Australian miners facing bust look to China's Zijin

Sun Aug 4, 2013 11:43pm EDT
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By James Regan

KALGOORLIE, Australia (Reuters) - Gold miner Dianmin Chen - running Australia's Norton Gold Ltd NGF.AX for China's biggest gold producer Zijin Mining Group (601899.SS: Quote) - says there's still money to be made in mining.

While other companies are bracing for tough times by laying off workers and closing mines, Chen has been given a mandate to nearly double gold production and is keeping an eye out for potential acquisitions.

"We see this lower market as an opportunity to grow," he said in an interview.

Chen, who took the top job after Zijin paid $240 million for control of Norton a year ago, is lead speaker at the Diggers and Dealers mining conference starting Monday as organizers hope to inject some optimism into a likely gloomy gathering.

With bullion prices down more than 25 percent since October 2012, giants like Barrick Gold (ABX.TO: Quote) and Newmont Mining (NEM.N: Quote) are joining Australia's small- and mid-tier miners in laying off workers and selling higher-cost operations.

A group of seven one-time Australian favorites including Alacer Gold AQG.AX, OceanaGold (OGC.AX: Quote) and Silver Lake Resources (SLR.AX: Quote) have clocked up A$2.5 billion ($2.23 billion)in writedowns this year.

Globally, Barrick posted an $8.7 billion writedown, while majors Goldcorp Inc (G.TO: Quote), Newmont and Kinross Gold Corp (KGC.N: Quote) reported a combined $6 billion in impairment charges linked to plunging gold prices.

By contrast, Norton, which has mines in the Kalgoorlie region in western Australia's outback, aims to nearly double bullion output to 300,000 ounces over three to five years.   Continued...