By Robb M. Stewart
MELBOURNE--Australia's gold production recovered in the second
quarter of the year and appears set to continue growing, benefiting
from a strong bullion price, after output declined in the previous
three quarters, mining consultants Surbiton Associates Pty. Ltd.
said in a report released Sunday.
April-June production rose 4% to 65 metric tons from 62.5 tons
in the first quarter. However, first-half output was down 4% at 261
tons, or roughly 8.4 million troy ounces, partly due to wet weather
earlier.
"Producers took advantage of higher gold prices and made the
most of their deposits by treating slightly lower grade ore,"
Sandra Close, a director at Melbourne-based Surbiton, said.
She added that production was set to rise, with several new and
rejuvenated mining projects coming on stream later this year and in
2013.
International metals consultancy GFMS last week said Australia's
gold output had fallen 5% in the first half of 2012 to 122.5 tons,
in part due to a drop in volumes from Newcrest Mining Ltd.'s
(NCM.AU) Cadia Valley operations. Production rates at Australia's
two largest gold mines--Newmont Mining Corp. (NEM) and Barrick Gold
Corp.'s (ABX) Kalgoorlie Super Pit, and Newmont's own Boddington
mine--also declined.
Surbiton said in its report that Super Pit remained the
country's top producer in the 12 months to June 30, with output of
746,000 ounces. This was followed by Newmont's Boddington mine,
which produced 713,000 ounces, and Newcrest's Telfer, which
produced 540,115 ounces.
Strong gold prices encouraged companies to mine lower-grade ore
bodies and supported takeover activity in Australia. The country is
the world's second-largest producer of gold after China.
"Overseas investors are showing considerable interest in
Australian gold operations," Ms. Close said. "Lately, there have
been various bids and takeovers by overseas companies of both local
and foreign-owned gold producing companies."
Singapore-based LionGold Corp.'s (A78.SG) all-scrip bid for
Castlemaine Goldfields Ltd. (CGT.AU) closed this week after the
company secured a more-than-97% stake. Zijin Mining Group Co.
(2899.HK) last month bought control of Norton Gold Fields Ltd.
(NGF.AU) in a cash offer that valued the Australian company at
roughly A$215 million.
In Australian dollar terms, the gold price rose 1.2% in the
first half of 2012, compared with an 0.03% increase in U.S. dollar
terms.
Rhiannon Hoyle in Sydney contributed to this article
Write to Robb M. Stewart at robb.stewart@wsj.com