JOHANNESBURG (miningweekly.com) – Gold production in Western Australia has fallen almost 50% over the past decade, with a 16% reduction in gold production during 2008.

However, Western Australia Mines Minister Norman Moore stated on Wednesday that while gold production in Australia had fallen to its lowest level in 20 years, the value of the gold produced was relatively unchanged, as a result of the weaker Australian dollar.

“We are all aware of the challenges faced by industry to ensure competitive outputs and financial returns during a period when prices for resources are falling. However, not all commodity prices have fallen. In fact, because of the depreciating Australian dollar, some have risen.”

Moore noted that recent figures revealed that gold had increased 25% because of this depreciation, coupled with its rising commodity price.

“So, as it is usually the case in times of downturns, the gold sector is offsetting the current financial crisis, providing some hope in these uncertain times. People’s faith has remained in gold with its price remaining strong over the past 12 months, and again briefly reaching         $1 000/oz in February.”

In a copy of a speech delivered at the Paydirt 2009 Gold Conference in Perth, Moore stated that the fact that the Australian dollar had taken a pounding, had put the Australian dollar gold price into the stratosphere, with recent levels of around A$1 500/oz.

During the 2007/8 period, the estimated value of Western Australia’s mineral and petroleum industry reached $58,6-billion, and Moore added that while there were some concerns about how the current financial crisis might impact on the state, he believed the resources industry was doing extremely well in the circumstances.

“It doesn’t matter where you look. All our companies are very efficient and very productive.”

During 2007/8, Western Australia continued to experience growth within the minerals industry, with the value of mineral production in the state increasing by 6%. During this period, mineral exploration expenditure also set a new record.

“Western Australia accounts for the major proportion of exploration dollars expended in Australia, including 58% of the country’s gold exploration.”

However, Moore raised the concern that most of the exploration undertaken was on brownfield sites, and there had been little exploration on greenfield sites.

“That is why I recently announced that we were finalising plans for an A$80-million, five-year exploration incentive scheme. The proposal has already been well received by industry groups, including the Association of Mineral and Exploration Companies and the Western Australian Chamber of Minerals and Energy.”

Moore believed that such a plan would reduce the risk for mining and petroleum producers, and would help the state regain some of the market share lost to the rest of Australia and overseas.

“We must keep encouraging new investment right across the board to ensure that the mines of tomorrow, are found today.”

He added that the Department of Mines and Petroleum had also emphasised the promining policies of the State government, which has seen it lift the ban on uranium mining.

“Although it has never been illegal to explore for uranium, between June 2002 and September 2008, the Labour government specifically excluded the right to mine uranium ore from the 1 475 mining leases granted in Western Australia, during that time. We are assessing options to allow uranium-mining on those leases, where it had been excluded.”

Moore stated that there was significant potential for additional deposits of uranium to be discovered in Western Australia, with several favourable targets yet to be tested. The latest figures available showed that the total of Western Australia’s known resources was 189 000 t of uranium oxide, in 28 deposits.

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