Newcrest won’t make production targets

Newcrest Mining has reported a lower quarterly output and the company says the contributing factors include wet weather, declining ore grades and unrest on the Ivory Coast.

In a quarterly report released by the company yesterday Newcrest said it expected gold production for this year to be down from a range of 2.85 to 2.95 million to 2.82 million ounces.

The downgrade is a result of seven of its eight gold projects decreasing in production, while its copper has remained unchanged in the 75 000 to 80 000 range and expected costs stable.

In January the world’s fifth-largest miner cut its output guidance due to wet weather in Eastern Australia.

Newcrest’s Cadia Valley mine produced 40 000 ounces less than planned due to wet weather, which made it impossible for the company to access the high grade iron ore during the quarter.

The company Newcrest took control of last year, Lihir Gold, also faced problems with wet weather at its Papua New Guinea project, but in an ironic twist, it was a lower than average rainfall that meant there was not enough water available for its processing plant and its production dropped 24 per cent from the previous quarter, 40 000 ounces less than expected.

The election stand-off and civil unrest in Ivory Coast meant Newcrest had to suspend operations for most of the March quarter, losing 20 000 ounces in gold production.

The lower iron ore grades contributed to lower production at Telfer in Western Australia, Cracow in Queensland and also in Indonesia.

The Mount Rawdon mine in Queensland was Newcrest’s only mine to increase March quarterly production rates, and only by a relatively small amount.

Image: NSW Government

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.