Lukas Lundin, and walking through the Congolese jungle. She orchestrated Lundin’s 2014 acquisition of the Candelaria Copper Mining Complex in Chile, raising $2.2 billion and nearly doubling the size of the company. In October of last year, Inkster replaced Paul Conibear as CEO. That puts her in charge of what’s now Canada’s top mid-tier miner and makes her an important voice in an industry increasingly challenged by difficult markets and human rights controversies. We sat down with her in Lundin’s new offices in Toronto’s financial district.
What made you the right choice to lead Lundin Mining?
I knew what it took to make it a success. I had a very big part in building the strategy of the company. People knew that if my predecessor was going to approve an investment in anything, he would have to get my stamp of approval first. When we bought the Candelaria mine, for example, Paul and I together told the board how we were going to do it. We spoke to investors together. We sat in board meetings together. And for at least two years prior to my taking over, in internal meetings, Paul had identified me as his successor.
How involved was Lukas Lundin in the decision?
The board was very supportive. To be honest, the first time Paul and Lukas talked to me about taking over the company, early in 2018, I actually told them it wasn’t the right time. I have two daughters. One of them was in Grade 7, the other one in Grade 11. They were coming up to big years. I’ve always had this guilt. When I was working with LionOre, I used to travel for long periods of time. One time, my elder daughter was four years old. I had been away for about 10 days, and I called home. My husband said, “Danielle, do want to talk to Mommy?” And I could hear her yelling in the background, “No! She’s not my mommy anymore!” I think that stuck with me. So in January 2018, the timing wasn’t right. In May, Lukas and I talked about it again, and I said the timing still wasn’t right. It was my daughters who told me I was being stupid. They had a mini intervention with my husband. They said, “We don’t want to be the reason you pass up a great opportunity. We want you to do it.” (see footnote 1 below)
The month before you took over, Lundin abandoned its long effort to acquire Nevsun. Was there a reason you didn’t want that to happen on your watch?
No, it wasn’t that at all. The announcement that I was taking over was in July. The transaction was still in play; the Chinese hadn’t yet made a bid. (see footnote 2) There’s no good time to announce a transition when you’re in the middle of a transaction. If the transaction had failed, everyone would have said, “Paul Conibear is getting the blame.” If the transaction had succeeded, everyone would have said, “Paul didn’t like the transaction so he left.” We consulted with a PR firm, and they said, “Do you want to wait until it’s over?” We said either way people will put a spin on it, so let’s just do what’s right for the business.
The Lundin family has been known for making brash, risky moves. As CEO, how do you assess risk?
In our business, there is always going to be risk. It’s a matter of what’s an acceptable risk. We don’t want to bet the company on any one single asset. So when we look at a big investment, we look at something that would have relatively lower political and technological risk. For smaller investments, if you see large reward, you maybe take a little bigger risk. Since I’ve been here, we’ve taken great steps to de-risk. When I joined in 2008, half of our value was in Congo.
Why that shift?
Around 2010, the government of Congo announced it was reviewing every mining contract in the country. Lots of unpleasant things happened with foreign investment in Congo at that time. We saw companies’ assets get expropriated. Others had contracts resolved with very bad economics. We were lucky to have a good partner in Freeport-McMoRan, which stayed resolute, but it could have turned out very badly for us. So we thought, Do we really want to have that much of our value in a high-risk jurisdiction? Probably not.
The SNC-Lavalin situation makes me wonder to what degree companies that work in risky regions are prepared for anything. Do you have a code of conduct in place regarding things like bribery and corruption?
Absolutely, we do. We actually updated it last year, and did training for all the senior executives and sites. We had to issue a press release a couple of weeks ago in relation to a story that Bloomberg picked up from a Spanish publication. One politician accused another of bribery in relation to an environmental impact study (see footnote 3) we’d submitted. There were no allegations against us, but the headline linked accusations of bribery with the mine. And Bloomberg ran with it. Their headline was: “Lundin Chile Unit Named in Alleged Bribe Investigation.” Our stock took a huge hit. We issued a news release to say clearly we were not the subject of any bribery investigation. So we are very careful to make sure people know what is expected of them. And when we are dealing with foreign officials and mayors, we don’t take political sides. In the community next to our mine, Tierra Amarilla, we invest in the community to help improve the infrastructure, provide essential services, help with health care and education. Six months prior to the municipal election, we stopped all spending on the programs. We didn’t want any politician to say, “Look what I got from the mine.”
