The biggest gold company in North America is making an estimated $4.4bn bid to become the world's biggest producer of gold.

Newmont Mining announced on Wednesday that it is to buy Franco Nevada Mining.

Newmont also plans to make a rival bid for Australia's Normandy mining - already under offer from South Africa's AngloGold, currently the world's top gold producer.

If Newmont is successful, it will emerge as the key player in the world's gold production, following a prolonged period of consolidation in the sector.

The price of gold jumped almost $2 to $279.10 on the news.

Consolidation in the sector had been triggered by the falling price of gold.

With gold prices low, but production near record levels, the world's four major producers - South Africa, Australia, the United States and Canada - have seen profits squeezed.

Blow to AngloGold

If the bid for Normandy is successful, it is a serious blow to AngloGold's ambitions.

The South African company has said it will make an announcement shortly about the bid. Its shares jumped on the Johannesburg Stock Exchange as speculation grew that it would increase its offer.

AngloGold chief executive Bobby Godsell had always maintained his confidence that the deal would be completed.

Normandy chairman and chief executive, Robert Champion de Crespigny, had said that the company's silence over the bid should not be seen as acceptance.

"This is certainly the consolidation of the gold sector at the largest level," Victor Flores, mining analyst at HSBC Securities said.