Gold to shine as output declines
Rebecca Bream,London
April 04, 2006
ANGLOGOLD Ashanti chief executive Bobby Godsell predicts that worldwide
gold production will stagnate
and then fall in the coming years as large deposits of the precious metal become scarce.
He said this would support the rally in the gold price, which last week hit a 25-year high of $US588 an ounce.
The South African company, the world's third-biggest gold producer, mined 6.2 million ounces of gold in 2005 but expects production to be lower this year, between 5.8 million and 6.1 million ounces, and then increase again in 2007 as new projects come on stream.
But Mr Godsell warned that the gold industry would find it hard to keep up current levels of production.
"All of the gold majors are finding it difficult to replace their reserves," he said.
"New mine production will be flat to declining."
RBC Capital Markets in London estimated that total gold production would rise slightly this year and next, be flat in 2008 and start to fall in 2009. "There hasn't been a big gold discovery for years," an analyst said.
Mr Godsell said: "Gold is precious because it is scarce. Twenty years ago the majority of gold was produced by four countries: South Africa, Australia, Canada and the US. In the future it will be anything but. Tomorrow's ounces of gold are going to be in interesting countries."
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