(In U.S. dollars, unless noted)
By Cameron French
TORONTO, Feb 23 (Reuters) - Barrick Gold (ABX.TO) is trying to negotiate lower contracted prices on consumables so it can take advantage of the sharp downturn in energy and commodity prices, the company's chief executive said on Monday.
Speaking at an investor conference in Florida, Barrick CEO Aaron Regent said cost control and containment would be a focus for the big gold producer in a year when its production is set to decline even as gold prices push toward record levels.
"We are pushing our supply chains across the board, working with various vendors to look to see if we can get better terms and price reductions," he said.
Rising costs for things such as oil, equipment and reactants kept miners from realizing the full benefit of metal prices that soared through early last year.
Market prices of just about every commodity slumped in recent months, but mining companies have not yet seen much benefit from the retreat because of long-term purchasing contracts they have with suppliers.
Barrick expects to see higher prices this year from 2008, because of hedges on oil and the Australian dollar that are now well above current prices.
Excluding the hedges, Barrick would be seeing some relief on costs.
"We're hoping we can do better on that," Regent said.
Barrick bought oil producer Cadence Energy last year in order to use its production to offset its own energy costs, but it was forced to write down the value of the asset.
Gold prices were down slightly on Monday, around $990 an ounce, after pushing above $1,000 on Friday.
Barrick's production is expect to be in a range of 7.2 million to 7.6 million ounces this year, down from last year's output of 7.66 million ounces.
Asked whether the company would follow the lead of other gold producers who have issued equity recently to take advantage of strong demand for gold assets, Regent left the door open to such a move.
"I think that whether you raise equity or not I think that's one option you always have to consider," he said.
He also suggested that Barrick was in no hurry to dispose of its non-gold development projects, including the Sedibelo platinum project in South Africa, the Fedorova platinum project in Russia, and the Reko Diq property in Pakistan, which has gold, but also extensive copper resources.
He said the company's strategy was to get the projects to the feasibility stage, where the economics of the project have been determined, before deciding whether to proceed with them or sell them.
Barrick's shares were down 3.1 percent at C$44.67 on the Toronto Stock Exchange on Monday morning.
$1=$1.25 Canadian Reporting by Cameron French; editing by Rob Wilson