Newmont sees gold supply flat, price high

By Steve James

NEW YORK (Reuters) - Gold's current high price still has a ways to run, partly because global production is likely to be flat or decline in the next 5-10 years, the head of Newmont Mining Corp. (NEM.N: Quote, Profile, Research, Stock Buzz) said on Tuesday.

Wayne Murdy, chief executive of Newmont, a major gold producer, told the Reuters Global Mining and Steel Summit in New York that a recent price forecast of $850 per-ounce "doesn't sound unreasonable."

Newmont President Pierre Lassonde made the forecast in May in his capacity as current chairman of the World Gold Council, saying that the highs would last for the next 18 months.

Gold, which hit a 26-year high of around $730 last month, on Monday closed in New York at $643 and was down in London on Tuesday at $628.

"I don't muzzle Pierre... we think it's a good situation for gold," said Murdy. "We think there's still a long way left in this run," he said of the price.

Asked about world gold production, Murdy said there were several major new projects still awaiting to come on line, although he was not concerned about gold deposits dwindling.

"I think we could be in a flat, and I'm talking within a couple of percentages, flat to declining production for the next 5 to 10 years," he said.

"We're an industry that has very long lead times for new projects. It takes 5-10 years from the time of discovery until you get it into production.  Continued...