Business News of Tuesday, 14 January 2014
Source: Graphic Business
Goldcorp forecast that the company’s gold production will grow by 13-18 per cent this year to between three million and 3.5 million ounces. In a press release issued, the Mexican mining company with concessions across South America predicted gold production would increase by 50 per cent over the next two years along with a reduction in an all-in sustaining cost of 15-20 per cent during that period.
For 2014, the company estimates that all-in sustaining costs will decrease to between $950 and $1,000 per ounce, compared to $1,065 per ounce in 2013. “Decreasing costs are expected to be driven by increasing grades and by-product production, lower costs of production Goldcorp’s continued overall focus on cost efficiencies through the Operating for Excellence programme,” said Goldcorp. The company reported 2013 gold production of 2.67 million ounces, an 11 per cent increase over 2012.
Gold premiums soar in India
Meanwhile, a surge in the physical gold premium to new levels signals strong demand from India. An Indian wedding without gold is an unheard of thing. With the nation moving into wedding season mode, gold importers are making hay across the country, asking for extremely strong premiums from jewellers, who have been rushing to get hold of the precious metal.
"Imports are down to a trickle. There is absolutely no gold available anywhere in the country. Most jewellers have been making do with recycled gold, but given the wedding season that is upon us, many of us are finding it difficult to keep pace with the soaring demand for gold,'' said Manish Kedia, bullion retailer. While some retailers said they paid up premiums as high as US$120 an ounce, on December 6, premiums crossed US$180 an ounce higher than London prices.
Good news for Ghana
This could be good news for Ghana which earns enormous sums of money from gold trade. Besides, Newmont Ghana, AngloGold Ashanti and Gold Fields Ghana Ltd, there are a lot of medium and small scale mining firms in the country.
However, due to a slump in price and production, the country earnings from nine months of exporting gold dropped from US$4.28 billion in September 2012 to US$3.67 billion in the same period last year. With the projected 50 per cent increase in prices coupled with rising demand from places such as India, it is expected that Ghana can take advantage and rake in some windfall.
December 5 was the first Thursday of the Margashirsha Lakshmi Puja, the most auspicious time for seeking the blessing of Goddess Laxmi, the Goddess of fortune and prosperity.
The puja (reverence, homage) is as important as the Lakshmi puja at Diwali, when the Goddess of wealth is revered and honoured, and holds immense significance across the country. Many people tend to offer gold coins or small gold items at the time of the puja,'' said Manganeshwar Dholke, bullion retailer.
Given the scarcity of gold at the retail end, jewellers have been paying high premiums to source the precious metal. Dholke added that it was not only the rush for the wedding season that had pushed premiums ever higher.
"There is a severe slowdown in the recycled gold trade. Earlier, jewellers were not so keen to source gold at these high premiums and made do with scrap and recycled gold. Demand has soared in the past week to such an extent that, though premiums jump by around $10-$20 a day, there are many retailers who are queuing up for gold,'' said Haresh Soni of the All India Gems and Jewellery Trade Federation.
Incidentally, gold is bought in India during the festive season, for marriages as part of the bridal trousseau and almost always on an auspicious occasion as an offering to the gods, which could be moving into a new house, buying a new vehicle, children getting educational degrees, in-laws marriage anniversary, birthdays, children going abroad for studies — the list is limitless. It is expected that premiums may cross US$200, if the government does not ease the rules on gold import soon.