Zambia agrees to Further Investment from Barrick Gold

Oct 6, 2023 | Business, News, Politics | 0 comments

In other positive economic news for Zambia, Barrick Gold recently announced plans to invest nearly $2 billion to expand its Lumwana copper mine. The Canadian mining giant aims to turn Lumwana into a “super pit” operation by developing two new large-scale open-pit mines.

The project is expected to extend the life of the mine by over 20 years while increasing average annual copper production to 250 million pounds. At its peak, production could reach 350 million pounds per year by the end of the decade, Barrick said.

The investment signals a remarkable turnaround for Lumwana, which was slated for closure in 2015 when copper prices slumped amid operational challenges. Barrick acquired the mine later that year through its merger with Equinox Minerals. 

Since then, Barrick has worked to optimise the operation, navigate power constraints, and improve efficiencies. The super-pit expansion will develop two high-grade deposits known as Malundwe and Chimiwungo, turning Lumwana into one of Zambia’s largest and most productive mines.

For the Zambian government, the project represents a major boost to the country’s copper sector, which accounts for over 70% of export earnings. With demand for copper expected to grow thanks to its use in electric vehicles and renewable energy, an expanded Lumwana mine holds significant economic potential.

Barrick said the capital investment will go towards mining fleet replacement, equipment and infrastructure upgrades, as well as exploration drilling. The company expects to employ over 4,500 Zambians at Lumwana by 2027, up from the current workforce of 3,000.

While details are still being finalised, the expansion bodes well for local job creation and growth in copper production at a time when Zambia is looking to tap its vast mineral resources to drive broader economic development.

For Barrick, the potential rewards are also substantial. The low-cost, open-pit super-pit mines are projected to generate robust returns for decades to come, despite the hefty upfront investment. As long as copper demand remains robust, the gamble on Lumwana’s untapped potential could pay off handsomely.

The expansion project will unfold in multiple phases over several years, with Barrick forecasting initial production from Malundwe by 2027. Once complete, the super pit concept could potentially be a template for optimising other mines in Zambia and across Africa.

With Barrick’s willingness to invest in Lumwana’s long-term future, the mine’s best days may still lie ahead. For Zambia’s struggling economy, the planned expansion provides reason for optimism that better times may be on the horizon.