Gold revenue to reach $10bn

The Age

Monday March 8, 2010

By BARRY FitzGERALD

RISING production at a time of historically high prices is set to push the value of Australia€™s gold production through $10 billion this year.Prospects for the revenue surge have strengthened after a survey of output in the December 2009 quarter by the Melbourne-based industry consultant Surbiton Associates identified strong and building production. Surbiton€™s survey found gold output rose by 7 tonnes or 13 per cent to 62 tonnes (2 million ounces) from the preceding September quarter and by 14 per cent on the previous corresponding period in 2008.For 2009, Australia produced 227 tonnes (7.3 million ounces) of gold, an increase of 3 per cent on 2008. At the current Australian price of $1250 an ounce, the 2009 output would be worth more than $9 billion.Gold now vies with steaming coal exports as Australia€™s third-biggest export earner, behind iron ore and coking coal.The opening last year of Newmont€™s $3 billion redevelopment of the Boddington mine in Western Australia€™s Darling Ranges is a key factor in the gold industry€™s growth spurt.Surbiton director Sandra Close said several other operations had increased production substantially in the December quarter, taking advantage of attractive gold prices and operating margins.Boddington is still in the ramp-up phase and produced 118,000 ounces or about 3.7 tonnes of gold in the December quarter. Dr Close said it was expected to produce at a rate of more than 200,000 ounces of gold a quarter in 2010.Other big mines increased output in the December quarter. According to the Surbiton survey, they were the Super Pit at Kalgoorlie (Newmont/Barrick, up by 28,000 ounces) and Cadia Hill (Newcrest, up 23,000 ounces) €” both due to treatment of higher-grade ore.The five biggest mines in the December quarter were the Super Pit (680,000 ounces), Newcrest€™s Telfer mine (674,445 ounces), Gold Field Ltd€™s Lefroy operation (414,590 ounces), Newmont€™s Jundee mine (411,000 ounces) and AngloGold Ashanti€™s Sunrise Dam mine (401,112 ounces).

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