Barrick to Fund Yokohama OTR Tyre Expansion

Further to the January 30 announcement that Yokohama Rubber has signed an OTR tyre supply agreement with Barrick Gold Corporation, the mining giant disclosed it has provided Yokohama with financial assistance to upgrade its facilities in preparation for supply.

The 5 billion yen (£23.57 million) expansion includes a new building, production line, and related equipment, and according to a statement released by Barrick these additions will be primarily funded by a US$35 million loan made available by the company. Start up, Barrick adds, is scheduled for late in the fourth quarter of 2008.

“This is an innovative response to the worldwide tyre shortage now facing the mining industry,” said Barrick president and CEO Greg Wilkins. “We are providing partial financing for our supplier’s plant expansion to secure a supply of high quality tyres for our operations and our new projects. In our assessment, Yokohama produces the finest bias-ply OTR tyres on the market, so we are proud to partner with them as a key tyre supplier.”

The contract covers five sizes of bias-ply, giant OTR tyres, including loader and haul truck sizes up to the 40.00-57 profile. In addition, Yokohama will provide technical assistance at each Barrick site to ensure that the proper compound, tread pattern, and other characteristics are optimised for the operation. Barrick mines will receive delivery directly from the Onomichi plant and direct-from-manufacturer pricing for the next decade.

Barrick reports that tyres are one of its single largest procurement expenses. For all tyre categories, Barrick spent a total of about $80 million in 2006. The company currently buys about 3,000 giant (45 inch and larger) tyres a year, and that number is expected to increase to 4,500 by 2012.

As a result of the high global demand for radial tyres, Barrick has rediscovered applications for bias ply tyres such as those Yokohama will supply. Testing conducted by Barrick tyre teams in Peru at the start of 2005 determined that 51 and 57-inch bias ply tyres could be successfully used for haul trucks at appropriate speeds and loads. These findings were shared with other Barrick sites, which replicated local testing later that year. Further tests held in early 2007 at the company’s flagship Goldstrike mine in the US, using Yokohama bias ply tyres on the front and rear positions of haul trucks at full rated load and speed, concluded that Yokohama bias ply tyres performed as well as radials on 190-ton trucks.