GFMS Says Gold Mining Cash Costs Increased 17% to Most Ever
Gold producers’ average total cash costs climbed 17 percent to a record $736 an ounce in the first nine months of last year, Thomson Reuters GFMS said.
The average cash margin increased by $12 an ounce to $915 an ounce as prices advanced, the London-based researcher said today in a report. The average all-in cost of production gained 7 percent last year to about $1,150 an ounce, it said. Output rose 0.2 percent to a record 2,841.9 metric tons last year and first-half supply will climb 1.5 percent from a year earlier.
South African gold production slumped 11 percent to 179.8 tons last year due to labor unrest, according to GFMS, a unit of Thomson Reuters Corp. While Peru’s output declined 2 percent to 184 tons, it moved above South Africa to become the fifth- biggest miner, the report showed. The U.S. and Russia were the third- and fourth-biggest producers last year, after China and Australia.
Mining companies reduced gold hedges by 20 tons last year and will probably cut another 6 tons from forward sales in the first half of this year, compared with 11 tons a year earlier, the researcher said. Miners can sell future output at fixed prices to secure loans and may cut hedges by buying back contracts, adding to demand.
Bloomberg competes with Thomson Reuters in selling financial and legal information and trading systems.
To contact the reporter on this story: Nicholas Larkin in London at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Carpenter at email@example.com.