Australia’s gold production increased in the first half of this year, but both export volumes and values have declined, Australia’s Bureau of Resources and Energy Economics (BREE) reported Wednesday.
“Gold exploration expenditures in Australia has continued to fall and new project development has stalled in response to lower prices,” said BREE Resources Program chief John Barber.
“In 2015, a higher US interest rate, albeit marginally higher, is expected to further reduce the appeal of gold relatively to other investment assets and support lower prices,” Barber forecast. “A moderate rebound in jewelry purchases in response to lower prices is not expected to offset this decline in gold investment or market speculation that accompanies it.”
“The average price of gold is forecast to decrease a further 4.7% in 2015 to US$1123 per ounce,” he advised.
“Forecast lower prices in 2014 and 2015 are expected to slow the development of new mines with production from low cost projects that do start up likely to be offset by declining production at existing mines or closure of higher cost producers,” said BREE’s Resources and Energy Quarterly, September 2014. Nonetheless, gold mine production is Australia is estimated to have increased 7.5% and totaled 274 tonnes in 2013-14.
“Looking forward, the robust production growth in 2013-14 is not expected to be repeated over the outlook period. Lower forecast prices over the next 18 months are expected to challenge a number of high cost producers in Australia and many of the easier gains in cost cutting have already been reaped.”
The country’s gold production is projected to increase at an average annual rate of 1% and total 228 tonnes in 2018-19 with most of the growth occurring later in the period, BREE forecast.