Oz gold output begins upward climb

At the same time, the spot gold price has just moved past the symbolic US$1,000 per ounce barrier on September 9th, on a sharp decline in the US dollar and inflation fears.
According to Surbiton, gold output rose by two tonnes or four per cent to 57 tonnes (1.8 million ounces) in the June quarter, compared with the March quarter 2009 and also by 4 per cent compared with the June quarter 2008.
“We seem to be seeing the start of a recovery in Australian gold production,” said Dr Sandra Close, a director of Surbiton Associates.
“The ramp up of some new operations contributed to an increase in the amount of ore treated in the June quarter.”
Currently, Australian and South African gold output is similar, making them the world’s equal third gold producing countries. The US produces a little more gold and ranks second, while China is the largest gold producing country.
However, Dr Close said it was likely that Australia might move up to become the second largest gold producing country in the coming year.
“Despite the recent increase in quarterly output, Australian gold production for the full 2008/09 fell to 223 tonnes, a reduction of four percent or ten tonnes compared with 2007/08, “ Dr Close said. “But the immediate outlook is brighter.”
A further increase in Australian gold production should occur in the current quarter with the first contribution from Newmont’s redeveloped Boddington mine in Western Australia. The first ore was fed into the recently-completed new plant in early August. When the mine reaches full output in mid-2010, it should add some 31 tonnes or one million ounces annually to Australia’s gold output.
Dr Close said several other new or redeveloped gold operations in Western Australia should join the list of producers in the current fiscal year. These include A1 Minerals Ltd’s Brightstar project and Range River’s Mt Morgans project, which are both expected to commence production in December 2009.
Also, by the end of the year Focus Minerals’ Three Mile Hill treatment plant should be re-commissioned, which will remove a production bottleneck and result in greater output. Saracen Mineral Holdings’ Carosue Dam project should start up in March 2010, followed by Catalpa Resources’ Edna May operation and Integra Mining’s Randalls project, in mid-2010.
“The modern Australian gold industry continues to make a substantial contribution to Australia’s exports, despite the market ups and downs,” Dr Close said. “That has been the case for over 25 years now.”
She said the gold rushes and gold boom of the 1850s are probably the best known in Australia and they had a major impact on the country, both in social and economic terms. There was a second gold boom in the late 1890s and early 1900s, based largely on the finds in the Kalgoorlie area in Western Australia. However, the modern gold boom, which commenced in the early 1980s, has been by far the largest in terms of output.
“Almost half of the gold ever produced in Australia has been mined since 1982,” Dr Close said. “That amounts to around 5,800 tonnes, or 190 million ounces - it’s a major industry.”
Dr Close pointed to the significant contribution the gold sector had made to export earnings in the last few decades, especially with the higher gold prices over the past few years.
“For over 25 years Australia has been riding on huge yellow haul trucks, not the sheep’s back,” Dr Close said. “Just the 223 tonnes of gold alone produced in 2008/09 was worth over A$8 billion.”
However, while the gold industry is making the most of higher prices and extending the life of current mines and redeveloping old mines where possible, the continuing reduction in expenditure on exploration is of great concern over the longer term.
“Throughout the 1980s and 1990s gold exploration accounted for over half of all mineral exploration expenditure but now it’s down to around 20 per cent,” Dr Close said. “To ensure the long-term future of the gold sector it is vital to encourage and stimulate exploration.”
The top five producing operations for the June quarter 2009 were: Super Pit JV (Newmont Mining Corp/Barrick Gold Corp); Telfer (Newcrest Mining Ltd); Lefroy (Gold Fields Ltd); Jundee (Newmont Mining Corp); and Sunrise Dam (AngloGold Ashanti Ltd).

For more information visit: www.surbiton.com.au