63% of Newcrest’s assets situated in ‘very high-risk’ countries

Marc Howe | July 31, 2012 | 6:17 am Precious Metals Asia Australia Gold

Newcrest Mining (ASX:NCM) is the one Australian mining major exposed to the greatest level of country risk with 63% of its assets situated in nation-states categorized as ‘very high-risk’ by analysts.

Gillian Tan writing in the Australian cites the findings of Citi research analyst Elaine Prior who says that Newcrest’s operations in developing countries expose it to a far greater level of risk than Australia’s two other mining majors BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO).

Prior calculates that 63% of Newcrest’s assets are situated in countries categorized as ‘very high-risk’, including Papua New Guinea, Indonesia and the Ivory Coast, compared to 14% for Rio Tinto and 1% for BHP, the later of whom’s growth assets are primarily located in OECD nations.

Offshore business operations in developing countries confront a long list of potential contingencies and perils, including civil unrest, political turmoil and official corruption, as demonstrated by the recent travails of Australia’s Intrepid Mines.