Saturday, 28 March 2009

Philippines may produce 27% more gold this year

By Luzi Ann Javier and Haslinda Amin
Bloomberg
Manila Standard
http://www.manilastandardtoday.com/?page=news5_mar27_2009

THE Philippines may this year produce 27 percent more gold, its most valuable metal export, as mining companies start new projects or expand mines to meet rising demand, the government said yesterday.

Output will expand to 1.45 million ounces, from 1.14 million ounces last year, according to a government estimate provided yesterday.

Production might rise to 2 million ounces by 2012, Environment and Natural Resources Secretary Lito Atienza said.

Gold has gained 6 percent this year as investors buy the precious metal to act as a haven asset as the dollar weakened and equities globally dropped.

“While the global crisis exists, gold will always be a very sound investment,” Atienza said in a Bloomberg television interview in Singapore Thursday. He forecasts “a steady growth” in bullion prices.

Gold for immediate delivery fell 0.2 percent to $932.24 an ounce at 12:49 p.m. Singapore time.

The value of the Philippines’ resources sales, including gold, copper, silver and nickel, might rise 42 percent to $2.1 billion this year from 2008, the Mines and Geosciences Bureau said.

CGA Mining and its Philippine partner, Filminera Resources Corp., would produce 163,000 ounces of gold this year from their Masbate mine, the bureau said.

Nickel laterite ore production in the Philippines will drop by more than half to 4.05 million tons, from 8.28 million tons a year ago, as demand for the raw material used to produce pig iron plunges, according to the government.

Meanwhile, gold traded little changed in Asia as a rally in equities reduced investor demand for the precious metal as a haven and store of value.

Bullion is down 1.9 percent this week as the benchmark MSCI Asia Pacific Index rallied 7.5 percent.

Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, stood unchanged at a record 1,124.99 metric tons on Wednesday, according to figures on the company’s Web site.

“Commodities are likely to depend on US dollar movements and risk appetite,” Tobias Merath, head of commodity research at Credit Suisse Group in Singapore, wrote in a note Wednesday.

“Recent volatility in risk appetite causes investor interest to shift quickly. Speculative positioning suggests that there is further potential for profit-taking to weigh on gold prices.”

Gold for immediate delivery was up 0.2 percent at $935.45 an ounce at 2:28 p.m. in Singapore, after rising to $938.15 an ounce earlier.

The Standard & Poor’s 500 Index has risen 5.9 percent this week on optimism the global economy is stabilizing and credit markets may be revived after a US government plan to help investors buy toxic assets.

The dollar last traded at $1.3584 per euro from $1.3583 on Wednesday.

Among other precious metals for immediate delivery, silver was down 0.2 percent at $13.46 an ounce, platinum rose 1.2 percent to $1,137.75 an ounce, and palladium was unchanged at $215.50 an ounce at 1:58 p.m. in Singapore.

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