Gold output hit record in 2010, may rise further – GFMS
Global gold production is expected to increase in the short-term, but it would then decline as fewer and fewer large discoveries were being made, precious metals consultancy firm GFMS World Gold MD Paul Burton said on Wednesday. He said at a conference in Perth that gold production hit a record high in 2010, reaching 2 652 t. This was a 3% increase on the previous year, and followed on a 7% increase in production during 2009.There were currently over 60 gold producing countries, with only 20 of these accounting for 80% of global production.
China held on to its first place spot as top producer, while Australia came in second, followed by the US and South Africa. Russia also held on to its fifth place position.
South Africa had lost its prominent position in the global gold market, with production falling for the last ten years.
“I think the problems and woes of South Africa as producing nation are well known. Many of the mines are very mature and very deep, and there is a lot of logistical and safety problems,” he told delegates at the Paydirt Gold conference.
Australian production rose by 16% to 259 t in 2010. The increase in gold production was predominantly as a result of Newmont’s Boddington mine, which added around 18 t to the total, with the Prominent Hill operation adding a further 3 t.
“I think it is a very healthy scene in Australia and we are very pleased to see this, and its great to see the exploration going on and the resurrection of old mines, as well as deeper drilling,” he said.
Burton added that the high gold price made previously uneconomic gold bodies attractive, which would boost global output in the short term. But he stressed that exploration was still offering up challenges, as fewer and fewer large deposits were discovered, despite gold companies spending significant amounts on exploration.
“I think what we are seeing is that juniors are doing a lot of the grass roots exploration, which a lot of the majors are staying clear of. Juniors account for over 50% of all major discoveries, and are one of the keys [to successful future production].”
The major mining companies, said Burton, were waiting in the wings to acquire any major new finds.
“Merger and acquisition activities are expected to increase as companies that are flush with cash will buy some of the smaller companies with assets,” said Burton.
However, he noted that investment in these assets would be a key in supporting and sustaining the current high gold price.
Burton noted that the gold price could go as high as $1 600/oz this year, with GFMS optimistic that the price would remain high during the next two years, unlikely to fall below $900/oz.
However, after this, the gold price was likely to decrease as investment in projects wanes.
Edited by: Mariaan Webb
China held on to its first place spot as top producer, while Australia came in second, followed by the US and South Africa. Russia also held on to its fifth place position.
South Africa had lost its prominent position in the global gold market, with production falling for the last ten years.
“I think the problems and woes of South Africa as producing nation are well known. Many of the mines are very mature and very deep, and there is a lot of logistical and safety problems,” he told delegates at the Paydirt Gold conference.
Australian production rose by 16% to 259 t in 2010. The increase in gold production was predominantly as a result of Newmont’s Boddington mine, which added around 18 t to the total, with the Prominent Hill operation adding a further 3 t.
“I think it is a very healthy scene in Australia and we are very pleased to see this, and its great to see the exploration going on and the resurrection of old mines, as well as deeper drilling,” he said.
Burton added that the high gold price made previously uneconomic gold bodies attractive, which would boost global output in the short term. But he stressed that exploration was still offering up challenges, as fewer and fewer large deposits were discovered, despite gold companies spending significant amounts on exploration.
“I think what we are seeing is that juniors are doing a lot of the grass roots exploration, which a lot of the majors are staying clear of. Juniors account for over 50% of all major discoveries, and are one of the keys [to successful future production].”
The major mining companies, said Burton, were waiting in the wings to acquire any major new finds.
“Merger and acquisition activities are expected to increase as companies that are flush with cash will buy some of the smaller companies with assets,” said Burton.
However, he noted that investment in these assets would be a key in supporting and sustaining the current high gold price.
Burton noted that the gold price could go as high as $1 600/oz this year, with GFMS optimistic that the price would remain high during the next two years, unlikely to fall below $900/oz.
However, after this, the gold price was likely to decrease as investment in projects wanes.
Edited by: Mariaan Webb
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