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Cost levels fall for Randgold Resources, uranium contracts to 2015 for Rössing, US housing weakness hits pigment sector
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14th November 2008
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In the past 30 days, Randgold Resources has virtually returned to the cost levels of September 2007, says CEO Dr Mark Bristow on page 30 of this edition of Mining Weekly.

Bristow sees cost reduction as the single most important response to the current global financial turmoil and the evaporation of inflation.

Investment banking company Lazard calculates that Randgold Resources’ “relative” share price has “outperformed” 13 other gold companies, including Harmony Gold, placed second, AngloGold Ashanti, placed fifth, and Gold Fields, eighth.

Rio Tinto’s Rössing Uranium operation in Namibia has sales contracts extending to 2015 and is “well covered” pricewise, says Rössing MD Mike Leech on page 13 of this edition of Mining Weekly. Rössing, Leech says, negotiated its contracts during the 2006 period of ascendancy in the uranium market.

Rössing received its life-of-mine extension in 2005 and was out filling its order book the next year, when the spot price of uranium was on the rise. While the company is “not fully contracted”, it is “well contracted” – a very far management cry, indeed, from Uranium One, which has left South Africa without a primary uranium operation at a time when the country is entering a nuclear renaissance.

The weakness in the US housing sector has impacted on the pigment sector, into which mineral-sands-miners supply titanium oxide. Rio Tinto CEO Tom Albanese points out on page 10 of this edition of Mining Weekly that the US housing sector weakness has had an immediate impact on the use of pigment.

But what the operator of Richards Bay Minerals in South Africa has been detecting “up until recently” is the growing interest in the pigment markets for Chinese demand, which is a plus for Rio Tinto. The group is the lowest-cost producer of a third of the world’s titanium-oxide feedstock capacity.

To watch a video in which Gold Fields CEO Nick Holland tells of his outlook for a $1 000/oz gold price in 2009, go to www.miningweekly.com and click on ‘Multimedia’ and then on ‘Video Clips’.

Likewise, to watch a video in which AngloGold Ashanti CEO Mark Cutifani talks about the impact of gold underproduction, go to www.miningweekly.com and click on ‘Multimedia’ and then on ‘Video Clips’.

Also note Creamer Media’s two new mobile options of obtaining Mining Weekly mining news on the iPhone and also by going to m.miningweekly.com on your cellphone.

Edited by: Creamer Media Reporter

 

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