Newmont Corporation (TSE: NGT) (NYSE: NEM) Cadia operation in Australia has been recognized for its responsible production practices in an independent assessment.
The operation announced on Monday that it had been awarded both The Copper Mark and the The Molybdenum Mark. These two respectively are awarded by the International Copper Association (ICA) and the Responsible Molybdenum Initiative (RMI), in partnership with the Responsible Minerals Initiative (RMI).
This certification recognizes companies that meet high standards of environmental, social, and governance (ESG) performance specific to copper and molybdenum production. The mark encourages responsible practices across the supply chain, promoting transparency and accountability in these critical metals’ mining and production.
Furthermore, Newmont’s Cadia operation ranks among Australia’s largest gold and copper mines. It’s located in the Cadia Valley about 20 kilometers south of Orange, New South Wales.
The operation produced 597 thousand ounces of gold and 98 metric kilotons of copper in 2023.
The operation relies heavily on underground mining, with the Cadia East mine recognized as one of the world’s largest gold and copper deposits. Ridgeway mine, also part of the operation, is currently under care and maintenance.
“Meeting growing global demand for copper brings an obligation to sustainability and responsible mining which prioritises environmental stewardship, social responsibility and economic development for the communities in which we operate,” said Suzy Retallack, Newmont’s chief safety and sustainability officer.
“We take great pride in being at the forefront of the copper industry with The Copper Mark, which highlights our dedication to responsible production and transparency.”
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Copper Mark positioned as top promoter of sustainable practices
In 2020, Cadia signed a 15-year renewable power purchase agreement with Tilt Renewables Limited to purchase 55 per cent of the wind farm’s output. Now fully operational, Rye Park supplies approximately half of Cadia’s power needs.
Retallack noted that Cadia’s community commitment led to an investment of nearly A$6 million (USD$3.96 million) over the 18 months leading up to December 2023, funding local projects, education, and infrastructure.
Meanwhile, Michèle Brülhart, executive director of The Copper Mark, congratulated Cadia for becoming the third site in Australia to receive The Copper Mark and the first to achieve The Molybdenum Mark. She added that this milestone means roughly 35 per cent of Australia’s copper now comes from certified sites.
The Copper Mark positions itself as the top assurance framework for fostering responsible, sustainable, and ethical practices across the copper, molybdenum, nickel, and zinc value chains. Cadia includes the Cadia East underground mine, one of the largest gold and copper deposits worldwide, and the Ridgeway underground mine, which is currently under care and maintenance.
Cadia is not only Australia’s second largest copper producer but also significant for its gold production. Its operations contribute to the economy through employment and community investments, while also facing challenges like environmental management and community relations.
Presently, Newmont is the world’s largest gold corporation by market valuation, with projects and properties scattered all over the world.
Even such, Newmont shares saw their steepest drop in over two years last week, plunging 9.1 per cent in New York. The decline followed disappointing Q3 results, where higher mining costs in Australia, Canada, Peru, and Papua New Guinea impacted adjusted earnings, costs, and revenue.
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Labour and energy prices on rise for gold miners
This performance contrasts with high investor expectations amid soaring gold prices, up over 30 per cent this year. Despite the market’s reaction, Newmont still posted its highest quarterly profit in five years, with net income attributable to shareholders reaching USD$922 million.
Gold miners have faced rising labour and energy costs over the past few years.
Newmont reported a 10 per cent increase in capital expenses due to expansion projects in Australia and Argentina. Additionally, the company absorbed higher expenses from significant assets acquired through last year’s USD$15 billion takeover of Newcrest Mining Ltd. In the third quarter, Newmont’s all-in sustaining costs at its Lihir operation in Papua New Guinea rose by 55 per cent compared to the previous period.
Higher mining costs have significantly affected other companies in the sector, as rising labour, energy, and material expenses continue to challenge profitability. For instance, Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF) has faced cost pressures that have increased its all-in sustaining costs, impacting its margins and pushing the company to explore more efficient operations.
Similarly, Barrick Gold Corp (TSX: ABX) (NYSE: GOLD) has reported higher operational expenses across its global sites, with cost escalations particularly evident in energy and supply chain disruptions. These pressures have led companies like Calibre and Barrick to consider strategies for cost management, including investing in automation and renewable energy to mitigate future expense volatility.
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