TORONTO (Jan. 31, 2008) — Barrick Gold Corp. will loan Yokohama Rubber Co. Ltd. $35 million to help finance an expansion of Yokohama's OTR tire plant in Japan as part of a 10-year, $200 million deal between the firms.
The contract, which would start in 2009, covers five sizes of bias-ply OTR tires, including loader and haul truck sizes up to the 40.00-57 profile, Barrick said.
In addition, Yokohama will provide technical assistance with each Barrick site to ensure that the proper compound, tread pattern and other characteristics are optimized for the operation.
Barrick mines will receive delivery directly from Yokohama's plant in Onomichi, Japan, and direct-from-manufacturer pricing for the duration of the contract, Barrick said.
To meet the demand of the contract — 1,300 tires a year for 10 years — Yokohama will spend $50 million to expand the Onomichi plant with a new building, production line and related equipment, Barrick said. The expansion there is expected on stream late this year.
Barrick said a boom in recent years in the mining and construction industries created high demand and tire shortages as well as upward pressure on prices.