World gold production to decline 3% per year – Cutifani
AngloGold Ashanti CEO Mark Cutifani says world gold production will continue to drop for the next five years and gold fundamentals will assert themselves.
Posted: Thursday , 30 Oct 2008
AngloGold Ashanti CEO Mark Cutifani expects gold production to drop 3% per year over the next five years as the gold industry has failed to make the necessary investment in the industry.
Cutifani said today gold production in the South African, Australian and North American industries was in decline, while production in the "brave new world" of South America and continental Africa was growing. However, the net effect was still a declining industry.
He said we were set to see another five years of decline in the industry as the industry had not seen the same amount of investment as other metals since the commodity boom. At the same time deep level mines were coming under increasing pressure.
The global gold industry has been in decline for the last seven years.
Cutifani said he didn't know when the gold fundamentals would fully assert themselves, but mentioned it could take three to six months.
"We believe there is a structural break in the industry and we do believe fundamentals will drive an improvement in the gold price."
Cutifani's comments on the gold industry came after Gold Fields CEO Nick Holland told Moneyweb Radio yesterday he believed the gold price would go to $1,000/ounce and remain at that level during 2009. (see Gold to reach $1,000 next year - and stay there: Gold Fields CEO)
He pointed out the price would have to be at this level to restore the margin and keep the industry going, but said the price was unlikely to go much beyond $1,000/ounce.