Surbiton: Australian gold output rising

Australian gold production for 2010 totalled 266 tonnes (8.5 million oz), which is an increase of 17% or 38 tonnes from 2009, according to Melbourne-based consultancy Surbiton Associates’ latest survey of the Australian gold mining industry, available at www.surbiton.com.au. The 2010 figure also represents the highest annual output since 2003.

In the fourth quarter of 2010, Australian gold output totalled 70 tonnes (2.2 million oz), up 2 tonnes on the third quarter of 2010, and up 7 tonnes compared with the fourth quarter of 2009. 

Australia retained its position as the world’s second-largest gold producing country in 2010, said Surbiton Associates managing director Sandra Close. China was number one with reported production of 341 tonnes and it looks as though the U.S. will come third with an output of around 240 tonnes.

Gold produced from Australian mines in 2010 was worth some A$12 billion at the current spot price, Close said. “Gold remains one of Australia’s top export earners.”

Newmont Mining’s redeveloped Boddington mine, southeast of Perth, increased output by 26,000 oz. to its highest quarterly figure yet of 206,000 oz., making it the largest single producer for the fourth quarter of 2010. 

Among the copper-gold producers, Xstrata’s Ernest Henry mine near Cloncurry in Queensland had a much better second half-year in 2010, producing almost 72,000 oz. of gold in the period against 19,500 oz. in the first half of the year.

“We can’t afford to be complacent just because Australian gold production is on the rise again,” Close said. “Continued exploration is essential to ensure the long term viability of the industry.” She added that mining is an international business and exploration investment will flow to the most attractive locales where exploration is encouraged.

The 2010 year proved positive for gold prices, which rose from US$1,100 per oz. to a record US$1,421 per oz. in November. Although the price declined in January 2011, it has now climbed to near its record price again.

“Like the U.S. dollar gold price, the Australian dollar gold price also trended upwards in 2010,” Close said. “But due to variations in the Australian dollar to U.S. dollar exchange rate, the local gold price has been more volatile.”

In early 2010 the Australian dollar averaged US90¢ but fell to just over US80¢ by mid-year before rising to reach parity with the U.S. dollar in November 2010, where it has remained. 

“The weak dollar in mid-2010 led to a peak in the Australian dollar gold price of A$1,528 per oz. in June, only A$20 per oz. less than its all-time record price in February 2009,” Close said. “Currently it is some A$150 or so per oz. below the record price.”