Barrick’s new CEO says shakeup of gold industry is just starting
Bristow cites too few assets, too much management
Barrick Gold Corp.’s new chief executive officer has a message for the gold industry: This is just the start of a big shakeup.
Barrick agreed to buy smaller rival Randgold Resources Ltd. in a $5.4-billion (U.S.) deal announced in September.
As part of the agreement, Randgold’s CEO, Mark Bristow, became the chief executive of Barrick, the world’s biggest gold miner.
“Without a doubt, this industry needs transformation,” Bristow said in an interview from New York, where the combined company started trading Wednesday.
“We believe we have started that. We’re going to end up with a blue-chip business and on the way, we’re not going to be sitting on our hands should there be other opportunities.”
By combining the two companies, Barrick says it will run five of the 10 best gold mines in the world, with operations from Nevada to South America and Mali and the Democratic Republic of Congo.
The deal happened at a time when gold mining has fallen out of favour with many investors after a year of lacklustre bullion prices and a recent history of costly takeovers.
“This industry, if it had carried on the way it was, was going to become irrelevant,” said Bristow, a South African geologist who founded Randgold more than 20 years ago.
The industry has “too few assets with too many management teams and it needs reorganization.”
Randgold’s more than 20-year listing in London ended Wednesday as its merger with Barrick was completed.
It’s been one of the U.K.’s most successful corporate stories, gaining more than 5,000 per cent so far this century.
While John Thornton will continue as executive chairman, Randgold personnel will populate much of the upper management.