Barrick Gold continues to sell gold assets, more to come?
Barrick Gold is cleaning house.
The Canadian mining company has announced two deals in the past week, agreeing to sell its Cowal gold mine to Evolution Mining Ltd. for $550 million, as well as signing a $298 million deal with Chinese miner Zijin Mining Group to sell 50 percent of its stake in the Porgera gold mine in Papua New Guinea.
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The recent transactions are among several planned sales aimed at helping Barrick streamline operations in order to cut costs and reduce debt. The company has previously outlined plans to cut debt by $3 billion by the end of 2015.
Barrick also announced it had signed a “long-term strategic co-operation agreement” with Zijin to co-operate on future projects and investments.
"Our partnership with Zijin is the first step in a long-term strategic relationship with one of China's leading mining companies—a multi-faceted partnership that will provide significant opportunities to work together on an ongoing basis as we continue to create value for our respective owners.”
Zijin, one of China’s largest gold and copper producers, called the partnership with Barrick an “excellent fit.”
"Our companies have complementary expertise and experience and share a common vision for creating long-term value for our owners," Zijin chairman Chen Jinghe said.
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Barrick Gold has sold six mines since 2012 for a total of $1.3 billion. Five of those mines are located in Australia. Barrick’s only remaining Australian gold-mining interest is the Kalgoorlie Super Pit operation, which the miner has a 50 percent stake in.
“The sale of Cowal is consistent with the strategy we have outlined to create long-term value for our owners, making a significant contribution to our debt-reduction target while further focusing the geographic footprint of our portfolio,” said Barrick Co-President Kelvin Dushnisky.
The next potential sale for Barrick could be the Zaldivar copper mine in Chile.
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.