Record-high gold mining output sees China's consumer demand peak, says leading figure...
GOLD MINING output from China, the world's No.1 producer, is set to reach 430 tonnes this year, a fresh annual record, according to its largest gold miner.
The world's largest gold mining producer since 2007, China mined some 403 tonnes in 2012. Speaking at an industry conference Monday, China Gold Group Corp.'s vice-general manager Du Haiqing told reporters he expects national growth of 7% in 2013.
China is also set to overtake India as the world's No.1 gold consumer this year, industry data suggest. After buying 832 tonnes last year, Chinese households and investors will buy nearer 1,000 tonnes in 2013, said Du.
But starting from 2014, "Consumption will gradually cool down," he forecast. "The current level will not be sustained and will fall to normal levels as consumers become more rational."
Former world No.1 India may retain that title, market-development group the World Gold Council's Indian director P.R.Somasundaram said last month, despite the government's strict anti-gold import rules.
"There are 20% more auspicious days and also there is pent-up demand from last quarter," he told Bloomberg as the Diwali festival – which ends this week – drew near.
"All indications are demand will be robust
," Somasundaram said, forecasting another 1,000-tonne year for Indian gold consumption.
India has no domestic gold mining output. Fighting the drag on balance-of-payments which heavy imports cause, the government has this year raised import duty to 10%, banned gold coin imports, forced importers to pay in full in advance rather than using trade credit, and imposed a 20% re-export rule which saw new inflows fall to zero over the summer.
Gold mining costs in China have meantime continued to rise in 2013, Du told the China's gold conference in the northern city of Tianjin.
"Any company, regardless of whether it has exploration ability, can [buy] mining rights," he explained, blaming investors for squeezing genuine miners by demanding high sale prices for mining rights bought from the authorities.
According to Reuters, China Gold's International Resources paid $912 per ounce to mine gold in the first half of this year, compared to $907 a year earlier.