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Tuesday, June 2, 2020

Barrick Gold prepping sale of Zambian copper mine in second half

Headlines Barrick Gold prepping sale of Zambian copper mine in second half

The Lumwana copper mine is located about 100 km west of Solwezi in Zambia’s Copperbelt. (Image courtesy of Barrick Gold.)
The Lumwana copper mine is located about 100 km west of Solwezi in Zambia’s Copperbelt. (Image courtesy of Barrick Gold.)

Reuters Agency Report that Barrick Gold Corp, the world’s second largest bullion miner, is preparing its Zambian copper mine Lumwana for sale in the second half of 2019, looking to target Chinese buyers, three sources with knowledge of the matter said.

Fresh from two major deals in recent months, Barrick has said it plans to shed $1.5 billion of less productive mines, which have little expansion potential.

It included Lumwana among the possible sales, as a relatively low-grade copper mine whose margins could be materially affected by Zambia’s new mining code and import duty. Analysts value the mine at up to $500 million.

Barrick is holding discussions with investment banks about appointing advisers to the sale, the sources said.

Two of the sources said that a bank with links to Chinese companies was likely to get the advising role for Lumwana.

Barrick didn’t immediately respond to a request for comment.

The group is looking to enter talks with Chinese state-owned companies including Aluminum Corp of China, known as Chinalco, and China Minmetals Corporation, which have been seeking growth abroad and a foothold in Africa, lured by its vast resources.

The sale process, however, may not be easy, the sources said, as the potential acquirer will have to be comfortable with the risk associated with tax changes in Zambia.

Africa ’s second-biggest copper producer, is determined to enforce a new 5% copper import duty and also plans to replace value-added tax with a non-refundable sales tax as part of a plan to keep a greater share of mineral resource profits for the country and tackle its debt.

The new taxes also include a royalty on copper production that increases as commodity prices rise.

Zambia has overcome opposition of some of the world’s biggest mining companies, betting that a global need for its resources, particularly copper, essential for manufacturing electric cars, and cobalt, used in lithium-ion batteries, will keep the tax receipts flowing.

Diversified miners Glencore, Vedanta Resources and First Quantum also operate in the southern African country.

The sale of Lumwana doesn’t signal a complete exit from copper assets for Barrick. The company is interested in acquiring assets that include both copper and gold, and pure copper projects if it has a competitive advantage over traditional copper miners, Chief Executive Officer Mark Bristow told Reuters last week.

Over the past six months, Barrick closed a $6.1 billion acquisition of African miner Randgold Resources and formed a joint venture with rival Newmont Goldcorp to combine operations in U.S. Nevada to create the world’s biggest gold complex.


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    • Show proof or shut the Fark up.

      PFools, you have failed to create jobs, just busy spreading falsehood. Days are numbered…….

    • Let them go.
      I wish ZCCM-IH could co-buy the mines with Zambia’s businessmen and other chaps from who knows where so we could do this thing ourselves.
      I can’t stand chaps who don’t wanna pay tax. Too much arm twisting and job insecurity in the sector.

    • I can give Barrick Gold the benefit of doubt, not those *****s at KCM who are now in scrap metal trading. Indians are stripping the mine in Chingola and Lungu doesn’t care! No wonder Jay Jay calls him LAZY

    • @Thorn. I highly doubt ZCCM IH will run the mine any better with the current scenario. Bare in mind mining is extremely capital intensive and requires long term planning and projections to secure financing. Now with the instability with tax regime coupled with an unstable currency makes it very difficult to achieve this regardless of who the investor is or where they’re from.

    • @Thorn in the flesh … totally agree!!! This is a real blessing in disguise as ZCCM-IH can block the sale to outsiders claiming “first right of refusal”.

      Once we own the mine, it’s totally in our hands, 100% of the proceeds are Zambian, no royalty payments required just dividends, sales tax flows back to us and all FX receipts go to BoZ and we stabilize the ZMK.

