Barrick Gold is a Canada-based mining company with a market capitalization of about $28 billion. If this seems like a lot you might compare it to Apple which is the world’s biggest by market cap, over two trillion dollars, or two thousand billion if that’s easier to grasp. It’s like you have $28 in your pocket and your buddy has $2000!
Barrick has over 21,000 employees which is about half the population of Siskiyou County. Compare that to the world’s biggest employer, Walmart, which has over two million in its ranks. Again, you’ve got 21 bucks and your pal has 2000!
The biggest mining company in the world is the Australia-based BHP. They weigh in at $128 billion. Barrick is 15th on the list of mining companies.
So they aren’t a small player. They are one of the “majors” in the mining industry. They are making a big seven billion-dollar bet on a copper mine called Reko Diq in a faraway place. A dangerous and unstable place.
Pakistan. And near the border of both Iran and Afghanistan.
The thing is, there’s no mine. Not yet. It’s just an undeveloped area with lots of copper and gold potential. It’s going to cost Barrick seven billion dollars to make it into a producing area. They hope to have a mine that lasts 40 years and can produce up to 80 million tonnes of ore annually.
All the wealth that is tied up in the world’s richest companies, like Saudi Aramco at number two ($2 T), Microsoft at number three ($1.9 T), followed by Alphabet ($1.4 T) and Amazon ($1.2 T), is dependent on the mining industry. I note that the market’s darling, Tesla, is listed at number six ($760 B), and is thus the poster child for mining. All the copper needed for the electric motors, the lithium and nickel for the batteries, not to mention the steel and aluminum requirements that all vehicles share, will have to come from big holes in the ground.
Those holes in the ground have to be where the stuff is. And the stuff could be in a crazy place like Pakistan. I think it’s amazing that an outfit like Barrick is willing to make a seven billion-dollar bet. That’s a big chunk of their overall wealth (one-fourth of their market cap). Would Apple make a five-hundred billion-dollar bet on a new product? I don’t know. I don’t think so.
Let’s hope the bet pays off. We’ll need the copper, that’s for sure. A seven billion-dollar bet is one dollar from each person in the world. I know there’s folks out there that could not part with that dollar as they might go hungry. So I’m willing to pony up a few hundred to cover some of them. How about the rest of you?