The price of gold is at record highs, yet gold production fell 12% in 2008, Surbiton Associates managing director Dr Sandra Close told MINING DAILY.
According to the Melbourne-based mining consultants’ latest Quarterly Gold Review, production for 2008 was 219 tonnes, 28 tonnes less than in 2007.
Production in the December quarter 2008 was 55 tonnes, 3% lower than the September quarter and 13% lower than the 2007 final quarter.
“This is the lowest annual production since 1989,” Close said.
“Output has trended downward over the last decade thanks to reduced throughput and higher gold prices which have enabled lower grade ores to be treated profitably.
Close said by treating lower grade ore, mines produce less gold in a given time period but significantly extend the life of the mine.
“Despite the drop in production for 2008, the value of gold produced is higher,” Close said.
“At average prices, 2008 production was worth around $7.3 billion compared with $6.6 billion in 2007, but at the current price of $1,500 per ounce, 2008 output would be worth more than $10.5 billion.”
Close said the benefits provided by higher gold prices will not remain in Australia but flow to overseas investors.
“Australian investors fail to appreciate the long term value of Australia’s mineral resources and are unaware of their strategic value and economic importance,” she said.
“Yet, our mineral resources, including gold, provide the best hope of paying our way in the world and reducing our escalating trade deficit.”