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LAWRIE WILLIAMS: Aussie Q3 gold output falls. Is it still No.2? Russia?

According to specialist Melbourne based specialist Australian gold consultancy, Surbiton Associates, the No. 2 gold mining country’s production of the yellow metal fell by four tonnes from that of Q2,  This could allow Russia, currently the world’s No. 3 gold miner, where production appears to be rising, to overtake Australia as the world’s No. 2 gold producer in the current year.   China is likely to retain the world No. 1 gold producer status this year, and for some time to come, but its nnual output appears to be falling and Australia and Russia have been narrowing the gap.  

Surbiton reckons that Australia’s gold mine output in the September quarter 2019 totalled some 78 tonnes, a decline of around four tonnes or five percent compared with the previous quarter,.  The Q3 production figure was the lowest quarterly output since the rain affected March quarter in 2018. Australian gold output reached an all-time record of 321 tonnes in 2018/19, worth around A$22 billion at current prices.

“Two major factors contributed to the lower production in the September quarter,” said Dr Sandra Close, a Surbiton Associates director. “One was due to production factors such as planned maintenance or unexpected technical problems lowering output at some gold plants, while the other was due to the effect of higher Australian gold prices.”  This latter point is something we have pointed out in the past.  Higher gold prices can lead to a fall in output, at least initially,

Dr, Close explains this thus: “The higher gold prices we are seeing in Australian dollar terms can result in a reduction in the overall amount of gold produced.  One of the effects of higher prices is that it allows some operations to reduce the grade of ore being treated by blending in material from lower grade stockpiles and/or mining some lower grade ore, thus lengthening the life of the operation.”  With mill throughputs likely remaining unchanged, lower grade ore through the mill inevitably leads to lower metal output!

Meanwhile there has been news out of Russia that gold output so far this year in the Magadan region, Russia’s primary gold mining area, is currently running about 7 tonnes higher and the region may produce a further 10 tonnes of gold year, so unless output is falling elsewhere in the nation, we can probably assume that Russian gold output is heading for a new high!  Last year, from figures compiled by Metals Focus (see below) Russia only lagged Australia by some 18 tonnes, although some other analysts put the gap as rather smaller.

 Table: Top 10 Gold Producing Nations 2018 (Tonnes)



20 18 Output


























South Africa





But back to Australia’s gold output so far this year, while there were Q3 output reductions from Newcrest, Northern Star and at Nemont Goldcorp’s Boddington among the major producers, the new Gruyere gold mine, owned equally by South Africa’s Gold Fields and ASX-listed Gold Road Resources, increased production by 28,000 ounces as it ramped up towards full production.  Another good performer noted by Surbiton was Canada’s RNC Minerals which increased production by almost 16,000 ounces, not including another 1,800 ounces of gold in specimen stone, from Beta Hunt and from its newly acquired Higginsville operation.

Dr Close did comment though that gold production could recover somewhat in the December quarter 2019 as some of the operational problems are overcome and as some new operations join the list of gold producers.

Dr. Close also noted that the ownership of the Super Pit in Kalgoorlie has now been resolved, following Saracen Mineral Holding’s recent confirmation that it has successfully acquired Barrick Gold Corporation’s 50% joint venture interest for US$750 million (A$1.1 billion) in cash, thus removing the uncertainty that has prevailed since Barrick first signalled its wish to divest this the last of its Australian operations, initially acquired with its merger with Homestake Mining in 2001.

01 Dec 2019 | Categories: Gold, Russia

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