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Newmont to become largest gold producer

Credit: Reuters Studio
Published 3 days ago - Duration: 01:02s

Newmont to become largest gold producer

Newmont Mining said it will buy smaller rival Goldcorp for 10 billion, becoming the world's biggest gold producer, just as gold reserves are declining.

Fred Katayama reports.

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Newmont to become largest gold producer

Newmont Mining is buying smaller rival Goldcorp for $10 billion, paying an 18 percent premium.

The deal creates the world's biggest gold producer just as easy-to-find gold reserves decline.

Newmont's shares fell on the news.

Goldcorp skyrocketed.

Reuters correspondent Liana Baker is covering the story: (SOUNDBITE) REUTERS CORRESPONDENT LIANA BAKER, SAYING: "There's just fewer and fewer places in the world to mine for very valuable gold.

So, by having a bigger company, they a better chance getting access to the right deposits, keeping costs down.

This this could be the future for mining companies, to just be part of a bigger and bigger companies.

But there is also antitrust risk to getting bigger.

So, we'll see what the authorities say about this one." The deal is the second high-profile merger in the mining industry since Barrick Gold agreed to buy Randgold Resources in September last year.

It's expected to close in the second quarter and generate up to $100 million in savings.

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