Aus’ gold production balances out to China

PERTH ( – Australian gold production fell almost 11%, or 9t in the March quarter of this year, compared to the December 2020 quarter, with the country producing 74t in the first quarter of 2021 .

“While gold production for the quarter declined significantly, this is not of concern. Production was around 3 t or 4% lower than in the corresponding quarter of March 2020 and such variations are not uncommon, ”said head of gold mining consultancy Surbiton Associates, Dr Sandra Close mentionned.

Close noted that the January-March quarter is the shortest quarter of the year and typically has the lowest quarterly output. In addition, production at the start of the year is often affected by cyclonic weather conditions in northern Australia, although fortunately the impact has been less this year than is often the case.

“While the majority of local operations have processed less ore over the past three months, overall the fact that the price of gold has remained favorable has helped the results for many producers. First-quarter production was worth around A $ 5.5 billion at the average price of gold for the period. “

She said that according to the China Gold Association, Chinese gold production in the March 2021 quarter was 74.44 t. This was only about 5,000 ounces more than Australian production. Production for the quarter in China is reportedly around 9% lower than a year ago, due to dislocations caused by the Covid-19 epidemic and tighter environmental regulations.

“Chinese production figures should be treated with caution. Australia may even be on the way to overtaking China as the world’s largest gold producer, but it is far too early to draw any real conclusions, ”said Close.

Likewise, Russia’s production figures should also be treated with caution, according to Close.

She noted that various sources gave different figures for Russian gold production and that gold recycled from scrap metal is sometimes added to mining production, thus increasing the total production figure.

Close noted that in Fosterville, gold miner Kirkland Lake had announced a reduction in gold grade, which resulted in a drop of 55,000 ounces in the last quarter. As a result, Fosterville went from the third to the fifth largest operation in Australia.

In addition, compared to the December 2020 quarter, the Tropicana joint venture decreased by 31,000 ounces and Newmont’s Boddington operations decreased by 30,000 ounces.

“Just Fosterville, Tropicana and Boddington together accounted for a reduction in production of 116,000 ounces, or 3.6 t of gold, or more than a third of the total reduction for the March 2021 quarter,” said Close .

“That 116,000 ounces of gold alone was worth nearly A $ 270 million, at the average price for the quarter.”

In comparison, only a few operations reported an increase in production. These included Tribune and Rand’s share of production from the East Kundana joint venture, which was up 13,000 ounces; Novo Resources’ new Canadian operation at Beaton’s Creek, with a first 7,000 ounces; The new Ora Banda Mining mine at Davyhurst near Kalgoorlie, with a 6,000 ounce maiden; and Newcrest’s Telfer operation, also up 6,000 ounces.

“Novo and Ora Banda will increase their production as they reach full capacity over the coming months. In addition, Karlawinda of Capricorn Metals is due to start in the middle of the year and the Wiluna Mines expansion project is underway, ”said Close.

A few years ago, some analysts predicted that Australian gold mining companies were running out of ore reserves and that production would decline sharply in the first half of the 2020s.

Close said Surbiton Associates disputed those claims at the time, noting that although the discovery of very large gold deposits is rare in Australia, with a few notable exceptions, it is primarily a country of deposits. relatively small and medium gold.

“Thanks to the rise in gold prices over the past two years, the gold sector has continued to raise significant capital and there is a tremendous amount of exploration going on, with excellent results reported. Australian gold production is unlikely to decline sharply over the next few years. “

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