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The Globe and Mail

Balance sheet carnage: Eight big mining deals gone bad

1 of 8

Agnico-Eagle Mines
The purchase: Junior explorer Cumberland Resources Ltd. for $710-million in 2007.
The problem: Agnico-Eagle suddenly realized its Meadowbank mine in Nunavut would cost a bundle to develop.
The writedown: $644-million last February.


2 of 8

BHP Billiton Ltd.
The purchase: Fayetteville shale gas assets in the U.S. for $4.75-billion in 2011.
The problem: Falling natural gas prices interrupt BHP’s growth strategy.
The writedown: $2.84-billion last year.


3 of 8

Barrick Gold Corp.
The purchase: Equinox Minerals Ltd. for $7.3-billion in 2011.
The problem: The prized Lumwana copper mine in Zambia turned out to be a cash drain as extraction costs rose. Copper prices fell, too.
The writedown: $3.8-billion this week.


4 of 8

Newmont Mining Corp.
The purchase: $1.5-billion for Hope Bay project in Nunavut in 2007.
The problem: After initial optimism, Newmont deems it too expensive to delve into one of the largest undeveloped gold sites in North America.
The writedown: $1.61-billion last year.

Newmont Mining

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5 of 8

Rio Tinto
The purchase: Alcan Inc. for $38.1-billion (U.S.) in 2007.
The problem: Rio Tinto paid top dollar for Alcan at the peak of the commodity cycle. Demand slowed and aluminum prices slumped.
The writedown: $14-billion last month. The aluminum portion of the charge, roughly $11-billion, raises Rio’s total Alcan writedown to about $30-billion, or almost 80 per cent of the purchase price.


6 of 8

Anglo American PLC
The purchase: Minas-Rio iron ore mining project in Brazil for $5.2-billion in two deals in 2007-08.
The problem: Iron ore prices tanked. Anglo has shelled out $3.8-billion on Minas-Rio, with another $5-billion planned.
The writedown: $4-billion this week.


7 of 8

Cliffs Natural Resources
The purchase: Consolidated Thompson Iron Mines Ltd. for $4.9-billion (U.S.) in 2011.
The problem: Iron ore prices are driven by Chinese steelmaking.
The writedown: $1-billion in January.

Cliffs Natural

8 of 8

Kinross Gold Corp.
The purchase: Red Back Mining Inc. for $7.9-billion in 2010.
The problem: Valuation slashed at the Tasiast mine in Mauritania as capital and operating costs increase in industry.
The writedown: $5.6-billion, including $3.1-billion this week and the rest from last year.


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