Newcrest Mining

Newcrest Mining
Newcrest Mining
Type Public
Industry Resources
Headquarters Melbourne, Australia
Key people Ian Smith - MD
Don Mercer - Chairman
Products Gold
Production output Gold: 1,631,000 ounces

Newcrest Mining Limited (ASXNCM) engages in the exploration, development, mining and sale of gold and gold-copper concentrate. Newcrest is an Australian based Company which initially incorporated in Victoria in 1980. Today it has become Australia’s leading gold mining company. Newcrest’s operations have since expanded beyond Australia, for example Indonesia, thus becoming a prominent international mining corporation.

Presently, Newcrest’s primary gold and copper production in Australia is at Ridgeway, Telfer, Cadia and Cracow and in Indonesia at Gosowong.[1] Past and present exploration is being undertaken to further Newcrest’s interests overseas in The Americas, Asia, and Europe.

In April 2010, Newcrest announced it was in merger talks with Lihir Gold, a move that would create the world's fifth-largest gold producer, with a combined production of 2,8 million ounces of gold in 2009.[2] In August 2010 the deal won the approval of Lihir Gold shareholders (99.86%) and by the end of the month newcrest overcame the last hurdle when the national court of Papua New Guinea (PNG) approved it.[3][4] Under the deal worth US$9.45 billion Newcrest will give shareholders of Lihir gold 0.12 Newcrest Mining shares as well as an extra A$0.225 per Lihir share.



Newmont Mining Corporation was founded in 1921 in New York by Colonel William Thompson as a holding company to invest in worldwide mineral, oil, and relations companies. The Newmont name is an abbreviation of where Thompson lived and worked; New York and Montana. Newmont is now the world’s second largest gold producer. The Newmont Mining Corporation began an Australian subsidiary in 1966 and by 1971 they claimed to have discovered Telfer.

In 1980 the subsidiary became Newmont Holdings Pty Ltd and was based in Victoria, Australia. Seven years later it was listed on the Australian Stock Exchange as Newmont Australia Limited. When in 1990, the Company acquired 100% of Australmin Holdings Ltd and 92% of BHP Gold Mines Ltd it acquired its current company name.

Newcrest’s primary focus was within Australia until 1991, when it commenced exploration overseas. Newcrest was determined to become a significant and internationally recognised gold mining and exploration company.[citation needed] The company established exploration offices and new companies offshore in Jakarta, Indonesia and Chile, South America.

In 1992, exploration discovered its first offshore gold in the Halmahera Islands, Indonesia. And in 1996, Newcrest stated that the company wished to transform itself into a world-scale and internationally recognised producer.[citation needed] In 2002, years of exploration around Australia and overseas were paying dividends and the Newcrest group was capitalised at over $2 billion.[citation needed]

Industry Development

The discovery of gold has been a major contributor to Australia’s economy and infrastructure. Gold mining provided transportation, communication, road and rail and raw material for export around the colonies. This was especially prominent after 1851 in the Victorian goldfields. In the past, Australia has exported gold to the US and Europe, however over time the traditional consumers have changed.

When alluvial gold deposits were exhausted in the 1800s, deeper mines were necessary. Working deep veins necessitated deep shafts, machinery and treatment plants, consequently these required investment. Individual miners were replaced by companies, employing dozens or even hundreds of men. Gold exploration became more efficient and accurate as technology and mapping expanded. Australia was seen to have very large mineral resources. This development, together with Australia’s political stability, led to an influx of major overseas mining companies, such as Newmont, in the 1960s.

The emergence of Japan as a major buyer of minerals combined with technological advances in ore separation saw a shift in many mines from uneconomic production to sustainable production. By the mid-1980s, one of the few productive mining industries in Australian was gold mining because its price had been fixed since World War II.

Other factors lifted the production in gold such as the development of the efficient carbon-in-pulp method for recovering very fine-grained and low grade gold. It became feasible to mine entire zones of gold bearing veins via open cut or underground mining instead of only main veins.

In the 1990s there was a period of consolidation with extensive focus on further improving efficiency and safety of operations and movement towards globalisation; a period of increasing diversity with reduced dependence on a few major customers for minerals and metals.

It was also a period in which the industry, despite far-reaching changes in world mineral production and consumption patterns able to retain its role as a major source of export income for the Australian economy. India and China have recently become the top nations to import Australian gold because it continues to function extremely well as an inflation hedge. Furthermore, environmental and social concerns in relation to the mining industry have become global with the widespread uptake of new communication technologies.

From a corporate perspective, the Australian mining industry grew beyond being a large national sector into a world player. The industry is now diversified and integrated internationally through its exploration, mining and processing activities, and the supply of information technology, engineering, construction and other services. Annual surveys by the Minerals Council of Australia show that from the mid- to late-1990s, respondents spent over 40% of their total exploration budgets overseas.

The industry is also making a wide range of major investments in overseas mines and forging international marketing and processing alliances in regard to many minerals and metals. The flow of investment, however, has not all been one way, with significant overseas investment coming into Australia for exploration and the development or expansion of mining and processing facilities.

Geography of Newcrest’s operations

Newcrest’s mining operations are presently located around Australia, Indonesia, Ivory Coast, and Papua New Guinea. The Telfer Mine is a large open cut and underground mine in Western Australia. The mine has the potential to become the largest gold mine in Australia with production expected to average 800,000 ounces (25,000 kg) of gold per annum. Ridgeway is a large underground mine being developed by Newcrest. In its first full year of operation and metal production of 377,539 ounces (11,742.8 kg) of gold was in line with plan. Development of the Cadia Hill mine, NSW commenced in 1996 and production began in 1998. It produces 298,848 ounces (9,295.2 kg) of gold per year. At Cracow, Queensland, mining is expected to begin in December 2004, producing 95,714 ounces (2,977.0 kg) of gold per annum.

Gosowong, Indonesia, is an open pit mine opened in 1999. It is 82.5% owned by Newcrest, whilst Pt Nusa Halmahera Minerals owns the other portion as a joint venture partner. The mine has produced 772,018 ounces (24,012.4 kg) of gold and 812,815 ounces (25,281.4 kg) of silver over the first five years of production.

Hidden Valley is an open-pit, gold-silver mine and processing plant in Morobe Province, Papua New Guinea.[5] The mine is approximately 210 km north-north-west of Port Moresby, and 90 km south-southwest of Lae.[5] It is operated by Morobe Mining Joint Ventures, a 50:50 joint venture between Harmony and Newcrest Mining.[5]

Newcrest’s headquarters are located in Melbourne, Australia since having been integrated with Sydney in 1995. Other offices are based at major mine sites to help communication between miners and the head office.

A majority of Newcrest’s copper-gold concentrate is sold under long term contract to smelters in Japan. Feed for the Saganoseki Smelter and Refinery is transported to Japan's southernmost island Kyushu, the concentrate is turned into 99.99% pure gold bullion which is sold to Asia’s metal market. However, Newcrest also operates in the sale of concentrate to merchants who deliver the material to various regional smelters under their own contracts.

In December 2010, Newcrest announced that work at the Bonikro mine had been suspended due to the controversial election in Ivory Coast.[6]

Newcrest and the environment

Newcrest has come under fire from various human rights and environmental groups for its mines in Indonesia. It has been in conflict with local communities on the island of Halmahera, where its private security forces have clashed with protesters, killing one. It was mining in an area that was nominally protected, however the government in Jakarta changed the law, allowing the mining to go ahead.

See also


External links

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