Newmont sticks to strategy in Africa
Colorado-based Newmont says while competition for good assets in Africa is tight, mining on the continent presents many challenges
The hunt for gold assets in Africa is a competitive business and while Newmont Mining is awake to acquisitions on the continent, its focus remains on its own growth projects, says Alwyn Pretorius, head of the company’s African operations.
Pretorius, who was chief operating officer at Harmony Gold in SA, said Colorado-based Newmont had one of the strongest project pipelines in the gold sector. Its two operations in Ghana generate more than 800,000oz of gold, making up nearly a third of that country’s gold exports.
The African region has two major projects in Ghana that it will take to the Newmont board in the first half of 2017. The two projects could add up to 300,000oz of gold a year.
Newmont bases its views of countries on an analysis that includes governance, political risk, social security, predictability, security of tenure and the state of the mining environment, limiting possible destinations.
For companies which work in Africa — and some South African miners are not doing this — they are doing detailed studies of countries’ prospectivity and deposits and other operations there to understand potential areas for growth, exploration or acquisitionsAlwyn Pretorius
"The most cost-effective way to add good quality ounces to our reserve base is through exploration but we are also looking at options presented by junior exploration companies and the potential to develop deposits. We’re also looking at acquiring assets from other companies," Pretorius said.
"It’s a lot more difficult to buy into good quality assets," he said. "It is very competitive for assets in Africa, but it does depend on the risk appetites of various companies and where they’re prepared to go. It’s not as easy as just going into Africa and developing mines.
"For companies which work in Africa — and some South African miners are not doing this — they are doing detailed studies of countries’ prospectivity and deposits and other operations there to understand potential areas for growth, exploration or acquisitions," he said.
His warning about the competitiveness for gold mines in Africa comes as a number of South African gold mining companies have woken up to the potential of the continent.
New Harmony CEO Peter Steenkamp in 2016 spoke of needing to lift production in the next three years to replace output from ageing and closed mines in SA, looking at the
rest of Africa, SA and Papua
Both Pan African Resources and Gold Fields have said they are looking for growth in Africa.