Barrick Gold overnight announced a
US$9.2 billion takeover offer for fellow Canadian Placer Dome in a bid
become the world’s biggest gold miner – and in the process showed how
weak Australia’s gold corporate life has become at the top of the pile.

Placer’s key mines are in Australia, producing 950,000 ounces of gold, 40,000 tonnes of
copper and 26 per cent of its total revenue last year. Barrick is no slouch
here either, expecting to produce about 1.1 million ounces of Australian gold
this year, 20 per cent of its total output.

Should the takeover prove successful, the
merged Australian operations will form the politically and environmentally
stable bedrock needed by the world’s
biggest gold miner as the industry faces increasing environmental issues in
North America and the usual political risks elsewhere.

The enlarged Barrick operation in Australia will also be about twice the size of the largest
domestic gold miner, Newcrest – and that depends on Newcrest getting its
troubled Telfer mine working.

There will be analysts trying to drum
up business today with a story about the United States’ Newmont (the present world number one producer) maybe
looking to bid for Newcrest if it doesn’t try to top Barrick’s bid for Placer –
but that appears wishful thinking.

Despite attempts to reassure nervous
shareholders at last week’s AGM, Newcrest has plenty of problems at Telfer and
it would be a very brave miner who would bid without knowing they can be solved
and at what cost. More importantly, it’s just not all that big in the scheme of
things and doesn’t do a lot for the golden catch phrase among the majors:
Reserve Replacement

AngloGold Ashanti – the other member of the Big Four – could be a more
interesting dance partner for Newmont, particularly as majority
Anglo American has announced it wants to sell down its stake. And
AngloGold Ashanti’s main claim to fame is the longevity of its reserves.

Which all leaves Australian companies
as bystanders in the rationalisation of the gold industry. Despite gold being
so important to Australia for one and a half centuries, we haven’t been able to
produce a significant international player.

There is a good crop of enthusiastic
but relatively small miners and explorers active domestically and around our
region, but having plenty of the yellow metal, good geologists and miners
hasn’t translated into anything that looks like a lasting international
corporate achievement.

Unless of course you count British
Petroleum being started with profits made from mining Queensland gold.

Michael Pascoe has chaired investor information
conferences for the Australian Gold Council.