WGC tips flat gold consumption for year

PUBLISHED : Monday, 05 September, 1994, 12:00am
UPDATED : Monday, 05 September, 1994, 12:00am

EAST Asia's gold consumption this year may stay flat at last year's level of 966 tonnes despite a slight setback in the first half of the year, World Gold Council (WGC) officials say.

Consumption fell by five per cent to 483.9 tonnes in the first half of this year from the same period in 1993, said Kitaru Inagaki, WGC area manager for southern Asia.

But he expected consumption to pick up in the coming months as a result of Christmas and other holiday seasons.

'We believe consumption will peak in the coming months to bring the 1994 total to more or less the same as in 1993.' Demand from China slowed in the first half but this could be offset by better offtake in South Korea and Indonesia, he said.

WGC figures showed China's demand fell by six per cent to 53.5 tonnes in the second quarter of the year from the same period in 1993 because of Beijing's austerity package and the government's gold industry reforms aimed at eliminating the black market.

But South Korea posted the highest regional growth at 63 per cent in the second quarter because consumers sought the security of gold in the face of recent developments in North Korea.

The WGC said this did not include the unofficial flows of gold coins going into South Korea from Hong Kong.

Mr Inagaki said despite the slump in China, the Asian market still offered the best growth prospects for gold consumption.

He said Asia (excluding India) was the world's single biggest gold market, accounting for 53 per cent of Western newly mined gold - which amounted to 1,819 tonnes in 1993.

WGC officials said the region's growing consumer spending continued to outweigh higher gold prices, while consumer perceptions of gold were also changing.

Jan Cheng, WGC manager for Malaysia and Singapore, said: 'In Asia, we have traditionally seen gold as a safe haven. This is now changing, at least for gold jewellery.

'Today, people are increasingly regarding gold jewellery, and the way it is designed, as a personal statement.' Mr Inagaki said to further tap the region's gold potential, the WGC would be organising a two-day conference and exhibition on gold in Singapore from September 29.

'The show, dubbed GoldAsia '94, will - for the first time - provide Asian buyers and sellers with a comprehensive view of the Asian gold market,' he said.

The Swiss-based WGC is funded by several leading gold producers.

Meanwhile, Australia's Gold Mines of Kalgoorlie and Homestake Gold of Australia said they would increase the capacity of their gold ore treatment plants at Kalgoorlie from 5.1 million to 9.1 million tonnes a year.

The two companies each own 50 per cent of Kalgoorlie Consolidated Gold Mines, which operates Australia's largest gold mine, the Super Pit, at Kalgoorlie in Western Australia.

The expansion programme for the Fimiston treatment plant will cost A$115 million (about HK$658.95 million).

The new capacity will allow the two companies to maintain gold output when the Oroya treatment plant, which has a capacity of 2.8 million tonnes a year, is removed to make way for an expansion of the giant open pit.

The companies said the capacity of the Fimiston treatment plant would be increased to 7.5 million tonnes of Super Pit ore a year.