Your basket will timeout in Checkout
Time remaining:

LAWRIE WILLIAMS: YoY gold output still rising in world’s No. 2 producer

According to Melbourne-based consultancy, Surbiton Associates, which specialises in collecting statistical data on the Australian gold mining sector, Q1 2018 gold production was three tonnes higher than in Q1 2017, despite production in Western Australia and north Queensland being adversely affected by heavy rains.  It did however fall by around 7% from Q4 2017 but, as noted by Surbiton’s Dr. Sandra Close “Overall it was a reasonable performance given that production in the December quarter was particularly high at 80 tonnes.  This was an outstanding result, however, as anticipated, the figures for the latest quarter are down, as the usual wet weather early in the year in Western Australia and north Queensland caused production cuts at several mines.”

The latest figures confirm that Australia’s annual gold production is still rising even though peak gold may have just about been reached as far as total global gold output is concerned, suggesting that any overall decline may be slow in coming about.  That any total fall in global output is likely to be small, is emphasised particularly as output also appears still to be rising in Russia, the world’s no. 3 gold producer, the USA (No. 4) and Canada (No.5), but is diminishing in many other gold producing nations as existing mines age and close down, or through declining grades. (See: Further thoughts on peak gold).

Interestingly Surbiton Associates’ assessment of Australia’s annual gold output puts it rather higher than the estimates of the major precious metals analytical consultancies like Metals Focus and GFMS estimating the country’s annual gold output at over 300 tonnes – the mainstream international consultancies estimate Australian production at around 10 tonnes below this level.  Given its local access to data, Surbiton’s figures should not, in our opinion, be disregarded as too optimistic.

“Just a handful of the largest operations accounted for some four tonnes less gold production in the March quarter,” Dr Close went on to say. “When wet conditions cause mining and haulage problems, operators have to draw from low grade stockpiles to maintain mill throughput.”   Giving more dtail she noted that in the latest quarter, AngloGold and Independence Group’s Tropicana Joint Venture produced 34,000 ounces less; Newcrest’s Telfer operations output was down 33,000 ounces; Newmont and Barrick’s Super Pit produced 28,000 ounces less; and output from Newmont’s Boddington and Tanami operations fell by a combined 30,000 ounces.

“In addition, Newcrest’s Cadia East operation in NSW was down some 37,000 ounces in the March quarter,” Dr Close said. “It has had a difficult time in the last 12 months but now production has resumed once more and gold and copper output is improving.”

Surbiton’s Dr Close also criticised the revived proposals in Western Australia, the country’s largest gold producing state, for an increase in royalties for gold mining companies.  Although the royalty was not increased in the WA State Budget on 10 May, Treasurer Ben Wyatt said he believed that an increase in the royalty for gold was justified, noting that its royalty rate was lower than that charged for other minerals.

In a spirited riposte to the proposal, Dr Close commented  “Not all commodities are the same and the royalty rate applying to one mineral may not be appropriate for another. For example, iron ore is a bulk commodity that lends itself to large-scale mining and minimal upgrading. Gold is at the other end of the spectrum, with very low grade ore mined on a much smaller scale, with that ore also requiring significant processing and refining.”  She also went on to comment that at any particular time there were always some operations doing well, some operations  just profitable and some really struggling.  “Overall the gold mining sector works hard to control costs but currently some producers have All In Sustaining Costs (ASICs) well above the gold price,” she said. “To impose a higher royalty would seem a peculiar way for the present WA government to keep people in work and to keep the gold industry productive and contributing to our export earnings.”

According to the consultancy, Australia’s largest gold producers for the March quarter 2018 were: 




Super Pit – JV


Newmont Mining Corp 50%, Barrick Gold Corp 50%



Newmont Mining Corp

Cadia East*


Newcrest Mining Ltd



Newmont Mining Corp



AngloGold 70%, Independence Group NL 30%

*Two treatment plants


29 May 2018 | Categories: Gold, Mining

Send a message

Can we help?-

We are online Mon-Fri between 9am-5pm. Please leave a message and we'll get back to you.

Our showroom is also open Mon-Fri between 9am-5pm at 54 St James's Street, London, SW1A 1JT.

Contact us on +442078710532.

Many thanks for your time, we will be in touch where appropriate.