Australian Gold Production Up, but Problems Remain

Mineweb reported that according to Surbiton Associates Pty Ltd., in 2013-2014, Australian gold production came to 9.1 million ounces, a 9-percent increase from 2012-2013. At the current spot price that output has a value of AU$12.5 billion.

However, Dr. Sandra Close, director of Surbiton, cautioned:

Don’t be fooled by the good news of higher gold output. While some new operations have opened, others have closed, so the majority of the rise is due to an overall increase in ore grades as the industry responds to harder times.

Many gold producers are treating higher grade ore in order to protect their margins, in response to lower prices in much of 2013 and 2013. While this has led to higher overall gold production, it means lower grade material is left in the ground or stockpiled, so that over time reserves are reduced and mines lives are shortened.

Click here to read the full Mineweb report.