Home > Australia gains greater control of its gold mines

Australia gains greater control of its gold mines

Editorial
article image

Australia’s control of its $12 billion domestic gold mining industry has risen to around 50 per cent recently, with several large overseas-based gold producers selling some of their Australian mines to local companies, Melbourne-based gold mining consultants, Surbiton Associates said , in a news release Monday.

“Recently the pace of overseas selling has increased significantly,”  Surbiton Associates director Dr. Sandra Close said. 

“We have seen locals who already had operating experience expand their gold interests considerably.”

Canada’s Alacer Gold sold its Higginsville and South Kalgoorie operations to Metals X in late 2013. Earlier this year, Toronto-based Barrick Gold sold Kanowna Belle and Plutonic and its 51 per cent interest in the East Kundana joint venture to Northern Star Resources, which in July also bought Jundee from Colorado-based Newmont Mining.

Barrick also sold its Granny Smith, Lawlers and Darlot operations to South Africa’s Gold Fields, “but this had no effect on overall Australian control, as the mines went from one overseas company to another,” Close observed.

“Several of the world’s largest gold producers have switched their strategy from chasing ounces to rationalisation and cost reduction,” Close said . 

“This does not always sit easily in an Australian context as, unlike many other gold producing regions, Australia’s production comes from a considerable number of smaller mines rather than a small number of large mines.”

“Despite Australia having the large gold reserves, a large proportion of these are locked up in iron oxide-copper-gold deposits, such as Olympic Dam and Prominent Hill,” she noted. 

“It will be many decades before these deposits are fully exploited.”

These are big, long-tern operations with mining based on the rate of production of the main ore component, which is copper; the amount of gold output is contingent on the overall production schedule.

“So, it looks great on paper but the practicalities are that much of our gold reserves are for the very long term,” said Close. “For a sustainable industry we still need production from traditional primary gold deposits and ongoing exploration is as vital today as it ever was.”

“Gold is often overlooked as an important export earner for Australia,” Close suggested. 

“Although gold’s export value is less than that of iron ore or coal, it is worth more than export earnings from meat, almost double the export earnings from wheat, and four times the earnings from wool.”

“The Western Australian government is currently examining royalty rates, but any adjustment should only be made after very careful consideration and consultation with producers both big and small,” Close advised. 

“It’s essential to get the right balance."

This article appears courtesy of Mine Web. To read more daily international and finance mining news click here.

Newsletter sign-up

The latest products and news delivered to your inbox