A drive to benefit from record bullion prices lifted Australian gold production by 10 percent, or 24 metric tons, to 270 metric tons in the 2010/11 financial year, maintaining Australia's No. 2 ranking behind China, a sector survey released on Sunday showed.

In the quarter ended June 30, Australia's output of bullion rose 5 percent to 68.1 tonnes versus the previous three months, though it was flat compared to a year ago, according to the survey by Melbourne-based consultancy Surbiton Associates.

An 18 percent rise in global gold prices in the 2010/11 year to a record around $1,500 an ounce encouraged miners to dig more mines, Surbiton analyst Sandra Close said.

Spot gold hit a record $1,911.46 on Aug. 23, and closed at $1,828.05 on Friday, according to Reuters data.

The increase year-on-year is due to new operations coming into production and old mines being successfully redeveloped, Close said.

The recent spike in the gold price has certainly drawn attention to the industry, but it is the sustained, longer-term upward trend in the gold price that has prompted companies to re-evaluate older deposits and also explore for new ones, Close said.

China is the world largest gold producer, mining 345 metric tons in calendar 2010 and analysts expect a higher yield in 2011.

A recent survey by precious metals research group GFMS suggested that one-time sector leader South Africa had tumbled to fifth place in the list of gold producers, with the United States and Russia heading for higher yields.

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