Chinese companies said to be eyeing bids for Barrick’s Zambian mine
NEW YORK China Minmetals Corp., Jiangxi Copper Co. and Zijin Mining Group Co. are among companies considering bids for Barrick Gold Corp.’s Zambian copper mine that could fetch about US$1 billion, people with knowledge of the matter said.
China Molybdenum Co. and Aluminum Corp. of China, known as Chinalco, were also invited to bid, said the people, who asked not to be identified as the information is private.
Barrick, the world’s second-largest bullion producer, is working with advisers to solicit interest for the Lumwana mine, the people said. The Toronto-based miner continues to target US$1.5 billion of asset sales by the end of 2020, chief executive Mark Bristow said in August.
Deliberations are at an early stage, and there’s no certainty they will result in a transaction, the people said.
Representatives for Barrick, China Minmetals, Jiangxi Copper and Zijin declined to comment. Representatives at China Molybdenum and Chinalco couldn’t immediately comment.
Lumwana, an open-pit mine, is expected to produce 210 million to 240 million pounds of copper this year and has proven and probable copper reserves of 4.5 billion pounds, according to Barrick’s website.
Barrick acquired Lumwana as part of its takeover of Equinox Minerals Ltd. for more than US$7 billion in 2011 and took a Us$3-billion writedown on the mine two years later. Lumwana was valued at about US$1 billion in 2014.
Subsequently, the Zambian government proposed to raise mining taxes, putting Lumwana in a “challenging situation,” according to Bristow.
Barrick is working with Bank of Nova Scotia to identify buyers for its Tongon Gold mine in the Ivory Coast as it ramps up asset disposals following its purchase of Randgold Resources Ltd., people familiar with the matter said in August.