Talking Sutainability Strategy and Governance with Dave Garofalo, President and CEO

Jul 26, 2017 1:05 PM ET
Blog

Goldcorp’s 2016 Sustainability Report was recently published, reaffirming our dedication to our vision of Together, Creating Sustainable Value. Throughout the year, we adopted important optimization measures across the organization; our commitment to sustainability remains unwavering. Dave Garofalo, Goldcorp’s President and Chief Executive, looks back on the strategic and governance aspects of the year and the impact these have had on our sustainability objectives and goals, and our aspirations and challenges for the coming months.
 

When you reflect on 2016, your first year as CEO, what are some of the highlights and accomplishments that come to mind?

From a sustainability perspective, launching the Towards Zero Water (H2Zero) initiative was our major strategic accomplishment. Water, or the lack of it, is a growing concern that limits our ability to develop and expand mines, and it is also a major issue for communities surrounding our mines.

As a company, we must be good stewards of water and the environment. With H2Zero, we are putting our best scientific and engineering minds to work to innovate and address challenges around water consumption. Moving Towards Zero Water consumption will lower our operating costs and it will be a powerful and positive message to send to communities where we want to develop natural resources.

Since announcing the initiative, we have set a series of benchmarks spanning the next decade. The first step is to put the metrics in place. In 2017, we will be compiling water-use data to gain an accurate assessment of the cost of water. There’s a cost to every drop of water that we draw, handle, treat and return back to the environment. When we have an accurate assessment, I suspect we’ll find that some of the water-reduction strategies that may seem costly at first, like filtered tailings, are actually cost-effective in the larger picture.

What are some of the challenges the industry faces? How is Goldcorp managing them?

Mine closure and reclamation have been historic challenges for the mining industry. The management of legacy sites has been a particular issue. We see mine closure as an opportunity to set an example. After a mine closes, the mine operator is responsible for restoring and revegetating the land, and for ensuring its long-term environmental viability. At Goldcorp, environmental and social closure planning begins when the mine produces its first ounce. We start restoring the land while the mine is still in operation, in a process called progressive reclamation. We invest millions a year in progressive reclamation at our operating sites.

Another major sustainability challenge is the management of wet or conventional slurry tailings. The Mining Association of Canada and the International Council on Mining and Metals are very focused on tailings management and water, because wet tailings management is the most water-intensive aspect of our industry and the dams bring geotechnical and social risks. Tailings disasters are extremely rare, but when they happen, communities and biodiversity can be negatively affected, and they put a stigma on the entire industry.

In the long run, I think wet tailings are unacceptable, and as a corporate strategy we are looking for ways to move away from them. This ties back to our H2Zero initiative. We’re not ready to move every mine to dry stack or filtered tailings. The technology is not ready to be scaled up for high-volume, large-scale mines, like Peñasquito, for example. But in the long term, I think it is viable and we are exploring opportunities in this area.

What are some sustainability issues you anticipate will affect Goldcorp in the coming years?

Throughout the industry, ore reserves have been declining for more than a decade. A significant impediment in developing resources is the scarcity of water and energy. Among local communities there is a perception that mining consumes too much energy and water, and competes with communities for those scarce resources. That perception puts us in a bad light when we enter a new community and want to build a new mine.

As an industry, we have to change that conversation. We have to be more effective in our stewardship of energy and water resources if we hope to change the downward trajectory of resources. We have to communicate better with our affected stakeholders on the issues that matter most to them. At Goldcorp, we are leading on several fronts: through the H2Zero initiative and in a company-wide drive to innovate on energy, as in our all-electric Borden project.

Sustainability is one of Goldcorp’s core pillars. Can you speak about its importance to the overall company strategy?

In simple economic terms, when a company makes capital investments of the scale of building a mine in a remote location, long-term sustainability is essential. The local community, of course, also wants a long-lived sustainable mine. It’s a case of working together to deliver sustainable value: we build relationships with communities, because we have come to their homes and built a mine, and it’s incumbent on us to share in the benefits. When we have community members as staff and as service providers, it benefits both sides. The local economy grows and the people gain skills, and local employment dramatically reduces our cost structure, by reducing our transportation costs and our camp costs. So building and supporting sustainable communities around the mine sites is part of our sustainability strategy for social and economic reasons.

Environmental sustainability is also central to our overall strategy. Our ongoing diligence in environmental stewardship is essential to our ability to maintain local relationships and to be accepted into new communities. And, of course, it is simply good business for us, and for any company in the extractive industries, to be a responsible member of the global community.

This year Goldcorp experienced changes in leadership and moved to a decentralized model of operation. What are some of the benefits and opportunities for advancing sustainability in a decentralized model?

In the past, many decisions that affected mine operations were made at our head office. The new decentralized approach gives mine managers the cradle-to-grave responsibility for their operations. They are responsible for operations, growing their reserves and looking for expansion opportunities. They are also responsible for engaging with local communities and advancing sustainability initiatives in their areas of operation. In effect, they are running local businesses, and you can’t run a business in isolation from the people who live in the neighbourhood.

We are trying to establish a sustainable socio-economic ecosystem around each of our mine sites. Ultimately, that will drive down our cost structures and improve the long-term sustainability and economic viability of those businesses. There are many benefits of drawing from the local community. It makes for a much more sustainable business.

 

For further information on Goldcorp’s commitment to sustainability, visit our 2016 Sustainability Report