Monday, June 28, 2010

Eight Mega-Sized Gold Projects Coming On Stream..Or Seven

The numbers in "Sizing Up the World’s Mega Copper-Gold Projects" are eye-opening. Collectively, the metals have a gross value of $846 billion. One project, the Oyu Tolgoi in Malaysia, promises to be the biggest gold mine ever in terms of value. (It's owned by Ivanhoe.) The capital costs needed to get it up and running are probably a record too: $6 billion. One of the eight projects mentioned is being reviewed because it's not economic.

Near the end is an item, concerning a ninth deposit, that can serve as a warning. That huge deposit in the Pakistani province of Balochistan looks like it's going to be taken over for development from the company that discovered it. Reko Diq, owned by Barrick Gold and Antofagasta, might be (effectively) expropriated by the province although the companies plan to fight to keep it. At a price tag of $4 billion in capital costs, they'd better be sure they win in the end.

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