The West

High costs still hinder Newmont

The biggest gold producer in WA, Newmont Mining, has provided a down-beat outlook on the cost environment in the State, telling investors it will require higher ore processing volumes and "dispatching management" to mitigate further inflation.

Handing down his first full-year result since taking over as chief executive last March, Gary Goldberg flagged gold costs applicable to sales (CAS) for the company's Australia-New Zealand division this year were likely to range between $US855 an ounce and $US930/oz, then $US830/oz to $US910/oz next year and $US850/oz to $US925/oz in 2016.

The division, which includes the Boddington and Jundee mines and half of the Kalgoorlie Super Pit, last year contributed 1.8 million ounces to Newmont's 5.1moz global total at a CAS of $US966/oz. All-in sustaining costs were $US1176/oz, including $US1222/oz at Boddington.

Mr Goldberg said Newmont expected to keep group-wide CAS relatively stable over the next three years with the help of lower operating cost and efficiency improvements. In Australia, "higher throughput, as well as improved shutdown, payload and dispatching management are expected to offset the impact of anticipated inflation".

Mr Goldberg's outlook makes clear that one of the world's biggest mining companies is yet to see the end of the high-cost operating environment that is prompting mine closures and project deferrals.

Boddington remains Newmont's biggest regional producer but also its most challenging operation. Last year's CAS at Boddington, about 120km south-east of Perth, were $US1083/oz, 24 per cent higher than in 2012, primarily because of lower ore grades.

The Australia-New Zealand division has proven and probable reserves of 21.5moz, including 13.6moz at Boddington based on an average grade of two grams per tonne and an 80 per cent recovery rate.

The West Australian

Latest News From The West

WA could be hit with a domestic gas supply crunch within two years if there are delays to a processing plant at Chevron’s $45 billion Wheatstone LNG project near Onslow.

Roy Hill boss Barry Fitzgerald says the Pilbara iron ore miner will make an effort to recruit newcomers to the mining industry as it looks to find another 500 to 600 new workers in the next 18 months.

Former solicitor-general Justin Gleeson was consulted about the constitutional problems with WA’s audacious attempt to seize control of the Bell Group liquidation six months before the plan was …

Popular videos

Our Picks

Follow Us

More from The West