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Former CEO discusses mining in developing nations

| Wednesday, November 12, 2014

Wayne E. Murdy, former CEO of Newmont Mining Corporation, one of the world’s largest producers of gold, silver and copper, spoke Tuesday in DeBartolo Hall as part of the Engineering Distinguished Leader Lecture Series. He spoke about the impact of industrialization on poverty, using Newmont’s copper mine in Indonesia as an example.

Murdy briefly outlined the the scale of Newmont’s Batu Hijau mine in Indonesia and its 14-year road to commercial production to a crowd comprised of mostly engineering students and professors.

He said dozens of mechanical and chemical engineers, along with computer scientists, are employed to create, “the mine of the 21st century.” When the Batu Hijau has reached the end of its operation in 2036, it will be 2.5 kilometers deep and 1 kilometer wide, Murdy said.

Murdy emphasized the ability of industries, such as mining, to affect change in communities. He showed a video from a TED talk by Hans Rosling entitled “The Magic Washing Machine” to show how access to simple technology can drastically improve poor communities, and he explained how this applied to the Batu Hijau mine.

“Typically, when we go in a mining sense, we are going into areas that have not seen any industrialization at all,” Murdy said. “They mostly consist of subsistence farmers or fishermen, living from day to day. This is a way to bring jobs and to bring training and impact people’s lives.”

The Batu Hijau power plant benefitted its local community by providing locals with cheap electricity and reducing the local malaria rate by 24 percent. Murdy also testified to the impact of education and formal training on the locals.

“Many of you have been to graduations here at Notre Dame,” Murdy said. “You know what a happy occasion that is. [The graduations from the training facilities] are as good an occasion or better to watch.”

Murdy said Newmont consciously phased out the high amount of expatriates working at the mine in favor of hiring local workers. He noted that the current manager of Batu Hijau is Indonesian.

Murdy warned of the ethical and environmental dilemmas that coming with building mines in third-world countries.

“Working in the developing world is not for the faint of heart,” he said.

Murdy noted the significant drop-off in environmental and ethical standards in developing nations. He stated that companies must decide whether they will operate by low standards or the standards of the United States. He also noted that in countries like Indonesia, corruption is ubiquitous. Newmont’s mine emphasized how its mine would not operate by corruption.

“We have a policy of zero harm, zero tolerance,” Murdy said about bribery. “If you start down that path it never stops.”

Murdy said only 2,000 of the 60,000 applicants received jobs, which can result in some jealousies within the community. However, he said, the relatively high wages that the mineworkers receive have a substantial impact on the community.

“In the past 25 years we have seen a 21 percent decrease in the number of people living in extreme poverty,” Murdy said. “Where does that credit go? Let me tell you, it does not go to foreign aid. The change in the level of extreme poverty came from industrial activities.”

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