Gold production in Australia hit its highest level in a decade last year on the back of increased processing of higher-grade ores by mining companies.
Figures from mining consultant Surbiton Association indicate that Australia’s gold production volume lifted to a decade-long high last year.
Output in the world’s second biggest gold producer saw a year-on-year gain of 18 metric tonnes in 2013 to hit 273 tonnes in total – its highest level since 2003.
2013 fourth quarter production was also the highest since the quarter ended June 2003, rising 4 tonnes compared to the preceding quarter to reach 74 tonnes.
Australia is now firmly ensconced as the world’s second largest gold producer after China, which produced 403 tonnes of the precious metal in 2012 according to the US Geological Survey. Australia’s prodigious gold output puts it ahead of both the US and Russia, which produce 230 tonnes and 205 tonnes per year respectively.
The production peak arrived during an inopportune period, however, with gold falling 28 per cent in 2013 for the precious metal’s worst year in over three decades.
Gold prices were pulled lower by signs of recovery in the US economy last year, which saw investors withdraw from their holdings of bullion in favour of equities.
According to Surbiton, however, this spurred an increase in Australian output as miners responded to difficult market conditions by turning to higher grade ores.
“Producers are responding to lower gold prices by treating less low-grade material and this results in higher outputs and reduced costs,” said Surbiton director Dr. Sandra Close.
According to Close a renewed focus on “quality ounces” amongst miners was translated into an overall reduction in costs.
“The downside in processing higher-grade ore is that some lower-grade material that was economic to treat at higher prices is no longer profitable.”
While prices have rebounded this year due to doubts over the US economy’s convalescence and uncertainty surrounding emerging markets, many see gold prices continuing to decline in 2014 as a result of the US Federal reserve winding down its stimulus program.
Goldman Sachs expects bullion to fall by at least 15 per cent this year to $1,057 per ounce as result of the Fed’s tapering of monetary stimulus.