Personality profile

Don Lindsay is a very likeable guy–soft-spoken and boyishly fit-looking. A mid-April interview in Vancouver revealed that Lindsay combines a thoroughly analytical mind with a keen interest in people.

The 46-year-old Toronto native earned a BSc in mining engineering from Queen’s University (Kingston, Ont.) in 1980. (“I’m probably one of those people who went to Queen’s and never got over it,” said Lindsay.) His initial post-graduation job was at Iron Ore Co. in Labrador City, first as foreman and then involved in mine planning and design.

He soon moved into mine finance, doing an MBA at Harvard University (Boston, Mass.), and then joining Wood Gundy in 1985, to start up its mining group. The group has since grown to six offices around the world, and is part of CIBC World Markets Inc. He left CIBC World Markets in 2004, where he was president, as well as head of investment and corporate banking, and head of the Asia Pacific region. Of his time with CIBC, he says, “You really become a student of the industry, because you’re studying the strategies of different companies, trying to figure out what their next move might be. To do that well you need to know the chief executives of most of the companies, and they have to trust you. It’s a thrill to be involved with some of those people and the deals.”

Then came a new twist: Lindsay was invited to join the executive of one of those companies he used to study. In January 2005 he was appointed president of Teck Cominco Ltd., Canada’s 8th largest mining company (see “Top 40” article), and joined its board the next month. At the end of April, he succeeded David Thompson as CEO of the company.

This management change is also a departure for the company, which has been controlled by the Keevil family since the late Dr. Norman B. Keevil purchased controlling interest in Teck Corp. in 1958. Teck Corp. gained controlling interest in the much-larger Cominco Ltd. in 1986, and the two companies formally merged in 2001. Keevil senior was succeeded as president in 1982 by his son Norm Jr., who added the title of CEO the next year, and who is now chairman. Long-time employee David Thompson was the next CEO, from 2001 until this year. (Through Temagami Mining Co., Keevil Holding Corp. is still the largest shareholder, controlling 33.1% of the Teck Cominco shares.)

Over the years Lindsay has learned lessons that he will be applying to his new job, such as: “You’re never smarter than the cycle. There’s a very good commodity cycle right now, because of the economy in China. But one thing you know for sure is that there will be a down-cycle. You have to manage the company and your assets with that in mind all the time.”

The analyst in him finds it intriguing that so few mineral deposits have been found by global exploration in the last two years, despite easy access to money. “A large amount has been raised,” says Lindsay, “one investment dealer told me it was as much as $5 billion; another said $3 billion–but not much has been discovered from that. The two most notable deposits are Oyu Tolgoi [Ivanhoe Mines’ copper-gold project in Mongolia] and Placer Dome’s Cortez Hills gold deposit [in Nevada]. We have yet to see a cluster of five or six major discoveries close together. I think we’re still two years away from that, and the limitation is more related to people than to money.

“The down-cycle was so long, from March 1997 until not long ago, that a lot of consolidation took place, and unfortunately the exploration end of the business gets hit pretty hard in the down-cycle. It takes time to reassemble those teams of people, for people to get their land positions and the initial surveys to be done, and for the first drilling to take place. You can almost plot it on a curve–a people skills-related curve.

“Many of the people who left the industry [during the down-cycle] will come back, but you lose half a generation, especially the more senior people. When you get extensive consolidation–BHP and Billiton, RTZ and CRA, MIM and Xstrata, Cyprus Amax and Phelps Dodge, Barrick and Homestake, Teck and Cominco, Noranda and Falconbridge–you end up with two or three exploration groups consolidated to form one. They have to be built back up to the same level of activity, knowledge and experience.

“It all comes down to people’s interpretations of the data. It almost wouldn’t matter now if there was any more money, because the people have gone.”

So what’s a CEO to do? “I will be spending a lot of time with people on the front lines. We’re having a world-wide exploration conference next week in Townsville [Australia], and we’ll have a similar operators’ conference in June. You can see how the industry is really competing for people. It’s so much better to retain the good employees than to try to replace them. We’ll be spending a lot of time making sure careers are developed, so we can be an employer of choice.

“We’ve had the ‘partner of choice’ niche for some time, which is all about relationships with people. You want people to bring their properties to you, to want to work with you. This is important, because there is also competition for properties. The cash flow generated by the top 15 companies so far in 2005 comes to roughly US$48 billion. Most of that will be invested in building new mines. Also the banks, the bond markets and the equity markets are all wide open now, but very few properties have been discovered, so the prices of those properties has got to go up. There’s more demand than supply.”

Mining companies are having no trouble attracting investors these days. “Certainly we’ve come a long way from the ‘dot com’ days,” Lindsay agrees. “I would hope that people have a renewed appreciation of just how good the mining industry is. It should be self-evident that, ‘If you can’t grow it you have to mine it,’ but we probably have to invest even more in educating the public about how important it is to their daily lives.”

