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LAWRIE WILLIAMS: Australia’s 2017/2018 Gold Output Near Record

I am indebted to Dr Sandra Close and her Surbiton Associates consultancy for the latest figures on Australia’s 2018 gold output. Surbiton always seems to come up with a higher figure for Australian gold production than the mainstream consultancies, but as an Australian(Melbourne-based) concern which concentrates almost solely on Australian gold and monitors all the country’s gold producers in detail, these figures should not bie ignored.

Australia is the world’s second largest producer of new mined gold, after China and just ahead of Russia. In the 2017-18 financial year (most Australian mining companies have June year ends), Surbiton puts Australia’s annual gold output at 310 tonnes - the highest annual production level since 1997-1998. And production looks still to be growing. Surbiton assesses output in the June quarter at 81 tonnes, an increase of some 6.5 tonnes or 9% on the March 2018 quarter figure and six tonnes, or 8% more than in the three months to June 2017.

“Currently Australian gold production is near record highs,” said Dr Close. “The 2017-18 output is 12 tonnes higher than for 2016-17 and only eight tonnes short of the all- time record in1997-98, while the latest quarterly figure is just 1.5 tonnes lower than the all-time quarterly record. Boddington and Super Pit, both Newmont Mining operations, although Barrick also has a 50% stake in the Kalgoorlie Super Pit, vied for the top spot for the year, with each producing almost 23 tonnes, or nearly three quarters of a million ounces of gold,” she comments.

“However, despite the buoyant results, gold production may well be lower in the next few quarters,” Dr Close said. “The problems at Super Pit will no doubt have a negative effect, although fortunately the recent problems at Cadia, Australia’s third largest producing gold mine, have now been overcome.”

Even so, at the Super Pit a failure in the northeast wall in mid-May severely curtailed mining operations and ore haulage from the mining areas near the base of the pit. Nevertheless, output at the Super Pit actually increased by 22,000 ounces to 192,000 ounces during the quarter. “Super Pit’s increased production for the June quarter must have come from stockpiled material and perhaps from a reduction of gold in the processing circuit,” Dr Close said. “But I doubt that this can continue.”

In early March, Newcrest Mining reported the partial failure of one of the walls of its northern tailings dam at Cadia, NSW. While all tailings material was contained by the southern tailings dam, production was curtailed. Limited production commenced in early April and full production was achieved in May. “Despite the dislocations, Cadia managed to overcome the problems pretty quickly,” Dr Close said. “Output in the June quarter increased by 9%, to 156,000 ounces.”

Dr Close also commented that recent studies predicting future Australian gold production would decline by about one-third or 100 tonnes annually by 2022 were ‘unduly pessimistic.’ She said that while Surbiton Associates does not and cannot predict the future, it seemed improbable that such a rapid and dramatic fall in Australian production would be likely in the next few years.

“Many analysts, particularly in South Africa and the US, fail to understand that Australia is a land of small-to-medium sized gold deposits,” Dr Close said. “Large gold deposits such as those in the Rand or Nevada are not typical here.”

Australia’s largest gold producers for the 2017-18 year were:






Newmont Mining Corp

Super Pit – JV


Newmont Mining Corp 50%, Barrick Gold Corp 50%

Cadia Valley*


Newcrest Mining Ltd



AngloGold 70%, Independence Group NL 30%



Newmont Mining Corp

*Two treatment plants


All this should be viewed in the context of the ‘Peak Gold’ debate. While gold production in some countries like China may definitely be declining, in other key nations it is still on the rise – notably Australia, Russia, Canada and the U.S. - although the latter may see a small fall this year. The technical problems at the Kalgoorlie Super Pit may put a small dent in Australian production in the current year, but one doubts the country’s total gold output will fall and it may still end the year higher than a year ago.

Overall the major precious metals consultancies are predicting a very small increase in total global gold output in 2018 – or at worst flat production, so although ‘peak gold’ (the point where output starts to turn down significantly) is just about with us, it may not be quite here yet, although recent gold price weakness could well accelerate closure decisions and discourage lower grade reserves being exploited. We do expect to see global gold production beginning to turn down by the end of the decade, and the decline accelerating thereafter, but not quite yet!

02 Sep 2018 | Categories: Gold, Mining

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