July 13 (Bloomberg) -- Barrick Gold Corp., the largest producer of the metal, agreed to form a joint venture with Saudi Arabian Mining Co. to operate a copper project in the country.
The Saudi company, which is also known as Ma’aden, will acquire 50 percent of the Jabal Sayid mine in the Middle Eastern country for $210 million, Toronto-based Barrick said in a statement today. It’s expected that the sale will close in the fourth quarter and the mine will start production in late 2015, the company said.
Barrick acquired Jabal Sayid when it bought Equinox Minerals Ltd. for C$7.1 billion ($6.6 billion) in 2011. While construction of the project was completed in 2012, its startup was delayed after Saudi regulators said the site wasn’t in compliance with local safety standards. The government also questioned whether it should have been asked to approve changes in ownership of the project.
The joint venture “will enable the Jabal Sayid project to move forward with the benefit of Ma’aden’s extensive experience in the Saudi Arabian mining sector,” Barrick Chief Executive Officer Jamie Sokalsky said in the statement.
Ma’aden is 50 percent owned by the government of Saudi Arabia. Jabal Sayid is located 120 kilometers (75 miles) southeast of Medina and is expected to produce about 100 million to 130 million pounds (45,000 to 59,000 metric tons) of copper in its first five years of operation, Barrick said.
Barrick Chairman John Thornton is seeking to establish partnerships with Chinese companies that may include investment in Barrick and future mining projects, people familiar with the situation said in December.