China's Gold Output Hits Record at 313.98T in 2009

Source:

"World's largest gold producer for three straight years"

China's gold output jumped 11.34% to a record of 313.98 tons in 2009, the China Gold Association said on Thursday, securing the country's position as the world's largest producer of the yellow metal.

China has dramatically opened bullion markets to active trade in the past decade, including allowing gold to be traded freely on the Shanghai Gold Exchange. Gold hoarding was initially outlawed in 1949 when the Communists took power.

"Gold output reached above 300 tons for the first time," the association said on its website, adding that China maintained its position as the world's top gold producer for the third straight year in 2009.

Nearly 60% of China's gold output in 2009 came from the top-five producing provinces—Shandong, Henan, Jiangxi, Fujian and Yunnan.

China had more than 700 gold producers in 2009, down from more than 1,200 firms in 2002 as the industry consolidated. China produced a mere 4.07 tons of gold in 1949.

The China Gold Association gave no figures for last year's consumption, but China consumed 395.6 tonnes of gold in 2008.

China said last April its official gold holdings had risen to 1,054 tons from 600 tons in 2003, with the increase attributed to purchases of domestically produced gold to help soak up unsold output.

Metals consultancy GFMS said last month that China, the world's most populous nation, would overtake India, the second most populous nation, as the world's largest gold consumer in 2009. Total demand is forecast at 432 tons as wealthy investors defy record bullion prices.

Gold XAU inched up to $1,092 an ounce on Thursday, well below a lifetime high around $1,226 an ounce struck in early December.

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