Newmont CEO delivers powerful message
Metal Tech News - September 8, 2023
Last updated 9/8/2023 at 10:58am
Urges the mining industry to build goodwill and trust to survive societal, geopolitical, and new technology megatrends in a changing world.
Newmont President and CEO Tom Palmer did not waste his keynote address at the Minerals Week 2023 gathering in Australia to tout the many achievements of the world's largest gold mining company he leads. Instead, he delivered a powerful and sometimes foreboding message to the mining leaders in the room and around the world about the industry's responsibilities in a world being driven by three megatrends – societal transformation, turbulent geopolitics, and advanced technologies.
"The intensity and velocity of these global megatrends are so universal and disruptive that if, as an industry, we are not agile enough to adapt, align and lead, we will risk losing control of our businesses," he warned during a thoughtful and powerful speech.
Palmer delivers this dire warning to a mining industry that is coming under greater scrutiny both for its past sins and the world's unprecedented need for this sector to deliver the copper, cobalt, graphite, lithium, nickel, zinc, and other mined materials needed to build the clean energy future.
While Newmont is best known for its gold, the company produces a sizeable quantity of copper, which is expected to swell to 350 million pounds per year upon the soon-to-be finalization of a buyout of Australia-based Newcrest Mining Ltd.
The global demand for the copper the expanded Newmont will produce is skyrocketing in a world transitioning to electric vehicles charged with low-carbon energy.
According to S&P analysis, the demand for copper will need to double by 2035 in order to achieve net-zero targets by 2050.
"Bridging this gap will require significantly more copper mines, copper recycling and enhanced copper leaching processes," said Palmer.
The mining executive says bringing enough copper mines online to meet the surging demand seems unlikely given how long it takes to garner regulatory approvals and social licenses.
"To even come close to achieving this pace, we are going to need to bank as much goodwill and trust as possible by demonstrating that we are responsible actors guided by strong values," he told the audience in Australia.
Building trust and respect
Banking goodwill is all about people and for Palmer this begins with the more than 15,000 Newmont workers.
"The most powerful force that we have as organizations to buffer against, and more importantly, thrive in the face of these global megatrends are workforces who are motivated by and demonstrating our core values in everything that we do," he said. "This cannot and will not happen unless we openly and honestly address the very real problems of sexism, racism, harassment and bullying in our workplaces. And this includes Newmont."
"Today, I would like to openly and publicly acknowledge that we – individually as companies and collectively as an industry – have a major challenge to overcome," he added.
The Newmont executive said the mining sector has a "solemn obligation to proactively address these problems, head on."
"No one should ever feel harassed, threatened, or discriminated against at work," he added.
Not only is this a moral obligation but is necessary for retaining and attracting employees during a digital revolution that is pitting mining companies against other technologically driven sectors for talent.
From new IT professionals to old-school underground miners, a mining company's workforce is its best ambassadors in a world that often views the sector with suspicion and is largely unconscious of society's deeply rooted dependency on mining and the materials it supplies.
"It is about establishing and maintaining long-lasting relationships built on trust and respect. Relationships that have at their foundation the creation of safe, healthy, and equitable workplaces," said Palmer. "Trust and respect are built from this foundation as our workforces are members of our neighboring communities who are, in turn, constituents of their respective nations."
Bridging societal rifts
Building strong and lasting relations that ripple out from the mining workforce across communities and nations has become even more important in a post-pandemic world with widening societal rifts.
"Already anxious from the dislocating economic effects of a globalizing economy, due to the pandemic, working and middle-class people felt the earth move beneath their feet over the last three years in a way they had not experienced before," said Palmer.
He said post-pandemic job anxiety, the loss of millions of lives, and the uncertainties resulting from crumbling supply chains became fertile ground for social and political rifts to grow.
"These widening rifts over pandemic policies were capitalized on by opportunists and groups seeking to harness anger and frustration, whilst leveraging digital and social media to amplify these social chasms to gain or keep power," the mining executive told the crowd.
"The mining industry is not immune from the societal tectonics that are creating new social and political fault lines, as older ones become more pronounced," he added.
