Barrick Gold, one of the world's largest gold producers, has been keen to acquire copper assets to diversify its mining portfolio. The firm had recently made an unsuccessful informal attempt to buy First Quantum Minerals, a copper mining company. This move is critical evidence of a shift of focus by Barrick to copper. Barrick's gold production has been falling to record lows, while its long-time rival, Newmont, recently made a significant acquisition in gold that puts it far ahead of Barrick. Despite historically being "pure plays" for investors interested in exposure to gold prices, Barrick sees copper as a strategic commodity underpinned by demand for electrification.
Copper is an essential metal in the mining industry if a company wants to remain relevant. Barrick's CEO, Mark Bristow, has consistently voiced his desire to invest in copper. Copper is generally found alongside gold in mineral deposits and can be processed using similar methods.
Barrick’s most extensive investment project, with a value of $7 billion, is the copper-gold project in Pakistan, which is scheduled to start operations in 2028. The project could operate for at least four decades. Barrick is also exploring expansion possibilities for its Zambian copper mine while searching for new deposits across Africa, Asia, and the Middle East.
Barrick has an edge over its rivals, given Bristow’s willingness to take risks by investing in areas where western miners are hesitant. Bristow is a trained geologist who has established a reputation for building gold mines in the Democratic Republic of Congo, Ivory Coast, and Mali under Randgold Resources, which he founded.
After buying Randgold in a no-premium deal in 2019, Bristow brought the same approach to Barrick. For example, the Reko Diq mine in Pakistan, whose license was denied in 2011, was revived after a years-long dispute with the government was resolved.
Although Bristow has made little progress in large acquisitions since joining Barrick, he attempted a hostile no-premium takeover of Newmont in 2019, which was unsuccessful. He also considered acquiring Freeport-McMoRan Inc. to increase the firm's copper exposure. While insisting that organic growth is the best way to stay competitive in an industry with numerous ill-timed acquisitions, Bristow has voiced strong criticism of getting bigger for the sake of it.
In response to the news of Barrick's interest in First Quantum, analysts have pointed to the difficulty in reconciling Bristow's discipline in M&A with the need for a substantial premium for any deal, given the industry-wide scramble for copper assets.
Barrick's gold production has fallen to the lowest level since 2000, and its shares have fallen 5% this year. Newmont's acquisition of Newcrest Mining would solidify its position as the world's leading gold producer. Copper output is the only metal that has increased at Barrick since the merger with Randgold.
Bristow maintains that despite the company's emphasis on copper, Barrick is still at its core a gold mining firm. "It’s as strategic as gold is precious," Bristow said.