Australian gold production is on the way up, but according to mining consultants Surbiton Associates, the results for the latest quarter are still among the lowest of the last 20 years.
The 56 tonne output for the 2008 September quarter of was down 9% from 61% at the same time in 2007.
“It looks as though Australia’s gold production for the full 2008 year will be the lowest since 1989,” Surbiton Associates director Sandra Close said.
“It will be somewhere between 25 to 30% lower than the peak year of 1997.”
Despite the lower production numbers the value of gold has been increasing, with the average Australian dollar price for the September quarter around $1,000 an ounce.
“This was due to the high US dollar gold price and a rapidly declining Australian dollar exchange rate,” Close said.
According to Close, some gold producers have had positive results, but companies trying to develop older operations have struggled.
“The low cost producers are making excellent profits but those at the high end of the cost curve are battling,” she said.
“Some of the miners and also some of the explorers with limited cash resources are vulnerable.”
An area of concern raised by the global financial downturn is the effect it has had on mineral exploration, Close said.
“Now is the time for the state and federal governments to re-examine the whole question of how best to encourage and support mineral exploration,” she said.
“Where would Australia’s balance of trade be without our mineral and resources export?”
According to Close, gold is particularly attractive under the current economic circumstances, and its future exploration should be ensured.
“Gold projects can be developed relatively quickly and as gold is a high-value, low-volume product, it does not require expensive transport and port facilities.”
“Commodities such as iron ore, base metals and coal are dependent on industrial demand but gold always can be sold.”