KEY POINTS
- Barrick Gold aims to complete the Lumwana mine feasibility study by late 2024.
- The expansion could double the mine’s copper production by 2028.
- The project promises a 20% internal rate of return.
Barrick Gold expects to finish a feasibility study for the expansion of its Lumwana copper mine in Zambia by the end of this year.
The company hopes to create a foundation to commence construction in 2025 as it aims to turn the mine into one of the world’s best copper producers. During the recent webinar, Barrick’s CEO Mark Bristow shared that the expansion will transform Lumwana into a long-life, high-grade copper producer and position it in the top 25 copper mines in the world.
The project involves a significant boost in mining volumes and production capacity. Currently, Lumwana utilizes 27 million tonnes per annum of material. The expansion will bring this up to 52 million tonnes by optimizing the current process circuit. Consequently, it is projected that the annual copper production of the mine will double from 120000t to 240000t.
Ramp-up plans and expected growth
According to Mining.com, Barrick has a phased plan for increasing mining volumes. Starting in 2024, mining output will gradually rise, reaching 240 million tonnes by 2028. By 2030, production is expected to stabilize at 290 million tonnes annually. This ramp-up is key to maintaining competitive production costs and boosting cash flow.
Barrick’s Chief Operating Officer for Africa and the Middle East, Sebastiaan Bock, highlighted the expansion’s expected financial gains. Based on long-term copper price forecasts, annual operating cash flow and free cash flow are projected to increase by 85% and 60%, respectively.
Regarding profit returns, Barrick estimates an additional net present value (NPV) of $1.7 billion for the expansion. However, with copper prices forecasted at around $4.13 per pound, the project could deliver a 20% IRR. Barrick expects to recover the initial investment in just two years after the expansion is complete.
Long-term benefits for Lumwana mine
Once the new processing plant is online in 2027, Barrick expects costs to fall significantly. This cost of sales is estimated to drop to $2.36 per pound, while C1 cash costs are predicted to decrease to $1.85 per pound. This would place Lumwana among the most cost-efficient mines in the world.
The project continues to progress rapidly, and Barrick has made equipment procurement decisions by ordering mill and crusher-sized items. Preconstruction grading is set to commence next year while the Zambia government is likely to endorse the environmental and social impact assessment by year-end.
