SYDNEY – May 29 Gold output in Australia, the world’s second biggest producer, slipped 2 percent in the first quarter, due in part to mining of lesser grade ores during a period of higher bullion prices, a survey released on Sunday showed.
Australian gold production reached some 71 tonnes in the first quarter, around 1.5 tonnes, or 2 percent lower, than the previous quarter, according to the survey by sector consultants Surbiton Associates in Melbourne.
“Many operators have the flexibility to trim their grades and still make a reasonable profit,” said Surbiton’s director, Sandra Close. “If the overall grade is reduced by just a fraction of a gram per tonne, it will reduce the total gold output by several tonnes.”
Close said mining companies had preserved some richer grade ores for leaner times while gold prices firmed in the first quarter, leading to the decline. That strategy may not play out in the current quarter as gold prices once again contract.
Gold prices have been falling for most of the second quarter, both in U.S. dollar and Australian dollar terms. Since late April, the Australian dollar has fallen 5.8 percent against the U.S. dollar, while the U.S. dollar gold price has dropped 6.5 percent.
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