Having worked at a northern Ontario gold mine, I know firsthand the importance of managing your risk and environmental compliance. As a metallurgical student I worked at a open pit and underground mine where I was responsible for sampling the tailing pond and adjusting chemical balances and ensuring we remained within our permit limits. Thinking about it, this was a lot of responsibility for student!
Gold mining is a complex and often polluting business. It is therefore critical to carefully manage environmental compliance and stay strictly within your permit limits issued by the government. A class action lawyer friend of mine brought the case of Barrick Gold v. a Canadian Pension Fund to my attention. The lawsuit is for over 3 billion dollars which would likely sink the entire project. The lawsuit also names directors and officers of the company. In 2013 Barrick Gold was forced by the Chilean government to shutdown a gold mine due to a lack of compliance with their environmental permits. The company’s value went down on the stock market and a group of investors then launched a class action lawsuit that is working its way through Canadian courts.
Without having access to all the details, it is impossible to know exactly what happened. However it is clear that when you operate large, complex, dangerous operations in remote locations – tight control over your compliance seems like good management practices. With gold prices back up from 2013 this mine could very well have been very profitable for Barrick, instead they have a large lawsuit on their hands!
