Flat outlook for gold output

Gold miners around the world project flat production through to 1996, The Gold Institute of Washington, D.C., reports in an annual survey.

The survey, in which more than 200 producers were assessed, says output is expected to decline by 1% in 1993 and remain at that level through to 1995, with a 1% increase expected for 1996.

The slowdown is attributed to a relatively stagnant gold price during the past five years, which affected exploration budgets. The price of gold in London last peaked in December, 1987, at just above US$500 per oz. A rally this year has seen the price climb past US$400 from below US$330. South Africa, the world’s top producer, turned out 19.7 million oz. in 1992 and the report says 19.9 million oz. are projected for 1993. By 1996, annual production from the country may dip to 18.5 million oz.

Canada, with total output of 5.1 million oz. in 1992, is expected to see its output drop to 4.3 million oz. in 1996.

The U.S. is expected to mine 10.2 million oz. this year, down from 10.3 million oz. in 1992. (This would mark the first decline in output since 1978.) Production is expected to be flat during the next two years and rise by 8% to 11.6 million oz. in 1996.

American producers say they are fighting a lacklustre gold price and increasing political risk involved with permitting and mining the metal. “The risk factor is increasing faster than the price of gold,” says John Lutley, president of The Gold Institute. “The ongoing battle over the Mining Law is shifting exploration expenditures away from the U.S.”