Aussies to spend A$7b on gold sector

Australia’s gold-mining industry will spend roughly A$7 billion, or an increase of 3.6%, on capital investment, exploration and operations in 2003-04, according to a recent survey by accounting firm Deloitte Touche Tohmatsu.

The 2003 Gold Investment Survey, commissioned by the Melbourne-based Australian Gold Council (AGC), says that the lion’s share of investment, or A$6.6 billion, will be spent in regional areas of the gold industry where 17,000 of the roughly 20,000 gold-sector workers are employed.

In addition, the survey found that Australian-based gold companies would spend about A$97 million on environmental projects and contribute more than A$17 million to community development in 2003-04.

For the first time, AGC members were surveyed on their activities in the Asia-Pacific region, which excludes Australia. Gold companies said they expected to invest more than A$1.2 billion in operations and exploration in the region.

The 2003-04 domestic investment forecasts represent an increase from the A$6.7 billion spent by the domestic gold sector in 2002-2003.

“While Australian gold production fell slightly last year, a jump in the gold price during the first six months of 2003 has underpinned confidence for the year ahead,” says AGC Chief Executive Officer Tamara Gorrie.

The rise in investment spending comes at a time of continuing consolidation and rationalization of production in the Australian gold sector.

The survey assessed the investment proposals of major producers, exploration companies and contractors. In Australia, the survey found that in 2003-04, gold producers will spend more than A$4.7 billion on exploration, operations and capital improvements, and that contractors would invest another A$2 billion.

Gold producers are expected to employ a total of 11,251 people in 2003-04, with more than 10,000 of those in regional areas; contractors were expected to employ 7,889 people, with nearly 6,400 in regional areas.

Despite a forecast increase in exploration investment by explorers, the exploration sector still accounted for less than 3% of total investment activity in Australia.

Survey results are available at www.australiangold.org.au