Mining indaba
Wave of consolidation in gold sector sweeps by broader mining industry
Greater proportion of passive funds made size matter
The wave of consolidation sweeping the gold mining sector is for now passing the wider sector by as diversified majors have delivered returns to keep shareholders happy and investors are wary of repeating past mistakes, executives say. Newmont Mining said in January it would buy Goldcorp for $10bn, creating the world's biggest gold producer. This followed Barrick Gold's agreement in September to buy Randgold Resources in a $6.1bn deal. In previous cycles, gold industry mergers have paved the way for broader activity, but executives say they expect the focus to stay on mid-tier gold companies and selling off any assets the new merged companies do not want. Mark Bristow, CEO of the new Barrick, said gold had reached a point where action was inevitable.
"The one thing about business is that it eventually kills you. If you don't perform, the options run out. The gold-mining industry is actually at that point and now you're seeing people making decisions," he told reporters on the ...
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