Australia’s gold production totalled 327 t, or about 10.5-million ounces, in 2020, marking a record and a 1.5 t improvement on 2019's output, reports consultancy Surbiton Associates.

Last year's gold production was worth A$27-billion, based on the average daily Australian dollar gold price.

Australia is the world’s second-largest gold producer and most of its gold is exported.

“Although Australian gold production is remaining near record levels, we are seeing a significant overall drop in the grade of ore being treated,” says Surbiton Associates director Dr Sandra Close.

She adds that this is a rational response to the higher gold prices during the year.

When gold prices are high, the grade of ore can be reduced, but the mine can remain profitable, Close explains.

“Often this results in reduced output and the cost of production per ounce goes up – but at the moment operators are producing much the same amount of gold from lower grade material by increasing the throughput of their treatment plants.

“Some mines have greater flexibility in selecting the grade of ore mined, while some have stockpiled lower grade material which can be blended with their run-of-mine ore.”

The Covid-19 pandemic and its resultant leading to investors investing in a “safe haven” asset resulted in the gold price shooting up to an all-time high of $2 067/oz, or A$2 868/oz, in August last year.

Although prices have fallen since then, it remains relatively high at $1 753/oz.

Australia’s largest producing gold mines in 2020 were Newcrest Mining’s Cadia East operation with 822 478 oz, Newmont's Boddington operation with 670 000 oz and Kirkland Lake Gold’s Fosterville operation with 640 000 oz produced in the year.

Close expects new producers to come on line during 2021, including Red River Resources with its Hillgrove mine and Capricorn Metals' Karlawinda operation.