Gold Mining in the Grip of a Merger Frenzy; FINANCIAL MAIL

The Mail on Sunday (London, England), July 9, 2000 | Go to article overview

Gold Mining in the Grip of a Merger Frenzy; FINANCIAL MAIL


Byline: ANITA HOWARTH

A GOLD rush is on and it is likely to transform the global industry.

Faced with falling prices and indifference from investors, mining companies are rushing to merge in the hope that boosting their size will polish up their appeal to sharebuyers.

There is merger mania as companies fear they may be left on the sidelines unless they can find partners.

In the biggest shakeup in the history of the sector, experts predict that within three years the market's 20 biggest producers will shrink to just four, each controlling up to 15 per cent of the world's gold production.

The industry is notoriously fragmented even by the standards of the wider mining sector, with the biggest, AngloGold, accounting for only nine per cent of global production.

The fragmented market and the lack of dominant global players means that gold companies have 'barely registered on the radar screens' of the big fund managers in New York, Toronto and London.

Now, with a sustained low gold price over a number of years hitting profitability, the industry is being forced to consolidate.

Industry executives believe a market dominated by four players, each with a market value of more than [pounds sterling]6.6 billion, will attract institutional investors in London and New York.

They also believe that bigger players, able to build the kind of global profile that De Beers enjoys in the diamond industry, would appeal to small investors keen to take stakes in well-run gold companies.

The pace of consolidation has accelerated in the past month with three big mergers or takeovers, including the biggest-ever in the sector, a [pounds sterling]2.6 billion linkup of South Africa-based Gold Fields and Toronto-listed Franco Nevada.

The Americans, reluctant to be left behind, responded within days. Newmont announced a takeover of smaller rival Battle Mountain, making it the world's second-biggest producer after AngloGold, and last week Bar-rick announced that it was buying Tanzania-based Pangea.

Industry experts are now speculating that London-listed Rio Tinto may bid soon for Freeport McMoran Copper & Gold, in which it already has a 14 per cent stake.

The combined business, though not a pure gold operation like AngloGold or Gold Fields, would catapult Rio Tinto into a position to challenge Anglo-Gold's market leadership.

Kelvin Williams, director at AngloGold, said: 'In the broader context of the mining world, no other sector is so fragmented or has so little centre of gravity among the largest companies. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Gold Mining in the Grip of a Merger Frenzy; FINANCIAL MAIL
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.