Newmont flags job cuts at Waihi gold mine on surging costs
Global gold miner Newmont plans to scale back its exploration at its Waihi site in New Zealand's Coromandel Peninsula and expects to lay off 20 workers and contractors as operational costs surge faster than gold prices.
Newmont Waihi Gold is consulting with staff and contractors about its global restructuring programme which it expects to finish on Oct. 2, it said in a statement. About 20 staff and contractors will be affected by the cuts, and some are being offered roles at other Newmont sites.
"The reality is that over the past five years, our operational costs such as materials and labour, have risen far faster than gold prices and that has had a significant impact on the company," general manager of operations Glen Grindlay said. "We need to start reducing our costs now in order to keep the mine viable."
The price of gold has spiked since the global financial crisis in 2008 as investors fled risk-sensitive assets such as equity markets, and put them in so-called 'safe havens' such as precious metals. Gold prices have surged 142 percent to US$1,763.95 per ounce in the past five years, outpacing the 10 percent appreciation in the New Zealand dollar over the same period which would damp those gains.
Newmont said the cuts were part of a wider package across its global operations, with likely redundancies set at its four Australian mines and regional headquarters across the Tasman.
Today's job losses come a day after state-owned coal miner Solid Energy said it plans to cut its workforce by a quarter to 1,360 as it winds down its operations in the face of slumping coal prices.
Miners are marching on Parliament in Wellington this afternoon to plead their case for government assistance.
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