Newcrest cuts 150 jobs

Gold miner Newcrest has sacked 150 workers and is currently undertaking a review of its higher cost mines following a significant gold price drop.

The company said the majority of the cuts were made from its corporate offices in Melbourne and Brisbane last month, news.com.au reported.

Newcrest has been hammered by a plunging gold price which has fallen about 20 per cent since last October’s spike at about $1750 an ounce.

Last week gold hit a more than two year low of $US1390 but has since recovered slightly to be trading around $US1424.

Newcrest said it is reviewing its business activities and has paused studies on a number of long-term projects.

"With its major projects ramping up and the more challenging external environment, Newcrest continues to review all of its business activities, particularly those related to higher cost current or future production,'' the company said.

Such a significant gold price drop may mean Newcrest could struggle to match last year’s record profit of $1.2 billion.

In February Newcrest recorded a profit drop of more than half year on year, because of lower metal prices and gold production.

In the six months to December 2011 the miner recorded a profit of $659 million, which last year slumped to $320 as costs increases at its sites.

Recently there has been a trend towards tightening belts when it comes to mining houses, they are closely watching their operation costs and attempting to cut costs where ever possible.

As a result a significant amount of jobs have gone from the mining sector of late, most have been contractors or white collar workers.

The miner produced 514,421 ounces of gold in the March quarter, a 4 per cent rise on the December quarter.

The company has revised its gold production guidance down from a forecasted range of 2.3 to 2.5 million ounces to 2 million to 2.15 million ounces for the current financial year.

Newcrest shares dropped to a 4.5 year low at Easter and the company last month announced it would again fail to meet its gold production forecasts, the company cited problems at the Lihir mine in Papua New Guinea as the reason.

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