Rio Tinto, Panguna stakeholders to address mine legacy impacts at roundtable
The Panguna Mine Legacy Impact Assessment is expected to be published later this month.
BHP Billiton (ASX:BHP), Canada’s Teck Resources (TSX:TCK, NYSE: TCK), Hudbay Minerals (TSX:HBM) and China Molybdenum Co is said to be the miners which have submitted final bids for Barrick Gold’s (TSX, NYSE:ABX) Zaldivar copper mine in Northern Chile.
According to Bloomberg a final decision is expected by the first week of August:
The copper mine is valued at more than $2 billion, people familiar with the situation have said. While Barrick is seeking a buyer for 50 percent of the mine, some of the bidders are interested in the whole asset, the people said.
BHP, together with partner Rio Tinto (LON:RIO) already owns the world’s largest copper mine, Escondida, which sits, quite literally, across the road from Zaldivar.
Real cost synergies are not common in mining and they are mostly the product of proximity, which is exactly what Barrick’s mine has going for it.
Copper, in turn, has been repeatedly named by BHP as a commodity of choice or “pillar”. What’s more, CEO Andrew Mackenzie has in the past stated he would consider opportunistic bolt-on acquisitions, rather than its more traditional transitional deals, in both copper and its other key division — petroleum.
Zaldivar, an open-pit, heap-leach mine, produced 222 million pounds of copper in 2014, according to Barrick’s website. Proven and probable copper reserves from the mine as at Dec. 31, 2014, were 5.558 billion pounds. Production costs last year were US$1.65 a pound and they are increasing as head grades fall.
