GOLD 1300.80 $/ozChange: -2.06
PLATINUM 1437.00 $/ozChange: 0.50
R/$ exchange 10.57Change: -0.01
R/€ exchange 14.60Change: -0.01
 
We have detected that the browser you are using is no longer supported. As a result, some content may not display correctly.
We suggest that you upgrade to the latest version of any of the following browsers:
         
close notification
powered by
Advanced Search
 
 
 
Home
 
Most Popular Articles - Australasia
 
 
GOLD
 
Gold mine output hits record in 2010; scrap fell despite price gains – GFMS
PRINT
 
 
Embed Code Close
content
 
13th January 2011
TEXT SIZE
Text Smaller Disabled Text Bigger
 

TORONTO (miningweekly.com) – Gold supply from mines rose to about 2 652 t in 2010, a “significant” increase of 2,7% year-on-year, and a new all-time high, metals consultancy GFMS said on Thursday.

The increase in mine supply represents the second year of production gains (output rose an impressive 7% in 2009), after three consecutive years of decline.

In terms of above-ground supplies of gold, however, both the main sources in previous years – central bank and scrap supplies, declined year-on-year, so that the total gold supply in 2010 increased just 0,5%, despite the higher mine production.

The production figures for 2010 indicate that the industry has finally beaten the previous output record, set in 2001, GFMS chairperson Philip Klapwijk said in Toronto.

GFMS is forecasting further increases in mine production for at least the next couple of years, he said in an interview.

“There's a reasonably healthy pipeline and at current prices we would certainly expect production to increase in 2011 and 2012,” Klapwijk said.

“Thereafter, I think it does depend to some extent on whether prices continue to march higher or moderate.

“And if they moderate, we could see production start to level off again.”

China was the top producing country again in 2010, followed by Australia, the US, South Africa and Russia.

The biggest year-on-year increase was from Australia, helped by rising production from Newmont Mining's new Boddington mine.

The top-five gold producers by output levels were Barrick Gold, Newmont Mining, AngloGold Ashanti, Gold Fields and Goldcorp.

SCRAP DECLINES

Interestingly, the supply of scrap into the gold market actually declined by just over 1% in 2010, despite a 26% increase in the average gold price.

The decline in scrap sales likely reflects expectations, particularly in the developing world, that prices are still going to move higher, Klapwijk said.

The US and European markets did respond to the higher prices, helped by 'cash-for-gold' adverts on almost every corner, however, scrap supply in the Middle East and Asia declined markedly.

A number of potential sellers are probably waiting to see gold hit at least $1 500/oz before putting more metal on the market, Klapwijk said.

Price expectations “have meant that they are not willing to sell scrap at $1 400 and change. Or at least not as much as one might have expected.”

GFMS expects scrap supply will decline 1,7% in the first half of this year, and is not looking for any new supply from the official sector. Central banks are more likely to be net buyers, Klapwijk said.

Mine production is forecast to increase 6,4% in the first half of this year, compared with the same period last year, partly because of new mines started up in the latter half of 2010, he said.

“But production is growing, and it's growing fairly robustly in the first half of this year.”

That works out to about a 3% increase in total supply, driven by the growth in mine production.
 

Edited by: Liezel Hill

 

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

FULL Access to Mining Weekly and Engineering News - Subscribe Now!
Subscribe Now Login
 
 
 
GFMS chairperson Philip Klapwijk discusses the outlook for gold mine supply.
This video is licensed under a Creative Commons License
GET SELECTED VIDEO
Embed
Selected Video Download (1.23mb)