PDAC 2022: Gold miners need to partner up to avoid being left behind in future, says Newmont CEO  

If gold companies want to survive the future of mining, which will entail low-grade ores and the required responses to climate change, they will need to consolidate, said Newmont (NYSE: NEM, TSX: NGT) CEO Tom Palmer, during his keynote speech on the second day of PDAC 2022 in Toronto.  

According to Palmer, miners are identifying fewer “large scale and transformative” gold deposits that are harder to reach, with the situation likely to get more difficult with companies expected to invest more in sustainability. He believes that only a few gold companies have the capacity to mine future discoveries in a suitable way, which “makes the case” for partnerships.  

“To reach our 2050 carbon neutral goals, companies will [be] required to have the size, scale and mine life to invest and deliver results,” he said. “Those who do not understand these fundamentals are doomed to be left behind because while gold will always exist, not all of us will without collaboration and consolidation. 

“As we design the mine of the future, we see factors on the horizon we must address (such as) the need to reduce our footprint,” he added. “It is clear, technology will play a role with an important element…being automation. We continue to…implement technology not only to address climate change challenges but also to improve safety and productivity.” 

The gold sector has seen at least eight notable consolidations since 2018, when Barrick Gold (TSX: ABX; NYSE: GOLD) and Randgold Resources announced an $18 billion all-share merger. More recently, South African miner Gold Fields (NYSE: GFI) said in May it was buying Canada’s Yamana Gold (TSX: YRI; NYSE: AUY) in an all-share deal worth $6.7 billion.  

The mergers take place as the world looks to meet the goals of the 2015 Paris Accord, in which nearly 200 nations agreed to keep global temperatures within 2 degrees Celsius above pre-industrial times. 

Palmer said that Newmont is looking to challenge conventional mining methods and “disrupt” the industry by considering applications and technologies that have minimal carbon footprints. For instance, the company is looking to develop an all-electric autonomous system, including a mobile mining fleet, for its open pit and underground mining activities by 2027.   

“If we don’t implement this technology by this decade, then the mines we start to build in the early 2030s which will be the mines we operate in 2050, will still be operating without (sustainable) technology. So, unless we are prepared to disrupt the cycle and get that technology into operation and prove them this decade, we would have lost 2050,” he said.  

Aside from addressing climate change issues, Palmer talked about the need to better address accidents.

“We know the fatality risks and how [they] can be managed, yet they still exist and we still kill people. If we cannot provide the fundamental protection and ensure our workforce that they can return home to their loved ones in the same condition they left, we will become obsolete,” he said.  

Palmer also discussed the need to build a culture that fosters a psychologically safe workplace and address issues like sexual harassment, bullying and discrimination. 

Mining leaders must also undertake “behavioural change,” the CEO explained. 

“We need to recognize who makes up the majority of our workforce in Newmont. They look like me, they are white men, and we are in the position of having power and privilege. So, we need to change our behaviours. We need to understand the minority,” said Palmer.