You’ve stepped into the leadership of Lundin at a time of change in the industry. Do you think Canadian mining companies are doing enough to protect the interests of the communities and populations where they operate?
I do. But we are not good at promoting the good work we do in foreign jurisdictions. That’s why, often, only the bad stories rise to the top. I would be very surprised if people intentionally went out to do bad things. Although I’m not naïve enough to think that never happens. There are a lot of rules and best practices established by the Mining Association of Canada that you have to follow to be a member.
A study by an Osgoode Hall researcher concluded that “one of the biggest threats (see footnote 4) to Indigenous people in Latin America comes from Canadian mining companies.” I’m trying to measure that against what you’re saying—that Canadian mining companies are doing enough.
I guess I would ask, who else is there? I think we are an easy target in our industry because we are in places where other industries aren't.
But you’re also doing risky things, right?
Yeah. And that’s part of our business. I think mining is an easy target. People are very anti-mining—"mining is evil, and mining should stop, and we are destroyers of the environment.” That’s the narrative. But what’s the solution? That we stop mining? Name something you can do without mining. That’s where I come back to saying we don’t do a good job in the industry of promoting ourselves as good corporate citizens, and the positive things that can come with mining investment.
I wanted to come back to Nevsun, which you were trying to acquire for a long time. Were you aware that Nevsun had been accused of using slave labour in Eritrea? (see footnote 5)
It was known and discussed at the board table quite extensively—the history and the risk, and what we planned to do with that asset if we were successful. And the potential for more people to come and make those kinds of claims.
But that issue in and of itself wasn’t enough to push you away?
It was very concerning. But I think we said in the grand scheme of this transaction, this asset is actually quite small. And there's a legal claim here, but it's probably something that's resolvable.
So were you looking at it as a financial equation?
No, there are reputation issues that are far more damaging than financial. When we go to a new community, the first impression you make can often dictate whether you're going to be successful there and whether the community will accept you. You want people to say, “Lundin—they came in, they respected us, they listened to us, and we want them to be here. We trust them.”
What’s the mood in your industry these days?
Certain tier leaders are feeling good, but there’s a definite lack of investment in the junior space. That’s risk capital, and the risk capital is going other places at the moment—blockchain, cannabis. (see footnote 6) A lot of investors have lost faith in the industry. I think we need to reinvigorate ourselves. When people only hear the bad stories—the dam collapses and lawsuits and human rights issues—it doesn’t inspire new generations to come to this industry to help us. We need that.
How will Lundin Mining under Marie Inkster be different from previous versions?
I don’t think it’ll be drastically different. I think we’ve built a really good company here. There’s a great culture. We’ve done a good job in being stewards of investment. We’ve kept the company financially healthy through two downturns. I think our long-term investors trust us, and they like the direction the company has been going. I think they would like to see a little bit more growth. I think they’d like to see us deploy our capital.
So you’ve been on the hunt for more copper mines.
Absolutely. We have been searching for the next Lundin mine for a while now. We are ready when the right opportunity presents itself.
Do you expect to make a big announcement in 2019?
I hope to make a big announcement in 2019. That's our objective.
After successive bids, Lundin’s offer for Nevsun stood at $4.75 a share in July 2018. When China’s Zijin Mining offered $6 per share, Lundin walked away.
The bribery accusations, which did not involved Lundin officials, involved an apparent attempt by local lawyers to divert some of the money Lundin had committed to the town of Tierra Amarilla (including $16.5 million promised for social programs and infrastructure) by charging exorbitant legal fees.
The researcher found 709 cases of criminalization involving Canadian miners in Latin America between 2000 and 2015.
A lawsuit filed in 2014 against Vancouver-based Nevsun accused a local subcontractor of forcing three Eritreans to work under cruel conditions against their will.
Trevor Cole is the award-winning author of five books, including The Whisky King, a non-fiction account of Canada’s most infamous mobster bootlegger.