It could be said that mining is more prone to these widening rifts due to suffering from an image problem that complicates the sector's relationship-building efforts.
"This is in part due to the darker legacy of mining from decades ago, but also the high-profile tailings dam disasters in our recent past," Palmer bluntly stated.
Overcoming this legacy in an increasingly divided world will require mining companies to individually and collectively invest time, energy, and resources into quality engagement with governments and other stakeholders.
"Values-based governance, transparency and accountability are all critical to helping stabilize the geopolitical environments in which we operate so that we can create a degree of certainty that will satisfy our shareholders, whilst living up to the commitments we make to our other stakeholders," Plamer said.
"The world will not meet its climate targets if we are not able to do this," he added.
Embracing technological change
Rapidly advancing technology is one area that can bolster the mining sector's ability to supply the metals needed to meet climate targets and put its best boot forward when it comes to overcoming its image problem.
"Whilst technology has helped make our businesses safer, cleaner, more efficient and productive, the velocity of technological change today is altering social and economic dynamics in ways not seen since the industrial revolution," Palmer said.
The mining sector, which has not traditionally been eager to embrace new technologies, is now rapidly onboarding innovation as it races to lower its own carbon emissions while also ramping up production of the metals the rest of the world needs to do the same.
Newmont, which announced in 2020 plans to invest $500 million to transform to a carbon neutral mining company by 2050, has been a leader in mining technology uptake.
Automation is one technology in particular that Newmont has found advantageous when it comes to improving worker safety, reducing emissions, and improving efficiency.
"Specifically, autonomous vehicles, automated drilling, remote operations, and asset monitoring are critical to how we mine today and, even more so, in the future," Palmer said.
Since the implementation of the technology in 2021, there have been zero workplace injuries related to the autonomous haul fleet, vehicle damage has been cut in half, and tire damage has plummeted 90%.
And prior to its implementation at Boddington, Newmont typically recorded more than 3,000 micro-sleeps by truck operators each year.
"That number is now zero and a significant fatality risk has been eliminated," said Palmer.
Toward its own net-zero emissions goals, Newmont is also staying on the cutting-edge of electrifying mining equipment.
Palmer says Newmont is also leveraging artificial intelligence and machine learning to monitor air and water quality, as well as the condition of wildlife and other natural resources.
"But like any technology, AI, including Large Language Models like Chat GPT, are advancing and self-learning so rapidly that even their own creators are not sure how they are able to do what they do," he said.
Pointing to an open letter signed by more than 1,000 technology leaders and researchers working on AI that warns this technology poses "profound risks to society and humanity", the Newmont CEO said, "AI's exponential advancement is creating unknown unknowns."
"We must prepare our businesses and our workforces to responsibly navigate these technological opportunities and threats by anchoring ourselves in our core values so that we can all make moral and people-centric decisions in fast-moving and complex situations either driven or exacerbated by technology," he continued.
Clarion call and manifesto
In his thoughtful and sometimes foreboding message to mining colleagues, Palmer said the societal, geopolitical, and technological megatrends the world faces today "animate one another in ways we cannot predict."
"However, under any scenario, the responsible production of gold, copper and other minerals remains the only way we can generate sustainable value for our workforces, our communities, our host countries and our shareholders whilst supplying the essential resources necessary for the new energy future," he continued.
The top executive of the largest mining company on Earth said leveraging the abilities, creativity, and goodwill of employees and community partners is fundamental to the mining sector's success in supplying the world with the resources its needs through this era of disruptive change.
"Whilst the challenges ahead of us are significant and unprecedented, I firmly believe in the ingenuity and resolve of our teams to rise to the occasion and capitalize on emerging opportunities to overcome and ultimately thrive in the face of the headwinds confronting us," he concluded.
Palmer's clarion call to his colleagues in the mining sector also serves as a manifesto for his own responsibilities to lead the world's largest gold mining company through the societal, geopolitical, and technological megatrends that will likely reshape the future of mining.
"As the Chief Executive of Newmont, my role is to thoughtfully navigate these issues and global megatrends by, first and foremost, doubling down on anchoring our business in our purpose: to create value and improve lives through sustainable and responsible mining," he said.