GOLD has always been a safe haven for investors in times of trouble and uncertainty.
GOLD has always been a safe haven for investors in times of trouble and uncertainty.
No clearer example of that appeal can be seen than in the performance of Western Australia's gold sector.
While increased production in other states has resulted in WA's share of mine output declining in recent years, local output still accounts for more than 60 per cent of all gold mined nationally.
Consequently, the value of gold mined in WA last financial year rose by 25.8 per cent to $5.19 billion.
The gain was largely the result of much stronger prices, which averaged $US874 per ounce for the year. In Australian dollar terms, the average price rose 28 per cent to $1,171 per ounce in 2008-09.
The strong Australian-dollar gold price more than offset a 4.15 per cent decline in WA production to 135.6 tonnes, or 4.4 million ounces.
Three major producers dominated WA's gold mine production - Barrick Gold, Newmont and Newcrest Mining - which combined produced more than 2.1 million ounces worth almost $2.5 billion in 2008-09.
The biggest single producer in WA was Canada's Barrick Gold, which produced 787,000oz from its half share in the Kalgoorlie Super Pit, plus its Yilgarn South and Plutonic operations.
US-giant Newmont produced 697,000oz from its stake in the Super Pit and its wholly owned Jundee mine near Wiluna, followed by Melbourne-based Newcrest Mining, which produced more than 629,000oz from its redeveloped Telfer mine in the Pilbara.
But WA's real grunt in the gold industry comes from its role as the primary gold and precious metals refiner in the Australasian region.
Refiner AGR Matthey, in which the state government holds 40 per cent through Perth Mint operator Gold Corporation, refines all gold produced in Australia as well as large tonnages of gold produced in surrounding nations such as Papua New Guinea, Thailand, New Zealand, Fiji and Malaysia.
With gold prices soaring, AGR Matthey was again the state's second biggest export earner with revenue estimated at just over $16.5 billion in 2008-09, almost $5.5 billion more than in the previous financial year.
The bulk of this reflects increased imports of gold produced interstate and overseas for refining, which were then re-exported overseas. In total, Australia exported 437t of gold, mostly from AGR's refinery near Perth Airport, compared to the 217t actually produced at Australian mines and 135t produced at mines in WA.
Including sales within Australia, AGR Matthey reported total revenue of around $21.4 billion.
The big increase in AGR's revenue base flowed through to WA taxpayers through Gold Corp, which last week reported a 10-fold increase in pre-tax earnings in 2008-09 to a record $38 million following a 200 per cent increase in turnover to $2.48 billion.
However, the tiny margins that prevail in the metals refining sector could be seen in AGR's relatively modest contribution to Gold Corp's result of $8.7 million. In 2007-08, Gold Corp's share in AGR generated a loss of $2.7 million.
Still, Gold Corp delivered a significantly improved dividend of $16 million to the state government for the year, compared to just $823,000 in 2007-08.
Gold Corp chief executive Ed Harbuz attributed the turnaround to global uncertainty.
"Precious metals are traditionally a safe haven investment and the uncertainty and volatility in global equity markets resulted in significantly higher levels of activity across all of Gold Corporation's business divisions," he said.
Unit sales of minted products jumped 50 per cent to 2.7 million bars, coins and medallions, while the value of precious metals held on deposit for customers of Gold Corp's depository business jumped by a third to $2 billion.
Mr Harbuz said although improving economic conditions were likely to lead to an easing in demand for precious metals over the next year, Gold Corp was positive about the year ahead and would look to build on renewed interest in its products.
It also hoped to build on the 77,000 visitors who visited the historic Perth Mint last year by refurbishing the visitors' centre.