Australian gold ends record streak in 2021

Gold

Australia has produced its lowest annual gold volume since 2017, totalling 315 tonnes in 2021 after the first half saw the country momentarily overtake China.

Australia had produced records of 325 and 327 tonnes of gold in 2019 and 2020, respectively, but the streak couldn’t be maintained as pandemic lockdowns forced producers to dig into lower grade stockpiles.

Gold mining consultancy Surbiton Associates said the industry had weather much of the pandemic but the restrictions had begun to weigh heavy in 2021, according to Surbiton director Sandra Close.

“Compared with 2020, Australian gold production in 2021 declined by 12 tonnes or four per cent,” Close said.

“There are a number of factors which have contributed to the fall, many of which are a result of the pandemic.

“Although the gold producers continued to operate extraordinarily well under the circumstances, the restrictions imposed due to the pandemic have had an increasing impact.

“Personnel shortages and burn-out have been taking a toll and this year production has been negatively affected.”

The lack of fly-in, fly-out (FIFO) workers and haul truck drivers had a significant impact on gold production, but this was slightly offset by a higher gold price.

The price fell to a 2021-low of about $2220 per ounce (oz) in the first quarter, after coming off record highs in 2020 above $2800/oz.

It then peaked in the final quarter in the mid $2500s and has continued to climb in 2022 in response to Russia’s invasion of Ukraine.

Close said this recent spike was as expected.

“The gold market thrives on uncertainty,” she said. “It is not really surprising to see buoyant gold prices at present, given the huge concerns regarding the situation in Ukraine, as well as rising inflation in the US and elsewhere.

“In the September quarter, several producers had operational difficulties. However, in the final quarter of 2021, Australian gold mine production rose by four per cent to 81 tonnes.”

Australia’s largest gold producers in the 2021 calendar year were Newmont Corporation’s Boddington mine (696,000oz), Newcrest Mining’s Cadia East pit (598,670oz), Kirkland Lake Gold’s Fosterville mine (509,600oz), norther Star Resources’ Super Pit (490,112oz), and Newmont’s Tanami mine (485,000oz).

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