Boddington's first pour heralds golden days
The Age
Friday October 2, 2009
THE mine that will single-handedly reverse the long-term decline in Australia's gold production, Newmont's $3.5 billion Boddington mine in the Darling Ranges, south-east of Perth, has poured its first gold.But even Boddington's forecast annual output of 1 million ounces a year (31.1 tonnes) will not be enough to return Australian output to the record 318 tonnes achieved in 1997 €” the year it is now argued represented "peak gold" for the country.According to a paper in the Australasian Institute of Mining and Metallurgy, world peak gold came in 2001 when global output hit 2600 tonnes, due to a major fall-away in production from the "mature" goldfields of Australia, South Africa, the US and Canada.David Denham wrote in the AusIMM's Bulletin journal that since Australian gold production peaked in the December quarter of 1997, production had fallen at an average annual rate of about 3.2 per cent a year."Gold is getting harder to find and there are fewer giant shallow resources, such as the greenstone belts in the eastern goldfields of Western Australia, to be developed," Dr Denham said. "To stop this downtrend we need major exploration breakthroughs."There would still be significant gold production through to the end of this century, he said, but "we will just have to keep working harder to find it".According to Melbourne-based industry consultant Surbiton Associates, the local $8 billion gold industry now ranks equal third in the global production stakes with former global industry heavyweight South Africa, behind the US in second spot and the world's biggest gold producer, China.But Surbiton believes Australia could move past the US in the gold production stakes this financial year, due mainly to the Boddington start-up and other mine start-ups or reopenings.Surbiton found Australian gold production for the June year fell 4 per cent or 10 tonnes to 223 tonnes €” 95 tonnes (3 million ounces) less than the peak year.Newmont's president and chief executive, Richard O'Brien, said yesterday that Boddington was a world-class asset and would provide a stable production base for many years.Before Boddington reaches full capacity, the title of Australia's biggest goldmine will be fought for on a quarterly basis by the Newmont/Barrick Super Pit at Kalgoorlie and Newcrest's Telfer mine, also in Western Australia. They average about 650,000 ounces each annually.Boddington is based on a 20.1 million ounce reserve and its mine life is expected to be more than 24 years, with annual production rates to fall from 1 million ounces in later years.The project's cost partly reflects the fact that the bulk of its construction occurred during the resources boom, which sent material and labour prices skyrocketing.But with forecast production costs of $US300 ($A341) an ounce (after byproduct copper metal credits), the mine will be capable of a rapid payback of the capital outlaid. It would enjoy a cash margin of $US700 an ounce at current gold prices or $US700 million a year.
© 2009 The Age