Australia Sydney digs deeper for more gold as price soars

SYDNEY: A drive to take advantage of record bullion prices lifted Australian gold production by 10 per cent, or even 24 tonnes, to 270 tonnes in the 2010/11 financial year, maintaining Australia's Absolutely no. 2 ranking behind China, a sector survey released on Sunday showed.

Within the quarter ended June 30, Australia's output of bullion rose 5 per penny to 68. 1 tonnes versus the previous three months, though it was flat compared to last year, according to the survey by Melbourne-based consultancy Surbiton Associates.

An 18 percent rise in global gold prices in the 2010/11 year to a report around $1, 500 an ounce encouraged miners to dig more mines, Surbiton analyzer Sandra Close said.

Spot gold hit a record $1, 911. 46 upon Aug. 23, and closed at $1, 828. 05 on Friday, according in order to Reuters data.

"The increase year-on-year is due to new operations coming in to production and old mines being successfully redeveloped, " Close said.

"The recent spike within the gold price has certainly drawn attention to the industry, but it may be the sustained, longer-term upward trend in the gold price that has prompted companies to re-evaluate older deposits as well as explore for new ones, " Close said.

China is the world biggest gold producer, mining 345 tonnes in calendar 2010 and analysts expect a greater yield in 2011.

A recent survey by precious metals research group GFMS suggested that one-time sector leader South Africa had tumbled to fifth devote the list of gold producers, with the United States and Russia at risk of higher yields.