WASHINGTON, D.C. (August 18, 1999) — Trends in declining exploration expenditures and the closure of high cost mines are beginning to lower projections for future gold production, as reported in The Gold Institute's annual forecast of world gold mine production, released here today.

The report, World Gold Mine Production 1998-2002, presents actual production figures for 1998 with projections for gold mine output through 2002. The study was compiled by The Gold Institute with the participation of more than 100 mining entities from 70 countries supplying actual production data and projections.

Despite gold prices that averaged $37 per ounce less than in 1997, world gold mine production grew 3 percent in 1998 to reach 82 million ounces. The new forecast for 2002, at 83 million ounces, shows 1 percent growth from 1998. However, those projections were made when gold was at $285 per ounce. It is likely that if the current $255 price had been taken into consideration some forecasts would have been lower. Unless prices recover, instead of growing 1 percent, it is more likely that production will decline 1.5 percent to 2 percent per year for the next few years.

On a regional basis, the trends identified last year are continuing. Twelve percent growth in Latin America and 7 percent growth in Asia are offset by declines of 11 percent in Oceania and 7 percent in North America.

The South African industry, the world's largest gold producer, saw 1998 gold mine production at 15 million ounces, 5 percent less than in 1997 and 2 percent less than forecast a year ago. The AIDS epidemic sweeping through the mines is having a severe negative effect on productivity. Although this industry forecast a 4 percent increase in production by 2002, this may be optomistic in light of current prices. If production continues to decline at the rate it has for the past five years, South Africa will produce only a little over 12 million ounces in 2002.

The United States gold production increased to 11.7 million ounces from 11.4 million ounces in 1997.

This 2.6 percent increase was in sharp contrast to the 4 percent decrease that had been forecast the year before. However, companies are forecasting 1998 will be the peak and U.S. production is expected to decline 6 percent to just over 11 million ounces in 2002.

Australia's gold production topped out in 1997 at 10.1 million ounces, declined slightly in 1998 and is projected to decline steadily through the year 2002. A reduction totaling 1.2 million ounces or 12 percent is expected to bring production down to 8.8 million ounces in 2002.

Gold production in Canada peaked in 1991 at 5.6 million ounces and has since fluctuated between 4.7 and 5.4 million ounces. 1998 production of 5.3 million ounces is forecast to decline to 4.8 ounces in 2002.

Indonesia has experienced tremendous growth in gold production since 1990. With a dramatic 700 percent increase in productivity, Indonesia will probably overtake both China and Canada in the next three years with projected growth of 11 percent to 5.2 million ounces in 2002.

To obtain copies of the World Gold Mine Production 1998-2002 , see our publications list.