Canada’s Gold Tycoon

For one of the world’s most successful gold tycoons, Canada’s Peter Munk seems to hold no special regard for the yellow metal. In less than 10 years, the Hungarian- born magnate’s Barrick Gold has emerged as the world’s third largest gold producer. With a pending deal to develop the $20 billion Busang deposit in Indonesia, Barrick may even outstrip South Africa’s Anglo American for the No. 1 spot. Yet, says Munk, he is no gold bug. “For a Canadian, natural resources were a good fit,” he conceded recently from his corporate headquarters in Toronto. “But you don’t get into a business because of personal tastes.”

True to his word, Munk is cutting another swath, this time in real estate. With his TrizecHahn corporation, he is the second largest developer in the U.S. (with 32 shopping malls and 39 office properties in Manhattan, Atlanta, Denver and elsewhere), and he is expanding into Eastern and Central Europe, Asia and South America.

Born in Budapest, Munk immigrated to Canada in his teens, after World War II. He studied engineering at the University of Toronto before launching a consumer-electronics firm in the 1950s, only to see it succumb to U.S. and Japanese competition. Munk then built a chain of resorts in Fiji, called Southern Pacific Hotel Corp., and next dabbled in oil and gas, but lost heavily when energy prices collapsed in 1982. Munk turned to gold, he says, only when political unrest in South Africa during the 1980s presented what he saw as an irresistible opportunity. Hunting for safe neighborhoods to mine, he settled on the northern Nevada desert and set about convincing investors that this was the time to gamble on North American gold. Those who believed him were soon rewarded. Goldstrike mine, near the town of Elko, has become the largest mine outside South Africa.

Munk credits his success to determination and the ability to set priorities. “I’m not exactly an Einstein, so I compensate by being more focused,” he says. He also makes a point of hobnobbing with the right people. Nearly two years ago, Munk formed a blue-chip advisory board at Barrick whose members include former U.S. President George Bush and former Canadian Prime Minister Brian Mulroney, as well as former Bundesbank chairman Karl Otto Pohl.

Munk’s taste for authority figures has drawn some criticism. When he praised Augusto Pinochet Ugarte recently for the former Chilean strongman’s contribution to economic reform, some Canadian commentators took him to task for ignoring the dictator’s human-rights abuses. Munk still bridles at the charges but notes, “Maybe I’m less sensitive to these issues because I see that what people need first is economic security, and only when they have that can they afford to focus on human rights.” The alternative to liberalized economies, he argues, “is the true enslavement of the people.”

–By Andrew Purvis