Australian gold production overview

Surbiton Associates, the Australian gold production analyst, has reported that the country’s gold production in the nine months to the end of September 2007 was well ahead of that of the US, at 184.5 tonnes (compared with a US estimate of 179 tonnes).

For the September quarter Australia produced 61.7 tonnes of gold, a quantity similar to the third-quarter of 2006 but around one tonne less than in the June quarter of this year.

Last week, the Australian gold price reached an all time closing high of $A939 per ounce and Dr Sandra Close of Surbiton attributes the record price to “a combination of a higher $US gold price and a lower Australian dollar exchange rate.”

While referring to higher local gold prices as encouraging, Dr Close points out that even if the prices are maintained, they may not result in increased production levels because producers may prefer to extend the life of mines by mining slightly lower grade ore.

Australia’s annual gold output stands at around 250 tonnes and while new operations are coming on stream others are closing or being suspended.

During the September quarter, Telfer was named top producer, with Super Pit and Sunrise Dam close behind.

The three operations, all in Western Australia, accounted for almost one quarter of gold output in the country.

Analysts at Surbiton have also reported that they expect China to overtake South Africa as leading producer of the metal, as early as this year.

During the nine months to the end of September 2007, China’s gold production totalled 191.5 tonnes.

South African production stood at 192.7 tonnes but output is declining and the country could be overtaken by China in the current quarter.