China 2010 gold output seen above 340 tons

BEIJING (Commodity Online) : China, the world's largest gold producer expects its gold production in 2010 above 340 tons, according to the Chinese Ministry of Industry and Information Technology.

Actual gold output for the first 11 months of the year, according to official figures, was 308.39 tones, up 9.2% on the same period in 2009.

In 2009, China's gold output was 319. 980 tones. This is now the 6th successive year in which the country has raised its gold output.

China also imported 209.7 tonnes of gold in the first 10 months of 2010 - up a massive 500% on the previous year's imports over the same period.

Analysts said China's overall gold consumption, a figure reached by adding mine output to imports, in 2010 could reach close to 600 tones or more - equivalent to around a quarter of global mine production.

China is seen as needing to raise its Central Bank gold reserves to percentage levels near those of major Western countries, which would absorb a substantial amount of the precious metal, but is also seen as being extremely cautious about releasing data on any reserves rise.

In some analysts' views this is because an overt increase in China's gold reserves would have the effect of stimulating substantial price increases in the yellow metal.

All in all this makes China a very substantial player in the global gold market with the capability of controlling the gold price if it so wants to given the trillions of dollars in its reserves.

It is currently gaining ground on India as the world's biggest importer of gold and many think China will surpass India in this respect over the next couple of years - particularly given the Indian nervousness about buying into a rising gold price, a factor which does not seem to be impacting the Chinese investor so far.

Meanwhile, China National Gold Group Corp, the country's largest gold producer, said its operating profit in 2010 reached 3.2 billion yuan ($471 million), more than five times the amount in 2006.

By the end of 2010, the company's reserves of gold resources reached 1,300 tons, up from 275 tons in 2006. Copper reserves reached 8 million tons, up from 1.25 million tons in 2006 while molybdenum reserves increased to 1.4 million tons from 200,000 tons in 2006.

Source: http://www.commodityonline.com