Newmont CEO says open to adding more copper production

Tue Sep 24, 2013 3:40pm EDT
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By Allison Martell

DENVER, Sept 24 (Reuters) - Newmont Mining Corp is open to adding more copper production onto its core gold output, the company's CEO said on Tuesday, as the biggest U.S. gold miner, along with its peers, seeks to revamp operations in a tough environment.

Newmont already has three copper-gold operations and as a result has "very good core capabilities that we can leverage into copper," chief executive Gary Goldberg told delegates at the Denver Gold Forum.

"I think it's leveraging our capabilities so that we don't restrict ourselves just to gold in the future, but look at gold and copper opportunities," Goldberg said, adding that the company will not target a specific percentage of copper volumes.

Sliding gold prices and ballooning capital and operating costs have rocked the industry, making reliance on gold alone less attractive.

"Two years ago you probably would not have been saying copper," said Goldberg. "There was a premium for gold producers."

In late June, gold slid close to $1,180 an ounce, its lowest price in nearly three years. Gold is down more than 20 percent so far this year, while benchmark copper is down about 10 percent this year at $7,159 a tonne.

A move into copper may spook some investors after the disappointment that followed Barrick Gold Corp's C$7.3 billion ($7.09 billion) takeover of Africa-focused copper miner Equinox Minerals in 2011.

The jewel at the center of that deal, the Lumwana mine in Zambia, has so far failed to live up to expectations, forcing Barrick to halt a planned expansion and book a $3.8 billion impairment charge on its value.

Goldberg said any copper asset purchase would have to help take Newmont "down the cost curve" and be in a jurisdiction where the company could manage the social, political and technical risks.