Tags: gold | Bristow | mining | sector

Randgold CEO Bristow: Gold Mining Sector Needs to 'Get its Act Together'

By    |   Thursday, 15 May 2014 03:04 PM EDT

The gold mining industry, which has suffered from bloated costs and overcapacity during the last few years, needs to shore things up pronto, says Mark Bristow, CEO of miner Randgold Resources.

Gold miner stocks have slumped much worse than the precious metal itself during the past two years. The Market Vectors Gold Miners ETF has dropped 42 percent during that period, compared with an 18 percent decline for SPDR Gold Shares ETF, which tracks the price of gold.

"Fundamentally we've got a structural issue in the gold industry," Bristow tells Yahoo.

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"Everyone is cutting capital, cutting exploration and producing a lot of our gold at a loss and selling it into the market. When you do that you're going to put pressure on the gold price."

So what should be done?

"If the industry could get its act together and really focus on profitability, it will do two things," Bristow notes. "One, shareholders of gold stocks will do better, and two, we'll drive the gold price up so it becomes a circuitous positive thing."

While there has been talk of consolidation in the gold mining industry, he says the "key takeaway is a recognition these companies are badly structured corporately and there needs to be substantial restructuring of the industry. Not only at top end but bottom as well."

Thursday, gold futures fell the most in a week as tumbling jobless claims reflected a stronger economy. Gold futures for June delivery fell 0.9 percent to settle at $1,293.60 an ounce on the Comex in New York.

“Jobless claims dropping below 300,000 is a big deal and people are getting convinced that the economy is showing signs of recovery,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, told Bloomberg. “People don’t need to invest in a safe-haven asset like gold when the economy is doing just fine.”

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Markets
The gold mining industry, which has suffered from bloated costs and overcapacity during the last few years, needs to shore things up pronto, says Mark Bristow, CEO of miner Randgold Resources.
gold, Bristow, mining, sector
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2014-04-15
Thursday, 15 May 2014 03:04 PM
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