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The Corporate Citizen, February 2008Section: FeaturesSuccess in Public-Private Partnerships: On Feb. 21 and 22, BCLC's Kitty Taylor interviewed Patrick Garver of the Barrick Gold Corporation and Governor Mike Rounds of the state of South Dakota. Barrick and South Dakota have a six-year partnership involving the development of a deep underground science and engineering laboratory. Kitty Taylor: Gov. Rounds, how long have you been governor of South Dakota? Gov. Mike Rounds: I was elected in 2002, and I began my term of office in January 2003. KT: Patrick, please tell me a little bit about your role at Barrick Gold Corporation. Patrick Garver: I'm the executive vice president and general counsel for the company. KT: Gov. Rounds, would you tell me about the South Dakota Science and Technology Authority, as well as the Homestake Mine? Gov. Rounds: The South Dakota Science and Technology Authority was created to receive and to operate the Homestake Mine in the town of Lead in the Black Hills of South Dakota, for the purpose of creating an underground science lab. We were able to acquire ownership interest in the Homestake properties from the Barrick Gold Corporation. However, since the deep underground lab was going to be a national underground laboratory, the Deep Underground Science and Engineering Laboratory, which would require Congressional funding, we've actually created an interim lab which we call the Sanford Underground Science and Engineering Laboratory. Currently, we are in the process of rehabilitating the structure. At the 4,850 foot level, it would be one of the deepest locations already available for underground research. In fact, there has already been research at the location in the past, so most of the scientists who work underground know about the 4,850 foot level at the Homestake Mine. At the 4,850 foot level, the Homestake lab would be one of the deepest locations already available for underground research.A gentleman by the name of Danny Sanford, a business person who has made South Dakota his home, donated $70 million to the creation of the Sanford Underground Science and Engineering Laboratory. $50 million is designed to fix up the 4,850 level and to go deep underground. This way, while we're waiting for Congress to work through the issues, the science community does not necessarily have to wait to see progress made on their studies of new types of energy and dark matter. By looking underground, the particles are being shielded from cosmic radiation, which means that scientists can look for particles they believe are created deep within a star. We see it as a huge opportunity to advance basic and applied scientific research. Because Homestake has over 350 miles of drifts and tunnels, the Deep Underground Science and Engineering Laboratory will be one of the first ever in which multiple fields of science will share the same facility. Kitty Taylor: Patrick, why the Homestake mine is important to your company? PG: This was an old mine that was first opened in 1876, and it was operated continuously by Homestake Mining Company for 125 years. In December of 2001, Barrick acquired Homestake Mining Company, but we acquired it just at exactly the same time the mine was being closed by Homestake. While we never mined an ounce of gold at the Homestake Mine, we did inherit the obligation to properly close the mine, clean it up, and reclaim the site. We've been doing that for the last six years, having spent approximately $100 million. While we never mined an ounce of gold at the Homestake Mine, we did inherit the obligation to properly close the mine, clean it up, and reclaim the site.As the mine neared closure, the state of South Dakota and the international physics community hoped to persuade Barrick to donate the mine and a significant amount of land and buildings around the mine for an underground research facility.
It may sound odd, but in the wrong hands, an 8,000-foot deep mine can present some serious risk to people or the environment, and that was something that we just couldn't be a part of. We worked hand-in-hand with the state for several years while they developed and refined a business plan for the research lab.So, we worked hand-in-hand with the state for several years while they developed and refined a business plan for the research lab. They arranged for the necessary public and private support to both reopen and refurbish the mine for use as a lab. That vision is now finally being realized. KT: Governor, why is the creation of this underground laboratory so important to your state? Gov. Rounds: When I first became governor, it was clear that we had young people who were leaving our state. Some because they wanted to do research; they wanted to move into areas of technology that we didn't have the facilities for. This laboratory will become one example of new research facilities in South Dakota. The mine also became a jewel that people focused on in terms of what would happen if we had a national laboratory here. Young people now in grade schools, high schools, and universities are focusing on research and technology like never before. Before, when I'd go to a small town and ask the youngsters what they wanted to be, there might be one or two who would say a doctor or a lawyer, while the others would involve mechanical activities like farming or ranching. Many of them would say, "Oh, I don't know, but I might have to leave the state." Now when I go back into small towns I hear people saying, "You know, I'd like to do research. I'd like to be a scientist. I want to be involved in something that's new and unique." Now they believe that they can stay in South Dakota, where they love the quality of life and they actually have a chance to participate in advancing research. It's kind of like going back to when we had the race to the moon, it grabbed our attention. KT: Patrick, what were some of the hurdles in the process of developing this public-private partnership? How you got to where you are today? PG: First we tried to do a deal for an underground research laboratory at the federal level, with the state's involvement, to be sure, but principally working with federal politicians and the National Science Foundation. We just couldn't get a deal done. It was too complicated politically to conclude a donation on acceptable terms. Then, South Dakota stepped in with a much more central role. The state and the governor's office proved to be a lot more nimble, a lot more creative and entrepreneurial. Ultimately, the state succeeded where the federal government couldn't. The state and the governor's office proved to be a lot more nimble, a lot more creative and entrepreneurial.I would say the key to that whole process was the state's establishment of the South Dakota Science and Technology Authority. It was really the