JOHANNESBURG (miningweekly.com) – Major gold miners’ profits are set to rise over the coming years as gold prices are forecast to continue increasing, encouraging a slow return to the miners’ growth strategies.
Global research firm BMI on Monday noted that, following years of financial austerity, prioritising cost competitiveness and core assets, gold miners will gradually shift the focus to growth through acquisitions and increased spending.
“Senior gold miners will prioritise risk mitigation in terms of both political and financial risk, resulting in project development in developed markets and joint venture partnerships among top firms,” the firm said in a statement.
The research firm pointed out that a slower recovery in gold prices, compared with the spike in base metals prices, will result in a gradual recovery for gold miners.
Chinese firms, in particular, will continue to target gold assets abroad.
Large-scale, low-cost producers, such as Zijin Mining and China Gold International Resources will support China's slowing gold production growth, while firms such as Shandong Gold and Shaanxi Gold will invest in projects abroad.
BMI stated that miners would remain focused on lowering their operating costs to improve competitiveness and to better withstand long-term price volatility.
In terms of market share, the global gold industry will remain fragmented.
Barrick Gold, Newmont Mining, AngloGold Ashanti and Goldcorp will remain the largest producers, accounting for nearly one-fifth of global output.
Russia’s gold sector will continue to be dominated by Polyus Gold, as the firm's Natalka mine remains the key driver of gold production growth.
“While improving gold prices will gradually boost miners’ profit margins over the coming quarters, we expect firms to remain committed to spending cuts in an effort to reduce debt loads,” the research firm said.