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Australian gold production sees slow start to 2021, production down 3% in 2021

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(Kitco News) - Australia's gold production got off to a slow start in the first quarter of 2021; however, according to one research firm, the nation could be on track to surpass China and become the world's top gold producer.

In a report published Sunday, according to analysts at Surbiton Associates, a Melbourne-based gold mining consultancy firm said that Australia produced 74 tonnes of gold between January and March, down roughly 4% from the first quarter of 20202.

Dr. Sandra Close, a director of Surbiton Associates, noted that because of seasonal factors, production is usually lower at the start of the year and then ramps up by the end of the year.

"While gold output for the quarter was down considerably, this is no cause for concern," Close said in the report. "While the majority of local operations treated less ore in the latest three-month period, overall the fact that the gold price remains favorable assisted many producers' bottom lines," Dr. Close said. "The first quarter's production was worth some A$5.5 billion at the average gold price for the period."

The drop in gold mining activity also comes after Australia reported record production in 2020. The nation is also seeing stronger data compared to other countries.

Close pointed out that according to the China Gold Association, Chinese gold production in the March 2021 quarter totaled 74.44 tonnes, only about 5,000 more ounces compared to Australia. Due to COVID-19 issues and tightening environmental regulations, Chinese production is down 9% compared to last year, she said.

"Chinese production figures need to be treated with caution," Close said. "Australia may even be on the way to overtaking China as the world's largest gold producer, but it is far too early to draw any real conclusions."

Close added that Australian mining companies have only scratched the surface when it comes to the nation's mineralization.

"Thanks to higher gold prices in the last couple of years, the gold sector has continued to raise considerable capital and there is a tremendous amount of exploration going on, with excellent results being reported," Close said. "The chances of Australia's gold output declining sharply in the next few years is unlikely."

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