Continent, where are the nuggets of giant


Consolidation and internationalization

In April this year, a conference was held in Melbourne on gold. Participants drew attention to the trend of rising prices and industry consolidation. So, the question, and outlines a new industry mega-mergers, the president golden giant "Barriks" Randall Oliphant said yes. According to him, almost all the companies in the industry will conduct similar negotiations with each other. Rex McLennan, executive vice president of another golden giant - "Placer Dome" - said that they were interested in acquiring new assets. According to R. Oliphant, the prospects for the gold industry in Australia is now better than before.

Australian mining companies are no different high-volume production. So, on the 26 enterprises in Western Australia, producing 100 thousand ounces per year, accounting for 90% of gold production. In this sense, the industry lags behind its North American and South African counterparts, are aggressively increasing their production volumes, especially in the late 90's.

An important trend in recent years has been the internationalization of the industry. The presence of foreign companies in Australia already hard enough. In the second half of the 90's 22% owned gold production to foreign manufacturers such as "Homestake", "Placer", "Anglo Gold", "Harmony" and "Newmont". Over the past five years, these companies have increased production here three times.

In the ongoing process of consolidation and lack of attention to the industry in the country monitoring the Australian gold mining industry is gradually moving into the hands of foreign companies. Thus, during 1995-2000. control by foreign investors increased from 20% to 30%, and in the near future, will exceed 60%.

An essential component of the Australian gold industry is hedging. Thus, the price of delivery is 550-600 per ounce at a price of 320-350 dollars in cash. Australia is prohedzhirovala approximately 1,400 tons of gold, 46% of its reserves. Much of this hedging carried out in the form of stock options.

Jewelers take all

The deregulation of the gold market in the 70s contributed to the rapid rise in prices for the metal. Central banks have ceased to fix them, and were simultaneously removed the main restrictions on trade bullion for individuals. "Liberation" of private trade and high inflation have dramatically increased the interest of private investors. Production has responded accordingly. Despite reduce the role of gold in monetary circulation, central banks generally retained their huge buffer stocks, which caused some concern in the market.

But the rise in prices was replaced downward trend. Gradually began to change and market structure. Demand for the metal has become the dominant way to determine the production of jewelry. Today, it accounts for about 90% of annual net use of gold. The strong growth in demand from jewelers, on the one hand, and rather slow increase in gold, on the other, have led to what became the increasing gap between the total use of the metal and its prey. This in itself has created pressure on prices and pulled them up. However, the real prices continued progressive decline that was associated with the growth of gold mines and the expansion of trade existing stocks from both private and public sources.