• Newmont weighs cost cuts, possible layoffs after Newcrest takeover
• AISC up 25% since 2022; aims $300/oz cost reduction
• Ghana’s Ahafo South mine key asset, employs thousands locally

Facing a rise in its costs, the American mining group Newmont is reportedly working on a plan to cut expenses, including potential job cuts. The information, which was reported on Wednesday, August 27 by Bloomberg citing sources close to the matter, raises questions about the future of the company's 22,000 employees worldwide, particularly in Ghana. Newmont operates the Ahafo South gold mine there, along with its Ahafo North expansion project.

According to the report, the situation is directly linked to Newmont’s $15 billion acquisition of Australian mining company Newcrest Mining in 2023. The transaction led to an increase in the number of projects under management and, by extension, its operating costs. While Newmont has not officially confirmed the existence of a plan, its costs have shown an upward trend since 2023.

The company's All-In Sustaining Cost (AISC), an indicator of the costs to produce and maintain its mines, has increased by 25% between 2022 and 2024, rising from $1,211 per ounce to $1,444 in 2023, then to $1,516 in 2024. To limit this increase, the company plans to reduce its AISC by $300 per ounce through the reported plan, according to Bloomberg's sources.

Ahafo South was Africa's largest gold mine in 2024, with a production of 798,000 ounces, making it a key asset in Newmont's gold portfolio. The company had approximately 5,900 employees in Ghana in 2024, with Ahafo South accounting for the majority of that figure, even though the estimate also included the Akyem mine (sold to Zijin Mining in October 2024). Production at Ahafo North is slated to begin by the end of 2025.

A sustained increase in operating costs can erode a mining company’s profitability and hinder the development of new projects. Newmont addressed this issue in its 2024 annual report. "We could have significant increases in capital and operating costs over the next several years in connection with new projects, costs related to closure reclamation activities, and in the sustaining and/or expansion of existing mining and processing operations. … Significantly higher and sustained increases in operational costs or capital expenditures could result in the deferral or closure of projects and mines in the event that costs become prohibitive," the document stated.

Aurel Sèdjro Houenou