* Gold net hedging had first consecutive rise since 2001
* Full-year net hedging expected at 1 mln oz (32 tonnes)
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NEW YORK Oct 4 Gold mining companies in the
second quarter reported their first consecutive quarterly net
hedging in 10 years, driven by new hedges by small producers,
metals consultancy Thomson Reuters GFMS and French bank Societe
Generale said on Tuesday.
(Graphic: r.reuters.com/ruw24s )
For the full year, the global hedge book is expected to
result in a net addition, the first annual net hedging since
1999, even though most major gold miners have already
eliminated their hedges and fully exposed their output to
market prices, the report said.
Hedging helps producers lock in prices for future output,
but can backfire if spot metal prices rise above the hedged
price. The buying back of outstanding hedge positions was a key
element in gold's rally over the past decade.
The second quarter saw 0.19 million ounces (6 tonnes) added
to the global hedge book, which stood at 5.07 million ounces
(158 tonnes) at the end of June.
The largest addition to the global hedge book was from
Australian gold miner Alkane Resources (ALK.AX), which entered
into 0.09 million ounces (3 tonnes) of forward sales against
one of its gold projects, the report said.
The report said the volume of net hedging is expected to
total one million ounces (32 tonnes) for the full year.
Major gold mining companies are still against hedging amid
gold's decade long bull market, the report said.
"In the face of a strongly rising gold price, the pressure
is currently still on company management from investors to
retain full exposure to gold prices," the report said.
AngloGold Ashanti (ANGJ.J), Africa's biggest gold miner,
was the last major producer to eliminate its hedges. It did so
during the fourth quarter of last year.
(Reporting by Frank Tang; Editing by Carol Bishopric and Bob