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Lumwana, located in Zambia’s Northwestern Province. (Image courtesy of Barrick Gold)
Canada’s Barrick Gold (NYSE:ABX)(TSX:ABX) said Friday it will continue operations at its Lumwana copper mine in Zambia while the government tweaks a new royalty regime announced last year.
In December, after the country increased mining royalties on open pits from 6% to 20% starting January 1, Barrick said the hikes left the company “no choice” but to phase out operations at its open pit mine.
Zambian President Edgar Lungu on Wednesday ordered finance and mining ministers to rejig the new royalties by April 8. The royalty rates on underground operations were also hiked 6% to 8%.
The Southern African nation is considering temporarily reverting to the 2014 royalty scheme while the changes are being made reports Reuters.
Major job cuts at the mine, which employs about 4,000 people directly, were planned to begin this month, following the legally required notice period for putting the mine in care and maintenance,.
The Toronto-based company recorded an $3.8 billion impairment charge related to Lumwana, acquired when it bought Equinox Minerals Ltd. in 2011.
In 2014 the mine produced 214 million pounds (97,000 tonnes) of copper at fully allocated costs of $2.76 per pound. The mine had 3.3 billion pounds of proven and probable copper in reserves as of December 31, 2014.
