Australian gold production drops slightly in Q3 due to lower-grade ore

Despite record-high gold prices, miners experienced lower production between July and September, according to Melbourne-based consultants Surbiton Associates. In their latest quarterly report, the analysts noted that Australia produced 73 tonnes of gold, worth A$8.6 billion at the average price for the quarter. This marked a decline of two tonnes compared to the second quarter.

The analysts highlighted that, from early September to the end of October, gold prices rallied more than 15% in Australian dollar terms. Surbiton Associates noted that companies began processing lower-grade ore in the higher-price environment, which may have impacted production. The analysts observed that at Newmont’s Boddington operation in Western Australia, the country’s largest gold mine, 6.3 million tonnes of ore were mined during the quarter, while 8.4 million tonnes were processed. The difference of 2.1 million tonnes was presumably sourced from stockpiles. The ore grade decreased by around 5%, reducing output by approximately 10,000 ounces of gold.

While gold producers benefited from a robust price rally last quarter, recent market volatility is prompting changes in the industry. In a volatile market, companies are increasingly turning to hedging strategies.