Australia No.2 in gold production

A flat production effort has been enough for the Australian gold industry to regain its status as the world's second-biggest behind China.

A survey of local industry output in the September quarter by Surbiton Associates, released yesterday, found that production was near steady for the period at 56 tonnes (1.8 million ounces).

That continued the run rate that saw production in the June half weigh in at 112 tonnes of gold.

Surbiton director Sandra Close said the past few years had seen a shift in the rankings of the world's biggest gold-producing countries. South Africa dominated global rankings for close to a century but has now slipped to fourth position.

''In 2005, Australia was the world's second-largest gold producer behind South Africa but it was overtaken by the US in 2006 and by China in 2007, putting it back to fourth place,'' Dr Close said.

''But with the continued decline in South African output and lower production in the US in the first half of 2009, Australia has regained the No. 2 spot.''

China's Ministry of Industry and Information Technology put Chinese production at 147 tonnes for the first half of 2009. That compares with 105 tonnes in the US and 103 tonnes in South Africa.

''Few people seem to realise just how important the gold industry is to Australia,'' Dr Close said. She said the current annual value of gold production ($9.3 billion at spot prices) was equal to the value of Australia's exports of wool, wine and dairy products combined.

Australian gold production is set to increase in coming quarters, thanks to the opening of new mines and the redevelopment of others.

Leading the way is Newmont's Boddington mine in Western Australia's Darling Ranges. It will be Australia's biggest mine once full production of more than 1 million ounces a year is reached.

Boddington poured its first gold on September 30, but Newmont did not report any output for the quarter as commercial production was not declared until after the quarter on November 20.

Another post-quarter development is Saracen Mineral's $7 million redevelopment of the Carosue Dam project in WA. Refurbishment and construction has been completed, and commissioning of the planned 120,000-ounce-a-year operation is under way.

Dr Close noted that while the US dollar gold price had risen to record levels, Australian gold producers were not getting the full benefit due to the exchange rate. Australian gold prices peaked at $1547 an ounce in February this year compared with a current Australian gold price of about $1300 an ounce.

- © Fairfax NZ News