Barrick Gold beats Minmetals to buy Equinox Minerals

Aerial shot of the Lumwana copper mine in Zambia
Image caption Equinox counts the major Lumwana copper and uranium mine among its assets

Barrick Gold has beaten a Chinese rival to buy a major copper miner in the latest battle over commodity supplies.

The world's biggest gold producer will pay 7.2bn Canadian dollars ($7.4bn, £4.5bn) for Equinox Minerals.

The offer, which has been accepted, is 16% higher than a rival bid from China's Minmetals earlier this month.

Equinox owns the Lumwana copper and uranium mine in Zambia - Africa's third largest - and the Jabal Sayid copper deposits in Saudi Arabia.

The firm, which is jointly listed in Canada and Australia, said that Barrick's offer was superior not only in terms of price, but also its likelihood of being completed.

Equinox has agreed not to seek any other bids and to give Barrick the right to match any other solicited bids received. It also agreed to pay Barrick a 250m Canadian dollar fine if it withdraws from the takeover.

Riding high

"The acquisition of Equinox would add a high-quality, long-life asset to our portfolio and is consistent with our strategy of increasing gold and copper reserves through exploration and acquisitions," said the Canadian gold producer's chief executive Aaron Regent in a statement on the firm's website.

"Combined with our Zaldivar mine and Cerro Casale project in Chile, this acquisition would position Barrick with significant production growth potential in two of the most prolific copper-producing regions of the world."

Barrick has been riding high thanks to the gold price, which hit a new all-time high on Monday of $1,518.30 an ounce.

But the company's share price closed down almost 7% on Monday after the deal was announced.

While the gold price has doubled in the last two years, the price of copper has more than tripled to its own all-time high.

And Equinox' share price has risen with it. It had increased sevenfold since 2008, even before Minmetal's bid became public.

The Chinese firm's interest pushed up Equinox shares a further 32% to 7.55 Canadian dollars.

Following Barrick's $8.15-a-share offer, the copper miner's share price jumped even further on Monday to $8.37.

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