New highs for world gold prices again, with the futures price rising above $US1,227 in trading yesterday and overnight.
The US dollar’s weakness accounted for much of that, plus the continuing surge of investment funds into riskier investments.
The rise in price is coming for a good time for Australian producers, but the high value of the Australian dollar – almost 93 US cents – means the spoils are not as golden as seems from the headlines.
But Australia surpassed the US as the world’s second-largest gold producer in the first half of this year as output fell in US mines.
But whether this is a secular change, or temporary, remains open, with reports that one big US mine, Goldstrike, moved into a waste stripping phrase, which cut production of gold, especially in the third quarter.
As well, Newmont Nevada has seen a falling in output, according to a recent report from the World Gold Council.
According to Melbourne-based Surbiton and Associates Australian gold output rose to 112 tonnes in the six months to June 30.
China produced 147 tonnes and the US 105 tonnes, the report said.
Australian output in the three months to September 30 was little changed at 56 tonnes.
“With the continued decline in South African output and lower production in the U.S. in the first half of 2009, Australia has regained the No. 2 spot,” the firm said.
Newcrest Mining Ltd’s Telfer mine in Western Australia, was Australia’s largest producing mine in the third quarter with output of 162,929 ounces, the report said.
The Super Pit, a venture involving Newmont Mining Corp. and the world’s largest gold producer, Barrick Gold Corp (Also in WA), was second at 162,000 ounces.
Meanwhile the World Gold Council said that global mine production showed a firm improvement in the third quarter, reaching 670 tonnes.
"The 6% quarterly increase matched the 6% increase over year-earlier levels.
"At the country level, the greatest increase in mine output came from Indonesia, which almost doubled, adding over 15 tonnes compared with Q3 2008.
"This was largely due to improvements at Grasberg and Batu Hijau, both of which saw substantial improvements in processed grades.
"Elsewhere, projects starting or ramping up output were instrumental in country gains of around 25% in both Tanzania (from Barrick’s Buzwagi) and Argentina (Kinross’ Gualcamayo). China and Russia both recorded continued production increases in Q3.
"On the other side of the equation, output in South Africa continued its declining trend, falling by around 5 tonnes.
"The US also posted a decrease, largely attributable to declines at the country’s two largest gold operations, Goldstrike and Newmont Nevada.
"Reduced output at the former was due to mining operations entering a waste stripping phase during the quarter." the Council said.
But the action remains in China, and to a slightly lesser extent, India.
The China Gold Association has forecast that gold demand in the rebounding economy may top 450 tonnes, up from the 395.6 tonnes in 2008.
And output could rise 10% to 310 tonnes, compared with 282 tonnes last year.
China is now the world’s leading producer, having overtaken South Africa to become the world’s largest producer in 2007.
World Gold Council says China may also surpass India as the biggest consumer of the metal.
The Council said that consumer demand for gold in The Greater China region was 128.6 tonnes, 10% higher than in Q3 2008 "which was itself a very strong quarter".
That was less than India where demand in the September quarter was 137 tonnes, but that was a fall of 29% on the same quarter of 2009.
