Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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NEWS-LEADING DEVELOPMENTS MARCH 2019 • E&MJ 5 $5 billion pre-tax net present value over a 20-year period. Barrick President and Chief Executive Officer Mark Bristow said the deal has been 20 years in the making. "We listened to our shareholders and agreed with them that this was the best way to realize the enormous potential of the Nevada goldfields' unequalled mineral endowment, and to maximize the returns from our operations there," Bristow said. "We are finally taking down the fences to operate Nevada as a single entity in order to deliver full value to both sets of share- holders, as well as to all our stakeholders in the state, by securing the long-term fu- ture of gold mining in Nevada." Following the completion of the joint venture, the Nevada complex will be the world's single-largest gold producer, with a pro forma output of more than 4 million ounces (oz) in 2018, three tier one as- sets, potentially another one in the mak- ing, and 48 million oz of reserves, the companies said. The agreement is expected to be com- pleted in the next few months. The joint venture will exclude Barrick's Fourmile project and Newmont's Fiberline and Mike deposits, pending the determination of their commercial feasibility. As a result of this agreement, Barrick has withdrawn its Newmont acquisition proposal announced on February 25. Barrick Gold Corp. said its proposal to merge with Newmont would form a gold company with unprecedented poten- tial for value creation. Barrick President and CEO Mark Bristow said the proposed merger would unlock more than $7 bil- lion net present value of real synergies, a major portion of which is generated by combining the two companies' assets in Nevada, including Barrick's mineral en- dowments and Newmont's processing plants and infrastructure. Barrick also recently merged with gold miner Randgold Resources and New- mont has entered into an agreement to purchase Goldcorp Inc. That transaction is moving forward as Goldcorp recently obtained an interim order from the On- tario Superior Court of Justice to hold its shareholder meeting in April. In the proposal, each Newmont share- holder would have received 2.5694 Bar- rick shares per Newmont share. Barrick shareholders would have owned approx- imately 55.9% of the merged company and Newmont shareholders would own approximately 44.1%. On March 4, the Newmont board unanimously determined Barrick's pro- posal wasn't in the best interest of New- mont's shareholders. Newmont CEO Gary Goldberg said, "The combination with Goldcorp is sig- nificantly more accretive to Newmont's shareholders on all relevant metrics com- pared to Barrick's proposal, even when factoring in Barrick's own synergy esti- On February 15, Brazil's National Mining Agency (ANM) released a new regulation establishing the ban of all dams in the country built with the upstream method fol- lowing the dam failure at Vale's Córrego de Feijão mine in Brumadinho, Minas Gerais, Brazil. Companies holding such structures will have six months to present a technical decommissioning project and until August 15, 2021, and August 15, 2023, to fully conclude deactivation processes of inactive and active dams, respectively. Wood Mackenzie estimated that Vale will produce around 50 metric tons (mt) less than planned this year. Following the dam failure, Vale announced a plan to de- commission all of its 10 upstream dams by 2022 at a total cost of approximately US$1.7 billion. The whole program is set to impact close to 40 mt per year of the company's total output. The company identified 35 tailings dams in Brazil as either an upstream type or unknown. "For the 35 dams, we have assessed weather disruption as a result of the de- cree will affect day-to-day mining oper- ations of the associated mine site," the company said. "Our analysis indicates that, exclud- ing Vale, close to 8 million mt of seaborne supply is at risk in 2019 with the new regulation," the company added. The supply cutbacks will most likely Morro do Ipê and junior miners that sell run-of-mine ore to Vale and CSN, Wood Mackenzie said. Pellet feed production from Usiminas will account for half of the export declines, with the other half sinter feed from the remaining impacted producers. Vale's losses of 50 million mt — 20 million mt of net losses from decommis- sioning plus 30 million mt from Brucutu's shutdown — indicates an incentive price of US$85/mt. A further 8 million mt of losses shifts the cost curve further to the left and suggests an incentive price of US$90/mt. The International Council on Mining & Metals (ICMM), which is governed by a council comprising of CEOs of member companies, recently announced it will es- tablish an independent panel of experts to develop an international standard for tailings facilities for its member compa- nies. The standard will be informed by a review of current global best practices in the mining industry, and beyond, the ICMM said. The standard is expected to create a step-change for the industry in the safety and security of these facilities. The details of the standard are expect- ed to include a global and transparent consequence-based tailings facility clas- sification system with appropriate require- ments for each level of classification; a system for credible, independent reviews of tailings facilities; and requirements for emergency planning and preparedness. "ICMM CEOs have committed to cre- ating a step-change for the industry in the safety of tailings facilities by developing a recognized international standard for member companies," ICMM CEO Tom Butler said. "The standard will be based on best practices to ensure that tailings facility risks are managed appropriately, consistently, and transparently." ICMM will engage with representa- tives from civil society, communities, industry, investors, and multilateral or- ganizations to determine the detailed scope of the review. The review will be carried out by a team of experts from di- verse disciplines, led by an independent chair and is expected to be complete by the end of 2019. ICMM will initiate work to define technical guidance for the safe design, construction, operation, and closure of tailings facilities, by drawing upon ex- isting technical best practice; develop capacity and a database to facilitate learning and knowledge sharing across the industry; and consider ways to lever- age member resources to enhance and optimize the industry's existing research and training initiatives. Brazil's Mining Agency Bans Dams Built With Upstream Method

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