Economic Contributions

Barrick’s direct economic contributions to host communities and governments are sizable. In addition to extensive capacity building, community investments and infrastructure development, these include employee wages and benefits, taxes and royalties paid to governments, purchases of goods and services from local and regional suppliers, charitable donations and scholarships. In 2011, Barrick contributed a total of $13 billion to the local and regional/national economies of our host countries.

Local Procurement

Barrick gives preference to purchasing local or regional goods and services when possible. However, as a mining company, we must purchase high cost capital equipment (trucks, shovel, mills, etc.) and most bulk reagents where they are available. This is most often outside local or regional areas in developing countries. In 2011, we spent 8.9 billion on local and regional goods and services.

In 2011, we continued expansion of our local supplier development programs aimed at stimulating economic growth and creating business opportunities in communities where few economic opportunities previously existed. These programs are designed to generate business benefits and sustainable development for local communities by increasing the capacity of local suppliers.

Supporting capacity building of our local and regional suppliers can increase the economic sustainability of local businesses beyond the life of the mine. For example, the IPI Group in Papua New Guinea has successfully grown from a limited supplier to the Porgera mine to become a national company, now commercially diversified into food service and catering, warehousing and storage, and transportation and haulage.

And in Chile, Security Express Ltd. was founded over five years ago in order to provide security services to the Pascua-Lama project. The company, located in Vallenar, started with a staff of six people. Today, 157 Security Express employees work at Barrick’s 15 offices and sites in Chile, and the company was recently awarded the contract to provide security services for a leading copper producer. The growth and success of the IPI Group and Security Express are examples of the positive impact that Barrick has on local business development.

Local Employment

Employment is a potential benefit of a mining operation and often a key expectation of local communities. Local employment increases the net positive benefits to host communities by enhancing skills and providing income. Barrick also reaps positive benefits; local hiring can potentially provide us with significant cost savings on recruitment, accommodation and transportation that might be required for non-local employees. Barrick is committed to the localization of our workforce; local employment is one of the priority elements of the newly created CRMS. We recruit the bulk of candidates for employment from the local and regional areas near our operations and are putting in place mechanisms to enable the maximization of local employment opportunities.

For example, Bulyanhulu’s local community cooperative (IBUKA) creates short-term job opportunities at the mine (lasting between two months to one year) for its 5,000 members. A skills inventory, created by IBUKA, allows the cooperative to match local skills with potential opportunities at the mine.

Across the company we are developing programs to help local community members gain the skills necessary for employment in and outside of the mining industry. In 2011, ABG conducted an initial adult education basic literacy program in the communities around the Buzwagi mine, where basic literacy is a requirement for employment. As well, the Veladero mine in Argentina has developed a training course in plumbing skills for the local community. These basic skills allow community members to fill vacancies at local plumbing companies and with contractors.

Coconut-fiber Mats Help Local Women and the Environment in the Dominican Republic

Local women produce coconut fiber mats for reclamation work at the Pueblo Viejo project in the Dominican Republic.

In the small rural town of Hatillo in the Dominican Republic, Eunices Romero Franco is generating an income for her family, while helping the local environment. Franco is a member of the Club de Madres (or Mothers’ Club), a group of 38 women who operate a thriving mat-weaving micro-enterprise. The biodegradable mats, made of locally available coconut fiber, are sold to the Pueblo Viejo project and used for environmental remediation purposes.

Each woman can weave 72 square meters of mats over a four-month period. Barrick employees then use the mats around the project site. “We use the mats in the revegetation process, mainly on slopes where soil has been exposed and we need to protect the seeds from the rain, birds and other environmental factors,” says Daniel Rosario, an agronomist working on the reforestation projects at Pueblo Viejo. “These mats have a positive impact and grass re-growth has been very successful.”

The mine chose to use the coconut-fiber mats for their ecological characteristics, and to create a business opportunity for local women. This was deemed a priority, given that in some rural areas poverty rates can be as high as 50 percent. One of the entrepreneurs, Margairis Franco, talks about her pride in the project. “We can see how the environment is improving significantly. With the use of the mats we’re supplying, Barrick is making the ground very green.”

Regional senior management staff is hired as often as possible from the host communities or host nations. However, if qualified people are not available locally, we initially hire outside of the region while trying to build local capacity through mentoring programs and skills development. In 2011, the number of expatriates at our operations varied regionally, but globally they represented four and a half percent of our employees.

