Making the grade: White gold prices are falling, output is rising. Photo: Warren HackshallGold output in Australia, the world’s second-biggest producer, climbed to the highest in a decade last year as miners increased processing of higher-grade ores, according to mining consultant Surbiton Associates.
Nanjing Night Net

Production increased 18 metric tonnes to 273 tonnes in 2013 from a year earlier, the highest annual output since 2003, Melbourne-based Surbiton said. Output in the fourth quarter rose to 74 tonnes from 70 tonnes in the previous three months, the highest since the quarter ended June 2003, it said.

Gold fell 28 per cent in 2013, capping bullion’s worst year since 1981, as some investors lost faith in the metal as a store of value and investor holdings decreased. Bullion has rebounded this year as concern the US recovery may be losing momentum and turmoil in emerging markets boosts haven demand.

”Producers are responding to lower gold prices by treating less low-grade material and this results in higher output and reduced costs,” Surbiton director Sandra Close said in a statement.

”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.”

Gold will decline to $US1011 an ounce as the US Federal Reserve tapers monetary stimulus and the dollar strengthens, Westpac said recently. Goldman Sachs said it would drop to $US1050 by the end of the year.

US Federal Reserve boss Janet Yellen said last week the central bank was ”open to reconsidering” the pace of scaling back asset purchases should the economy weaken. The Federal Open Market Committee, which next meets on March 18-19, announced a reduction to bond buying at each of its past two meetings.

Bloomberg

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