Authority and the executive director of the Authority who were able to find solutions to the various issues that arose. The negotiation process was more difficult than you might imagine it would be to make a donation. The easiest and safest course for the company at the time really looked like to permanently seal the underground facilities and reclaim that portion of the disturbed area the same way as we have with the rest of the mining complex. A mile-and-a-half underground, it can be extremely hazardous. We weren't really willing to make the donation at all unless we were confident that it would actually become a research lab and that it would be run to the highest standards of safety. The state came to understand that and worked with us hand-in-hand to make us feel comfortable about donating the underground workings and a lot of the surface lands and buildings that they needed for the lab. KT: And that took about six years? PG: It certainly took a long time because the state needed to establish this authority, and they needed to raise a substantial amount of money. Plus, they needed to approach the whole thing in a business-like way because you can't just take title to a large underground mine. You have to have a plan on how you're going to run it, who's going to maintain it, and how you're going to ensure that it's safe for people. KT: Gov. Rounds, Dr. Kevin Lesko, the lead investigator for the laboratory proposal, has called the donation by Barrick "the single most critical achievement in the effort" to establish the laboratory. From your perspective, what were the ups and downs of this partnership process? Gov. Rounds: There had been an earlier attempt by our previous governor, Bill Janklow, along with Tom Daschle, Senator John Thune, and Senator Tim Johnson – to work through the issues of a donation from the Barrick Gold Corporation of the Homestake properties. The problem was that it was mired with liability issues. What we were able to do in working with Patrick — and I give Patrick a huge amount of credit because he stuck with us — was to remain accountable for what we were trying to do. Patrick allowed us to do the research necessary in order to put a good document together. We were able to find commercial insurance available that would protect the interests that Patrick had to be aware of for the Barrick Gold Corporation. Patrick, in making the state realize the enormous responsibility we would have once that abandoned gold mine became ours, made us dot our "I"s and cross our "T"s. He was the person who kept saying, "Now wait, let's not get ahead of ourselves. Let's make sure we do this correctly." He continued to hold us accountable and never stopped negotiations. For a person in his position, who has a lot of obligations and responsibilities, to take the time to work with one state and one abandoned mine showed us that he also understood the vision of what could happen at that location. To take the time to work with one state and one abandoned mine showed us that Patrick understood the vision of what could happen.We could not have done this it if wasn't for the generosity of the Barrick Gold Corporation. They said, "Look, we don't want anything from this. We just want to be protected adequately. We want to make sure that you know what you're getting into, and as long as you do that, we don't want anything from you. We will gift it to you." And they have. What a marvelous example of a responsible business that Barrick Gold Corporation offers to the rest of the business community. KT: What is the current status of the laboratory? Gov. Rounds: We're going underground. Our rehab specialists are down below the 2,000 foot level and rehabbing the facility, because we're bringing it up to a different standard in terms of the entryway and the exitways over what it would be for a mining project. We're bringing it up to a standard in which scientists and their students can safely come in and leave. That's an obligation we have not only to the scientists and their students, but it's part of a commitment that we made to the National Science Foundation. We're not sending anybody down there until it is as safe as we can make it. That's a commitment I made to Patrick Garver as well, and we're going to honor that commitment. We said we were going to do this right, and we intend to. KT: I understand that some educational collaboration is already taking place there? Gov. Rounds: Yes. Because there's over 350 miles of drifts and tunnels in here, as they begin to reopen it after being closed for a while, it's an opportunity for microbiologists and geologists to be able to see what has changed within the structure itself. They are also putting together a seismology laboratory because they want to be able to take a three-dimensional look at what happens if there are volcanic events or earthquakes elsewhere in the United States. Because the Black Hills of South Dakota are extremely stable and not at a spot of a lot of plate activity, you can measure sound coming through these particular types of rocks three-dimensionally.They're already in the midst of putting in sensors as they continue to move down into the deeper parts of the mine. KT: Patrick, are you still involved with the Homestake site, and what's Barrick's presence in the state of South Dakota today? PG: We're doing a lot of environmental monitoring to ensure the success of the work that we've already done in terms of closing the mine. We're also running a water treatment plant in Lead to ensure the protection of water quality, and we're doing a little bit of additional reclamation. But most of the heavy lifting, most of the most serious work and reclamation is done. KT: How does the donation of the mine align with Barrick's philosophy of corporate citizenship? PG: Our approach, with respect to all of our mines, whether they're new mines that we're building in the United States and around the world, or old mines that we've inherited as the result of acquiring other companies, is to try to leave the community in a state where it can continue to benefit from Barrick's involvement after we're gone. We look for opportunities to ensure that the communities remain sustainable after we're gone.We look for opportunities to ensure that the communities remain sustainable after we're gone. We did that in a number of ways in Lead, the most visible among those was the donation of the mine for the lab. In addition, there is also quite a bit of land and buildings, which will ultimately be used for education and lab support facilities. KT: Gov. Rounds, what are the projections of the economic impact this will have for South Dakota? Gov. Rounds: The individuals who have worked at other national laboratories just very calmly look me straight in the eye and say, "You measure it in billions of dollars." Naturally, we are interested in the economic