- Newmont Mining said it would buy Goldcorp in a deal valued at $10 billion.
- The deal will create the world’s biggest gold producer by output.
Newmont Mining said on Monday that it would buy smaller rival Goldcorp in a deal valued at $10 billion, creating the world’s biggest gold producer by output.
The deal is the second high-profile merger in the mining industry since Barrick Gold agreed to buy Randgold Resources Ltd in September last year to cut costs.
The gold mining industry has come under fire from investors in recent months for poor management of capital. This combined with falling gold reserves and higher extraction costs have prompted miners to look for cost efficiencies.
“The strategic rationale for combining Goldcorp with Newmont is powerfully compelling on many levels,” Goldcorp Chief Executive Officer David Garofalo said in a statement.
The combined company is expected to produce 6 million to 7 million ounces of gold over the next 10 years. In 2017, Newmont produced 5.3 million ounces of gold, while Goldcorp mined 2.6 million ounces.