Wednesday, 8th March 2006 (2679 views)

The gold mining sector is poised for further consolidation, according to the man at the helm of the world's second largest gold outfit.

In an interview with Reuters, Newmont chief executive Wayne Murdy argued that "we probably still have a fair way to go", predicting that continued M&A activity was likely.

US-based Newmont recently lost its number one spot to Canada-based Barrick after it completed its acquisition of rival Placer Dome last month.

But Mr Murdy argued that the balance of power is steadily shifting towards the industry's big players due to the recent increase in costs associated with developing mines.

"The day of the small miner coming in and being able to develop a mine, operate it just on the shoestring and at the end of the life of the mine there's no money left - I think those days are over," he said.

Last month Canada-based Barrick also indicated it may continue to dip into its pocket to fund further acquisitions, even as it digests its latest conquest.

Barrick expects to produce between 8.6 million and 8.9 million ounces of gold this year, more than two million ounces more than closest rivals Newmont and AngloGold Ashanti.

 

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