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Driven by Electric Vehicles and Energy Transition, the World’s Second-Largest Gold Miner Turns Its Focus to Copper

published: 2023-07-04 9:30

Considered a "strategic game-changer," Barrick Gold, the world's second-ranked gold mining titan, is now setting its sights on a different kind of treasure—copper.
Earlier, Barrick tested the waters with a potentially transformative deal Canada’s premier mining company, First Quantum Minerals. Even though their informal overture was turned down, the audacious move reflected Barrick's strategic pivot towards the copper market, with their sights set on a lucrative acquisition worth US$17 billion.

Barrick's CEO, Mark Bristow, has been vocal about his copper aspirations for some time. But the stakes have been raised. Not only has Barrick's gold output plunged to an unprecedented multi-decade low, but its archrival Newmont has also raised the ante with a grand-scale acquisition that promises to significantly boost its own gold production.

In May, Bristow raised a red flag about the dwindling supplies of gold and copper. With the escalating growth of electric vehicles and central banks worldwide beefing up their gold reserves as a dollar alternative, copper's significance has soared. As a vital element in electric vehicles, wind power generation, and power transmission lines, copper has carved out a pivotal role in the energy transition narrative and maintenance of power grids, hence Bristow's label, a "strategic commodity."

In a recent earnings call, Bristow emphasized that to truly be a power player in the mining sector, copper's importance can't be underestimated. For a gold miner like Barrick, diversifying into copper is not only strategic but also crucial for its future growth. Interestingly, nature seems to be on their side as copper often shares the same geological bed with gold, and both can be processed in similar ways.

Barrick is also drawing up plans for a monumental copper-gold project in Pakistan, worth a staggering US$7 billion, set to launch in 2028. This mining colossus is predicted to operate for a whopping 40 years. Meanwhile, Barrick is studying the prospects of supercharging its copper mine in Zambia and launching ambitious explorations for new mineral deposits across the Middle East, Asia, and Africa.

The rise of electric vehicles, wind, and solar energy, coupled with the demand for high-voltage cables, has been music to the ears of the mining industry, despite analysts sounding the alarm about an impending copper shortage since the mid-2020s. Mining giants worldwide are ramping up copper production, hoping to ride the wave of prospective price hikes. Yet, new mine projects remain conspicuously absent from the landscape, creating a fascinating and volatile stage for the future of copper mining.

(Image Source: shutterstock)

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