Barrick’s $1 billion Zambian mine draws Chinese interest

Lumwana, located in Zambia’s Northwestern Province could fetch as much as $1.3 billion. (Image courtesy of Barrick Gold)

China Minmetals Corp., Jiangxi Copper Co. and Zijin Mining Group Co. are among companies considering bids for Barrick Gold Corp.’s Zambian copper mine that could fetch about $1 billion, people with knowledge of the matter said.

China Molybdenum Co. and Aluminum Corp. of China, known as Chinalco, were also invited to bid, said the people, who asked not to be identified as the information is private.

Lumwana, an open-pit mine, is expected to produce 210 million to 240 million pounds of copper this year

Barrick, the world’s second-largest bullion producer, is working with advisers to solicit interest for the Lumwana mine, the people said. The Toronto-based miner continues to target $1.5 billion of asset sales by the end of 2020, Chief Executive Officer Mark Bristow said in August.

Deliberations are at an early stage, and there’s no certainty they will result in a transaction, the people said.

Representatives for Barrick, China Minmetals, Jiangxi Copper and Zijin declined to comment. Representatives at China Molybdenum and Chinalco couldn’t immediately comment.

Lumwana, an open-pit mine, is expected to produce 210 million to 240 million pounds of copper this year and has proven and probable copper reserves of 4.5 billion pounds, according to Barrick’s website.

Barrick acquired Lumwana as part of its takeover of Equinox Minerals Ltd. for more than $7 billion in 2011 and took a $3 billion writedown on the mine two years later. Lumwana was valued at about $1 billion in 2014. Subsequently, the Zambian government proposed to raise mining taxes, putting Lumwana in a “challenging situation,” according to Bristow.

Barrick is working with Bank of Nova Scotia to identify buyers for its Tongon Gold mine in the Ivory Coast as the company ramps up asset disposals following its purchase of Randgold Resources Ltd., people familiar with the matter said in August.

(By Vinicy Chan and David Stringer, with assistance from Winnie Zhu)

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