The entire global gold mining industry should consider the adoption of the World Gold Council’s (WGC’s) newly released gold mining cost standards, Gold Fields CEO Nick Holland urged last week.

Hours after WGC director Terry Heymann told Mining Weekly from London that the new metrics had been developed to help provide greater transparency and consistency, Holland expressed the hope that the entire industry would adopt the one cost standard to allow all stakeholders to have a uniform approach to evaluating the industry.

Holland has been calling for cost-reporting reform for the past five years.

“It’s really good to see the council adopt something similar to what we have been looking at,” said Holland.

Last week, the WGC released two new methods of calculating and reporting gold mining costs to improve clarity and provide greater investor understanding of the complete costs associated with the mining of gold.

The first method is an extension of the existing “cash cost” metrics and incorporates costs that are related to sustaining production, which the council refers to as the “all-in sustaining cost”.

The second method takes into account additional costs and reflects the varying costs of producing gold over the life cycle of a mine, which the WGC dubs the “all-in cost”.

“I hope they all take it up and I would strongly urge them to consider it,” Holland commented to Mining Weekly.

The “all-in sustaining” metric now includes sustaining capital and sustaining exploration as well as noncash employment costs, share-incentive-scheme costs and reclamation costs.

“They’ve got everything in there now,” he added.

The different “all-in cost” metric includes all the other capital expenditure, which includes factors like growth, life extension and reclamation.

“The ‘all-in’ is the one stakeholders should be thinking about because that has no interpretation gaps,” Holland said.

Up to now, the industry has been content to have a half-baked cost story because “cash costs” did not tell the real cost story.

It only showed the operating cost with- out including capital expenditure and exploration and accurately telling what it costs to produce an ounce of gold.

The industry often spoke loosely about its low cash costs and the money it was making at the earnings before interest, taxes, depreciation and amortisation level, which failed to give investors the true cost picture.