Newmont Mining Faces Significant Potential Liabilities in its Mining Operations
Investors Call on Gold Company to Disclose and Address Environmental and Social Liabilities
BOSTON, Dec. 11, 2003 — This week, investment company Boston Common Asset Management filed a shareholder resolution with Newmont Mining Corporation, the world’s largest gold-mining firm, calling on the company to prepare a report on the risk to the company’s operations, profitability and reputation from its social and environmental liabilities.
The company, which has mining operations in Latin America, Africa, Asia, Central Asia and the US, has been dogged by allegations that its mines in these countries are polluting local waterways and are harming the health of nearby communities. Some local communities have protested the company’s planned operations in environmentally and culturally sensitive areas. The firm is currently under investigation by the US Department of Justice over accusations that it bribed officials in Peru to gain ownership of its highly-profitable Yanacocha mine.
To address the problems that underlie these potential liabilities, Boston Common is also requesting that Newmont Mining develop policies on operating in protected areas, provide sufficient funds for long-term environmental clean-up, and provide full disclosure of the company’s impact on the environment, labor and human rights. Boston Common filed the resolution on behalf of its client, The Brethren Benefit Trust, Inc. (BBT), which is the financial arm of the Church of the Brethren. BBT holds approximately 3,100 shares of Newmont Mining Corporation common stock.
With its recent acquisitions and global expansion, Newmont Mining has become increasingly exposed to risk to the company’s operations, profitability and reputation from its social and environmental liabilities. These liabilities, including environmental clean-up costs, compensation to displaced or otherwise aggrieved local communities and related legal expenses, may total hundreds of millions of dollars, thus representing a significant cost to the company.
Lauren Compere of Boston Common Asset Management remarked, “Newmont Mining senior executives purport to be committed to sustainable development and but we continue to have concerns as investors that the company is not fully disclosing its social and environmental liabilities. We feel that Newmont Mining needs to disclose not only its potential liabilities but also what policies the company will put in place to avoid those costs in the future.”
Keith Slack, senior policy advisor for Oxfam America said, “Newmont has made a commitment to obtaining a ‘social license to operate’ for all its projects. The company should demonstrate this commitment by fully disclosing all relevant social and environmental impact information and by committing itself to not mining in protected areas or in places where local communities are opposed to their operations.”
Stephen D’Esposito, President of Mineral Policy Center remarked, “Our research shows that mining companies operating in the U.S. have consistently underestimated their environmental reclamation liabilities. Full disclosure and an independent review of potential environmental liabilities are in the interest of Newmont, investors and the public.”
“Newmont continues to invest in risky projects as shown by the current plans for developing the Phoenix project in Nevada”, said Tom Myers, executive director of Nevada-based Great Basin Mine Watch. “Newmont risks its shareholders’ money by planning to treat acid runoff from the site for 20,000 years.”
Human rights and environmental organizations such as Project Underground, JATAM, Friends of the Earth-US, Mineral Policy Center, Oxfam America and Great Basin Minewatch have raised concerns for a number of years about Newmont’s social and environmental practices.