Resource World Magazine

70 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 1 7 Epilogue by David Duval F oreign investment successes that failed to generate controversy have been few and far between for Canadian mining companies, especially in the developing world where economic divergence between the 'haves' and 'have nots' is often exacerbated by industrial development. It's also made companies easy targets for well-funded activist groups, mostly NGOs (Non-government Organizations), who question the ethics of investing in countries that typically don't share Western values concerning democracy and human rights. Barrick Gold, which expects to have 30% of its 2016 gold output from outside the Americas, has faced more than its share of controversy in recent years, mostly related to its Porgera Mine in Papua New Guinea. Papua New Guinea represents one of the most difficult operating environments in the world for any business. The country is often labelled as potentially the worst place in the world for gender violence. Many incidents have occurred within and around the Porgera Mine – some by indigenous security personnel. Predictably, this has drawn global attention from activists who accuse Barrick of corporate neglect and even complicity, something the company denies. A recent article in Canada's The Walrus magazine painted a bleak picture of the operational environment faced by Barrick and its partner, Zijin Mining Group, in Papua New Guinea where the publication concludes that "wealth and social cohesion are determined by the possession of land, women and pigs." Barrick and Zijin each hold a 47.5% interest in Porgera while Enga province, which hosts the mine, and local land own- ers each have a 2.5% interest. It's this latter 5% ownership that has allegedly created many of the social problems in the region since much of the promised economic benefits have not gone back into the local economy. Frequent incursions by artisanal miners into the Porgera Mine site have often been met with deadly force, something we have seen in Tanzania and Peru. Today, mining and mineral processing are heavily automated, limiting the broad economic benefits seen in the past – and not surprisingly perhaps – creating a sense of entitlement from those who fail to derive any economic benefit from new mines. In the case of Barrick's Pascua Lama Project on the Argentina-Chile border, more than 10,000 employment applications were reportedly received by the company – six times the number required at the time. The Canadian Mining Association, which represents several of the nation's largest mining companies, notes that many of its members operate in jurisdic- tions where violence is more prevalent and the rule of law is often below Canadian standards. "Our members don't condone violence" nor are many reported examples of violence "directly related to (mine) opera- tions," said Pierre Gratton, the Association's president. In the Democratic Republic of the Congo, Canadian companies are major investors, accounting for a reported $3 billion in mining-related assets. Since 1996, civil wars there have cost millions of lives and a resur- gence in violence seems likely if President Joseph Kabila fails to relinquish the presi- dency due to constitutionally-mandated term limits. Nevsun Resources' gold and copper mine in Eritrea, adjacent to volatile Sudan, has also come under scrutiny for its alleged use of "conscripted labour," something that Nevsun denies. Three former Eritrean con- scripts, presumably funded by third party activists, are suing Nevsun in BC's Supreme Court, accusing it of being "an accomplice to the use of forced labour, crimes against humanity and other human rights abuses." Foreign investment has sometimes proved extremely challenging for Canadian mining companies doing business outside of North America – Australia being a nota- ble exception. Eldorado has invested millions develop- ing its Skouries gold-copper mine in Greece only to face many roadblocks. The com- pany recently announced it would sell two operating mines and an exploration proj- ect in China, effectively pulling out of the country. Eldorado also owns the Kisladag Mine, the largest gold producer in Turkey, where an unsuccessful coup d'état earlier this year unleashed a wave of retaliation by an increasingly totalitarian government which has unnerved investors. Barrick is currently looking at partner- ing its two projects in Argentina's El Indio gold belt, Veladero and the troubled Pascua- Lama project mentioned earlier. Examples like these might be the reason why there's been a shift by Canadian min- ing companies to focus on the Americas – mostly in Canada, the US and Mexico. Established mining camps are coming back into fashion with companies like Goldcorp announcing 10 more years of life at its Dome Mine near Timmins which was scheduled for closure this year. n activists target Canadian companies for alleged improprieties in foreign jurisdictions

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