Average cash costs for gold production on the decline

The cost of operating gold mines in the Western World in 1996 fell to US$250.70, down US$2.50 from $253.2 per oz. in 1995, according to a survey conducted by Sydney-based AME Mineral Economics.

Average real-Term costs (adjusted for inflation) fell US$30 per oz. in South Africa and US$24 in Canada, though they rose US$11 in Australia and US$13 in the U.S.

The rankings of major gold-producing countries have remained unchanged in the 1990s; South Africa is still the world’s highest-Cost producer, followed by Australia, Canada and the U.S.

Cash costs, in real terms, are expected to fall to US$238.5 per oz. in 2001 from US$259.5 in 1996. Cost averages will fall as a result of the influence of large, low-Cost producers such as Freeport-McMoRan Copper & Gold’s Grasberg mine in Indonesia and Rio Algom’s Alumbrera copper-gold project in Argentina. The latter is scheduled to open in the third quarter.