Valcambi loses deal to refine Newmont's gold: sources

LONDON (Reuters) - Swiss gold refiner Valcambi has lost a contract to refine around 4 million ounces of gold a year from Newmont Mining Corp, one of the world’s biggest producers, five sources familiar with the matter told Reuters.

FILE PHOTO: An employee shows a 1 gram piece of a gold Combibar at a plant of gold refiner and bar manufacturer Valcambi SA in the southern Swiss town of Balerna December 20, 2012. REUTERS/Michael Buholzer/File Photo

U.S.-based Newmont put the contract up for tender last year and has split the business between three of Valcambi’s rivals - Asahi in the United States and Argor-Heraeus and PAMP in Switzerland, the sources said.

“It all went up for tender and different refineries won different pieces (of the contract),” said one source.

Valcambi, Argor-Heraeus, PAMP, Asahi and Newmont all declined to comment.

Valcambi is the world’s largest gold refinery and had processed almost all of Newmont’s gold output for around 15 years, the sources said. Newmont owned a majority stake in Valcambi until 2015 when it sold the shares to India’s Rajesh Exports.

The sources said Newmont would send gold from its mines in the United States to Asahi and material from mines in Peru and Ghana to either PAMP or Argor-Heraeus.

Newmont also operates mines in Suriname and Australia, and in total produces around 5 million ounces, or 155 tonnes, of gold a year - more than 4 percent of global mine production and enough on its own to fill the capacity of a medium-sized refinery.

Competition has pushed refining charges down sharply in recent years, and sources said rates for the Newmont deal could range from $0.30 an ounce to as little as $0.05 an ounce – translating to revenue of between $200,000 and $1.2 million a year for 4 million ounces.

To boost revenues, refiners are increasingly making money out of products such as coins and jewelry parts for which they can charge more.

Newmont is set to overtake Barrick Gold Corp as the world’s largest gold producer this year when it acquires rival Goldcorp Inc.

Reporting by Peter Hobson; Editing by Veronica Brown and Mark Potter