The mindful miner

Vale’s base metal boss and Canadian CEO Jennifer Maki believes in building bridges, staying connected and delivering results. And she does it her way.

It was a February Friday in 2007. Jennifer Maki was given a choice. At the time, Maki was assistant treasurer at Vale Canada, a subsidiary of the biggest iron-ore mining company in the world, Rio de Janeiro-based Vale. Like lots of Vale’s senior positions, Maki’s duties were moving to head office in Brazil. The question was: would she rather take an 18-month buyout package or stay with Vale in Toronto in a yet-to-be-determined position?

The buyout looked appealing. In the months leading up to Vale’s offer, Maki’s world had gone through seismic shifts, and in the process, friends, colleagues and fellow executives either left or were asked to leave the company. There was little doubt she would find other work.

Her rise to the senior ranks of the company had been meteoric, beginning in 2003. After 10 years as a CA with PricewaterhouseCoopers in Toronto, Maki had accepted an offer from the client whose file she had been auditing for nine of those years, giant nickel miner Inco. A few years later, Inco found itself the object of worldwide attention during a protracted and dramatic takeover battle that climaxed in August 2006, when a surprise bid for the publicly traded Inco was announced by Brazil's Vale (pronounced vah-lay). The deal ultimately cost the Brazilians about US$17 billion.

The purchase rocked the industry. Suddenly, the very profitable 100-year-old nickel giant was off the stock market and out of Canadian hands. Vale imported a new corporate culture and Canadians who had worked for Inco were viewing their new bosses with suspicion and fear. Morale sank. Retired Vale smelter worker Chris Palmaro, 60, of Sudbury, Ont., worked 30 years for Inco, then Vale. The difference was “night and day,” he says. “Why do you think I retired early? We figured Vale would be taking profits off the backs of Canadians and spending them on their South American operations.”

What’s worse, Vale’s iron-ore operations were in debt; the price of nickel and iron ore was starting to decline and Vale Canada’s future was uncertain. There was some talk of splitting it off in an IPO, an idea Vale eventually decided against.

On the other hand, Maki was only 35. She had been at Inco and Vale through some of the most exciting times in the history of Canadian mining. “It was 2005 when Inco made the bid for Falconbridge [its chief competitor in Sudbury] and from that time to the following August, when Vale made its bid, there couldn’t have been a more exciting period to be involved. I remember you’d wake up and be the business news of the day. Most people don’t get that in a lifetime,” she says.

Maki had also fallen in love with the mining business. PwC had sent her to Arizona to learn about the complexity of the mining process, and the broad range of issues she faced at Inco, she says, invigorated her. “I’m a person who likes challenge.”

Finally, Maki is also bullish about nickel. “One of the things we’re excited about is the proliferation of electric vehicles. The batteries use a high amount of nickel. Today there’s about 60,000 tonnes of nickel going to that market and by 2022 and 2023 there are estimates that the number will grow to 250,000.” She believes the price and demand for nickel are on the rise.

Vale gave her until Monday to make up her mind.

Today Maki, CEO of Vale Canada and executive director of Vale Global Base Metals since 2014, has about 16,000 people around the world — from Voisey’s Bay in northern Labrador to the South Pacific island of New Caledonia, including Taiwan, Indonesia, Brazil and Japan — calling her boss.


The Kitchener, Ont.-born daughter of former Canadian Olympic hockey player Ted Maki and his wife, Dorothy, has faced issues including falling nickel prices, culture clashes, increasingly stringent emission-control regulations, miners getting crushed to death and competition from low-cost producers in zones with minimal labour and environmental regulations. In an indebted company that was spending billions on new capital projects, Maki not only shaved costs, but she also unearthed at least one innovative revenue stream that helped Vale Base Metals return to profitability. Included in Maki’s portfolio is a huge US$3.5-billion copper mine in Brazil called Salobo. Copper mines typically produce other minerals, including gold, as byproducts.

When Vale bought Inco 10 years ago, it incurred a huge debt. Maki figured that a way to help pay down that debt was by pre-selling or “streaming” the gold that was coming out of Salobo at a premium to another company, Silver Wheaton. It was a tactic that had been used by junior mining companies, but never by a major international company like Vale.

“It was a pretty neat thing,” Maki says. “We built it for $3.4 billion or $3.5 billion but we stream the gold from Salobo, so in 2013 we had very high capital commitments and the nickel price was starting to decline. We had to stand on our own two feet so we sold forward the gold from Salobo for the life of the mine. I think it really surprised the market. It’s something we’re very proud of because it opened up a source of streaming to major mining companies like Vale.”

“She definitely broke new ground there,” says Scotiabank’s managing director, Jeff Richmond, who was Maki’s financial adviser on the project.

She also bridged corporate cultures. Brazilians had a production-oriented style that didn’t wash with the Canadians. One Vale insider says Canadian workers had an attitude of entitlement. Another Vale employee says that with Inco, everybody would get year-end bonuses but there would be no accounting for the amount. Vale also gives bonuses but they’re based on measurable results. “So at least now I know what I’m supposed to do to get a bigger bonus,” says the insider.

