Australia recorded its highest annual rate of gold production in a decade in 2014, accelerating the depletion of high-grade mine reserves, a survey released on Sunday said.
Gold output in Australia, the second highest producing nation after China, rose to 284 tonnes in 2014, up 11 tonnes or four percent on 2013, mining consultants Surbiton Associates Pty said in its latest survey of Australian gold mining.
This is the highest annual figure tallied by Surbiton since 2003.
Output for the fourth quarter 2014 reached 73 tonnes, up three tonnes on the previous quarter, according to Surbiton. “Superficially, the figures give the impression of a healthy and vibrant industry but you need to dig a little deeper to get the whole picture. Its not all good news,” said Sandra Close, a Surbiton director.
Gold in Australian dollars peaked in August 2011 at just over A$1,800 per ounce compared to around A$1,550 per ounce currently, Close noted.
Over this period the Australian dollar exchange rate has declined by 25 percent, while the U.S .dollar gold price has fallen some 37 percent, she said.
Lower prices forced producers to mine their richest deposits to remain profitable, a practice known as high grading.
“The downside is higher grades certainly lift production but lower grade material left behind for another day becomes uneconomic, so mine-lives are shortened,” Close said.
For now at least, say analysts, the higher output, cheap oil and expectations of more interest rate cuts puts most Australian gold miners in the black heading into the second half of fiscal 2015.
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