(Entertainment-NewsWire.com, June 11, 2013 ) DongGuan, China -- Australian Newcrest mining company that specialises in gold extrusion, has reported a massive $6 billion in losses, has cut 350 jobs in Australia and will close its Brisbane office and will not pay a final dividend.
The announcements addressed shareholders after a slew of broker downgrades this week. The Newcrest arm specialising in custom extrusions set the scene for one of the nation's biggest corporate losses, when between $5 billion and $6 billion of writedowns on mines in Papua New Guinea, Australia and Africa are taken in its August full-year results report.
The announcement accelerated a recent hammering of Newcrest's share price, sending the stock down $1.01, or 7.6 per cent, to a nine-year low of $12.35. As a result of the drop, Newcrest is no longer Australia's third largest miner behind giants Rio Tinto and BHP Billiton.
Experts suggest that Newcrest has been plagued by operational issues and production cut-backs, as well as the general escalation of costs that has afflicted all Australian miners. This is on top of the shift of investors out of gold companies and into physical bullion.
The company has responded in line with the resources sector generally; it is cutting discretionary spending, halving exploration spending, suspending higher-cost production and cutting costs across the board in order to target a 20 per cent reduction next financial year.
The closure of the Brisbane office and other redundancies will take about 20 per cent off Newcrest's corporate costs. The Brisbane office has over 100 people in it and some of those roles will transfer to Melbourne. As well as shrinking its corporate activities, Newcrest will significantly reduce its exploration activities. The company is also believed to be considering cost savings at its Lihir mine in Papua New Guinea.
Experts believe Newcrest is now in talks with aluminium extrusion specialist Alcola discussing a takeover bid. The world's leading producer of primary and fabricated aluminium, as well as the world's largest miner of bauxite and refiner of alumina, Alcola is well known for its high quality die casting products with outlet in China supplying a key market direct.
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