Production tipped to break through $10b
Sydney Morning Herald
Monday March 8, 2010
RISING production at a time of historically high prices is set to result in the value of Australia's gold production bursting through $10 billion this year.Prospects for the revenue surge have strengthened after a survey of output in the latest December quarter by industry consultant Surbiton Associates identified strong and building production.Surbiton's survey found that gold output rose by seven tonnes or 13 per cent to 62 tonnes (2 million ounces) from the September quarter and by 14 per cent on the corresponding period in 2008.Last year Australia produced 227 tonnes (7.3 million ounces) of gold, an increase of 3 per cent on 2008. At the current Australian gold price of $1250 an ounce, last year's output would be worth more than $9 billion.Gold now vies with steaming coal exports for third-ranked position behind iron ore and coking coal as Australia's biggest export earner.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 growth spurt.A Surbiton director, Sandra Close, said that several other operations increased production substantially in 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 this year.Several other mines increased output in the quarter. According to the Surbiton survey, they included the Super Pit at Kalgoorlie (Newmont/Barrick, up by 28,000 ounces), Cadia Hill (Newcrest, up 23,000 ounces). Both were due to the treatment of higher grade ore."Gold production should increase in the near term, with the continued ramp-up of Boddington plus output from additional producers in WA," Dr Close said."Despite the low level of exploration, which is still a real cause for concern in the longer term, the current attractive gold price and margins are fostering the redevelopment of old operations and there are even a few new developments as well."The five biggest mines were the Super Pit (680,000 ounces), Newcrest's Telfer mine (674,445 ounces), Gold Field's Lefroy operation (414,590 ounces), Newmont's Jundee mine (411,000 ounces) and AngloGold Ashanti's Sunrise Dam (401,112 ounces).Ben Potter's market analysis was unavailable this week.
© 2010 Sydney Morning Herald
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