In an exit interview, Barrick Gold’s founder Peter Munk has said Glencore Xstrata’s boss is going to “eat them all”.
Ask Peter Munk, the founder and former chairperson of Barrick Gold Corporation, whom he most admires in the mining industry, and you get a passionate, digressive response, along with a possible clue to the direction of the world’s largest gold producer.
“What Ivan Glasenberg has done equals an Olympic record,” Munk said last week in an interview, referring to the billionaire chief executive at Glencore Xstrata Plc.
It was Glasenberg who led Glencore’s 2013 takeover of Xstrata Plc, the biggest in mining. Munk, who is 86 and retired at Barrick’s annual shareholder meeting in Toronto on Wednesday, says he’s good friends with the Glencore boss and admires his ambition to compete with the biggest miners, such as Rio Tinto Group, BHP Billiton and Vale SA.
“He’s taken Xstrata, he’s now very close to the BHP Billitons, he’s going to eat them all,” Munk said. Munk’s comments are being scrutinised particularly closely after failed merger talks between Barrick and Newmont Mining Corporation degenerated this week into a public dispute between both miners.
Had it gone ahead, the merger would have been the kind of bold deal extolled by Barrick’s founder, combining the world’s two largest gold producers after the biggest slump in the market for the precious metals in 32 years.
Taking risks
For Munk, Glencore’s Glasenberg – who attended a farewell dinner for the Barrick founder on Wednesday night – represents the aggressive, buccaneering spirit that other large mining companies either have lost or never had. Munk says risk-taking is essential to expand and survive in mining.
“The only way not to make a mistake is to try nothing, and then we would have disappeared like many other penny stock companies in the mining sector,” Munk said.
According to Barrick, the merged Barrick-Newmont would have been based in Toronto. That would have helped fulfill Munk’s ambition of creating a genuine Canadian national mining champion, after a decade in which some of its biggest domestic rivals were acquired by foreign buyers.
John Thornton, the man picked by Munk to replace him as chairperson, led Barrick in the negotiations and would have been executive chairperson of Barrick-Newmont, people with knowledge of the matter said on April 19.
A former president of Goldman Sachs Group, Thornton had never worked in mining until he joined Barrick two years ago. Since then he’s helped oversee its strategy and explored investment from China, people familiar with the situation said in December. He is open to a potential diversification into metals other than gold, they said.
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