Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Barrick Gold may take a $5.5 billion asset impairment charge for its Chilean Pascua-Lama project, the company announced on Friday.
The miner estimates write-downs of between $4.5-$5.5 billion in its Q2 report due to plummeting metal prices.
The company anticipates “significant” impairment charges on other assets such as goodwill.
Pascua-Lama’s production schedule has also been re-evaluated and will not be producing until mid-2016. Construction on the mine stopped in April due to the Chilean government’s environmental concerns.
The write-down comes at the end of a difficult month for the ore miner which hit a 21-year low last week on the Toronto exchange.
Barrick is not alone: Earlier this month Australia’s Newcrest Mining (ASX:NCM) announced a multi-billion dollar write-down following Ben Bernanke’s hinting at an end to quantitative easing.
Creative Commons image by: Michael Pedersen.
