New figures show Australia is challenging China for the title of the world’s biggest gold producer, but experts say it is too early to tell if Australia will take over the top spot.
- China has been the world’s biggest producer of gold for years
- With Australia producing 74 tonnes of gold in the March quarter, it is closing the gap with China
- Cadia East in NSW is Australia’s biggest-producing gold mine for that quarter
According to the China Gold Association, the Asian powerhouse produced 74.44 tonnes of the precious metal in the March quarter.
The Chinese output was down 9 per cent on last year, due to the pandemic and tightening environmental regulations.
Australia’s production of 74 tonnes for the quarter was worth more than $5.5 billion at the average gold price for the three months to March 31.
Melbourne-based analyst Sandra Close, of Surbiton Associates, said Australia’s production was about 5,000 ounces less than China’s.
“But it’s far too early to draw such conclusions.”
Chinese plans to expand SA mine
The new figures have been released amid an ongoing trade war and as some Chinese-owned gold mines in Australia aim to either expand or restart operations.
Chinese and Australian flags fly above the Paddington gold operations near Kalgoorlie.
That mine is operated by Norton Gold Fields, which has been wholly owned by China’s Zijin Mining Group since 2015.
In April last year, Zijin announced a $552 million expansion of its Paddington operations that processes refractory and low-grade ore sources.
The project was originally expected to begin production in July this year, but the ABC understands it has experienced some delays.
Zijin expects to maintain production levels of around five to six tonnes of gold a year through Paddington after the expansion is complete.
Meanwhile, Focus Minerals — in which China’s Shandong Gold holds a 49 per cent stake — has begun the environmental approvals process for a potential restart of its Coolgardie operation in WA.
The company last year estimated it would cost $48 million to restart mining at Coolgardie, which was closed in 2013 amid a gold price crash.
Among the deposits Focus hopes to mine is an area known as Brilliant, near the south-east boundary of the Coolgardie townsite, which the company says will require detailed planning to manage any potential environmental and social impacts.
Super Pit climbs back up rankings
According to Surbiton’s analysis, Newcrest’s Cadia East mine in New South Wales was Australia’s largest-producing gold operation, with 179,546 ounces in the March quarter.
The Newmont-owned Boddington mine in WA (152,000oz) and the Tanami operations in the Northern Territory (117,000oz) rounded out the nation’s top three.
Kalgoorlie’s Super Pit, which has been operating since 1989, was the big mover, up to fourth spot, with 111,278oz as its new Australian owners look to ramp up production.
Super Pit had less than seven years’ mine life as an open pit before Perth-based Northern Star Resources and Saracen Mineral Holdings bought the operation for a combined $2.2 billion.
The companies — which merged in a $16 billion deal earlier this year — have now committed to a major exploration campaign and have already discovered new deposits which could extend the mine’s life to at least 2035.
Dr Sandra Close said the Super Pit was showing signs of recovery after major rock fall events in 2018.
“In the worst of times, it fell below the top five,” Dr Close said.
New life on Golden Mile
The new strategy at the Super Pit includes heading back underground on the Golden Mile for the first time in 30 years, with the establishment of two new underground portals inside the mine.
Northern Star chief executive Stuart Tonkin said the portals on the western wall of the Super Pit would be used to establish underground drilling platforms.
Mr Tonkin said drilling has already confirmed high-grade gold exists below the deepest historical workings on the Golden Mile, which extend about 1,400 metres below the surface.
As Mr Beament told analysts and media on a site tour last week: “We didn’t buy this asset for this big hole … we bought it for the underground potential.”