“Production from Australian gold mines remains stable at around 300 tonnes a year worth $4.6 billion annually at current spot prices,” Surbiton Associates managing director Sandra Close said.
“Output for 1999/2000 would have exceeded 300 tonnes if it had not been for the abnormally wet March quarter when cyclonic rain affected many operations and reduced output.”
June quarter production - the highest since the December 1998 quarter – outstripped the 74t produced in the June 1999 quarter.
Many companies took advantage of drier weather in the June quarter to treat higher-grade ore as well as increase the tonnage of ore processed, which enabled gold production to return to more normal levels, the mining consulting group said
In Australian dollar terms, the gold price trended upwards during 1999-2000 from an average $398 per ounce in the September quarter to an average of $475/oz for the June quarter, due in part to the weaker Australian currency in the first half of 2000, Surbiton said.
In US dollar terms, the gold price firmed mid-year before settling back to around the US$280/oz mark by year-end.
While gold producers struggle to keep costs down, miners in Western Australia – which produces about three-quarters of Australia’s gold - have been hit with a doubled gold royalty of 2.5% from July 1, Surbiton said.
“Annual royalties paid to the WA government will jump from about $40 million to $80 million,” Close said.
“While it is difficult to argue against the principle of a royalty it is unfortunate that it should rise at a time when the industry has had so little support from the stock market due to dot.com mania.”
The top producers for the year were the: Super Pit (Normandy 50%, Homestake 50%) with 668,265oz; Granny Smith (Placer Dome 60%, Delta Gold 40%) with 497,867oz; St Ives (WMC 100%) with 415,543oz; Jundee/Nimary (Normandy 100%) with 358,100oz; Cadia (Newcrest 100%) with 326,035oz; and Granites (Normandy 100%) with 323,646oz.
“Looking ahead there seems little reason to expect any major change to gold production in the short term,” Close said.
“It will be the usual mix of some good news and some bad news but the real concern is the long term effect of continuing low exploration expenditure.”
Suspension of production at Newcrest’s Telfer mine in Western Australia and placement of the Northern Territory’s Yimuyn Manjerr project – previously the Mt Todd operation – on care and maintenance should be offset by production from new mines under development, Surbiton said.
These include Pacific Mining’s Carosue Dam in Western Australia, Equigold’s Mt Rawdon operation in Queensland and Newcrest’s Ridgeway mine in New South Wales, which produced its first gold from trial mining in the June quarter.
Also in the pipeline are the Sunrise Dam extension via Wallaby, and the Boddington extension courtesy of Wandoo.
