Gold is Back!!

My gosh, what about Barrick, Newmont, Gold Fields, Placer Dome, etc, awful lot of reserves owned by those companies.

 

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I also disagree that this would drive up prices, both projects affected by this would have been 3 years from production anyway. BTW, the issue is not that they want to concentrate resources on oil, but rather that recently certain countries are threatening to nationalize or do away with anything resembling a viable mining sector altogether.

 

I admit Newmont escaped my mind. Didn't Barrick buy up Placer Dome some time ago?

 

Yes, they did, so Barrick is sitting on quite a lot of reserves now (Placer was #5 in Au reserves a few years back). I don't know if it now has more or less than Anglo does. What is the production you see in China that makes it top Au producer?

EDIT: I see now where you are getting the China gold production, basically running neck and neck with South Africa. The strikes in SA haven't helped in that respect.

 

It is not the direct factor in what is driving the price today, oil is. Bushes friends in Saudi Arabia said NO! to his request for increasing production. So that sent oil to a record $128 a barrel and spooks people into going for other safe havens, or those which they think are safe.

 

China was officially credited the largest gold producer last year but at the same time South Africa's production wasn't as high as previous year due to workers striking and bad infrastructure. Recent stringent laws in SA could have make it difficult to mine at times. Edited to add, if people didn't realize, I think a few of SA gold mines are extremely challenging as they are reaching to the depth of nearly 4 kilometers underground and heat at that depth is not a joke.

It was only very recent that some smaller companies found a large amount of gold deposits like Sino-Gold did in Jinfeng. I think Sino Gold is an Australian-Chinese venture company - I've been to their headquarters before looking for a job. Some of the more interesting deposit area is actually at the Inner Mongolia (China) and parts of Mongolia where a large amount of gold is already identified and in the midst of development. (Oyu Tolgoi is the name of the mine which is very interesting) There is also very interesting mineral deposits in Xinjiang, Eastern part of China where gold and oil are found but funny enough is an islamic area. Aren't most oil deposits in Islamic countries? Scary thought.

But again, the key difference of why China's production raised dramatically was because the government did allow foreign investments and skills into the country 10 years ago. China is trying to reverse the policy at the moment as it wants to protect it's national reserve.

 

I agree that SA's mines are deep, I've been down 3km depth there and yes heat and rock stability are issues.

China's production is coming from a few big players and a multitude of small local operations, mostly at shallow depths. However we all have seen examples of China's safety record in mining, and local miners are high-grading rather than establishing long term plans, so the future of production is going to be some combination of those factors.

I agree Oyu Tolgoi is an amazing deposit, it will be interesting to see how that will turn out in the end, given some of the changes the Mongolian government has made regarding operation of foreign mining companies.

 

I read somewhere that China has a death toll annually from coal mining that ranges from 4-6 thousand a year. I am sure that gold mines are not going to be much if any safer.

 

never mind