Barrick speeds up Zambian copper mine expansion

The proposed expansion of Barrick Gold’s (TSX: ABX; NYSE: GOLD) Lumwana copper mine is being accelerated with first production scheduled for 2028, CEO Mark Bristow told Zambian President Hakainde Hichilema in their meeting Tuesday.

According to Barrick, the Super Pit expansion project will transform Lumwana into one of the world’s major copper mines, with projected annual production of around 240,000 tonnes per year over a 30-plus-year life. It will be a key component to the Zambian government’s drive to revive the country’s copper industry over the next decade.

“In line with Barrick’s partnership philosophy, our REDD+ initiative will uplift our host communities through conservation of the natural forest surrounding the mine. Resources have already been allocated and engagement with the communities is underway,” Bristow stated in a news release.

The expansion adds to a flurry of copper activity in Zambia, with First Quantum Minerals (TSX: FM) announcing just over six weeks ago that it had inked a deal with Mimosa Resources to fast-track development of its Fishtie copper project in the country’s south-central region, near the border with the Democratic Republic of Congo. First Quantum, rattled by the forced closure of its flagship copper mine in Panama, was also said to be in talks to sell a stake in its Sentinel and Kansanshi copper mines in Zambia, though no agreement has been reached. 

Since 2019, Lumwana has contributed almost US$3 billion to the Zambian economy in the form of royalties, taxes, salaries and the procurement of goods and services from local businesses. Last year, local procurement made up more than 81% of total spending for the mine.

In association with the expansion, Barrick has also launched a business accelerator program designed to build the business capacity of the Zambian contractors in its supply chain, equipping them to grow and diversify their enterprises and remain sustainable beyond Lumwana’s life of mine.

As the company detailed last year, the estimated cost of the Lumwana expansion is almost US$2 billion. Construction is scheduled to start towards the end of this year, with a feasibility study also expected by the end of the year.

Since Barrick refocused its strategy in 2019, Lumwana, the once struggling mine, has been restructured and re-engineered into a significant contributor to Barrick’s expanding copper portfolio. The ramp-up of the re-opened Malundwe pit and completion of the transition to owner-mining supported the achievement of its production guidance for 2023.

In addition, the Canadian gold giant has also expressed its desire to add more copper assets to its African portfolio, thus expanding its presence on the continent’s copper belt. The goal is to double its copper production by 2031 to 1 billion pounds.

Shares of Barrick Gold were up 1.4% to $21.33 apiece on the TSX by at mid-day on Tuesday, valuing the company at $37.4 billion.