
Gold Miners Face Rising Costs Amidst Record Gold Prices
Gold miners are grappling with higher labor costs and persistent inflation, which could pressure their profits as they move into 2025. According to a recent Reuters report, while these challenges loom, the surge in gold prices presents a promising prospect for increased free cash flow.
Gold prices soared nearly 27% in 2024, marking the largest increase since 2010, reaching unprecedented highs this year. Analysts at Bank of America anticipate that companies under their coverage could generate nearly $3 billion in free cash flow during the fourth quarter, with further improvements expected in 2025.
Despite these opportunities, increased costs have had a significant impact on earnings, causing major players like Newmont and Barrick to fall short of profit expectations in the third quarter. "I think we're going to have that inflation story still continue to play out in the next year or so," stated Sarah Tomlinson, director of mine supply at consultancy Metals Focus, emphasizing that labor remains one of the substantial expenses for miners.
Newmont's profit estimates fell short largely due to escalating contracted labor costs, with its all-in sustaining costs (AISC) rising nearly 13% compared to the same quarter last year. Barrick endured a similar challenge with a 20% rise in AISC. Furthermore, a declining interest in mining careers, partly due to the industry's perception as dirty and polluting, compounds the challenges miners face.
Looking ahead, Barrick is projected to report adjusted earnings per share of 41 cents for the fourth quarter, based on LSEG data. An ongoing royalty dispute with the Malian militia at its Loulo-Gounkoto mine and the difficult ramp-up at the Pueblo Viejo mine in the Dominican Republic are expected to cause Barrick to narrowly miss its gold production guidance for 2024. "We assume the (Loulo-Gounkoto) mine ultimately restarts in late 2025E with ramp-up to full run-rate production in 2026E, but under less favorable economic terms for Barrick," noted Bank of America analysts.
While challenges persist, Newmont is expected to report an adjusted earnings per share of $1.09 on February 20, with potential dividends from asset divestments and high gold prices. However, they will need to balance this with their share buyback program, according to Scotiabank analysts.
As the gold mining industry moves forward, focus is expected to shift towards improving margins and implementing cost controls, rather than growth in production, as stated by David Hove, VP of metals & mining at Jefferies, according to data from IndexBox platform.
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1. INTRODUCTION
Making Data-Driven Decisions to Grow Your Business
- REPORT DESCRIPTION
- RESEARCH METHODOLOGY AND AI PLATFORM
- DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
- GLOSSARY AND SPECIFIC TERMS
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2. EXECUTIVE SUMMARY
A Quick Overview of Market Performance
- KEY FINDINGS
- MARKET TRENDS This Chapter is Available Only for the Professional Edition PRO
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3. MARKET OVERVIEW
Understanding the Current State of The Market and Its Prospects
- MARKET SIZE
- CONSUMPTION BY COUNTRY
- MARKET FORECAST TO 2030
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4. MOST PROMISING PRODUCT
Finding New Products to Diversify Your Business
This Chapter is Available Only for the Professional Edition PRO- TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
- BEST-SELLING PRODUCTS
- MOST CONSUMED PRODUCT
- MOST TRADED PRODUCT
- MOST PROFITABLE PRODUCT FOR EXPORT
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5. MOST PROMISING SUPPLYING COUNTRIES
Choosing the Best Countries to Establish Your Sustainable Supply Chain
This Chapter is Available Only for the Professional Edition PRO- TOP COUNTRIES TO SOURCE YOUR PRODUCT
- TOP PRODUCING COUNTRIES
- TOP EXPORTING COUNTRIES
- LOW-COST EXPORTING COUNTRIES
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6. MOST PROMISING OVERSEAS MARKETS
Choosing the Best Countries to Boost Your Exports
This Chapter is Available Only for the Professional Edition PRO- TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
- TOP CONSUMING MARKETS
- UNSATURATED MARKETS
- TOP IMPORTING MARKETS
- MOST PROFITABLE MARKETS
7. GLOBAL PRODUCTION
The Latest Trends and Insights into The Industry
- PRODUCTION VOLUME AND VALUE
- PRODUCTION BY COUNTRY
8. GLOBAL IMPORTS
The Largest Importers on The Market and How They Succeed
- IMPORTS FROM 2012–2024
- IMPORTS BY COUNTRY
- IMPORT PRICES BY COUNTRY
9. GLOBAL EXPORTS
The Largest Exporters on The Market and How They Succeed
- EXPORTS FROM 2012–2024
- EXPORTS BY COUNTRY
- EXPORT PRICES BY COUNTRY
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10. PROFILES OF MAJOR PRODUCERS
The Largest Producers on The Market and Their Profiles
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11. COUNTRY PROFILES
The Largest Markets And Their Profiles
This Chapter is Available Only for the Professional Edition PRO- United States
- China
- Japan
- Germany
- United Kingdom
- France
- Brazil
- Italy
- Russian Federation
- India
- Canada
- Australia
- Republic of Korea
- Spain
- Mexico
- Indonesia
- Netherlands
- Turkey
- Saudi Arabia
- Switzerland
- Sweden
- Nigeria
- Poland
- Belgium
- Argentina
- Norway
- Austria
- Thailand
- United Arab Emirates
- Colombia
- Denmark
- South Africa
- Malaysia
- Israel
- Singapore
- Egypt
- Philippines
- Finland
- Chile
- Ireland
- Pakistan
- Greece
- Portugal
- Kazakhstan
- Algeria
- Czech Republic
- Qatar
- Peru
- Romania
- Vietnam
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LIST OF TABLES
- Key Findings In 2024
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Per Capita Consumption, By Country, 2018–2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country Of Destination, 2012–2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, By Country Of Origin, 2012–2024
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LIST OF FIGURES
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Consumption, By Country, 2024
- Market Volume Forecast to 2030
- Market Value Forecast to 2030
- Products: Market Size And Growth, By Type
- Products: Average Per Capita Consumption, By Type
- Products: Exports And Growth, By Type
- Products: Export Prices And Growth, By Type
- Production Volume And Growth
- Exports And Growth
- Export Prices And Growth
- Market Size And Growth
- Per Capita Consumption
- Imports And Growth
- Import Prices
- Production, In Physical Terms, 2012–2024
- Production, In Value Terms, 2012–2024
- Production, By Country, 2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, 2012–2024
- Imports, In Value Terms, 2012–2024
- Imports, In Physical Terms, By Country, 2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country, 2012–2024
- Exports, In Physical Terms, 2012–2024
- Exports, In Value Terms, 2012–2024
- Exports, In Physical Terms, By Country, 2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, 2012–2024