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Friday, Dec 03, 2004

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Gold output may slip on low supply from mines

Our Bureau

Mumbai , Dec. 2

IN the past, high gold prices have provided encouragement to mines to expand gold production; but over the next few years gold output is unlikely to rise, despite current high rates.

In the medium term, global mine output of the yellow metal is forecast to trend lower despite an increase in global output expected in 2005 in part due to a recovery from temporary factors that hit global mine production in 2004, according to GFMS Ltd.

From a moderately higher base of 2005 of 2,650 tonnes, GFMS has predicted that global output will decline by an average of 30 tonnes per annum over a five-year period to reach 2,494 tonnes in 2010, in a base case scenario.

Several new mining projects are being planned. Notwithstanding the ongoing 50-odd feasibility studies, it is unlikely that all the projects will be developed. There could be delays in permission, financing and construction of new mines. Therefore, an optimistic view is that global output could peak at 2,660 tonnes in 2006 and start declining then on.

The London-based consultancy has commenced a `mining project alert service' to provide a comprehensive quarterly update on advanced exploration to development stage gold and silver projects covering 43 countries.

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