Barrick Needs Randgold to Make the Grade
Few gold miners can operate profitably near the metal’s current grade levels. A merger may be the best solution.
Explosives detonate on the floor of the open pit at the Kibali gold mine, operated by Randgold in Kibali, Democratic Republic of Congo. The company’s biggest pits are in Mali and the DRC.
Photographer: Simon Dawson/Bloomberg
Gold miners have been struggling for decades against geological destiny.
The grade of metal in the world’s gold reserves has been declining for years, from average levels above 10 grams a metric ton in the late 1960s to almost one-tenth of that now. That’s a worrying metric, because few gold mines can operate profitably below 1 gram a ton — equivalent to extracting two teaspoons of gold from a Statue of Liberty’s-worth of ore.