Australian gold ownership balance on the edge

Local control of Australia’s gold mining companies came close to dipping below 50 per cent last month, when US-based Newmont Corp made a takeover bid for Newcrest Mining, Melbourne-based consultants Surbiton Associates said. The $24.4 billion bid for Australia’s largest ASX-listed gold mining company was rejected by Newcrest’s directors as inadequate. “It would be rather sad to see Newcrest go to an overseas-based owner, as local control of Australia’s gold mining companies would then fall to below 50 percent,” Surbiton director Sandra Close said. “Unfortunately, few people now know that huge changes in control of the Australian gold industry have happened before." Surbiton Associates director Sandra Close. Dr Close has published two books on the industry; Australia’s Greatest Gold Boom and The Great Gold Renaissance. "Together these books cover the whole modern gold boom and explain how Australian control of the local gold industry went from 80 per cent to under 30 per cent in just a few years but more recently has recovered to stand at around 60 per cent,” she said. “... It will be interesting to see what happens regarding the Newmont bid for Newcrest. "One aspect which had a major impact on the change in overseas control in the early 2000s was the US dollar:Australian dollar exchange rate – it will be worth keeping an eye on this factor particularly.” US dollar gold prices slumped in February to the lowest figures for almost two years, but Australian gold producers have been broadly shielded from the impact. Dr Close said fall in US dollar gold prices was mainly due to the appreciating US dollar compared to other currencies, including the Australian dollar, plus the effects of increasing interest rates worldwide. “Although the US dollar gold price fell by US$101 per ounce in February 2023, the Australian dollar gold price only declined by A$14 per ounce over the same period, thanks to a weaker Australian dollar,” she said. “For local Australian producers and investors, it is absolutely vital to pay attention to the US dollar:Australian dollar exchange rate.” Dr Close was commenting as Surbiton Associates released figures on the Australian gold industry’s output for the full 2022 calendar year. “Gold production for the 2022 calendar year totalled around 313 tonnes, or a little over 10 million ounces and just half a percent or two tonnes less than in 2021,” Dr Close said. “The value of gold produced in 2022 was around $26 billion and, as most of this gold is exported, the gold mining industry is an important contributor to Australia’s total foreign exchange earnings. “For the three months to 31 December 2022 gold output was around 78 tonnes. This was around four percent or almost three tonnes more than for the previous three months.” She said that overall, the industry’s performance was steady, with the usual ups and downs at individual operations. Australia’s largest gold producing operations in 2022 were: Operation Ounces Owner Boddington 798,000 Newmont Inc Cadia 647,790 Newcrest Mining Ltd Tanami 484,000 Newmont Inc SuperPit 469,084 Northern Star Resources Ltd Tropicana JV 438,665 AngloGold Ashanti 70%, Regis Resources 30%

Australian gold ownership balance on the edge

Industry Queensland

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