Gold production takes a hit

Australia's gold production fell five per cent in the first three months of 2012, marking the third consecutive quarter of loses, according to mining consultants Surbiton Associates.

In the latest Australian Gold Quarterly Review Surbiton director Sandra Close said wet weather, as well as a host of other factors, was the cause for the decline.

"As well as the usual ups and downs, wet weather caused access problems in several mines, particularly in NSW and the NT, so there was greater reliance on treating lower grade stockpiles which reduced gold output," she said.

Close said while there were a number of new projects coming online, several of Australia's largest operations, including Boddington, Cadia Hill, and the Super Pit, had seen lower output.

At Newmont's Boddington mine lower grades and processing rates led the decline, while ground slippage problems and heavy rain hit Newcrest's Cadia Hill mine.

Surbiton said the Super Pit at Kalgoorlie, a 50/50 joint venture between Newmont Mining and Barrick Gold, regained its place as the largest gold producer despite mill maintenance hampering production.

On the expansions in the sector Close said the "most significant" was Newcrest's Cadia East gold-copper mine in NSW.

But Close said fluctuations in the gold market, as well as financial instability in Europe, were challenges for the sector.

"While the European financial crisis is the current concern, many of the other factors affecting global financial, economic and political uncertainty remain and these problems are not going to be solved quickly," she said.