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« How does SK OptionTrader compare with other world class investments? | Main | Do Western Central Banks Have Any Gold Left??? »
Tuesday
Oct022012

No easy ride for world's top 10 gold miners

 

 LONDON (MINEWEB) - 

It's tough being at the top and staying there and the world's top 10 gold miners are no exception. They have not been having an easy ride of late.

Author: Lawrence Williams

Table 1: Top 10 Gold Mining Companies by Market Capitalisation

Rank 2012

Company

Market Cap ($billion)

1

Barrick Gold

41.10

2

Freeport-McMoRan

37.57

3

Goldcorp

36.56

4

Newmont Mining

27.79

5

Newcrest Mining

22.28

6

Yamana Gold

14.27

7

Anglogold Ashanti

13.44

8

Kinross Gold

11.46

9

Randgold Resources

11.30

10

Eldorado Gold

10.87

 

 

 

 

Nobody ever said mining was easy - all kinds of things can, and probably will, go wrong with an operating mine. And the world's top 10 gold miners, despite their years of mine-building expertise, are no exception, with most of them experiencing significant difficulties with one aspect or another of their operations over the past year or so.  Indeed they have, as a group, come in for a significant amount of flak over their poor stock price performances vis a vis the gold price.  In part this is because of a perception that ever rising production costs are eating into the profit potential generated by high gold prices, but, in truth, most of them have seen other factors coming into play which have also led to sometimes significant underperformance against the metal price - and even against their own past growth patterns.

But how does one categorise the top 10 gold miners?  A common practice is to define them by market capitalisation - see Table 1. below, but this creates some anomalies in the pecking order - notably with companies which produce significant quantities of other metals or minerals. Most, in fact, do so either through co- or by-products which are very significant in some cases.  Indeed in our listing by market capitalisation we have included Freeport McMoran in second place (a year ago it would have been top on the basis of the tabulation) which is actually primarily a copper miner, but, as can be seen in Table 2, which lists the major miners by annual gold output, it still classifies as one of the world's top gold producers under any categorisation so has been included nonetheless. In fact, of the global top 10 there are virtually none which could nowadays be classified as a 'pure' gold miner, except perhaps Randgold Resources which has come into the top 10 by market cap through a great growth performance and development pipeline, although remains well out of the listing of top gold miners by gold output.

If one goes through the individual companies in the listings one comes up with a chapter of problems for virtually all - from delayed new project developments (Barrick Gold), major labour disputes/difficulties - Freeport, AngloGoldGold Fields (which has slipped out of the top 10 by market capitalisation but ranks fourth by mine output), Existing project expansion setbacks (Goldcorp, Newcrest), Geopolitical difficulties (Newmont), Significant underperformance of major strategic asset (Kinross).  Indeed the perceived problems are such that so far two CEO heads have rolled (Barrick Gold and Kinross) and there are rumours that others may yet follow.

Please click here to read this article in full.

Have a good one.

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