South Africa’s second largest gold miner Gold Fields is toying with the idea of splitting the group into two companies, one housing its South African operations and the other its international operations, chief executive officer (CEO) Ian Cockerill said on Friday.
There are two streams of thought on gold companies, one which advocates splitting companies to improve shareholder value and the other that gold companies should have critical mass, Cockerill said at an investor presentation.
The current trend in the international gold mining industry is toward consolidation with the formation of mega gold miners like Newmont of the US and South Africa’s AngloGold.
As part of the continuation of that consolidation process, AngloGold is currently in the process of attempting to merge with Ghana’s Ashanti Gold Fields.
The major reason for Gold Fields considering a spilt is the move by Mvelaphanda Resources to take a stake of 15% in its South African assets.
“Mvela has a significant role to play in Gold Fields South African operations,” Cockerill said.
Gold Fields has gold mines in South Africa, Ghana and Australia.
The group produced record gold output in its financial year to June 2003 of 4,334-million ounces, of which over 60% was mined in South Africa. – I-Net Bridge