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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bill Murphy who wrote (29997)	3/14/1999 12:40:00 PM
From: Doug Green	Read Replies (1) \| Respond to of 116763

Bill: I don't understand: How was POG held down to a puny $9 gain in light of this tremendous degree of short covering??

To: Bill Murphy who wrote (29997)	3/15/1999 8:13:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116763

Resources crisis: mines close By Ian Howarth and Bruce Hextall Nearly 800 mine workers were stood down yesterday from nickel, gold and copper operations in Queensland and Western Australia after management and creditors combined to stop financial bleeding caused by sinking commodity prices. WMC Ltd laid off more than 310 staff and contractors as it closed two more mines at its Kambalda nickel operations, following the closure of three other Kambalda mines late last year as nickel plunged to 10-year lows. A further 400 employees were stood down at operations in Western Australia and Queensland when gold producer Australian Resources Ltd first went into voluntary administration yesterday morning and was later put into receivership by a major creditor, Rothschild Australia Ltd. The lay-offs have raised concerns across the resources sector which faces one of its deepest slumps in more than 30 years. Job losses are rapidly accelerating in the mining and energy sector as companies scale back in response to weak commodity prices. Several commodities are close to all-time lows. Nickel is now trading around $US2.20 a pound after slumping to about $US1.70 before Christmas. Copper is struggling to maintain a price above US65¢ a pound, nearly half its price of two years ago, while the international gold price refuses to move above $US300 an ounce. The latest closures come as resources industry leaders increasingly express concern about the future of the mining sector. Exploration budget cutbacks in the face of low prices and other difficulties including land access mean the number of new projects in planning stage is rapidly shrinking. The oil industry is also in the doldrums because of the plunge in prices in the past six months. Leading oil and gas producer Santos Ltd yesterday said it would cut $170 million from its exploration and development budget in the current year while Shell Australia has already cut $100 million from its offshore drilling budget. BHP has been forced to cut iron ore production in response to softer markets in Asia, while a host of planned offshore gas developments are on hold. The Organisation of Petroleum Exporting Countries (OPEC) yesterday provided a brief respite from the energy markets gloom, revealing new talks aimed at cutting the global surplus of oil. That was enough to lift the All Resources Index off the floor and helped the All Ordinaries Index to another record close at 2989.5, but analysts say the weak commodity prices could persist for another two years. The failure of Australian Resources could have a direct impact on leading resources industry players Mr Robert Champion de Crespigny and Mr Joe Gutnick, who each have exposure to the company. Last year Mr Gutnick's Great Central Mines acquired a 21 per cent stake in Australian Resources ahead of an expected takeover move. Great Central is being taken over by a private company, Yandal Pty Ltd, in which Normandy holds 49 per cent and Mr Gutnick's private company, Edensor, owns 51 per cent. Great Central is facing a potential loss of about $25 million on its investment. WMC has cut its planned nickel production rate from 100,000 tonnes to 78,000 in the current year. WMC's executive general manager, nickel and gold, Mr Peter Johnson, said: "Times are tough for the nickel industry and the resources sector generally. "Nickel prices have remained low over an extended period and this continues to put pressure on the industry." At this stage WMC has no plans to close mines at its Leinster operations or alter production from the lower cost Mt Keith mine, a WMC spokesman said. Great Central last night was understood to be considering injecting fresh funds into Australian Resources to protect its investment. Australian Resources has about $12 million cash, but has long-term debt of $14.7 million and short-term liabilities of more than $25 million. Although it lifted its production performance last year, the slight price improvements for copper and nickel have not be enough to prevent drastic action. Recently the company had been surviving on its wholly owned Selwyn gold-copper project. Its two Western Australian gold operations, Mt McClure and Gidgee, were already struggling because of weak bullion prices and high operating costs. Australian Resources, capitalised at nearly $70 million on Friday, requested a suspension from trading yesterday when Mr Martin Green, a partner at accountancy firm Grant Thornton, was appointed voluntary administrator. Soon after Rothschild Australia Ltd moved to protect its position as a secured creditor with an exposure of more than $5.2 million. It appointed Ferrier Hodgson as receiver to the group as mining operations were put on care and maintenance. Australian Resources' gave little indication of its financial problems although its managing director, Mr Robert Ryan, resigned suddenly two weeks ago. On Sunday the company's chairman, Mr Philip Pearce, a former financial director of Woolworths Ltd and a director of N.M. Rothschild & Sons Australia, also resigned. afr.com.au