Newmont boss says gold giant committed to Australian market

Newmont is moving fast after closing its acquisition of Newcrest Mining. Chief executive Tom Palmer talks about the company’s plans after the megadeal.

Newmont boss Tom Palmer says the company’s ageing Telfer gold and copper mine in the Pilbara remains a key strategic asset for the world’s biggest gold miner, playing down speculation the operation could be sold as it looks to liberate cash after closing its acquisition of Newcrest Mining.

The company has previously said it is looking to find up to $US2bn by selling assets and rescheduling mine developments across its global portfolio, with the company’s Cripple Creek operations in Colorado seen as likely to be the first asset sale.

Speaking after ringing the bell to open trading on the Australian Securities Exchange after Newmont finalised its $29bn takeover of Newcrest and launched trading of its own stock on the exchange, Mr Palmer said the mine’s infrastructure in the prospective Paterson district of the Pilbara – and the nearby emerging Havieron joint venture with Greatland Gold – meant Telfer remained a key asset for Newmont.

“When you’ve got infrastructure – a copper concentrator, an airstrip, a village in the northern part of the Pilbara – it’s really important you understand the strategic potential of that infrastructure, as well as the potential of the Havieron deposit, and that wider Paterson district,” he told The Australian.

“When you’ve got an Australian postcode, you want to think long and hard about the strategic potential of that, particularly when it’s in the Pilbara.”

Newcrest said in October it had made substantial progress in advancing a decline down to the deposit at Havieron, with the company still to finalise feasibility studies on the deposit – which has the potential to significantly expand the life and value of the ageing Telfer mine and infrastructure.

Mr Palmer confirmed that Newmont was moving swiftly now it has control of Newcrest’s Australian and international assets, rebranding both mine sites and its Melbourne offices as the US-headquartered giant took control of Newcrest, and flagging a changeover of senior management across the company’s operating mines.

Newcrest’s most senior executive team, including acting chief executive Sheri Duhe, parted ways with the company as Newmont took control, but Mr Palmer confirmed the gold giant was already making expectations clear to its new workforce on the first day it took charge of its new assets.

Mr Palmer confirmed Newmont has already moved its own senior management into all five of Newcrest’s operating mines – Cadia in NSW, Telfer in WA, Lihir in PNG and its two North America operations, Brucejack and Red Chris.

“A couple of them actually had acting general managers in place. So it was in some instances we put in place Newmont general managers to fill an acting position. And in other instances, the Newcrest general manager is in place, and we have senior Newmont leaders on the ground supporting them through the important integration work,” he said.

“Our experience, and the important lessons that we learned from the Gold Corp acquisition four and a half years ago, is to ensure we have got a clear Newmont leadership presence on site.”

In July Mr Palmer also promoted Perth-based executive Suzy Retallack to its most senior leadership team, as the company’s chief safety and sustainability officer, and this month anointed Ms Retallack as the boss of its Australian operations.

At the same time, the company lured back from retirement the former boss of its African and South American operations, Alwyn Pretorius, to take charge of Lihir in PNG and drive the development of the giant Wafi-Golpu joint venture in the country.

After ringing the bell to open trading on the Australian Securities Exchange on Tuesday, the Newmont boss also gave a firm commitment the company would retain its secondary listing on the local market, putting to bed concerns in some parts of the market that Newmont would eventually ditch the Australian market – as it eventually did after making similar promises following its takeover of Normandy Mining in 2002.

“It’s sitting up around $21bn, so it’s a very sizeable listing – much bigger than the Normandy acquisition some 20 years ago. And we see an investment community that understands mining – and an investment community that has significant funds to invest in well run companies. And we’re going to take advantage of that,” Mr Palmer said.

“We see an opportunity to use the Australian market as an echo chamber back into our main listing on the New York Stock Exchange.”

But Mr Palmer rejected suggestions the company’s moves to spread its most senior executive team around the globe – and the appointment of new Australian director Sally-Anne Layman, who joins fellow local Bruce Brook on the Newmont board – should be seen as a move to decentralise the company away from its US base.

“We are very firmly based in Denver, and a key part of that is our primary listing on the New York Stock Exchange,” he said.

“Before this deal closed, our business was international. So we had one managed operation in the United States, everything else was international. It’s more about understanding the demographic of this expanded business and that we’ve got the appropriate level of resource in place to lead their business.”