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.
Zijin Mining, China’s no.1 gold producer, is fine-tuning plans to boost the capacity of its Buritica gold mine in Antioquia, Colombia, to produce copper and zinc as well as gold and silver.
Speaking at the CGS2021 conference in Medellin, the CEO of the local subsidiary James Wang said the goal was to boost output to 4,000 tonnes per day from the current 3,000-3,300 tpd and add a flotation circuit to increase the suite of metals produced.
The expansion will allow Buritica, one of the country’s only five large-scale mines, to produce 240,000 ounces a year of gold, 600 tonnes per year of copper and 5,000tpy of zinc.
Major miners are trying to expand their copper output as the world will need almost double the current production levels in the next 30 years to achieve decarbonization goals, BHP said on Wednesday.
Zijin Mining acquired the mine after buying Canada’s Continental Gold for $1 billion (C$1.4 bn) in late 2019. Before construction was finished, the coronavirus pandemic hit and work was halted for months.
The hiatus allowed thousands of illegal miners to take over the asset, working on tunnels either within or adjoining the concession. The illicit activity, controlled by criminal gangs by take 10% of the output, sparked fears potential violence and the poisoning of the local watershed with mercury.
They also cut into Zijin’s profits, as the company’s losses in the first quarter of the year amounted to 20% of total production, Wang told Reuters in May.
Despite its largely untapped deposits of gold and copper, Colombia’s environmental authority ANLA has approved only two large-scale mining projects in the last 10 years: Buritica and AngloGold’s (JSE: ANG)(NYSE: AU)(ASX: AGG) Gramalote, which was okayed with conditions.
The gold asset, which the company is developing in partnership with B2Gold (TSX:BTO) (NYSE:BTG), is at the centre of long-dragged out mining rights dispute with Canada’s Zonte Metals that remains active.
To boost the country’s gold sector, Colombia’s mining agency has announced a first bidding round for gold exploration contracts to begin in early 2022.
