Newmont Mining Corp (NYSE:NEM) and the Story Of Gold


Newmont Mining Corp (NYSE:NEM) has been well known for its work in the field of gold and copper mining. However, the company has struggled hard to reach the position that it has today.

The company started in 1916 and was primarily involved in purchase of mining businesses. Around 1917 Newmont Mining Corp (NYSE:NEM) got involved in gold mining when it acquired 25% interest in a gold space called Anglo American Corporation, of South Africa. In around 1928 the company further invested in copper mining as they purchased a company called Magma Copper, which was amongst the largest copper producers.

However, Newmont Mining Corp (NYSE:NEM) got into serious gold mining after the great depression. Before that the company was more than a mining firm and was involved in several other businesses. The serious involvement in the gold mining was majorly because of President Roosevelt’s decision to increase the gold price from $20 to $35/ounce. This rise in the gold price helped the company get through the great depression. However, after the great depression the gold price did hit its lowest, which taught the company how the market for gold works.

After Newmont Mining Corp (NYSE:NEM) came through this big crisis, it started to invest in new joint ventures and acquisitions. Soon the company’s portfolio included 28 different products. Though gold remained the main interest, it also invested in iron, nickel, lithium, cement, and coal mining. The company also participated in several developmental research projects. Two of the major projects included copper refining, for use of copper in auto industry, and location of submicroscopic gold in the Carlin Trend at Nevada.

1980s was a dramatic time period for the company. Several competitors tried to break Newmont Mining Corp (NYSE:NEM) by either acquiring its segments or by taking over it. However, Newmont Mining Corp (NYSE:NEM) proved itself strong and attempted to acquire the company by Consolidated Gold Fields (ConsGold), T. Boone Pickens, Minorco, Hanson Industries, and Sir James Goldsmith, which all failed miserably. Despite all these circumstances, the company was able to pay a dividend of $33/share that made a total dividend of $2.2 billion. To pay off its debts the company sold some of its other assets that were not related to gold industry. This move in the 1990s preserved the company’s gold assets and made it a prominent gold company.

In 2000’s, Newmont Mining Corp (NYSE:NEM) once again entered the copper industry as it started mining copper at its Batu Hijau (Indonesia) copper and gold mine. From 2002 to 2006 the company made itself one of the top notch gold miners by acquiring the best gold companies. With the expansion of gold assets, the company’s copper assets also increased, as several of the companies that Newmont Mining Corp (NYSE:NEM) had acquired released copper as a byproduct.

Years have passed yet still Newmont Mining Corp (NYSE:NEM) has maintained a top position in the gold industry, though recent drop in gold prices has left the company with fewer resources for investment. It is being predicted that the prices will remain constant between year 2015 and 2017. The drop in prices and stagnant growth is certainly frustrating the investors, but this historic background of Newmont Mining Corp (NYSE:NEM) has a lesson for us and them. History has always revealed that in the long run gold investment will surely be beneficial, however, investors have to be patient in current times.

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