Gold mining drama in Barrick’s Newmont takeover bid – The Wall Street Journal

DUBLIN — Barrick's takeover bid for Newmont is fast becoming a very dramatic chapter in the ongoing corporate thriller that is the gold mining industry. The bid, and Newmont's subsequent rejection of the bid in favour of its own planned deal with Goldcorp, underscores some of the most important features of today's mining industry. The gold mining business has always been about scale and costs. The goal is to have a lot of productive mines that are close enough to one another to achieve cost savings. In addition, there have been relatively new gold discoveries in the last few years. As a result, mergers and acquisitions have become the primary path to growth and cost cutting for gold mining companies. Barrick has been at the forefront of this. Its recent merger with Randgold Resources created the world's biggest gold mining company by some measures. In seeking to merge with Newmont, Barrick was hoping to increase its size and, crucially, to combine its Nevada operations with Newmont's, securing massive cost savings. But Newmont isn't keen – it prefers to pursue its own bid for Goldcorp, which will make the combined entity the world's biggest gold producer by output. It's not clear yet how this drama will play out, but one thing's for sure – this proves that Mark Bristow knew what he was talking about back in January when he said that the gold industry is in line for a major shakeup. – Felicity Duncan

Newmont Rejects Barrick Gold's Takeover Bid

By Alistair MacDonald

Newmont Mining Corp. turned down a proposal from rival Barrick Gold Corp. to merge and create one of the world's largest mining companies, a widely expected move.

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