LONDON (Commodity Online): Gold mined output may fall a little to around 3% and silver will grow by around 4% to almost 24,250 tons in 2012, said Natixis Commodity Markets Limited in 2012 first quarter Metals Review.
According to Natixis, gold output may decline as investment in new production capacity is arriving more slowly than they initially anticipated. Silver mine output may grow at a faster pace as a result of further mine expansions becoming operational such as the Santa Anna mine in Peru, and La Parilla silver mine in Mexico.
Global gold output 2011 a preview
In December, the Chinese Ministry of Information and Technology announced that during the first three quarters of the year gold production was up 4.2% yoy to 259 tons. During that period Chinese output from mines rose 6.5% yoy to 217 tons. For the year as a whole it is estimated that Chinese gold production was around 380 tons, up 8% yoy.
The strike at Freeport’s Grasberg mine in Indonesia, which lasted for almost 6 months, came to an end early in December. During this period, the company lost something in excess of 28 tons of gold to the industrial action.
The environment for Peruvian gold producers has also proved increasingly difficult. After the election of populist President Ollanta Humala, miners have found it more difficult to implement development plans as local communities have been given greater powers to reject new mines that offer them no benefits or are perceived to be harmful to the local environment. In November, Newmont suspended work at its $4.8bn Conga gold project following anti-mining protests. Newmont was the fourth company in 2011 to have cancelled mining investment plans in Peru. Before Humala’s election, miners had intended to invest $50bn in Peru over the coming decade. Despite the strikes, the latest data from the Peruvian government indicate that output dropped by only 1.2% yoy to 149.5 tons during the period Jan11-Nov11.
For 2011, Natixis estimates that global gold output was in the region of 2,800 tons, an increase of around 4% (down from initial forecast for 5% growth), despite problems in both Indonesia and Peru.
Global silver output 2011 a preview
For 2011 Natixis expect silver output to have grown by around 2% yoy to 23,300 tons. Silver production benefited from mine expansions which became operational last year, with particular growth in Mexico at mines including La Negra and San Jose.
Fresnillo, the world’s largest producer of primary silver, was forced to cut output in Mexico to reinforce safety measures following the death of ten workers.
Fresnillo reported that silver output from its mines dropped 5.8% yoy during the third quarter, leading the company to cut its yearly production guidance at the time to 1,275 tons from 1,368 tons. Despite this temporary setback, the company was able to produce a record amount of silver during the year as a whole, reaching its initial target of 1,368 tons.
What held back silver production in 2011 was lower Australian output (the world’s fourth largest producer with 1,860 tons in 2010). Australian silver output received a blow in early 2011 when many mines were flooded due to heavy rainfall in the North and North West of Queensland, home to some of the world’s biggest silver mines.
