Australia’s gold production declined in the first quarter of 2025, but soaring global prices ensured strong profit margins for miners despite lower output, according to the latest report from Melbourne-based gold consultancy Surbiton Associates.
Total gold mine production across Australia reached 73 tonnes in the March quarter, a 6-tonne (or 7%) drop compared to the December 2024 quarter. However, output remained 3 tonnes (or 4%) higher than in the same period last year.
The decline comes amid an environment of record-breaking gold prices. Between January and March, gold prices on the London Bullion Market ranged from $2,633 to $3,115 per troy ounce. When converted to Australian dollars, that equated to a range of A$4,232 to A$4,960 per ounce—levels that buoyed the industry’s overall revenue despite lower physical output.
“Effectively, the recent decline in Australian gold production was largely the result of higher gold prices,” said Sandra Close, director of Surbiton Associates. “At today’s prices, the March quarter’s output is worth more than A$12 billion, so it’s understandable that many producers are now optimising their operations in response.”
Impact of Trump-Era Trade Policies
According to Close, much of the recent rally in gold prices was driven by political uncertainty stemming from the policies of U.S. President Donald Trump, who began his second term in January. His inconsistent trade tariffs and regulatory moves have fueled global market instability, boosting demand for gold as a safe-haven asset.
“Higher gold prices make lower cut-off grades economic because what was once unprofitable to mine and treat becomes viable,” Close explained. “This allows operators to extract more gold from each orebody.”
She also noted that high prices have made it economical to reclaim low-grade stockpiled material for processing—material that would otherwise be considered uneconomical. However, this has also led to a decline in the average head grade of ore being treated, which in turn results in lower overall gold production and higher costs per ounce.
“Although cash costs and all-in sustaining costs per ounce rise when head grades fall, the elevated value of each ounce more than offsets these increases,” Close said.
Stockpile Reprocessing on the Rise
Surbiton Associates reported that low-grade, reclaimed stockpiled ore now constitutes about 15% of total ore feed—up dramatically from around 1% just a year ago. This trend has persisted for five consecutive quarters as gold prices have continued their upward trajectory.
While the high price environment would typically be expected to encourage new projects or reactivation of idle operations, Close pointed out that processing capacity remains a major bottleneck.
“Many existing treatment plants are already operating near capacity,” she said. “That leaves limited immediate availability for smaller miners to sell ore or secure toll treatment services.”
Major Mines See Output Drop
Several major gold operations reported significant reductions in output during the March quarter. These included:
Tropicana (AngloGold Ashanti/Regis Resources), down 57,000 ounces
St Ives (Gold Fields), down 40,500 ounces
Tanami (Newmont), down 46,000 ounces
Despite these production setbacks and rising per-ounce costs, Close emphasized that the overall outlook for the sector remains highly positive.
“On the face of it, lower gold production and rising costs per ounce might suggest that the gold industry in Australia is in trouble,” she said. “Far from it. Many gold producers are experiencing high margins and are doing very well.”
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