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Australia becoming too costly for gold miners: Newcrest
04/06/2012 - Australia's largest goldminer Newcrest Mining says it would not be further expanding its Australian operations while costs remain high. Greg Roberts
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Chief executive Greg Robinson warned that cost pressures and declining grades in Australia would push miners towards emerging regions including Uzbekistan, Russia, Latin America and West Africa.
Australia was now among the 25-50 per cent most expensive destinations for gold miners, Robinson told the annual Stockbrokers Conference in Melbourne.
"Labour costs are very, very high, the currency is high.
"Energy costs and taxation issues are making Australia's gold industry a third and fourth quartile industry," Robinson said.
"It is very difficult within this cost cycle to allocate major expansionary capital.
"The number of projects that will be delayed will increase."
That would be a good thing for Newcrest as Robinson says the cost cycle peaked last year, which will take pressure off the industry and lower costs.
The company was aiming for five to 10 per cent increases in production from a current 2.3 million ounces over the next five years, he said.
Newcrest operates mines in four countries, is focused on two major growth projects, the Cadia East underground mine in central western NSW - which will be Australia's largest underground miner - and Lihir Million Ounce Plant Upgrade project in Papua New Guinea (PNG).
It also aimed to have what it called a spectacular discovery at the Wafi-Golpu gold/copper project in PNG in production by the end of the decade.
Robinson said he was still positive about the gold price and margins as central banks, particularly in emerging economies such as China and India were moving away from currencies and investing in gold as an asset class and wealth holding.
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