Gold output in Australia, the world’s second-biggest producer, climbed to the highest in a decade last year as miners increased processing of higher grade ores, according to mining consultant Surbiton Associates Pty.
Production increased 18 metric tons to 273 tons in 2013 from a year earlier, the highest annual output since 2003, Melbourne-based Surbiton said in an e-mailed statement. Output in the fourth quarter rose to 74 tons from 70 tons in the previous three months, the highest since the quarter ended June 2003, it said.
Gold fell 28 percent in 2013, capping bullion’s worst year since 1981, as some investors lost faith in the metal as a store of value and investor holdings decreased. Bullion has rebounded this year as concern that the U.S. recovery may be losing momentum and turmoil in emerging markets boosts haven demand.
“Producers are responding to lower gold prices by treating less low grade material and this results in higher output and reduced costs,” Sandra Close, a director at Surbiton, said in the statement. “The downside in processing higher-grade ore is that some lower grade material that was economic to treat at higher prices, is no longer profitable.”
Gold will decline to $1,011 an ounce in December as U.S. Federal Reserve tapers monetary stimulus and the dollar strengthens, Westpac Banking Corp. said Feb. 20. Goldman Sachs Group Inc. said it will drop to $1,050 by the end of the year.
Fed Chair Janet Yellen said Feb. 27 that the central bank is “open to reconsidering” the pace of scaling back asset purchases should the economy weaken. The Federal Open Market Committee, which next meets March 18-19, announced a reduction to bond buying at each of its past two meetings.