In search of leadership, needle points north for De Beers

When De Beers went looking for a new chief executive to head its Canadian operations, word was they were looking for someone in tune with the political and economic issues of Canada’s Far North.

After all, with its Snap Lake and Victor diamond projects coming into production over the next couple of years, De Beers is investing heavily in Canada. That means that the legendary diamond company, with deep roots in South Africa, had to find someone who knew how to walk firmly on Canadian tundra.

Jim Gowans was a prime candidate, having had a hand in bringing some of the world’s largest zinc and nickel mines into production during his 30 years on the job — 17 of those working in the Arctic. The fact that he’s Canadian simply sealed the deal.

On March 27, Gowans, a native of Kimberley, B.C., came to De Beers from Inco (N-T, N-N) subsidiary PT Inco of Indonesia, where he served as chief operating officer. He replaces retiring chief executive and president in Canada, Richard Molyneux. Gowans is the first Canadian to reach so high an echelon in De Beers’ corporate structure.

Gowans — with typical Canadian humility — plays down his accomplishments and deflects praise towards his mentors: Hank Giegerich, president of Cominco Alaska while Gowans worked at the Red Dog mine, and Sandy Laird, whom he worked under at Placer Dome.

“I was just lucky to work with them,” he says.

Gowans says he was “wet behind the ears” and “snot-nosed” when he first met the two men, whom he describes as “technically really smart” people who are accepting of new ideas, driven, and value relationships.

These days he’s working on building relationships with northern aboriginals, since much of De Beers’ success hinges on connecting with aboriginal communities.

When Gowans speaks on the matter, his words carry the weight of experience. Perhaps it’s his study of anthropology at the University of British Columbia (he also studied mining engineering) or his passion for native art, especially that of northern coastal B.C.’s Haida — he owns several works by the late Haida artist, Bill Reid.

Gowans has had extensive contact with Northern communities over the years. In fact, Gowans can rhyme off countless First Nations bands in the Far North. It’s knowledge he’ll have to put to good use. Because while his office overlooks the lush expanse of Toronto’s Don Valley, Gowans knows that most of his time will be spent dealing with an arid landscape well north of 60.

Since the 1960s

De Beers has been exploring Canada since the early 1960s, and is working on roughly 30 exploration projects here, but Snap Lake in the Northwest Territories and Victor in northern Ontario will be the company’s first mines inside Canada’s borders — and perhaps more importantly, its first diamond mines outside of Africa.

Snap Lake, 220 km northeast of Yellowknife, N.W.T., is slated to enter production in 2007 and will be the first entirely underground diamond mine in Canada.

Despite the premature melting of ice roads early this spring and the resulting difficulty in getting fuel and accommodations supplies to the Snap Lake site, Gowans says construction remains on target.

“The bad news is the ice floes went out early,” Gowans says. “The good news is the ice floes went out early. It means the weather is better, so you gain on faster and more productive construction.”

Initial estimates peg the cost of the early departure of the floes at roughly $30 million.

Snap Lake has a resource of 18.3 million tonnes, grading 1.64 carats per tonne, with an average value of US$144 per carat. The estimated mine life is for 20 years, and at full production, the mine should employ about 500 people.

The Victor project, in the James Bay Lowlands of northern Ontario, will be an open-pit operation with a life expectancy of 12 years, which could be pushed to 17 if all goes well. The resource stands at 27.4 million tonnes, grading 0.23 carat per tonne.

With such large projects on the horizon, the need to attract the right personnel is foremost on Gowans’ mind.

“The biggest challenge is how to field operating teams in a red-hot commodities market,” he explains.

The projects will go from 100 people in the current advanced phase, up to 1,200 employees, once in operation.

Such a task isn’t without precedent for Gowans. Faced with similar challenges while general manager of Cominco’s [now Teck Cominco (TEK.B-T, TCKBF-O)] Red Dog mine, Gowans bet mentor Giegerich a bottle of scotch that he could have a 61% aboriginal workforce trained within a tight timeframe.

“It was what I call grunt work,” he says. One of the secrets, he notes, was to ensure that the first 18 candidates made it through training so that an example was set for the rest.

“If they were drunk, we’d get them out of the bars. We’d force them through the system. We just said: ‘We shall not fail. They will die or succeed,'” he says with a good-natured chuckle. “Once you do that, people (in the community) say, ‘these guys are really committed.'”

But that sort of training success isn’t possible, Gowans believes, without working to understand the communities you’re involved in.

“If you don’t have empathy, forget it,” he says. “Get off the train.”

The extreme sensitivity of aboriginal relations was highlighted earlier this year at De Beers’ exploration project near Agusk Lake in northern Ontario. The company was accused of conducting activities that interfered with the Muskrat Dam First Nation’s annual goose hunt.

Gowans says the incident arose more from the inherent difficulty of getting all members of the community to come to meetings than a lack of diligence and sensitivity on behalf of De Beers.

“Even after doing all our homework, you get somebody going into what he considers to be his traditional land and he complains and says, ‘You guys are there when we goose hunt,'” Gowans clarifies.

The incident points to how Gowans will need his expertise in negotiating with native groups in the days and months ahead. But he’s had success before. As vice-president of project development at Placer Dome he was instrumental in securing deals with four First Nations bands to get the Musselwhite mine in northern Ontario into production.

“They wanted training and we wanted production. There were cross-purposes,” Gowans explains. “I said, ‘This is nuts. We both like each other. This is good for both of us.’ So we modified the agreement. If we got record production, they got more. We went from cross-purposes to being on the same page.”

Gowans says that other management teams can learn from that approach, and plans to continue to apply the strategy as needed.

“Mining companies are reluctant to give up that little bit of revenue, but at the end of the day, they do anyway,” he says. “You have to do it so you’re in alignment.”

That alignment can be more readily achieved when you know your history.

“I have a lot of sympathy for the native groups, having seen what happened in the history of northern natives,” he says. “We haven’t been particularly fair.”

Good to be back home

As Gowans leans back into his nondescript office chair, a look of ease and comfort settles over his face.

“It’s like going back to my home front,” he says of returning to the North to deal with the land and its people. “I feel very attached to it.”

And while he speaks glowingly of Indonesia and the success that Inco has had there — the mine is the largest producer of nickel in the world — it’s clear that issues such as ongoing death threats, a part of doing business in the sometimes-turbulent Third World, can be easily left behind.

The man, who’s lived in every region of Cana
da except Newfoundland, is glad to be back and keen to re-establish his roots. And why not? The industry is booming.

“There’s a lot of opportunity left in Canada,” he says. “It’s a good way to finish up my career.” He’s quick to catch himself.

“I’m not winding down,” he cautions. “I’m just starting to crank it up. I’m looking long term. If I can do ten years here, that’d be fun.”