Australian quarterly gold output plunges to lowest level in 19 years
miningweekly.com
By: Matthew Hill
Published on 2nd June 2008
Updated 3 hours ago
Gold production in Australia dived to the lowest levels in about two decades for the March quarter as miners treated lower ore grades, a Melbourne-based mining consultancy said at the weekend.
At 53 t, Australia's first-quarter gold production showed a 16% drop on the previous quarter's figure, and was 12% lower year-on-year.
The price of the yellow metal hit new highs during the three months ended March, which was slightly offset by a stronger Australian dollar, Surbiton Associates said in an emailed statement.
While the production figures seemed dismal, there were reational reasons for the drop, and "things were nowhere near as bad as they seem", Surbiton director Sandra Close said.
"The primary cause of the sharp drop in output was the lower average grade of ore treated," she stated. "I suspect some operators are taking every advantage of the high gold price to reduce their head grade."
Close explained that this enabled them to recover more gold over the life of the mine, while still maintaining their profitability.
Operational problems had also reduced the grade of ore that some mines were treating, which had been compounded by wet weather.
"Closures accounted for about two tons of the quarterly production drop," Close said. "Few new operations have come on stream lately, but there are several slated to commence in the latter part of the year."
RISING COSTS
She went on to note that sliding grades also had an effect on production costs.
"When costs have to be spread over fewer ounces produced, obviously the cash cost per ounce must rise," commented Close, adding that this was "certainly the case" in the March quarter, but that it was only part of the picture.
"Despite the increase in cash costs per ounce of gold produced, there has been far less of an increase in the cost per ton of ore mined and treated," she said. "The cost of labour, energy and consumables may be rising but the industry is doing a remarkable job keeping overall costs under control."
Editor: Mariaan Olivier |