Lindsay traces his ties to the company back to when he was 11 years old. “In our lobby you can see drill core from the Temagami copper mine [in northern Ontario], discovered 50 years ago. Ironically it was the first mine I ever visited. I was on a canoe trip with my father, and it was just a coincidence that we ended up there, but something about that makes me feel that this [company] is the right place to be.”

The timing of his arrival couldn’t have been better. “The company’s in fantastic shape. We are really benefiting from people having worked so hard during the down-cycle–the team of Mike Lipkewich [senior vice-president mining] has really been performing, as well as Roger Brain [senior vice-president marketing and refining] and his team at Trail and the marketing and sales operations. When I accepted the job in November [2004], I thought the company would be net debt-free by the end of April; it was net debt-free the next month! It’s a terrific situation; you just hope you don’t mess it up.”

Lindsay points out that this is a managed transition of power, with no radical changes in philosophy. “The key now is to build from where it is, to do whatever we must do to find or acquire new mines. That’s the most important job for the company.” He has a couple of built-in mentors. “Although David Thompson is retiring, he is remaining on the board, so he will be close by and I will be consulting him frequently. Plus my office is right next to Norm [Keevil]’s.”

And how does Lindsay plan to spend his spare time? “Outside of work I have my family life. My daughters are 5 and 7 years old. For 15 years my main vacation was a canoe trip to the far north. My father’s too old to do that now and my daughters are too young, but I’ll be back to doing that. I’ve certainly taken them on their first canoe trip.”

We say goodbye to Don Lindsay as he heads back to the wilderness of Vancouver’s downtown waterfront and a sometimes- fickle marketplace.

***

The modest David Thompson retires…

W’ho’s the friendly, 65-year-old gentleman doing his utmost to put a
frazzled reporter at ease? He is David A. Thompson, the very person who’s happy to take a pie in the face for a good cause, and to strong-arm all his friends in the Vancouver mining community to do the same. (Thompson’s pie alone raised an amazing $205,000 at “Mining for Miracles”, the B.C. Children’s Hospital annual fundraiser last fall.) He plans staff celebrations, attends retirements, and is the longest-serving board member of the St. Paul’s Hospital Foundation (14 years). And till the end of April this year he was also chief executive officer and deputy chairman of Teck Cominco–a very smart, aggressive, diversified international mining major based in Vancouver.

I am interviewing Thompson in his Vancouver office just two weeks before his retirement. He joined the company 25 years ago as vice-president finance and CFO, and has seen it grow from a company with interests in seven small metal mines, through its amalgamation with Cominco, to what it is today–a major base and precious metals miner with interests in six large mines and two smelters/refineries, and a major player in Canadian metallurgical coal mining.

Thompson was born in the United Kingdom, and educated in economics at the London School of Economics (1960), plus he completed the Harvard Business School Advanced Management Program in 1976. He joined Teck Corp. in 1980 as CFO, following 10 years in South Africa where he was co-managing director of Messina (Transvaal). He became CEO of Cominco in 1995, and has held the position of deputy chairman and CEO of Teck Cominco since 2001.

He reminisces: “I joined Teck because it was a young, exciting company and I hoped it would work out. Bob Hallbauer [then senior vice-president] and Norman Keevil [then executive vice-president] had already started growing the company, and all I did was join the team.

“The highlight of my time here has been that we successfully grew the company from a very small base to a very sizable company now. If you look at it deal-by-deal you miss the point; really the day-to-day organic growth of the company is much more important.”

And it has grown. In 1979, Teck had revenue of $138 million and $40 million in cash flow. The revenue of Teck Cominco in 2004 was $3.4 billion and cash flow was $1.1 billion. That’s a 24-fold increase in revenues and a 28-fold increase in cash flow over 25 years. Net earnings were also up 27 times over that period to $617 million.

Financials are only one of the high points for the company. Last October, Thompson received the first-ever Individual Impact Award from Ethics in Action. The award was for leading by example and championing social responsibility in business practices. Besides leadership in health as well as the environment of the communities where it works, the award commended Teck Cominco for the support it gave to the town of Kimberley, B.C., in the decade prior to the closing down of its Sullivan mine.

About retiring from his job, Thompson says, “I will miss the interaction with people–the management group, going to the sites, taking care of the customers–but I’m not sure I’ll miss the pace of it.” He will retain his positions on the boards of Teck Cominco and Fording Canadian Coal Trust (Teck Cominco’s partner in the Elk Valley Coal Corp.) and will continue working for both the B.C. Children’s Hospital Foundation and St. Paul’s Hospital Foundation.

But his working life will take a new direction. He will co-chair the B.C. Competition Council, which is being set up by the provincial government to review the competitiveness of the major industries in British Columbia, starting with forestry, pulp and paper, and oil and gas. One of the attractions is that he’ll get to know a lot of new people.

And for Thompson’s closing remark to our readers: “This is a cyclical business. We all know it, but people often don’t behave that way. At the top everyone wants to spend as much money as possible. At the bottom everybody feels that we’ve had it and should go somewhere else. If you keep a level head, and realize that triumph and disaster are really two sides of the same coin, then you just ride it through.”

---