Miner eyes new options

Business, Normal
Source:

The National, Thursday 13th June 2013

 By GYNNIE KERO

Newcrest Mining Ltd aims to simplify its Lihir operations and achieve reliable predictable performance, country manager Peter Aitsi says.

He said this after Newcrest writes down the value of its mines in PNG, Australia and Africa by A$6 billion (K12.6 billion).

A major chunk of anticipated write-downs – about A$3.6 billion – is related to the Lihir operations, which Newcrest acquired in 2010.

The Australian leading gold miner is seeking to slash overall corporate costs by 20%, in the process closing its Brisbane office and cutting 250 Australian jobs.

Newcrest’s shares have lost 70% of their value in the past two years and the company was valued at about A$9 billion (K18 billion) on June 11

The company plans to improve its cash flow over the next three years by cutting discretionary spending on projects and studies, reducing exploration activities, cost-cutting, using the stockpile at Lihir and suspending production of high cost operations.

Aitsi said: “Gold prices have fallen and investors are expecting returns rather than growth.  

“Newcrest is working on productivity and efficiency opportunities and to reduce costs across the business.

“All our sites are reviewing their activities to simplify, reduce activity, and focus on priorities and lower costs.  

“This is in response to changed global conditions for resources companies, a lower gold price and our own need to improve production performance. 

“With the major plant upgrade at Lihir completed, we are now working on achieving reliable predictable performance, optimising the plant, reducing activity and simplifying our operations. Our employees are aware of this.  

Aitsi said that Newcrest, like other resources companies, is responding to changed global economic circumstances.