Barrick takes US$3.8B writedown on Lumwana

摘要

Copper isn't turning out to be the growth avenue Barrick Gold (ABX-T, ABX-N) hoped it would be. The gold major jumped into the copper scene in 2011 with the $7.3-billion acquisition of Equinox Minerals, owner of the Lumwana copper mine in Zambia. At the time copper was selling for more than US$4.50 per lb. amidst booming demand from China. Two years later, Barrick has found out Lumwana isn't quite the mine it was chalked up to be - or at least, it isn't an operation that works at today's lower copper prices. A new life-of-mine model for the operation shows higher-than-expected operating and sustaining costs, which means lower-than-expected production and profitability.