Rising dollar affects miners

The strength of the Australian dollar is making it increasingly harder for junior resource development companies to warrant mining projects. Wedgetail Mining was just one company who recently abandoned its $57 million Nullagine project, to produce 70,000 ounces of gold, due to the Australian dollar affecting project labour and equipment costs, and revenue margins. The value of the Australian dollar has strengthened close to 20 per cent against the greenback over the past year, from US72c to US86c, and many analysts believe it will comfortably stabilise above this figure. Wedgetail Managing Director, Terry Stark said, “For us, every cent appreciation impacts about $10 worth of revenue an ounce. The gold industry is under a lot of pressure.”