The world’s top gold miners are retrenching after covid-19 related shutdowns despite record prices for the yellow metal, with cost-conscious executives prioritizing investor returns over production growth.
Gold prices have jumped 30% this year to roughly $2,000 an ounce as central banks dial-up stimulus measures in response to the coronavirus pandemic.
But interviews with executives, analysts and fund managers show miners are hesitant to spend on pricey projects and tap marginal deposits that require sizeable capital and take years to break even.
Seven out of 10 of the global gold miners, including Newmont , the world’s biggest gold miner, Canada’s Barrick and South Africa’s Gold Fields, have cut planned output for the year by 7%, citing coronavirus-related shutdowns, regulatory filings show.
The caution is a reversal from the 2011 gold price boom, which prompted buyers to overspend on acquisitions and led to billions in impairments when prices crashed in subsequent years.