Barrick Gold denies Freeport-McMoran tie-up in the works

February 6, 2020

Rumors of a possible merger of Barrick Gold, the world’s second-largest gold miner, and Freeport-McMoRan, the copper mining giant based in Phoenix, AZ, have been floating around the industry for some time, but on Feb. 5, Mark Bristow, Barrick’s chief executive officer, said those rumors are unfounded.

Speaking to Reuters at the Mining Indaba conference in Cape Town, South Africa, Bristow admitted that he is interested in Freeport-McMoRan’s Grasberg Mine in Indonesia but that the talks of a merger are “completely wrong.”

The Grasberg Mine in Indonesia is the world’s largest gold mine and the second-largest copper mine.

“People ask, ‘Are you interested in Grasberg?’ I say I have to be; it’s a tier-one asset,” Bristow explained.

With the rising popularity of electric vehicles, the demand for copper has risen. Bristow wants to grow Barrick’s copper business to capitalize on a projected increase in demand for copper.

“If you’re going to be a world-class gold miner, you’re going to have to accept copper. In 10 years’ time, the most strategic metal on this planet is copper if you believe the electric vehicle story, and I do,” said Bristow.

He cautioned, however, that he was far from finding a deal that would work.

Freeport-McMoRan, which traces its roots back to 1834, could bring with it legacy risk, he said.

“Freeport is a very old company and it has bought lots of very old companies, so there’s risk, rehabilitation liabilities... and also you would never want to go in a place like Indonesia without proper due diligence,” he said.

Freeport-McMoRan’s CEO Richard C. Adkerson said in January that he would consider acquisitions, mergers or other deals once three ongoing expansion projects finish by 2022.

Struggling with unrest at the Porgera Mine in Papua New Guinea (PNG), Bristow told Reuters that Barrick offered the government a 52 percent share of the economic benefits of the mine in response to government demands for a larger stake.

"Our principle is 50-50, like we did with Tanzania," he said. "In fact, in this case we will pay a little bit more than 50."

Last month Barrick signed a deal with Tanzania that gave the state a 16 percent stake in each of the company's three gold mines in the country and an equal share of the economic benefits from the mines, ending a bitter tax dispute.
 

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