How has Newmont been working towards achieving sustainability goals and what would you pinpoint as the main initiatives the company is taking?
Firstly, speaking from a lifetime of experience in mining towns globally and across various commodities, I firmly believe that sustainable operating performance is deeply linked to robust sustainability performance; they naturally follow each other. A pivotal element of this robust sustainability performance is ensuring the health and safety of the workforce, which is grounded in managing fatality risks diligently. Establishing a trusting relationship with the workforce is vital.
This philosophy extends to maintaining excellent environmental performance, emphasizing controlling emissions and effectively managing various aspects of mining operations, including dust and chemicals. Furthermore, this approach engenders a positive social performance, which stems from the fact that our workforce is part of the local communities where we operate. Consequently, building a trustful relationship that begins with safety and risk management in the workplace gradually influences the environmental and social performances in the larger community. Essentially, securing a robust operating performance relies on embedding these layers of trust and responsible management, given the capital-intensive and long-lasting nature of mining operations.
Continuing with this, how has this philosophy of integrating sustainability and community relationships influenced Newmont's social initiatives?
Certainly, communities have indeed started to flourish with the mining companies' sustainable initiatives in their locales. I see a considerable role for the mining industry to play, especially in this crucial stage of the energy transition that the world is heading towards, with metals like copper being vital components in this shift. However, there's still a significant task ahead of us to elevate the general public’s understanding of this imperative role that the mining sector is poised to play.
Despite the dark legacy of the old mining industry, we are committed to learning from our experiences and instilling appropriate controls to prevent tragic incidents like the recent tailings dam failures of other mining companies in South America. We envision a proactive approach to communicating the pivotal role of the mining sector in the green transition, emphasizing that accomplishing the energy transition is unattainable without the inputs from the mining sector. Building long-lasting relationships with various stakeholders is a central part of this endeavor.
Can you elaborate on the strategic thinking behind Newcrest's acquisition, especially concerning speeding up the green transition?
Absolutely. The acquisition emerged from Newmont's clear strategies which revolve around four pillars: sustainability leadership, a strong existing portfolio, a globally integrated business model, and a prudent capital allocation strategy. Understanding the ongoing mega trends—societal shifts, and technological advancements—is central to devising our strategies. We recognize the current fragmentation in the gold industry and the imminent significant demand-supply gap in the copper market, both of which directly influence our M&A strategy. Our Newcrest acquisition strategically tops our list given their tier-one operations globally, their prominent presence in Australia and Canada, and their existing and potential growth in copper production. It aligns perfectly with our criteria of having tier-one operations worldwide, consolidating in top mining jurisdictions, and increasing exposure to copper to cater to the rising demand, especially concerning the energy transition.
This acquisition was also facilitated by developing relationships grounded in trust with the Newcrest team, thus paving the path to explore collaborative opportunities. The process took a significant turn with the sudden retirement of their CEO in late December, leading to intensified discussions and a potential value-accretive and executable transaction. Through this strategy, we are gearing towards maintaining our position as a leader in responsible gold mining and effectively responding to the industry's consolidation and the increased copper demand needed for the clean energy transition.
Do you think the West is reacting swiftly enough in establishing policies to secure independent copper supplies, given the delicate geopolitical context around critical metals?
I can observe a definite awakening in the West regarding the urgency to secure independent copper supplies, with ongoing discussions and debates, for instance, facilitated by policy changes like the IRA (Inflation Reduction Act) in the US and events like the recent annual minerals week conference in Australia. Governments, industries, and stakeholders are increasingly coming together to deliberate on the required policy adjustments in light of the evident supply-demand deficits in critical metals, especially focusing on the clean energy transition. However, there is a consensus that we need to accelerate our efforts to address the potential gap between supply and demand in critical metals that could significantly shape the world's future. I am optimistic as I see a general consciousness and willingness to engage in these necessary discussions, yet the pace needs to be stepped up to match the urgency the situation demands.
Can you elaborate on the role you see gold playing in the future economy, especially considering its application in technology and space?
Certainly. The role of gold in the future can be seen from a multifaceted perspective. First and foremost, gold has been a symbol of wealth and a store of value for millennia, a role it will continue to uphold owing to its well-regulated, liquid, and deep market. Ensuring that gold is mined responsibly and sustainably is a primary focus for us and the World Gold Council. This responsible production not only guarantees gold's stature as a store of value but ensures that individuals can invest in gold with confidence, knowing that it meets high standards of production.
Furthermore, gold mining serves as a vehicle for improving lives globally, providing livelihoods to the communities in which we operate. We are committed to creating value and enhancing lives through responsible and sustainable mining, an endeavor that extends beyond the operational lifespan of the mines, thereby leaving a lasting positive imprint on these communities. Looking forward, our strategic focus remains on running tier one, long life mines efficiently, which often entails producing copper alongside gold, contributing further to economic advancements and aiding in the energy transition society is currently navigating.
How do you envision Newmont changing in the next 25-30 years, especially considering automation and possible futuristic innovations in the mining industry?
I envisage Newmont undergoing transformative changes in the coming decades, fundamentally rooted in embracing automation and sustainable technologies.
To begin with, renewable energy sources will be at the forefront, powering our operations as we ardently pursue our 2030 emissions reduction targets centered on energy sustainability. Our substantial investments and strategic alliances, notably the one with Caterpillar formed a few years ago, are focused on spearheading the introduction of battery-electric vehicles in both underground and open-pit mining operations. This initiative is a linchpin to realize our net-zero 2050 ambition, and entails extending electrical infrastructures to facilitate operations through battery-electric vehicles, which I perceive as the future of mining transportation. However, it’s imperative to emphasize that achieving this vision calls for breaking the existing product development cycle and fostering a synergy between equipment manufacturers and mining operators to expedite the production-ready state of these vehicles into the early 2030s.
Moreover, our alliance with Caterpillar not only accelerates the development cycle but grants them a veritable ground to test and refine this technology in real-time operational environments. This extends beyond just vehicles; we are contemplating comprehensive mining systems enveloping these electric vehicles, encompassing aspects such as maintaining a constant charge for these batteries possibly through catenary cables and innovating the mining process to be seamlessly integrated with automated battery electric vehicles. It's a symbiotic relationship where we undertake risks together, pushing boundaries to forge a future where automation is central, not only fostering efficiency but enhancing safety measures as well. This vision is already partly realized at our Boddington mine in Western Australia, where we have seen marked improvements in safety and productivity through the introduction of automation in the mining fleet.
