Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canadian miner Kinross Gold (TSX:G) (NYSE:KGC) has reached a three-year collective labour agreement (CLA) with unionized employees at its mine in Mauritania, which has been hit this year by two stoppages over pay and working conditions.
Operations at Tasiast were last suspended for three weeks in June after a government inspection led to a dispute over expatriate work permits that ended in late July, with activities fully resuming in August.
Kinross is also in the midst of completing a “Mauritanization” plan, which aims to increase the number of local workers at Tasiast, a requirement under the country’s law.
The Toronto-based miner also said is in the midst of completing a “Mauritanization” plan, which aims to increase the number of local workers at Tasiast, a requirement under the country’s law.
Kinross, the world’s fifth largest gold producer, acquired Tasiast in 2010 as part of its takeover of Red Back Mining for $7.1 billion, a deal that soon proved disastrous. As gold prices fell and costs remained high, Kinross had to write down most of the asset’s value.
The biggest issue with Tasiast is its high operating costs, as it is located in a remote desert location, where Kinross had to build a huge camp to accommodate up to 2,500 people.
Despite the challenges, Kinross approved in March a $300 million first-phase expansion to double the mine’s output and slash production costs.
Tasiast mine produced 219,045 of gold equivalent ounces (6.2 tonnes) last year.
