The World Gold Council pointed out that as gold becomes increasingly difficult to find, its production may soon fail to keep up with demand growth.
The World Gold Council said that as gold becomes harder to find, the gold mining industry is struggling to maintain production growth.
John Reade, Chief Market Strategist for the World Gold Council, said, "We have seen a year-on-year increase of 4% in mining production in the first quarter of 2024. However, from a larger perspective, I think mining production reached a stable level around 2016 and 2018, and since then we have not seen any growth."
According to data from the International Trade Association, gold production in 2023 only increased slightly by 0.5% year-on-year. In 2022, global gold production increased by 1.35% year-on-year, significantly lower than the previous year's 2.7%, and in 2020, global gold production had the first decline in 10 years, down 1%.
Reade said, "I think the most important situation is that since around 2008, the gold mining industry has experienced 10 years of rapid growth and is now struggling to maintain continuous growth in production."
Currently, finding gold, obtaining permits for gold, and financing gold are becoming increasingly difficult. Reade explains that as many promising areas have already been explored, new gold mines around the world are becoming harder to find.
According to the World Gold Council, large-scale gold mining is capital-intensive and requires a lot of exploration and development, which takes an average of 10 to 20 years to put into production.
In the exploration process, the likelihood of discovering a gold mine that can be developed into a mine is also low, with only about 10% of gold mines discovered globally containing enough metal to be mined.
So far, about 187,000 tons of gold have been mined, with most of it coming from China, South Africa, and Australia. The US Geological Survey estimates that the amount of gold reserves that can be mined is about 57,000 tons.
In addition to exploration, Reade adds that government permits are becoming increasingly difficult to obtain and require more time to pass, making mining more difficult. It may take mining companies several years to obtain the licenses and permits needed to start operations.
Reade also said that many mining projects are in remote areas and require additional infrastructure such as roads, electricity, and water, which increases the cost of building and financing these mines. He said, "Finding gold, getting approval for mining, financing it, and operating it are becoming increasingly difficult."