Gold is Getting Harder to Find: World Gold Council
Mon Aug 05 2024
The gold mining industry faces increasing difficulties in maintaining production growth as accessible gold deposits become scarcer, the World Gold Council (WGC) reports.
According to data from the international trade association, global mine production saw a modest rise of just 0.5% in 2023 compared to the previous year.
“It’s getting harder to find gold, permit it, finance it, and operate it,” remarked John Reade, WGC’s Chief Market Strategist.
Reade elaborated that while the first quarter of 2024 witnessed a 4% year-on-year increase in mine production, the broader trend shows a plateau since around 2016-2018, with no significant growth thereafter.
In recent years, the growth rates of mine
production have been declining. In 2022, production increased by 1.35%
year-on-year, down from 2.7% in the previous year. Notably, in 2020, global
gold production experienced its first decline in a decade, dropping by 1%.
Reade highlighted that the overarching narrative is one of struggle for the mining industry to sustain production growth after a decade of rapid expansion starting around 2008. He noted that new gold deposits are increasingly challenging to discover as many potential areas have already been explored.
The WGC emphasizes that large-scale gold mining is a capital-intensive endeavor, often requiring 10 to 20 years of exploration and development before a mine becomes operational. Even during exploration, the odds of a discovery progressing to a productive mine are slim, with only about 10% of global gold discoveries deemed viable for mining.
The World Gold Council provided key data points:
Reade also pointed out the increasing difficulty in securing government permits, which are taking longer to obtain. Licensing and permit processes can extend over several years before mining operations can commence.
Additionally, many proposed mining projects are situated in remote areas that lack necessary infrastructure like roads, power, and water. This adds to the costs of building and financing these operations.
“Securing licenses and permits needed before mining companies can start operations can take several years,” Reade noted.
Above-Ground Stock and Demand
The best estimates currently available suggest that around 212,582 tonnes of gold have been mined throughout history, of which around two-thirds have been mined since 1950. Since gold is virtually indestructible, almost all of this metal still exists in some form. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure around 22 meters on each side.
This article sheds light on the intricate and mounting challenges faced by the gold mining industry in its quest to maintain production growth amidst dwindling deposits and increasing operational hurdles.
Source: https://www.msn.com/