      Beyond that we can use all proceeds for our own benefit since we can manage our low margins the same way Chile is doing right now.

      Our ZCCM-IH needs to dispatch a team to Chile immediately to start preparing for this new bonanza.

      Let’s roll … tweende webo Barrick, tweende yama!!

      Epo mpelele,


    • @B R Mumba, Sr
      And where will your 100% owned Zambian mine get funding to capitalist the mining venture?
      You want to borrow more money from Chinese banks cause your PF government is waist deep in debt.
      Small Andrew Kamanga managed to get $5MM from a Netherlands Bank to start the Lumwana or North Western Power Corporation.
      ECL does not have the international clout like Mwanawasa or HH to get financial deals.

    • @independent … you every right to believe whatever you want. Tweende Zambia, tweende webo.

      In English … Let’s roll

    • @Gay Gay … lobe!!! Fwebo twaya!!! Every individual is limited by 2 things.

      1. The worth of his/her character

      2. The knowledge and capabilities they acquire in a lifetime.

      Fwebo twaya! Webo ukashalafye ulecensa … Let’s roll!!

      Epo mpelele,


    • Please JUNIOR dont cheat yourself …you are not knowledgeable you are simply an educated foooooool

    • @Gay Gay … Ala akusabailafye webo if it makes you feel good about your pathetic sorry self.

      I don’t even care … epo mpelele.


    • Jay Jay backoff … your personality attacks are so childish. Can someone at LT ban this sucker??? He’s always spoiling the mood on brilliant ideas from guys like this BRM chap. All we get from this ***$holeee are insults like he is a retard.

      Gosh!!! SMH

    • Jay Jay backoff … your personality attacks are so childish. Can someone at LT ban this sucker??? He’s always spoiling the mood on brilliant ideas from guys like this BRM chap. All we get from this coward are insults like he is a retard.

      Gosh!!! SMH

  1. 2020 will be a very tough year for Zambia. We are now starting to see the full fruit of Lungu leadership

    • What do you mean kapala iwe? You should work with these MNC to understand how lowly they think of us. They are so manipulative in their approach and it is ingrained in their DNA that we don’t deserve what we require in terms of basic needs. Government should be strong in their current position. Please Boma, don’t relent!

    • @ Ba Robbie It is exactly because of mindsets like yours that is why the WHOLE WORLD thinks lowly of us. You seem to even feel proud of your lowly status. In your right mind you think the whole world is wrong about you? It is that same world that came and taught you that you were sitting on a mineral, and you think they are wrong about you? You have such a clueless government that no longer knows where the economy is going and you think they are wrong about you? They can’t even trust you who is proud about voting into power a ‘vision-less’ leader…and they are still wrong about you? You in-fact live in their countries – you ran away from your own poverty…and they are still wrong about you???? No wonder they think lowly of you!!

    • @2.2 Judge..foreigners didn’t teach us about copper and other minerals.Get your history right,we were already mining and trading in copper when colonialists came.The copper cross was used as money that is why is a symbol on Zanaco’s logo! The MNCs and the West think lowly of us bcoz most of our leaders in Africa are corrupt and have ruined public institutions and state enterprises that are supposed to manage our resources! Chile under coldeco runs copper mines and here the main potential buyer is a Chinese parastal!! Now look at how our politicians have abused ZESCO,ZAMTEL and some remaining parastals,there in the reason for disrespect!!

    • @JourneyMan … 2020 is going to be a great year for the smart people of the Zambian Enterprise. Finally, we would be resetting Zambia back to 1973 whipping out all the 27 year loses the MMD brought us.

      I love what I see … Epo mpelele nebo.

      Let’s roll …


  2. Changing tax regimes like underwear creates uncertainty and subsequently disturbs investments! Chinese, unlike Barrick Gold, will come with thousands of their expatriates to displace Zambians from their jobs!

