UBC Theses and Dissertations

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UBC Theses and Dissertations

Management of socio-political risk arising from corporate transitions : the Mt. Milligan experience Thomson, Garth Connor


Changes in management and/or ownership at mineral exploration and mining projects can cause a regression in corporate-stakeholder relationships, as the changing faces and attitudes can lead to breakdowns in communication, misunderstandings, and heightened risk of conflict. Failure to maintain positive relationships with stakeholders can lead to significant costs for proponents, and is frequently cited as one of the most pressing issues facing the mining industry. By examining the Mt. Milligan mine in central British Columbia, Canada, as a case-study, this thesis provides an analysis of how successive management teams endeavored to mitigate socio-political risk by building relationships with local stakeholders, and specifically how these relationships were impacted by successive changes in management and ownership. Interviews with managers from the three most recent proponents of Mt. Milligan were conducted to collect data on perceptions of socio-political risk and the execution of corporate transitions. The study also incorporates perceptions of the Mt. Milligan experience drawn from interviews with local and regional stakeholders, including First Nations groups and neighboring municipalities. Information from the interviews was scrutinized using data analysis software, and collectively reviewed for main themes and patterns over time. The research also included a historical document review, and a field visit to the mine region. This study finds that the levels of socio-political risk arising from a transition are linked to: effective due-diligence, corporate culture and experience of the proponent, and community experience and capacity. Effective mitigation of this risk is linked to: transfer of personal relationships, quality and frequency of communication, creation of institutionalized stakeholder engagement mechanisms, and preserving an institutional record of social engagement and commitments to communities. A strong relationship is noted between the experience of managers and community members during Mt. Milligan's development history, and the ideas conveyed by the current literature on socio-political risk management in the mining industry. In summary, this study delivers a review of the historic mitigation of socio-political risk at Mt. Milligan arising from multiple changes in management and ownership. Lessons drawn from this review inform key strategies that can be employed in the management and mitigation of socio-political risk at future projects. The study advances the current dialogue surrounding stakeholder relations in the mining industry, and contributes to an improvement of industry practices addressing the management of socio-political risk through transitions in the management and ownership of mining projects.

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Attribution-NonCommercial-NoDerivs 2.5 Canada