Output of gold hit by price fall
By BARRY FitzGERALD
Monday 26 February 2001
Australian gold production has continued to fall from the record levels of recent years in response to the exploration and development squeeze brought on by the slump in US dollar gold prices.
According to an industry survey released yesterday by Surbiton Associates, gold production in 2000 was 295.7 tonnes, down 2 per cent on the 301.3 tonnes produced in 1999.
Gold production by the industry in the final (December) quarter of the year was 74.5 tonnes, down by 2.6 per cent on the previous corresponding quarter.
Surbiton managing director Sandra Close said yesterday that, despite the falls, gold production was "holding up well given the lower levels of gold exploration in recent years ... But this may not continue indefinitely".
The irony in the continued fall in Australian gold output is that local dollar gold prices hit a five-year high ($A507 an ounce average) in the December quarter of 2000. That compares with the slide in US dollar prices to a near two-decade low.
"The constant focus on the US dollar gold price is quite misleading when you look at the local scene," Ms Close said. "The average local miner selling gold just at Australian dollar spot prices has been doing quite nicely," said Ms Close.
"Some producers have also taken advantage of the higher Australian dollar prices by topping up their hedge books."
For the year, the Super Pit (Normandy Mining/Homestake) remained the largest operation, with record annual production of 715,164 ounces. Granny Smith (Placer/Delta) with 412,048 ounces held second place, although production was 21 per cent lower than in 1999. St Ives (WMC/408,155 ounces) maintained a steady output to retain its position as the third-biggest operation.
Normandy NFM's Tanami Operations in the Northern Territory (382,810 ounces) increased production by 38per cent on the previous year to take fourth position, and fifth was the Jundee/Nimary operation of Normandy Mining with a sound 343,742 ounces.
Ms Close said there was a perception that the industry had declined substantially but the production figures show this is not the case.
She said that while the number of gold mines had fallen steadily the average output of remaining operations had increased.
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