Gold reserves running out amid soaring price: miners
- Source: Global Times
- [00:37 November 26 2009]
- Comments
Gold production will continue to fall, despite a brief boost in 2009 and soaring prices, as de-posits are exhausted and new discoveries remain elusive, mining companies say.
In terms of production, "2009 is the outlier as far as the trend (goes)," said Omar Jabara, spokesman for US-based Newmont Mining, the world's second-largest gold producer.
Overall, "it's a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year," said Vincent Borg, spokesman for number-one producer Barrick Gold.
"It sort of goes down about one million ounces every year and our forecast is that it will continue to decline despite the higher price" for gold nowadays, he said.
Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them, the experts explain.
South Africa, which was once at the vanguard of world production, saw a 9.3-percent drop in production year-over-year in the second quarter, said its Chamber of Mines.
Globally, "it's just that the assets are not there anymore," said Tonya Todd, a spokeswoman for Goldcorp, Canada's second-biggest gold mining firm.
"It's not like a water tap you can turn on and it comes right away," Borg said.
Barrick and Newmont expect to continue increasing production next year by 7 percent and 5 to 10 percent, respectively. But long term, it's downhill.
Global goldmine production is forecast to rise by 3.7 percent in 2009 to about 2,500 tons, but will satisfy only two-thirds of demand, according to the World Gold Council.
During the financial crisis, banks have been buying up gold in large quantities to protect monetary reserves against weakness of the US dollar.
Amid uncertainty in stock markets, investors and hedge funds are also coveting gold, driving up gold demand.
After reaching new highs over the past year, the precious metal Wednesday hit a record above $1,180 an ounce in trading on the London Bullion Market on the back of a weak greenback, which makes the precious metal cheaper for buyers using stronger currencies, traders said.
In China, Shandong Gold- Mining stock rose by the 10 percent daily limit to 84.39 yuan, with the Shanghai Composite Index closing up 2.07 percent.
AFP/Global Times
