largest gold mine in the world shut down, does gold respond?

[Large Sarge]

http://seekingalpha.com/article/1476581-biggest-gold-mine-in-the-world-shutdown-is-this-the-catalyst-gold-has-been-awaiting?source=yahoo

[mamboni]

Oh no, largest gold mine closed?!?!? Obviously gold will drop in price in response.

[Spectrism]

Since the article is not posted here, you have to go to the site.... it is only a temporary shut down.

[Large Sarge]

Grasberg and the Mine Shutdown

Unknown to many gold investors, the largest gold mine in the world is the Grasberg mine that is operated by Freeport-McMoRan Copper & Gold (FCX) and located in Indonesia. This monster of a mine has averaged over 1 million ounces of annual gold production over the last three years and, according to FCX, holds the world's largest gold reserves.

Over the last few months, Grasberg has hit a number of setbacks. Three weeks ago a tunnel collapsed while thirty-nine workers were undergoing safety training. This led to worker protests and a government closure of the whole facility that was only resumed at the Grasberg open-pit mine last week (other portions still remain shutdown).

On Friday, a wall collapsed hospitalizing a worker and exacerbating an already accident weary workforce. The mining ministry ordered all mining shutdown at Grasberg for at least three months while the accidents are investigated and safety precautions are taken. Additionally, workers already on edge about contract negotiations are now increasingly unhappy with safety at the mines. Three months may already exhaust supplies of FCX ore, but if the strike leads to a longer closure and more worker demands, then production may be halted for much longer.

[mamboni]

Since the article is not posted here, you have to go to the site.... it is only a temporary shut down.


Temporary - until the Union lawyers and environmentalists smell the blood in the water and close in for the kill.

[palani]

I thought when a gold mine shut down all that was left was the shaft.

[Horn]

What's this going to do to the end price of a laptop?

[mamboni]

I thought when a gold mine shut down all that was left was the shaft.

Actually, the stockholders and bondholders get the shaft.

[Serpo]

http://static.cdn-seekingalpha.com/uploads/2013/6/3/280094-1370267193337419-Hebba-Investments.jpg (http://static.cdn-seekingalpha.com/uploads/2013/6/3/280094-1370267193337419-Hebba-Investments_origin.jpg)

[Spectrism]

Just for this place to shut down for... let's say half the year.... that's half a million ounces of gold NOT being brought to market. I do think that before August we will see the release of the silver and gold leash. The destruction of currency will likely outpace the destruction of buying power of the market so we can expect a panic to set in.

But there are other games they can play. They will likely pass laws requiring you to register your assault metals and get licensed to keep them and have to prove you have them in child-safe vaults and insured.

If you have any dry powder, get ready to grab any physical you can. My hope is that there is enough time at the lower prices for physical to come down a bit.

[Down1]

It appears this mine produces about 31 tonnes of gold a year.
World gold production is about 2700 tonnes.

Is this a big deal ?

[Serpo]

. Grasberg Gold Mine-- This mine, which is in the Indonesian province of Papua, produced 2,025,000 ounces of gold, according to the annual report of Rio Tinto Plc. The mine is majority owned by Freeport-McMoRan Copper & Gold Inc. Besides gold, it also produces silver and copper. 2.Muruntau Gold Mine -- This mine, which is about 250 miles west of the capital in Uzbekistan, is believed to have produced approximately 1,800,000 ounces of gold last year. The project, which is an open-pit operation, is run by state-owned Navoi Mining and Metallurgical Combinat.
3. Carlin-Nevada Complex -- This mine, which is in the U.S. state of Nevada, produced 1.735 million ounces in 2010. It is owned by Newmont Mining Corp. It includes both open-pit and underground operations.
4. Yanacocha Gold Mine -- This mine, which is in northern Peru and is the largest gold mine in Latin America, produced 1.46 million ounces last year. It is run by Newmont Mining and owned by Newmont Mining and Buenaventurda, a Peruvian company.
5.Goldstrike (Betze Post) Gold Mine -- This mine, which is northwest of Elko, Nev., produced 1.24 million ounces of gold last year. It is owned by Barrick Gold Corp.
6.Cortez Gold Mine -- This mine, which is southwest of Elko, Nev., produced 1.14 million ounces of gold last year. It is owned by Barrick Gold.
7. Veladero Gold Mine -- This mine, which is in Argentina, produced 1.12 million ounces of gold last year. It is owned by Barrick Gold.
8. Lagunas Norte Gold Mine -- This mine, which is in north-central Peru, produced 808,000 ounces of gold last year. It is owned by Barrick Gold.
9. Lihir Gold Mine -- This mine, which is in Papua New Guineau, produced 790,974 ounces of gold in the 12 months ended June 30. It is owned by Newcrest Mining Ltd., Australia's largest gold producer.
10. Super Pit/Kalgoorlie -- This mine, an open-cut mine in Western Australia, produced 788,000 ounces last year. It is 50-50 owned by Barrick Gold and Newmont Mining.

http://www.ibtimes.com/10-biggest-gold-mines-world-photos-553223

[Down1]

If it's producing 2 million ounces then that would be over 60 tonnes. Although that link is from a few years ago.
It's loss is still not a big deal in my mind.

[Spectrism]

If it's producing 2 million ounces then that would be over 60 tonnes. Although that link is from a few years ago.
It's loss is still not a big deal in my mind.


Maybe not on the grand scale. But- how many paper tons are sold every years and how many physical tons are available to cover paper receipts? There needs be only one ton of default to break the camel's back.

[Serpo]

it is the biggest and its shut ,must mean something

[mamboni]

If it's producing 2 million ounces then that would be over 60 tonnes. Although that link is from a few years ago.
It's loss is still not a big deal in my mind.

Price and supply are determined at the margins. Gold production has peaked and is in slow decline, despite increased manpower and capital injections because of declining ore grades, reserves depletion and lack of new discoveries of size. The closing of large gold producers will only accelerate the decline in production and hasten the day of a physical short squeeze. Yes, one mine closing is no big deal. But a a few closings on top of the general decline in production industry-wide will have significant impact on supply eventually.