Australian gold production was steady in the March quarter 2009 but is expected to rise as new and re-developed operations come into production, according to Surbiton Associates.
Latest figures from the Melbourne-based industry consultants show Australian gold production for the March quarter 2009 totalled 54.5 tonnes or 1.75 million ounces, unchanged from the December quarter 2008 but 3% up on the March quarter of 2008.
Surbiton Associatesâ€™ director Dr Sandra Close says, â€œFrom a production point of view, it was very much steady-as-she-goes for the March quarter, however, barring any unforeseen mine closures, output for 2009 should exceed that of 2008.â€
She says Oz Mineralsâ€™ long-awaited Prominent Hill copper-gold mine came on-stream during the quarter, Apex Mineralsâ€™ Wiluna and ATW Goldcorpâ€™s Burnakura operations recently rejoined the list of producers and Avoca Resourcesâ€™ Higginsville operation, which is now treating higher grade ore, continues to ramp up output.
â€œThe biggest boost to production will come when the re-developed Boddington gold-copper operation is commissioned mid-year. Boddington will produce around 31 tonnes of gold annually.â€
Newmont Miningâ€™s latest report indicates that the Boddington redevelopment project will have cost between US$2.6 billion and US$2.9 billion, with output of around 1 million ounces annually for the first full five years of operation.
Although a few small operations including Brockâ€™s Creek and Gympie ceased production, this had little effect on the March quarter figures.
Dr Sandra Close said that the higher gold output anticipated in 2009 should allow Australia to regain a higher ranking among the worldâ€™s top producing countries.
In 2008 China was the leading gold producer with 282 tonnes, the US was second with 229 tonnes, then followed South Africa with 220 tonnes and Australia with 219 tonnes. For some years Chinaâ€™s gold output has been increasing while that of the other major gold producing countries has declined.
â€œAnnual Australian gold production has been on a downward trend since 1997. Last year Australia produced almost 100 tonnes less gold than we did in 1997 and 100 tonnes of gold is worth around Aus$4 billion at current prices.â€
While it is the US dollar gold price that is usually quoted, Dr Sandra Close said that it was important locally also to take account of the Australian dollar price.
She says the Australian dollar gold price has been on an upward trend for the last nine years, with a record quarterly average of Aus$1371 per ounce in the March 2009 quarter. An all time daily high of Aus$1547 per ounce was reached on February 20 but since then the Australian dollar had strengthened substantially against the US dollar, trimming the Australian dollar gold price back to around Aus$1220 per ounce.
â€œEven at around Aus$1200 per ounce, the low cash cost Australian operations such as Ridgeway, Cadia and Challenger are doing very, very well.
She says that the current economic climate and the attractive gold price might actually encourage more companies to explore for gold in Australia, which has seen a significant reduction in gold exploration over the past decade.
â€œGold is an ideal target for smaller companies in the current environment. It is a high-value, low-volume commodity that doesnâ€™t have the massive development costs or the enormous infrastructure requirements that the bulk commodities require.â€
The top five producing operations for the March quarter 2009 were Newcrest Miningâ€™s Telfer with 162,035 ounces, Newmont Mining and Barrick Goldâ€™s Super Pit JV with 158,000, Gold Fieldsâ€™ Lefroy with 109,538, Newmontâ€™s Jundee with 102,000 and AngloGold Ashantiâ€™s Sunrise Dam.www.surbiton.com.au