Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Newcrest Mining Ltd. may have enough gold and copper deposits at its Red Chris project in Canada to open an entirely new section and extend mining in the area for decades, chief executive officer Sherry Duhe said.
Australia’s biggest gold producer, which is set to be acquired by US giant Newmont Corp., plans to decide later this year on whether to add underground block cave mining to its open pit operations at Red Chris. Meanwhile, exploration at the neighboring East Ridge area was yielding “exciting” results, Duhe said in an interview in Brisbane on Wednesday.
Block caving is a method of underground mining with low operating costs due to its use of gravity to extract the ore through a layered system of shafts and tunnels. The proposed Red Chris block cave covered under Newcrest’s feasibility study would only produce until around 2030, Duhe said.
“We expect we might get an entire macro block cave just out of East Ridge that could change the whole sequence of the block cave that we’re developing,” Duhe said. That could lead to “decades of production that is going to come out of that block cave,” she said.
Newmont last month agreed to acquire Newcrest in a deal valued at about $19 billion to create a global gold and copper behemoth with mines across the Americas, Africa, Australia and Papua New Guinea. Duhe said she would leave the group following completion of the takeover.
The deal, which is subject to regulatory and shareholder approval, will give Newmont much greater exposure to copper, a key metal in the energy transition. Red Chris and another planned block cave mine, Wafi-Golpu in Papua New Guinea, would take the share of copper in Newcrest’s revenue to above 50%, Duhe said.
“We don’t have a ceiling set on the percentage of copper in the portfolio,” she said.
(By James Fernyhough)
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