After years in doldrums, gold miners are finally hot again


LONDON: After years on the sidelines, gold producers are suddenly the mining world’s hottest topic as the industry gathers in Cape Town this week.

For more than half a decade, gold miners have been stuck in the doldrums, shunned by investors following a string of missteps and bogged down by a stagnant bullion price. Then, in September, a surprise mega deal turned the industry on its head.

Barrick Gold Corp’s US$5.4bil purchase of Randgold Resources Ltd set off a chain reaction that led to Newmont Mining Corp’s US$10bil deal for Canada’s Goldcorp Inc last month.

The flurry of activity – which coincided with a late-2018 surge in bullion prices – has re-ignited interest in gold, throwing the whole industry into a thrall of speculation over who might be next.

“It’s an exciting time to be a gold miner,” said Martin Horgan, the chief executive officer of Toro Gold, who arrived in Cape Town this weekend.

Horgan said while specialist funds have remained supportive of profitable companies, he sees the resurgent gold price drawing generalists back to the sector.

As thousands of executives, investors and bankers fly in to Cape Town for the annual Mining Indaba conference, one of big themes for the week is likely to be the future of South Africa’s own gold mining industry.

The country’s gold output fell for a 14th straight month in November as the sector grapples with cost pressures, geological challenges and labour disputes.

The biggest Johannesburg-based producer, AngloGold Ashanti Ltd, is currently considering a London listing and exiting its last South African gold projects, people familiar with the matter said in December.

Further afield, analysts have tapped companies from Kinross Gold Corp to Iamgold Corp and Australia’s Newcrest Mining Ltd as names to watch amid expectations that the wave of deals has further to run.

Gold equities have also been boosted by a rebound in bullion. The metal’s impressive December rally has carried over into 2019 as concerns stack up about slowing global growth and holdings in exchange-traded funds continue to expand.

For the wider mining industry, the excitement around gold has served as a shot in the arm at a time when big diversified producers are veering away from dealmaking fireworks in favour of asset sales, cost cutting and shareholder returns.

It’s also a boon for the Mining Indaba. In recent years, the largest global producers have had a shrinking public presence at the conference, with no sign of executives from Glencore Plc or BHP Group and a reduced role from Rio Tinto Group.

Only Anglo American Plc, the century-old miner built on South Africa’s natural resources, is sending its chief executive officer this year. The company also hosts the official dinner at its 300 year-old Vergelegen wine estate, an hour’s drive from Cape Town. — Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Business , Gold

   

Next In Business News

Axiata seeks 66% stake in Indonesia's Link Net
Pos Malaysia appoints Charles Brewer as new Group CEO�
Bursa ends July on a disappointing note, KLCI closes below 1,500
Gamuda Engineering, Bosch Rexroth to raise construction benchmark
SC cracks down on Binance, tells investors to take their money out
KLCI falls below key 1,500 level
CIMB Niaga posts higher 1H net profit of RM614m
Oil prices drop, but on track for weekly gain
Dollar near one-month low, set for worst weekly showing since May
Asian shares extend losses, set for worst month since March 2020

Stories You'll Enjoy


Vouchers