According to the World Gold Council, the gold mining industry is struggling to sustain production growth as deposits of the yellow metal become harder to find. A data from the international trade association, mine production inched up only 0.5% in 2023 compared to a year ago.
The World Gold Council Chief Market Strategist John Reade says, they have seen record first quarter mine production in 2024 up 4% year on year. But the bigger picture about mine production is that, effectively, it plateaued around 2016, 2018 and the council have seen no growth since then.
In 2022, the growth was 1.35% year on year, the year before it was 2.7%, while in 2020, global gold production logged the first decline in a decade, sliding 1%.
The mining sector is having challenges reporting sustained production growth after a decade of rapid expansion back in 2008.
New gold stores are becoming more difficult to find all over the world as numerous imminent regions have proactively been explored.
The World Gold Council says that large-scale gold mining uses a lot of money and requires a lot of exploration and growtj. It usually takes 10 to 20 years for a mine to be ready for production.
Even during the exploration process, the likelihood of a discovery progressing into the development of a mine is low, with only about 10% of global gold discoveries containing sufficient metal to warrant mining.
Around 187,000 metric lots of gold has been mined to date, with the larger part coming from China, South Africa and Australia. Gold reserves that can be uncovered are assessed at around 57,000 tons, as per the US Geological Survey.
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Aside from the discovery process, it’s harder to secure and requiring more time to come through have made mining more difficult. Securing licenses and permits needed before mining companies can start operations can take several years.
In addition, a lot of mining projects are planned for remote areas that need infrastructure like roads, electricity, and water, so building these mines and financing them will cost more.
Gold prices are taking a breather after rallying to record highs in recent months bolstered by strong demand led by China. Spot gold is currently trading at $2,294.3 per ounce.
