Newmont The Gold Company on Ecological Leadership Essay
Newmont The Gold Company on Ecological Leadership
Newmont is a mining industry since 1921. It’s the leading producer of gold, silver, copper, and the newest one, mercury. It has operations worldwide and employs an integrated, diverse group of people. Newmont’s goal is to become the “choice” company for producing gold and other ores in the world. This vision made the company consider the factors that will help them achieve it. Whenever there’s a mining operation, the land, water and natural resources of that area are said to deplete consequentially. They are aware too, that the mining industry creates job opportunities to a lot but only a certain group of people are qualified for the job. This led Newmont to become socially and environmentally aware of the bad effects of the mining industry. The acknowledgement of Newmont’s role as a leader in ecological conservation gave way to the industry’s sustainable development. Sustainable development is an industry’s way of doing its business while maintaining the environment’s fertility so that the future generation will still be able to use the natural resources. The rape of the environment can cause people to go hungry because these resources were consumed or destroyed. Farming good crops will be impossible and freshwater fish will die.
The awareness of Newmont’s role in conservation of natural resources became its marketing point. People had become more and more aware on how they can save the earth from becoming so polluted and depleted. Newmont will be the “resource company of choice” of ore buyers because people will support their business for they wanted to help preserve and conserve the environment. So if people buy Newmont’s products, they are helping to save the earth. The US government even has a program to boycott those companies that the government doesn’t support or favor. The US government of course supports Newmont because of its ecological stewardship. Affiliates of the US government will also support Newmont’s products because of the good cause of Newmont’s existence. For example, Love Earth is a jewelry company. The stones and minerals used in making jewelries come from two sources; one being from Newmont Mining Industry. Love Earth jewelries are sold especially in Wal-Mart. Wal-Mart supports sustainable development and it only sells products that meet its criteria of social and environment relevance. (Love, Earth. 2008).
Newmont’s yearly objectives always include reports on how the company has performed on its environment programs. In order to achieve sustainable development, the company always has to see if the programs they created for ecological development were successful. The industry can measure if the standards were met using the “Five Star Integrated Management System.” This is similar to the new measurement of standards certifying a company that it underwent surveillance and audit of its measured objectives. A company is said to have been successful in its aim if they get an “ISO 14001 certification.” (Newmont The Gold Company. 2006.) Newmont’s programs were based on the principles of sustainable development. There are teams designated by the company to collect samples from the different environment across the globe. They follow proper procedures of packaging and handling so that the samples reach the lab in its original condition. The lab tests can identify if a particular environment has reached a certain degree of pollution or contamination based on those samples. Surveys for endangered species are done and examined first before any mining operation will begin in an area. The company will know if certain species can survive based on the impact of mining operations. The wastes from processing minerals at the base of the facility flow to a “double or triple lined ponds for processing.” “Leach pads” are used to absorb the waste solution and contain it to prevent any wastes from leaking through it and to the ground, especially into groundwater. (Beyond the Mine. 2008).
During mining, there’s too much water due to rain and digging. Water management system was developed in order to utilize water effectively. It will result to “water balance” even though the mine continues its operations. “The potential effects of mining on water quality and quantity are of concern to communities around the mines. At all of Newmont’s operations, surface water, including storm water and snowmelt runoff is diverted around the mining operations. The water removed from the mine is put to beneficial use in agricultural applications to support crop production and livestock.” The company also sees to it that there is minimal disturbance of the land and the habitat of animals in it during exploration activities, so if there’s a disturbance, the company “closes and reclaims” back the natural habitat of that area. Restoration efforts can greatly lead to sustainable development because the natural habitat of species will be brought back. “Villagers rely on subsistence farming to support their families due to the lack of viable alternative industries in the region. To help subsistence farmers, Newmont financed two dams that irrigated more farmland. Farmers in the region now have better techniques and are yielding now up to three times more crops.” Newmont also saw the need to maintain a clean air environment by minimizing its “carbon footprints.” In order to minimize it, energy should be utilized very efficiently. To maintain safe, clean air, the mercury emissions should also have a proper way of being mined. Mercury, when inhaled, can poison men and animals breathing it. So, mercury should be covered with something in order to prevent it from spurting up into air. Industrial wastes in the office are recycled and in the process of recycling, the use of toxic chemicals is strictly prohibited. Citrus-based solvents instead of chlorinated solvents were used. (Beyond the Mine. 2008)
Based on the Annual Report of 2007, outcomes of the 2007 targets turned out pretty well. Water management guidance was said to have been followed as implemented. Biodiversity risk mapping was successfully done at 75% expected target level based on the 2007 targets. This just means that the team who were assigned knew the risks involved in the habitats of animals around and was able to actively manage the risks. Another successful target last 2007 was there were mining sites that had been certified by the International Cyanide Management Code. “All cyanide suppliers and transporters were certified to the Code too.” Mercury as a very dangerous pollutant had been well taken cared of. Last target was that all sites will have an ISO 14001 by the end of 2009, had been a little bit successful because two of all the sites got the certification: Waichi and Yanacocha. (Beyond the Mine. 2008)
The stewardship of Newmont Mining Corporation has affected the common stocks of the company as follows:
Cumulative Total Return: 5 Year-Shareholder Return Comparison
(Newmont The Gold Company. 2006.)
A five-year chart of the common stocks of Newmont Mining Corporation showed that from the year of 2002, the stocks remained pleasantly above the initial share in 2002. The common stocks of Newmont as compared to Standard & Poor 500 and PHLX Gold & Silver Index mining industries turned out to be the lowest from the year 2005 to the present. This just shows the response of the market towards Newmont’s active campaign for sustainable development was poor. New programs for ecological stewardship were formulated, especially that new policies were developed in the company against hedging:
“Elimination of our gold hedge book, which positions Newmont as the premier unhedged gold company and improves our financial strength and flexibility.” (Annual Report 2007, p. 1)
Hedging would’ve made a lot of opportunists in the company very rich because they’re selling the products of the company at really high prices…too high that it’s too risky for the business. Hedging encourages corruption, which was strictly prohibited at Newmont. This is probably the reason why the shares were high during 2002, 2003, and 2005. The shares reached its peak in 2005. The slope went down and further slid by the end of year 2005, and the line increased minimally as the year 2007 approaches. The stocks went down so low in five years, but not low enough to say that there was no yield from the original investment. There is a very slow increase of the slope which means that the common stocks are yielding so slow…which means that there is no hedging in the company and that the company is running based on its current assets and expenses. Although corruption was thought to have been gone due to the slow rise of the slope, the company was making money with the response of the market. It just reflects here that the consumers (the society) are not yet ready to embrace ecological stewardship. There is a weak response, thus, common stock is low. This just means that people still don’t care about the earth as long as people still get what they wanted. A lot are still unaware of the ecological responsibility of each one to save the earth. Although Newmont poses the lowest stock, it proved to be uncorrupt, real and was able to get up from the ashes slowly rising. Newmont, indeed, showed integrity.
Newmont The Gold Company. 2006. Newmont Mining Corporation. August 28, 2008. [http://www.newmont.com/en/].
Beyond the Mine. 2008. Newmont Mining Corporation. August 28, 2008. [http://www.beyondthemine.com/2007/].
Love, Earth. 2008. Wal-Mart Stores, Inc. August 28, 2008.
Annual Report 2007. 2008. Newmont Mining Corporation. August 28, 2008.