« "Diamonds Are For Ever", But Are Diamond Mines? | Main | Luxury Watches Coming To China. »
Predict Gold To Become Scarcer.
Financial Times of London quotes Bobby Godsell, chief executive of AngloGold Ashanti, predicting that worldwide gold production will stagnate, then fall in the coming years as large deposits of the precious metal become scarce.
He said this would support the rally in the gold price, which last week hit a 25-year high of $588 per ounce.
The South African company, the world’s third biggest gold producer, mined 6.2m ounces of gold in 2005 but expects production to be lower this year, between 5.8m and 6.1m ounces, and then increase again in 2007 as new projects come on stream.
But in an interview with the FT, Mr Godsell warned that the gold industry will find it hard to keep up current levels of production. “All of the gold majors are finding it difficult to replace their reserves. New mine production will be flat-to-declining.”
RBC Capital Markets in London estimated that total gold production would rise slightly in 2006 and 2007, be flat in 2008 and start to fall in 2009. “There hasn’t been a big gold discovery for years,” said an analyst.
Mr Godsell said: “Gold is precious because it is scarce. Twenty years ago the majority of gold was produced by four old world countries: South Africa, Australia, Canada and the US. In the future it will be anything but. Tomorrow’s ounces of gold are going to be in interesting countries.”
AngloGold, which has expanded away from its base in South Africa as the country’s reserves of gold dwindle, is focusing on exploration in high potential but high risk areas such as the Democratic Republic of Congo, Colombia, Mongolia and Russia.
The high gold price has stimulated exploration activity by smaller mining companies, but Mr Godsell is sceptical about whether this will lead to increased gold supplies as rising costs threaten to kill off these projects. “The juniors have a better track record of finding ore bodies [than major gold companies], but to build a mine now you are talking about $500m for an open pit and at least $1bn for an underground mine,” he said.
Speculation that AngloGold would try to grow by takeover has increased since Anglo American, a UK-listed mining group, said it would cut its stake in the company from 51 per cent to 41 per cent. After Anglo American cedes direct control AngloGold would be “more fleet of foot” in making decisions on mergers and acquisitions, said Mr Godsell. “We look at everything and we have exploratory discussions, but we have no announceable deals.”
Rumors have suggested AngloGold may buy Gold Fields of South Africa, the fourth biggest gold miner, to form the world’s largest gold company. “There are some synergies, we both have mines in South Africa, Ghana and Australia. If we could put together a good deal that would be in the interests of shareholders that would be a great thing to do.”
But he added: “Most M&A activity is value-destructive and this may be particularly true in the gold sector as gold shares trade at a premium.”
Scare tactics or accurate? Time will tell.
Comments
You stand for a different point on your post than many people do. I entierly agree with you.
Posted by: Tremblay Headache on March 18, 2011 2:52 PM
Nice blog.keep up the good work.
Posted by: Burton Haynes on March 31, 2011 4:56 PM
Very usefull blog. i will follow this blog. keep up the good work.
Posted by: vstabi mikado on April 11, 2011 6:16 PM
how aged is th is post?
Posted by: Rosetta stone languages on April 22, 2011 3:18 PM
I really loved th is submit!
Posted by: Christian Louboutin Pumps on April 23, 2011 1:03 PM
Fantastic post but several additional images could make it improved
Posted by: Rosetta stone languages on April 25, 2011 11:16 AM
This is certainly a topic thats close to me so Im happy that you simply wrote about it. Im also pleased that you did the subject some justice. Not merely do you know a fantastic deal about it, you know how to present in a way that people will need to read much more. Im so happy to know somebody like you exists on the web.
Posted by: mens shoulder bags on June 4, 2011 1:59 PM
Im a large fan already, man. Youve performed a brilliant job generating certain that people recognize where youre coming from. And let me tell you, I get it. Wonderful stuff and I cant wait to read much more of your blogs. What youve got to say is essential and wants to be read.
Posted by: Boots Travel Insurance on June 4, 2011 4:01 PM
This is really a smart weblog. I mean it. You've so a lot understanding about this problem, and so a lot passion. You also know the way to make folks rally behind it, certainly from the responses. Youve got a style here thats not too flashy, but makes a statement as massive as what youre saying. Wonderful job, indeed.
Posted by: Shower Hose on June 4, 2011 8:56 PM
What I wouldnt give to understand how you got your design to be so incredible! I mean it. Besides the weblog just becoming awesome, this page is too sweet! Its not too flashy. It doesnt do an excessive amount of with colours and points and also the videos you use are excellent for this topic! Truly, awesome blog.
Posted by: mens shoulder bags on June 5, 2011 3:41 AM
All I want to say is, yes! Yes! Yes! Youre so correct. I need to get behind this so much. You speak with so considerably authority, so much spirit, I feel as although youve certainly hit the nail on the head. Good job with this. Please keep brining us far more due to the fact we want a lot more of your kind of blogger.
Posted by: High Pressure Shower Head on June 5, 2011 6:26 AM
I ought to say that overall I am genuinely impressed with this blog.It can be effortless to see which you are passionate about your writing. If only I had your writing ability I look forward to much more updates and will be returning.
Posted by: Boots Travel Insurance on June 5, 2011 6:46 AM
This layout is so stellar. How did you manage to create a blog thats as smart as it is sleek? I mean, its like an Aston Martin --smart and sexy at the exact same time. Ive got to say, the layout alone created me come back to this blog once again. But now that Ive read what youve got to say, Ive got to share it with the world!
Posted by: panoxyl on June 5, 2011 11:03 AM
I hope you in no way quit! This is one of the best blogs Ive ever read. Youve got some mad skill here, man. I just hope which you dont lose your style because youre certainly among the coolest bloggers on the market. Please keep it up due to the fact the internet needs someone like you spreading the word.
Posted by: Ski Travel Insurance on June 5, 2011 6:47 PM
You...are...my...hero!!! I cant believe some thing like this exists on the web! Its so accurate, so honest, and a lot more than that you simply dont sound like an idiot! Finally, a person who knows how to talk about a subject without having sounding like a kid who didnt get that bike he wanted for Christmas.
Posted by: Speaker Stands on June 6, 2011 1:08 AM