Barrick Gold chief eyes growth in ‘strategic’ copper

Barrick Gold is looking for opportunities to grow its copper business through either exploration or acquisitions, according to its chief executive Mark Bristow.

Copper is viewed as having the best fundamentals of any commodity, with demand tipped to rise over the medium term as the world shifts to cleaner energy just as supply is pressured by falling grades at ageing mines.

As a result, most of the world’s big mining companies are trying to find ways to increase their exposure to the metal.

“Where we have opportunities to secure or expand our copper footprint, we will,” Mr Bristow told the Financial Times in an interview.

Hailing copper as a “strategic” metal, Mr Bristow said he was already looking at some exciting copper projects in South America but was also prepared to consider acquisitions.

“It is more strategic than cobalt, more strategic than lithium. You can’t replace copper on conductivity. It is a modern metal,” he said.

The added attraction of copper for Barrick is that it is often mined alongside gold in the Americas and shares common processing techniques.

“It’s processing characteristics are identical to gold,” Mr Bristow said. “You can leach it, you can concentrate it, you can smelt it. It is a very uncomplicated process. It’s the same as gold and it comes with gold.”

Barrick owns the Lumwana copper mine in Zambia, which it has just revalued, as well as 50 per cent of the Zaldívar deposit in Chile and a half share of Jabal Sayid, a Saudi Arabian copper operation.

The company’s attributable production in the nine months to September was 142,000 tonnes, making Barrick a relative minnow in the copper market, which is dominated by Codelco, Chile’s state-owned miner, BHP, Glencore, Freeport-McMoran and Anglo American.

Analysts said Barrick would have to make a major acquisition to break into that group of companies.

Mr Bristow previously ran Randgold Resources, London’s biggest gold producer, which he sold to Barrick a year ago in a $6bn deal. Since taking control of Barrick in January he has shown a willingness to make bold strategic moves.

He used a hostile bid to pressure arch rival Newmont Goldcorp into a joint venture in Nevada, where both companies have gold projects. Later in the year, he swooped to buy the shares Barrick did not already own in Acacia Mining, a gold producer focused on Tanzania.

Mr Bristow was speaking to the Financial Times last week after Barrick published five-year production forecasts and increased its dividend by 25 per cent.

“We have $2.1bn of cash and a $3bn revolving credit facility. That’s $5bn of available liquidity. We don’t need much more than that. So when you have a very good quarter like we did — we generated $500m — you pay it out,” Mr Bristow explained when asked about the company’s dividend policy.

He also said plans to sell $1.5bn of non-core assets by the end of 2020 were on track, with the first disposal expected in the next three months.

Shares in Barrick have climbed 21 per cent this year, outpacing gold, which is up 15 per cent.