Copper production lower
In 2014, Barrick Gold’s (ABX) copper production of 436 million pounds was 19% lower than the prior year. The decrease was primarily due to lower production at Zaldivar. This was due to lower tons processed combined with a minor disruption in leaching irrigation due to piping and pump failures.
The decrease in production at Lumwana was primarily due to the shutdown of the mill and concentrate production for a significant portion of the second quarter 2014. The shutdown resulted from the partial collapse of the terminal end of the main conveyor, combined with the adverse effect of an unusually long and severe rainy season in Zambia during the second quarter of 2014.
Cost of sales for 2014 was $961 million, a decrease of 14% compared to the prior year. The decrease was primarily due to lower sales volumes compared to the prior year. C1 cash costs were $1.92 per pound, which was in line with the prior year. The impact of decreased production levels on unit production costs was more than offset by the benefit of lower direct mining costs.
In 2014, capital expenditures decreased by $107 million, or 26%, compared to the prior year. The decrease was mainly due to lower mine site sustaining capital expenditures at Zaldivar due to the deferral of expenditures. It was also due to lower project capital expenditures at Jabal Sayid, which was put on care and maintenance in late 2013.
Guidance lower on Lumwana suspension
Copper production guidance for 2015 of 310–340 million pounds at C1 cash costs of $1.75–$2.00 per pound assumes the planned suspension of Lumwana in March.
Lower copper prices have also led other copper producers such as Freeport-McMoRan Inc. (FCX), BHP Billiton Ltd. (BHP), and Southern Peru Copper Corporation (SCCO) to cut their costs and capital expenditures.