Cui Lin, an analyst with Antaike Information Development Co Ltd, the Beijing-based metal industry consultancy, said gold production in China is expected to increase by as much as 7 percent this year.

"Gold prices will continue to be on the bullish side and Chinese incomes will continue to grow steadily this year. Miners will produce more gold to satisfy mounting demand," Cui said.

NDRC said earlier this month that total gold production in the country would reach 1,300 tons from 2006 to 2010.

And it expected a total of 3,000 to 3,500 tons of gold mineral resources to be found in China.

Domestic gold miners have increased spending on prospecting and exploration considerably since 2001, when gold prices started to climb, according to Cui.

Statistics from the gold association showed the average price of aurum-99.99 gold in China rocketed by 32.35 percent, or 37.95 yuan per gram, last year from 2005.

Domestic gold prices began fluctuating in line with changes in the world's market in 2001 when the Shanghai Gold Exchange, China's sole national bourse for the metal, was formed in a move to open up the gold market.

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