Kalgoorlie’s Superpit operator reviews costs

The company which operates the Kalgoorlie-Boulder Superpit has announced low gold prices and high production costs have forced them to run cost reviews in order to keep the mine viable.

Kalgoorlie Consolidated Gold Mine said current market conditions have led to a recruitment freeze, roles remaining unfilled and a review of all commercial agreements.

Russell Cole, KCGM’s general manager, said changes would be necessary in ensuring the Superpit remained a viable gold producer, ABC reported.

KCGM employs more than 1,000 people.

No redundancies have been made as yet but Cole said KCGM is looking closely at the company's organisational structure.

Since hitting highs of $US1900 an ounce in September, gold prices have tumbled to below $US1400 an ounce, with many predicting this is only the start of further decreases.

Neil Charnock, an economist at leading gold investment and trading company Gold Oz has predicted the price of gold will drop further as the market faces what he calls a ‘correction’ phase that is expected to last for at least 12 months.

“My gold targets are at around US$1100 and possibly as low as US$900 with a major influence of a strong USD over this correction period,” he told Australian Mining.

“Many companies will struggle to make a profit so jobs will be lost, merger and acquisition to come along with cost cutting.”

Newcrest Mining, Barrick Gold and Alacer Gold have all announced job cuts in recent weeks, with Alacer set to sell off its Australian assets.

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