THE GOLD MINING INDUSTRY IN THE NEW MILLENNIUM

摘要

Producers need to react to the twin threats to their existence of the low gold price and investor apathy, with bold and imaginative plans. Gold production is truly global but ownership is not. It is vested in the hands of a few multinationals based in the four main gold producing countries. These majors are pursuing different strategies. Placer seems to be the most aggressive in striving for 'market share', but its returns are not as good as the world's biggest producer, AngloGold. The big question is, are these returns attractive enough to entice general investors away from the dot comedies? And are the gold producing companies big enough to appear on the investors' radar screens? The answer is, probably not. Four years ago I suggested, somewhat tongue in cheek, that by 2006 the industry will comprise just seven major gold mining groups. I was wrong. I think that there may be fewer companies way before then. Pierre Lassonde raised the intriguing notion last month that maybe the best thing for the industry would be a mega-merger of AngloGold, Barrick, Newmont and Placer. That would create a company with critical mass. The idea might cause an apoplexy in some corporate boardrooms but it is not so fanciful as to be dismissed out of hand. It could also aid the objective of operational efficiency, where producers have already demonstrated an ability to cut costs, and bestow on the new entity greater clout in the marketplace. And, in the absence of any major technological breakthroughs that might lead to a drastic fall in mining and processing costs, the gold mining industry needs to turn its attention to the markets for its product. Now is the time, for with the potential of the internet and e-commerce the opportunities are there to influence a new generation of gold lovers. It needs an innovative approach and the gold mining industry was never short on innovation or courage to accept a challenge in the last millennium. I don't expect it to be in the present one.