THE shift to the production of gold concentrates in Vatukoula is being blamed for the decline in Fiji’s overall gold output. In its latest monthly economic review, the Reserve Bank of Fiji (RBF) revealed gold ore production contracted by 28.2per cent in December, “led by declines at Vatukoula Gold Mines Ltd (VGML) (-62.4per cent), which offset improvements at Tuvatu Gold Mines (23.1per cent).”
“The decline at VGML partly mirrors a shift in production to gold concentrates, which so far this year has totalled 12,400 ounces,” RBF stated.
In clarifying its production status, VGML told this newspaper its switch to gold concentrates has actually preserved the gold content of the finished product resulting in higher gold production.
“When we talk about gold production, we normally talk about the gold content in the final product itself. In Vatukoula, we produce two products: the gold concentrates and the gold dore,” VGML vice president Ian He said.
“When we talk about the gold production, we say: the gold content in the dore. And now our final product is the concentrate, so we then talk about the gold content in the gold concentrate.
“Because we are not smelting the gold (concentrates), our gold production containing gold has actually increased by a minimum of 12 to 13per cent. That 12 to 13per cent is the loss incurred during the smelting process at Vatukoula. So by selling the concentrate, we have avoided the gold loss in the smelting process. That means we increase our revenue by 12-13per cent.
“At the same time we increase our tax payment and export duty payment by 12-13per cent, because the taxable duty and the royalty payment is calculated based on the contained gold in the concentrate or in the dore.”
The mine, which has been in operation for over 90 years, has suffered from a lack of investment in infrastructure and machinery, with easy access high grade deposits now depleted and mined out. VGML is currently ramping up modernisation of the mine under the $200million investment package commitment from its new major shareholder Shandong Zhaojing Group Company Limited, one of China’s top mining companies.
