Rio Tinto ready to build Simandou after almost 30 years of setbacks
Simandou has faced delays due to legal disputes, political changes, and the challenges of building a 600 km rail and port infrastructure.
Barrick Gold’s (TSX, NYSE:ABX) planned $1.3 billion sale of its 50% stake in Australia’s Kalgoorlie mine won’t be happening any time soon because Minjar Gold, the Chinese bidder, said talks with the Canadian miner have ended without a deal.
The Perth-based firm, a unit of Shanghai-listed Shandong Tyan Home, announced in an exchange filing it was “no longer pursuing the project,” reportedly due to recent tightened controls in China on outbound investment.
Barrick, the world’s No.1 gold producer, may decide to re-enter talks with other buyers or just keep the asset.
This was not the first attempt by Minjar Gold to acquire an Australian mine. In August it purchased Evolution Mining’s (ASX:CAH) Pajingo mine for $40 million.
It’s also not the first time Barrick seeks a deal with Chinese companies. Earlier this month, the Toronto-based miner sold half of its Veladero mine in Argentina to Shandong Gold Group for $960 million.
Now for Barrick, the world’s No.1 gold producer, may decide to re-enter talks with other buyers, including its joint venture partner Newmont Mining (NYSE:NEM), which owns the other half of the vast Western Australia mine. Price, however, has been an issue and a deal has so far eluded the Denver-based company.
Another option for Barrick would be to keep the asset, which is Australia’s largest open-pit gold mine.
The company’s decision may be announced next week, as it reports first-quarter financial results on April 24.
The Super Pit is expected to run out of ore by 2019 but underground mining could continue after that.
Barrick shares fell on the news closing 3.38% down in Toronto on Wednesday to Cdn$25.48, but were slightly up today in pre-market trade in New York (o.32%) to $18.97, after closing Wednesday at $18.91.
