Newcrest backs licence to operate as a licence to grow

The Cadia site. Image: Newcrest Mining.

Safety and sustainability drive operational outcomes, according to Newcrest Mining chief development officer Michael Nossal.

In a keynote address at the International Mining and Resources Conference, Nossal told delegates they only had to “look at the conference program or stop and talk to some of the people demonstrating outside to understand how the sustainability message is really affecting everything we do.”

“…It is more and more common that each new project is undergoing higher and higher levels of scrutiny,” Nossal said.

“What that means is that it is more challenging to get a new project up and in particular we have to think about time frames.

“People talk about a licence to operate; we like to think that if we get this right, we have a licence to grow.”

Nossal said the Newcrest had to walk into new communities, sit with new governments and set out how it operated to earn a social licence to operate.

The company had to “basically pass this test every time” it looked at moving into a new country, he added.

“But we actually have to deliver on these promises from the very beginning. We have all probably, in this room, been associated with projects that have gone wrong from that first interaction; the first time a geologist walks over a piece of ground,” Nossal said.

“We think Newcrest has made significant strides in the past few years. Mainly about being more explicit on our commitments. From a business point of view, it is straight forward; if we get this right, we will have the licence to grow.”

He said the company was also proud of its achievements around safety. The goal was to be achieve zero fatalities and be industry leading for total recordable injuries frequency rate by the end calendar year 2020.

The company has achieved zero fatalities for the past four years and was industry leading for total recordable injuries frequency rate.

“There has been significant progress in our lagging indicators, however in safety I like to say we are only as good as our last five minutes,” Nossal said. “It’s a continual struggle and you never give up on something.”

Nossal said Newcrest’s asset mix – Cadia Valley (New South Wales), Telfer (Western Australia), Lihir (Papua New Guinea), Gosowong (Indonesia), Red Chris (Canada) and Golpu (Papua New Guinea) – gave it several unique attributes.

“Cadia and Lihir have two of the largest operating gold reserves base in our pier group. This large gold endowment…enables us to be patient and gives us time to make decisions that are aligned to our focus on cash generation and shareholder value,” he said.

“We don’t believe that reserve size or gold production for the sake of it is a proxy for value creation. Instead, we are about safely generating the most cash we can from our existing asset base and sensibly growing our business profitably with a focus on that value creation.”

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