LAWRIE WILLIAMS: Australian Gold Output Still Near Record Levels - Surbiton

Peak gold may be with us, or thereabouts, but some of the world’s largest producing nations, like Australia (No. 2), Russia (No.3), the U.S. (No. 4) and Canada (No. 5) are ensuring that any decline in global gold output remains small, or it may even still possibly be rising, albeit by a very small amount.  Those countries with still rising, or maintained, gold outputs are countering those, like China and South Africa where annual gold production is seen to be falling quite sharply..

Thus it is always interesting to receive the quarterly analysis of Australia's gold production from Melbourne-based gold mining consultants, Surbiton Associates.  Surbiton, which specialises in analysis of the Australian gold sector, probably produces the most accurate assessment of gold mine production from the world’s No.2 producer.

Surbiton’s latest data on Australian gold output, covering the three months to 30 September 2018, puts the country’s Q3 production at 81 tonnes, which it reckons was just a few thousand ounces less than in the previous quarter but six tonnes more than in the same quarter of 2017.

Surbiton thus assessess total Australian annual gold output at comfortably more than 300 tonnes a year, worth around A$16 billion a year in exports. This compares with China, the world’s largest producer with around 440 tonnes output last year.  Interestingly Australian gold output is now more than double the gold mined from South Africa, which was for many years the world’s No. 1 producer, but where annual production continues to fall quite sharply due to its ever deeper and higher cost gold mines.  Latest figures from Statistics South Africa suggest that the country's annual gold production is running about 16% down on that for 2017.

“Overall, [Australian] production is remarkably stable, despite the ups and downs at individual operations,” said Dr Sandra Close, of Surbiton Associates. . “If gold output is maintained at current levels in the December quarter, output for the full calendar year 2018 will remain at a near record level.”

Dr Close attributed the steady gold production to relatively stable Australian gold prices, to improved output from existing operations and to junior companies mining small gold deposits and selling their ore to the larger companies with spare treatment capacity or having their ore toll treated.  “Many treatment plants are running at close to, or above capacity,” Dr Close said. “Certainly we might lose some production due to mine closures in the next few years but there are other big and small projects coming along that should enable Australian gold output to be maintained and perhaps increased.” .

The country’s gold production has continued strong despite technical problems at  two of Australia’s largest gold mines, Newcrest’s Cadia gold-copper operation west of Sydney and the Newmont/Barrick Super Pit at Kalgoorlie.  These have both been affected by problems that cut production, “Fortunately, some of these problems are being overcome but others still remain.” Dr. Close commented.

The Cadia gold-copper mine suffered a tailings dam wall collapse in March this year which halted production but the problem has been largely solved. Cadia, produced 214,000 ounces of gold in the September quarter, an increase of 57,500 ounces on the June quarter. On the other hand, production at the Super Pit in Kalgoorlie, which experienced a pit wall collapse in May, fell by 42,000 ounces to 150,000 ounces for the quarter, with investigations in progress to determine how the remediation works should be undertaken. But these production problems were offset by gold output growth elsewhere in the country

Australia’s largest gold producers for the September 2018 quarter were:

Operation

Ounces

Owner

Cadia East

213,514

Newcrest Mining Ltd

Boddington

187,000

Newmont Mining Corp

Super Pit – JV

 150,000

Newmont Mining Corp 50%, Barrick Gold Corp 50%

Tropicana

125,100

AngloGold 70%, Independence Group NL 30%

Tanami

123,000

Newmont Mining Corp

 

 

 

 Above data from Surbiton Assocates

 

25 Nov 2018

About the author

Lawrence Williams

Lawrence (Lawrie) Williams is a well known London-based writer and commentator on financial and political subjects, but specialising in precious metals news and commentary. He is a qualified and experienced mining engineer having graduated in mining engineering from The Royal School of Mines, a constituent college of Imperial College, London - recently described as the World’s No. 2 University (after MIT).

e: lawrie.williams@sharpspixley.com