KALGOORLIE, Australia, Aug 5 ( Reuters ) - Newmont Mining Corp ( NYSE:NEM - News ) , the world's largest gold miner, said on Monday it would look at ways to accelerate the unravelling of millions of ounces of gold pre-sold at fixed prices.
The mining house has already extinguished some two million ounces of a total 10 million ounces inherited with the takeover of Australia's Normandy Mining in February, but has vowed to rid itself of all positions as soon as possible.
As of the end of March, the Normandy hedges were valued at negative US$411 million, Newmont President Pierre Lassonde said.
Lassonde earlier told the Diggers and Dealers mining conference here that one of the company's goals in 2002 was to "review opportunities" to accelerate delivery or to close out the positions.
Newmont, which forecast gold production of over seven million ounces this year, is among a growing legion of big miners with an aversion to hedging -- the practice of selling yet-unmined nuggets at fixed prices.
Newmont has criticised hedging as hurting the gold price by erecting a false ceiling on upward price movements.
"This has been the bane of this industry for the past three years," Lassonde said.
However, some firms defend hedging as a way to protect margins when bullion prices fall.
Normandy's multi-year hedges stood at around 7.3 million ounces at the end of the first quarter, down from 9.5 million ounces in February.
Gold is trading around US$307 an ounce, up from $279 in January, encouraging less hedging industry-wide.
Lassonde said at current bullion prices, mining houses faced difficulty surviving.
He said when gold traded around $275 an ounce for much of last year, "nobody was making money".
"At $300 ( an ounce ) the pain is a little less, but we will not survive," Lassonde said.
He predicted further declines in the value of the U.S. dollar -- making gold cheaper to buy outside the United States -- would eventually push gold to between $325 and $350 an ounce.
Newmont also aims to save between $70 million and $80 million via merger-related synergies this year, while reducing net debt to 20 percent of total capital, Lassonde said.
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