China’s demand for Australian commodities won’t fall as hard or for as long as some have predicted, Newcrest Mining’s chief executive Ian Smith told the Australian Institute of Company Directors lunch in Sydney yesterday.
“There’s a driving social imperative in China, and as we all know they can mobilise very quickly when they want,” he said
According to Smith, mining companies need to be prepared for the inevitable upturn.
Newcrest Mining is currently on the hunt for acquisitions, with Australia’s largest gold producer deploying two teams to explore opportunities.
“I think the next 12 months is rich with opportunity,” Smith said.
“We are actually scouring the world looking at … any companies that may find themselves in a distressed position that have a really good resource, that they can’t develop to the right rate and to the right size because of the profile they find themselves in,” he said.
Newcrest is also looking for opportunities to enter into existing mines to boost gold production.
But it does not need mergers or acquisitions to maintain its gold reserves, Smith said.
“We’ll only undertake M&A if we see something that is particularly exciting or particularly value accretive compared to our other projects,” he said.
Despite Smith’s buoyant predictions for China, he said the employment outlook for the Australian mining sector remained bleak.
“More jobs would be cut in the year ahead as commodity exports continue their inevitable decline,” he said.