World’s Second-Largest Gold Miner Sets Sights on Copper Expansion

Barrick Gold Corp., renowned for its gold operations, is displaying a remarkable shift in focus towards copper. In its pursuit of growth, the company recently made an unsuccessful approach to acquire First Quantum Minerals Ltd., signaling its interest in the $17 billion copper mining industry. This move underscores Barrick’s evolving strategy, given its dwindling gold production and Newmont Corp.’s recent monumental acquisition, which has positioned the rival company far ahead in the gold sector.

Unlike traditional gold-focused companies, Barrick recognizes the strategic value of copper as a key commodity driven by the demand for electrification. Copper is often found alongside gold in ore deposits and can be processed using similar methods.
According to Barrick’s CEO, Mark Bristow, copper is crucial for staying relevant in the mining industry. On the company’s latest earnings call, he stated that gold miners must include copper in their portfolios to sustain growth. Currently, Barrick’s largest investment project is a $7 billion copper-gold venture in Pakistan, scheduled to commence operations in 2028 with a potential lifespan of four decades. Furthermore, the company is exploring expansion opportunities in its Zambian copper mine and actively seeking new deposits across the Middle East, Asia, and Africa.

Bristow’s pursuit of copper aligns with industry trends, as mining executives and analysts anticipate copper shortages from the mid-2020s onwards, driven by rising demand for electric vehicles, wind and solar farms, and high-voltage cables. With few new projects in the pipeline, major mining companies are vying to expand their copper operations to capitalize on future price increases.
Notably, Barrick may possess an advantage over its competitors. Bristow’s willingness to venture into riskier regions, where many Western miners hesitate to invest, sets the company apart. With a background as a geologist, the South African executive has successfully established gold mines in the Democratic Republic of Congo, Ivory Coast, and Mali during his tenure at Randgold Resources Ltd., a company he founded. Bristow has brought the same approach to Barrick, breathing new life into the Reko Diq project in Pakistan after resolving a long-standing dispute with the government. Barrick is also engaged in discussions with the Congolese government regarding potential exploration projects in Zambia and Congo.

While Bristow has not made significant acquisitions since joining Barrick, his pursuit of growth has been evident. The company’s failed hostile takeover bid for Newmont in 2019 and public contemplation of a deal with Freeport-McMoRan Inc. demonstrate his ambitions. However, Bristow remains vocal about prioritizing organic growth over hasty mergers and acquisitions, emphasizing the need for strategic decision-making to maintain competitiveness.

Analysts note the challenges of reconciling Bristow’s disciplined M&A approach with the steep premiums often associated with copper deals amid intense competition for copper assets. Nonetheless, Bristow emphasizes that Barrick’s core focus remains on gold. Yet, with gold production at its lowest since 2000 and shares declining by 5% this year, Newmont’s takeover of Newcrest Mining Ltd. would solidify its position as the world’s leading gold miner. The only metal output that has witnessed growth at Barrick since the Randgold merger is copper.

Bristow concludes by affirming the strategic importance of copper, equating it to the preciousness of gold in Barrick’s overall business strategy.