    Chagwa is a curse to this nation, he’s go no clue, doesn’t want to learn or appoint competent advisers. His job now is getting on a new jet, get drunk and jog like a clown every morning! He thinks running a country is like managing his shabin in Kuku compound. As Jay Jay would say;” These are Wasted years”.

  3. Costs of doing bussiness in Zambia are spiralling out of control….. GRZ had blown its chance at real development through corruption and uneconomic construction , now they are taxing everyone to death just to survive…..

  4. Selling to the ching chong is a very bad idea. We have enough of them in our country and they exploit our Zambian people. In their country they have no respect for foreigners but here they are tolerated. Us Zambian people are just lost I tell you.

  5. Something to learn from article,RESPECT FOR STATE RESOURCES(ASSETS)!!They are mentioning Chinalco a state company as likely buyer of the mine and yet we have ZCCM-IH which doesn’t even know where our copper and Cobalt ends!! Due to poor management under PF we can’t even dare to suggest that we take over all these mines foreigners are dumping coz the ZESCO,ZAMTEL other parastatal of poor management and corruption will colapse them!!

  6. Not surprising. Lumwana as many other Zambia copper mines is generally very low grade, poor quality material that is expensive to run at low copper prices and the mad tax regimes introduced by government. The only sustainable long term way out of poverty for our country is to seriously diversify our economic footprint from mining. With empty heads and lazy bodies in government nothing is happening on that front. Its early days the worst is coming.

  7. Why should the mines be run by people who do not want to share the profits? They take more than they invest and due to our laziness we fail to jump at the opportunity to renationalise our assets. You are busy putting yourselves under the microscope and in turn fail to see how you are constantly on the losing side by the so called investors. These people know that we are not organised enough to run these mines and turn to scare tactics to ensure they externalise 100% profits. Why do we only have issues with the mines only when we ask them to pay the correct taxes?

    • I’m no mining expert or economist , but with lungu and PF , I can guess Zambian copper is some of the most expensive to mine on the planet ….. from electricity, Labour , transportation , tax and other costs , me thinks it is the most expensive ,

      I stand to be corrected and learn

    • No investor will come here to be a charity case and share profits equally…never going to happen. The problem here is an inept leadership that clearly has no clue how to handle these investors. Today it’s Vat, tomorrow sales tax, the following day something else. Chipantepante at its best.

    • Iwe ka kapotwe, for how long have we had VAT? MOE THAN 20YEARS. Niwe ka chilandelande? We are not asking to share equally but only 9%.
      Are you telling me VAT REFUNDS is the only fund at their dispospal? They externalise everything and they just wait for vat refunds, where is their profit?
      Check how they are governed in Australia, Argentina,Chile, Tanzania, Phillipines.
      See the advice from NORWAY about BARRICK, then you will think twice before uttering a word.

  8. Many times I wonder how did we run the mines as ZCCM? Because people now are saying no we can’t run the mines because we have no capacity or technology. Which people ran ZCCM, is it not us ordinary Zambians? I once worked for ZCCM in luanshya and we had no much so called expatriates. We had Zambian engineers, Technologies, Technicians, Craft men and ordinary experienced shop floor workers and we operated the mine very well for years!!! Chiluba decided to sale the mines because he just did want anything created by Kaunda there was no other reason.
    So, we can do it again let’s run our own affairs thats how countries develop. We fail we try again until we get it right.

    • Chiluman..the difference then is that there was very little political interference back then. Professionals were left to do their jobs. Today just go to Zesco for example and see how many clueless political cardres have been employed. Sad state of affairs indeed.

    • I agree. The other problem is that you have Zambians in management who have more faith in these owners, such that it is mind boggling how they have become so hopeful that things will change. This mine is in ICU, I saw it 6 years ago and I left and never looked back!

