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The Dominant Producing Countries

It is known that the Egyptians mined gold before 2000 BC and the first coin containing gold was struck in the eighth century BC. It is believed that the first pure gold coin was struck on the orders of King Croesus of Lydia in the sixth century BC.


The best estimates available suggest that the total volume of gold mined over history is approximately 155,500 tonnes, of which around 64% has been mined since 1950. The upward trend in annual production is now levelling off, due not least to a considerable slowdown in exploration spending in the late 1990s. Independent analysts are of the belief that mine output will remain flat for the next few years and may even drop slightly. For a history of gold mining, click here.
Gold is produced from mines on every continent with the exception of Antarctica (where mining is forbidden), in operations ranging from the tiny to the enormous.
The dominant producing country for much of the 20th century was South Africa, which in the early 1970s was producing 1,000 tonnes per annum, or over 70% of the world total at that time. This position has been eroded in the past two decades, however, as South African production has dropped (due in part to ageing mines and reduced flexibility), while other nations have expanded their output considerably.
Nonetheless, in 2005 South Africa remained the world’s largest producing nation, with just over 296 tonnes and 12% of the total, but Australia was not far behind with almost 263 tonnes (10%), closely followed by the US with 262 tonnes. The most spectacular rises in output over the past decade have come from Indonesia, which in 1992 produced just two tonnes of gold but in 2005 produced over 167 tonnes, predominantly from the Grasberg mine, which is the world’s largest gold producer, from a copper-gold deposit (Rio Tinto and Freeport Copper & Gold in a joint venture); and Peru, where production has risen from 18 tonnes in 1992 to 207 tonnes in 2005, of which almost half came from Newmont’s Yanacocha mine, the second largest in the world, which is 14,000 feet above sea level in the Andes.


At the other end of the scale, there are a myriad of very small “artisanal” miners operating as one-man bands, panning for alluvial gold or working shallow outcrops in many parts of Africa, Latin America and Asia, and finding perhaps only a few ounces in any one year.
Increasingly gold is mined in developing countries (other than South Africa) including some of the poorest. Many of those designated as Heavily Indebted Poor Countries by the World Bank are gold producers. For some of these countries gold comprises a significant proportion of their exports; it accounts for over a third of goods exports in the case of Ghana and around half for Mali, for example.
Some mining companies refer to their output in terms of ounces, and their ore grades in terms of ounces per tonne (or in some cases in North America, per short ton). Others use the metric system. For a table of weights and conversions, click here. In the main, gold is thought of in terms of the troy ounce, which takes its name from the old French city of Troyes, where there was a regular marketplace at which gold was traded.
Grades vary enormously with ore bodies. Generally, the largest South African underground operations run at between eight and ten grammes per tonne (i.e. eight to ten parts per million), with more marginal South African operations grading between four and six grammes per tonne. At a grade of 10 grammes/tonne, therefore, it takes more than three tonnes of ore to produce one ounce of gold. Many of the world’s operations are open pits, which tend (generally) to be of lower grade than the underground mines, running from as low as one gramme to three or four grammes per tonne. While this low grade is instructive in that it shows how rare gold is in the ground and gives an idea of how much rock has to be shifted to produce the metal, production costs are a more important parameter in determining the quality of an operation and these are a mix of both grade and operating costs.
The world’s deepest gold mine is currently the Savuka (which means “rise up”) mine on the north-west rim of the Witwatersrand Basin in South Africa. This operation mines to a depth of 3,777m. Savuka yielded 5.68g/t in the fourth quarter of 2002.
This means that, on a simplistic basis and working solely to the average numbers (and assuming a rock density of approximately 3.5kg m-3), some of Savuka’s miners are working at a depth of almost 2.4 miles, mining an ore grade which contains almost 20 cubic centimetres of gold in every cubic metre of rock. That’s just under 20 parts per million by volume and attests to the high technological achievements of the industry.
Production costs vary widely, according to the nature of the mine, be it open pit or underground and at what depth, the nature and distribution of the ore-body (and by implication the metallurgy which affects processing techniques) and the grade. Average quoted cash costs for 2005 were estimated by GFMS at US$269/ounce with total cash costs (including depreciation, amortisation, reclamation and mine closure costs) at US$339/ounce.
Note also that these figures do not include greenfield exploration and other ancillary costs and so most mining analysts add a further $30-40/ounce, depending on the mining company concerned, to come to an estimate of true total costs. Thin margins made by the mining companies in the second half of the 1990s meant that exploration expenditure tended to suffer.




Date: 2015-12-24; view: 907


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