Has gold mining peaked World Gold Council Gold reserves scarce mining growth rate sees first decline
According to a report by the World Gold Council (WGC), the gold mining industry is facing challenges in production growth as gold deposits are becoming increasingly difficult to find.
Gold Mining Industry Faces Challenges in Production Growth
Gold Deposits are Becoming Harder to Find
Challenges of Large-Scale Gold Mining
Already Mined and Potentially Mined Gold Reserves
Challenges of Government Permits and Infrastructure Development
John Reade, market strategist at the World Gold Council, stated that although mine production in the first quarter of 2024 set a record with a 4% year-on-year increase, from a broader perspective, mine production peaked between 2016 and 2018 and has not seen any growth since then.
Reade stated: “Our mine production in 2023 only grew by 0.5% year-on-year. The growth rate in 2022 was 1.35%, down from 2.7% the previous year. Global gold production in 2020 saw its first decline in a decade, dropping by 1%.”
Reade explained that gold deposits are becoming increasingly difficult to find globally, as many potential areas have already been explored. He pointed out: “After a rapid growth in the industry in the past decade since 2008, it has become challenging for the mining sector to maintain production growth.” “Discovering new gold deposits, obtaining permits, raising funds, and operating are becoming increasingly difficult.”
Data from the World Gold Council shows that large-scale gold mining requires significant capital and involves major exploration and development, often taking 10 to 20 years before production can begin. Even during the exploration process, the probability of discoveries that can be converted into mine development is low, with only about 10% of global gold discoveries having sufficient metal content worth mining.
As of now, approximately 187,000 metric tons of gold have been mined globally, with the majority coming from China, South Africa, and Australia. According to the U.S. Geological Survey, estimated mineable gold reserves are around 57,000 metric tons.
In addition to the exploration process, obtaining government permits has become more challenging and time-consuming. Reade added that obtaining the necessary permits and licenses before mining companies can begin operations may take several years. Furthermore, many mining projects are located in remote areas requiring infrastructure (such as roads, power, and water sources), which increases the costs of constructing and operating these mines.
After a recent strong increase driven by demand from China, the price of gold is currently stabilizing slightly. The spot price of gold is currently at $2,294.3 per ounce.
Gold Mines
Mining Growth Rate
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