  9. It was coming that Barrick under the new management focused on the high value generating units within their portfolio could not keep Lumwana. What people don’t understand is that Barrick already lost billions when acquiring the mine from Equinox. Today apart from banking on hope for higher Copper price the mine is marginal. The only advantage the new buyer would have is that they don’t have to worry about short to medium capital investment, except for operating capital . This will be buy and run, basically management aspect. With a well designed financing package anyone with proper management skills can run that. Zambia has that type of management, but has no money to run even for a year (unless you borrow again, which is not what we want)

  10. School of mines should be abolished if we cannot run our own mines using the human resource that we churn out every year. Why should we leave the mines to be run by expatriates who have little knowledge about our environment? Zambia needs leadership that is practical and is not scared to take risks. There is potential in the mines but it is going down the drain because of naivety in leadership. It is pointless producing graduates of mines who cannot be utilized. Zambia has capacity to run her own affairs. Let the mines be nationalized. This privatization has not yielded any benefit for the nation. It has just brought the nation on its knees economically. These foreigners have no heart for the nation apart from leaving empty holes in the ground which will not be filled.

  11. After plundering our resources now these whites want to sell the mine please let them go now and bring Anhlo American

    • School of Mines is Technical. What we’re looking for here is not Technical Management but Strategic Management to move the mines forward as a viable business.

    Our biggest challenge as a nation for now is economic fueled by political uncertainty. Just like the recent Political Dialogue, we need an economic dialogue forum with proper expertise. Instead having political debates all the time we need to debate the turn around for our economy and what needs to be done. We need to road map driven by experts and not politicians. Instead of calling for only politicians call for a forum for Engineers, Economists, Bankers, Lawyers, Farmers, Unions, Lecturers/Teachers to debate issues like proposed by others above. Examples include; can we as Zambian run mines? What do we need to run a Zambian owned mine? How much and how long will it take to turn around KCM? What went wrong at KCM? etc.

    • I agree with what you’re advocating for but I beg to disagree with your sentiments that we have political uncertainty in the country. We have a democratically elected functioning government in place. Unless I don’t understand what you term political uncertainty??

  13. Its crazy to think ZCCM IH can run any mine. Look at their Management Structure and composition and tell me how those people are able businessmen? They have dividends from their shareholding in some of these mines and check how they have utilized them. Still in doubt? Check how they have grounded their only but viable face saver, Ndola Lime.

    The logical nationalist thing to do is to hand over the mines to government. But it remains just that, logical nationalist. But is this viable? Never a business option. Which government company makes money without undue pressure on the treasury…? ZESCO and their weird tariffs proposals, ZNBC and their crazy boring programming….?

  14. The open debate will highlight some of the problems we experienced during the ZCCM days and some of those that led ZCCM should have great inputs (hindsight.) What could they have done differently given a chance to run ZCCM again? I don’t mean bringing them to run the mines again, but to provide insight and leave that to the younger generation of professionals. There has been a generation lost during the privatization error when all decisions were left to new owners with little or no local input.

  15. This time around ensure that the transaction is not concluded offshore, please collect the applicable sales tax. Last this mine was sold Zambia was a laughing-stock

  16. Mines run on huge debt!
    Investors pump in money at a specified rate of return.
    The profitability of a mine will depend on the cost of mining one pound of Copper VS the Copper sales price! Each truck they takes owe is NOT profit! Profit = Revenue minus Cost of production minus Taxes minus Debt repayments to the investors, etc. When PF increased Fuel and Electricity costs, plus taxes, what do we expect? Inconsistent Business environment leads to Investor flight!

    • School-boy mentality. Have a broader scope. You think mines don’t make profits? This habit of arm-twisting the govt is real. See what they did to the late beloved MC Sata when he said all revenue should be deposited in Zambian banks before externalizing it. They ex rate soared & the economy was temporarily unmanageable.

      They have gotten used to making 200% profits and can’t just pay a 9% ST.

  17. Good. Time for all opportunists of massive gains in a short period to exit the country.

    Time for those in for the long haul or mother Zambia at heart to come in and replace them. And they are plenty.

    KCM not exiting goes to show they are playing a ransom strategy. GRZ should not blink at that.

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