New Gold Rush In Australia Boosts Global Supply

Australia is poised to overtake South Africa and the U.S. as theworld's second-largest producer of gold as new mines boost output tomeet a sharp rise in international demand. A giant facility south ofPerth near the town of Boddington is leading the charge. Productionhas just started at what will be Australia's biggest gold mine thataims for an output of a million ounces a year.

After recent falls, Australia's gold output has bounced back and is worth about $7 billion annually.

Thenew gold rush has been boosted by production at the open castBoddington mine in Western Australia that's owned by American resourcescompany, Newmont.

Spokeswoman Annette Dix says the project has lofty ambitions.

"Forthe first five years, we will be the biggest goldmine in Australia.Eventually, it will be the size of the Perth CBD," she said.

Sincethe decision to develop the site near Perth was made in the late 1990s,the gold price has tripled. The facility expects to produce about $1.4billion of the precious metal each year.

The development hastransformed Boddington from a small community with a dozen shops into aprosperous hub of activity that's attracted 4,000 mine workers.

Gary Sherry from the local council is looking forward to the good times.  

"Certainlywe're a boom town, but I don't see a bust for Boddington. While thingswill calm down once the construction of the gold mine is finished,there'll be continued growth over 20 years as the mine slowly developtheir resource, and that is 20 years of growth for our town," he said.

Pricesfor gold are approaching $1,000 an ounce and international investors,especially those in China, are taking a keen interest in the trade.

Chinaremains the world's largest producer of gold.  Analysts have predictedthat increases to Australia's output could see it overtake the UnitedStates and South Africa as the second most important source of aprecious commodity that shows few signs of going out of fashion.