Newcrest bears the burden of a shifting gold market

Gold miner Newcrest Mining has maintained its full-year gold and copper production guidance despite recognising the gold market is changing.

In a presentation Newcrest said it still expects its full-year gold production to come in between 2 million ounces and 2.15 million ounces, Business Spectator reports.

The company also highlighted copper production for the year should be between 75 kilotonnes and 85 kilotonnes.

But the miner said despite reacting to shifting market conditions the gold sector is increasingly challenging, especially for mines on the higher end of the cost curve.

The gold price has plummeted since its peak last year,, dropping by more than 26 per cent this year.

However, Newcrest said the Australian dollar’s recent dip below parity following its sustained strength against the US dollar has delivered some relief.

But job cuts across its operations are still expected, with the miner announcing earlier this month employee numbers will be slashed at its Telfer mine in Western Australia as the gold miner continues to implement a raft of cost cutting measures.

Newcrest said it is scaling back operations at Telfer mine which will result in a number of redundancies over the coming months.

“Newcrest, like other gold companies, has experienced significant external economic pressures.  The gold price has fallen significantly (and the Australian operating cost environment remains high,” the company said in a statement.

“As a result, over the coming months Telfer will reduce the level of mining activity across the operation, which means an associated reduction in the number of employees and contractors required to support the operation. 

“Communication and consultation with Telfer’s employees and contractors about the proposed operational changes has been underway for some time. “

The exact number of redundancies has not yet been finalised.

In early June Newcrest announced it would continue to cut costs “in response to the change in market conditions”.

Newcrest flagged discretionary spend on projects and studies would be cut, it will move to reduce exploration activities, and is suspending the production of higher cost ounces across all operations.

The company have slashed more than 400 jobs from Australia and Papua New Guinea this year.

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