TORONTO (miningweekly.com) – Gold mine production is expected to rise 2% this year, compared with a 7% rise in 2009, consultancy GFMS predicted in a report published on Wednesday.

GFMS calculated that global mine production of gold rose by 163 t last year, to 2 572 t, after three consecutive years of declines.

The increase was linked with new projects either starting production or ramping up, especially in 'newer' production regions, which offset declines in maturer gold producing areas, like South Africa, GFMS research director Neil Meader said in a presentation in Toronto.

In fact South Africa, which lost its century-old position in 2007 as the top gold producing nation, has now slipped to third place, behind China and Australia.

Still, despite a 6%, or 14 t, decline from South Africa, Africa as a whole still recorded an increase in gold production, thanks to gains in West Africa in particular, Meader said.

At the end of the day, the only region that showed a drop in output was North America, where gold production fell 13 t year-on-year, mainly because of a 6% decline in production from the US.

The biggest winner was Asia, where output increased by 99 t, driven by gains in Indonesia and China.

Latin American production rose by 30 t, while output in the Commonwealth of Independent States increased 6%.

NEW ORDER

At the company level, the top four firms by gold production were unchanged from 2008 with Barrick Gold leading the pack, followed by Newmont Mining, AngloGold Ashanti and Gold Fields.

But Freeport-McMoRan Copper & Gold leapt into the number-five spot, from 12th position a year ago, pushing Vancouver-based Goldcorp down to sixth place.

COSTS WEIGH

Cost pressures continue to weigh on gold producers, with world total cash costs increasing by an average of 3%, or $14/oz in 2009, to $478/oz, Meader said.

Production costs in 2009 were highest in South Africa, while Latin America reported the lowest figures.

GFMS has calculated that the “true” long-term cost of gold mine production – including things like greenfields exploration, sustaining capital, expansion capital costs and project development – at somewhere between $925/oz and $950/oz.

This figure does not include any allowance for returning money to shareholders though.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.