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Agencies
Australian gold output rose to a record in the year ended June 30, though a fall in exploration spending means that's unlikely to be matched again soon, the government's top commodity forecaster said last week.
Gold production rose six per cent to 317 tonnes in the year ended June 30, the Australian Bureau of Agricultural and Resource Economics (Abare), said in its latest quarterly "Australian Mineral Statistics" report.
While gold priced in dollar has been falling since January 1996 -- reaching into lowest price in 19 years last month -- a falling Australian dollar has more than offset that decline. Australian dollar gold was recently selling for A$487.50 per ounce, up 15 per cent from last December.
An Abare's report shows spending on gold exploration fell to A$136.1 million in the March quarter, the third consecutive decline from A$225.9 million spent in the June quarter of 1997. It's the first extended decline in more than eight years.
Abare, in its July report, estimated production in the year at315.5 tonne and saw output in 1998-99 dropping to 306.7 tonne. "Australia's gold mine output will begin to decline over the next couple of years," Abare said then, citing a decline in exploration spending as an indicator of future production.
The scaling back in exploration budgets reduces chances of any major new gold find to replace dwindling reserves from established mines. Still, the decline in exploration spending may take more than a year to impact on production, said Bell Securities gold analyst, Keith Goode. He said he is expecting production in 1998-99 to be little changed from the year earlier as major gold reserves discovered during an exploration boom in the mid-1990s come into production.
Among big miners set to expand are Delta Gold NL, with its Golden Feather mine in Western Australia state set to start producing about 1,00,000 ounces a year from December. "You could find the current year mirroring last year" in total gold out put, Goode said. "It's not that easy to call. There's somesizeable operations coming through." The gold price tumbled to an 18-year low of $276.75 an ounce in January, amid concern about central bank sales from their reserve holdings and dwindling demand from Asia.
Since reaching a 19-year low on August 28, it has risen recently to $290.45 an ounce in inter-bank trading. The falling price reduced the allure of gold as an investment. Selling shares in gold mining companies to the public is a major source of revenue for gold exploration.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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