Saudi through their hat in- they understand a need to get POG (read oil) up.. (in dollar terms not rand of course (3 year high) :)
INTERVIEW-Saudi sees gold output doubling by 2001
12:05 p.m. Jul 18, 1998 Eastern
By Caroline Drees
RIYADH, July 18 (Reuters) - The world's biggest oil producer Saudi
Arabia hopes to double its gold production by 2001, optimistic that
sickly gold prices will recover.
Abdallah al-Dabbagh, president of the state-owned Saudi Arabian Mining
Co (Maadin), told Reuters expansion of two operating mines and the
startup of two new ones would strongly boost the kingdoms output, which
topped seven tonnes last year.
''By the year 2001 we hope to double the production of gold in Saudi
Arabia, along with some of the other minerals,'' Dabbagh said in an
interview in the Saudi capital Riyadh.
In addition to the active gold mines of Mahd ad-Dhahab and Sukhaybarat,
the mines of al-Amar and al-Hajjar were expected to come on stream
within about two years, Dabbagh said.
Saudi Arabia, more famous for its vast reserves of the ''black gold,''
is seeking to tap its substantial deposits of gold, silver, copper,
bauxite and other minerals in a bid to reduce its reliance on petroleum.
Brimming oil inventories and a slump in Asian demand due to the region's
economic turmoil have pushed crude prices into the bargain basement,
highlighting the value of Saudi efforts to diversify the oil-led
economy.
''We are feeling that we have a lot of pressure now to bring some of our
projects (on stream) as soon as possible,'' Dabbagh said.
The Maadin chief was optimistic sagging world gold prices would recover
by the time the new mines come on stream. Bullion, which hit an 18-year
low in January at $278 an ounce, was quoted at $294.20 on Friday.
''The fact that gold prices are depressed now is encouraging for us
because a lot of mines are closing down,'' Dabbagh said. ''By the time
we start producing (at the new mines) in 18 months to two years, I
assume that the price of gold will be up.''
The newly-formed Maadin runs the country's largest mine Mahd adh-Dhahab
-- ''cradle of gold'' in Arabic -- which has an annual production of
170,000 ounces, Dabbagh said.
It also holds a 50 percent stake in the Sukhaybarat gold mine, which has
an output of 90,000 ounces per year. Dabbagh said Maadin was considering
buying the remaining 50 percent from joint venture partner Boliden Ltd,
which is listed in Toronto.
Dabbagh said expansion work was underway at both mines.
Maadin was awarded the mining licences for al-Amar last year and for
al-Hajjar in May.
''We are just breaking ground at al-Amar,'' he said, adding that his
company was investing some $98 million in the project which was expected
to start production by 2000. Dabbagh said his company had already dug
the mine tunnels and hoped to sign a contract ''fairly soon'' for a
treatment plant.
''Production is expected to be about 125,000 ounces a year and will run
for eight or more years,'' he said.
Al-Amar has reserves of about 2.7 million tonnes with a yield of about
12 grams per tonne (g/T).
''We are also breaking ground at al-Hajjar, another project with about
4.2 million tonnes of reserves, but only 2.6 g/T,'' he said, adding the
mine had a life expectancy of five years.
''We will produce something like 50,000 ounces per year (at
al-Hajjar),'' he said.
In addition to gold, Dabbagh said Maadin was also looking at mines of
other minerals for potential development, including the central Saudi
Khnaiguiyah zinc mine, phosphate deposits at al- Jalamid and bauxite in
az-Zabirah, both in the north.
Copyright 1998 Reuters Limited |
