Gold production cash costs were the highest on record in 2012, rising by 13.1% to US$673/oz, mainly due to higher costs in South Africa, according to Barclays Capital analyst Christopher Louney.
Marginal cash costs rose by 15.2% y/y to $1,104/oz.
"Although cash costs are rising, we do not expect the curve to provide the floor for prices in the near term given that marginal cash costs are also well below gold's spot price," the analyst wrote. "Even
after adding in sustaining capital expenditures, which we estimate at more than US$200/oz for the industry, headroom remains, but the mining environment remains challenging."
Barclays is forecasting an average gold price of US$1,646/oz in 2013.
The highest cash costs in the world according to Barclays data are in South Africa (US$1,141/oz), followed by Australia and New Zealand (US$909/oz) and Ghana (US$883/oz).
In South America, Brazil is ranked highest with US$741/oz, Peru is second (US$519/oz) with Argentina coming in third (US$312/oz).
Although the base of gold cash costs is set to rise, the scope for greater upside risk in 2013 is through labor-related supply disruptions, according to the analyst.
The gold cash costs compiled by Barclays comprise production costs per mined ounce of gold, excluding capital expenditure. The bank's database accounts for around 35% of global mine output. The main omission is China due to a lack of reported data.