Gold miners remove 2,16Moz from global hedge book
miningweekly.com
By: Loni Prinsloo
21st January 2011
JOHANNESBURG (miningweekly.com) - Gold producers reduced their hedges by almost a third during the three months ended September 30, 2010, GFMS and Société Générale said in the third-quarter 'Global Hedge Book' report.
Nearly 2,16-million ounces, or 67 t, of gold were removed from the global book, which left the outstanding delta-adjusted hedge book at just 5,11-million ounces. Of this, 3,44-million ounces were forward sales.
“The third-quarter dehedging story was very much to do with AngloGold Ashanti,” stated the report.
The world’s third-largest gold miner removed a large portion of its hedge book during the three-months, realising its objective to become an unhedged producer early in the fourth quarter.
“This was heralded by some as ‘the end of gold producer hedging’, as AngloGold’s book was the last of the ‘great’ hedge books, which at end-2009 amounted to 46% of the global total.”
However, the analysis also showed that the first nine months of 2010 saw a continued stream of hedgers emerge, such as Sumitomo Metal Mining, Jaguar Mining, Petaquilla Minerals and Perseus Mining.
The GFMS/Société Générale report said that the mark-to-market liability of the producer hedge book improved to a negative $1,81-billion, mainly owing to the cut in AngloGold’s hedge position.
This represented an almost halving of the global hedge book’s collective liability, which was further reduced in the fourth quarter, when AngloGold Ashanti completed its hedge elimination. |
