At the YLG Bullion International headquarters in Bangkok, Thailand, an employee is sorting gold bars and taking photos.
Dario Pignatelli | Bloomberg | Getty Images
The World Gold Council says the gold mining industry is struggling to maintain production growth as deposits of the yellow metal become increasingly difficult to find.
“We see mine production increasing 4% annually in the first quarter of 2024, which is a record high. But looking at the bigger picture, I think mine production actually stabilized around 2016 and 2018, and from there We haven’t seen any growth since then,” said John Reade, chief market strategist at WGC.
according to Data comes from the International Trade AssociationCompared with a year ago, mine output increased slightly by only 0.5% in 2023.
In 2022, the annual increase was 1.35%, compared with 2.7% the year before; in 2020, global gold production fell for the first time in ten years, down 1%.
“I think the most shocking thing is that after 10 years of rapid growth starting around 2008, the mining industry is struggling to report continued growth in production,” Reade said.
He explained that finding new gold deposits around the world is becoming increasingly difficult because many promising areas have already been explored.
Finding gold, allowing gold mining, financing and operating it are becoming increasingly difficult.
john reed
world gold council
Large-scale gold mining is capital intensiveAccording to the World Gold Council, extensive exploration and development is required and it will take an average of 10 to 20 years before it is ready for production.
Even during exploration, the likelihood of a gold discovery progressing to mine development is low, with only about 10% of gold deposits discovered globally containing enough metal to warrant mining.
Approximately 187,000 tons of gold have been mined to date, Most come from China, South Africa and Australia. Minable gold reserves are estimated at approximately 57,000 tons, According to the U.S. Geological Survey.
Reed added that in addition to the discovery process, obtaining government permits is increasingly difficult and takes more time to complete, making mining even more difficult. Obtain required licenses and permits before a mining company can commence operations It may take several years.
In addition, many mining projects are planned to be built in remote areas that require infrastructure such as roads, power and water, leading to increased costs of building these mines and financing their operations, Reed said.
“It’s becoming increasingly difficult to find, license, finance and operate gold,” he said.
Gold is taking a breather after rising to record highs in recent months on strong demand from China. spot gold It is currently trading at $2,294.3 per ounce.
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