NEW YORK (Reuters) - As gold prices have surged near $1,000 an ounce, miners' appetites for geopolitical risk have grown as well.
Executives speaking at the Reuters Global Mining and Steel Summit in New York this week defended operations in such far-flung locations as Mexico, Indonesia and the Democratic Republic of Congo, even as they said geopolitical risks were a major worry going forward.
"We don't have a list of places that we will and won't go, because I believe gold is distributed in the earth as it's distributed. We don't get to call that. So, we have to go where the gold is," said Newmont Mining Corp (NEM.N: Quote, Profile, Research, Stock Buzz) Chief Executive Richard O'Brien.
His company can afford to take a few risks since it has enough production in safe environments, he said.
"It's one of the great things about owning a larger gold mining company, is that we provide diversity -- diversity of production, diversity of exposure to various assets and technical diversity," he said.
Most executives downplayed the risks they face in the areas where they already have mines.
"You can't look at what is happening over the course of a month or a couple of months or a couple of quarters to come to a conclusion on what the geopolitical risk is," said Yamana Gold (AUY.N: Quote, Profile, Research, Stock Buzz) CEO Peter Marrone, speaking of his company's presence in Mexico. "You have to evaluate it over a longer time.
"There is a significant amount of violence taking place in the country today, but I don't believe that that will be something that will be sustainable, nor do I believe that it will impact mining activity in-country."
PRIOR DIFFICULTIES
Over the last several years, top miners have tangled with governments around the world over issues like environmental concerns and revenue sharing.
Freeport-McMoRan Copper and Gold Inc (FCX.N: Quote, Profile, Research, Stock Buzz) has had to deal with protesters at its Grasberg mine in Indonesia. A Newmont executive was also charged criminally there and later acquitted over alleged pollution in the water.
Newmont has also had to deal with strikes and protests around its Yanacocha mine in Peru and problems with a joint venture in Uzbekistan -- before it eventually left the country.
"This is becoming a bigger issue," said Goldcorp CEO Chuck Jeannes. "I can envision a world going forward where you continue in a worldwide economic recession, but we have high gold prices...Those are the kinds of scenarios in which we have seen governments look for more of a revenue participation in the past or even nationalization."
Jeannes touted his company's relatively low risk profile. He said the fact that 70 percent of its reserves are in NAFTA countries gives it a competitive advantage.
"I am not going to do something to destroy that...We are finding plenty of opportunities to grow within countries where we are comfortable operating," he said.
(Reporting by Michael Erman)
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