As prices of precious metals were smashed down mining companies must accommodate to the new environment. The world’s largest gold mining company Barrick Gold has announced plans to slash about 40 positions in Nevada, 15 in Salt Lake City and five to 10 elsewhere in the region. It is just a very small part of the company total 4500 workers in North American operations. Company said that their North American operations are the most valuable and productive business units and they intend to keep it that way. Barrick also announced plans to eliminate 100 jobs at its corporate headquarters in Toronto as well. Reasons behind these actions are apart from falling prices, rising costs and a sagging stock price weighed down by its Pascua-Lama project have plagued the company. Golden Minerals Company announced that it has suspended operations at its Velardena mine because prices of silver and gold do not provide a sustainable cash margin for operations. The company released 470 employees. But the company plans to retain 50 to 60 employees to facilitate a re-start of operations once prices of both metals recover from the plunge.
Russia and Kazakhstan expanded to their gold reserves for an eighth straight month in May, to diversify their assets. Russian holdings climbed 6.2 metric tons to 996.2 tons. Kazakhstan’s hoard grew 4 tons to 129.5 tons. IMF´s data showed that Turkey’s holdings rose 18.2 tons to 445.3 tons and Azerbaijan and Kyrgyz Republic were among other nations that add some gold to their reserves. Contrary Mexico and Czech Republic cut its gold reserves.
U.S. mines produced 90,400 kilograms of silver in March, which means a 4% increase compared with March 2012. Average daily silver production in March 2013 was 2,920 kg, compared with 2,820 kg per day for the full year 2012. It seems to me that it has to be outcome of better usage of technology because grades of mines generally dropping.
The big offensive of the Reserve Bank of India against gold in India has continued. It imposed restrictions on the country’s regional rural banks for lending money against gold and that sales of gold coins will not exceed 50 grams per customer. I am still asking myself if it is gold so huge problem for India why their Reserve Bank does not sell its gold reserves and satisfy demand from its inhabitants. There will be no problem with current account deficit. What do you think? And it seems that another wave of physical gold demand just stated. Gold premiums allegedly doubled in India on Wednesday. Why? Suppliers are not able to meet surging demand due to the fact of the ban on consignment imports and drop of futures prices which fell to their lowest levels since 2010.
Gold output in China will raise probably more that 10 percent this year even though bullion prices slumped. Output may rise to as much as 440 metric tons which is 37 tons more than previous year when the output was about 403 tons. And Chinese miners look also for new opportunities to acquire new projects abroad especially in Africa and Australia.