Barrick says mergers will not alleviate forthcoming copper shortage
MERGERS and acquisitions (M&A) will not expand the copper supply necessary for the energy transition, according to Barrick Gold Chief Executive Officer, Mark Bristow.
While mining giant BHP pursued a US$39 billion deal for Anglo American, the Barrick chief told the Financial Times that companies should prioritise investing in exploring and developing new copper deposits.
According to Mr Bristow, BHP’s approach to Anglo reinforced the necessity for industry investment in its future.
“You can consolidate, but it does not bolster the production profile. Consolidation often leads to production reduction,” he said.
Copper demand on the market was projected to surge in the coming decades.
By 2030, the world’s copper supply gap was forecast to approach 10 million metric tonnes.
BHP has until May 22 to decide on making a formal offer for Anglo.
BHP’s initial proposal would require Anglo to sell its majority stakes in its South African platinum and iron ore businesses to its shareholders for the deal to proceed.
“BHP is the ultimate 800-pound gorilla. It is a complex transaction. It is hard to imagine how we could be competitive in that process,” Mr Bristow said.
He also reportedly shot down any ideas to take over Canada’s First Quantum Minerals.
“Until we can see some clarity, there is no interest from us in this opportunity. In our view, it is not an opportunity,” Mr Bristow said.
Last November, Panama’s Supreme Court reportedly deemed First Quantum’s mining contract to be unconstitutional, leading to the eventual shutdown of the country’s only mining operation.