You are here

Builder of world's biggest gold mining company dies

BT_20180402_NAHMUNK2_3375176.jpg
In 1986, Mr Munk bought Goldstrike, a mine in Nevada that was estimated to hold 17 tonnes of gold. As it turned out, it held more than 600 tonnes.

New York

PETER Munk, the Canadian who built the world's largest gold-mining company died on Wednesday in Toronto. He was 90.

Barrick Gold, the company he founded, announced the death but did not give a cause. Mr Munk wore a pacemaker and had dealt with heart problems for several years.

A former escapee from Nazi-occupied Hungary, he initially tried out several different lines of business including stereo equipment and resorts in Fiji. Not all were successful, but he was undeterred by his failures.

sentifi.com

Market voices on:

Barrick itself started out as an oil company that endured three years of losses. Then Mr Munk began acquiring gold mines in Canada and the US. Most were small ventures.

But in 1986, he bought Goldstrike, a mine in Nevada that was estimated to hold 17 tonnes of gold. As it turned out, it held more than 600 tonnes, making it the richest deposit outside of South Africa at the time.

Barrick grew through expansion, and with the acquisition in 2006 of British Columbia-based mining company Placer Dome, it became the world's largest gold miner.

And it made Mr Munk immensely wealthy, though there are few good estimates of his fortune. He controlled Barrick without holding most of its shares. In 2013, it was estimated that he owned only 0.2 per cent of its stock.

But Mr Munk led the life of an international billionaire. He had three homes in Ontario and houses in Paris and Switzerland, where he remained a keen skier late in life, and took to the sea in a 40m-long yacht, the Golden Eagle.

His associates included Prince Charles; fellow billionaires like Bernard Arnault, the chairman and chief executive of the French luxury goods maker LVMH; and Brian Mulroney, the former Conservative prime minister of Canada.

As Barrick expanded globally, Mr Munk often dealt with governments with widely-condemned human rights records. He devoted part of Barrick's annual meeting in 1996 to praising the economic programme of Augusto Pinochet, the former military dictator in Chile, although Mr Munk subsequently condemned Mr Pinochet's human rights abuses in a letter to the newspaper The Globe And Mail.

An electrical engineer by training, Mr Munk often attributed his success at Barrick to his lack of a mining background. That meant, he said, that he made decisions about his company almost entirely from a financial perspective, introducing measures that offset the inevitable financial risks of mining.

"For 100 years, it was assumed that a successful mining company had to be run by miners," he told The Economist in 2014. "What I did know was how to run a business. The investor doesn't give a damn about what you know about mining. They want results."

For all of Barrick's later success, it was his stereo equipment company, Clairtone - Mr Munk's first big venture and his greatest humiliation - that most shaped his approach to business.

"Clairtone was the single most formative experience in my life, because it was so traumatic," he told The New York Times in 1993.

He set off to manufacture stereo equipment in 1959 with David Gilmour, a friend, and the help of C$2,800 (S$2,842) from the father of Mr Munk's first wife, the former Linda Gutterson. The audio gear became popular internationally as much for its futuristic design as for its sound.

The company's success led to a move from Toronto to a large manufacturing plant in Nova Scotia, drawn in part by the province's offer of C$7 million in assistance. Overwhelmed by a variety of problems, however, including an unsuccessful move into television and poor management of the company's growth, the founders were ousted in 1968. Clairtone collapsed six years later.

Munk was born into a Jewish family in Budapest, Hungary, on Nov 8, 1927. When the Nazis occupied Hungary in 1944, his grandfather Gabriel, a chocolate distributor and real estate investor, used most of the family fortune to secure train passage to Switzerland for 14 family members.

At 20, Mr Munk left Switzerland for Toronto on a student visa to study at the University of Toronto. The odd jobs that financed his studies included selling Christmas trees.

"When he landed in Canada, he was stunned by what he viewed as a relatively pleasant atmosphere," said Anna Porter, a friend.

Throughout his business career, Mr Munk publicly bemoaned the sale of Canadian corporations to foreign investors. "He chose to see himself as a nationalist," said Ms Porter.

Mr Munk is survived by his wife, the former Melanie Jane Bosanquet, whom he married in 1973; five children and 14 grandchildren. NYTIMES