Barrick Gold, the World's Second Largest Gold Miner, Is Also Betting on Copper in Addition to Gold

Mark Bristow, chief executive of Barrick Gold, the world's second-largest gold miner, told the media that the company is looking for acquisition targets because it predicts a rebound in two key commodities. The two commodities Bristow is referring to are gold, the company's main business, and copper metal, another business the company is expanding. It is understood that the copper mine business accounts for about 20% of Barrick's profit at this stage. Bristow expects higher gold and copper prices ahead, boosting mining stocks. Recently, the spot gold price set a new record high of US$2,080 per ounce, but then fell back significantly. The latest trading was around US$2,024, which has increased by 10% since the beginning of the year; while LME copper futures have fallen significantly since February, but still held onto the gains made since the beginning of the year.
Previously, Bristol had stated that while increasing gold production, the company was also optimistic about the importance of copper mines in the electrification of the industry, so it decided to expand its copper mine business. “There is significant upside risk to gold and copper prices, with supplies of both tightening and central banks planning to diversify their reserves by holding gold instead of dollars,” he said in the latest interview. In the current environment of high inflation and high interest rates, the importance of gold as a precious metal goes without saying. The latest report from the World Gold Council shows that central banks of various countries began to buy gold in large quantities in early 2023: demand in the first quarter reached 228 mt, an increase of 176% from 82.7 mt in the same period last year, the strongest first quarter on record. At the same time, in the context of the global shift to renewable energy such as electric vehicles and wind power, copper metals with excellent electrical conductivity are naturally enthusiastically sought after by many mining companies. Mining executives and traders are also warning that historically low copper inventories raise the risk of a price spike later this year. In February this year, Barrick Gold's main competitor and the world's largest gold miner by market value, Newmont Mining, launched an offer to acquire Australia's largest gold mining company, Newcrest Mining, for nearly US$17 billion. The deal boosts its position in the global copper and gold mining sector. In November last year, Newcrest Mining's acting CEO Sheri Duhe said that he planned to increase the proportion of copper mining business to cope with the increase in demand. Some analysts said, "A stronger Australian dollar, rising gold prices and reduced global reserves mean that more mergers and acquisitions will occur in the (mining industry), especially for companies like Newcrest that hold rich copper resources." Previously, Bristow also revealed that Barrick intends to buy copper assets and focus on areas where its rival (Newmont) cannot operate. Bristow said Barrick had built a strong exploration team since it acquired African-focused miner Rand Resources five years ago. “We have an exploration footprint across all frontline gold and copper districts and our geologists are on the front line. We understand M&A activity far better than most of our peers. "