This week, Newmont's President and Chief Executive Officer, Tom Palmer, delivered a speech at the 26th annual World Mining Congress in Brisbane, Australia.
During the speech, Tom discussed how the emerging global megatrends of societal transformation, technological change and geopolitical turbulence are impacting the mining industry now and will continue to do so well into the future.
Read the full speech below.
Thank you to the World Mining Congress for the opportunity to speak with you today.
Before I begin, I would like to acknowledge the traditional custodians of the land on which we meet today, the Nunukul and Yuggera people, and pay my respects to their Elders past, present and emerging. I extend this respect to all Aboriginal and Torres Strait Islander people in attendance.
Those of us who work in the resources industry understand and recognize the necessity, value and role that minerals play in our modern way of life and standard of living. We also understand the extent to which society, as a whole, is unconscious of its deeply rooted dependency on the minerals we produce. However, as an industry we do not now, nor will we ever, have the luxury of ignoring societal megatrends and the impacts they have on our workforces, our operations, and our host communities.
I am not here today to deliver a 20-minute spiel about Newmont. I would like to use this time to shine a light on the emerging global megatrends that will directly impact our industry, now and well into the future. In fact, I believe we are on the cusp of an age that will be as consequential and disruptive as the industrial revolution, if not more so.
As I see them, the emerging global megatrends impacting our world and our industry fall into three categories.
First, Society and Investors are increasingly demanding accountability, value sharing, and values-based decision making, and we will need to meet and exceed these demands to remain in business.
As an industry, we are tasked with satisfying society’s accelerating needs to resource the new energy future, whilst mining safely and sustainably. Not just because society expects it, but also because our workforces will demand it.
This is where I would like to spend much of my time today, with a focus on our workforces.
Second, the exponential acceleration of technological change, particularly in artificial intelligence and long language models, requires that we temper these game-changing technologies with tried and true human wisdom and robust social process, translated into people-centric, values-based decisions to responsibly govern and harness these transformational digital innovations.
And third, geopolitical turbulence, often driven by internal demographic changes, migration, deepening political polarization, and economic anxiety, is complicating relationships within governments, and between governments, whilst triggering never-seen-before cracks in the foundations of well-established societal institutions.
Together, these megatrends simultaneously animate, interact with, and reinforce one another in ways we cannot predict, giving rise to a growing meta-crisis, one in which we will be expected to succeed in right now, and over the long-term. 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.
What I will argue for today is that successfully navigating this period of disruptive change will require knowing, integrating, and living our organizations’ core values. Failure to do so will leave us rudderless and at the mercy of these tidal waves of change in society, technology and geopolitics. On their own, each of these megatrends has the ability to impact our workforces by creating greater confusion, uncertainty and anxiety. Taken together, their convergence into a potential meta-crisis has the ability to break the critical social bonds between individuals, communities and nations.
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. 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. Demonstrating our commitment to, and taking action on, these critical problems must align with our vision of safe, inclusive, and sustainable workplaces. No one should ever feel harassed, threatened, or discriminated against at work,
As leaders, if we are to earn the trust of our workforces and in turn other stakeholders, then we have a solemn obligation to address these problems, head on. We must ask ourselves, what more should we be doing? This is essential if we are going to attract and retain the best people. We’re no longer competing with each other for talent. Thanks to the digital revolution, just one aspect of the technology megatrend, we now find ourselves in a global war for talent with every other industry. So, for both moral and practical reasons, we cannot exclude or alienate anyone because of their race, gender, sexual orientation, national origin, or creed.
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 and sustainable and responsible mining. And this Purpose is underpinned by our core values of safety, sustainability, integrity, inclusion and responsibility. I would now like to expand a little more on each of these three global megatrends of society, technology, and geopolitics.
Let me begin with Society and social transformations. 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. 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. Feeling the effects of job losses or the anxiety of potentially losing one’s job, not to mention the loss of millions of lives and crumbling supply chains resulting in product scarcity, the pandemic became fertile ground for social and political rifts to grow. These widening rifts over pandemic policies were capitalized on by opportunistic politicians and groups seeking to harness anger and frustration, whilst leveraging digital and social media to amplify these social chasms to gain or keep power.
Economic dislocation and the resulting government fiscal interventions to prevent complete economic collapse ballooned national deficits and debt. One consequence of this has been increased attention and focus on the mining industry to contribute more through taxes, royalties, economic development, and social investments, whilst still responsibly supplying the materials to support our modern way of life and the new energy economy. As we know, creating a new energy economy through renewable power generation and electrification of our transportation systems will require massive increases in the production of minerals such as copper, zinc, cobalt, lithium amongst others.
According to a study by S&P Global, copper demand is expected to nearly double from 25 million tons today to about 50 million tons by 2035 in order to deploy the technologies needed to achieve net-zero targets by 2050. Top of FormBased on current copper production trends, we will experience copper shortfalls of 10 million tons by 2035. In fact, by 2050, the world will only be producing 20 percent of the copper needed to meet the net-zero climate goals. Bridging this gap will require significantly more copper mines, copper recycling and enhanced copper leaching processes.
