Figures for the first five months of this year published yesterday by China’s Ministry of Industry and Information Technology show the country’s gold output for the period rose 6.59% year on year to 140.7 tonnes. However this suggests that the world’s largest gold producer’s pace of increase in output could be declining, although it is yet too early to say. But, in relation to the 10% year on year gold production growth reported at the end of the first quarter the latest figures suggest the rising trend in output may have declined in April and May.
Even so, May gold production was still put at 31.2 tonnes – a figure which, if extrapolated over the full year would see total output rise nearly 4% above last year’s total of 360.96 tonnes.
While such figures do give a guide to the general direction of the country’s gold mining industry they may well not tell the true picture. Some commentators have suggested China produces more gold than the official figures suggest noting that small mines outside the aegis of the China Gold Association do not necessarily have their gold recorded in official statistics and also that the significant gold by-product from China’s big base metals concentrate custom smelting industry may also not be included in official figures.
Writing here on Mineweb back in April in an article entitled: The world gold market and China’s ‘profound influence’ precious metals analyst Jeff Nichols noted, following a visit to China and discussions with Chinese colleagues: “China’s total gold supply from domestic mine production and other sources is probably much higher than reported or discussed by analysts and observers of the Chinese gold scene. Actual gold-mine production – and supplies from other sources – could easily be close to 400 tons and possibly much more. Here’s why:
“My understanding is that the mine-production numbers from the China Gold Association (CGA) include mine output by their members only – but not non-members such as many small, rudimentary, unofficial mines operating in the “underground economy.”
“The CGA data also excludes production from mines owned and operated by the military as well as by-product output from the country’s copper, silver, and other metal-mining activities.
“Also missing from the CGA reports are the very significant quantities of gold contained in copper and precious-metals bearing concentrates imported from abroad but processed by Chinese smelters and refiners.”
But back to the ‘official’ figures – with almost half of the official production figure coming from the country’s top 10 gold mining companies the fact that growth from these companies was only 0.96% year on year does suggest the overall pace of increase may indeed be slowing down.
But, like its gold import figures and Central Bank gold holding reports, China’s official pronouncements on gold-related matters are perhaps not as transparent as they could be with the impression official sources’ statistics may record what the government wants outsiders to believe rather than the true picture. But then China would not be the only nation to manipulate official statistics in a politically expedient manner!
iPad Version: Picture – An employee arranges gold jewellery in the counter as her arm is reflected in the mirror at a gold shop in Wuhan: REUTERS/Stringer China