Report outlines improving state of the market

Early production announcements for the three months to end-December (Q4) demonstrate positive growth in metals production, compared with results published for the September Quarter (Q3). The weighted average of all announced Q4 production showed an 18% increase in gold output, a 6% improvement in copper and 3% rise in iron-ore, compared with production in the prior three-month period.

As indicated in the quarterly State of the Market Report by IntierraRMG, significant rises came in both Africa
and Asia. The size of the spike in Asian gold being partially due to Centerra Gold’s announcements that they had overcome production delays at Kumtor. Other notable changes include operations in the copper sector, where the biggest actual increase in production (quarter-over-quarter) came at the massive Escondida mine.

Production there has benefited from the transition to higher -grade ore feed, and the successful completion
of large-scale maintenance programmes to increase concentrator throughput.

Commenting on the gold sector specifically, IntierraRMG’s Editorial Director, Chris Hinde, stated: “A number of North American and African mines showed strong Q4 production increases. Goldcorp's cornerstone mine, Red Lake, ended the year with operational stability, a strong production result and newly-discovered mineralised zones. The latter holds the potential to contribute to the production profile over the longer term.”

The State of the Market Report also notes that two significant Australian iron-ore mines announced sharply higher production for the December quarter, with strong results from Chichester Range and Yandi. The result from Chichester Range contributed to Fortescue’s announcement that in December 2012 the company's operations had achieved an annualised shipping rate of more than 100Mt/y. The result from Yandi helped BHP Billiton to announce that its Western Australia Iron Ore (WAIO) division had delivered a 12th consecutive December half year production and sales record.

Supply trends are analysed by assessing new mine openings each quarter. One such mine is Barrick Gold’s 60%-owned Pueblo Viejo gold mine in the Dominican Republic. Initial production was announced during the December quarter from an operation that is exploiting a deposit containing 25.3Moz of gold. Subsequent announcements indicate that ramp-up to full capacity is expected to occur in the second half of this year, and production for calendar 2013 is anticipated to be 500,000-650,000oz.

Production at Rio Tinto’s Benga coal mine in Mozambique’s Moatize Basin continues to ramp up. The State of the Market Report highlights that work has been undertaken to expand capacity on the Sena railway line to eliminate a bottleneck in the system. The December quarter was also significant for magnetite, with the mid-November announcement by Gindalbie Metals Ltd that it had produced the first magnetite concentrate from its Karara project.

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