Barrick Gold Seeks Efficiencies With Corporate Structure Changes
Barrick Gold Corp. (ABX), the world’s biggest producer, is overhauling its corporate structure so that mines are managed more directly by senior executives in its Toronto office.
Barrick, which already cut its corporate office staff by 30 percent this year, will create new operating units to replace its regional units that run as largely self-contained businesses, the company said yesterday in an e-mailed statement. Support functions will be centralized and roles and responsibilities may change for some employees in regional offices, the company said.
Barrick is among gold miners seeking to curb spending and reduce costs after bullion had its steepest drop in three decades. Chief Executive Officer Jamie Sokalsky started a companywide review of operations after he was promoted from Chief Financial Officer in June 2012 and efforts have accelerated after gold slipped into a bear market in April.
Barrick appointed Gary Halverson, the company’s regional head of North America, to act as interim chief operating officer, Sokalsky said in a Sept. 12 presentation. Barrick is seeking a permanent replacement for former COO Igor Gonzales, who left during the second quarter.
“The new operating units will be accountable for managing our core business of mining operations, with a focus on free cash flow, production, costs, safety performance, and meeting our environmental obligations and commitments,” the company said in the statement. “Under this new structure, the operations will have a more direct reporting line to the corporate office, and the COO.”
Barrick will cut regional managers, the Financial Times reported yesterday. Andy Lloyd, a Barrick spokesman, declined to comment on any job cuts or provide further comment on the reorganization.
Barrick sold its oil and gas unit and agreed last month to sell three Australian mines to Gold Fields Ltd. The company will also start shutting down its high-cost Pierina mine in Peru this quarter, Sokalsky said Sept. 12, when he also discussed plans for changes to the corporate structure.
Higher-cost mines that don’t improve will be closed or sold, he said.
“We are going to emerge leaner, more agile and profitable,” Sokalsky said in the presentation. “If we get smaller, so be it.”
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