Australia Has #1 Gold Producer In Sights

An Australian based specialist gold consultancy has revealed that Australia has indeed reclaimed the mantel of 2nd biggest gold producer in the world from Russia and is even flirting with taking the number one spot.  From gold analyst Lawrie Williams:

“According to Melbourne-based specialist gold consultancy, Surbiton Associates, Australia is the world’s second biggest gold producer and at one time in the past year had looked as if it might displace China as the world No.1.  However this was not to be as a number of Covid pandemic-related issues caused the country’s gold output to fall back a little as the year progressed and it ended up coming in in second place again among the global gold producing nations.

It should be noted here that Surbiton’s assertion that Australia is the world’s No.2 gold producer is slightly contentious as independent London-based precious metals consultancy, Metals Focus, puts Russian output marginally higher than that of Australia – or at least it did in 2020 – but the 2021 assessment has not yet been published.  Russia will have suffered similar Covid-related production issues last year, and U.S. sanctions – which have led to Kinross witrhdrawing from the big Kupol gold mining operation will almost certainly have affected that nation’s current gold output levels.

According to Surbiton, which as being Australia-based is probably in a better position to assess the country’s gold mine output, Australian gold production in 2021 totalled 315 tonnes, or 10.1 million ounces. This was therefore a little lower than the peak production levels recorded in 2019 and 2020.The consultancy put  local gold output for the first half of the 2021 year slightly ahead of China but this was not sustained later in the year, so according to Surbiton’s figures, Australia remains in second place globally.

“Compared with 2020, Australian gold production in 2021 declined by 12 tonnes or four per cent,” said Dr Sandra Close, a director of Surbiton Associates. “There are a number of factors which have contributed to the fall, many of which are a result of the pandemic.”

Western Australia, which produces around three-quarters of Australian gold, closed its borders in mid-March 2020 to restrict the spread of COVID-19. Its border was not finally reopened until 3 March, 2022, just three days ago.

“Although the gold producers continued to operate extraordinarily well under the circumstances, the restrictions imposed due to the pandemic have had an increasing impact,” Dr Close said. “Personnel shortages and burn-out have been taking a toll and during 2021 production has been negatively affected.”

Surbiton goes on to outline what a huge export gold is for Australia:

“The gold price in 2021 has been supportive – particularly in Australian dollar terms.  Dr Close noted. “The 315 tonnes of gold produced in 2021 was worth around A$25.5 billion at the average price for the year, which was a substantial contribution to Australia’s exports.””

And it looks promising for 2022!

“Given that in the final quarter of 2021, Australian gold mine production, according to Surbiton, rose by four percent to 81 tonnes this bodes well for the overall gold production total in the current year.  With Chinese gold output seemingly continuing to fall back year on year one suspects that there is a good chance of Australian gold ouput getting close to matching that of China this year.”