Reuters reported that while gold miners have been working hard to cut costs and remain profitable, the ways in which they’ve reduced their spending may ultimately be detrimental.

As quoted in the market news:

[A]lmost all of the cost reduction is due to miners pulling easy levers: slashing capital and exploration spending, cutting head office costs and shrinking mine plans to focus on extracting higher-grade gold.

‘Even though this is a good short-term thing for the gold sector it is exactly the worst thing that they can do from a long-term value perspective,’ said Johann Steyn, an analyst with Citigroup in Johannesburg.

Click here to read the full Reuters report.