Gold News

Gold output 'to fall amid rising costs'

One of the world's biggest gold mining companies has said that it expects output of the precious metal to fall in 2008.

Newcrest Mining, owner of the Telfer mine in Australia, said in a statement that gold will cost $55 per ounce more to extract than it did in 2007, which may put production out of the financial reach of many smaller companies, Trading Markets reports.

However, investors in gold may be interested to know that demand for the commodity is still rising, especially from countries like India, which could increase prices.

"The cash costs for gold miners have gone up by $200 an ounce over the last five years. The discovery rate [of new gold veins] hasn't gone up and overall gold output will fall in the future," said Newcrest Mining chief executive Ian Smith, according to Trading Markets.

GFMS reported earlier this year that global mine production fell by 0.4 per cent in 2007, while demand rose by five per cent.

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