Thursday, 16th March 2006 (2928 views)

China could become the world's largest producer of gold in just three years time, according to a leading gold analyst.

Speaking at a presentation in Johannesburg today (March 16th), Jeffrey Christian, managing director at consultancy CPM, said South Africa was in danger of losing its crown if present trends persist.

South Africa has been the world's biggest gold producer for decades but saw gold output fall to 9.5 troy ounces last year, the lowest level since 1923.

China currently produces about seven million ounces of the yellow metal annually, up from just three million ounces a decade ago.

If Chinese gold production continues to grow at five per cent annually then it will catch South Africa by 2009, Mr Christian asserted.

"There is quite a bit of exploration on the go in China," he was quoted to have said by the Mail & Guardian Online.

With local producers struggling against unusually high costs, the South African market is also in danger of being caught by Australia, added the analyst.

This would represent a dramatic fall from grace for South Africa, which Mr Christian said was responsible for "75 to 80 per cent" of global gold production when he started out in the business.

 

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