barrick-slideshow
TRANSCRIPT
Sustainability Strategy March 25, 2015
1
BARRICK GOLD CORPORATION
Group 13
Agenda
1. Introduction to Barrick Gold2. Scanning Tools3. SWOT Analysis4. Strategy Choices5. Redevelop Community Engagement
Procedure (Strategy Implementation) 6. Community Engagement Milestones
(Organizing for Action) 7. Evaluation & Control8. Closing Remarks9. Q&A
2
Introduction
Founded 1983 Publicly Traded (TSX:ABX, NYSE:ABX) One of the world’s largest gold miners 2013 – Produced 7.2 million ounces of
gold 2013 – Net Loss of $10.37 Billion 2014 – Reserves of 93 million (oz) gold Multinational Corporation – North and
South America, Africa, Oceanic Region, and Asia
3
Scanning
STEEP Analysissociocultural issues: community
expectations, social licenses
Industry Analysisoligopoly, high capital costs
Financial Analysis
4
Increasing debt financingDeteriorating cost managementPoor growth expectations
SWOT Analysis
Strengths:• Large gold reserves • 23% Energy sourced is
renewable• 6 New board members in the
last year• 5 Board members are on the
CSR Committee
Weaknesses:• Poor brand reputation• High debt (13.1 billion)• No Social License to operate
(anywhere)
Opportunities:• Demand for green technology• Expanding product range
(Concentric Diversification) • Relatively low industry
standards
Threats: • Social Licenses to operate are
becoming crucial for operations, also more challenging to get
• Increased regulations (Carbon Taxes, Mineral Taxes)
5
Strategy Choices 6
Redevelop CommunityEngagement Procedures
Stakeholder Relations Increase transparency, develop benchmarks &
indicators Operations
Download engagement decisions to local managers
Strategy/Senior Management/Governance Influence a learning organization culture
7
Community Engagement Plan Milestones
8
2015
• 100% Operations with engagement plans• Completed set of community engagement
indicators• Public disclosure of yearly grievances
2016
• Indicator score improvements 10%
2017
• Indicator score improvements 20%
Evaluation & Control9
1. Improved Dupont Ratio Dupont = Net Profit Margin x Asset Turnover x Equity
Multiplier
2. Increased Shareholder Value3. Improved Community Engagement Indicators4. Reduced Number of Grievances5. Decreased Cost of Victim Compensation
-60%
2017-30%
2016-15%
2015Baseline
Victim Compensation Costs
2014
Closing Remarks
High Debt
Social Failings
Poor Risk Management
Eco-Efficiency and reduced Costs
Social Success through new programs
Reduced risk through improved environmental and economic decisions
10
History Future
Questions & Answers 11
Why Dupont?12
Expanded version of Return on Equity Composed of:
Operational Efficiency Financial Leverage Asset Use Efficiency Ratio
NGO Partnerships?13
Former relationship with World Vision No info on current partnerships Bad reputation may be to blame
Why Barrick? 14
Room for improvement Dirty Industry Bad Press
Is this plan practical?15
Absolutely Capital Costs are not massive Time-consuming Could be challenging Long-process
What separates Barrick?16
Capital Size Reserves
What’s Acid Rock Drainage?17
Acidic water that is produced when minerals are exposed to oxygen
Can leach into the water and harm aquatic flora and fauna
Most metals are relatively rich in sulphide minerals
References18
Barrick Gold. (n.d.). Community [Photograph]. Retrieved from http://www.barrick.com/responsibility/community/default.aspx
Barrick Gold. (n.d.). Lagunas Norte [Photograph]. Retrieved from http://www.barrick.com/operations/peru/lagunas-norte/default.aspx
Barrick Gold. (n.d.). Unknown [Photograph]. Retrieved from http://www.barrick.com/files/history/barrick-history-13.jpg
Calabreese, D. (2015). Unknown [Photograph]. Retrieved from http://business.financialpost.com/2015/02/17/barrick-gold-corp-chairman-keeps-investors-guessing-on-miners-next-move-im-looking-into-a-black-hole/
Mining Facts. (n.d.). What is acid rock drainage? Retrieved from http://www.miningfacts.org/Environment/What-is-acid-rock-drainage/