Australia's gold production increased by 3% to 56 tons in the September quarter, compared with the previous three-month period, although this was still the third-lowest quarterly output recorded by the country in the past 20 years, mining consultant Surbiton Associates reported on Monday.

The consultant on Monday released its latest Gold Quarterly Review, indicating that gold production was down 9% year-on-year.

"It looks as though Australia's gold production for the full 2008 year will be the lowest since 1989. It will be somewhere between 25% and 30% lower than the peak year of 1997," said Surbiton Associates director Dr Sandra Close.

However, despite the lower output, the value of the gold produced had increased, said Surbiton, with the Australian dollar gold price recently achieving record levels.

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The average Australian dollar gold price for the September quarter was about A$1 000/oz, said the consultant.

"In early October, Australian gold prices rose to an all time record of just over A$1 400/oz during intraday trading. This was due to a combination of a high US dollar gold price and a rapidly declining Australian dollar exchange rate," said Close.

She noted that the year to date had seen excellent results from some producers, but that several of the companies, which had sought to redevelop older operations, had found the going tough and some had not survived.

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