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Gold bonanza as profits up 53.21%
Latest Updated by 2006-08-08 10:30:53
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Profits in China's gold mining sector surged more than 53.21 per cent in the first half from a year ago, buoyed by bullish gold prices, but the pace is expected to slow in the second half.

The sector's profits reached 2.47 billion yuan (US$308.8 million) from January to June, according to statistics from the China Gold Association on Friday.

The growth was much faster than that of gold production in China and the sector's output value, the Beijing-based gold association said.

First-half gold production rose by 6.33 per cent to 106.03 tons. Meanwhile, the sector's output value expanded by 22.64 per cent to 22.15 billion yuan (US$2.77 billion).

"The blistering profit growth should be largely attributed to strong gold prices in the first half of this year," said Lu Wenyuan, vice-chairman of the gold association.

But Lu told China Daily that profits in the second half would gear down.

At the Shanghai Gold Exchange, the sole national bourse for the precious metal, the price of aurum-99.99 gold bullion closed at 165.45 yuan (US$20.68) per gram on Friday, down 0.6 per cent from Thursday. But it represented a 15 to 20 per cent increase compared to January.

Domestic gold prices fluctuate in line with changes on the international gold market. International gold prices are now hovering at around US$650 per ounce (equal to 31.035 grams), up from some US$550 at the beginning of this year. In May, prices reached a 26-year high of US$730 per ounce.

Cui Lin, an analyst with Antaike Information Development Co Ltd, the Beijing-based metal industry consultancy, predicted gold prices at home and abroad would continue on the upward trend in the second half due to the weakening US dollar and soaring oil prices.

"International gold prices will possibly get to the first-half peak again in the second half," Cui said.

According to a government-set goal revealed in April, China's gold production is expected to reach 240 tons this year, up 7 per cent from 2005.

The nation's demand for gold has also seen growth this year.

Combined gold demand in the form of jewellery and retail investment on the Chinese mainland increased by 2 per cent to 68.4 tons in the first quarter of this year, according to data provided by the World Gold Council based in London.

The gold council's Beijing office said it would release the mainland's figures for first-half gold demand later this month.

Editor: Donald

By: Source: China Daily Website
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