Asia unseats South Africa in gold race
Tuesday, 9 February 2010 12:20pm
Indonesia, Tanzania and China reported the fastest growing output for gold last year - usurping South Africa, once the world's largest gold producer, which saw its production levels drop 5 per cent, according to a precious metals expert.
British research specialist GFMS highlighted that global gold mine production grew by 6 per cent last year to a six-year high.
But South Africa saw its production levels decrease by 5 per cent over the same period.
In contrast, China and Australia are leading the pack with South Africa taking third place in the gold production tables, according to the firm's latest Gold Survey Update.
Despite South Africa's lower output, the African region overall saw growth by 4 per cent. Four of the world's top ten global output increases stemmed from the region, led by a doubling in output in Burkina Faso.
Meanwhile, the fastest growing output figures were posted by Indonesia, Tanzania and China.
Which country produces the most gold is being closely watched by world investors, as the growing weight of investment money is poised to enter the gold market in the first half of 2010.
The result is a likely spike in gold prices, arguably to new record highs, said GFMS.
Investor demand will come amid fears of a double dip recession, continuing huge government deficits, very loose monetary policy and a belief that "...notable, if not runaway, inflation is set to return", said the report.
The consequences to gold prices will be significant - with predictions gold will reach $1,200 an ounce by the second quarter of this year. In comparison, prices in 2009 averaged $972.
Gold peaked at a record $1218 in early December but has since fallen back.
World output was 2,553 tonnes last year, compared with 2,049 in 2008.
Ruth Liew