This means more deposits need to be discovered and mines built at a pace that seems unlikely given the drawn out timeframes to secure government and community approvals. 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. Whilst the global mining industry contributes nearly $2 trillion dollars in economic and social contributions globally, apart from some local recognition and acknowledgement in certain communities and countries, the world at large continues to view us with suspicion. 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.
Will throwing more money at the issue change how we’re perceived and accelerate the pace at which new projects are brought online? Perhaps, but we all know the margins our businesses generate, and there’s a point at which projects and operations become economically unviable. As such, we need to think more than just transactionally. This will require us to leverage the capability, creativity and goodwill of our workforces and community partners to anchor our decisions and actions in people-centric approaches.
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.
Workplaces that value differences and ensure everyone feels safe, and are safe. Trust and respect is built from this foundation as our workforces are members of our neighboring communities who are, in turn, constituents of their respective nations.
The second megatrend I’d like to discuss is the impact of rapidly advancing technology.
Whilst technology has helped make our businesses safer, cleaner, more efficient and productive, the velocity of technological change today is changing social and economic dynamics in ways not seen since the industrial revolution.
Some of the technological benefits we’ve seen at Newmont in recent years include automation and remote operations – in particular post the lesson learnt from the pandemic. Automation is helping us mitigate safety risks, reduce emissions and improve efficiencies. Specifically, autonomous vehicles, automated drilling, remote operations, and asset monitoring are critical to how we mine today and, even more so, in the future. As part of our commitment to address the impacts of climate change, we are also challenging ourselves and our equipment manufacturers to take risks in order to drive innovation and more rapidly develop sustainable solutions to reduce emissions.
In 2021, Newmont announced a $100 million strategic alliance with Caterpillar to develop, build, test and then deploy in operating mines, both battery electric open pit and underground trucks, before the end of this decade. Also as part of our pathway to achieve our 2030 emission reduction targets and our 2050 net-zero ambition, we are working to implement energy efficiency improvements at our operating sites, and working with our suppliers to reduce emissions in power generation and transportation.
At Newmont, we are using artificial intelligence algorithms 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.
In fact, earlier this year more than 1,000 technology leaders and researchers working on AI signed an open letter warning that these technologies present, and I quote, “profound risks to society and humanity.” In short, AI’s accelerating 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.
The third and final megatrend I’d like to discuss is the influence of geopolitics on where we explore, invest and operate.
Geopolitical developments have hugely material impacts on the supply and demand of individual commodities, including gold and copper. As I mentioned earlier, internal societal changes, political rifts, and economic anxieties can drive geopolitical turbulence within governments and between governments.
Last year, Newmont contributed $11 billion dollars in direct economic contributions through salaries, taxes, royalties, payments to governments, and community contributions. This included one and a half billion dollars in taxes and royalties and nine and a half billion dollars in direct economic contributions.
Newmont’s Development Foundations in Ghana have been recognized many times nationally and internationally for their work in directly improving people’s lives through capacity building, infrastructure investment, business development, women’s empowerment and so on. This is a result of the partnerships we have developed with local civil society organizations, traditional leaders and others to identify what the community needs, whilst providing the catalysts to drive organic solutions. Our Development foundation model has been so effective in Ghana that we have replicated it at other operations around the world. While we’re proud of the work we’ve done in Ghana and elsewhere, we know that societal and government demands and needs only increase.
Our work as leaders in the resources sector extends well beyond the boundaries of our operations and into local communities, civil society organizations, legislatures, ministerial, and presidential offices. As leaders in the mining industry, if we are to navigate resource nationalism and turbulent geopolitical trends so we can satisfy society’s rapidly growing demand for the minerals we produce, then we are going to have to quickly adapt and invest the time, energy, resources and skills needed to focus on regular, 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. The world will not meet its climate targets if we are not able to do this.
These megatrends in society, technology and geopolitics 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.
As I stated earlier, the most powerful force we have to buffer against and thrive in the face of these emerging global megatrends are our workforces motivated by and demonstrating core values in everything we do.
Successfully navigating through this period of disruptive change will require leveraging the capability, creativity and goodwill of our workforces and community partners to anchor our decisions and actions in people-centric approaches.
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 the headwinds confronting us.
Thank you for making time to listen today.
Cautionary Statement
This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and other applicable laws. Forward-looking statements may include, without limitation, expectations regarding the evolution of megatrends and future impacts on the mining industry, estimates of future metal supply and demand, including expectations with respect to gold and copper, expectations regarding future investments in technology, and expectations regarding emission reduction targets and net-zero ambition emission reduction targets, or other statements which are not historical fact. Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, such statements are based upon assumptions which remain subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied. For a discussion of risks and other factors that might impact Newmont’s business, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. SEC under the heading “Risk Factors”, available on the SEC website or www.newmont.com. The Company does not undertake any obligation to release publicly revisions to any forward-looking statement
About Newmont
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. The Company’s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution and technical expertise. Newmont was founded in 1921 and has been publicly traded since 1925.
At Newmont, our purpose is to create value and improve lives through sustainable and responsible mining. To learn more about Newmont’s sustainability strategy and initiatives, go to www.newmont.com.
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Source: Newmont Corporation