Gold Production in Australia Increase in Third Quarter

US gold production

(Bloomberg) – The world’s second-biggest gold producer, Australia, increased its gold output in the third quarter due to the treatment of higher ore grades, according to mining consultant Surbiton Associates Pty.

Surbiton Associates Pty said Gold production increased to 69.5 metric tons in the quarter ended September, compared with 67 tons in the previous quarter ended June. Gold output increased by 7.5 year-on-year, as it was 62 tons in the same period a year earlier.

Gold value climbed 7.6% in the third quarter, the first such gain in a year, after a crash into a bearish market in April that encouraged sales of coins, jewelry and bullion bars. Bullion prices dropped 26% this year in the course of speculations that the U.S. Federal Reserve will curb its monthly bond purchasing that helped gold prices to cap a 12-year bull run in 2012.

Treating higher ore grades and this, in turn, reduced cash costs was the main reason for the increased production, said Sandra Close, a director at Surbiton. She added that this is precisely what Surbiton expected, given the sharp decline in gold prices during April and the lack of a significant recovery since then.

The latest Fed minutes announced on November 20 pointed that policy makers expect an improving U.S. economy to justify curbing asset purchases in the next few months. Gold value rose 70% from December 2008 to June 2011 as the federal banks bought bonds to encourage economic recovery.

Gold price for immediate delivery dropped to $1,225.55 an ounce on November 25, the lowest since July 8. The metal traded at $1,242.05 in Sydney on November 29, heading for a third straight monthly decline.

According to the U.S. Geological Survey, China was the biggest producer in 2012 followed by Australia. Gold production in China during the first nine months of this year rose 6.8% to 307.8 tons, with total production in the September quarter of 115 tons, according to data from the China Gold Association.