impact. However, what I'm really interested in is the science and educational impacts that it will have on the young people that need a place to advance their skills. I see the lab as a center where young people can come and participate in the Black Hills, which is a beautiful area. It's a vacation area, but it's also a spot where they can come with their professors and participate in research. That's The $70 million gift that Denny Sanford has committed to us includes $20 million for an outreach facility to be built at the top where the mine entry is located. The reason for this is that I think it's critical that scientists have a place where they can go to share what they're trying to do with students from around the country and around the world. It's critical that scientists have a place where they can go to share what they're trying to do with students.This will enable us to get other scientists to come and share their story and share the research in a way that's fun for kids. We have to get kids actively involved in technology in the 2nd, 3rd and 4th grades because by that age, they've decided whether or not they have an interest in science and math. Our goal is to find matching funds from other corporate sponsors so that we'll have the money available to invite scientists to come in and to share their stories. KT: Governor, how do you envision other states being interested in this? Gov. Rounds: I think part of it will come from their science communities. Even though, at the national level, the country is really strapped for cash, South Dakota has made plans and we're still continuing in our quest to go to the 4,850 foot level, which is as deep as we're going to go anyplace else in the United States. Second, we're trying to make it available to other states. South Dakota is not seeing this as a profit center. We're seeing this as a place where research can be done, and we want them to see it as a location where they can further develop possible scientific breakthroughs. We think it's an excellent opportunity for the study of certain types of science that can't be done at surface level. Maybe breakthroughs can be made, if the science community has the laboratory at the right depth to actually be able to capture the types of particles that they're looking for. KT: Is this lab one of a kind in America? Gov. Rounds: At the depths that we are talking about, yes. I think you'll find Fermi (Fermi National Accelerator Laboratory) having an interest in what's going on here. The University of Minnesota has a laboratory which is about 3,300 foot underground, and that's worked well for them. There may very well be opportunities to participate in mutual experiments. What we're looking at right now – and we're doing our best not to limit – is inviting all of the different folks who have had an KT: Patrick, the partnership was nominated for this year's National Governors Association Public-Private Partnership Award, and Barrick won. What does this recognition mean to your company? PG: Well, we were surprised, but we're also delighted. It's terrific to have someone recognize some of the success stories with your CSR work. Most of the work we do along those lines is very low profile, and we're not doing it for the publicity; we're really trying to make an impact on the communities. And to be singled out and recognized is a very nice thing. To be singled out and recognized is a very nice thing.KT: Patrick, based on your experience with this partnership, do you have any learnings you'd like to share with other companies that might be seeking meaningful ways to build partnerships with their state government? PG: One thing I learned from the process which has been helpful to us everywhere else that we're doing business, is that you have to be flexible and creative and that there's no single formula for benefiting a community. Here, the key was letting the community take the lead, sort out what it wanted, what it needed, and to be supportive. We've tried to remain supportive throughout the whole piece. You really want to work with the community, because ultimately that's who has to define what they want at the end of the day. KT: Governor, what has the partnership-building experience been like for you? Gov. Rounds: Well, I come from a business background to begin with, so I tried to approach this from a business scenario when dealing with Patrick. What should we do to gain your favor? What should we do to gain your approval on what we're trying to get done? I wanted to create a businesslike relationship. We wanted to identify the issues that would stop us from completing this business deal and take our time to work through it. They knew much more about underground laboratories than the state of South Dakota did. So, we really tried to get the point across that we knew what our goal was, and that we would work in a businesslike manner. And that's the way they approached it also. Barrick never quit; they never gave up on us. In addition, if it hadn't have been for people like Dr. Lesko, who stepped in and shared his vision to keep the science community with us and supporting us, this opportunity that we have today just wouldn't be here. KT: What else would you like our readers to know about this partnership? Gov. Rounds: This was a dream that's becoming a reality, and it's taken a whole lot of people to make it happen. It took the Barrick Gold Corporation to agree to generously donate this. It took people like Dr. Kevin Lesko, who has stayed with us through all this. It took a gentleman by the name of Professor Mann who stepped in and who has been a mentor to many scientists, who just said, "This is the right place for it to occur." This was a dream that's becoming a reality, and it's taken a whole lot of people to make it happen.It took former elected officials, many of whom are not even in office any more, but who all agree that this was a bipartisan effort and that it was too big not to cooperate on. The South Dakota state legislature has shown incredible support. It authorized $39 million in spending for the creation of this lab. We had 99 out of 100 votes in favor of approving the spending. So it's been a whole lot of people that have really joined together to make this work. # # # Editor's Note: Dr. Kevin Lesko has provided a summary of research and experiments that are already taking place at the Homestake deep underground laboratory. Read about them here.
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We were very supportive of the concept, but we were unwilling to make the donation until it was clear that the state could commit the substantial resources to hold, operate, and maintain the mine in a safe and sustainable manner. 
interest in underground research to come in and to participate with us. But it wouldn't have happened if it wouldn't have been for Barrick Gold agreeing to help us.
