New rules pressure gold miners to come clean on costs
The gold industry has released new guidelines for bullion miners. Photgraph: Neil Chatterjee/Reuters
The gold industry has released new guidelines for bullion miners under pressure to disclose the real economics of producing an ounce of metal, feeding a debate over the sustainability of many gold mines in a sector battered by falling prices.
Miners have seen gold prices soar since the turn of the millennium. At their height in 2011, prices were more than six times the level a decade earlier. But costs like wages, taxes and electricity have all climbed, sometimes faster than the gold price.
The effect has been that a price drop since April – the sharpest in a generation – has pushed many mines into the red and miners to the verge of reserve writedowns. The World Gold Council said its new guidelines would help clarify the real cost, beyond cash costs which account for only a portion of what goes into producing an ounce.– (Reuters)