Barrick Gold Corp.—arguably the largest gold producer in the world—is seeking to establish its position in the southern African nation of Zambia’s copper sector. Zambian officials have now included the Lumwana copper mine as part of Barrick’s $7.5 billion acquisition of Equinox Minerals.
As part of the acquisition, the Zambian Competition Commission has placed some stringent requirements on Barrick. First, Zambia Consolidated Copper Mines Investment Holdings must retain its 2.2 percent stake in Equinox. Second, existing agreements with local smelters and suppliers in regard to the Lumwana copper mine must be maintained while minimizing job losses of Zambian citizens.
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“The Board granted final conditional authorization on the premise that the acquisition did not raise any competition concerns because Barrick Gold Corp. (ABX) had no known presence in Zambia and, therefore, unlikely to lead to a situation that could substantially lessen competition in the mining sector,” said the commission.
Zambia is the largest producer of copper on the African continent and is expected to increase output to 2 million metric tons per year by 2015. A nearly doubling in the price of copper in recent years has seen a boom in production.