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TAKEAWAY
The gold market is dominated by four major players with Barrick Gold leading the pack with revenues of nearly $9.2 billion in 2019. While Newmont Goldcorp, Freeport-McMoRan and Kinross Gold are behind with revenues $9 billion, $3.5 billion and $1.4 billion, respectively, Newmont Goldcorp's superior asset quality and processing infrastructure, is expected to help the company capture additional market share from its rivals. Additionally, the deal between Newmont and Goldcorp is expected to be a clear winner compared to the one between Barrick Gold and Randgold Resources, as Newmont is set to benefit for Goldcorp's high grade ores, whereas Barrick's portfolio is concentrated my lower grade African mines
In this dashboard, Trefis analyzes the changes in the gold revenues of the 4 largest gold players over the last few years.
Note: Gold market consists of the top 4 gold mining companies for this analysis
Though gold market size is expected to grow by 10% from the current level through 2025, Newmont Goldcorp's market share is likely to see a growth of >15%, from 39% in 2019 to 45% by 2025, primarily due to higher volume and premium pricing, aided by inorganic growth strategies and superior asset quality
Gold Mining Market
Newmont Market Share
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The top players in the gold space generated around $23.1 billion in revenues over 2019, posting a y-o-y growth of about 17.8%. Market size has increased from $18.1 billion in 2015 to $23.1 billion in 2019, marking a growth of 28% during this period, with most of the growth coming in 2019 due to higher output and pricing. However, the market size is expected to increase by another 10% to $25.5 billion by 2025
Gold Mining Market
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Gold Market Growth
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To understand how global gold prices have moved over the last 50 years and their relation with gold production and demand, view our dashboard analysis - Gold Prices: 50 Year Price Performance And Production-Demand Analysis
Below we explore the volume, price and revenue forecast for major gold companies, and see how Newmont's market share is rising
a) Volume
• With 2020 being the first full year post the deal, Newmont's gold output is expected to rise further, while Barrick's is expected to remain flat.
• All companies except Newmont and Freeport-McMoRan are likely to see their volume decrease from 2019 to 2025 in the absence of any major deal during this period.
• Newmont Goldcorp's total asset portfolio along with exploration and processing infrastructure is much superior compared to Barrick Gold, and one of the best in the industry.
• Freeport's volume growth is to be mainly driven by a low base in 2019 due to mine transition work.
• Thus, Newmont is set to outperform its rivals and increase its volume sales from 6.5 million ounces in 2019 to 7.7 million ounces in 2025
Newmont - Gold Volume Sold
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Barrick - Gold Volume Sold
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Kinross - Gold Volume
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Freeport-McMoRan Gold Volume
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b) Prices
• Price realization is expected to see a slight uptick for Newmont due to its superior grades and with global gold prices expected to remain elevated. Newmont's price realization is expected to rise from $1,400/ounce in 2019 to $1,490/ounce by 2025
• Barrick could see lower price realization as lower-grade ores from its African mines begin to form a major portion of its portfolio
• Freeport-McMoRan's and Kinross' price realization is expected to remain range bound around $1,380-$1,400.
• Thus, Newmont's output is likely to see higher growth in prices compared to its rivals
Newmont- Realized price per ounce
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Barrick- Realized price per ounce
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Kinross- Realized price per ounce
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FCX- Realized price per ounce
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Newmont Goldcorp's market share in the gold market is expected to rise from 39.1% in 2019 to reach 45% by 2025
Newmont Market Share
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This compares with-
• Barrick's Market share decline from 39.7% in 2019 to 30.4% in 2025;
• Kinross' market share decline from 15.1% in 2019 to 12.1% in 2025; and
• Freeport-McMoRan's market share growth from 6% in 2019 to 12.5% in 2025
FCX's sharp growth in market share is to be led by Grasberg mine going to pre-transition production levels. However, its market share in 2025 is still likely to be lower than its high achieved in 2018
Thus, Newmont-Goldcorp, with a higher market share in the medium term, is likely to be the dominant player in the gold sector
Related Analysis
Our Complete Set Of Analyses For:
Newmont GoldcorpBarrick GoldFreeport-McMoRan
