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| Updated: July 26,2004 |
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Fueled mostly by the weakening dollar, gold mining costs have
risen in the last quarter, from 49% in South Africa to only 14%
in the USA. Australia, which had one of the higher costs of
producing gold ($256/oz) actually had a 14% decrease in cost.
The US gold mines are currently averaging $202.ounce. Should
this trend continue, Australia may eventually knock South Africa
from its perch as the world's largest gold producing country.
The US does not have the reserves (discovered, anyway) to
accomplish this, even though we produce at a lower cost. Fortunately, for the gold industry, gold has appreciated significantly, due to the same reasons, and increased demand, and the increase in gold prices have more than offset the increased costs of production, so gold mining companies profits have actually increased. According to World Gold data, cash costs in South Africa rose 49%, the US rose 13%. and Australia had its gold mining costs drop 14%. In Australia, the Ridgeway mine opened producing 108000 oz at just $67/oz, which significantly helped reduce the overall cost of gold mining there, I would say. When all is said and done, with South Africa's reserves getting deeper, less rich, and technically more difficult, while being more expensive to mine, it is only a question of time until they are the 2d largest producer. -------------------------------------------------------------------------------- But that's just my opinion. Charles Kubach Mine-Engineer.Com |