Barrick generally provides wages and benefits relative to regional economics. We exceed average wages in the countries where we operate, and our entry level wage for full-time workers is much higher than the minimum wage in each country. Benefits provided are in line with cultural norms and include a core group of health care benefits at all operations, as well as non-core regional benefits. Non-core benefits are partially determined by local competitive practices and needs, and may include superannuation and other retirement programs, maternity or parental leave, and employee assistance programs. Wages and benefits totalled 2.1 billion in 2011.

Charitable Donations and Scholarships

In addition to our community initiatives and infrastructure projects, our sites, regional offices and corporate offices allocate funds for broader philanthropic contributions – these are not typically tied to our site-level impacts or opportunities, but rather are available to support charitable causes based on priority focus areas and occasionally linked to employees. Philanthropy and donations are intended to increase Barrick’s profile as a good corporate citizen in the communities where employees live and work. Supporting education, recreation, health facilities and special projects in local communities is in keeping with our Vision of operating in a socially responsible manner. In 2011 for example, we donated $250,000 to the Boys & Girls Clubs of Elko, Nevada to assist with their construction of a new club facility. In Ontario Canada, we donated $20,000 to support the construction of an interactive mining tunnel at the University of Waterloo. The passageway will connect the university’s Earth Science – Chemistry building to the Centre for Environment & Technology. It replicates a historic underground tunnel from a local silver mine, and will contain mining equipment, miner’s gear, ore samples, computer modules and interactive explosive simulations. In Chile, Barrick donated more than $600,000 to renovate a sports facility near our closed El Indio mine. The facility includes a soccer field, a basketball court and an athletic track for the benefit of the local community and Barrick employees. Plans for the future include a heated swimming pool, a barbeque area and multipurpose rooms. The renovated facility will help to promote physical activity and recreation for area residents.

The Donlin Gold Project Supports Local Communities and Organizations in Southwestern Alaska

Alaska Native Science and Engineering Program (ANSEP) students tour the Donlin Gold site.

In 2011, Donlin Gold contributed to Yup’ik community dance festivals and cultural celebrations, Native Youth Olympics and World Eskimo Indian Olympics, Kuskokwim Native Association fisheries summer program, the Alaska Federation of Natives Convention, the First Alaskan’s Youth and Elders convention, ANCSA Village CEO Association Conference and the Association of Village Council Presidents convention. Donlin Gold has also partnered with ten local communities in their “clean-up green-up” events. Bicycles and other prizes are awarded to youth who help communities clean up after the winter snow melt.

We have provided support for the Alaska SeaLife Center, Alaska Native Heritage Center, Quinhagak Heritage Foundation, Yupiit Piciryarait Museum (Bethel), Marshall Traditional Council exhibit, US Fish and Wildlife Migratory Bird calendar, Alaska Native Tribal Health Consortium, the Bethel Community Foundation’s swimming pool, Bethel Search and Rescue and the Aniak Dragon Slayers (fire fighters), and youth organizations such as Girl Scouts of Alaska Rural Program, Big Brothers Big Sisters Bethel program, and Boys and Girls Clubs.

Barrick reaches out to local communities during times of disaster as well. Early in 2011, Barrick’s Australia office donated $100,000 to the Queensland Premier’s Flood Relief Appeal after severe flooding in Queensland damaged houses and cost lives. We also supported fundraising activities for the relief of the victims of the Carnarvon, Western Australia floods which occurred late in December 2010. ABG donated $37,000 to a disaster relief fund for families of more than 200 people killed when a ferry sank off the coast of Zanzibar in September. During a flood in May 2011, which devastated the Crooked Creek village near the Donlin Gold project site, the efforts of employees saved lives and provided emergency relief support to the flood victims. Donlin Gold assisted the village’s restoration effort throughout 2011.

Another way we strengthen local communities is by providing scholarships to community children and the children of our employees. Education is one of the most significant and lasting benefits that a community can receive from the presence of a mine. In all areas where we operate, we provide support for education; whether by building schools, providing classroom materials, books and computers, by developing adult literacy programs and small business training, or by providing scholarships. In many of the countries where we operate, a child’s education is not free. Families must pay school fees for primary and secondary education, which are often out of reach for the very poor. By providing scholarships we can increase the number of children attending school, thereby increasing the capacity of the community. Barrick also provides scholarships for high school graduates to attend college, university or vocational training. In 2011, we provided 3,800 scholarships for students in eight countries.

