Barrick Gold Corp is open to bringing in Saudi Arabia’s wealth fund as one of its partners in Pakistan’s Reko Diq gold and copper mine, Barrick CEO Mark Bristow told Reuters in an interview on Tuesday.
He also dismissed a June media report that Barrick was in talks with fellow Canadian miner First Quantum Minerals on a possible acquisition as a “rumour”.
Barrick Gold owns a 50% stake in Pakistan’s Reko Diq mine, with the remaining 50% owned by the governments of Pakistan and the province of Balochistan. Barrick considers the mine one of the world’s largest underdeveloped copper-gold areas.
Bristow said Barrick won’t be diluting its equity in the project but “will not mind” if Saudi Arabia’s Public Investment Fund (PIF) wants to buy out the equity of the Pakistan government.
“There is a strong relationship between Saudi and Pakistan and since we control the project we have the first right of refusal,” Bristow added.
He said that Barrick will support PIF coming into the mine through Pakistan’s 25% equity stake.
Pakistan has not publicly stated that it is considering selling. Last year, in an out of court agreement, Barrick Gold ended a long-running dispute with Pakistan, and agreed to restart development. Under the deal, the company withdrew its case in an international arbitration court, which had slapped a penalty of $11 billion on Pakistan for suspending the contracts of the company and its partners in 2011.
The company’s licence to mine the untapped deposits was cancelled after the Supreme Court ruled illegal the award granted to it and its partner, Chile’s Antofagasta.
Antofagasta had agreed to exit the project, saying its growth strategy was focused on production of copper and by-products in the Americas.
“The new project company shall be owned 50% by Barrick Gold. The remaining 50% shareholding shall be owned by Pakistan, divided equally between Federal Government and the provincial government of Balochistan,” a statement from the office of Prime Minister’s Office said after the signing ceremony in Islamabad.
The Barrick-Antofagasta joint venture discovered the vast mineral deposits more than a decade ago at the foot of an extinct volcano in the Balochistan region on Pakistan’s borders with Iran and Afghanistan. It said it had invested more than $220 million.
Earlier this month Pakistan hosted officials from Saudi Arabia in a mining conference in its capital Islamabad where officials of Barrick were also present. Barrick and Saudi’s state-owned mining company Ma’aden jointly operate a copper project in Jeddah.
PIF has been looking to invest in copper projects across the world as part of its drive towards funding energy transition projects. Earlier this month, PIF agreed to acquire a 10% stake in Brazilian mining company Vale base metals business.
Barrick, the world’s number two gold producer, considers sovereign wealth funds from the Middle East as “serious”, long-term investors to whom the company can sell its long-term vision of growing its copper and gold business.
Asked about the company’s interest in First Quantum Minerals, Bristow said Barrick will stick to growing its production organically and that its acquisition strategy would be “measured.”
“We have people suggesting us First Quantum... but our shareholders are gold bulls,” Bristow said. “So, I don’t know where that rumour came from, it was definitely not us, but that certainly helped lift their shares up.”
Published in The Express Tribune, August 9th, 2023.
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