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Gold miners need gold above $1,650 to keep nose above water
For the gold industry to keep its nose above water and maintain the current production base, gold prices need to stay above $1,650 an ounce.
Speaking to Mineweb from the sidelines of the 2012 African Mining Indaba conference, AngloGold Ashanti CEO, Mark Cutifani, said, at a price of $1,650 per ounce, gold miners are “only just returning the weighted average cost of capital for the industry”.
This is the number that gold miners need to work from on a real basis he says, but added, “The average cost to produce an ounce of gold, all up, everything loaded in, is about $1,200 to $1,250.
Harmony Gold CEO, Graham Briggs, agrees with Cutifani saying, from Harmony’s perspective, the all-in cost to pull an ounce of gold out of the ground is around $1,250. This figure includes everything from the cost of the Harmony head office to maintenance and its exploration programme which is why it is higher than the $958/oz cash operating cost figure reported by the miner at its half year results on Monday.
Briggs added, “Of course there are other costs as well that would need to be added in over and above these so Mark [Cutifani] is probably fairly spot on with his calculations.”
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