Bloomberg News

GFMS Says Gold Mining Cash Costs Increased 19% in First Half

September 04, 2012

Gold producers’ average total cash costs jumped 19 percent to a record $727 an ounce in the first half as output was little changed, Thomson Reuters GFMS said.

The average cash margin dropped to $872 an ounce in the second quarter from as much as $1,032 an ounce in last year’s third quarter, as the average all-in cost of production climbed to $1,050 in the first half, the London-based researcher said today in a report. Output rose 0.1 percent to 1,366 metric tons in the first half from a year earlier and second-half supply will rise 1.7 percent year-on-year to 1,482 tons, GFMS said.

The average grade of ore processed globally dropped 23 percent from 2005 through the end of last year and will probably decline another 4 percent this year, GFMS estimated. Peru’s gold output rose 6 percent to 97.2 tons in the first half, beating South Africa and Russia as the fourth-biggest producer in the period. Russia and South Africa were the fourth- and fifth- biggest miners last year, after China, Australia and the U.S., according to GFMS.

Producers reduced gold hedges by 8 tons in the first half and will cut forward sales by another 12 tons in the second half, 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

To contact the editor responsible for this story: Claudia Carpenter at

Toyota's Hydrogen Man
blog comments powered by Disqus