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Barrick Gold chief executive Mark Bristow has slammed western fund managers for their short-sighted focus on making quick returns.
He urged them to follow the example of some sovereign wealth funds that are showing interest in investing in risky mining projects in the world’s dangerous regions.
He used Saudi Arabia’s Public Investment Fund (PIF) as an example of an investor considering projects that may not deliver short-term returns but would help production of vital metals for the clean energy transition.
“The western world has become extremely myopic, driven by instant gratification,” he told the Financial Times in an interview.
He said money from passive funds that track markets rather than actively pick stocks and assets was “not conducive for mining investments” as they failed to support “pioneer-type opportunities”.
“The sovereign wealth funds come with a much longer horizon” creating a “very exciting” opportunity for Toronto-based Barrick, he added.
With the exception of Glencore and billionaire Robert Friedland’s Ivanhoe, western groups have largely avoided risky mining ventures in places such as copper-rich Democratic Republic of Congo and Indonesia, where China has invested to extract nickel.
Bristow criticised the short-term focus on quarterly earnings by large asset managers such as BlackRock and Vanguard, which run some of the world’s biggest passive funds and are also shareholders in Barrick.
That has made it challenging to find the right sort of capital to press ahead with long-term projects such as Pakistan’s $7bn Reko Diq mine, which Barrick is developing and which is unlikely to deliver returns for years.
It is also a risky project because of its location in Balochistan, a Pakistani province next to Iran and Afghanistan, which has suffered violence and insurgencies from anti-government rebels.
Bristow, a South African, is hopeful Saudi Arabia’s sovereign wealth fund PIF and state mining company Ma’aden will become shareholders in the Pakistani mine.
Ma’aden and PIF expressed interest in taking a stake in the mine at a gathering in Islamabad for Pakistan’s first mineral conference this month.
Reko Diq is the largest foreign direct investment in Pakistan and is one of the world’s largest undeveloped copper deposits.
Barrick, the world’s second-largest gold producer, owns 50 per cent of the mine with the remainder held by the Pakistan government and local authorities.
“The interest that Saudi has is supporting the Pakistan side of the register,” Bristow said. “Would we support Saudi becoming involved in Reko Diq on the Pakistan side? We would say absolutely.”
Its development would boost the production of copper, which is expected to see a surge in demand in the next decade as it is used in car batteries, electric motors and power cables, vital for the clean energy switch.
Saudi Arabia also last month made its first significant foray into the global rush for critical minerals such as copper, nickel and lithium that underpins the shift to clean energy.
A joint venture between Ma’aden and PIF bought a 10 per cent stake in Brazilian miner Vale’s base metals business for $2.6bn.