Newmont (TSX: NGT; NYSE: NEM) is preparing a major cost-reduction plan that could lead to thousands of job losses, Bloomberg reported on Wednesday, citing people familiar with the matter.
The world’s largest gold miner, which completed its $15-billion acquisition of Newcrest Mining in 2023, is targeting a reduction of as much as $300 per oz. in all-in sustaining costs (AISC). That would represent a cut of about 20% and bring Newmont closer in line with its lowest-cost peers.
Newmont’s costs have surged in recent years, climbing more than 50% over the past five years due to higher energy, labour, and material prices. The situation worsened following the Newcrest acquisition, which expanded the miner’s portfolio to about 20 operations, including copper assets.
“Moves to reshape our structure reflect one of several steps we are taking in 2025 to reduce our cost base and improve productivity – positioning Newmont to deliver on our commitments to shareholders and partners across a range of gold price environments, and for the long-term success of the business,” Newmont said in a statement.
Shares in Newmont have surged 80% year-to-date on stronger bullion prices. The stock was flat on Wednesday at $72.39 in New York but was up 0.3% early on Thursday. The company has a market capitalization of $79.5 billion.
Structural changes
In this year’s second quarter, Newmont reported an AISC of $1,593 per oz., nearly 25% higher than Agnico Eagle Mines (TSX: AEM; NYSE: AEM), one of the industry’s lowest-cost producers. The Lihir mine in Papua New Guinea and the Cadia operation in Australia, both legacy Newcrest assets, continue to struggle with cost overruns and underperformance.
Newmont has already begun notifying staff of redundancies, with executives and division managers holding calls to discuss job cuts and other measures, Bloomberg reported. Alongside workforce reductions, the miner is considering scaling back long-term incentives as part of the restructuring.
‘Thousands affected’
At the end of 2024, Newmont employed 22,200 people and had an additional 20,400 contractors. While the company has not disclosed how many positions may be eliminated, sources told Bloomberg the cuts could affect “thousands” of employees.
The miner has hired Boston Consulting Group to assist with the cost-cutting plan, though no final decisions have been announced. The company is executing on a cost and productivity program launched earlier this year, a Newmont spokesperson told Bloomberg.
The cost-cutting push comes even as the gold sector is benefiting from record bullion prices. Gold reached an all-time high of $3,500 an oz. in April and has mostly traded above $3,300 since, lifting gold equities.
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