PERTH (miningweekly.com) - Gold output in Australia fell by some two tons during the three months to September, compared with the previous quarter, and by nearly five tons compared with the previous corresponding period, mining consultancy Surbiton Associates reported this week.
“The fall in production was disappointing, given the new operations that have just come on stream,” said Surbiton Associates director Dr Sandra Close.
“Many of the larger gold mines, mostly in Western Australia, had technical issues which reduced their gold output. Hopefully this situation will be short-lived.”
Gold production at Newmont/Barrick’s Super Pit in Kalgoorlie declined by 42 000 oz to 132 000 oz, owing to lower ore grade and a reduction in the amount of ore treated.
“Super Pit’s production for the quarter was down substantially and is the lowest in four-and-a-half years. Lately, it has been producing at around 180 000 oz to 200 000 oz a quarter,” Close said.
Output at Newcrest’s Telfer operation fell by 21 000 oz, owing to a planned shutdown of the grinding mill for a reline and maintenance. At St Barbara’s Gwalia mine, near Leonora, output was down 20 000 oz owing to poor haul truck availability.
Production at Newmont’s Boddington mine also fell by 14 000 oz owing to unplanned mill downtime.
However, Close noted that on the other hand, gold production rose at two of Barrick’s operations. At Cowal, in New South Wales, output was up by 23 000 oz, while at Kanowna Belle, near Kalgoorlie, production rose 21 000 oz.
Close added there were a number of new operations that have just been commissioned or would come into production before the end of 2012.
“The biggest new entrant was Regis Resources’ Garden Well operation, north of Laverton, which produced 17 000 oz of gold in less than a month, following its first gold pour in early September. Also, Kentor Gold’s mine in the Murchison district in Western Australia produced its first gold in mid-August and Millennium Minerals’ new plant at Nullagine in Western Australia, poured its first gold at the end of September.”
Close said that Newcrest’s Cadia East mine should also reach commercial production before the end of the year, as would Resource Base’s small Broula King operation.
Meanwhile, Reed Resources, which was redeveloping Bluebird operation, would start commissioning in December.
Close again highlighted the renewed interest of overseas investors in the Australian gold industry, where overseas control currently stands at about 60% and eight out of ten of the largest operations were controlled by overseas companies.
“Overseas interest in our mining and agricultural industries remains high and local investors seem only too willing to sell. We need to determine why foreign investors put a higher value on our natural resources than do Australian shareholders.”
She suggested that one probable explanation was that overseas investors had a much longer time horizon than several Australian investors and took a long-term, strategic approach.
“Locally, professional fund managers seem to focus almost exclusively on short-term portfolio performance with little consideration of the long-term implications. They are rewarded on the basis of their short-term performance, almost irrespective of the nature of the investment and the assets involved.”
“You have to query the mismatch between the objectives of many fund managers and the much longer perspective of say, superannuation investment,” Close said.
She added that superannuation investment was of particular relevance to Australians given current government requirements and the substantial pool of funds now involved. There was also an obvious parallel between the long-term nature of superannuation and the lives of many of the large mining and resource projects.
“Many of Australia’s long-term assets are already in foreign hands. We need to strike a balance between local and overseas ownership, otherwise we are in danger of becoming tenants in our own land,” Close warned.