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REPORT: Australia Gains Control of Gold Mining Industry

Australian owned mining companies account for approximately 50 percent of gold mining operations in Australia, according to a recent report by mining co...

Admin
|Aug 5|magazine5 min read

Australian owned mining companies account for approximately 50 percent of gold mining operations in Australia, according to a recent report by mining consultancy Surbiton Associates.

The shift in control is contributed to foreign investors selling off their stake in Australian mines, giving local companies more control of the country’s $12-billion gold mining industry.

“When the gold boom started in the early 1980s, Australia’s control of its domestic gold mining industry was around 80 percent,” says Surbiton director Dr. Sandra Close. “However, around the turn of the new century, there was a spate of overseas takeovers when the Australian dollar was weak and Australian control fell below 30 percent.”

The tide has changed with Australia climbing back, now owning 50 percent of Australian mines.

In the past year Canada’s Alacer Gold sold two of its mining operations to Australia-based Metals X and Northern Star purchased the Jundee mine from Colorado-based Newmont Mining.

“Several of the world’s largest gold producers have switched their strategy from chasing ounces to rationalization and cost reduction. This does not always sit easily in an Australian context as, unlike many other gold producing regions, Australia’s production comes from a considerable number of smaller mines, rather than a small number of larger mines,” said Close.

For years companies have held on to these Australian operations, viewed as long-term operations, as the amount of gold output contingent on the overall production schedule.

“So it looks great on paper, but the practicalities are such that much of our gold reserves are for the very long term. For a sustainable industry, we still need production from traditional primary gold deposits, and ongoing exploration is as vital today as it ever was,” Close added.

Australia is home to the world’s largest gold reserves.