And a testament to Maki’s bridge-building skills comes from the president of Local 6166 of the United Steelworkers union in Thompson, Man., Les Ellsworth: “Jen’s very transparent. And that’s good for morale. She tells us how Vale’s doing and she’ll answer all your questions. I’d rather be dealing with her than anybody from Brazil.” Leo Gerard, the Sudbury-born and now Pittsburgh-based international president of the USW, says the thaw in the union-management relationship can be attributed to the fact that Canadians are back in charge and they are much better attuned to the local scene.

“In those first few years,” says Maki, “there were some challenging times, but where I stood out was I was able to navigate through on a relationship basis with personal day-to-day contact with people. People’s jobs are impacted and you can get overwhelmed by the negativity of it all. Other people look to you as a leader and you acknowledge that you have a period during which you can mourn the changes but then you have to get on.”

Beena Narwani, Vale Canada’s comptroller, has worked with Maki since Maki was an auditor for Inco. “If anybody ran into Jennifer on the street they would never think she’s CEO of a multibillion-dollar mining company, because she’s down to earth and approachable. But don’t make a mistake. She expects you to perform and deliver.” She is easy to work with, she makes you comfortable, says Narwani, but don’t think it means you can get away with sloppy work. “She expects high standards.”

“Jen is a happy person; very strong; but she does show vulnerability. A few years ago, we were having layoffs. It really hurt her to let people go. She does show that feeling side of her. She’s not afraid to make the tough decisions but when she does, she makes them in a human, caring way," Narwani says.


That human side of mining — the fact that so much of the company’s wealth is derived from men working deep in the belly of the Earth — is impossible to ignore, even in the company’s splashy downtown Toronto offices. Along the hallway leading to Maki’s office on the 16th floor of RBC Plaza hang eight oil paintings — detailed depictions of the mining life in oily tooth and muddy claw as depicted by the late artist Terence Cuneo. There’s a painting of the inside of a factory at Port Colborne, Ont., and another of an exploration camp in Manitoba in 1964.

The most riveting painting, though, is the close-up of a miner in full protective gear wielding a drill, boring into a rock face deep underground. The title plate reads: “At the stope of the Frood Mine, 1955.”

Vale closed the Frood mine in 2012. And when a mine closes, a community mourns. Ron Sarazin lives outside Sudbury in the town of Onaping. His father was a miner; Sarazin himself spent eight years underground and now works in an employment development agency in Sudbury. “When a mine closes, it hits a town like an earthquake,” he says. “Even though you know it’s coming, it comes as a shock. You boom, you bust, you boom, you bust — that’s the way it is in mining. But when the mine closes, you not only lose the people who move away, you lose their kids, the future.”

Frood was connected to another mine called Stobie. In March, Vale announced Stobie’s shutdown. And Maki handled the Stobie closure masterfully. “Nobody could have done it better,” Vale’s Brazil-based group CFO Luciano Siani Pires says. “The inertia leads you to always be hopeful that something will improve and then you engage in another cost-cutting program. Any other person would have taken another two years to get to the same place.” Her plan: celebrate the legacy of the mine’s contribution to the community, but look ahead.

“Vale is committed to our future in Sudbury,” Vale announced in a press release. “Over the past decade we have invested US$4.7 billion to modernize and upgrade our operations. In this prolonged period of uncertainty in the base metals market, we will continue to monitor economic conditions very closely and make disciplined operational decisions in the best long-term interests of our company, our employees and the community.”

About 250 people work at the Stobie mine, and the company said there will probably be job losses, despite its best efforts to reassign the workers. Ellsworth says Maki’s approach was reassuring. “Until she convinces me otherwise, I have to believe she does care. At the end of the day she really doesn’t like to see anyone lose his or her job. She’s open to what we can do differently; how we can accommodate people so they can continue to work. Everyone knew Stobie was done. It was best to just pull the bandage off fast to avoid making the pain last longer.”

“It was a very tough call but necessary,” says Siani Pires. “She knows that in relationships with the unions you always need to walk a fine line between being nice, which lets the entitlement culture flourish, or being too tough and risking everything, which is what happened in 2009 when there was a year-long strike in Sudbury. That was the other extreme. She’s very direct and blunt about the needs of the business and the need for adaptation, but willing to make the tough calls.”

Maki, who is single and has no children, works all the time. Colleagues say she responds to every email, promptly. Adds Siani Pires: “I find myself wondering, how does she know so much? The other day we were with a group of engineers discussing a challenge of a project in New Caledonia. It’s amazing how knowledgeable she was about the details: the tradeoffs, the alternatives, the economic implications of choosing technical solutions A or B. You would think she was an engineer.”

Maki’s take on it? “I don’t stay up all night reading management books. I prefer to read people. I also trust my instincts.”

And so it was, on that Friday 10 years ago, when deciding to stay with Vale or take the buyout package, she turned to one of her most reliable decision-making tools. “I know it’s not good career advice I’d give to anyone in that position, but I just followed my gut and stayed.”

“And,” she adds, smiling, “I think I did OK.”