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China still biggest gold producer

CHINA'S gold produced 282 tons last year to help secure its position as the world's biggest gold mining country, the China Gold Association said today.

China managed to produce 4.26 percent, or 11.5 tons, more gold in 2008 than 2007, despite the massive earthquake and the financial crisis, the association said today on its Website.

Shandong, Henan and Jiangxi were the top three gold mining provinces, contributing to 46.4 percent of the country's total.

China surpassed South Africa as the world's biggest gold mining country in 2007 with a yearly production of 270.49 tons.

No official figures on South Africa's gold output last year have been released but last month London-based precious metals consultancy GFMS said its output is expected to plummet by 14 percent in 2008, the sharpest percentage fall since 1901.

The Chinese gold mining industry is consolidating, which will cut production costs.

Gold's generally bullish run increased its allure and stimulated output.

Turnover of gold on the Shanghai Gold Exchange, the country's sole gold bourse, skyrocketed 174.8 percent in 2008 to 868.39 billion yuan (US$127.14 billion). Gold sales for jewelry and bullions in retail market also soared last year.

The gold jewelry sales may face challenges due to economy slowdown this year, analysts said, but gold bullion is still expected to remain attractive as a hedge heaven.

South Africa holds the world's biggest gold resources. Its peak gold output once topped 1,000-plus tons in the 1970s. For the past century the country's gold output accounted for nearly one-third of the world's total.

Traditionally, China has not been a top gold miner. Its gold output was merely 4.5 tons in 1949, rising to 100 tons by 1995 and 200 tons by 2003.

Chinese has a traditional frenzy for gold as a fortune symbol. China deregulated its gold market by setting up the Shanghai Gold Exchange in 2002.


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