Newcrest Mining Writes Down Value of Assets by $6 Billion Due to Dipping Gold Price

The continuous decline of gold prices the past few weeks has caused Newcrest Mining, Australia's largest gold miner, to write down $6 billion in assets and downsize operations.

Newcrest officials told shareholders it will also cut 250 jobs in Australia, shutter its Brisbane office and would not issue a final divided. The write downs are for its mines in Papua New Guinea, Australia and Africa.

News of the write downs caused shares of Newcrest to plummet 7.6 per cent by $1.01 to a nine-year low of $12.35 as rating agency Moody's place the company's credit rating on review for a possible downgrade, which could cause it to lose its current Baa rating to junk.

The miner would also reduce its 2014 capital spending by a third and reduce by 50 per cent is spending on exploration.

Greg Robinson, chief executive of Newcrest, said between $50 million and $75 million worth of redundancies would be processed and completed by the company in the next 23 days. The job cuts would initially affect 150 employees who were declared redundant in the early part of 2013, with 100 workers to be added to their ranks soon.

Other gold producers around the world are also reeling from the continuous drop in value of the yellow metal. A report by PricewaterhouseCoopers said gold producers are among the top 40 mining companies in the world that lost $58 billion in market capitalization in the first trimester of 2013.