TORONTO (miningweekly.com) – Barrick Gold is evaluating potential expansions at its Lumwana copper mine in Zambia which could involve doubling throughput at the operation, executives said on Thursday.
The company will complete an expansion study for Lumwana in the second half of 2012, senior VP for global exploration Rob Krcmarov said on a conference call.
Toronto-based Barrick, the world's biggest gold miner, acquired the operation after it agreed in April to buy copper miner Equinox Minerals for C$7.3-billion, trumping an earlier bid from China's Minmetals Resources.
The company is focusing on exploration at Lumwana, and sees “excellent potential for both brownfields and greenfields resource growth,” Krcmarov said.
The company will spend more than $50 million in 2011 as part of an 18 month exploration program to increase the measured and indicated resource as part of the expansion study.
“We feel confident that we can materially increase resources, throughput and production here,” Krcmarov said.
Lumwana is expected to produce 155-million to 175-million pounds of copper between June 1 and the end of the year, at total cash costs of between $1.75/lb and $1.95/lb.
Barrick is working on improvements at the operation, including mill debottlenecking, pit re-optimisation, mine sequencing changes and better dilution control.
TIGHT OR IN DEFICIT
The company expects that copper prices will continue to be well supported from both the demand and supply sides, CFO Jamie Sokalsky said.
Demand will be driven by emerging economies, and particularly the ongoing industrialisation and urbanisation of China, he said.
“Against the backdrop of demand that should continue to be strong, it's our view that the industry will continue to be challenged to provide a supply response for this strong and growing demand,” Sokalsky said.
A lack of large projects on the horizon and a litany of challenges facing the industry, “should keep the market tight or in deficit for an extended period,” he said.
“And that bodes very well for high copper prices going forward.”