PERTH (miningweekly.com) – Australian gold production declined by 7 t in the third quarter of 2022, new data from Melbourne-based gold mining consultants Surbiton Associates found.

Output for the September 2022 quarter totalled 76 t, down nine percent from the high of 83 t produced in the June 2022 quarter. It brings total Australian gold mine production to 235 t for the first nine months of 2022.

“Gold production in the September quarter was somewhat disappointing, with fewer tonnes treated and lower recovered grades, but the Australian gold sector remains in good shape, longer term” said Surbiton Associates director Dr Sandra Close.

“Some wet weather and Covid-19 problems affected output adversely, but fortunately these effects seem to be slowly receding and the rise in production costs seems to be starting to abate.”

While the US dollar gold price has fallen through much of 2022, the Australian dollar price has remained relatively stable, despite the usual volatility, averaging around A$2 600/oz. Notwithstanding concerns regarding the US dollar gold price, once again the weaker Australian dollar has benefitted the gold price in local terms.

During the September 2022 quarter, according to the World Gold Council (WGC), gold purchases reported by central banks totalled almost 400 t, compared with the previous record of 241 t in the September 2018 quarter. This lifted central banks net purchases in the year-to-date to 673 t, which is already higher than the record set in 1967.

“With many of the world’s central banks buying gold at a record rate and with US dollar gold prices beginning to rise again just recently, it is interesting to look back 25 years and consider the wisdom of the Reserve Bank of Australia’s (RBA) announcement in July 1997, that it had sold two-thirds of Australia’s gold reserves,” Close said.

The rationale given at the time was to use the sale proceeds to invest in foreign bonds and achieve a higher return than gold itself which earns no interest. Around 160 t, or 5.1-million ounces, of gold, were sold at a price of approximately A$440/oz.

“Perhaps the RBA did not recognise that a “return” is the combination of two factors: interest earned plus capital gain. Between July 1997 and today, the price of gold in Australian dollars has risen currently to around A$2 600/oz, or around six-fold.”

“Turning to the latest quarterly results, operations producing fewer ounces of gold in the latest period outnumbered those producing more gold by almost two to one,” Close said.

“Newmont’s Boddington was down 59 000 oz on the June quarter and Newcrest’s Cadia was down 44 600 oz, while Tropicana was up 19 440 oz.”