Gold Mining Like 'Finding a Needle in a Haystack' in the Desert... Last Year's Production Increased by Only 0.5%

Exploration of Promising Gold Mining Areas Has Been Extensive
"Gold Production Has Been Stagnant Since 2018"

As gold mines around the world become increasingly difficult to find, the gold mining industry is struggling to maintain its growth in gold production, CNBC reported on the 9th (local time).

According to the World Gold Council (WGC) report released in January, global gold mining production in 2023 increased by only 0.5% compared to the previous year, reaching 3,644 tons. The highest annual gold mining record was set in 2018 at 3,656 tons. Previously, gold mining production increased by 2.7% and 1.35% in 2021 and 2022 respectively, but in 2020, it decreased by about 1%, marking the first decline in 10 years.

[Image source=Reuters Yonhap News]

Experts point to the fact that exploration has already been conducted in many promising gold mining areas, making it increasingly difficult to discover new gold deposits as the cause of the slowdown in gold mining production. In particular, large-scale gold mining is a representative capital-intensive industry, requiring significant effort in exploration and development, and it takes an average of 10 to 20 years for a mine to be ready for production.

John Reed, WGC’s chief analyst, stated, "The mining industry, which experienced rapid growth for about 10 years starting around 2008, has since struggled to report continuous production increases. Although gold production grew by 4% year-on-year in the first quarter of this year, showing record growth, overall gold production has essentially plateaued since around 2018."

According to the U.S. Geological Survey (USGS), the total amount of gold mined to date is approximately 187,000 tons. Most of this gold was produced from mines in China, South Africa, and Australia. The estimated amount of gold deposits that can be mined in the future is about 57,000 tons. However, CNBC noted that only 10% of the gold deposits discovered during exploration contain enough gold to be economically mined.

Analyst Reed pointed out, "Not only finding gold but also obtaining permits and financing to operate mines is becoming increasingly difficult." Even if a gold mine is discovered, securing mining permits from regulatory authorities is very challenging, and many mining projects are planned in remote areas requiring infrastructure such as roads, power, and water, which means financing alone can take several years.

Along with this slowdown in gold mining production, gold prices, supported by strong demand within China, surpassed $2,400 per ounce in April, reaching an all-time high. As of 4:20 PM Korean time, the price of gold spot on the New York Mercantile Exchange is trading at $2,293 per ounce. Gold prices have risen about 11% since the beginning of this year.