Australian production slump could boost gold investment - Monday 1st September 2008

Gold production in Australia plunged by 13 per cent during the quarter to June on the back of rising gas, oil and diesel costs.

Melbourne-based research group Surbiton Associates also confirmed today (September 1st) that year-on-year production has dropped by seven per cent - the biggest decrease since 1989.

The country, the world's third-largest producer, has seen output at a number of leading mines owned by Newmont Mining Corporation and Newcrest Mining Ltd fall dramatically.

The figures are largely being attributed to increased raw material, fuel and labor prices, while a gas outage in Western Australia - the country's largest producing region - has also played a significant role.

Sandra Close, a director at Surbiton, told Bloomberg: "While you can't draw too many conclusions from just one quarter's figures, there is cause for concern. Two of the gold sector's real challenges are cost containment and exploration spending.''

However, the news will come as a boost to anyone considering investing in gold, as a period of sustained decreases in output in Australia could push gold prices higher.
Goldbug, 01 Sep '08

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