Gold Prices Down, So Miners In Australia Produce More

December 2, 2013 at 08:44

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Gold miners in Australia have reacted to weaker prices by producing more of the precious metal for a second successive quarter.

Gold output rose four per cent to 69.5 tonnes — or more than 2.2 million ounces — in the three months to the end of September.

That is up 12 per cent on 62 tonnes in the September quarter in 2012.

Gold producers were targetting higher grades since gold prices fell earlier this year to protect margins, Dr Sandra Close, a director with mining consultants Surbiton Associates is quoted by the Australian Associated Press as saying.

During a decade-long period of rising gold prices between 2001 and 2011, gold producers had reduced ore grades leading to higher cash costs, she said.

The price of gold fell from US$1,580 a ounce to US$1,190 during the June quarter, and has remained in a narrow range since.

Australia’s largest goldminer Newcrest Mining was hit hard suffering writedowns and a multi-billion dollar loss with its share price down 65 per cent this year.

But a fall in the value of the Australian dollar this year from around US105 cents to US90 cents was giving producers relief, she said.

The biggest producing gold mines in Australia are in Western Australia, including Newmont Mining’s Boddington mine and the Super Pit joint venture run by Newmont and Barrick Gold.