Domestic gold industry bands together

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 13 Aug 2015   Posted by admin


Former Mines minister Norman Moore at the launch of the Gold Industry Group at Diggers and Dealers, Kalgoorlie.

Former Mines minister Norman Moore at the launch of the Gold Industry Group at Diggers and Dealers, Kalgoorlie.

By Courtney Pearson

August 13, 2015

IN a show of solidarity, Australian gold producers will launch a new Gold Industry Group (GIG) to represent the domestic industry.

The group, introduced at the Diggers and Dealers Forum in Kalgoorlie, would champion gold issues, education and community initiatives and promote gold as an investment.

The GIG was founded by companies including Gold Road Resources, Doray Minerals, Ramelius Resources and Norton Goldfields.

Less than half of Australian mines are owned by overseas companies following a rise in mergers and acquisitions which saw the emergence of locally-based, mid-tier gold producers.

Mining consultancy Surbiton Associates told the Diggers and Dealers forum that, while Australian gold output is still controlled by major international companies, the economic environment has caused domestic mid-tier players to lift their stakes in the Australian market.

“Gold production in Australia is still dominated by a few large overseas companies,” Surbiton Associates director Dr Sandra Close said.

“However, as some have sold down their Australian assets in order to reduce debt, the mid-tier Australian gold producers have taken the opportunity to increase the number of gold mines they own and lift their overall profit.”

Evolution Mining and Northern Star Resources were named as two of the most aggressive opportunists.

Late last month, Evolution Mining completed the US$550 million acquisition of Barrick Gold’s Cowal mine in NSW, while Northern Star Resources has fully and partly acquired five operations in the past five years.

“With the recent acquisitions by companies like Evolution and Northern Star, overseas control of the gold mining industry has slipped below 50 per cent,” Dr Close said.

Overseas control of Australia’s gold mining industry peaked in 2003 at 70 per cent, but has recently fallen due to a number of divestments.

Dr Close said the biggest problem mid-tiers would face was the integration of so many geographically and geologically diverse operations under a single corporate structure.

“Hopefully it will not be a case of growing too big, too quickly,” she said.

Newmont Mining is still Australia’s largest gold producer, annually producing about 1.5 million ounces of gold, and Newcrest Mining is Australia’s largest ASX-listed gold miner with 1.1moz per annum from its Australian operations.