Saudi’s Ma’aden, Barrick Gold Set Up Joint Venture Around Copper Asset

Barrick Gold Corp said on Wednesday it has formed a joint venture with Saudi Arabian Mining Co (Ma’aden) to run the Jabal Sayid copper asset in the Kingdom, which will jump-start output at the long-delayed mine.

Toronto-based Barrick Gold said Jabal Sayid, located some 120 km (75 miles) southeast of Medina, is now expected to begin shipping low-cost concentrate in early 2016.

Ma’aden, which is controlled by the Saudi state, agreed in July to buy a 50 per cent stake in the project for $210 million.

Ma’aden said separately it will report the impact of acquiring the stake in its fourth-quarter financial statement.

Although some analysts criticized Barrick for selling the 50 percent interest for much less than fair value, others noted that forging a partnership with Ma’aden was a boost for Barrick as it lets miner finally get back on track on a project that has been mired in regulatory and licensing woes.

It also fits well with the Saudi state’s efforts to create a stronger industrial base, beyond oil refining and exports.

Barrick acquired the Jabal Sayid asset in the C$7.3 billion ($6.41 billion) purchase of copper miner Equinox in 2011. Most of the construction on Jabal Sayid has been complete for a while, but output was delayed due to permit problems and legacy issues over mining licenses.

In July, when Barrick initially outlined plans to form the joint venture, it said the tie-up would move the project along and get the mine into production in late 2015.

When fully operational, the mine is expected to produce 100 million pounds of copper in concentrate per year in its first full five years, with the potential to boost output to about 130 million pounds per year.