Gold Fields Looking to Buy Mines to Replace Domestic Supplies
Gold Fields Ltd. (GFI), the South African producer that announced spending of $1.15 billion on assets last year, is looking for more deals to replace dwindling supply from its domestic operations as demand for bullion grows.
Mines in the Andean corridor in South America, British Columbia in Canada, the Tien Shan belt that runs through Kyrgyzstan and China, and the Philippines are of particular interest, Nick Holland, chief executive officer of the Johannesburg-based company, said today in an interview, declining to say when a deal might be concluded. It’s also exploring for mines in Australia, he said.
South African gold producers including AngloGold Ashanti Ltd. (ANG) and Harmony Gold Mining Co. are struggling to boost output to benefit from rising gold prices and counter higher costs. Gold is up 3.7 percent this year, adding to 11 consecutive annual gains as investors sought a hedge against everything from accelerating inflation to Europe’s debt crisis to slumping equities.
“Demand is reasonably solid and should remain so, provided the two principal drivers, China and India, continue to grow into the future, which looks likely,” Holland said separately at a speech in Melbourne.
There have been 225 mergers and acquisitions worth a combined $5.47 billion in the gold mining industry this year, compared with $39.2 billion for the whole of 2011, according to data compiled by Bloomberg.
Gold Fields in May trimmed its full-year production outlook to 3.5 million ounces from a range of 3.5 million ounces to 3.7 million ounces because of technical difficulties. First-half output was 1.69 million ounces, it said July 4. The full-year guidance is unchanged, Holland said today.
Gold Fields shares were little changed at 108.02 rand at the close in Johannesburg yesterday. The stock has dropped 13 percent this year.
To contact the reporter on this story: Soraya Permatasari in Melbourne at firstname.lastname@example.org