for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Energy

Gold mines will produce more than ever in 2021: Metals Focus

FILE PHOTO: Gold products on sale are displayed at a shop in Hanoi June 11, 2013. REUTERS/Kham

LONDON (Reuters) - The world’s mines will produce 3,368 tonnes of gold this year, down 4.6% from 2019 and the lowest in 5 years, but high bullion prices will help to push up output by 8.8% to a record 3,664 tonnes in 2021, consultancy Metals Focus said on Wednesday.

Demand for gold, meanwhile, will fall 25% this year to about 3,000 tonnes before recovering 17% in 2021, the consultant’s head of mine supply, Adam Webb, said in a webinar.

Three thousand tonnes of gold is worth about $180 billion at current prices. XAU=

The coronavirus pandemic forced many mines to close temporarily and curtailed sales of gold jewellery, but it also triggered a rush to buy gold for its perceived safe-haven status.

These investors pushed prices XAU= above $2,000 an ounce earlier this year, the highest level on record, and Metals Focus said prices are likely to average more than $2,000 in 2021.

It said mining companies’ earnings per ounce in the second quarter of 2020 were on average $739 higher than their costs, up from about $350 in mid-2019.

Production of gold by artisanal and small-scale (ASM) miners using basic technology will decline slightly this year before increasing 13% to more than 600 tonnes in 2021, the most on record, Metals Focus said.

Reporting by Peter Hobson; Editing by David Goodman

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up