Such is copper’s standing as a key element for the globe’s energy transition,even the boss of the world’s biggest gold miner is talking about the conductive metal. Copper prices hit a five-year high in May,rising above $US5 a pound before falling back to around $US4.50.
Newmont CEO Tom Palmer at the Melbourne Mining Club.Eamon Gallagher
Newmont chief executive Tom Palmer,fresh from bedding down last year’s $26 billion buyout of top Australian gold producer Newcrest,said global demand for copper would drive “tectonic” opportunities across the mining industry,empowering companies to either build copper mines or buy them.
BHP wanted to shed unwanted Anglo American assets and harvest its lucrative copper operations.
Palmer said at a Melbourne Mining Club event on Thursday that copper comprised about 10 per cent of the gold miner’s output,but said Newmont’s future project pipeline “is all copper.”
“The world is going to continue to see the demand for copper drive opportunities where you can buy or where you can build,” Palmer said.
The US-based miner is comfortable with its project pipeline and its ability to develop those resources over future decades,but Palmer said,“ensuring that you have got partners that you can work with” was an important part of the process.
“Whether that’s BHP or other mining companies,that is an important part of how we look at developing that project pipeline,” he said.
Newmont will focus on expanding beyond the 150,000 tons of copper it currently produces as it develops resources in Ghana,Papua New Guinea and Canada,he said.
The gold miner announced in February it would whittle down its portfolio and sell half a dozen mines around the world,including Telfer in the Pilbara and an adjoining gold and copper prospect called Havieron,in a bid to raise $3.05 billion in cash.
The value of gold producers hasn’t followed the gold price curve.Trevor Collens
Telfer,a fly-in fly-out gold,copper and silver mine in Western Australia’s Great Sandy Desert,was part of Newcrest’s portfolio along with the Cadia mine in NSW and Lihir mine in Papua New Guinea,when it was absorbed by Colorado-based Newmont last November.
Palmer said there was strong interest in the Telfer gold mine.
“We had a high level of interest through the first phase and we’ve taken six or seven organisations into second phase. That’s progressing very well and there is good interest,” he said.
Gold prices are on a tear,rising above $US2400 an ounce in May,underpinned by the US dollar,elevated interest rates,inflation and buying by the world’s central banks,particularly China.
But precious metal’s meteoric rise isn’t reflected in the equity value of gold producers,a dissonance Palmer attributes to the $300 an ounce production cost increase that assailed the industry after Russia’s war against Ukraine sparked severe global inflation. “There’s a decoupling there,” he said.
While the value of gold producers hasn’t followed the gold price curve,Palmer believes Newmont’s steady yearly production of around 7 million gold ounces and its ability to maintain margins through the price cycle can “break the trend that you’re seeing in gold equities”.
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