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Barrick Says Gold Supply to Fall Faster Than Expected (Update1)
By Brett Foley
Nov. 15 (Bloomberg) -- Barrick Gold Corp., the world's largest gold producer, said supply will fall faster than expected as it gets harder to extract the precious metal from deeper and older mines.
``Global mine supply is going to fall at a much faster rate than people generally believe,'' Chief Executive Officer Greg Wilkins said today at a conference in London organized by RBC Capital Markets. ``Many of the mines that people are anticipating bringing into production will either not come into production or will be on a much longer timeframe.''
Gold mining companies are trying to boost output after bullion climbed to within 0.5 percent of a record last week. Strikes, stoppages and the difficulties of mining farther underground are hampering operations in South Africa, the world's largest producer. Demand is rising as consumption increases in China, India and the Middle East, RBC Capital Markets said yesterday.
Gold demand rose 19 percent in the third quarter, led by a sevenfold increase in investment in exchange-traded funds backed by bullion, the producer-funded World Gold Council said yesterday.
Gold for immediate delivery rose 1.2 percent to $802.93 an ounce as of 12:54 p.m. in London. Prices have gained 26 percent this year.
Mining production costs have increased so much that if prices were to fall, many mines may become unprofitable, Wilkins said.
``The cost structure of the industry has substantially changed and if we were to see a return to a $500 gold price, I think the industry will be in serious trouble,'' Wilkins said.
To contact the reporter on this story: Brett Foley in London bfoley8@bloomberg.net .
Last Updated: November 15, 2007 08:10 EST
By Brett Foley
Nov. 15 (Bloomberg) -- Barrick Gold Corp., the world's largest gold producer, said supply will fall faster than expected as it gets harder to extract the precious metal from deeper and older mines.
``Global mine supply is going to fall at a much faster rate than people generally believe,'' Chief Executive Officer Greg Wilkins said today at a conference in London organized by RBC Capital Markets. ``Many of the mines that people are anticipating bringing into production will either not come into production or will be on a much longer timeframe.''
Gold mining companies are trying to boost output after bullion climbed to within 0.5 percent of a record last week. Strikes, stoppages and the difficulties of mining farther underground are hampering operations in South Africa, the world's largest producer. Demand is rising as consumption increases in China, India and the Middle East, RBC Capital Markets said yesterday.
Gold demand rose 19 percent in the third quarter, led by a sevenfold increase in investment in exchange-traded funds backed by bullion, the producer-funded World Gold Council said yesterday.
Gold for immediate delivery rose 1.2 percent to $802.93 an ounce as of 12:54 p.m. in London. Prices have gained 26 percent this year.
Mining production costs have increased so much that if prices were to fall, many mines may become unprofitable, Wilkins said.
``The cost structure of the industry has substantially changed and if we were to see a return to a $500 gold price, I think the industry will be in serious trouble,'' Wilkins said.
To contact the reporter on this story: Brett Foley in London bfoley8@bloomberg.net .
Last Updated: November 15, 2007 08:10 EST