New #1 in gold mining
With worldwide worries about American financial stability and oil supplies, gold is a hot commodity. So it was no surprise when Canada-based Barrick Gold announced it would acquire another Canadian gold company, Placer Dome. The deal is worth of $10 billion (US).
The deal makes Barrick the #1 gold mining company in the world, edging out US-based Newmont Mining. Barrick was #3 and Placer Dome was #6. And the merger has lead to expectations of further gold deals, namely an acquisition by Newmont of either Newcrest Mining or Lihir Gold, Australia's leading gold mining companies.
Both Barrick and Placer Dome have mines in Canada, along with mines and prospects across the world form Tanzania to Australia, and from Chile to South Africa. Barrick and Placer may have to spin off some assets to keep regulators happy, and Canada's Goldcorp and Berna Gold look likely to pick up some mines.
The gold mining industry has had a number of mergers and attempted mergers in the last decade, even in the last few years.
But there's room for much consolidation, much as in other extraction industries (iron, aluminum, and other metals). The undoubted trend is to use plentiful cash to snap up limited resources.
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