Profits in gold.................
Gold producers set
new output record
By Mark Dixon
The Australian gold industry overcame weak global prices and negative market sentiment towards the sector to post record production in the past year.
In doing so, the industry proved itself the most efficient in the world and has largely avoided the massive shutdowns and redundancies which have plagued the biggest producer, South Africa, and the second largest, North America.
Australian gold production rose 6 per cent last year to a record 318 tonnes, or 10.2 million ounces, according to a study released yesterday by the Melbourne-based mining consulting group, Surbiton Associates.
"Gold production on an annual basis has continued to rise," the managing director, Ms Sandra Close, said. "The industry is performing well despite the widespread negative market sentiment over the past year."
That sentiment took a further hammering on Friday as the global gold price plummeted to an 18-year low of $US276.50 an ounce on fears of widespread producer selling from South Africa, Australia and Canada. The slide was sparked by major hedge funds anticipating the sales, which were tipped in response to the commodity-based currencies of the countries being crushed on world markets.
Ironically, Ms Close said the slide in the Australian dollar had also been a major benefit, with $A gold prices averaging $470-$480/oz through the year and rising above $500/oz in the past week.
The industry was buoyed by major cost-cutting measures, with average weighted cash costs falling through the year to around $320/oz.
Surbiton, which tracks the Australian gold industry and produces a quarterly review that includes detailed costs and production levels, found that the Super Pit in Kalgoorlie-Boulder remained the nation's leading performer with annual production of 654,341 oz.
That firmly entrenched Normandy Ltd as the country's major gold house. Normandy owns half of the Super Pit operations, with Homestake, and also has attributable production from several other leading mines, including the Granites in the Northern Territory.
However, the emerging star was the Granny Smith operation near Laverton in Western Australia, which is owned by Placer Pacific (60 per cent) and Delta Gold. Granny Smith's output in 1997-98 was 551,255 oz, a 61 per cent increase that was largely due to the treatment of high-grade ore from the newly developed Sunrise pit.
Other top contributors reflected the new face of the gold industry, with the major companies now asserting their dominance and many of the juniors falling by the wayside. WMC Ltd's St Ives was the third-largest producer at 435,424 oz, despite several problems with its underground operations which are likely to see the company focus on developing big open-cut operations in the area.
Next were Newcrest Mining Ltd's Telfer (319,891 oz) and Great Central Mines' Jundee/Nimary (317,837 oz).
A breakdown of the year showed the December quarter to be the major contributor with an all-time record of 82.5 tonnes, with industry output falling to 79.2 tonnes in March and 77 tonnes in June.
Ms Close said there was no cause for concern over the reduced output in the past two quarters.
"The December quarter was outstanding. March is the shortest quarter of the year, while rain affected some operations in the June quarter," she said. Operations hit by rain included Chalice, New Celebration and Bronzewing. Ms Close said while there were always going to be swings and roundabouts in production, the current year promised to be "interesting".
"Newcrest's Cadia Hill and Homestake's Darlot Centenary will make significant contributions in the current year. Cost savings and the higher gold price in Australian dollar terms should underpin the industry," she said.
afr.com.au |
