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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: goldsheet who wrote (7187)8/18/1999 12:52:00 AM
From: Greg Ford  Read Replies (1) of 81205
 
Bob those are very insightful comments. However, the difficulty for the majors is replacing low cost production with smaller exploration budgets and less financing. The focus in the industry is on profitability as opposed to production growth. Based on the 1998 Goldfields Mineral Survey, 80% of production had a total cost of over $260. 20% had a cash cost over $260. When you consider the fact that weak commodity currencies helped some producers last year you can certainly make a case for lower production. It will take time however as in many cases producers will need to consider environmental and closure costs when looking at closing high cost mines. In other words it may be better from a cash flow basis to operate the mine rather than accelerate closer/environmental costs.

Greg
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