Newmont Mining Corp., the world’s biggest gold company, said it will consider buying international assets owned by Gold Fields Ltd. if that company chooses to sell them to defeat a hostile $7.1 billion takeover bid from South Africa- based Harmony Gold Mining Co.
Denver-based Newmont is planning to spend $350 million digging the Ahafo mine in Ghana, the country where South Africa-based Gold Fields’ most profitable asset lies. Newmont said it’s interested in expanding in that region.
“West Africa is now of more focus for us as we have a critical mass in Ghana,” David Harquail, the vice president of merchant banking for Newmont, said at a Scotia Capital conference in Canada on Tuesday, according to a webcast. “We are interested in those assets. I wouldn’t be doing my job if we didn’t look at those assets. That’s all I can say.”
Gold Fields may sell the assets to benefit its shareholders rather than Harmony’s, Gold Fields spokesman Willie Jacobsz said this week. It also may need the money to buy the 20 percent of its shares OAO GMK Norilsk Nickel owns, London’s Sunday Telegraph said.
Norilsk spokeswoman Elena Scherbinina declined to comment on that report.
“Newmont has got big things going on in Ghana,” said David Davis, an Andisa Securities analyst in Johannesburg. “They would benefit from the synergies.”
Arcic Platinum, a Finnish platinum deposit Gold Fields owns, may also attract Newmont, he said.
Ghana’s Tarkwa mine and the smaller Damang operation accounted for 42 percent of Gold Fields’ operating profit of 456 million rand in the quarter months ended Sept. 30 and 14 percent of its output of about 1 million ounces.
Gold Fields is ending legal action against Norilsk, a lawyer for Norilsk said in Pretoria. “Gold Fields has dropped all their claims against Norilsk and tendered our costs,” the lawyer, Anthony Stein, said at a Competition Appeal Court hearing Wednesday.
Gold Fields was appealing the Competition Tribunal’s dismissal of its complaint against the bid. A decision of the appeal will be made today, said Dennis Davis, judge president of the court.
“Gold Fields and Norilsk have reached some sort of uneasy truce,” Jeremy Gauntlett, an advocate for Gold Fields, said. “We decided not to go against them in court. We don’t need another enemy.”
The company had filed complaints against Harmony and Norilsk in South African and U.S. courts and with South African competition and stock exchange regulators, all of which have been dismissed. Gold Fields is appealing all the dismissals except the U.S. ruling.
In another of those appeals, to South Africa’s Supreme Court in Bloemfontein against a High Court dismissal of the Gold Fields complaint, judgment was reserved, the South African Press Association said.
Harmony plans to buy as much as 34.9 percent of Gold Fields by Friday and bid later for the rest. Norilsk, which opposes Gold Fields’ own plans to buy Canada’s Iamgold Inc. for $2.1 billion, has said it will offer its shares in the second stage.
In an e-mailed statement Wednesday, Norilsk said it still backs Harmony’s offer and will vote against Gold Field’s plan to buy Iamgold.
Harmony on Oct. 18 offered 1.275 shares for each Gold Fields share, seeking to create the world’s largest gold producer and cut costs by sharing infrastructure and trimming management jobs.
Norilsk can sell its stake to a bidder that offers 15 percent more than Harmony, which would have 10 days to match the bid.
The gap between Harmony’s offer and Gold Fields’ share price widened to 2.29 rand Wednesday Tuesday. That was the biggest spread since Harmony shareholders approved the bid on Nov. 12, indicating investors had less confidence the deal would go through.
Shares in Harmony fell 4.25 rand, or 6.3 percent, to 62.75 rand in Johannesburg, giving the company a market value of 20.1 billion rand. Gold Fields fell 3.40 rand, or 4 percent, to 82.30 rand.
Jacobsz, the Gold Fields spokesman, declined to comment.
“If they are in talks with Norilsk or Newmont, then they should tell the market,” Ferdi Dippenaar, Harmony’s marketing director, said by phone from Johannesburg.
