South Africa's 2006 gold output slides to 84 year low: CoM
Source: Platts
metalsplace.com
South Africa's gold output fell by 7% in 2006 to the lowest level in 84 years while the 2006 fourth quarter showed a near double-digit decline when compared on-year, the Chamber of Mines said on Wednesday.
The Chamber, which counts AngloGold Ashanti, Harmony and Barrick among its members, said that total South African gold production for 2006 fell to 275,119.40 kilograms, down by 7.5% on that produced in 2005. "This is the lowest level of gold production since the strike in 1922 reduced production to 218,031 kilograms," the Chamber said in a statement.
There was even worse news for Chamber members producers production which fell by 7.9% to 235,042.5o kg as the 1.5% increase in mt milled was not sufficient to compensate for the 9.3% decline in the average grade mined. Total production costs showed an increase, before capital expenditure, of 11.9% on a year-on-year basis to Rand 99 725/kg ($13,471/kg), with the Chamber blaming higher input costs.
Total production costs including capital expenditure rose by 20.8% to Rand 125,030/kg. On a year-on-year basis, the US dollar gold price rose by 35.8% to $604/oz and the rand gold price rose by 44.6% to Rand 131,322/kg.
There was also little comfort for Chamber members in the fourth quarter 2006 figures which saw South Africa's gold production fall on a year-on-year basis by 9.3% in the fourth quarter compared to the 2.9% decline recorded in the third quarter of 2006.
When compared quarter-on-quarter gold output eased in the 2006 fourth quarter by 3.1% to 68,117.90 kg compared to the 2006 third quarter. Output for Chamber of Mines gold mine members declined by 2.6% on a quarter-on-quarter basis to 58,341.90 kg in the fourth quarter of 2006. The 0.1% increase in the tonnage of ore milled to 12.9 million mt was not enough to offset the 2.7% decline in the average grade achieved, the Chamber said explaining the decrease in production.
"On a year-on-year basis gold production declined by 10% in the last quarter of 2006 as the 4.9% increase in tons of ore milled was not sufficient to compensate for the 14.2%% decline in the average grade mined," the Chamber said. It did note that the year-on-year decline in the average grade mined was offset by the 41.7% increase in the gold price to an average of Rand 143,929/kg, which in turn allowed mining companies to mine lower grade ores that had previously been uneconomic to mine.
"However, the year-on-year increase in cash production costs of 16.3% eroded some of the grade flexibility provided to the mines by higher prices," the Chamber concluded. |
