SYDNEY, March 2 Output of gold in Australia, the
world's No. 2 producer, rose to its highest in a decade in 2013
as richer ores were mined to combat weak bullion prices, a
survey released on Sunday showed.
The practice, known as high-grading, caused output to jump
by 7 percent, or 18 tonnes, to 273 tonnes (8.8 million ounces)
last year, worth about $9 billion and the highest since
mid-2003, according to a tally by Melbourne-based consultant
"The 2013 total gold output of 273 tonnes is the highest
annual figure since 2003," said Dr. Sandra Close, a Surbiton
director. "Producers are responding to lower gold prices by
treating less low grade material and this results in higher
output and reduced costs."
The downside in processing higher-grade ore is that some
lower grade ore that was economic to treat at higher prices is
no longer profitable, Close said, suggesting output could go
down once the richer material is mined out.
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
$1,327 an ounce on Sunday.
In Australian dollars, bullion fell only 16 percent to
around A$1,345 per ounce, owing to a decline in the Australian
Since January 2014, Australian dollar gold prices have
increased by 11 percent to around A$1,485 per ounce.
Higher output from mines operated by AngloGold Ashanti Ltd
and Newcrest Mining Ltd in 2013 more than
offset declines from ones owned by Barrick Gold Corp
and Newmont Mining Corp, including the 50-50 Super Pit
joint venture, once Australia's biggest mine.
Newmont's wholly owned Boddington mine, some 700 km (400
miles) away, is currently Australia's biggest gold mine.
Despite the increase in 2013, Australia remains a distant
second to China, which produced around 430 tonnes in 2013, based
on industry estimates.