Barrick Gold reports robust financials for 2020
Barrick Gold has revealed it met all its key performance indicators in 2020. In the face of challenges across all regions, notably the Covid-19 pandemic, the company has made significant progress towards achieving its key objectives, says president and chief executive Mark Bristow in the company’s recently published 2020 Annual Report.
“The effectiveness of Barrick’s ESG strategy - which is powered at all levels by a long-established partnership philosophy and a close relationship with all stakeholders, from investors to host communities - was a key factor in the past year’s performance,” said Bristow.
“This was particularly evident in our successful Covid-19 containment programs, which buffered the impact of the pandemic on our business and people, and also enabled us to provide much needed and welcomed support to our host countries.”
Noting that the merged Barrick’s foundational objective was to build a business capable of delivering the industry’s best returns, Bristow said that since the announcement of the Randgold Resources merger the Barrick share price had grown by 118% by the end of 2020 against a 92% increase in the GDX. The quarterly dividend has been trebled and the Board has recommended that an additional $750 million of surplus cash be returned to shareholders as a return of capital distribution this year.
Bristow added: “A company that was burdened by net debt of more than $13 billion as recently as 2013 now has zero net debt, no significant maturities for the next 10 years and a robust balance sheet, with strong liquidity consisting of $5.2 billion in cash and an undrawn $3 billion credit facility.”
“Efficient operations and effective management enabled us to capitalize fully on the higher gold and copper prices and to pass the rewards on to our investors as well as our community stakeholders. These achievements were produced on the foundation of a solid 10-year plan built on a great asset base, a fit-for-purpose structure and management teams that more than lived up to our ‘best people’ mantra.”
Bristow said Barrick is still only at the beginning of an exciting and rewarding journey but it is well-equipped in every way to build on what it has and to find and exploit new opportunities, including any openings offered by the ongoing dynamics of the gold industry.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”