Toronto, Canada — MININGREVIEW.COM — January 18, 2008 – Global gold mine production dipped by just over 1% in 2007 to 2 441 tonnes through delays in development and expansion projects, but output for the first half of this year is forecast to grow by just over 2%.
This was revealed today by GFMS – the world’s foremost precious metals consultancy, specialising in research into the global gold, silver, platinum and palladium markets – in its latest report on the gold market, entitled “Gold Survey 2007 – Update 2”. A summary of the findings of the report was given by GFMS executive chairman Philip Klapwijk at a seminar here.
GFMS revealed that losses last year centred on South Africa, Peru and the United States, while gains focused on Indonesia, and more particularly on China, who knocked South Africa off the top spot to become the world’s largest gold producer.
Klapwijk pointed out that while Chinese gold production increased by an estimated 12% year-on-year, South African mines produced 8% less gold than in 2006. South Africa had held the accolade of the biggest gold producer since 1905, he said, but its output had been in steady decline since a peak of 1 000 tonnes in 1970
GFMS partly attributed the sharper-than-expected decline in South African output to safety-related mine closures, and the one-day industry-wide strike held by the country’s biggest mining union in December, which had knocked almost a ton of output off the country’s total annual production.
The report also made the point that global cash costs rose a dramatic 24% year-on-year for the January-September period, and hit a record level just over US$400/oz in the third quarter. The rise was driven by such factors as US dollar weakness, higher royalty payments and mine development work.
A key aspect of the update is its forecast for the supply and demand variables moving forward and, – based on that – the outlook for the price itself. The consultancy projects an average US$840 over the first half, with further increases possible later in the year.
“Investor appetite for gold at the moment seems undimmed, and this should push gold higher over the year,” commented Klapwijk. “Predicting the top is never easy, but we always thought the US$900 barrier could easily fall quite soon, and then we would have to start viewing US$1,000 as a clear possibility for later this year”.