Canada’s resource sector pulling out all the stops to drive down costs
Amid the recent onslaught of earnings reports from major mining companies, BNN sat down with a number of executives to discuss their latest quarter and how they’re managing their costs. The conversations come amid a cost-cutting trend in Canada’s resource sector, while companies also aim to ramp up production.
Goldcorp President and CEO David Garofalo
"What we’re not doing is taking any shortcuts with any of our businesses. We’re not playing the shell game by deferring underground development or deferring stripping at open pits. We’re actually intensifying our stripping costs at Penasquito and intensifying underground development at our long-life assets so we can liberate a lot of value in some of these higher-grade parts of the deposits."
Cameco President and CEO Tim Gitzel
"The market we can’t control, but we can control what’s going on in the company and we are working hard to streamline all of our costs. Our production costs are down 23 per cent this year, admin 28 per cent and we’re doing everything we can. The company’s in good shape."
Sean Boyd, CEO, Agnico Eagle
“It’s really just being efficient at your site. Your biggest single cost is your labour and you build in an annual wage increase, which has been [in the] two-to-three per cent range for the last couple of years. What we try to do is factor that in every year and try to improve the operations so we’re basically offsetting those increases in our biggest single cost factor through efficiencies and optimization.”
Paul Conibear, CEO, Lundin Mining
“When you take a look at it in local currency, operating costs are staying stable, or improving…What we focus on is making sure that we accomplish what we tell the market what we will do...We are patient and always looking for expansion.”
Kelvin Dushnisky, president, Barrick Gold
“We had a strong quarter, very happy. Production is up, costs are down, relatively speaking quarter over quarter. But we’re not satisfied – we think we can continue to do more. And that’s going to be our objective.”
We’re halfway through the year and we’ve already reduced our total debt by $500 million. As we sit here today, we have about $7.4 billion in total debt…our intent is to be at $5 billion in total debt by 2018. And [by] executing on that and our other priorities, including improving the operations and bringing the company into the 21st century with our digital approach, we’re seeing our share price increase and we hope it will continue.”
David Pathe, president and CEO, Sherritt International
“As we get through the Ambatovy right now, what we are focused on is continuing to get our costs down and get both of our operations into the bottom quartile from a cost perspective...and we are continuing to look in our oil business to drill out opportunities we have there."