Gold production declines in S Africa, booms in China
2009-06-10 15:35:00
commodityonline.com
JOHANNESBERG: South Africa, once the unquestioned leader in gold mining and production, is facing the music as far as the yellow metal output is concerned.
Labour issues, rising operational costs, power and skills shortages and plunging ore grades are leading to a plunge in the gold production in South Africa.
According to an analysis from Frost & Sullivan, gold mining and output in South Africa is continuing to decline thanks a plethora of problems, whereas gold production has been on a sustained growth in China in the last few years.
In the first quarter of 2009, South Africa produced 49,71 tons of gold, 4,8% less than in the same quarter last year. In 2008, South Africa’s gold output was around 220 tons of gold, falling into third place after China and the US among the world’s biggest gold mining countries.
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The Frost & Sullivan analysis said between next year and 2014, South African gold production was likely to be flat, or to improve by small increments, but it should start to increase significantly from 2014. From 2011, electricity supply and skills shortage should start to ease, it said.
In the longer term, growth in output would be stimulated by a higher gold price, which would attract explorers and investors to the deep-level gold deposits in the Wits Basin, and by technological advances that were minimising operating costs, the analysis pointed out.
Frost & Sullivan’s latest report came as gold edged higher after two sessions of retreat, driven by movements in the dollar. Gold was fixed at 952,50/oz yesterday in London compared with 943,75/oz on Monday.
In its latest Asian Metals Monthly, Fortis Bank-VM Group said it expected gold to fix in London between 900 and 1000/oz in the short term because investors were nervous about the markets.
While gold production has been plunging in South Africa, the yellow metal is glittering in China. China is estimated to produce around 290 tons of gold and explore 800 tons of gold reserves this year.
China's gold output last year rose to 282 tons, while industry profit surged to 12.4 billion yuan from 9.020 billion yuan a year earlier.
China mined 270.49 tons of gold in 2007, according to China Gold Association. Gold production grew 7.6 percent annually through 2003 to 2008, with an average growth in profit of 41 percent, statement said.
Last year, the major gold producing provinces in China are were Shandong, contributing 20.93% to the total output, Henan 11.19%, Fujian 8.03%, Inner Mongolia 3.99%, Hunan 3.99%, Gansu 3.30%, Shaanxi 3.23%, Guizhou 3.23%, Xinjiang 3.19% and Liaoning 3.09%, totaling 64.17%.
The value for the January-July gold output was Yuan 72.01 billion ($10.53 billion), up 90.60% from year on year.
According to GFMS Ltd, the world's above-ground stocks of gold at the end of 2007 were 161,000 tonnes. Jewelry makes up the largest component of this inventory. Much of this is in the form of 'monetary jewelry' – most popular in India and south-east Asia – for which the value is based upon the content of gold rather than its artistic value. |
