Newmont expects to take charge of $77 million
Newmont Mining Corp, the world’s No.2 gold miner, said third-quarter gold production fell 6 percent and it said it faced a record $77 million in maintenance and restructuring charges, Reuters reported.
Lower mill availability and recoveries at Boddington in Western Australia, and lower ore tons and grade mined at Tanami in northern Australia as reasons for lower productivity, cited by the Denver, CO-based company.
Gold production was 38.5 t (1.24 million oz), down 5.3 percent from 40.7 t (1.31 million oz) in the same quarter last year.
Reuters reported that Newmont said it is expecting a $27 million charge for the Hope Bay project in Canada and a charge of about $50 million for restructuring, severance, and related costs during the quarter.
The gold mining sector are facing difficulties in negotiating with workers over wages and jobs leading to a series of strikes and general labor unrest in the mining industry.
Though the price of gold has more than quintupled in the last decade, from about $300/oz in 2002 to over $1,700/oz, labor and material costs have skyrocketed along with metal prices.
Rising costs have weighed on the share prices of gold miners, most of whom have lost value this year even though spot gold is still well above historic levels.
In January, Newmont Mining said was evaluating development options and the feasibility of its Hope Bay project in Northern Canada, and set aside maintenance funding for the site. The project was not included as part of the company’s 2017 strategic growth plan.
Last month, Newmont said it plans to shed workers and cut costs at its giant Indonesian copper and gold mine as it loses a million dollars a day in cash flow because of low output that will continue through next year.