Barrick Gold Defends Practices After N.Z Fund Sells

May 14, 2013 at 09:58

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Barrick Gold Corp. said it would have appreciated a chance to talk with a New Zealand government fund before it sold its stake over the company’s mining practices.

Toronto-based Barrick, the world’s biggest gold producer by output, said it has made steady progress on environmental and human-rights standards, and would have liked to put its case to the New Zealand Superannuation Fund, which on Monday announced it had sold its entire stake, worth 1.9 million New Zealand dollars (US$1.6 million).

NZ Superannuation, a government retirement fund, said it had become uneasy with Barrick’s approach to disposing of mining waste, as well as its handling of community grievances. Barrick produces gold in countries such as Papua New Guinea and Tanzania, where mining companies have long run into local disputes. It also operates in parts of South America and Australia.

“Responsible mining is an absolute priority for Barrick and is central to how we run our business,” said company spokesman Andy Lloyd. “We operate in some very complex environments, where many of the most challenging issues pre-date Barrick’s arrival.”

Mr. Lloyd said both Barrick and its subsidiary African Barrick Gold, the biggest gold producer in Tanzania, had taken steps to improve environmental standards and smooth community relations, adding the company last year gave human-rights training to 10,000 employees under a United Nations program.

This year, Barrick was forced to suspend work at its flagship Pascua-Lama gold and silver project in Chile after indigenous communities alleged dust from its mine had polluted a local river. That followed a temporary halt last year when protestors set up blockades, demanding the company invest in local water projects.

Explaining its reasoning, NZ Superannuation Fund expressed particular concern over the practice of disposing waste into rivers.

The fund manages NZ$22 billion for future retirement payments. It had held NZ$1.8 million in Barrick Gold Corp. shares and NZ$78,824 in African Barrick Gold shares, all of which it has now sold.

Anne-Maree O’Connor, manager for responsible investments at the fund, said in a statement Monday that it viewed Barrick’s activities as inconsistent with U.N. standards on human rights and the environment.

Barrick shares fell 2.9% on the Toronto stock exchange overnight.

“In reaching our decision we took account of the security and environmental context in which the companies operate, and the length of time over which problems have occurred,” Ms. O’Connor said. “We believe engagement with Barrick would be unlikely to be successful, and until it is evident that significant improvements can be made on the ground we will be excluding both companies from our portfolio.”