China tipped as number one gold producer

First-half figures for gold production have led GFMS, the precious metals consultancy, to suggest that China may become the world’s largest producer of the metal, in 2007.

In the six months to the end of June 2007, South Africa’s gold production fell 7%, to 134 tons.

During the same period, China’s output increased by 18%, to 129 tons, only slightly behind South Africa.

In 2006, China held third place for gold production jointly with Australia, and the US was named the world’s second largest producer.

Analysts at GFMS are not expecting South Africa to return to its previous levels of production, which have declined by almost a third since 2002.

Ageing mines and the need to dig deeper meant that 2006 output was its lowest since 1922.

South Africa has been the world’s largest gold producer since 1905, when it took over the top position from the US, but the gap with China is likely to close this year.

Traditionally, China’s gold production increases in the second-half of the year and output from new projects could tip the balance by December.

These include operations owned by Jinshan Gold Mines Inc., Eldorado Gold Corp. and Sino Gold Mining Ltd.

Despite China’s dramatic rise in the gold output, experts believe it unlikely that the country will ever match South African production at its peak.

In 1970, the country produced over 1,000 tons of gold and over the past 121 years its mines have produced over 30% of all gold ever produced globally.