Taxes, Royalties and Other Payments

Along with hiring and purchasing locally, providing donations and scholarships and supporting community initiatives, direct economic benefits to communities and countries also include the taxes, royalties and other payments to governments. These payments provide benefits to the countries where we do business. In 2011, we contributed $2.0 billion globally, in payments to governments.

Barrick joined the Extractive Industries Transparency Initiative (EITI) in 2006, the first Canadian mining company to do so. By being EITI signatories, we contribute to an improved business environment and reduced political risk in countries where we operate. EITI country-level validation is a multi-year, multi-stakeholder process and, through our active participation in the process, we support the overarching goals of the EITI and endorse its 12 principles. The principles form the cornerstone of the initiative and demonstrate a commitment to anti-corruption and ethical business practices. We disclose our taxes, royalties and other payments to governments on our website and in this report. Barrick complies in all material respects with our EITI-related obligations.

Barrick supports implementation of EITI in the countries where we operate. We have operations in one country which is EITI compliant; Peru, designated fully compliant in February 2012. Barrick was actively involved in the validation process in Peru and promoted this initiative among other mining companies and stakeholders. Peru is the first country in Latin America to obtain this designation. We also have operations in two EITI candidate countries; Zambia (candidate country since 2009) and Tanzania (candidate country since 2009).

Indirect Economic Impacts

Direct economic impacts are measured as the value of transactions between a company and its stakeholders, while indirect economic impacts are the results – sometimes non-monetary – of these transactions. Indirect economic impacts are an important part of our economic influence in the context of community sustainability. They will vary depending on local circumstances, and are difficult to quantify. They include impacts from the spending of wages and salaries by our employees and contractors, as well as the employees of our supplier industries, along with the improvements in community health and livelihoods in communities where we provide clean water, medical and education facilities.

A study, by Consultora Malthus, of the socio-economic impact of Barrick’s Veladero mine in the San Juan Province, Argentina, was completed in 2009 and explores both the direct and indirect impacts on local communities. The study identified clear trends of socio-economic improvement in such indicators as the percent of the population living in poverty conditions and general mortality rates. Also of note was both an absolute and relative increase in employment in San Juan Province versus the rest of the country. A second study, also by Consultora Malthus, was completed in 2010. It looked at development in areas adjacent to the Pierina mine in Peru and identified evidence of the relationship between Pierina’s presence and the considerable reduction in poverty in the surrounding area.

The University of Queensland’s Centre for Social Responsibility in Mining conducted a study in 2010 and 2011 to analyze the main economic and social effects of the Pueblo Viejo mining project on neighbouring communities, and to investigate the project’s potential to improve human development in the Dominican Republic. The study included estimates of Pueblo Viejo’s contribution to the country’s gross domestic product, exports, tax revenue and local job creation. The study concludes that it is possible that the construction and operation of Pueblo Viejo can (within the project’s area of influence) improve the social conditions of the 47,000 residents living below the national poverty line and the 21,000 living in extreme poverty. It also states that this improvement will only be achieved with the implementation of effective CSR strategies and actions from the mine and both local and state governments.

Barrick Employees Volunteer in their Communities

Barrick encourages employees to volunteer within their communities and provides time off with pay to do so. In September 2011, employees from the Salt Lake City office volunteered with Habitat for Humanity to help construct homes in a Salt Lake neighbourhood that will benefit two single mothers and their children. At the end of a successful day of construction activities, the volunteers came together to donate their safety and work equipment to Habitat for Humanity.

In Australia, Canada and the United States our employees raised both money and awareness in the fight against prostate cancer. During November each year, the Movember campaign is responsible for the sprouting of moustaches on men’s faces around the world. By growing their Mo’s, our employees raised vital funds and awareness for men’s health, specifically prostate cancer and other cancers that affect men.  The money raised in each country stays in the country and is used by the various cancer groups involved in the Movember campaign.

Also in November, employees from the Toronto office helped the Daily Bread Food Bank by participating in the annual Food Sort challenge. The competition challenges teams to sort and pack food into specific categories for distribution. The food items collected by the Daily Bread support approximately 170 neighbourhood food programs that offer food hampers for people in need, and support meal programs that offer prepared meals such as soups and casseroles.