The gold mining industry today is a global business in every sense, conducted
in over 60 countries, of which 16 have significant output of over 31.1 tonnes
(1 million oz), and which is dominated increasingly by international mining groups.
Yet just 20 years ago, it was a business dominated by the output of South
Africa and the Soviet Union and undertaken mainly by local mining companies
(albeit large ones in South Africa). This transformation is as radical as any
in the history of the industry.
Partial view of the main
Cresson pit with historical Joe Dandy mine
headgear in the background (Credit:
courtesy AngloGold)
According
to GFMS, World gold output in 2001 was 2,604 tonnes (83.7 million oz), moderately
higher than 2,584 tonnes (83.1 million oz) in 2000. By comparison, it was only
1,311 tonnes (42 million oz), including estimated communist output, in 1980.
Effectively it has doubled. Western world output, excluding the old communist
bloc, increased even faster, from 959 tonnes (30.8 million oz) in 1980 to 2,112
tonnes (67.9 million oz) in 2001. Total production
throughout history topped 142,500 metric tonnes (m t) or 4,580 million ounces
by the end of 2001.
Union Reefs
processing plant (Credit:
courtesy AngloGold)
The
challenge facing the gold industry today is the drifting gold price, which can only be
partly offset by new technology and better productivity. Weighted average cash
costs in the Western World as reported by GFMS, including the main producing
countries, South Africa, the United States,
Australia and Canada
in 2001 were US$176, and total production
costs were $228 per ounce. Not all mines are so expensive. Barrick
Gold's Pierina in Peru had cash costs of just $40 per ounce
and Newmont Mining's Yanacocha, also in Peru,
was at $115. But these are the exception.
Main Cresson pit (Credit:
courtesy AngloGold)
Gold
exploration
budgets have fallen sharply since 1997. In that year miners spent US$2.99 billion
on gold exploration; in 2001 the total was just less than US$850 million, a
significant decline of over 70%. Moreover, the total share of exploration for
gold in all mining exploration worldwide has fallen from 65% to 38% in the same
period, according to Canada's Metals Economics Group. Not only is exploration
down, but some new projects are on hold. Metals Economics Group's chairman,
Michael Chender, told the Financial Times World Gold conference in March 2001
that ten major gold projects, which between them would yield 82.5 tonnes (2.65
million oz) annually, had been put "on the shelf". These include Barrick's
Pascua Lama in Chile and Placer Dome's Las Cristinas in Venezuela.
GoldAvenue's
mining section is prepared in conjunction with Gold Fields Mineral Services:
www.gfms.co.uk
Major revisions and corporate operating results are updated annually with reviews
of certain market information and corporate information quarterly.