Australia to overtake China as world’s largest gold producer: Resources Monitor

The price of gold on the stock exchange is rising. 3d illustration.

The gold industry is faring well during the coronavirus pandemic that is affecting so many other industries around the world, according to Resources Monitor’s latest report.

Gold prices have been on the rise for the past 18 months and — unlike other commodities — gold is continuing to rise this year with the precious metal is set to ride out the coronavirus storm.

Between January 1 and May 8 of this year, gold prices have risen by a whopping 12 per cent, according to data from Markets Insider and Trading Economics.

This is in contrast with other commodities like iron ore, which dropped by 5 per cent, battery metals like lithium and nickel, which both dropped by 12 per cent, thermal coal, which decreased by 22 per cent and of course crude oil, which plummeted by 53 per cent.

Resources Monitor also attributes gold’s comfortable position in the market to the attractive margins being made by key Australian gold producers.

Newcrest Mining for example, achieved an average gold price of $1569 per ounce at an all-in sustaining cost (AISC) of $827 per ounce, giving it a price margin of $742 an ounce.

Saracen Mineral Holdings’ average gold price was $2228 per ounce with an AISC of $1133 and $1095 margin, while Silver Lake Resources and Northern Star Resources achieved margins of $790 and $589 respectively.

These strong prices and margins allow Australian gold miners to expand their existing mines while developing new ones.

This is reflected in the above companies’ plans, such as Newcrest expanding Cadia Valley in New South Wales and Saracen escalating the Carosue Dam mine in Western Australia.

Other companies, such as Regis Resources and Capricorn Metals are full steam ahead for developing new gold projects, such as Regis’ McPhillamys project in New South Wales and Capricorn’s Western Australian project, Karlawinda.

However, the continuation of gold’s strong prices remains up in the air.

“This cannot be assessed with any confidence,” Resources Monitor stated in its report. “The sector has always had its bears and bulls, with bears currently seeing gold as over-priced and bulls seeing prices in coming months exceeding $US2500 ($3823).

“What can be said with reasonable confidence is that reflecting Australia’s role as a cost-effective producer, it will overtake China next year as the world’s largest gold producer.”

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.