LAWRIE WILLIAMS: Australia’s gold output dips sharply in calendar Q3
We have long been following the battle between Australia and Russia for second place in the global gold production stakes behind China. Indeed with production slipping in the Asian giant there seemed to be a chance that one of the two contenders might even achieve top world producer status sooner rather than later, although in the past couple of years production statistics have been adversely affected by factors like shutdowns due to Covid infections and the impact of economic sanctions. Thus the latest quarterly Australian gold output statistics released by Melbourne-based specialist consultancy, Surbiton Associates, are particularly relevant in trying to keep abreast of the current situation, at least as far as Australian gold output is concerned.
We have always found Surbiton to be particularly accurate with respect to Australia’s gold mining sector statistics and their latest release shows that September quarter gold production fell by as much as 7 tonnes in the period from its high of 83 tonnes recorded in the three-months to end-June. It brings total Australian gold mine production to 235 tonnes for the first nine months of 2022. Even so, this still puts Australia on track for an annual gold production total of well over 310 tonnes for the full 2022 calendar year.
“Gold production in the September quarter was somewhat disappointing, with fewer tonnes treated and lower recovered grades but the Australian gold sector remains in good shape, longer term” said Dr Sandra Close, Surbiton Associates’ founder director. “Some wet weather and COVID-19 problems affected output adversely but fortunately, these effects seem to be slowly receding and the rise in production costs seems to be starting to abate.”
Turning to the latest quarterly results, operations producing fewer ounces of gold in the latest period outnumbered those producing more gold by almost two to one,” Dr Close said. “Newmont’s Boddington mine was down 59,000 ounces on the June quarter and Newcrest’s Cadia was down 44,600 ounces, while Tropicana, (AngloGold 70% and Regis Resources 30%) was up 19,440 ounces.
Australia’s largest gold producers for the September quarter 2022 were:
Operation Ounces Owner
Boddington 174,000 Newmont
Cadia 142,194 Newcrest
Tropicana 122,576 AngloGold 70%, Regis 30%
Tanami 122,000 Newmont
Super Pit 109,215 Northern Star
For those who would like to learn more about the Australian gold mining industry, Dr. Close and Surbiton have published two very comprehensive books on the recent history of the country’s gold mining industry. The second of these, titled ‘Australia’s Greatest Gold Boom’, covers the period from 2001 to the end of 2021. It is the sequel to her first book, ‘The Great Gold Renaissance’, which covered the previous 20 years from 1982 on. While out of print for many years, this first volume has now been published as a second edition to complement the new book. See www.surbiton.com.au for details and sales information.
“Few people, including those associated with the industry or investors, realise that in the last 40 years Australia’s gold production has risen from less than 20 tonnes to around 315-320 tonnes per year,” Dr Close said. “In that time about 9,500 tonnes of gold have been produced. It is an important contributor to our exports and foreign exchange earnings, with gold currently contributing around A$26 billion annually.”
Even though the US dollar gold price has seen periods of weakness through much of 2022, and is around 4% down year to date, the Australian dollar price has remained relatively stable, despite the usual volatility, averaging around A$2,600 per ounce. Thus although there have been some consequent global concerns regarding the US dollar gold price, the weaker Australian dollar has benefitted the gold price in local terms and generally helped maintain the overall profitability of the Australian gold sector and kept it healthy and enabled it to expand even.