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PERTH (miningweekly.com) – Australian gold production in the 2017/18 financial year was its highest since 1997/98, totalling 310 t, mining consultancy Surbiton Associates has reported.
In the three months to June, gold production reached 81 t, a 9%, or 6.5 t, increase on the previous quarter, and 8%, or 6 t, more than the previous corresponding period.
“Currently Australian gold production is near record highs,” said Surbiton director Dr Sandra Close.
“The 2017/18 output is 12 t higher than for 2016/17 and only 8 t short of the all- time record in 1997/98, while the latest quarterly figure is just 1.5 t lower than the all-time quarterly record.”
“Boddington and Super Pit vied for the top spot for the year, with each producing almost 23 t, or nearly three-quarters of a million ounces of gold,” Close said.
She said that many of the treatment plants were producing at full or even above their rated capacity and a considerable number of smaller operations were having their ore toll treated or were selling ore direct to existing mills.
“However, despite the buoyant results, gold production may well be lower in the next few quarters. The problems at Super Pit will no doubt have a negative effect, although fortunately the recent problems at Cadia have now been overcome.”
At the Super Pit in Kalgoorlie, owned equally by Newmont and Barrick, a failure in the north-east wall in mid-May severely curtailed mining operations and ore haulage from the mining areas near the base of the pit. Nevertheless, output at the Super Pit actually increased by 22 000 oz to 192 000 oz during the quarter.
“Super Pit’s increased production for the June quarter must have come from stockpiled material and perhaps from a reduction of gold in the processing circuit. But I doubt that this can continue,” Close said.
“Just counting the reduced number of haul trucks coming out of the pit indicates that production will be affected. Given the nature of the slip and the pit configuration, it appears that this will be the case for some time.”
Meanwhile, in early March, Newcrest Mining reported the partial failure of one of the walls of its northern tailings dam at Cadia, New South Wales. While all tailings material was contained by the southern tailings dam, production was curtailed. Limited production commenced in early April and full production was achieved in May.
“Despite the dislocations, Cadia managed to overcome the problems pretty quickly. Output in the June quarter increased by 9%, to 156 000 oz.”
Close said recent studies predicting future Australian gold production would decline by about one-third, or 100 t, annually by 2022 were ‘unduly pessimistic’. She commented that while Surbiton could not predict the future, it seemed improbable that such a rapid and dramatic fall in Australian production would be likely in the next few years.
“Many analysts, particularly in South Africa and the US, fail to understand that Australia is a land of small-to-medium-sized gold deposits. Large gold deposits such as those in the Rand or Nevada are not typical here,” Close said.
She added that it was vital that gold mining companies maintained their spending on exploration and kept up the discovery of new deposits, to replace the more than 300 t of gold now produced each year.
“Although production has risen, the Western Australian government must tread very carefully regarding any possible increase in the royalty on gold. Increased royalties must be paid for somehow and any extra impost could result in exploration budgets being cut and exploration activity reduced.”
She warned that it was simplistic to assume that royalties should be the same for all commodities. Bulk commodities such as iron-ore and bauxite were mined from large openpits while gold was at the opposite end of the spectrum, with very low gold grades mined from relatively small surface and underground deposits.