Newmont expects to hit its deadlines for the sale $US2bn in unwanted assets
Newmont is confident it can divest unwanted assets by early next year, despite ongoing issues with its Telfer mine in WA’s Pilbara.
Newmont is confident it can shed its unwanted assets by early next year and add at least $US2bn ($3bn) to its balance sheet, despite ongoing issues with its Telfer mine in the Pilbara, president and chief executive Tom Palmer says.
Newmont’s ongoing sales process for mines in Australia, Ghana and the North America have been buoyed by the strong gold price – still comfortably above $US2300 an ounce – but the sale of Telfer has been made more complex by ongoing problems with the ageing mine’s tailings facilities, which has forced Newmont to halt ore processing at its mill while it fixes the waste storage issues.
Speaking at the Melbourne Mining Club on Thursday, Mr Palmer said that, while the gold giant was still interested in increasing its copper production in the long term, there were no plans to dip back into the merger market as Newmont digested its takeover of Australia’s Newcrest mining.
Mr Palmer said Newmont’s internal development pipeline would keep its production and growth profile strong for decades.
“We’ve got six massive copper gold projects in our portfolio, plus 11 large managed operations. We’ve got a very full plate,” he said.
Newmont is selling non-core operations in the wake of its Newcrest takeover, with three Canadian mines, two US sites and one Ghana project all on the market with Telfer.
Newmont has previously said Telfer could be out of action until the third quarter of the year, with industry sources suggesting a September date to restart the processing plant.
Mr Palmer would not be drawn on Thursday on a return to production for Telfer, but said the company had a clear line of sight to fix the problems at the tailings facilities. “A pathway to remediate where there’s been some issues with those facilities is clear,” he said.
“So we’re just stepping our way through that. And it’s weeks of work to get that done. Not months and months of work.
“The remediation work is around some buttressing here and there, and in terms of just ensuring that those facilities are meeting the latest global standards.”
It is unclear how the tailings problems will affect the sales process at Telfer, or the eventual price. But Mr Palmer said that, while Newmont would offer technical support to any eventual buyer, it would not consider retaining liabilities for future tailings dam issues.
“Assuming we’re able to successfully sell the asset, then the asset goes holus-bolus to the new owner,” he said.
“But in terms of our transparency, if there’s any support that we can provide, then that’s certainly available – if there was a buyer that maybe didn’t have the technical expertise that Newmont has.
“But a buyer picks up the liability of an asset, and that doesn’t change.”
Newmont said in late February that it expected to raise about $US2bn from asset sales within a year. Despite the troubles at Telfer interrupting its sales process, Mr Palmer said he believed the company would still be able to meet its self-imposed targets.
“Our commitment was $US2bn in cash and to do it within the first year, and we’re still on track for both of those,” he said.
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