CAPE TOWN (Reuters) – Barrick Gold is not looking to merge with copper miner Freeport-McMoran, CEO Mark Bristow said on Thursday, although he is interested in the company’s Grasberg mine in Indonesia, and indicated he wants to expand in the Pacific Rim.
Mark Bristow, chief executive officer of Barrick Gold, speaks during an interview at the Investing in African Mining Indaba conference in Cape Town, South Africa February 5, 2019. REUTERS/Mike Hutchings/File Photo
Rumours the world’s second-largest gold miner planned to combine with Freeport are “completely wrong”, Bristow told Reuters on the sidelines of the Mining Indaba conference in Cape Town.
But he said he was interested in Freeport’s Grasberg mine in Indonesia – the world’s largest gold mine, and second-largest copper mine.
“People say, are you interested in Grasberg? I say I have to be, it’s a tier one asset,” he said. Tier one assets refer to high-grade, long-life mines.
The CEO wants to grow Barrick’s copper business to capitalise on a projected increase in demand because of the rising popularity of electric vehicles.
“If you’re going to be a world-class gold miner, you’re going to have to accept copper. In ten years’ time the most strategic metal on this planet is copper, if you believe the EV story, and I do,” said Bristow.
He cautioned, however, that he was far from finding a deal that would work.
Freeport-McMoran, which traces its roots back to 1834, could bring with it legacy risk, he said.
“Freeport is a very old company and it has bought lots of very old companies so there’s risk, rehabilitation liabilities… and also you would never want to go in a place like Indonesia without proper due diligence,” he said.
Freeport-McMoran’s CEO has said he would consider acquisitions, mergers, or other deals once three ongoing expansion projects finish by 2022.
PAPUA NEW GUINEA OFFER
Struggling with unrest at the Porgera mine in Papua New Guinea (PNG), Bristow told Reuters that Barrick offered the government a 52% share of the economic benefits of the mine in response to government demands for a larger stake.
“Our principle is 50-50, like we did with Tanzania,” he said. “In fact in this case we will pay a little bit more than 50.”
Barrick last month signed a deal with Tanzania that gave the state a 16% stake in each of the company’s three gold mines in the country and an equal share of the economic benefits from the mines, ending a bitter tax dispute.
If Barrick succeeds in resolving the dispute in PNG, the market will be more comfortable with the company taking on more risk in the copper- and gold-rich Pacific Rim, Bristow said.
Papua New Guinea called off negotiations with ExxonMobil on the P’nyang gas project last Friday, blaming the energy giant for inflexibility over the government’s demand for a bigger stake.
Asked about the Lumwana copper mine in Zambia, Bristow said he wouldn’t necessarily sell it, and could instead look for a partner in Zambia or a deal with a copper processor.
Reporting by Helen Reid; editing by Barbara Lewis
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