May 17, 2020

Rising Costs Forces Barrick Gold to Shut Down Zambian Copper Mine

Barrick Gold
Copper
Operations
Mine site
Admin
2 min
Barrick Gold, First Quantum Expected to Take Hit from Zambia Tax Increase
Barrick Gold Corp. has announced plans to shut down work at its Lumwana copper mine in Zambia after a change in royalty policy. The Toronto-based compan...

Barrick Gold Corp. has announced plans to shut down work at its Lumwana copper mine in Zambia after a change in royalty policy. The Toronto-based company said the Zambian government is expected to eliminate corporate tax starting January. 1, but will increase the gross royalty rate from six percent to 20 percent.

"The introduction of this royalty has left us with no choice but to initiate the process of suspending operations at Lumwana," Barrick co-president Kelvin Dushnisky said in a statement.

"Despite the progress we have made to reduce costs and improve efficiency at the mine, the economics of an operation such as Lumwana cannot support a 20 percent gross royalty, particularly in the current copper price environment."

The open-pit mining operation, which supports roughly 4,000 jobs including contract workers, is expected to be closed by the second quarter of 2015. Barrick is expected to record an accounting charge in the fourth quarter of 2014 to reflect the impaired value of Lumwana, which is valued at $1-billion.

The Lumwana mine produced 138 million pounds of copper in the first nine months of 2014. The mine had 6.6 billion pounds of copper in reserves as of the end of last year.

Barrick acquired the Lumwana copper mine in 2011 for $7.3 billion in its acquisition of Equinox Minerals Ltd.  Since then, mining cost have risen dramatically, forcing Barrick to cancel expansion plans as well as incur a $3.8-billion charge in the fourth quarter of 2012.

The new policy in Africa comes at a time when copper prices have continued to decline amid slower economic growth in China, the world’s largest copper user.

Barrick has now sold several of its “non-core” mines in recent months as it pared down its portfolio and focuses on its key mines. The gold miner has said it wants to drop its debt to around $7 billion, down about $3.5 billion from where it stands now.

Zambia is currently the second-largest copper-producing country in Africa.

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Jun 29, 2021

Vale invests $150mn to extend life of Manitoba operations

Vale
Nickel
Manitoba
battery metals
2 min
Vale’s $150mn investment in operations at Thompson, Manitoba will extend mine life by 10 years

Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.

Global energy transition is boosting the market for nickel

The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.

“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.

“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”

Vale continues drilling program at Manitoba

Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.

“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.

“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”

The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history.  Mining of the Thompson orebody began in 1961.

“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.

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