Gold prices in Australian dollar terms have charged above $2700 for the first time, letting Newcrest Mining and three other big gold miners escape without major punishment from a raft of production downgrades in the past three months.
At $US1679 per ounce on Monday, the gold price was not far below the seven-year highs set in the past month on the back of interest rate cuts and quantitative easing in many nations, including the US.
Fears of a global recession have only fuelled the rush to buy gold, which is the traditional safe haven for investors. The local price exceeded $2000 per ounce for the first time in June 2019, and on Monday was above $2700 per ounce.
Newcrest’s flagship Cadia mine in NSW can cover its production costs almost ten times at Monday’s gold price. With a mostly residential workforce in the rural city of Orange, Cadia should escape from the virus saga without too much disruption to its workforce.
But Newcrest’s Lihir and Telfer mines may not be so lucky. Newcrest was the first Australian miner to cancel a fly-in, fly-out workforce route when it vowed to stop flying Australian workers to Lihir in PNG on March 20.
For the rest of this article: https://www.afr.com/companies/mining/gold-s-winning-streak-forgives-local-miners-many-sins-20200330-p54f6u