SYDNEY Feb 5 Australia's giant Super Pit gold
mine was given an eight-year extension by its operator on
Wednesday, delaying its closure until 2029 and allaying concerns
weakening bullion prices would lead to an early shutdown.
Actual mining of gold-bearing ore will cease in around five
years at what was until recently Australia's biggest gold mine,
though processing of ores already dug up and stockpiled has been
extended from 2021 to 2029, according to the operator.
Kalgoorlie Consolidated Gold Mines (KCGM), which operates
the Super Pit for 50-50 partners Barrick Gold and
Newmont Mining, last year laid off staff as it ran cost
reviews in response to falling gold prices.
Australia's gold mining industry - the world's
second-biggest behind China - has borne the brunt of widespread
job losses in mining across the nation as companies attempt to
rein in costs.
By moving to process ores containing lower grades of gold,
deemed mine reserves, the Super Pit will be able to keep up
production for a longer period, according to KCGM.
It follows a decision by Barrick, the world's biggest gold
producer, in January to re-calculate its worldwide reserves at a
gold price of $1,100, down from $1,500 a year ago.
At 140 million ounces, Barrick's reserves are the biggest in
the industry and equal to about 20 years of production. Reserves
are those parts of a mine economically feasible to extract.
Rising bullion prices in 12 of the past 13 years made
lower-grade ore profitable to extract, allowing miners to expand
their reserves. But a 28 percent decline in the price of gold in
2013 to just above $1,200 at year-end means that mining some of
those reserves would no longer pay off. Gold was quoted at
$1,253 an ounce on Wednesday.
"While current plans have us stopping open pit mining in
2019, processing the low grade stockpiles has now become part of
our long-term plan," KCGM general manager Russell Cole said in a
Barrick and other big miners have been looking to shut down
or sell assets and optimise their holdings.
Barrick and Goldcorp this week sold their jointly
-owned Marigold mine in Nevada to Silver Standard Resources
for $275 million.
Barrick also announced on Jan. 23 it was selling its Kanowna
gold mine in Australia, following an agreement in mid-2012 to
sell three other mines in Australia.
The Super Pit, which produces around 800,000 ounces of gold
each year, recorded its lowest quarterly yield in nearly five
years in the last quarter of 2013, according to industry
consultant Surbiton Associates.
As a result, it was overtaken by Newmont's Boddington mine
700 km (400 miles) away as Australia's biggest gold mine.