Gold Fields hedges yellow metal to shield Gruyere
CEO Nick Holland’s U-turn on hedging for a limited time is to ensure the producer can complete its project in Australia
In a remarkable U-turn on an antihedging sentiment often espoused by its CEO, Nick Holland, Gold Fields is selling three-quarters of its Australian gold output forward for the next six months to protect its large capital expenditure Gruyere project in the country. Gold Fields has also locked in prices for its oil prices in Australia and Ghana, where it faces expenditure of A$250m and $340m respectively on the Gruyere mine and work to expand its Damang open pit mine. Holland has been an outspoken critic of hedging gold production, often pointing out when asked about the company locking in gold prices that the long-term spot price always beats prices in a hedging contract. "We maintain our view that we will not enter into long-term systematic gold hedging," the company said in response to a question on whether this was a change in strategy. Gold Fields had little choice when it came to locking in the gold price for a limited time to ensure it could complete the project in Australia, t...
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